EXHIBIT 10.1



                                                                  EXECUTION COPY

                                  $320,000,000

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

                             Dated as of May 7, 1999

                                      Among

                      CENTRAL TRACTOR FARM & COUNTRY, INC.
                     (to be renamed "Quality Stores, Inc.")
                                  as Borrower,

                                CT HOLDING, INC.,
                      (to be renamed "QSI Holdings, Inc.")

                                   as Holding,

                                       and

                  THE INITIAL LENDERS, INITIAL ISSUING BANK AND
                          SWING LINE BANK NAMED HEREIN
          as Initial Lenders, Initial Issuing Bank and Swing Line Bank

                                       and

                               FLEET NATIONAL BANK
                             as Administrative Agent

                                       and

                                NATIONSBANK, N.A.
                              as Syndication Agent

                                       and

                            DLJ CAPITAL FUNDING, INC.
                             as Documentation Agent

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,
                          FIRST UNION NATIONAL BANK and
                          THE HUNTINGTON NATIONAL BANK
                                  as Co-Agents


<PAGE>

<TABLE>
<CAPTION>

                                           T A B L E  O F  C O N T E N T S

Section                                                                                                        Page
<S>                                                                                                             <C>
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
         1.01.  Certain Defined Terms.............................................................................2
         1.02.  Computation of Time Periods......................................................................28
         1.03.  Accounting Terms.................................................................................28
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
         2.01.  The Advances.....................................................................................29
         2.02.  Making the Advances..............................................................................31
         2.03.  Issuance of and Drawings and Reimbursement Under Letters of Credit...............................33
         2.04.  Repayment of Advances............................................................................35
         2.05.  Termination or Reduction of the Commitments......................................................37
         2.06.  Prepayments......................................................................................38
         2.07.  Interest.........................................................................................40
         2.08.  Fees.............................................................................................41
         2.09.  Conversion of Advances...........................................................................42
         2.10.  Increased Costs, Etc.............................................................................43
         2.11.  Payments and Computations........................................................................44
         2.12.  Taxes............................................................................................46
         2.13.  Sharing of Payments, Etc.........................................................................48
         2.14.  Use of Proceeds..................................................................................48
         2.15.  Defaulting Lenders...............................................................................49
         2.16.  Removal of Lender................................................................................51
ARTICLE III
CONDITIONS OF LENDING
         3.01.  Conditions Precedent to Effective Date...........................................................51
         3.02.  Conditions Precedent to Each Borrowing and Issuance..............................................56
         3.03.  Determinations Under Section 3.01................................................................57
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
         4.01.  Representations and Warranties...................................................................57
ARTICLE V
COVENANTS OF THE BORROWER
         5.01.  Affirmative Covenants............................................................................64
         5.02.  Negative Covenants...............................................................................68
         5.03.  Reporting Requirements...........................................................................75
         5.04.  Financial Covenants..............................................................................78
ARTICLE VI
EVENTS OF DEFAULT
         6.01.  Events of Default................................................................................81
         6.02.  Actions in Respect of the Letters of Credit upon Default.........................................84
ARTICLE VII
THE ADMINISTRATIVE AGENT
         7.01.  Authorization and Action.........................................................................85
         7.02.  Administrative Agent's Reliance, Etc.............................................................85
<PAGE>

         7.03.  Fleet and Affiliates.............................................................................85
         7.04.  Lender Party Credit Decision.....................................................................86
         7.05.  Indemnification..................................................................................86
         7.06.  Successor Administrative Agents..................................................................87
ARTICLE VIII
         8.01.  Guaranty.........................................................................................88
         8.02.  Guaranty Absolute................................................................................89
         8.03.  Waivers and Acknowledgments......................................................................90
         8.04.  Subrogation......................................................................................90
         8.05.  Continuing Guarantee; Assignments................................................................91
ARTICLE IX
MISCELLANEOUS
         9.01.  Amendments, Etc..................................................................................91
         9.02.  Notices, Etc.....................................................................................92
         9.03.  No Waiver; Remedies..............................................................................92
         9.04.  Costs and Expenses...............................................................................92
         9.05.  Right of Set-off.................................................................................94
         9.06.  Binding Effect...................................................................................94
         9.07.  Assignments and Participations...................................................................94
         9.08.  Execution in Counterparts........................................................................97
         9.09.  No Liability of the Issuing Bank.................................................................98
         9.10.  Confidentiality..................................................................................98
         9.11.  Jurisdiction, Etc................................................................................98
         9.12.  Governing Law....................................................................................99
         9.13.  Waiver of Jury Trial.............................................................................99
</TABLE>



<PAGE>
SCHEDULES

Schedule I          -      Commitments and Applicable Lending Offices

Schedule II         -      Disclosed Litigation

Schedule III        -      Subsidiaries

Schedule IV         -      Authorizations, Etc.

Schedule V          -      Plans

Schedule VI         -      Existing Debt

Schedule VII        -      Owned Real Property

Schedule VIII       -      Leased Real Property

Schedule IX         -      Material Contracts

Schedule X          -      Investments

Schedule XI         -      Intellectual Property

Schedule XII        -      Reserved

Schedule XIII       -      Liens

Schedule XIV        -      Surviving Debt

Schedule XV         -      Environmental Disclosure

Schedule XVI        -      Excluded Asset Acquisitions

EXHIBITS

Exhibit A-1         -      Form of Tranche A Term Note
Exhibit A-2         -      Form of Tranche B Term Note
Exhibit A-3         -      Form of Revolving Credit Note

Exhibit B           -      Form of Notice of Borrowing

Exhibit C           -      Form of Assignment and Acceptance

Exhibit D           -      Form of Security Agreement

Exhibit E           -      Form of Pledge Agreement

Exhibit F           -      Form of Subsidiary Guaranty

Exhibit G           -      Form of Solvency Certificate

Exhibit H           -      Form of Opinion of Sullivan & Worcester

Exhibit I           -      Form of Borrowing Base Certificate

<PAGE>

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT


                  SECOND AMENDED AND RESTATED  CREDIT  AGREEMENT dated as of May
7, 1999 among Central Tractor Farm & Country,  Inc., a Delaware  corporation (to
be renamed, Quality Stores, Inc.) (the "Borrower"), CT Holding, Inc., a Delaware
corporation (to be renamed QSI Holdings, Inc.) ("Holding"), the banks, financial
institutions  and other  institutional  lenders  listed on the  signature  pages
hereof as the Initial Lenders (the "Initial Lenders"),  the Initial Issuing Bank
(as hereinafter defined),  the Swing Line Bank (as hereinafter  defined),  Fleet
National Bank ("Fleet"),  as  administrative  agent (together with any successor
appointed  pursuant to Article VII, the  "Administrative  Agent") for the Lender
Parties (as hereinafter defined),  NationsBank,  N.A., as syndication agent (the
"Syndication Agent") for the Lender Parties,  and DLJ Capital Funding,  Inc., as
documentation agent (the "Documentation Agent") for the Lender Parties.


PRELIMINARY STATEMENTS:

                  (1) The  Borrower  and  Holding  entered  into an Amended  and
Restated Credit Agreement as of July 3, 1997 (as heretofore  amended,  modified,
or otherwise supplemented,  the "Existing Credit Agreement"), with the financial
institutions  and other  institutional  lenders  party  thereto  (the  "Existing
Lenders"), Fleet, as administrative agent for the Existing Lenders, NationsBank,
N.A., as  syndication  agent for the Existing  Lenders and DLJ Capital  Funding,
Inc., as documentation agent for the Existing Lenders.

                  (2) Pursuant to the Existing  Credit  Agreement,  the Borrower
requested  that the Existing  Lenders make  advances to it, and issue letters of
credit for its account,  in an aggregate principal amount of up to $150,000,000,
on the terms and conditions set forth therein.

                  (3) The Borrower  has entered  into an  agreement  and plan of
reorganization dated as of March 27, 1999 (as the same may be amended,  modified
or otherwise supplemented from time to time in accordance with the provisions of
this Agreement,  the "Merger  Agreement") among Holding,  the Borrower,  Quality
Stores, Inc., a Delaware  corporation (the "Company"),  and certain shareholders
of the Company (the "Company Shareholders"),  pursuant to which the Company will
merge  with  and into  the  Borrower,  with the  Borrower  being  the  surviving
corporation (the "Merger").

                  (4) Immediately following the Merger, the Borrower will change
its name to "Quality  Stores,  Inc.",  and Holding  will change its name to "QSI
Holdings, Inc."

                  (5) The  Borrower  has  requested  that  the  Initial  Lenders
hereunder  enter into this  Agreement to amend and restate the  Existing  Credit
Agreement  and to lend the  Borrower  and issue  Letters of Credit  (as  defined
herein)  for the  benefit  of the  Borrower  from  time to time in an  aggregate
principal  amount of up to  $320,000,000.  The Initial  Lenders  hereunder  have
indicated their  willingness to amend and restate the Existing Credit  Agreement
and to agree to lend such amounts on the terms and conditions of this Agreement.
<PAGE>

                  NOW,  THEREFORE,  in  consideration of the premises and of the
mutual  covenants and  agreements  contained  herein,  the parties hereto hereby
agree that,  subject to the  satisfaction of the conditions set forth in Section
3.01, the Existing  Credit  Agreement is amended and restated in its entirety to
read as follows:


                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

                  SECTION  1.01.   Certain   Defined  Terms.  As  used  in  this
Agreement,  the following terms shall have the following meanings (such meanings
to be equally  applicable  to both the  singular  and plural  forms of the terms
defined):

                  "Accepting  Lenders"  has the  meaning  specified  in  Section
         2.06(c).

                  "Administrative  Agent"  has  the  meaning  specified  in  the
         recital of parties to this Agreement.

                  "Administrative  Agent's  Account"  means the  account  of the
         Administrative  Agent maintained by the Administrative Agent with Fleet
         at its office at One Federal Street,  Boston,  Massachusetts 02211, ABA
         No.  011  5000  10  Agency   Services   Wire   Suspense,   Account  No.
         1510352-03-156, Attention: Timothy J. Callahan.

                  "Advance"  means a  Tranche A Term  Advance,  a Tranche B Term
         Advance,  a Revolving Credit Advance,  a Swing Line Advance or a Letter
         of Credit Advance.

                  "Affiliate"  means,  as to any Person,  any other Person that,
         directly or indirectly,  controls,  is controlled by or is under common
         control  with such Person or is a director  or officer of such  Person.
         For purposes of this  definition,  the term  "control"  (including  the
         terms  "controlling,"  "controlled by" and "under common control with")
         of a Person means the possession,  direct or indirect,  of the power to
         vote 10% or more of the  Voting  Stock of such  Person  or to direct or
         cause the  direction  of the  management  and  policies of such Person,
         whether   through  the  ownership  of  Voting  Stock,  by  contract  or
         otherwise.

                  "Agreement Value" means, for each Hedge Agreement, on any date
         of  determination,  an amount  determined by the  Administrative  Agent
         equal to: (a) in the case of a Hedge Agreement  documented  pursuant to
         the Master  Agreement  (Multicurrency-Cross  Border)  published  by the
         International  Swap and  Derivatives  Association,  Inc.  (the  "Master
         Agreement"),  the  amount,  if any,  that  would be payable by any Loan
         Party or any of its  Subsidiaries  to its  counterparty  to such  Hedge
         Agreement, as if (i) such Hedge Agreement was being terminated early on
         such date of determination,  (ii) such Loan Party or Subsidiary was the
         sole "Affected Party", and (iii) the Administrative  Agent was the sole
         party  determining such payment amount (with the  Administrative  Agent
         making such  determination  pursuant to the  provisions  of the form of
         Master Agreement); or (b) in the case of a Hedge Agreement traded on an
         exchange, the mark-to-market value of such Hedge Agreement,  which will
         be the  unrealized  loss on such Hedge  Agreement  to the Loan Party or
         Subsidiary of a Loan Party party to such Hedge Agreement  determined by

                                      -2-
<PAGE>
         the  Administrative  Agent based on the settlement  price of such Hedge
         Agreement on such date of determination, or (c) in all other cases, the
         mark-to-market  value  of  such  Hedge  Agreement,  which  will  be the
         unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary
         of a Loan  Party  party  to  such  Hedge  Agreement  determined  by the
         Administrative  Agent as the  amount,  if any, by which (i) the present
         value  of the  future  cash  flows  to be paid by such  Loan  Party  or
         Subsidiary  exceeds (ii) the present  value of the future cash flows to
         be  received  by such Loan Party or  Subsidiary  pursuant to such Hedge
         Agreement;  capitalized  terms used and not  otherwise  defined in this
         definition  shall have the  respective  meanings set forth in the above
         described Master Agreement.

                  "Applicable Lending Office" means, with respect to each Lender
         Party,  such Lender  Party's  Domestic  Lending Office in the case of a
         Prime Rate Advance and such Lender Party's Eurodollar Lending Office in
         the case of a Eurodollar Rate Advance.

                  "Applicable  Margin" means (x) during the period from the date
         hereof  through  October 31, 1999, (i) in respect of the Tranche A Term
         Facility and the Revolving Credit  Facility,  1.50% per annum for Prime
         Rate Advances and 2.75% per annum for  Eurodollar  Rate  Advances,  and
         (ii) in respect  of the  Tranche B Term  Facility,  2.00% per annum for
         Prime Rate  Advances and 3.25% per annum for  Eurodollar  Rate Advances
         and (y) thereafter,  a percentage per annum  determined by reference to
         the Debt to EBITDA Ratio as set forth below:
<TABLE>
<CAPTION>
                                     Tranche A Term Facility/                     Tranche B Term Facility
                                     Revolving Credit Facility
                                -------------------------------------        -----------------------------------
                                 Prime Rate          Eurodollar Rate         Prime Rate          Eurodollar Rate
                                  Advances              Advances              Advances              Advances
                                  --------              --------              --------              --------
<S>                                <C>                  <C>                    <C>                  <C>

Level I                             .375%                1.625%                 1.75%                 3.0%
less than 2.5:1

Level II                            .625%                1.875%                 1.75%                 3.0%
2.5:1 or greater,
but less than 3.0:1

Level III                           .875%                2.125%                 2.0%                  3.25%
3.0:1 or greater,
but less than 3.5:1

Level IV                            1.25%                 2.5%                  2.0%                  3.25%
3.5:1 or greater,
but less than 4.0:1

Level V                             1.5%                  2.75%                 2.0%                  3.25%
4.0:1 or greater
</TABLE>

                                      -3-
<PAGE>

         The  Applicable  Margin for each Prime Rate Advance shall be determined
         by  reference  to the Debt to EBITDA  Ratio in effect from time to time
         and the  Applicable  Margin for each  Eurodollar  Rate Advance shall be
         determined by reference to the ratio in effect on the first day of each
         Interest Period for such Advance; provided,  however, that no change in
         the  Applicable  Margin shall be effective  until three  Business  Days
         after the date on which the  Administrative  Agent  receives  financial
         statements pursuant to Section 5.03(b), (c) or (d) and a certificate of
         the chief financial officer of the Borrower  demonstrating such Debt to
         EBITDA Ratio.

                  "Applicable  Percentage"  means (x) during the period from the
         date  hereof  through  October  31,  1999,  0.50%  per  annum  and  (y)
         thereafter,  a percentage per annum determined by reference to the Debt
         to EBITDA Ratio as set forth below:

              Debt to EBITDA Ratio              Applicable Percentage
         -------------------------------------------------------------
         Level I
         less than 3.5:1                                 0.375%

         Level II
         3.5:1 or greater                                 0.5%

         The Applicable  Percentage shall be determined by reference to the Debt
         to EBITDA Ratio in effect from time to time; provided, however, that no
         change in the  Applicable  Percentage  shall be  effective  until three
         Business Days after the date on which the Administrative Agent receives
         financial  statements  pursuant  to Section  5.03(b),  (c) or (d) and a
         certificate   of  the  chief   financial   officer   of  the   Borrower
         demonstrating such Debt to EBITDA Ratio.

                  "Appropriate  Lender" means,  at any time, with respect to (a)
         any of the  Tranche A Term  Facility,  the  Tranche B Term  Facility or
         Revolving Credit Facility,  a Lender that has a Commitment with respect
         to such Facility at such time, (b) the Letter of Credit  Facility,  (i)
         the Issuing Bank and (ii) if the other  Revolving  Credit  Lenders have
         made Letter of Credit  Advances  pursuant to Section  2.03(c)  that are
         outstanding at such time, each such other  Revolving  Credit Lender and
         (c) the Swing  Line  Facility,  (i) the Swing Line Bank and (ii) if the
         other Revolving  Credit Lenders have made Swing Line Advances  pursuant
         to Section  2.02(b) that are  outstanding at such time, each such other
         Revolving Credit Lender.

                                      -4-
<PAGE>

                  "Assignment and Acceptance" means an assignment and acceptance
         entered into by a Lender Party and an Eligible  Assignee,  and accepted
         by the  Administrative  Agent,  in accordance  with Section 9.07 and in
         substantially the form of Exhibit C hereto.

                  "Available Amount" of any Letter of Credit means, at any time,
         the maximum amount available to be drawn under such Letter of Credit at
         such time  (assuming  compliance  at such time with all  conditions  to
         drawing).

                  "Borrower" has the meaning specified in the recital of parties
         to this Agreement.

                  "Borrower's   Account"  means  the  account  of  the  Borrower
         maintained  by the  Borrower  with Fleet at its  office at One  Federal
         Street,  Boston,  Massachusetts 02110, ABA No. 011 000 138, Account No.
         937 3835380, Attention: Maria Vieira.

                  "Borrowing" means a Tranche A Term Borrowing, a Tranche B Term
         Borrowing, a Revolving Credit Borrowing or a Swing Line Borrowing.

                  "Borrowing Base Deficiency" means, at any time, the failure of
         (a) the Loan Value of the Eligible  Collateral at such time to equal or
         exceed  (b)  the  sum of (i)  the  aggregate  principal  amount  of the
         Revolving Credit Advances,  the Letter of Credit Advances and the Swing
         Line  Advances  outstanding  at  such  time  plus  (ii)  the  aggregate
         Available Amount under all Letters of Credit outstanding at such time.

                  "Borrowing   Base   Certificate"   means  a   certificate   in
         substantially the form of Exhibit J hereto, duly certified by the chief
         financial officer of the Borrower.

                  "Business  Day" means a day of the year on which banks are not
         required or authorized by law to close in Boston,  Massachusetts or New
         York,  New York and,  if the  applicable  Business  Day  relates to any
         Eurodollar  Rate  Advances,  on which  dealings  are  carried on in the
         London interbank market.

                  "Capital  Expenditures"  means, for any Person for any period,
         the sum of (without duplication) (a) all expenditures made, directly or
         indirectly,  by such  Person  or any of its  Subsidiaries  during  such
         period for equipment,  fixed assets, real property or improvements,  or
         for replacements or substitutions  therefor or additions thereto,  that
         have been or should be, in accordance with GAAP, reflected as additions
         to property, plant or equipment on a Consolidated balance sheet of such
         Person  or have a  useful  life of more  than  one  year  and all  cash
         expenditures  made  during  such  period to acquire a Person  that as a
         result of such  acquisition  becomes a wholly  owned  Subsidiary  whose
         assets include equipment,  fixed assets,  real property or improvements
         to be reflected as additional property, plant or equipment plus (b) the
         aggregate  principal  amount of all Debt (including  Obligations  under
         Capitalized  Leases)  assumed or incurred in  connection  with any such
         expenditures.  For purposes of this  definition,  the purchase price of
         equipment  that  is  purchased  simultaneously  with  the  trade-in  of
         existing  equipment  or with  insurance  proceeds or Net Cash  Proceeds
         shall be  included  in Capital  Expenditures  only

                                      -5-
<PAGE>

         to the  extent of the  gross  amount of such  purchase  price  less the
         credit granted by the seller of such equipment for the equipment  being
         traded in at such time or the amount of such insurance  proceeds or Net
         Cash Proceeds,  as the case may be. For purposes of the Loan Documents,
         Capital  Expenditures  for any Person for any period shall  exclude (x)
         all expenditures made, directly or indirectly, by such Person or any of
         its  Subsidiaries  during  such  period  in  connection  with the asset
         acquisitions  described on Schedule  XVI hereto plus (y) the  aggregate
         principal amount of all Debt (including  Obligations  under Capitalized
         Leases) assumed or incurred in connection with any such expenditures.

                  "Capitalized Leases" means all leases that have been or should
         be, in accordance with GAAP, recorded as capitalized leases.

                  "Cash  Collateral  Account"  has the meaning  specified in the
         Security Agreement.

                  "Cash Equivalents"  means any of the following,  to the extent
         owned by the Borrower or any of its Subsidiaries  free and clear of all
         Liens  other than Liens  created  under the  Collateral  Documents  and
         having  a  maturity  of not  greater  than  360  days  from the date of
         acquisition  thereof:  (a) readily marketable direct obligations of the
         Government  of the  United  States  or any  agency  or  instrumentality
         thereof or obligations unconditionally guaranteed by the full faith and
         credit of the Government of the United States, (b) insured certificates
         of  deposit  of or time  deposits  with any  commercial  bank that is a
         Lender Party or a member of the Federal Reserve System,  issues (or the
         parent of which issues)  commercial  paper rated as described in clause
         (c),  is  organized  under the laws of the  United  States or any State
         thereof  and has  combined  capital and surplus of at least $1 billion,
         (c)  commercial  paper in an  aggregate  amount  of no more  than  $2.5
         million per issuer  outstanding at any time,  issued by any corporation
         organized under the laws of any State of the United States and rated at
         least  "Prime-1" (or the then  equivalent  grade) by Moody's  Investors
         Service,  Inc.  or "A-1" (or the then  equivalent  grade) by Standard &
         Poor's Ratings Group,  or (d) mutual funds which invest  exclusively in
         those assets described in clauses (a)-(c) hereto.

                  "CERCLA"  means  the  Comprehensive   Environmental  Response,
         Compensation and Liability Act of 1980, as amended from time to time.

                  "CERCLIS"  means  the  Comprehensive  Environmental  Response,
         Compensation and Liability  Information  System  maintained by the U.S.
         Environmental Protection Agency.

                  "Childs Management  Agreement" means the Management  Agreement
         dated as of March 27,  1997  between  the  Borrower,  Holding  and J.W.
         Childs  Associates,  L.P.,  as the same  may be  amended,  modified  or
         otherwise  supplemented  from  time  to  time in  accordance  with  the
         provisions of this Agreement.

                  "Collateral"  means  all  "Collateral"   referred  to  in  the
         Collateral  Documents and all other  property that is or is intended to
         be  subject  to any Lien in favor of the  Administrative  Agent for the
         benefit of the Secured Parties.

                                      -6-
<PAGE>

                  "Collateral  Documents"  means  the  Security  Agreement,  the
         Pledge Agreement, the Mortgages and any other agreement that creates or
         purports to create a Lien in favor of the Administrative  Agent for the
         benefit of the Lender Parties.

                  "Commitment"  means a Tranche A Term  Commitment,  a Tranche B
         Term Commitment,  a Revolving  Credit  Commitment or a Letter of Credit
         Commitment.

                  "Company"  has  the  meaning   specified  in  the  Preliminary
         Statements.

                  "Company  Shareholders"  has  the  meaning  specified  in  the
         Preliminary Statements.

                  "Confidential  Information"  means  information  that any Loan
         Party or Affiliate thereof furnishes to the Administrative Agent or any
         Lender  Party  that  is  proprietary  in  nature,  including  financial
         information,  projections,  business  plans and other  information in a
         writing marked,  labeled or otherwise  identified as confidential,  but
         does not  include  any such  information  that is or becomes  generally
         available  to the  public  other  than as a result  of a breach  by the
         Administrative  Agent or any Lender Party of its obligations  hereunder
         or that is or becomes  available  to the  Administrative  Agent or such
         Lender  Party from a source  other than a Loan  Party or  Affiliate  or
         advisor thereof.

                  "Consolidated"  refers to the  consolidation  of  accounts  in
         accordance with GAAP.

                  "Conversion",  "Convert"  and  "Converted"  each  refer  to  a
         conversion  of  Advances  of one Type into  Advances  of the other Type
         pursuant to Section 2.09 or 2.10.

                  "Country  General"  means  Country  General,  Inc., a Delaware
         corporation.

                  "Current Assets" of any Person means all assets of such Person
         that would, in accordance with GAAP, be classified as current assets of
         a company  conducting a business the same as or similar to that of such
         Person,  after  deducting  adequate  reserves  in each  case in which a
         reserve is proper in accordance with GAAP.

                  "Current Liabilities" of any Person means all items (including
         taxes accrued as estimated, but excluding Debt) that in accordance with
         GAAP would be classified as current liabilities of such Person.

                  "Debt"  of any  Person  means,  without  duplication,  (a) all
         indebtedness of such Person for borrowed money,  (b) all Obligations of
         such  Person for the  deferred  purchase  price of property or services
         (other  than trade  payables  incurred in the  ordinary  course of such
         Person's  business),  (c) all  Obligations of such Person  evidenced by
         notes,  bonds,  debentures  or  other  similar  instruments,   (d)  all
         Obligations  of such Person  created or arising  under any  conditional
         sale or other  title  retention  agreement  with  respect  to  property
         acquired by such  Person  (even  though the rights and  remedies of the
         seller or lender  under  such  agreement  in the event of  default  are
         limited to repossession or sale of such property),  (e) all Obligations
         of such Person as lessee under Capitalized Leases, (f) all Obligations,
         contingent or  otherwise,  of such Person under  acceptance,  letter of
         credit or  similar  facilities,  (g) for the  purposes  of  determining
         whether  a  Default  has  occurred  under  Section  6.01(e)  only,  all
         Obligations  of such Person to  purchase,  redeem,  retire,  defease or
         otherwise  make any payment in respect of any capital stock of or other

                                      -7-
<PAGE>

         ownership or profit  interest in such Person or any other Person or any
         warrants,  rights or options to acquire such capital stock,  valued, in
         the case of Redeemable Preferred Stock, at the greater of its voluntary
         or  involuntary   liquidation   preference   plus  accrued  and  unpaid
         dividends,  (h) all  Obligations  of such  Person in  respect  of Hedge
         Agreements,  (i) all Debt of others  referred to in clauses (a) through
         (h) above or clause (j) below guaranteed  directly or indirectly in any
         manner by such Person, or in effect  guaranteed  directly or indirectly
         by such Person through an agreement (i) to pay or purchase such Debt or
         to advance or supply  funds for the  payment or  purchase of such Debt,
         (ii) to purchase,  sell or lease (as lessee or lessor) property,  or to
         purchase or sell  services,  primarily  for the purpose of enabling the
         debtor to make  payment  of such Debt or to assure  the  holder of such
         Debt  against  loss,  (iii) to supply  funds to or in any other  manner
         invest in the debtor  (including  any  agreement to pay for property or
         services  irrespective  of whether  such  property  is received or such
         services are rendered) or (iv)  otherwise to assure a creditor  against
         loss,  and (j) all Debt referred to in clauses (a) through (i) above of
         another  Person secured by (or for which the holder of such Debt has an
         existing right,  contingent or otherwise, to be secured by) any Lien on
         property (including, without limitation,  accounts and contract rights)
         owned by such Person, even though such Person has not assumed or become
         liable for the payment of such Debt.

                  "Debt for  Borrowed  Money" of any  Person  means all items of
         Debt that, in accordance with GAAP, would be classified as indebtedness
         on a Consolidated  balance sheet of such Person (and excluding,  in any
         event, Debt under Hedge Agreements).

                  "Debt to EBITDA Ratio" means, for any fiscal month of Holding,
         a ratio of (A) Debt of Holding  and its  Subsidiaries  (other  than any
         Debt of Holding that bears interest on a  payment-in-kind  basis) as at
         the end of such  fiscal  month  (provided,  that the  amount of Debt in
         respect of Revolving Credit Advances as at the end of such fiscal month
         shall be deemed to be the average  aggregate amount of Revolving Credit
         Advances  outstanding  hereunder or under the Existing Credit Agreement
         during  the  last  twelve  months)  less  the  sum  of  cash  and  Cash
         Equivalents  held by Holding and its Subsidiaries as at the end of such
         fiscal month to (B) Consolidated EBITDA for the most recently completed
         twelve fiscal months of Holding and its Subsidiaries.

                  "Declining  Lenders"  has the  meaning  specified  in  Section
         2.06(c).

                  "Default"  means any Event of  Default or any event that would
         constitute an Event of Default but for the  requirement  that notice be
         given or time elapse or both.

                  "Defaulted Advance" means, with respect to any Lender Party at
         any time, the portion of any Advance required to be made by such Lender
         Party to the  Borrower  pursuant to Section 2.01 or 2.02 at or prior to
         such  time  which  has not  been  made by such  Lender  Party or by the
         Administrative  Agent for the account of such Lender Party  pursuant to
         Section  2.02(e)  as of such  time.  In the event  that a portion  of a
         Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the
         remaining  portion of such  Defaulted  Advance  shall be  considered  a
         Defaulted  Advance  originally  required to be made pursuant to Section
         2.01 on the same date as the Defaulted Advance so deemed made in part.

                                      -8-
<PAGE>

                  "Defaulted  Amount" means, with respect to any Lender Party at
         any time,  any amount  required to be paid by such Lender  Party to the
         Administrative  Agent or any other Lender Party  hereunder or under any
         other Loan Document at or prior to such time which has not been so paid
         as of such time, including,  without limitation, any amount required to
         be paid by such  Lender  Party to (a) the Swing Line Bank  pursuant  to
         Section  2.02(b) to purchase a portion of a Swing Line  Advance made by
         the Swing Line Bank,  (b) the Issuing Bank pursuant to Section  2.03(c)
         to purchase a portion of a Letter of Credit Advance made by the Issuing
         Bank,  (c) the  Administrative  Agent  pursuant  to Section  2.02(e) to
         reimburse the  Administrative  Agent for the amount of any Advance made
         by the  Administrative  Agent for the account of such Lender Party, (d)
         any other  Lender  Party  pursuant  to  Section  2.13 to  purchase  any
         participation  in Advances owing to such other Lender Party and (e) the
         Administrative  Agent or the Issuing  Bank  pursuant to Section 7.05 to
         reimburse the Administrative  Agent or the Issuing Bank for such Lender
         Party's  ratable share of any amount  required to be paid by the Lender
         Parties to the  Administrative  Agent or the  Issuing  Bank as provided
         therein.  In the event that a portion of a  Defaulted  Amount  shall be
         deemed paid pursuant to Section 2.15(b),  the remaining portion of such
         Defaulted  Amount  shall be  considered a Defaulted  Amount  originally
         required to be paid  hereunder or under any other Loan  Document on the
         same date as the Defaulted Amount so deemed paid in part.

                  "Defaulting Lender" means, at any time, any Lender Party that,
         at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
         shall take any action or be the subject of any action or  proceeding of
         a type described in Section 6.01(f).

                  "Disclosed  Litigation"  has the meaning  specified in Section
         3.01(j).

                  "Documentation Agent" has the meaning specified in the recital
         of parties to this Agreement.

                  "Domestic  Lending  Office" means,  with respect to any Lender
         Party,  the office of such  Lender  Party  specified  as its  "Domestic
         Lending  Office"  opposite  its name on  Schedule  I  hereto  or in the
         Assignment and  Acceptance  pursuant to which it became a Lender Party,
         as the case may be, or such other  office of such Lender  Party as such
         Lender  Party may from time to time  specify  to the  Borrower  and the
         Administrative Agent.

                  "EBITDA"  means,  for any  period,  the sum,  determined  on a
         Consolidated  basis,  of (a) net  income (or net  loss),  (b)  interest
         expense,  (c)  income  tax  expense,  (d)  depreciation   expense,  (e)
         amortization  expense, (f) all extraordinary,  unusual or non-recurring
         losses (and in any event  including all write-offs  resulting from SFAS
         121  adjustments,  and  all  non-cash  losses,  and  including  without
         limitation,  costs associated with closing the Iowa facility, severance
         payments,  stay  bonuses,  and other  integration  costs)  deducted  in
         determining  such net  income  (or net  loss)  less all  extraordinary,
         unusual or non-recurring  gains added in determining the net income (or
         net loss) for such  Period,  (g) all  expenses  relating  to the Merger
         (including without  limitation,  costs associated with closing the Iowa
         facility,  severance  payments,  stay  bonuses,  and other  integration
         costs) to the  extent  deducted  from such net income (or net loss) for
         such Period,  and (h) for the period ending July 31, 1999,  $1,952,000,

                                      -9-
<PAGE>

         and for the period  ending  October 31,  1999,  $955,000  (in each case
         representing  earnings and  non-recurring  expenses in connection  with
         certain  acquisitions  made by the  Borrower in 1998),  in each case of
         Holding and its Subsidiaries  (including,  without limitation,  for all
         calculations of EBITDA, the Company and its  Subsidiaries),  determined
         in accordance with GAAP for such period.

                  "Effective Date" has the meaning specified in Section 3.01.

                  "Eligible  Assignee"  means (a) with  respect to any  Facility
         (other  than the  Letter of  Credit  Facility),  (i) a Lender;  (ii) an
         Affiliate of a Lender; (iii) a commercial bank organized under the laws
         of the United States, or any State thereof,  and having total assets in
         excess of $500,000,000;  (iv) a savings and loan association or savings
         bank  organized  under  the laws of the  United  States,  or any  State
         thereof,  and  having  total  assets in excess of  $500,000,000;  (v) a
         commercial bank organized under the laws of any other country that is a
         member of the OECD or has concluded  special lending  arrangements with
         the   International   Monetary   Fund   associated   with  its  General
         Arrangements  to  Borrow  or of  the  Cayman  Islands,  or a  political
         subdivision  of any such country,  and having total assets in excess of
         $500,000,000, so long as such bank is acting through a branch or agency
         located in the United States; (vi) the central bank of any country that
         is a member of the OECD; (vii) a finance company,  insurance company or
         other   financial   institution   or  fund   (whether  a   corporation,
         partnership,  trust  or  other  entity)  that  is  engaged  in  making,
         purchasing or otherwise  investing in commercial  loans in the ordinary
         course  of its  business  and  having  total  assets  (i) in  excess of
         $500,000,000  in the  case of  assignees  under  the  Revolving  Credit
         Facility,  and (ii) in excess of $100,000,000  in all other cases;  and
         (viii) any other Person  approved by the  Administrative  Agent and the
         Borrower, such approval not to be unreasonably withheld or delayed, and
         (b) with respect to the Letter of Credit Facility,  a Person that is an
         Eligible  Assignee under  subclause  (iii) or (v) of clause (a) of this
         definition  and  is  approved  by  the  Administrative  Agent  and  the
         Borrower,  such  approval not to be  unreasonably  withheld or delayed;
         provided,  however,  that neither any Loan Party nor any Affiliate of a
         Loan Party shall qualify as an Eligible Assignee under this definition.

                  "Eligible Collateral" means, collectively,  Eligible Inventory
         and Eligible Receivables.

                  "Eligible  Inventory"  means all Inventory of the Borrower and
         the  Subsidiary   Guarantors  other  than  the  following   classes  of
         Inventory:

                           (a) Inventory consisting of "perishable  agricultural
                  commodities" within the meaning of the Perishable Agricultural
                  Commodities  Act of  1930,  as  amended,  and the  regulations
                  thereunder,  or on which a Lien  has  arisen  or may  arise in
                  favor of  agricultural  producers  under  comparable  state or
                  local laws;

                                      -10-
<PAGE>

                           (b) Inventory that is obsolete, unusable or otherwise
                  unavailable for sale;

                           (c)    Inventory    with   respect   to   which   the
                  representations  and  warranties set forth in Section 8 of the
                  Security  Agreement  applicable  to Inventory are not true and
                  correct;

                           (d) Inventory  consisting of promotional,  marketing,
                  packaging or shipping materials and supplies;

                           (e)  Inventory  that  fails  to  meet  all  standards
                  imposed by any governmental  agency, or department or division
                  thereof,  having  regulatory  authority over such Inventory or
                  its use or sale;

                           (f)  Inventory  that  is  subject  to any  licensing,
                  patent, royalty,  trademark, trade name or copyright agreement
                  with any third  party  from  whom the  Borrower  has  received
                  notice of a dispute in respect of any such agreement;

                           (g) Inventory located outside the United States;

                           (h)  Inventory  that is not in the  possession  of or
                  under the sole control of the Borrower or a Subsidiary  (other
                  than Inventory in transit);

                           (i) Inventory consisting of work in progress; and

                           (j)  Inventory  in  respect  of  which  the  Security
                  Agreement,  after  giving  effect to the  related  filings  of
                  financing  statements  that have then been made,  if any, does
                  not or has  ceased  to  create  a valid  and  perfected  first
                  priority  lien or  security  interest  in favor of the  Lender
                  Parties securing the Secured Obligations.

                  "Eligible  Receivables"  means all Receivables of the Borrower
         and the  Subsidiary  Guarantors  other  than the  following  classes of
         Receivables:

                           (a)  Receivables  that do not  arise  out of sales of
                  goods or rendering  of services in the ordinary  course of the
                  Borrower's business;

                           (b)  Receivables  on terms other than those normal or
                  customary in the Borrower's business;

                           (c)  Receivables  owing  from any  Person  that is an
                  Affiliate of the Borrower;

                           (d)  Receivables  more  than  90 days  past  original
                  invoice date or more than 60 days past the date due;

                           (e)  Receivables  owing from any Person  that (i) has
                  disputed  liability for any Receivable  owing from such Person
                  or (ii) has otherwise asserted any claim, demand or liability,
                  whether by action, suit, counterclaim or otherwise;

                                      -11-
<PAGE>

                           (f) Receivables owing from any Person that shall take
                  or be  the  subject  of any  action  or  proceeding  of a type
                  described in Section 6.01(f);

                           (g)  Receivables  (i) owing from any  Person  that is
                  also a  supplier  to or  creditor  of  the  Borrower  or  (ii)
                  representing  any   manufacturer's   or  supplier's   credits,
                  discounts,  incentive plans or similar arrangements  entitling
                  the Borrower to discounts on future purchase therefrom;

                           (h)  Receivables  arising  out of  sales  to  account
                  debtors outside the United States;

                           (i)   Receivables   arising   out  of   sales   on  a
                  bill-and-hold,   guaranteed  sale,  sale-or-return,   sale  on
                  approval  or  consignment  basis or  subject  to any  right of
                  return,  set-off or charge-back  out of the ordinary course of
                  business;

                           (j) Receivables  owing from an account debtor that is
                  an agency,  department or instrumentality of the United States
                  or any State thereof; and

                           (k)  Receivables  in  respect  of which the  Security
                  Agreement,  after  giving  effect to the  related  filings  of
                  financing  statements  that have then been made,  if any, does
                  not or has  ceased  to  create  a valid  and  perfected  first
                  priority  lien or  security  interest  in favor of the  Lender
                  Parties securing the Secured Obligations.

                  "Employment Agreements" means each of the agreements, dated on
         or about May 7, 1999, among the Borrower, Holding, and each of David E.
         Enos, G. Dean Longnecker,  James T. McKitrick,  Denny Starr and John R.
         Pearson.

                  "Environmental  Action" means any action, suit, demand, demand
         letter,  claim,  notice  of  non-compliance  or  violation,  notice  of
         liability or potential liability,  investigation,  proceeding,  consent
         order or consent  agreement  relating  in any way to any  Environmental
         Law, any Environmental Permit or Hazardous Material, including, without
         limitation,  (a)  by  any  governmental  or  regulatory  authority  for
         enforcement,  cleanup, removal, response,  remedial or other actions or
         damages and (b) by any  governmental  or regulatory  authority or third
         party  for  damages,  contribution,   indemnification,  cost  recovery,
         compensation or injunctive relief.

                  "Environmental Law" means any federal, state, local or foreign
         statute, law, ordinance, rule, regulation, code, order, writ, judgment,
         injunction,  decree or legally  binding  and  enforceable  judicial  or
         agency interpretation, policy or guidance that has the force and effect
         of law relating to pollution or protection of the  environment,  public
         or employee health and safety or natural resources,  including, without
         limitation,  those  relating  to  the  use,  handling,  transportation,
         treatment,   storage,  disposal,  release  or  discharge  of  Hazardous
         Materials.

                  "Environmental    Permit"   means   any   permit,    approval,
         identification  number,  license or other authorization  required under
         any Environmental Law.

                                      -12-
<PAGE>

                  "Equity  Investors"  means J.W.  Childs and its Affiliates and
         co-investors,  Fenway  Partners  Capital Fund, L.P. and its Affiliates,
         Fleet Equity Partners and its Affiliates,  and  stockholders of Holding
         following the Merger that are parties to the Stockholders Agreement.

                  "ERISA" means the Employee  Retirement  Income Security Act of
         1974, as amended from time to time, and the regulations promulgated and
         rulings issued thereunder.

                  "ERISA  Affiliate" means any Person that for purposes of Title
         IV of ERISA is a member of the controlled  group of any Loan Party,  or
         under common control with any Loan Party, within the meaning of Section
         414 of the Internal Revenue Code.

                  "ERISA  Event"  means (a) (i) the  occurrence  of a reportable
         event, within the meaning of Section 4043 of ERISA, with respect to any
         Plan unless the 30-day  notice  requirement  with respect to such event
         has been waived by the PBGC, or (ii) the requirements of subsection (1)
         of Section  4043(b) of ERISA (without  regard to subsection (2) of such
         Section) are met with respect to a contributing  sponsor, as defined in
         Section  4001(a)(13)  of ERISA,  of a Plan,  and an event  described in
         paragraph (9), (10),  (11), (12) or (13) of Section 4043(c) of ERISA is
         reasonably  expected  to occur  with  respect  to such Plan  within the
         following 30 days;  (b) the  application  for a minimum  funding waiver
         with respect to a Plan; (c) the provision by the  administrator  of any
         Plan of a notice of intent to terminate such Plan,  pursuant to Section
         4041(a)(2) of ERISA  (including  any such notice with respect to a plan
         amendment  referred to in Section 4041(e) of ERISA);  (d) the cessation
         of operations at a facility of any Loan Party or any ERISA Affiliate in
         the  circumstances  described  in  Section  4062(e)  of ERISA;  (e) the
         withdrawal  by any Loan  Party or any ERISA  Affiliate  from a Multiple
         Employer  Plan  during  a plan  year  for  which  it was a  substantial
         employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions
         for  imposition of a lien under Section 302(f) of ERISA shall have been
         met with  respect to any Plan;  (g) the  adoption of an  amendment to a
         Plan  requiring  the  provision  of security  to such Plan  pursuant to
         Section 307 of ERISA; or (h) the institution by the PBGC of proceedings
         to  terminate  a  Plan  pursuant  to  Section  4042  of  ERISA,  or the
         occurrence of any event or condition described in Section 4042 of ERISA
         that constitutes  grounds for the termination of, or the appointment of
         a  trustee  to  administer,  such  Plan;  provided,  however,  that the
         occurrence of the event or condition described in Section 4042(a)(4) of
         ERISA  shall be an ERISA Event only if the PBGC has  notified  any Loan
         Party or any ERISA  Affiliate  in writing  that it intends to institute
         proceedings  to  terminate  a Plan  pursuant  to  such  section  or has
         threatened in writing to do so.

                  "Eurocurrency   Liabilities"  has  the  meaning  specified  in
         Regulation D of the Board of Governors of the Federal  Reserve  System,
         as in effect from time to time.

                  "Eurodollar  Lending Office" means, with respect to any Lender
         Party,  the office of such Lender Party  specified  as its  "Eurodollar
         Lending  Office"  opposite  its name on  Schedule  I  hereto  or in the
         Assignment  and  Acceptance  pursuant to which it became a Lender Party
         (or, if no such office is specified,  its Domestic Lending Office),  or
         such other  office of such Lender  Party as such Lender  Party may from
         time to time specify to the Borrower and the Administrative Agent.

                                      -13-
<PAGE>

                  "Eurodollar  Rate"  means,  for any  Interest  Period  for all
         Eurodollar  Rate Advances  comprising  part of the same  Borrowing,  an
         interest rate per annum (rounded upward,  if necessary,  to the nearest
         1/32 of one percent) as  determined  on the basis of the offered  rates
         for deposits in U.S.  dollars,  for a period of time comparable to such
         Interest  Period which  appears on the  Telerate  Page 3750 as of 11:00
         A.M.  (London  time) two  Business  Days  before  the first day of such
         Interest Period,  provided,  however,  that if the rate described above
         does not  appear  on the  Telerate  System on any  applicable  interest
         determination  date,  the  Eurodollar  Rate shall be the rate  (rounded
         upward as described  above, if necessary) for deposits in dollars for a
         period  substantially  equal to the interest period on the Reuters Page
         "LIBO" (or such other page as may replace the LIBO page on that service
         for the purpose of  displaying  such rates),  as of 11:00 A.M.  (London
         time) two Business Days before the first day of such Interest Period.

                  If both the Telerate and Reuters system are unavailable,  then
         the rate for that date will be  determined  on the basis of the offered
         rates for deposits in U.S.  dollars for a period of time  comparable to
         such  Interest  Period  which are  offered by four  major  banks in the
         London interbank  market at approximately  11:00 A.M. (London time) two
         Business Days before the first day of such Interest  Period as selected
         by the Administrative Agent. The principal London office of each of the
         four major London banks will be requested to provide a quotation of its
         U.S.  dollar deposit  offered rate. If at least two such quotations are
         provided,  the rate for that  date will be the  arithmetic  mean of the
         quotations. If fewer than two quotations are provided as requested, the
         rate for that date will be  determined on the basis of the rates quoted
         for loans in U.S.  dollars  to leading  European  banks for a period of
         time  comparable to such Interest  Period offered by major banks in New
         York City at approximately 11:00 A.M. (New York City time) two Business
         Days before the first day of such  Interest  Period.  In the event that
         the  Administrative  Agent is unable to obtain  any such  quotation  as
         provided  above,  it will be deemed that the  Eurodollar  Rate for such
         Interest Rate cannot be determined.

                  In the  event  that the  Board  of  Governors  of the  Federal
         Reserve System shall impose a Eurodollar  Rate Reserve  Percentage with
         respect  to  Eurocurrency  Liabilities,  the  Eurodollar  Rate  for  an
         Interest Period shall be equal to the amount  determined above for such
         Interest  Period  divided  by a  percentage  equal  to 100%  minus  the
         Eurodollar Rate Reserve Percentage for such Interest Period.

                  "Eurodollar Rate Advance" means an Advance that bears interest
         as provided in Section 2.07(a)(ii).

                  "Eurodollar  Rate Reserve  Percentage" for any Interest Period
         for all Eurodollar Rate Advances  comprising part of the same Borrowing
         means the reserve  percentage  applicable  two Business Days before the
         first day of such Interest Period under regulations issued from time to
         time by the Board of  Governors of the Federal  Reserve  System (or any
         successor) for determining the maximum reserve requirement  (including,
         without  limitation,  any  emergency,  supplemental  or other  marginal
         reserve requirement) for a member bank of the Federal Reserve System in


                                      -14-
<PAGE>

         New York City with respect to  liabilities  or assets  consisting of or
         including  Eurocurrency  Liabilities  (or  with  respect  to any  other
         category of  liabilities  that includes  deposits by reference to which
         the interest rate on Eurodollar  Rate Advances is determined)  having a
         term equal to such Interest Period.

                  "Events of Default" has the meaning specified in Section 6.01.

                  "Excess Cash Flow" means, for any period,  the amount by which
         (a) the sum of (i) Consolidated net income (or loss) of Holding and its
         Subsidiaries  for such  period  plus (ii) the  aggregate  amount of all
         non-cash charges  deducted in arriving at such  Consolidated net income
         (or  loss)  plus  (iii) if there  was a net  increase  in  Consolidated
         Current Liabilities of Holding and its Subsidiaries during such period,
         the amount of such net  increase  plus (iv) if there was a net decrease
         in Consolidated Current Assets (excluding cash and Cash Equivalents) of
         Holding and its Subsidiaries during such period, the amount of such net
         decrease less (v) the aggregate amount of all non-cash credits included
         in  arriving  at such  Consolidated  net  income (or loss) less (vi) if
         there was a net decrease in Consolidated Current Liabilities of Holding
         and its  Subsidiaries  during  such  period,  the  amount  of such  net
         decrease less (vii) if there was a net increase in Consolidated Current
         Assets  (excluding  cash  and  Cash  Equivalents)  of  Holding  and its
         Subsidiaries  during such period,  the amount of such net increase less
         (viii)  the   aggregate   amount  of  cash  paid  by  Holding  and  its
         Subsidiaries in respect of Capital  Expenditures  during such period or
         committed  during  such  period  to  be  paid  in  respect  of  Capital
         Expenditures (so long as such commitment is required to be funded on or
         prior to the date which is six months following the end of such period)
         less (ix) to the extent not otherwise  excluded from the calculation of
         Excess Cash Flow for such period,  an amount equal to the net gain,  if
         any,  attributable to the sale,  lease,  transfer or any disposition of
         property  and assets of Holding and its  Subsidiaries  and  included in
         determining the consolidated net income of Holding and its Subsidiaries
         for such period less (x) without  duplication,  the aggregate amount of
         all cash  payments made by Holding and its  Subsidiaries  in respect of
         the  permanent  reduction  of Debt (of the type  referred to in clauses
         (a), (b), (c), (d), (e), (f) and (g) of the definition  thereof) during
         such period exceeds (b) $4,000,000;  provided, however, that the amount
         of Capital  Expenditures  deducted  pursuant to clause (viii) shall not
         include any amounts  deducted in the calculation of Excess Cash Flow in
         the prior period.

                  "Existing Credit  Agreement" has the meaning  specified in the
         Preliminary Statements.

                  "Existing  Debt" means Debt of the  Borrower,  the Company and
         their respective  Subsidiaries  outstanding immediately before the date
         hereof.

                  "Existing   Lenders"   has  the  meaning   specified   in  the
         Preliminary Statements.

                  "Extension  of Credit"  means a Borrowing  or an issuance of a
         Letter of Credit hereunder.

                                      -15-
<PAGE>

                  "Extraordinary  Receipt" means any cash received by or paid to
         or for  the  account  of any  Person  not in  the  ordinary  course  of
         business,  including,  without  limitation,  tax refunds,  pension plan
         reversions,  proceeds of  insurance  (other  than  proceeds of business
         interruption   insurance  to  the  extent  such   proceeds   constitute
         compensation for lost earnings),  condemnation  awards (and payments in
         lieu  thereof) and  indemnity  payments in respect of loss or damage to
         equipment,  fixed assets or real property;  provided,  however, that an
         Extraordinary Receipt shall not include (a) cash receipts received from
         proceeds  of  insurance,  condemnation  awards  (or  payments  in  lieu
         thereof) or indemnity payments to the extent that such proceeds, awards
         or payments in respect of loss or damage to equipment,  fixed assets or
         real property are reinvested (or in respect of which  expenditures were
         previously   incurred)   in  the  business  of  the  Borrower  and  its
         Subsidiaries,  so long as such  reinvestment  is made  within 15 months
         after  the  receipt  of  such  Extraordinary  Receipts  or (b)  amounts
         received by any Person in respect of any third party claim against such
         Person and  applied to pay (or to  reimburse  such Person for its prior
         payment  of) such claim and the costs and  expenses of such Person with
         respect thereto.

                  "Facility"  means the Tranche A Term  Facility,  the Tranche B
         Term Facility,  the Revolving Credit Facility,  the Swing Line Facility
         or the Letter of Credit Facility.

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

                  "Fenway Management  Agreement" means the Consulting  Agreement
         dated as of July 3, 1997  between  the  Borrower,  Holding  and  Fenway
         Partners,  Inc.  as the  same may be  amended,  modified  or  otherwise
         supplemented  from time to time in  accordance  with the  provisions of
         this Agreement.

                  "Fiscal  Year"  means,   for  Holding  and  its   Consolidated
         Subsidiaries,  (i) the fiscal  year  ending in October  1998,  (ii) the
         fiscal year ending in January  2000 and (iii)  thereafter,  each fiscal
         year ending in January or February of any calendar year.

                  "Fixed  Charge   Coverage   Ratio"  means,   at  any  date  of
         determination,  the ratio of (a) (i)  Consolidated  EBITDA for the most
         recently  completed four fiscal quarters of Holding or its Subsidiaries
         less (ii) the amount of cash Capital  Expenditures  made by Holding and
         its  Subsidiaries  during such  fiscal  period less (iii) the amount of
         cash income taxes paid by Holding and its Subsidiaries during such four
         fiscal  quarter  period to (b) the sum of (i) cash interest  payable on
         all Debt for Borrowed Money plus (ii) principal amounts of all Debt for
         Borrowed  Money  required to be repaid (in the case of  Advances  other
         than Advances under the Term Facilities, only to the extent accompanied

                                      -16-
<PAGE>

         by a permanent  reduction in the related  Commitments),  in the case of
         each item specified in this clause (b), by Holding and its Subsidiaries
         during such four fiscal quarters;  provided, however, that if such four
         fiscal quarter period includes any or all of the fiscal quarters ending
         on July 31, 1999, October 31, 1999, or January 31, 2000, (x) the amount
         referred to in clause  (b)(i) shall be the actual amount for the fiscal
         quarters  ended after the Closing  Date  multiplied  by a fraction  the
         numerator of which is four and the  denominator  of which is the number
         of fiscal quarters that have elapsed since the Closing Date and (y) the
         amount referred to in clause (b)(ii) shall be $6,200,000.

                  "GAAP" has the meaning specified in Section 1.03.

                  "Guaranty" has the meaning specified in Section 8.01.

                  "Hazardous   Materials"   means  (a)  petroleum  or  petroleum
         products,   radioactive   materials,   asbestos-containing   materials,
         polychlorinated  biphenyls  and radon gas and (b) any other  chemicals,
         materials or substances designated or classified as hazardous or toxic,
         regulated under, any Environmental Law.

                  "Hedge  Agreements"  means  interest rate swap,  cap or collar
         agreements,  interest  rate future or option  contracts,  currency swap
         agreements,  currency  future or  option  contracts  and other  similar
         agreements.

                  "Hedge  Bank"  means any  Lender  Party or an  Affiliate  of a
         Lender Party in its capacity as a party to a Secured Hedge Agreement.

                  "Holding" has the meaning  specified in the recital of parties
         hereto.

                  "Indemnified  Party"  has the  meaning  specified  in  Section
         8.04(b).

                  "Initial Issuing Bank" means Fleet.

                  "Initial  Lenders" has the meaning specified in the recital of
         parties to this Agreement.

                  "Insufficiency"  means,  with respect to any Plan, the amount,
         if any,  of its  unfunded  benefit  liabilities,  as defined in Section
         4001(a)(18) of ERISA.

                  "Interest  Period"  means,  for each  Eurodollar  Rate Advance
         comprising  part of the same  Borrowing,  the period  commencing on the
         date of such  Eurodollar  Rate Advance or the date of the Conversion of
         any Prime Rate Advance into such Eurodollar Rate Advance, and ending on
         the last day of the period  selected  by the  Borrower  pursuant to the
         provisions below and, thereafter,  each subsequent period commencing on
         the last day of the immediately preceding Interest Period and ending on
         the last day of the period  selected  by the  Borrower  pursuant to the
         provisions  below.  The duration of each such Interest  Period shall be
         one,  two,  three or six  months  (or,  to the extent  permitted  under
         Section  2.02(c),  one week), as the Borrower may, upon notice received
         by  the  Administrative  Agent  not  later  than  11:00  A.M.  (Boston,
         Massachusetts) on the third Business Day prior to the first day of such
         Interest Period, select; provided, however, that:

                                      -17-
<PAGE>

                           (a) the Borrower  may not select any Interest  Period
                  with respect to any  Eurodollar  Rate Advance under a Facility
                  that ends after any principal  repayment  installment date for
                  such Facility  unless,  after giving effect to such selection,
                  the aggregate  principal  amount of Prime Rate Advances and of
                  Eurodollar Rate Advances  having Interest  Periods that end on
                  or prior to such principal repayment installment date for such
                  Facility  shall be at least equal to the  aggregate  principal
                  amount of Advances  under such  Facility due and payable on or
                  prior to such date;

                           (b) Interest Periods  commencing on the same date for
                  Eurodollar Rate Advances comprising part of the same Borrowing
                  shall be of the same duration;

                           (c)  whenever  the  last day of any  Interest  Period
                  would  otherwise occur on a day other than a Business Day, the
                  last day of such Interest Period shall be extended to occur on
                  the next succeeding Business Day, provided,  however, that, if
                  such  extension  would  cause  the last  day of such  Interest
                  Period to occur in the next following calendar month, the last
                  day of such Interest  Period shall occur on the next preceding
                  Business Day; and

                           (d)  whenever  the first day of any  Interest  Period
                  occurs on a day of an initial  calendar  month for which there
                  is no numerically corresponding day in the calendar month that
                  succeeds such initial  calendar  month by the number of months
                  equal to the number of months in such  Interest  Period,  such
                  Interest  Period  shall end on the last  Business  Day of such
                  succeeding calendar month.

                  "Internal  Revenue  Code" means the  Internal  Revenue Code of
         1986, as amended from time to time, and the regulations promulgated and
         rulings issued thereunder.

                  "Inventory" means all Inventory referred to in Section 1(b) of
         the Security Agreement.

                  "Investment"  in any Person  means any loan or advance to such
         Person, any purchase or other acquisition of any capital stock or other
         ownership or profit interest, warrants, rights, options, obligations or
         other  securities  of such  Person,  any capital  contribution  to such
         Person or any  other  investment  in such  Person,  including,  without
         limitation,  any arrangement pursuant to which the investor incurs Debt
         of the types  referred  to in clause  (i) or (j) of the  definition  of
         "Debt" in respect of such Person.

                  "Issuing  Bank"  means  the  Initial  Issuing  Bank  and  each
         Eligible  Assignee to which the Letter of Credit  Commitment  hereunder
         has been assigned pursuant to Section 9.07.

                  "J.W. Childs" means J.W. Childs Equity Partners, L.P.

                  "L/C Cash Collateral Account" has the meaning specified in the
         Security Agreement.

                  "L/C Related  Documents" has the meaning  specified in Section
         2.04(e)(ii).

                                      -18-
<PAGE>

                  "Lender Party" means any Lender, the Issuing Bank or the Swing
         Line Bank.

                  "Lenders" means the Initial Lenders and each Person that shall
         become a Lender hereunder pursuant to Section 9.07.

                  "Letter  of  Credit"  has the  meaning  specified  in  Section
         2.01(e).

                  "Letter  of  Credit  Advance"  means  an  advance  made by the
         Issuing  Bank  or any  Revolving  Credit  Lender  pursuant  to  Section
         2.03(c).

                  "Letter of Credit  Agreement"  has the  meaning  specified  in
         Section 2.03(a).

                  "Letter  of Credit  Commitment"  means,  with  respect  to the
         Issuing  Bank at any time,  the amount set forth  opposite  the Issuing
         Bank's  name on Schedule I hereto  under the caption  "Letter of Credit
         Commitment"  or,  if the  Issuing  Bank  has  entered  into one or more
         Assignments  and  Acceptances,  set forth for the  Issuing  Bank in the
         Register  maintained by the  Administrative  Agent  pursuant to Section
         9.07(d) as the Issuing  Bank's "Letter of Credit  Commitment",  as such
         amount  may be  reduced  at or prior to such time  pursuant  to Section
         2.05.

                  "Letter  of Credit  Facility"  means,  at any time,  an amount
         equal to the amount of the Issuing  Bank's Letter of Credit  Commitment
         at such  time,  as such  amount may be reduced at or prior to such time
         pursuant to Section 2.05.

                  "Lien"  means any lien,  security  interest or other charge or
         encumbrance of any kind, or any other type of preferential arrangement,
         including, without limitation, the lien or retained security title of a
         conditional vendor and any easement,  right of way or other encumbrance
         on title to real property.

                  "Loan  Documents" means (a) for purposes of this Agreement and
         the Notes and any amendment or  modification  hereof or thereof and for
         all other purposes other than for purposes of the Collateral Documents,
         (i) this  Agreement,  (ii) the Notes,  (iii) the Collateral  Documents,
         (iv) each Letter of Credit  Agreement and (v) the  Subsidiary  Guaranty
         and (b) for purposes of the Collateral  Documents,  (i) this Agreement,
         (ii) the Notes,  (iii) the  Collateral  Documents,  (iv) each Letter of
         Credit  Agreement,  (v)  each  Secured  Hedge  Agreement,  and (vi) the
         Subsidiary Guaranty, in each case as amended or otherwise modified from
         time to time.

                  "Loan Parties" means the Borrower, Holding and each Subsidiary
         Guarantor.

                  "Loan  Value"   means,   with  respect  to  (i)  any  Eligible
         Inventory,  65% of the value of such  Eligible  Inventory  and (ii) any
         Eligible  Receivable,  80% of the unpaid face  amount of such  Eligible
         Receivable.

                  "Margin Stock" has the meaning specified in Regulation U.

                                      -19-
<PAGE>

                  "Material Adverse Change" means any material adverse change in
         the  business,   condition   (financial  or   otherwise),   operations,
         performance,  properties  or  prospects  of the Borrower or Holding and
         their respective Subsidiaries, in each case taken as a whole.

                  "Material  Adverse Effect" means a material  adverse effect on
         (a) the  business,  condition  (financial  or  otherwise),  operations,
         performance,  properties  or  prospects  of the Borrower or Holding and
         their respective  Subsidiaries,  in each case taken as a whole, (b) the
         rights and  remedies of the  Administrative  Agent or any Lender  Party
         under any Loan  Document or (c) the ability of the Loan Parties  (taken
         as a whole) to perform their Obligations under the Loan Documents.

                  "Material  Contract"  means,  with  respect to any Loan Party,
         each  contract  to which  such  Person is a party  involving  aggregate
         consideration  payable to or by such Person of  $10,000,000  or more in
         any year or otherwise material to the business, condition (financial or
         otherwise),  operations,  performance,  properties  or prospects of the
         Loan Parties taken as a whole.

                  "Merger"  has  the  meaning   specified  in  the   Preliminary
         Statements.

                  "Merger   Agreement"   has  the  meaning   specified   in  the
         Preliminary Statements.

                  "Mortgage" has the meaning specified in Section 5.01(n).

                  "Multiemployer Plan" means a multiemployer plan, as defined in
         Section  4001(a)(3)  of  ERISA,  to which  any Loan  Party or any ERISA
         Affiliate is making or accruing an obligation to make contributions, or
         has  within  any of the  preceding  five plan  years made or accrued an
         obligation to make contributions.

                  "Multiple  Employer  Plan" means a single  employer  plan,  as
         defined in Section  4001(a)(15)  of ERISA,  that (a) is maintained  for
         employees  of any Loan  Party or any ERISA  Affiliate  and at least one
         Person other than the Loan Parties and the ERISA  Affiliates or (b) was
         so  maintained  and in  respect  of which  any Loan  Party or any ERISA
         Affiliate  could have liability  under Section 4064 or 4069 of ERISA in
         the event such plan has been or were to be terminated.

                  "Net Cash Proceeds"  means,  with respect to any sale,  lease,
         transfer or other  disposition  of any asset or the sale or issuance of
         any Debt or capital stock or other  ownership or profit  interest,  any
         securities  convertible into or exchangeable for capital stock or other
         ownership or profit interest or any warrants,  rights, options or other
         securities  to  acquire  capital  stock or other  ownership  or  profit
         interest by any Person,  or any  Extraordinary  Receipt  received by or
         paid to or for the account of any Person,  the aggregate amount of cash
         received from time to time (whether as initial consideration or through
         payment or  disposition of deferred  consideration)  by or on behalf of
         such  Person  in  connection  with  such  transaction  after  deducting
         therefrom  only  (without  duplication)  (a)  reasonable  and customary
         brokerage  commissions,  underwriting  fees and discounts,  legal fees,
         finder's fees and other similar fees and  commissions,  in each case to
         the extent,  but only to the extent,  that the amounts so deducted are,
         actually  paid (or  required  to be  paid)  to a Person  that is not an
         Affiliate of such Person or any Loan Party or any Affiliate of any Loan

                                      -20-
<PAGE>

         Party,  (b) any Debt  permitted by Section  5.02(b)(iv)  and secured by
         assets being sold in such  transaction that is required to be paid from
         such proceeds,  and (c) income taxes that, as estimated by the Borrower
         in good  faith,  will be required  to be paid by the  Borrower  and its
         Subsidiaries  in cash as a result of, and within 15 months after,  such
         sale or disposition, in each case specified in clauses (a), (b) and (c)
         to the extent, but only to the extent, that the amounts so deducted are
         properly  attributable to such  transaction or to the asset that is the
         subject  thereof  and (d) in the case of any lease that is a  sublease,
         any rentals payable under the prime lease; provided,  however, that Net
         Cash Proceeds from the sale,  lease,  transfer or other  disposition of
         any asset shall not include any amount of cash  proceeds  reinvested in
         the  business of the  Borrower  and its  Subsidiaries,  so long as such
         reinvestment  is made  within 15 months  after the  receipt of such Net
         Cash Proceeds.

                  "Nonratable  Assignment" means an assignment by a Lender Party
         pursuant to Section  9.07(a) of a portion of its rights and obligations
         under this Agreement,  other than an assignment of a uniform, and not a
         varying, percentage of all of the rights and obligations of such Lender
         Party  under and in respect of all of the  Facilities  (other  than the
         Letter of Credit Facility and the Swing Line Facility).

                  "Note" means a Tranche A Term Note, a Tranche B Term Note or a
         Revolving Credit Note.

                  "Notice of  Borrowing"  has the meaning  specified  in Section
         2.02(a).

                  "Notice of  Issuance"  has the  meaning  specified  in Section
         2.03(a).

                  "Notice  of  Renewal"  has the  meaning  specified  in Section
         2.01(d).

                  "Notice of Swing Line Borrowing" has the meaning  specified in
         Section 2.02(b).

                  "Notice of Termination"  has the meaning  specified in Section
         2.01(d).

                  "NPL" means the National Priorities List under CERCLA.

                  "Obligation"  means, with respect to any Person,  any payment,
         performance or other obligation of such Person of any kind,  including,
         without limitation,  any liability of such Person on any claim, whether
         or not the right of any creditor to payment in respect of such claim is
         reduced  to  judgment,  liquidated,  unliquidated,  fixed,  contingent,
         matured, disputed,  undisputed, legal, equitable, secured or unsecured,
         and  whether  or not such  claim is  discharged,  stayed  or  otherwise
         affected  by any  proceeding  referred to in Section  6.01(f).  Without
         limiting the generality of the foregoing,  the  Obligations of the Loan
         Parties  under the Loan  Documents  include (a) the  obligation  to pay
         principal,  interest, Letter of Credit commissions,  charges, expenses,
         fees, attorneys' fees and disbursements,  indemnities and other amounts
         payable  by any  Loan  Party  under  any  Loan  Document  and  (b)  the
         obligation  of any Loan Party to reimburse any amount in respect of any
         of the foregoing  that any Lender Party,  in its sole  discretion,  may
         elect to pay or advance on behalf of such Loan Party.

                                      -21-
<PAGE>

                  "OECD" means the  Organization  for Economic  Cooperation  and
         Development.

                  "Open Year"  means a taxable  year of any Loan Party or any of
         its  Subsidiaries  or Affiliates  for which Federal  income tax returns
         have been filed and for which the applicable statute of limitations for
         assessment  or  collection  has not  occurred by reason of extension or
         otherwise.

                  "Other Taxes" has the meaning specified in Section 2.12(b).

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

                  "Permanent  Debt" means the  $105,000,000  original  principal
         amount of 10-N% Senior Notes due 2007 issued by the Borrower.

                  "Permanent   Debt   Documents"   means  the   agreements   and
         instruments  which govern the terms of the Permanent  Debt, as the same
         may be amended, modified or otherwise supplemented from time to time in
         accordance with the provisions of this Agreement.

                  "Permitted  Liens" means such of the  following as to which no
         enforcement,  collection,  execution,  levy or  foreclosure  proceeding
         shall  have  been  commenced:  (a)  Liens for  taxes,  assessments  and
         governmental  charges or levies to the extent not  required  to be paid
         under  Section  5.01(b)  hereof;  (b)  Liens  imposed  by law,  such as
         materialmen's,  mechanics',  carriers', workmen's and repairmen's Liens
         and other similar Liens arising in the ordinary course of business,  in
         each case (i) in existence  less than 90 days from the date of creation
         thereof or (ii) being  contested  in good faith by the  Borrower or any
         Subsidiary in appropriate  proceedings (so long as the Borrower or such
         Subsidiary  shall, in accordance with GAAP, have set aside on its books
         adequate reserves with respect  thereto);  (c) deposits or pledges made
         in the ordinary course of business (i) in connection with, or to secure
         payment of,  workers'  compensation,  unemployment  insurance,  old age
         pensions or other social  security,  (ii) in  connection  with casualty
         insurance  maintained  in  accordance  with the  provisions of any Loan
         Document,  (iii) to secure the performance of bids,  tenders or leases,
         (iv) to secure  statutory  obligations or surety or appeal bonds or (v)
         to secure indemnity, performance or other similar bonds in the ordinary
         course of business;  (d) any interest or title of a lessor or sublessor
         and any  restriction  or  encumbrance to which the interest or title of
         such  lessor  or  sublessor  may be  subject  that is  incurred  in the
         ordinary course of business and, either individually or when aggregated
         with all other Permitted Liens in effect on the date of  determination,
         could not be reasonably expected to have a Material Adverse Affect; (e)
         Liens in favor of customs and revenue  authorities  arising as a matter
         of law or  pursuant  to a bond to secure  payment of customs  duties in
         connection  with the  importation  of goods;  (f) Liens  arising out of
         judgments  or awards  that do not  constitute  events of default  under
         Section  6.01(g)  or (h),  and (g)  easements,  rights of way and other
         encumbrances  on title to real property that do not render title to the
         property encumbered thereby unmarketable or materially adversely affect
         the use of such property for its present purposes.

                                      -22-
<PAGE>

                  "Person"   means  an  individual,   partnership,   corporation
         (including a business trust),  limited liability  company,  joint stock
         company,  trust,  unincorporated  association,  joint  venture or other
         entity, or a government or any political subdivision or agency thereof.

                  "Plan"  means a Single  Employer  Plan or a Multiple  Employer
         Plan.

                  "Pledge  Agreement"  has  the  meaning  specified  in  Section
         3.01(n)(ix).

                  "Preferred  Stock"  means,  with  respect to any  corporation,
         capital  stock  issued  by  such  corporation  that  is  entitled  to a
         preference  or priority  over any other  capital  stock  issued by such
         corporation upon any distribution of such corporation's assets, whether
         by dividend or upon liquidation.

                  "Prepayment  Amount"  has the  meaning  specified  in  Section
         2.06(c).

                  "Prepayment   Date"  has  the  meaning  specified  in  Section
         2.06(c).

                  "Prime Rate" means a  fluctuating  interest  rate per annum in
         effect  from time to time,  which rate per annum  shall at all times be
         equal to the higher of:

                           (a) the rate of interest  announced publicly by Fleet
                  in Boston,  Massachusetts  from time to time, as Fleet's prime
                  rate; and

                           (b) 1/2 of one  percent  per annum  above the Federal
                  Funds Rate.

                  "Prime Rate Advance"  means an Advance that bears  interest as
         provided in Section 2.07(a)(i).

                  "Pro Rata  Share" of any  amount  means,  with  respect to any
         Revolving Credit Lender at any time, the product of such amount times a
         fraction  the  numerator  of  which  is the  amount  of  such  Lender's
         Revolving  Credit  Commitment at such time and the denominator of which
         is the Revolving Credit Facility at such time.

                  "Receipt Date" has the meaning specified in Section 2.06(c).

                  "Receivables"  means all  Receivables  referred  to in Section
         1(c) of the Security Agreement.

                  "Redeemable" means, with respect to any capital stock or other
         ownership or profit  interest,  Debt or other right or Obligation,  any
         such right or Obligation  that (a) the issuer has  undertaken to redeem
         on or prior to the Termination Date at a fixed or determinable  date or
         dates, whether by operation of a sinking fund or otherwise, or upon the
         occurrence  of a condition  not solely within the control of the issuer
         or (b) is  redeemable  at the  option  of the  holder  (other  than  as
         provided in the  Stockholders  Agreement or an  Employment  Agreement);
         provided,  however,  that the term  "Redeemable"  shall not include any
         such right or Obligation  that is redeemable  solely by being exchanged
         for common stock of the issuer.

                                      -23-
<PAGE>

                  "Register" has the meaning specified in Section 9.07(d).

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

                  "Related   Documents"   means  the   Merger   Agreement,   the
         Stockholders  Agreement,  the Childs Management  Agreement,  the Fenway
         Management Agreement,  the Employment Agreements and the Permanent Debt
         Documents.

                  "Required  Lenders"  means at any time Lenders owed or holding
         at  least a  majority  in  interest  of the  sum of (a)  the  aggregate
         principal  amount of the  Advances  outstanding  at such time,  (b) the
         aggregate Available Amount of all Letters of Credit outstanding at such
         time,  (c) the aggregate  unused  Commitments  under the Tranche A Term
         Facility at such time, (d) the aggregate unused  Commitments  under the
         Tranche B Term Facility,  and (e) the aggregate Unused Revolving Credit
         Commitments at such time; provided,  however,  that if any Lender shall
         be a Defaulting  Lender at such time,  there shall be excluded from the
         determination  of  Required  Lenders  at such  time  (A) the  aggregate
         principal  amount of the Advances owing to such Lender (in its capacity
         as a Lender) and  outstanding  at such time, (B) such Lender's Pro Rata
         Share of the aggregate Available Amount of all Letters of Credit issued
         by such  Lender  and  outstanding  at such time,  (C) the  unused  Term
         Commitments  of such  Lender at such time and (D) the Unused  Revolving
         Credit  Commitment  of such Lender at such time.  For  purposes of this
         definition, the aggregate principal amount of Swing Line Advances owing
         to the Swing  Line Bank and of Letter of Credit  Advances  owing to the
         Issuing Bank and the Available Amount of each Letter of Credit shall be
         considered to be owed to the Lenders  ratably in accordance  with their
         respective Revolving Credit Commitments.

                  "Responsible  Officer" means any executive officer of any Loan
         Party or any of its Subsidiaries.

                  "Revolving  Credit  Advance"  has  the  meaning  specified  in
         Section 2.01(c).

                  "Revolving Credit  Borrowing" means a borrowing  consisting of
         simultaneous  Revolving  Credit  Advances  of the same Type made by the
         Revolving Credit Lenders.

                  "Revolving  Credit  Commitment"  means,  with  respect  to any
         Revolving Credit Lender at any time, the amount set forth opposite such
         Lender's name on Schedule I hereto under the caption  "Revolving Credit
         Commitment" or, if such Lender has entered into one or more Assignments
         and Acceptances,  set forth for such Lender in the Register  maintained
         by the  Administrative  Agent  pursuant  to  Section  9.07(d)  as  such
         Lender's "Revolving Credit  Commitment",  as such amount may be reduced
         at or prior to such time pursuant to Section 2.05.

                  "Revolving  Credit Facility" means, at any time, the aggregate
         amount of the Lenders' Revolving Credit Commitments at such time.

                  "Revolving   Credit  Lender"  means  any  Lender  that  has  a
         Revolving Credit Commitment.

                                      -24-
<PAGE>

                  "Revolving  Credit  Note"  means  a  promissory  note  of  the
         Borrower  payable  to the  order of any  Revolving  Credit  Lender,  in
         substantially the form of Exhibit A-3 hereto,  evidencing the aggregate
         indebtedness  of  the  Borrower  to  such  Lender  resulting  from  the
         Revolving Credit Advances made by such Lender.

                  "Secured Hedge Agreements" means any Hedge Agreement  required
         or  permitted  under  Article V that is entered into by and between the
         Borrower and any Hedge Bank.

                  "Secured   Obligations"  has  the  meaning  specified  in  the
         Security Agreement.

                  "Secured Parties" means the  Administrative  Agent, the Lender
         Parties, and the Hedge Banks.

                  "Security  Agreement"  has the  meaning  specified  in Section
         3.01(n)(viii).

                  "Single  Employer  Plan"  means a  single  employer  plan,  as
         defined in Section  4001(a)(15)  of ERISA,  that (a) is maintained  for
         employees of any Loan Party or any ERISA  Affiliate and no Person other
         than the Loan Parties and the ERISA Affiliates or (b) was so maintained
         and in  respect of which any Loan  Party or any ERISA  Affiliate  could
         have  liability  under Section 4069 of ERISA in the event such plan has
         been or were to be terminated.

                  "Solvent" and "Solvency" mean, with respect to any Person on a
         particular  date,  that on such date (a) 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,
         (b) 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,  (c) such Person does not intend to, and does not believe that
         it will, incur debts or liabilities beyond such Person's ability to pay
         such debts and  liabilities  as they  mature and (d) such Person is not
         engaged in  business  or a  transaction,  and is not about to engage in
         business  or a  transaction,  for which such  Person's  property  would
         constitute  an  unreasonably  small  capital.  The amount of contingent
         liabilities  at any time shall be computed as the amount  that,  in the
         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.

                  "Standby  Letter of Credit"  means any Letter of Credit issued
         under the  Letter  of Credit  Facility,  other  than a Trade  Letter of
         Credit.

                  "Stockholders   Agreement"   means  the  QSI  Holdings,   Inc.
         Stockholders  Agreement  dated as of May 7,  1999  among  Holding,  the
         Persons listed as the "JWC Holders" on the signature pages thereof, the
         Persons listed as the "Other  Holders" on the signature  pages thereof,
         the Persons listed as the  "Management  Holders" on the signature pages
         thereof and the Persons  listed as "Quality  Holders" on the  signature
         pages  thereof,  as the  same may be  amended,  modified  or  otherwise
         supplemented  from time to time in  accordance  with the  provisions of
         this Agreement.

                                      -25-
<PAGE>

                  "Subordinated  Debt"  means any Debt of the  Borrower  that is
         subordinated  to  the  Obligations  of  the  Borrower  under  the  Loan
         Documents  on,  and  that  otherwise  contains,  terms  and  conditions
         reasonably satisfactory to the Required Lenders.

                  "Subsidiary" of any Person means any corporation, partnership,
         joint venture,  limited liability company, trust or estate of which (or
         in which) more than 50% of (a) the issued and outstanding capital stock
         having  ordinary  voting  power to  elect a  majority  of the  Board of
         Directors  of such  corporation  (irrespective  of  whether at the time
         capital stock of any other class or classes of such  corporation  shall
         or might have voting power upon the occurrence of any contingency), (b)
         the  interest  in the  capital or profits  of such  partnership,  joint
         venture or limited liability company or (c) the beneficial  interest in
         such trust or estate is at the time  directly  or  indirectly  owned or
         controlled by such Person,  by such Person and one or more of its other
         Subsidiaries or by one or more of such Person's other Subsidiaries.

                  "Subsidiary  Guarantor"  means Country  General and each other
         Subsidiary of the Borrower.

                  "Subsidiary  Guaranty"  has the  meaning  set forth in Section
         3.01(n)(x).

                  "Surviving Debt" has the meaning set forth in Section 3.01(g).

                  "Swing Line  Advance"  means an advance  made by (a) the Swing
         Line Bank  pursuant  to  Section  2.01(d) or (b) any  Revolving  Credit
         Lender pursuant to Section 2.02(b).

                  "Swing Line Bank" means Fleet.

                  "Swing Line Borrowing" means a borrowing consisting of a Swing
         Line Advance made by the Swing Line Bank.

                  "Swing Line  Facility"  has the meaning  specified  in Section
         2.01(c).

                  "Syndication  Agent" has the meaning  specified in the recital
         of parties to this Agreement.

                  "Tax   Certificate"  has  the  meaning  specified  in  Section
         5.03(o).

                  "Taxes" has the meaning specified in Section 2.12(a).

                  "Term  Facilities"  means the Tranche A Term  Facility and the
         Tranche B Term Facility.

                  "Termination Date" means the earlier of April 30, 2006 and the
         date of  termination  in whole of the Tranche A Term  Commitments,  the
         Tranche B Term  Commitments,  the Letter of Credit  Commitments and the
         Revolving Credit Commitments pursuant to Section 2.05 or 6.01.

                                      -26-
<PAGE>

                  "Trade  Letter of Credit"  means any Letter of Credit  that is
         issued  under the  Letter  of  Credit  Facility  for the  benefit  of a
         supplier of  Inventory to the  Borrower or any of its  Subsidiaries  to
         effect payment for such Inventory.

                  "Tranche A Term Advance" has the meaning  specified in Section
         2.01(a).

                  "Tranche A Term  Borrowing"  means a borrowing  consisting  of
         simultaneous  Tranche  A Term  Advances  of the same  Type  made by the
         Tranche A Term Lenders.

                  "Tranche A Term Commitment" means, with respect to any Tranche
         A Term Lender at any time,  the amount set forth opposite such Lender's
         name  on  Schedule  1(a)  hereto  under  the  caption  "Tranche  A Term
         Commitment" or, if such Lender has entered into one or more Assignments
         and Acceptances,  set forth for such Lender in the Register  maintained
         by the  Administrative  Agent  pursuant  to  Section  9.07(d)  as  such
         Lender's  "Tranche A Term Commitment," as such amount may be reduced at
         or prior to such time pursuant to Section 2.05.

                  "Tranche A Term  Facility"  means,  at any time, the aggregate
         amount of the Tranche A Term  Lenders'  Tranche A Term  Commitments  at
         such time.

                  "Tranche A Term Lender"  means any Lender that has a Tranche A
         Term Commitment.

                  "Tranche A Term Note" means a promissory  note of the Borrower
         payable to the order of any Tranche A Term Lender, in substantially the
         form of Exhibit A-1 hereto, evidencing the indebtedness of the Borrower
         to such Lender  resulting  from the Tranche A Term Advance made by such
         Lender.

                  "Tranche A Termination  Date" means the earlier of October 31,
         2004  and the  date of  termination  in  whole  of the  Tranche  A Term
         Commitments,  the Letter of Credit Commitments and the Revolving Credit
         Commitments pursuant to Section 2.05 or 6.01.

                  "Tranche B Term Advance" has the meaning  specified in Section
         2.01(b).

                  "Tranche B Term  Borrowing"  means a borrowing  consisting  of
         simultaneous  Tranche  B Term  Advances  of the same  type  made by the
         Tranche B Term Lenders.

                  "Tranche B Term Commitment" means, with respect to any Tranche
         B Term Lender at any time,  the amount set forth opposite such Lender's
         name  on  Schedule  1(b)  hereto  under  the  caption  "Tranche  B Term
         Commitment" or, if such Lender has entered into one or more Assignments
         and Acceptances,  set forth for such Lender in the Register  maintained
         by the  Administrative  Agent  pursuant  to  Section  9.07(d)  as  such
         Lender's  "Tranche B Term Commitment," as such amount may be reduced at
         or prior to such time pursuant to Section 2.05.

                  "Tranche B Term  Facility"  means,  at any time, the aggregate
         amount of the Tranche B Term  Lenders'  Tranche B Term  Commitments  at
         such time.

                                      -27-
<PAGE>

                  "Tranche B Term Lender"  means any Lender that has a Tranche B
         Term Commitment.

                  "Tranche B Term Note" means a promissory  note of the Borrower
         payable to the order of any Tranche B Term Lender, in substantially the
         form of Exhibit A-2 hereto, evidencing the indebtedness of the Borrower
         to such Lender  resulting  from the Tranche B Term Advance made by such
         Lender.

                  "Transaction"   means  the  Merger  and  the   amendment   and
         restatement of the Existing Credit Agreement.

                  "Transaction   Documents"   means,   collectively,   the  Loan
         Documents and the Related Documents.

                  "Type"  refers to the  distinction  between  Advances  bearing
         interest  at the  Prime  Rate  and  Advances  bearing  interest  at the
         Eurodollar Rate.

                  "Unused  Revolving Credit  Commitment"  means, with respect to
         any Revolving  Credit Lender at any time,  (a) such Lender's  Revolving
         Credit  Commitment  at such time minus (b) the sum of (i) the aggregate
         principal amount of all Revolving Credit Advances,  Swing Line Advances
         and Letter of Credit Advances made by such Lender (in its capacity as a
         Lender) and  outstanding at such time, plus (ii) such Lender's Pro Rata
         Share of (A) the  aggregate  Available  Amount of all Letters of Credit
         outstanding  at such time,  (B) the aggregate  principal  amount of all
         Letter of Credit  Advances made by the Issuing Bank pursuant to Section
         2.03(c) and  outstanding  at such time and (C) the aggregate  principal
         amount of all Swing Line  Advances made by the Swing Line Bank pursuant
         to Section 2.01(d) and outstanding at such time.

                  "Voting Stock" means capital stock issued by a corporation, or
         equivalent  interests  in any other  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  if the  right  so to  vote  has  been  suspended  by the
         happening of such a contingency.

                  "Welfare  Plan"  means a welfare  plan,  as defined in Section
         3(1) of ERISA, that is maintained for employees of any Loan Party or in
         respect of which any Loan Party could have liability.

                  "Withdrawal  Liability" has the meaning specified in Part I of
         Subtitle E of Title IV of ERISA.

                  SECTION 1.02.  Computation of Time Periods.  In this Agreement
in the computation of periods of time from a specified date to a later specified
date,  the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".

                  SECTION  1.03.  Accounting  Terms.  All  accounting  terms not
specifically  defined  herein shall be construed in  accordance  with  generally
accepted accounting  principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").

                                      -28-
<PAGE>

                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES
                            AND THE LETTERS OF CREDIT

                  SECTION 2.01.  The Advances.  (a) The Tranche A Term Advances.
Each  Tranche A Term  Lender  severally  agrees,  on the  terms  and  conditions
hereinafter  set forth, to make a single advance (a "Tranche A Term Advance") to
the Borrower on the date hereof in an amount not to exceed such Lender's Tranche
A Term  Commitment at such time. The Tranche A Term  Borrowing  shall consist of
Tranche A Term  Advances  made  simultaneously  by the  Tranche  A Term  Lenders
ratably  according to their Tranche A Term  Commitments.  Amounts borrowed under
this Section 2.01(a) and repaid or prepaid may not be reborrowed.

                  (b) The Tranche B Term  Advances.  Each  Tranche B Term Lender
severally  agrees,  on the term and conditions  hereinafter set forth, to make a
single  advance (a "Tranche B Term  Advance") to the Borrower on the date hereof
in an amount not to exceed such Lender's Tranche B Term Commitment at such time.
The  Tranche B Term  Borrowing  shall  consist of Tranche B Term  Advances  made
simultaneously  by the Tranche B Term Lenders ratably according to their Tranche
B Team  Commitments.  Amounts  borrowed under this Section 2.01(b) and repaid or
prepaid may not be reborrowed.

                  (c) The  Revolving  Credit  Advances.  Each  Revolving  Credit
Lender severally agrees,  on the terms and conditions  hereinafter set forth, to
make advances (each a "Revolving  Credit  Advance") to the Borrower from time to
time on any  Business  Day  during  the period  from the date  hereof  until the
Tranche A Termination Date in an amount for each such Advance not to exceed such
Lender's Unused Revolving  Credit  Commitment at such time;  provided,  however,
that Revolving  Credit Advances on the date hereof shall not exceed an aggregate
principal amount equal to $70,000,000.  Each Revolving Credit Borrowing shall be
in an  aggregate  amount of  $1,000,000  or an integral  multiple of $250,000 in
excess  thereof  (other  than a  Borrowing  the  proceeds of which shall be used
solely to repay or prepay in full outstanding Swing Line Advances or outstanding
Letter of Credit  Advances) and shall consist of Revolving  Credit Advances made
simultaneously  by the  Revolving  Credit  Lenders  ratably  according  to their
Revolving  Credit  Commitments.  Within  the  limits  of each  Revolving  Credit
Lender's  Unused  Revolving  Credit  Commitment in effect from time to time, the
Borrower  may borrow  under this  Section  2.01(c),  prepay  pursuant to Section
2.06(a) and reborrow under this Section 2.01(c).

                  (d) The Swing Line  Advances.  The  Borrower  may  request the
Swing Line Bank to make,  and the Swing Line Bank shall  make,  on the terms and
conditions  hereinafter set forth, Swing Line Advances to the Borrower from time
to time on any  Business  Day during the period from the date  hereof  until the
Tranche A Termination  Date (i) in an aggregate amount not to exceed at any time
outstanding  $10,000,000  (the "Swing Line  Facility") and (ii) in an amount for
each such  Swing  Line  Borrowing  not to exceed  the  aggregate  of the  Unused
Revolving  Credit  Commitments of the Revolving  Credit Lenders at such time. No
Swing Line  Advance  shall be used for the  purpose of  funding  the  payment of
principal of any other Swing Line Advance. Each Swing Line Borrowing shall be in

                                      -29-
<PAGE>

an amount of $250,000 or an integral  multiple of $100,000 in excess thereof and
shall be made as a Prime  Rate  Advance.  Within  the  limits of the Swing  Line
Facility  and within the limits  referred to in clause (ii) above,  the Borrower
may borrow  under this Section  2.01(d),  repay  pursuant to Section  2.04(d) or
prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(d).

                  (e) Letters of Credit.  The Issuing Bank agrees,  on the terms
and conditions  hereinafter  set forth, to issue letters of credit (the "Letters
of Credit")  for the account of the  Borrower  from time to time on any Business
Day during the period  from the date  hereof  until 30 days before the Tranche A
Termination Date (i) in an aggregate  Available Amount for all Letters of Credit
not to exceed at any time the Issuing Bank's Letter of Credit Commitment at such
time and (ii) in an  Available  Amount  for each such  Letter  of Credit  not to
exceed the Unused Revolving  Credit  Commitments of the Revolving Credit Lenders
at such time. No Letter of Credit shall have an expiration  date  (including all
rights of the Borrower or the  beneficiary  to require  renewal)  later than the
earlier of 5 days before the Tranche A Termination Date and (A) in the case of a
Standby Letter of Credit one year after the date of issuance thereof, but may by
its terms be renewable annually upon notice (a "Notice of Renewal") given to the
Issuing Bank and the Administrative  Agent on or prior to any date for notice of
renewal  set  forth in such  Letter of  Credit  but in any event at least  three
Business Days prior to the date of the proposed  renewal of such Standby  Letter
of Credit and upon fulfillment of the applicable conditions set forth in Article
III  unless the  Issuing  Bank has  notified  the  Borrower  (with a copy to the
Administrative  Agent)  on or prior to the date for  notice of  termination  set
forth in such Letter of Credit but in any event at least 30 Business  Days prior
to the date of  automatic  renewal of its  election  not to renew  such  Standby
Letter of Credit (a "Notice of  Termination");  provided  that the terms of each
Standby  Letter of Credit that is  automatically  renewable  annually  shall (x)
require the Issuing Bank to give the beneficiary named in such Standby Letter of
Credit notice of any Notice of Termination,  (y) permit such  beneficiary,  upon
receipt of such notice, to draw under such Standby Letter of Credit prior to the
date such  Standby  Letter of Credit  otherwise  would  have been  automatically
renewed  and (z) not permit the  expiration  date  (after  giving  effect to any
renewal) of such Standby  Letter of Credit in any event to be extended to a date
later than 5 days before the Tranche A  Termination  Date. If either a Notice of
Renewal is not given by the Borrower or a Notice of  Termination is given by the
Issuing Bank pursuant to the immediately preceding sentence, such Standby Letter
of  Credit  shall  expire  on the date on which it  otherwise  would  have  been
automatically renewed; provided, however, that even in the absence of receipt of
a Notice of Renewal the Issuing Bank may in its discretion, unless instructed to
the contrary by the Administrative Agent or the Borrower,  deem that a Notice of
Renewal had been timely delivered and in such case, a Notice of Renewal shall be
deemed to have been so delivered  for all  purposes  under this  Agreement.  Any
"Letters of Credit"  (as  defined in the  Existing  Credit  Agreement)  that are
issued  and  outstanding  on the date  hereof  shall be deemed to be  Letters of
Credit  hereunder.  Within  the  limits of the  Letter of Credit  Facility,  and
subject to the limits  referred to above,  the Borrower may request the issuance
of Letters  of Credit  under this  Section  2.01(e),  repay any Letter of Credit
Advances  resulting  from drawings  thereunder  pursuant to Section  2.03(c) and
request the issuance of additional Letters of Credit under this Section 2.01(e).

                                      -30-
<PAGE>

                  (f) All "Advances"  under the Existing Credit  Agreement shall
be deemed to be Advances for all purposes hereunder.

                  SECTION  2.02.  Making the  Advances.  (a) Except as otherwise
provided in Section  2.02(b) or 2.03,  each  Borrowing  shall be made on notice,
given  not later  than  12:00  Noon  (Boston,  Massachusetts  time) on the third
Business  Day  prior  to the  date of the  proposed  Borrowing  in the case of a
Borrowing  consisting of Eurodollar  Rate  Advances,  or the first  Business Day
prior  to the  date  of  the  proposed  Borrowing  in the  case  of a  Borrowing
consisting of Prime Rate Advances,  by the Borrower to the Administrative Agent,
which shall give to each Appropriate Lender prompt notice thereof by telecopier.
Each such notice of a Borrowing (a "Notice of Borrowing") shall be by telephone,
confirmed  immediately in writing or telecopier,  in  substantially  the form of
Exhibit B hereto,  specifying  therein the requested (i) date of such Borrowing,
(ii) Facility under which such  Borrowing is to be made,  (iii) Type of Advances
comprising  such Borrowing,  (iv) aggregate  amount of such Borrowing and (v) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such Advance.  Each Appropriate Lender shall,  before 11:00 A.M.
(Boston,  Massachusetts time) on the date of such Borrowing,  make available for
the account of its Applicable Lending Office to the Administrative  Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable portion
of such  Borrowing  in  accordance  with the  respective  Commitments  under the
applicable Facility of such Lender and the other Appropriate Lenders.  After the
Administrative  Agent's  receipt  of such  funds  and  upon  fulfillment  of the
applicable  conditions set forth in Article III, the  Administrative  Agent will
make such funds available to the Borrower by crediting the Borrower's Account.

                  (b) Each Swing Line Borrowing  shall be made on notice,  given
not  later  than  12:00  Noon  (Boston,  Massachusetts  time) on the date of the
proposed  Swing Line  Borrowing,  by the Borrower to the Swing Line Bank and the
Administrative  Agent.  Each such notice of a Swing Line Borrowing (a "Notice of
Swing Line Borrowing") shall be by telephone,  confirmed immediately in writing,
or telecopier, specifying therein the requested (i) date of such Borrowing, (ii)
amount of such Borrowing and (iii) maturity of such  Borrowing  (which  maturity
shall  be no  later  than the  seventh  day  after  the  requested  date of such
Borrowing). The Swing Line Bank will make the amount of the requested Swing Line
Advance  available to the  Administrative  Agent at the  Administrative  Agent's
Account,  in same day funds.  After the  Administrative  Agent's receipt of such
funds and upon  fulfillment  of the  applicable  conditions set forth in Article
III, the Administrative  Agent will make such funds available to the Borrower by
crediting the  Borrower's  Account.  Upon written demand by the Swing Line Bank,
with a copy of such demand to the  Administrative  Agent,  each other  Revolving
Credit Lender shall  purchase from the Swing Line Bank,  and the Swing Line Bank
shall sell and assign to each such other  Revolving  Credit  Lender,  such other
Lender's Pro Rata Share of such outstanding Swing Line Advance as of the date of
such  demand,  by making  available  for the account of its  Applicable  Lending
Office to the  Administrative  Agent for the account of the Swing Line Bank,  by
deposit to the  Administrative  Agent's  Account,  in same day funds,  an amount
equal to the  portion  of the  outstanding  principal  amount of such Swing Line
Advance to be purchased by such Lender.  The Borrower hereby agrees to each such
sale and  assignment.  Each  Revolving  Credit Lender agrees to purchase its Pro
Rata Share of an outstanding Swing Line Advance on (i) the Business Day on which
demand  therefor  is made by the Swing Line Bank,  provided  that notice of such
demand is given not later than 11:00 A.M. (Boston,  Massachusetts  time) on such

                                      -31-
<PAGE>

Business  Day or (ii) the first  Business  Day next  succeeding  such  demand if
notice of such demand is given after such time.  Upon any such assignment by the
Swing  Line Bank to any other  Revolving  Credit  Lender of a portion of a Swing
Line Advance,  the Swing Line Bank  represents and warrants to such other Lender
that the Swing  Line Bank is the legal  and  beneficial  owner of such  interest
being assigned by it, but makes no other  representation or warranty and assumes
no responsibility with respect to such Swing Line Advance, the Loan Documents or
any Loan Party. If and to the extent that any Revolving  Credit Lender shall not
have  so  made  the  amount  of  such  Swing  Line  Advance   available  to  the
Administrative  Agent,  such  Revolving  Credit  Lender  agrees  to  pay  to the
Administrative  Agent  forthwith on demand such amount  together  with  interest
thereon,  for each day from the date of demand by the Swing  Line Bank until the
date such amount is paid to the Administrative Agent, at the Federal Funds Rate.
If such Lender shall pay to the Administrative Agent such amount for the account
of the Swing Line Bank on any  Business  Day,  such amount so paid in respect of
principal  shall  constitute  a Swing Line  Advance  made by such Lender on such
Business  Day for  purposes of this  Agreement,  and the  outstanding  principal
amount of the Swing Line Advance made by the Swing Line Bank shall be reduced by
such amount on such Business Day.

                  (c)  Anything  in   subsection   (a)  above  to  the  contrary
notwithstanding,  (i) the Borrower may select Eurodollar Rate Advances having an
initial Interest Period of one week for the initial Borrowing hereunder, and for
the  period  from the  Closing  Date to the date that is the  earlier of 30 days
after the Closing Date and the date on which the  Administrative  Agent notifies
the Borrower and the Lender Parties that the  Facilities  are fully  syndicated,
and,  thereafter,  the  Borrower  may select  Eurodollar  Rate  Advances for any
Borrowing if the aggregate amount of such Borrowing is at least $1,000,000 or if
the obligation of the Appropriate Lenders to make Eurodollar Rate Advances shall
not then be  suspended  pursuant  to Section  2.09 or Section  2.10 and (ii) the
Advances may not be outstanding as part of more than 20 separate Borrowings.

                  (d)  Each  Notice  of  Borrowing  and  Notice  of  Swing  Line
Borrowing shall be irrevocable  and binding on the Borrower.  In the case of any
Borrowing that the related  Notice of Borrowing  specifies is to be comprised of
Eurodollar Rate Advances, if the Borrower fails to fulfill on or before the date
specified  in such  Notice  of  Borrowing  for  such  Borrowing  the  applicable
conditions set forth in Article III and the Advance to be made by such Lender as
part of such Borrowing,  as a result of such failure,  is not made on such date,
the Borrower will pay to the Administrative Agent for each Appropriate Lender an
amount equal to the present value  (calculated  in accordance  with this Section
2.02(d))  of  interest  for the  Interest  Period  specified  in such  Notice of
Borrowing on the amount of such Advance, at a rate per annum equal to the excess
of (a) the  Eurodollar  Rate that would  have been in effect  for such  Interest
Period over (b) the Eurodollar Rate applicable on the date of determination to a
deemed  Interest  Period  ending on the last day of such  Interest  Period.  The
present value of such additional interest shall be calculated by discounting the
amount of such  interest for each day in the Interest  Period  specified in such
Notice of Borrowing  from such day to the date of such  repayment or termination
at an interest rate per annum equal to the interest rate determined  pursuant to
the preceding sentence,  and by adding all such amounts for all such days during
such period.  The  determination by the  Administrative  Agent of such amount of
interest shall, in the absence of manifest error, be conclusive.

                                      -32-
<PAGE>

                  (e) Unless the Administrative Agent shall have received notice
from an Appropriate  Lender prior to the date of any Borrowing  under a Facility
under  which  such  Lender  has a  Commitment  that  such  Lender  will not make
available to the  Administrative  Agent such  Lender's  ratable  portion of such
Borrowing,  the  Administrative  Agent may assume that such Lender has made such
portion available to the  Administrative  Agent on the date of such Borrowing in
accordance   with   subsection   (a)  or  (b)  of  this  Section  2.02  and  the
Administrative  Agent may, in reliance upon such  assumption,  make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender  shall  not  have  so  made  such  ratable   portion   available  to  the
Administrative  Agent, such Lender and the Borrower  severally agree to repay or
pay to the Administrative  Agent forthwith on demand such  corresponding  amount
and to pay  interest  thereon,  for each day from the date  such  amount is made
available  to the  Borrower  until the date such amount is repaid or paid to the
Administrative  Agent,  at (i) in the case of the  Borrower,  the interest  rate
applicable at such time under Section 2.07 to Advances comprising such Borrowing
and (ii) in the case of such  Lender,  the Federal  Funds  Rate.  If such Lender
shall pay to the Administrative Agent such corresponding  amount, such amount so
paid shall  constitute  such Lender's  Advance as part of such Borrowing for all
purposes.

                  (f) The  failure of any Lender to make the  Advance to be made
by it as part of any  Borrowing  shall  not  relieve  any  other  Lender  of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be  responsible  for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.

                  SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit.  (a) Request  for  Issuance.  Each Letter of Credit  shall be
issued upon notice, given not later than 12:00 Noon (Boston, Massachusetts time)
on the third  Business  Day prior to the date of the  proposed  issuance of such
Letter of Credit,  by the Borrower to the Issuing Bank,  which shall give to the
Administrative  Agent and each Revolving  Credit Lender prompt notice thereof by
telecopier.  Each such  notice of  issuance  of a Letter of Credit (a "Notice of
Issuance")  shall  be  by  telephone,   confirmed   immediately  in  writing  or
telecopier,  specifying  therein the requested (A) date of such issuance  (which
shall be a Business  Day),  (B) Available  Amount of such Letter of Credit,  (C)
expiration  date  of  such  Letter  of  Credit,  (D)  name  and  address  of the
beneficiary of such Letter of Credit and (E) form of such Letter of Credit,  and
shall be accompanied by such  application  and agreement for letter of credit as
the Issuing  Bank may specify to the Borrower  for use in  connection  with such
requested  Letter of Credit (a "Letter of Credit  Agreement").  All  "Letters of
Credit"  under the Existing  Credit  Agreement  shall be deemed to be Letters of
Credit for all purposes under the Loan  Documents.  If (x) the requested form of
such Letter of Credit is acceptable  to the Issuing Bank in its sole  discretion
and (y) it has not received  notice of objection to such  issuance  from Lenders
holding at least a majority of the  Revolving  Credit  Commitments,  the Issuing
Bank will,  upon  fulfillment of the applicable  conditions set forth in Article
III, make such Letter of Credit available to the Borrower at its office referred
to in Section 9.02 or as otherwise  agreed with the Borrower in connection  with
such issuance.  In the event and to the extent that the provisions of any Letter
of Credit  Agreement shall conflict with this Agreement,  the provisions of this
Agreement shall govern.

                  (b) Letter of Credit  Reports.  The Issuing Bank shall furnish
(A) to the Administrative Agent on the first Business Day of each week a written
report  summarizing  issuance and  expiration  dates of Letters of Credit issued

                                      -33-
<PAGE>

during the  previous  week and  drawings  during  such week under all Letters of
Credit,  (B) to each  Revolving  Credit Lender on the first Business Day of each
month a written report  summarizing  issuance and expiration dates of Letters of
Credit issued during the  preceding  month and drawings  during such month under
all Letters of Credit and (C) to the Administrative Agent and each Lender on the
first  Business Day of each calendar  quarter a written report setting forth the
average daily aggregate  Available Amount during the preceding  calendar quarter
of all Letters of Credit.

                  (c) Drawing and Reimbursement. The payment by the Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this  Agreement  the making by the Issuing  Bank of a Letter of Credit  Advance,
which shall be a Prime Rate Advance,  in the amount of such draft.  Upon written
demand by the Issuing  Bank,  with a copy of such  demand to the  Administrative
Agent,  each  Revolving  Credit Lender shall purchase from the Issuing Bank, and
the Issuing  Bank shall sell and assign to each such  Revolving  Credit  Lender,
such Lender's Pro Rata Share of such outstanding  Letter of Credit Advance as of
the date of such purchase, by making available for the account of its Applicable
Lending Office to the Administrative  Agent for the account of the Issuing Bank,
by deposit to the Administrative  Agent's Account,  in same day funds, an amount
equal to the  portion  of the  outstanding  principal  amount of such  Letter of
Credit Advance to be purchased by such Lender.  Promptly after receipt  thereof,
the  Administrative  Agent shall  transfer such funds to the Issuing  Bank.  The
Borrower hereby agrees to each such sale and assignment.  Each Revolving  Credit
Lender agrees to purchase its Pro Rata Share of an outstanding  Letter of Credit
Advance on (i) the Business Day on which demand  therefor is made by the Issuing
Bank, provided notice of such demand is given not later than 11:00 A.M. (Boston,
Massachusetts  time) on such  Business  Day or (ii) the first  Business Day next
succeeding  such demand if notice of such demand is given after such time.  Upon
any such assignment by the Issuing Bank to any other Revolving  Credit Lender of
a  portion  of a Letter of Credit  Advance,  the  Issuing  Bank  represents  and
warrants to such other Lender that the Issuing Bank is the legal and  beneficial
owner of such interest  being  assigned by it, free and clear of any liens,  but
makes no other  representation  or warranty and assumes no  responsibility  with
respect to such Letter of Credit Advance,  the Loan Documents or any Loan Party.
If and to the extent that any Revolving Credit Lender shall not have so made the
amount of such Letter of Credit Advance available to the  Administrative  Agent,
such Revolving Credit Lender agrees to pay to the Administrative Agent forthwith
on demand such amount together with interest thereon, for each day from the date
of  demand  by the  Issuing  Bank  until  the date  such  amount  is paid to the
Administrative  Agent,  at the Federal Funds Rate for its account or the account
of  the  Issuing  Bank,  as  applicable.   If  such  Lender  shall  pay  to  the
Administrative  Agent such  amount for the  account of the  Issuing  Bank on any
Business  Day,  such amount so paid in respect of principal  shall  constitute a
Letter of Credit  Advance made by such Lender on such  Business Day for purposes
of this Agreement,  and the outstanding principal amount of the Letter of Credit
Advance  made by the  Issuing  Bank  shall be  reduced  by such  amount  on such
Business Day.

                  (d) Failure to Make Letter of Credit Advances.  The failure of
any  Lender to make the  Letter of Credit  Advance  to be made by it on the date
specified  in  Section  2.03(c)  shall  not  relieve  any  other  Lender  of its
obligation  hereunder to make its Letter of Credit  Advance on such date, but no
Lender  shall be  responsible  for the  failure of any other  Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.

                                      -34-
<PAGE>

                  SECTION  2.04.  Repayment  of  Advances.  (a)  Tranche  A Term
Advances.  The Borrower shall repay to the Administrative  Agent for the ratable
account of the Tranche A Term Lenders the aggregate outstanding principal amount
of the Tranche A Term Advances on the following  dates in the amounts  indicated
(which amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.06):

                          Date                    Amount
                          ----                    ------

                     July 31, 1999               $1,875,000
                     October 31, 1999              $625,000
                     January 31, 2000            $1,875,000
                     April 30, 2000                $625,000
                     July 31, 2000               $7,500,000
                     October 31, 2000            $2,500,000
                     January 31, 2001            $7,500,000
                     April 30, 2001              $2,500,000
                     July 31, 2001               $7,500,000
                     October 31, 2001            $2,500,000
                     January 31, 2002            $7,500,000
                     April 30, 2002              $2,500,000
                     July 31, 2002               $7,500,000
                     October 31, 2002            $2,500,000
                     January 31, 2003            $7,500,000
                     April 30, 2003              $2,500,000
                     July 31, 2003               $7,500,000
                     October 31, 2003            $2,500,000
                     January 31, 2004            $7,500,000
                     April 30, 2004              $2,500,000
                     July 31, 2004              $11,250,000
                     October 31, 2004            $3,750,000

provided,  however,  that the final principal installment shall be repaid on the
Tranche A  Termination  Date and in any event shall be in an amount equal to the
aggregate  principal  amount of the Tranche A Term Advances  outstanding on such
date.

                  (b) Tranche B Term  Advances.  The Borrower shall repay to the
Administrative  Agent for the ratable  account of the Tranche B Term Lenders the
aggregate  outstanding  principal  amount of the Tranche B Term  Advances on the
following  dates in the amounts  indicated  (which amounts shall be reduced as a
result  of the  application  of  prepayments  in  accordance  with the  order of
priority set forth in Section 2.06):

                          Date                       Amount
                          ----                       ------

                     July 31, 1999                   $450,000
                     October 31, 1999                $150,000
                     January 31, 2000                $450,000
                     April 30, 2000                  $150,000

                                      -35-
<PAGE>

                     July 31, 2000                   $450,000
                     October 31, 2000                $150,000
                     January 31, 2001                $450,000
                     April 30, 2001                  $150,000
                     July 31, 2001                   $450,000
                     October 31, 2001                $150,000
                     January 31, 2002                $450,000
                     April 30, 2002                  $150,000
                     July 31, 2002                   $450,000
                     October 31, 2002                $150,000
                     January 31, 2003                $450,000
                     April 30, 2003                  $150,000
                     July 31, 2003                   $450,000
                     October 31, 2003                $150,000
                     January 31, 2004                $450,000
                     April 30, 2004                  $150,000
                     July 31, 2004                   $450,000
                     October 31, 2004                $150,000
                     January 31, 2005             $28,350,000
                     April 30, 2005                $9,450,000
                     July 31, 2005                $28,350,000
                     October 31, 2005              $9,450,000
                     January 31, 2006             $28,350,000
                     April 30, 2006                $9,450,000


provided,  however,  that the final principal installment shall be repaid on the
Termination  Date and in any event shall be in an amount equal to the  aggregate
principal amount of the Term Advances outstanding on such date.

                  (c) Revolving Credit Advances. The Borrower shall repay to the
Administrative  Agent for the ratable account of the Revolving Credit Lenders on
the Tranche A Termination Date the aggregate outstanding principal amount of the
Revolving Credit Advances then outstanding.

                  (d) Swing  Line  Advances.  The  Borrower  shall  repay to the
Administrative  Agent  for the  account  of the Swing  Line Bank and each  other
Revolving  Credit  Lender  that has made a Swing Line  Advance  the  outstanding
principal  amount of each Swing Line Advance made by each of them on the earlier
of the maturity date specified in the applicable  Notice of Swing Line Borrowing
(which  maturity shall be no later than the seventh day after the requested date
of such Borrowing) and the Tranche A Termination Date.

                  (e) Letter of Credit Advances. (i) The Borrower shall repay to
the  Administrative  Agent for the  account of the  Issuing  Bank and each other
Revolving  Credit Lender that has made a Letter of Credit Advance on the earlier
of demand and the Tranche A Termination Date the aggregate outstanding principal
amount of the Letter of Credit Advances then outstanding.

                                      -36-
<PAGE>

                  (ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of  Credit  shall be  unconditional  and  irrevocable,  and shall be paid
strictly in accordance with the terms of this  Agreement,  such Letter of Credit
Agreement  and such  other  agreement  or  instrument  under all  circumstances,
including, without limitation, the following circumstances:

                  (A)  any  lack  of  validity  or  enforceability  of any  Loan
         Document,  any Letter of Credit Agreement,  any Letter of Credit or any
         other  agreement or instrument  relating  thereto (all of the foregoing
         being, collectively, the "L/C Related Documents");

                  (B) any change in the time,  manner or place of payment of, or
         in any other term of, all or any of the  Obligations of the Borrower in
         respect of any L/C Related Document or any other amendment or waiver of
         or any  consent  to  departure  from  all or  any  of the  L/C  Related
         Documents;

                  (C) the  existence  of any  claim,  set-off,  defense or other
         right that the Borrower may have at any time against any beneficiary or
         any  transferee of a Letter of Credit (or any Persons for whom any such
         beneficiary or any such transferee may be acting),  the Issuing Bank or
         any  other  Person,   whether  in  connection  with  the   transactions
         contemplated by the L/C Related Documents or any unrelated transaction;

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

                  (E)  payment  by the  Issuing  Bank  under a Letter  of Credit
         against  presentation of a draft or certificate  that does not strictly
         comply with the terms of such Letter of Credit;

                  (F) any exchange,  release or non-perfection of any Collateral
         or other  collateral,  or any  release  or  amendment  or  waiver of or
         consent to departure from the Guaranty or any other guarantee,  for all
         or any of the Obligations of the Borrower in respect of the L/C Related
         Documents; or

                  (G) any other circumstance or happening whatsoever, whether or
         not similar to any of the foregoing, including, without limitation, any
         other circumstance that might otherwise  constitute a defense available
         to, or a discharge  of, the  Borrower  or a  guarantor  (other than the
         gross negligence or willful misconduct of the Issuing Bank).

                  SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional.  The Borrower  may,  upon at least five  Business  Days' notice to the
Administrative  Agent,  terminate in whole or reduce in part the unused portions
of the Tranche A Term Commitments, the Tranche B Term Commitments and the Letter
of Credit  Facility  and the  Unused  Revolving  Credit  Commitments;  provided,
however,  that each partial reduction of a Facility (i) shall be in an aggregate
amount of $1,000,000 or an integral  multiple of $250,000 in excess  thereof and
(ii) shall be made ratably  among the  Appropriate  Lenders in  accordance  with
their  Commitments  with respect to such Facility.  Each reduction of the unused
portion of the Commitments under the Term Facilities pursuant to this subsection
(a) shall be applied pro rata to each of the Term Facilities.

                                      -37-
<PAGE>

                  (b)  Mandatory.  (i)  After  the  date of the  Tranche  A Term
Borrowing, upon each repayment or prepayment of the Tranche A Term Advances, the
aggregate  Tranche A Term  Commitments  of the Tranche A Term  Lenders  shall be
automatically and permanently  reduced,  on a pro rata basis, by an amount equal
to the  amount by which the  aggregate  Tranche A Term  Commitments  immediately
prior to such  reduction  exceed the aggregate  unpaid  principal  amount of the
Tranche A Term Advances then outstanding.

                  (ii) After the date of the Tranche B Term Borrowing, upon each
repayment or prepayment of the Tranche B Term Advances,  the aggregate Tranche B
Term  Commitments  of the  Tranche B Term  Lenders  shall be  automatically  and
permanently  reduced,  on a pro rata basis,  by an amount equal to the amount by
which  the  aggregate  Tranche  B Term  commitments  immediately  prior  to such
reduction  exceed the aggregate  unpaid  principal  amount of the Tranche B Term
Advances then outstanding.

                  (iii)  The  Letter  of Credit  Facility  shall be  permanently
reduced from time to time on the date of each reduction in the Revolving  Credit
Facility  by the  amount,  if any,  by which the  amount of the Letter of Credit
Facility  exceeds the  Revolving  Credit  Facility  after giving  effect to such
reduction of the Revolving Credit Facility.

                  SECTION 2.06.  Prepayments.  (a)  Optional.  The Borrower may,
upon at least one Business  Day's notice in the case of Prime Rate  Advances and
three  Business Days' notice in the case of Eurodollar  Rate  Advances,  in each
case to the  Administrative  Agent  stating  the  proposed  date  and  aggregate
principal  amount of the  prepayment,  and if such notice is given the  Borrower
shall,  prepay  the  outstanding  aggregate  principal  amount  of the  Advances
comprising part of the same Borrowing in whole or ratably in part, together with
accrued  interest  to the date of such  prepayment  on the  aggregate  principal
amount prepaid; provided,  however, that (x) each partial prepayment (other than
in respect of a prepayment of the Swing Line Advances)  shall be in an aggregate
principal  amount of  $250,000  or an  integral  multiple  of $250,000 in excess
thereof,  (y) each  partial  prepayment  of Swing Line  Advances  shall be in an
aggregate  principal  amount of $250,000 or an integral  multiple of $100,000 in
excess thereof and (z) if any prepayment of a Eurodollar Rate Advance is made on
a date  other  than the last day of an  Interest  Period  for such  Advance  the
Borrower  shall also pay any  amounts  owing  pursuant  to Section  9.04(c).  In
respect of each such optional  prepayment of a Term Facility,  50% of the amount
of such  prepayment  in  respect of such Term  Facility  shall be applied to the
installments of such Term Facility in direct order of maturity and the remaining
50% shall be applied to the  installments of such Term Facility in inverse order
of maturity.

                  (b)  Mandatory.  (i)  The  Borrower  shall,  on the  15th  day
following  each  date on  which  the  Borrower  delivers  the  annual  financial
statements pursuant to Section 5.03(d) (commencing with January 2001), prepay an
aggregate  principal  amount  of  the  Advances  comprising  part  of  the  same
Borrowings in an amount equal to (x) if the Debt to EBITDA Ratio for the related
Fiscal  Year is less than 3:1,  50% of Excess Cash Flow for such Fiscal Year and
(y) at all other  times,  75% of  Excess  Cash Flow for such  Fiscal  Year.  The
Borrower shall also, on the sixth month  anniversary of each Fiscal Year, prepay
an aggregate principal amount of Advances comprising part of the same Borrowings
in an amount  equal to (x) if the Debt to EBITDA  Ratio for the  related  Fiscal
Year is less  than  3:1,  50% and (y) at all  other  times,  75% of any  Capital
Expenditures  deducted in the  calculation of Excess Cash Flow for the preceding

                                      -38-
<PAGE>

Fiscal Year and not actually  made on or prior to such sixth month  anniversary.
Each such prepayment  shall be applied  ratably to each of the Term  Facilities;
provided,  however,  that 50% of the amount of such  prepayment  in respect of a
Term  Facility  shall be applied to the  installments  of such Term  Facility in
direct  order  of  maturity  and the  remaining  50%  shall  be  applied  to the
installments  of such Term  Facility  in  inverse  order of  maturity.  Upon the
payment  in full of the  Term  Advances,  there  shall be no  further  mandatory
prepayments pursuant to this Section 2.05(b)(i).

                  (ii) The Borrower  shall,  on the third Business Day following
the date of  receipt  of the Net Cash  Proceeds  by any Loan Party or any of its
Subsidiaries  from (A) the sale,  lease,  transfer or other  disposition  of any
assets of any Loan Party or any of its Subsidiaries (other than any sale, lease,
transfer  or other  disposition  of assets  pursuant  to clause  (i) of  Section
5.02(e)), subject to the proviso to the definition of Net Cash Proceeds, (B) the
incurrence or issuance by any Loan Party or any of its  Subsidiaries of any Debt
(other than Debt incurred or issued pursuant to Section  5.02(b)),  (C) the sale
or  issuance  after  the  Effective  Date  by  any  Loan  Party  or  any  of its
Subsidiaries  of any capital stock or other  ownership or profit  interest,  any
securities convertible into or exchangeable for capital stock or other ownership
or profit  interest or any warrants,  rights or options to acquire capital stock
or other  ownership or profit  interest  (other than the sale or issuance of (w)
capital  stock (other than  Redeemable  capital  stock) of Holding to any Equity
Investor, (x) any capital stock or rights or options to acquire capital stock in
Holding to  officers,  employees  or  directors  of  Holding  or any  Subsidiary
thereof, (y) common stock of Holding as contemplated by the Merger Agreement and
(z) capital stock by any wholly-owned  Subsidiary of any Loan Party to such Loan
Party)  and  (D) any  Extraordinary  Receipt  received  by or paid to or for the
account of any Loan Party or any of its Subsidiaries and not otherwise  included
in clause (A),  (B) or (C) above  (subject to the proviso to the  definition  of
Extraordinary  Receipt),  prepay an aggregate  principal  amount of the Advances
comprising  part of the same  Borrowings  equal to the  amount  of such Net Cash
Proceeds.  Each such  prepayment  shall be  applied  ratably to each of the Term
Facilities;  provided,  however,  that 50% of such amount of such  prepayment in
respect of a Term  Facility  shall be applied to the  installments  of such Term
Facility in direct order of maturity and the  remaining  50% shall be applied to
the  installments  of such Term Facility in inverse order of maturity.  Upon the
payment  in full of the  Term  Advances,  there  shall be no  further  mandatory
prepayments pursuant to this Section 2.05(b)(ii).

                  (iii) The Borrower  shall,  on each  Business  Day,  prepay an
aggregate  principal amount of the Revolving Credit Advances  comprising part of
the same  Borrowings,  the Letter of Credit Advances and the Swing Line Advances
equal to the amount by which (A) the sum of the  aggregate  principal  amount of
(x) the Revolving Credit Advances, (y) the Letter of Credit Advances and (z) the
Swing Line Advances then outstanding plus the aggregate  Available Amount of all
Letters of Credit  then  outstanding  exceeds  (B) the  lesser of the  Revolving
Credit Facility and the Loan Value of Eligible Collateral on such Business Day.

                  (iv) The  Borrower  shall,  on each  Business  Day, pay to the
Administrative  Agent for deposit in the L/C Cash  Collateral  Account an amount
sufficient to cause the aggregate  amount on deposit in the L/C Cash  Collateral
Account  to equal  the  amount by which the  aggregate  Available  Amount of all
Letters of Credit then outstanding exceeds the Letter of Credit Facility on such
Business Day.

                                      -39-
<PAGE>

                  (v) Prepayments of the Revolving Credit Facility made pursuant
to clause (iii) above shall be first applied to prepay Letter of Credit Advances
then outstanding  until such Advances are paid in full, second applied to prepay
Swing Line Advances then outstanding until such Advances are paid in full, third
applied to prepay Revolving Credit Advances then outstanding  comprising part of
the same Borrowings until such Advances are paid in full and fourth deposited in
the L/C Cash  Collateral  Account to cash  collateralize  100% of the  Available
Amount of the Letters of Credit then outstanding. Upon the drawing of any Letter
of Credit for which  funds are on deposit  in the L/C Cash  Collateral  Account,
such funds  shall be applied to  reimburse  the  Issuing  Bank or the  Revolving
Credit Lenders, as applicable.

                  (vi) All  prepayments  under this subsection (b) shall be made
together with accrued  interest to the date of such  prepayment on the principal
amount prepaid.

                  (c) Tranche B Term  Opt-Out.  Any Tranche B Term Lender,  may,
with the approval of the  Borrower,  elect not to accept any  prepayment  of the
Tranche  B Term  Facility.  Upon  receipt  by the  Administrative  Agent  of any
prepayment, the amount of the prepayment that is available to prepay the Tranche
B  Term  Advances  shall  be  deposited  in the  Cash  Collateral  Account  (the
"Prepayment Amount"),  pending application of such amount on the Prepayment Date
as set forth below and  promptly  after such  receipt  (the date of such receipt
being the "Receipt Date"), the Administrative Agent shall give written notice to
the Tranche B Term Lenders of the amount  available to prepay the Tranche B Term
Advances and the date on which such  prepayment  shall be made (the  "Prepayment
Date"),  which date shall be 5 days after the Receipt Date. Any Lender declining
such  prepayment  (a  "Declining  Lender")  shall  give  written  notice  to the
Administrative Agent by 11:00 A.M. (Boston,  Massachusetts time) on the Business
Day immediately preceding the Prepayment Date. On the Prepayment Date, an amount
equal to that portion of the  Prepayment  Amount  accepted by the Tranche B Term
Lenders  other than the Declining  Lenders  (such  Lenders being the  "Accepting
Lenders") to prepay  Tranche B Term  Advances  owing to such  Accepting  Lenders
shall be  withdrawn  from the Cash  Collateral  Account  and  applied  to prepay
Tranche B Term Advances owing to such Accepting Lenders on a pro rata basis. Any
amounts  that would  otherwise  have been applied to prepay  Advances  under the
Tranche B Term  Facility  owing to Declining  Lenders  shall  instead be applied
ratably to prepay the remaining  Tranche A Term Advances as provided in Sections
2.06(a) or (b) as the case may be; provided further that upon prepayment in full
of the Tranche A Term Advances,  the remainder of any Prepayment Amount shall be
applied ratably to prepay Tranche B Term Advances owing to Declining Lenders.

                  SECTION 2.07. Interest.  (a) Scheduled Interest.  The Borrower
shall pay interest on the unpaid  principal amount of each Advance owing to each
Lender from the date of such Advance until such  principal  amount shall be paid
in full, at the following rates per annum:

                  (i) Prime Rate  Advances.  During such periods as such Advance
         is a Prime Rate Advance, a rate per annum equal at all times to the sum
         of (A) the  Prime  Rate in  effect  from  time  to  time  plus  (B) the

                                      -40-
<PAGE>

         Applicable  Margin in effect  from time to time,  payable in arrears on
         the last day of each March,  June,  September and December  during such
         periods and on the date such Prime Rate  Advance  shall be Converted or
         paid in full.

                  (ii)  Eurodollar  Rate  Advances.  During such periods as such
         Advance is a  Eurodollar  Rate  Advance,  a rate per annum equal at all
         times  during each  Interest  Period for such Advance to the sum of (A)
         the Eurodollar  Rate for such Interest Period for such Advance plus (B)
         the  Applicable  Margin in  effect  on the  first day of such  Interest
         Period, payable in arrears on the last day of such Interest Period and,
         if such Interest  Period has a duration of more than three  months,  on
         each day that occurs  during such  Interest  Period  every three months
         from  the  first  day of such  Interest  Period  and on the  date  such
         Eurodollar Rate Advance shall be Converted or paid in full.

                  (b)  Default  Interest.  Upon the  occurrence  and  during the
continuance  of a Default under Section  6.01(a) or 6.01(f),  the Borrower shall
pay interest on (i) the unpaid  principal  amount of each Advance  owing to each
Lender,  payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above  and on  demand,  at a rate per  annum  equal at all times to 2% per annum
above the rate per annum required to be paid on such Advance  pursuant to clause
(a)(i) or (a)(ii)  above and (ii) to the fullest  extent  permitted  by law, the
amount of any interest,  fee or other amount payable  hereunder that is not paid
when due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full and on
demand,  at a rate per annum  equal at all times to 2% per annum  above the rate
per annum  required to be paid, in the case of interest,  on the Type of Advance
on which such interest has accrued  pursuant to clause (a)(i) or (a)(ii)  above,
and, in all other cases, on Prime Rate Advances pursuant to clause (a)(i) above.

                  (c)  Notice of  Interest  Rate.  Promptly  after  receipt of a
Notice of Borrowing pursuant to Section 2.02(a),  the Administrative Agent shall
give  notice to the  Borrower  and each  Appropriate  Lender  of the  applicable
interest  rate  determined  by the  Administrative  Agent for purposes of clause
(a)(i) or (ii).

                  SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay
to the  Administrative  Agent for the account of the Lenders a  commitment  fee,
from the date hereof in the case of each Initial  Lender and from the  effective
date specified in the  Assignment  and Acceptance  pursuant to which it became a
Lender in the case of each other  Lender until the Tranche A  Termination  Date,
payable in arrears on the last Business Day of each March,  June,  September and
December,  commencing June 30, 1999, and on the Tranche A Termination Date, at a
rate  equal to the  Applicable  Percentage  per annum on the sum of the  average
daily Unused  Revolving Credit  Commitment of each Appropriate  Lender plus such
Lender's Pro Rata Share of the average  daily  outstanding  Swing Line  Advances
during such quarter;  provided,  however, that no commitment fee shall accrue on
any of the Commitments of a Defaulting  Lender so long as such Lender shall be a
Defaulting Lender.

                  (b) Letter of Credit Fees,  Etc. (i) The Borrower shall pay to
the  Administrative  Agent for the  account of each  Revolving  Credit  Lender a
commission, payable in arrears quarterly on the last Business Day of each March,
June,  September and December,  commencing June 30, 1999, and on the earliest to
occur of the full drawing  expiration,  termination or  cancellation of any such
Letter of Credit and on the Tranche A  Termination  Date,  on such  Lender's Pro

                                      -41-
<PAGE>

Rata Share of the average daily aggregate  Available  Amount during such quarter
of (A) all Standby Letters of Credit outstanding from time to time at a rate per
annum equal to the Applicable  Margin in effect from time to time for Eurodollar
Advances  comprising a Revolving  Credit  Borrowing and (B) all Trade Letters of
Credit  outstanding from time to time at a rate per annum equal to the excess of
(x) the Applicable  Margin in effect from time to time for  Eurodollar  Advances
comprising a Revolving Credit Borrowing over (y) 1.00%.

                  (ii) The Borrower  shall pay to the Issuing Bank,  for its own
account, such commissions, issuance fees, fronting fees, transfer fees and other
fees and  charges in  connection  with the  issuance or  administration  of each
Letter of Credit as the Borrower and the Issuing Bank shall agree.

                  (c) Administrative Agent's Fees. The Borrower shall pay to the
Administrative  Agent for its own account  such fees as may from time to time be
agreed between the Borrower and the Administrative Agent.

                  SECTION  2.09.  Conversion  of  Advances.  (a)  Optional.  The
Borrower  may on any  Business  Day (without the payment of any fee or premium),
upon notice given to the Administrative Agent not later than 12:00 Noon (Boston,
Massachusetts  time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.07 and 2.10,  Convert all
or any portion of the Advances of one Type  comprising  the same  Borrowing into
Advances of the other Type; provided, however, that any Conversion of Eurodollar
Rate Advances into Prime Rate Advances  shall be made only on the last day of an
Interest Period for such Eurodollar Rate Advances,  any Conversion of Prime Rate
Advances into  Eurodollar  Rate Advances shall be in an amount not less than the
minimum amount specified in Section 2.02(c), no Conversion of any Advances shall
result in more separate Borrowings than permitted under Section 2.02(c) and each
Conversion of Advances  comprising part of the same Borrowing under any Facility
shall be made ratably among the  Appropriate  Lenders in  accordance  with their
Commitments under such Facility.  Each such notice of Conversion  shall,  within
the restrictions specified above, specify (i) the date of such Conversion,  (ii)
the Advances to be Converted  and (iii) if such  Conversion  is into  Eurodollar
Rate Advances,  the duration of the initial  Interest  Period for such Advances.
Each notice of Conversion shall be irrevocable and binding on the Borrower.

                  (b) Mandatory.  (i) On the date on which the aggregate  unpaid
principal  amount of Eurodollar Rate Advances  comprising any Borrowing shall be
reduced,  by payment or prepayment or otherwise,  to less than $1,000,000,  such
Advances shall automatically  Convert at the end of the existing Interest Period
into Prime Rate Advances.

                  (ii) If the Borrower  shall fail to select the duration of any
Interest  Period  for any  Eurodollar  Rate  Advances  in  accordance  with  the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative  Agent will forthwith so notify the Borrower and the  Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically,  on the
last day of the then existing  Interest  Period  therefor,  Convert into a Prime
Rate Advance.

                  (iii) Upon the  occurrence  and during the  continuance of any
Event of Default,  (x) each Eurodollar Rate Advance will  automatically,  on the
last day of the then existing  Interest  Period  therefor,  Convert into a Prime
Rate  Advance  and (y) the  obligation  of the  Lenders  to make,  or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.

                                      -42-
<PAGE>

                  SECTION 2.10.  Increased Costs, Etc. (a) If, due to either (i)
the  introduction  of or any  change in or in the  interpretation  of any law or
regulation  after the date hereof or (ii) the  compliance  with any guideline or
request  issued or  promulgated  after the date hereof from any central  bank or
other  governmental  authority  (whether or not having the force of law),  there
shall be any  increase in the cost to any Lender Party of agreeing to make or of
making,  funding or maintaining Eurodollar Rate Advances or of agreeing to issue
or of issuing or  maintaining  Letters  of Credit or of  agreeing  to make or of
making or maintaining Letter of Credit Advances  (excluding for purposes of this
Section 2.10 any such  increased  costs  resulting from (i) Taxes or Other Taxes
(as to which Section 2.12 shall govern) and (ii) changes in the rate or basis of
taxation of overall net income or overall  gross income by the United  States or
by the foreign  jurisdiction  or state under the laws of which such Lender Party
is organized or has its Applicable  Lending Office or any political  subdivision
thereof),  then the Borrower  shall from time to time,  on or prior to the third
Business Day following  receipt by the Borrower of the  certificate  referred to
below from such Lender  Party (with a copy of such demand to the  Administrative
Agent),  pay to the  Administrative  Agent for the account of such Lender  Party
additional amounts sufficient to compensate such Lender Party for such increased
cost;  provided,  however,  that the Borrower shall not be responsible for costs
under this  Section  2.10(a)  arising  more than 90 days prior to receipt by the
Borrower of the  certificate  from the affected  Lender pursuant to this Section
2.10(a)  with  respect  to such  costs;  provided  further  that a Lender  Party
claiming  additional amounts under this Section 2.10(a) agrees to use reasonable
efforts   (consistent   with  its  internal  policy  and  legal  and  regulatory
restrictions) to designate a different  Applicable  Lending Office if the making
of such a  designation  would  avoid the need for, or reduce the amount of, such
increased  cost that may  thereafter  accrue  and would not,  in the  reasonable
judgment of such  Lender  Party,  be  otherwise  disadvantageous  to such Lender
Party.  A certificate  as to the amount of such  increased cost (together with a
schedule setting forth in reasonable detail the calculation thereof),  submitted
to the Borrower by such Lender Party,  shall be  conclusive  and binding for all
purposes, absent manifest error.

                  (b) If any Lender Party  determines  that  compliance with any
law or regulation or any guideline or request  issued or  promulgated  after the
date hereof from any central bank or other  governmental  authority  (whether or
not  having  the force of law)  affects  or would  affect  the amount of capital
required or expected to be  maintained  by such Lender Party or any  corporation
controlling  such Lender  Party and that the amount of such capital is increased
by or based upon the existence of such Lender  Party's  commitment to lend or to
issue  Letters of Credit  hereunder  and other  commitments  of such type or the
issuance  or  maintenance  of the  Letters  of  Credit  (or  similar  contingent
obligations),  then, on or prior to the third Business Day following  receipt by
the Borrower of the certificate referred to below from such Lender Party (with a
copy of such demand to the Administrative  Agent), the Borrower shall pay to the
Administrative  Agent for the account of such Lender Party, from time to time as
specified by such Lender Party, additional amounts sufficient to compensate such
Lender Party in the light of such circumstances,  to the extent that such Lender
Party  reasonably  determines  such  increase in capital to be  allocable to the
existence  of such  Lender  Party's  commitment  to lend or to issue  Letters of
Credit  hereunder  or to the issuance or  maintenance  of any Letters of Credit;
provided,  however,  that, the Borrower shall not be responsible for costs under
this Section  2.10(b) arising more than 90 days prior to receipt by the Borrower

                                      -43-
<PAGE>

of the  certificate  from the affected  Lender  pursuant to this Section 2.10(b)
with respect to such costs.  A certificate  as to such amounts  (together with a
schedule setting forth in reasonable detail the calculation  thereof)  submitted
to the  Borrower by such Lender  Party shall be  conclusive  and binding for all
purposes, absent manifest error.

                  (c) If, with respect to any Eurodollar Rate Advances under any
Facility,  Lenders  owed at  least  a  majority  of the  then  aggregate  unpaid
principal  amount  thereof notify the  Administrative  Agent that the Eurodollar
Rate for any Interest  Period for such Advances will not adequately  reflect the
cost to such Lenders of making,  funding or maintaining  their  Eurodollar  Rate
Advances for such Interest Period, the  Administrative  Agent shall forthwith so
notify  the  Borrower  and the  Appropriate  Lenders,  whereupon  (i) each  such
Eurodollar Rate Advance under any Facility will  automatically,  on the last day
of the then existing Interest Period therefor, Convert into a Prime Rate Advance
and (ii) the  obligation  of the  Appropriate  Lenders  to make,  or to  Convert
Advances  into,   Eurodollar   Rate  Advances  shall  be  suspended   until  the
Administrative Agent shall notify the Borrower that such Lenders have determined
that the circumstances causing such suspension no longer exist.

                  (d) Notwithstanding any other provision of this Agreement,  if
the  introduction  of or any  change in or in the  interpretation  of any law or
regulation,  in each case after the date  hereof,  shall make it  unlawful,  or,
after the date hereof,  any central bank or other  governmental  authority shall
assert that it is unlawful,  for any Lender or its Eurodollar  Lending Office to
perform  its  obligations  hereunder  to make  Eurodollar  Rate  Advances  or to
continue to fund or maintain Eurodollar Rate Advances hereunder, then, on notice
thereof  and  demand  therefor  by  such  Lender  to the  Borrower  through  the
Administrative Agent, (i) each Eurodollar Rate Advance under each Facility under
which such Lender has a Commitment  will  automatically,  on the last day of the
then existing  Interest  Period  therefor,  if permitted by  applicable  law, or
otherwise  upon such  demand,  Convert  into a Prime Rate  Advance  and (ii) the
obligation  of the  Appropriate  Lenders to make, or to Convert  Advances  into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the  Borrower  that such  Lender has  determined  that the  circumstances
causing such suspension no longer exist; provided,  however, that, before making
any such demand,  such Lender agrees to use reasonable efforts  (consistent with
its  internal  policy and legal and  regulatory  restrictions)  to  designate  a
different  Eurodollar  Lending Office if the making of such a designation  would
allow such Lender or its  Eurodollar  Lending  Office to continue to perform its
obligations to make  Eurodollar Rate Advances or to continue to fund or maintain
Eurodollar  Rate  Advances  and would not, in the  judgment of such  Lender,  be
otherwise disadvantageous to such Lender.

                  SECTION  2.11.  Payments  and  Computations.  (a) The Borrower
shall make each payment hereunder and under the Notes, irrespective of any right
of counterclaim or set-off (except as otherwise  provided in Section 2.15),  not
later than 12:00 Noon (Boston,  Massachusetts  time) on the day when due in U.S.
dollars to the  Administrative  Agent at the  Administrative  Agent's Account in
same day funds.  The  Administrative  Agent will promptly  thereafter cause like
funds to be  distributed  (i) if such  payment by the  Borrower is in respect of
principal,  interest,  commitment  fees or any  other  Obligation  then  payable
hereunder  and under the Notes to more than one  Lender  Party,  to such  Lender
Parties for the account of their respective  Applicable  Lending Offices ratably
in accordance  with the amounts of such respective  Obligations  then payable to
such Lender  Parties and (ii) if such  payment by the  Borrower is in respect of
any Obligation then payable  hereunder to one Lender Party, to such Lender Party

                                      -44-
<PAGE>

for the account of its Applicable  Lending Office, in each case to be applied in
accordance  with  the  terms  of  this  Agreement.  Upon  its  acceptance  of an
Assignment and Acceptance and recording of the information  contained therein in
the Register  pursuant to Section 9.07(d),  from and after the effective date of
such Assignment and Acceptance, the Administrative Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender  Party  assignee  thereunder,  and the  parties  to such  Assignment  and
Acceptance  shall make all appropriate  adjustments in such payments for periods
prior to such effective date directly between themselves.

                  (b) If the Administrative Agent receives funds for application
to the Obligations  under the Loan Documents under  circumstances  for which the
Loan  Documents  do not specify the  Advances or the  Facility to which,  or the
manner in which, such funds are to be applied, the Administrative Agent may, but
shall not be obligated to, elect to  distribute  such funds to each Lender Party
ratably  in  accordance  with such  Lender  Party's  proportionate  share of the
principal  amount of all  outstanding  Advances and the Available  Amount of all
Letters of Credit then  outstanding,  in repayment or  prepayment of such of the
outstanding  Advances or other  Obligations  owed to such Lender Party,  and for
application to such principal  installments,  as the Administrative  Agent shall
direct.

                  (c) The Borrower  hereby  authorizes each Lender Party, if and
to the extent  payment owed to such Lender Party is not made when due  hereunder
or, in the case of a Lender,  under the Note held by such Lender, to charge from
time to time  against  any or all of the  Borrower's  accounts  with such Lender
Party any amount so due.

                  (d) All  computations  of interest,  fees and Letter of Credit
commissions shall be made by the Administrative  Agent on the basis of a year of
365 days (360 days, with respect to Eurodollar Rate Advances),  in each case for
the actual number of days  (including  the first day but excluding the last day)
occurring  in the  period  for which  such  interest,  fees or  commissions  are
payable. Each determination by the Administrative Agent of an interest rate, fee
or commission hereunder shall be conclusive and binding for all purposes, absent
manifest error.

                  (e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business  Day, such payment shall be made
on the next  succeeding  Business Day, and such  extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; provided,  however, that, if such extension would cause payment
of interest on or principal of  Eurodollar  Rate Advances to be made in the next
following  calendar  month,  such  payment  shall be made on the next  preceding
Business Day.

                  (f) Unless the Administrative Agent shall have received notice
from the  Borrower  prior to the date on which any  payment is due to any Lender
Party  hereunder  that the  Borrower  will not make such  payment  in full,  the
Administrative  Agent may assume that the Borrower has made such payment in full
to the Administrative  Agent on such date and the  Administrative  Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount  equal to the amount then due such Lender  Party.  If
and to the extent the  Borrower  shall not have so made such  payment in full to

                                      -45-
<PAGE>

the   Administrative   Agent,   each  such  Lender  Party  shall  repay  to  the
Administrative  Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon,  for each day from the date such amount is
distributed  to such Lender  Party until the date such Lender  Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.

                  SECTION 2.12.  Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made,  in  accordance  with Section  2.11,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions,  charges or withholdings,  and all liabilities with
respect  thereto,   excluding,  in  the  case  of  each  Lender  Party  and  the
Administrative  Agent,  taxes that are  imposed on its overall net income by the
United  States  and taxes  that are  imposed  on its  overall  net  income  (and
franchise  taxes imposed in lieu  thereof) by the state or foreign  jurisdiction
under the laws of which such Lender  Party or the  Administrative  Agent (as the
case may be) is organized or any political  subdivision thereof and, in the case
of each  Lender  Party,  taxes that are  imposed on its  overall net income (and
franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of
such Lender  Party's  Applicable  Lending  Office or any  political  subdivision
thereof (all such non-excluded  taxes,  levies,  imposts,  deductions,  charges,
withholdings and liabilities in respect of payments hereunder or under the Notes
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 hereunder or under
any Note to any Lender Party or the  Administrative  Agent,  (i) the sum payable
shall be  increased  as may be  necessary  so that  after  making  all  required
deductions  (including  deductions  applicable to additional  sums payable under
this Section  2.12) such Lender Party or the  Administrative  Agent (as the case
may be) receives an amount  equal to the sum it would have  received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant  taxation  authority
or other authority in accordance with applicable law.

                  (b) In addition,  the Borrower shall pay any present or future
stamp,  documentary,  excise,  property or similar taxes, charges or levies that
arise from any payment made  hereunder or under the Notes or from the execution,
delivery or  registration  of,  performing  under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").

                  (c) The  Borrower  shall  indemnify  each Lender Party and the
Administrative  Agent for and hold it harmless  against the full amount of Taxes
and Other  Taxes,  and for the full  amount of taxes of any kind  imposed by any
jurisdiction on amounts  payable under this Section 2.12,  imposed on or paid by
such  Lender  Party  or the  Administrative  Agent  (as the case may be) and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto.  This indemnification shall be made within 30
days from the date such Lender  Party or the  Administrative  Agent (as the case
may be) makes written demand therefor.

                  (d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the  Administrative  Agent, at its address referred to
in Section 9.02, the original or a certified copy of a receipt  evidencing  such
payment. In the case of any payment hereunder or under the Notes by or on behalf
of the Borrower  through an account or branch outside the United States or by or
on behalf of the Borrower by a payor that is not a United States person,  if the

                                      -46-
<PAGE>

Borrower  determines that no Taxes are payable in respect thereof,  the Borrower
shall  furnish,  or shall  cause such payor to  furnish,  to the  Administrative
Agent, at such address,  an opinion of counsel  acceptable to the Administrative
Agent  stating  that such  payment is exempt  from Taxes.  For  purposes of this
subsection (d) and subsection  (e), the terms "United States" and "United States
person"  shall  have the  meanings  specified  in Section  7701 of the  Internal
Revenue Code.

                  (e)  Each  Lender  Party   organized   under  the  laws  of  a
jurisdiction  outside the United  States  shall,  on or prior to the date of its
execution and delivery of this  Agreement in the case of each Initial  Lender or
Initial  Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender Party in the case of each other
Lender  Party,  and from time to time  thereafter as requested in writing by the
Borrower (but only so long thereafter as such Lender Party remains lawfully able
to do so),  provide each of the  Administrative  Agent and the Borrower with two
original  Internal  Revenue  Service  forms  1001 or 4224,  or (in the case of a
Lender Party that has certified in writing to the  Administrative  Agent that it
is not a "bank" as defined in Section 881(c)(3)(A) of the Internal Revenue Code)
form  W-8  (and,  if such  Lender  Party  delivers  a form  W-8,  a  certificate
representing  that such  Lender  Party is not a "bank" for  purposes  of Section
881(c) of the Internal Revenue Code, is not a 10-percent shareholder (within the
meaning of Section  871(h)(3)(B)  of the Internal  Revenue Code) of the Borrower
and is not a controlled foreign  corporation related to the Borrower (within the
meaning of Section 864(d)(4) of the Internal Revenue Code)), as appropriate,  or
any  successor  or  other  form  prescribed  by the  Internal  Revenue  Service,
certifying  that such Lender  Party is exempt from or entitled to a reduced rate
of United States  withholding tax on payments  pursuant to this Agreement or the
Notes or, in the case of a Lender Party  providing a form W-8,  certifying  that
such Lender Party is a foreign corporation, partnership, estate or trust. If the
forms  provided by a Lender Party at the time such Lender Party first  becomes a
party to this Agreement indicates a United States interest  withholding tax rate
in excess of zero,  withholding  tax at such rate shall be  considered  excluded
from Taxes unless and until such Lender  Party  provides  the  appropriate  form
certifying that a lesser rate applies,  whereupon withholding tax at such lesser
rate only shall be considered  excluded from Taxes for periods  governed by such
form; provided,  however,  that, if at the date of the Assignment and Acceptance
pursuant to which a Lender Party becomes a party to this  Agreement,  the Lender
Party  assignor  was  entitled to payments  under  subsection  (a) in respect of
United States  withholding tax with respect to interest paid at such date, then,
to such extent,  the term Taxes shall include (in addition to withholding  taxes
that may be imposed  in the  future or other  amounts  otherwise  includable  in
Taxes) United States  withholding  tax, if any,  applicable  with respect to the
Lender Party assignee on such date.

                  (f) For any period  with  respect to which a Lender  Party has
failed to provide the Borrower with the appropriate form described in subsection
(e) above (other than if such failure is due to a change in law occurring  after
the date on which a form  originally was required to be provided or if such form
otherwise is not required under  subsection (e) above),  such Lender Party shall
not be entitled to  indemnification  under subsection (a) or (c) with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Lender  Party  become  subject to Taxes  because of its failure to
deliver a form required  hereunder,  the Borrower  shall take such steps as such
Lender  Party shall  reasonably  request to assist such Lender  Party to recover
such Taxes.

                                      -47-
<PAGE>

                  (g) Any Lender Party claiming any additional  amounts  payable
pursuant to this Section 2.12 agrees to use reasonable efforts  (consistent with
its  internal  policy  and  legal and  regulatory  restrictions)  to change  the
jurisdiction  of its  Eurodollar  Lending  Office if the making of such a change
would avoid the need for, or reduce the amount of, any such  additional  amounts
that may  thereafter  accrue and would not, in the  reasonable  judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.

                  (h) The Borrower shall not have an indemnification  obligation
under  subsection  (a) or (c) with respect to Taxes imposed by the United States
as a result of a change in law occurring after the date hereof arising more than
90 days prior to receipt by the  Borrower  of notice  from the  affected  Lender
Party with respect to such change in law.

                  SECTION  2.13.  Sharing of Payments,  Etc. If any Lender Party
shall obtain at any time any payment (whether  voluntary,  involuntary,  through
the  exercise  of  any  right  of  set-off,  or  otherwise)  (a) on  account  of
Obligations  due and payable to such Lender Party  hereunder and under the Notes
at such time in excess of its ratable share  (according to the proportion of (i)
the amount of such Obligations due and payable to such Lender Party at such time
to (ii) the aggregate  amount of the  Obligations  due and payable to all Lender
Parties  hereunder  and under the Notes at such time) of  payments on account of
the  Obligations  due and payable to all Lender Parties  hereunder and under the
Notes at such time  obtained  by all the  Lender  Parties at such time or (b) on
account of  Obligations  owing (but not due and  payable) to such  Lender  Party
hereunder  and under the  Notes at such  time in  excess  of its  ratable  share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender Party at such time to (ii) the aggregate amount of the Obligations  owing
(but not due and payable) to all Lender Parties hereunder and under the Notes at
such time) of  payments  on account  of the  Obligations  owing (but not due and
payable)  to all  Lender  Parties  hereunder  and  under  the Notes at such time
obtained  by all of the Lender  Parties at such time,  such  Lender  Party shall
forthwith  purchase  from the other Lender  Parties such  participations  in the
Obligations  due and  payable or owing to them,  as the case may be, as shall be
necessary  to cause such  purchasing  Lender  Party to share the excess  payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter  recovered from such purchasing  Lender Party, such
purchase  from each other Lender Party shall be rescinded  and such other Lender
Party shall  repay to the  purchasing  Lender  Party the  purchase  price to the
extent of such Lender Party's ratable share  (according to the proportion of (i)
the  purchase  price paid to such Lender  Party to (ii) the  aggregate  purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender  Party's  ratable share  (according to the  proportion of (i) the
amount of such other Lender Party's required  repayment to (ii) the total amount
so recovered from the  purchasing  Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total amount so
recovered.   The  Borrower   agrees  that  any  Lender  Party  so  purchasing  a
participation  from another  Lender Party  pursuant to this Section 2.13 may, to
the  fullest  extent  permitted  by law,  exercise  all its  rights  of  payment
(including the right of set-off) with respect to such  participation as fully as
if such Lender  Party were the direct  creditor of the Borrower in the amount of
such participation.

                  SECTION  2.14.  Use of Proceeds.  The proceeds of the Advances
shall be  available  (and the Borrower  agrees that it shall use such  proceeds)
solely to finance the Merger and costs associated therewith,  to pay transaction
fees and expenses,  to refinance  certain Existing Debt, to repurchase shares of

                                      -48-
<PAGE>

common  stock of  Holding  from  certain  members of  management  (to the extent
permitted  hereby) and for general  corporate  purposes of the  Borrower and its
Subsidiaries.

                  SECTION 2.15.  Defaulting  Lenders.  (a) In the event that, at
any one time,  (i) any Lender  Party  shall be a  Defaulting  Lender,  (ii) such
Defaulting  Lender  shall owe a Defaulted  Advance to the Borrower and (iii) the
Borrower shall be required to make any payment hereunder or under any other Loan
Document to or for the account of such Defaulting Lender, then the Borrower may,
so long as no Default (other than a Default which occurs directly as a result of
a Lender being a Defaulting  Lender)  shall occur or be  continuing at such time
and to the fullest  extent  permitted by  applicable  law, set off and otherwise
apply the  Obligation of the Borrower to make such payment to or for the account
of such Defaulting  Lender against the obligation of such  Defaulting  Lender to
make such Defaulted Advance.  In the event that, on any date, the Borrower shall
so set off and otherwise  apply its obligation to make any such payment  against
the obligation of such Defaulting  Lender to make any such Defaulted  Advance on
or prior to such  date,  the  amount  so set off and  otherwise  applied  by the
Borrower shall  constitute for all purposes of this Agreement and the other Loan
Documents  an  Advance  by such  Defaulting  Lender  made on the date  under the
Facility  pursuant to which such Defaulted  Advance was  originally  required to
have been made  pursuant to Section  2.01.  Such  Advance  shall be a Prime Rate
Advance and shall be considered, for all purposes of this Agreement, to comprise
part of the  Borrowing  in  connection  with which such  Defaulted  Advance  was
originally  required  to have been made  pursuant to Section  2.01,  even if the
other Advances  comprising  such Borrowing  shall be Eurodollar Rate Advances on
the date such Advance is deemed to be made pursuant to this  subsection (a). The
Borrower  shall  notify  the  Administrative  Agent  at any  time  the  Borrower
exercises  its right of set-off  pursuant to this  subsection  (a) and shall set
forth in such  notice (A) the name of the  Defaulting  Lender and the  Defaulted
Advance required to be made by such Defaulting Lender and (B) the amount set off
and  otherwise  applied in respect of such  Defaulted  Advance  pursuant to this
subsection (a). Any portion of such payment otherwise required to be made by the
Borrower to or for the account of such  Defaulting  Lender  which is paid by the
Borrower, after giving effect to the amount set off and otherwise applied by the
Borrower pursuant to this subsection (a), shall be applied by the Administrative
Agent as specified in subsection (b) or (c) of this Section 2.15.

                  (b) In the event that,  at any one time,  (i) any Lender Party
shall be a Defaulting Lender,  (ii) such Defaulting Lender shall owe a Defaulted
Amount to the Administrative  Agent or any of the other Lender Parties and (iii)
the Borrower  shall make any payment  hereunder or under any other Loan Document
to the Administrative  Agent for the account of such Defaulting Lender, then the
Administrative  Agent  may,  on its  behalf or on behalf  of such  other  Lender
Parties and to the fullest  extent  permitted by applicable  law,  apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such  Defaulted  Amount to the extent  required to
pay such Defaulted Amount. In the event that the  Administrative  Agent shall so
apply any such amount to the payment of any such  Defaulted  Amount on any date,
the amount so applied  by the  Administrative  Agent  shall  constitute  for all
purposes of this Agreement and the other Loan Documents payment, to such extent,

                                      -49-
<PAGE>

of such  Defaulted  Amount  on such  date.  Any such  amount so  applied  by the
Administrative   Agent  shall  be  retained  by  the  Administrative   Agent  or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance  with the respective  portions of such Defaulted  Amounts  payable at
such time to the Administrative  Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower  shall at such time be  insufficient
to pay all Defaulted Amounts owing at such time to the Administrative  Agent and
the other Lender Parties, in the following order of priority:

                  (i)  first,  to the  Administrative  Agent  for any  Defaulted
         Amount then owing to the Administrative Agent; and

                  (ii)  second,  to any other Lender  Parties for any  Defaulted
         Amounts then owing to such other Lender Parties,  ratably in accordance
         with such respective  Defaulted Amounts then owing to such other Lender
         Parties.

Any  portion  of such  amount  paid by the  Borrower  for  the  account  of such
Defaulting  Lender  remaining,  after giving effect to the amount applied by the
Administrative  Agent pursuant to this  subsection  (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.

                  (c) In the event that,  at any one time,  (i) any Lender Party
shall be a  Defaulting  Lender,  (ii)  such  Defaulting  Lender  shall not owe a
Defaulted   Advance  or  a  Defaulted   Amount  and  (iii)  the  Borrower,   the
Administrative  Agent or any other  Lender  Party  shall be  required  to pay or
distribute  any amount  hereunder or under any other Loan Document to or for the
account of such Defaulting Lender,  then the Borrower or such other Lender Party
shall  pay  such  amount  to  the  Administrative   Agent  to  be  held  by  the
Administrative  Agent,  to the fullest  extent  permitted by applicable  law, in
escrow or the  Administrative  Agent shall,  to the fullest extent  permitted by
applicable law, hold in escrow such amount  otherwise held by it. Any funds held
by the  Administrative  Agent in  escrow  under  this  subsection  (c)  shall be
deposited by the Administrative  Agent in an account with Fleet, in the name and
under the control of the Administrative  Agent, but subject to the provisions of
this subsection (c). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from time to
time, shall be Fleet's  standard terms applicable to escrow accounts  maintained
with it. Any  interest  credited to such account from time to time shall be held
by the  Administrative  Agent in escrow under, and applied by the Administrative
Agent from time to time in accordance  with the provisions  of, this  subsection
(c).  The  Administrative  Agent  shall,  to the  fullest  extent  permitted  by
applicable  law,  apply  all  funds so held in  escrow  from time to time to the
extent  necessary  to make any Advances  required to be made by such  Defaulting
Lender and to pay any amount  payable by such  Defaulting  Lender  hereunder and
under the other Loan Documents to the  Administrative  Agent or any other Lender
Party, as and when such Advances or amounts are required to be made or paid and,
if the amount so held in escrow  shall at any time be  insufficient  to make and
pay all such  Advances and amounts  required to be made or paid at such time, in
the following order of priority:

                  (i) first, to the Administrative Agent for any amount then due
         and  payable  by such  Defaulting  Lender to the  Administrative  Agent
         hereunder;

                  (ii) second,  to any other Lender  Parties for any amount then
         due and payable by such Defaulting  Lender to such other Lender Parties
         hereunder,  ratably in accordance with such respective amounts then due
         and payable to such other Lender Parties; and

                                      -50-
<PAGE>

                  (iii) third,  to the Borrower for any Advance then required to
         be made by such  Defaulting  Lender  pursuant to a  Commitment  of such
         Defaulting Lender.

In the event that any Lender Party that is a  Defaulting  Lender  shall,  at any
time,  cease to be a  Defaulting  Lender,  any funds held by the  Administrative
Agent in  escrow  at such  time  with  respect  to such  Lender  Party  shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender  Party to the  Obligations  owing to such Lender Party at such time under
this  Agreement  and the other Loan  Documents  ratably in  accordance  with the
respective amounts of such Obligations outstanding at such time.

                  (d) The rights and remedies against a Defaulting  Lender under
this Section 2.15 are in addition to other rights and remedies that the Borrower
may have against such  Defaulting  Lender with respect to any Defaulted  Advance
and that the  Administrative  Agent or any Lender  Party may have  against  such
Defaulting Lender with respect to any Defaulted Amount.

                  SECTION 2.16.  Removal of Lender. In the event that any Lender
Party demands payment of costs or additional amounts pursuant to Section 2.10 or
Section  2.12 or asserts,  pursuant to Section  2.10(d)  that it is unlawful for
such Lender Party to make Eurodollar Rate Advances, then (subject to such Lender
Party's  right to  rescind  such  demand or  assertion  within 10 days after the
notice from the  Borrower  referred to below) the  Borrower  may,  upon 20 days'
prior written notice to such Lender Party and the Administrative Agent, elect to
cause such Lender  Party to assign its Advances  and  Commitments  in full to an
assignee  institution  selected by the  Borrower  that meets the  criteria of an
Eligible Assignee and is reasonably satisfactory to the Administrative Agent, so
long as such Lender Party  receives  payment in full in cash of the  outstanding
principal  amount of all Advances made by it and all accrued and unpaid interest
thereon and all other  amounts  due and  payable to such Lender  Party as of the
date of such assignment  (including without limitation amounts owing pursuant to
Section 2.10 or 2.3),  and such assignee  shall agree to accept such  assignment
and assume all  obligations of such Lender Party  hereunder,  in accordance with
Section 9.07.


                                   ARTICLE III

                              CONDITIONS OF LENDING

                  SECTION 3.01.  Conditions Precedent to Effective Date. Article
II hereof shall be effective on and as of the date (the  "Effective  Date"),  on
which each of the following  conditions  precedent  shall have been satisfied or
duly waived:

                  (a) The Merger Agreement shall be in full force and effect and
         the Merger shall be  consummated  immediately  following the funding of
         the Advances in all  material  respects in  accordance  with the Merger
         Agreement,  without any waiver or  amendment  not  consented  to by the
         Administrative  Agent of any material term,  provision or condition set
         forth therein, and in compliance with all applicable laws.

                  (b) The  aggregate  amount of cash  proceeds  received  by the
         Company  Shareholders  in  connection  with the Merger shall not exceed
         $111,600,000.

                                      -51-
<PAGE>

                  (c) The Lender  Parties  shall be satisfied  that all Existing
         Debt,  other than the Debt of the  Borrower  set forth on Schedule  XIV
         (the "Surviving Debt"), has been (or will be, immediately following the
         Merger)  prepaid,  redeemed or defeased in full or otherwise  satisfied
         and  extinguished;  the aggregate  principal amount of Revolving Credit
         Advances  outstanding  after  giving  effect to all  Borrowings  on the
         Effective Date) shall not exceed $70,000,000.

                  (d)  Before   giving  effect  to  the  Merger  and  the  other
         transactions contemplated by this Agreement,  there shall have occurred
         no material  adverse  change in the business  condition  (financial  or
         otherwise), operations, performance, properties or prospects of (x) the
         Borrower  and its  Subsidiaries,  taken as a whole,  since  October 31,
         1998, and (y) the Company and its Subsidiaries, taken as a whole, since
         January 30, 1999.

                  (e)  There  shall  exist  no  action,   suit,   investigation,
         litigation  or  proceeding  affecting  any  Loan  Party  or  any of its
         Subsidiaries  pending or  threatened  before  any  court,  governmental
         agency or  arbitrator  that (i) could  reasonably be expected to have a
         material  adverse  effect  on the  business,  condition  (financial  or
         otherwise), operations, performance, properties or prospects of (x) the
         Borrower and its Subsidiaries, taken as a whole, or (y) the Company and
         its Subsidiaries, taken as a whole, other than the matters described on
         Schedule II (the "Disclosed Litigation") or (ii) purports to affect the
         legality, validity or enforceability of the Merger, this Agreement, any
         Note, any other Loan Document, any Related Document or the consummation
         of the transactions  contemplated  hereby, and there shall have been no
         material  adverse  change in the  status,  or  financial  effect on the
         Borrower,  Company  or any of  their  respective  Subsidiaries,  of the
         Disclosed Litigation from that described on Schedule II.

                  (f) All  governmental  and third party  consents and approvals
         necessary in connection with the  Transaction and the Facilities  shall
         have been obtained  (without the imposition of any conditions  that are
         not acceptable to the Lender  Parties) and shall remain in effect;  all
         applicable  waiting  periods  shall have  expired  without  any adverse
         action being taken by any competent authority; and no law or regulation
         shall be applicable in the  reasonable  judgment of the Lender  Parties
         that restrains,  prevents or imposes materially adverse conditions upon
         the Transaction or the Facilities.

                  (g) All of the  information  provided  by or on  behalf of the
         Borrower or by or on behalf of the Company to the Administrative  Agent
         and the  Lender  Parties  prior to their  commitment  in respect of the
         Facilities (the "Pre-Commitment  Information") shall, taken as a whole,
         be  true  and  correct  in all  material  respects;  and no  additional
         information  shall  have come to the  attention  of the  Administrative
         Agent  or the  Lender  Parties  that is  inconsistent  in any  material
         adverse  respect  with the  Pre-Commitment  Information  or that  could
         reasonably be expected to have a Material Adverse Effect.

                  (h) The  Borrower  shall  have  paid all  accrued  fees of the
         Administrative Agent.

                  (i) The Administrative  Agent shall have received on or before
         the Effective Date the following, each dated such day (unless otherwise
         specified),  in form and substance  satisfactory  to the Lender Parties
         (unless  otherwise  specified) and (except for the Notes) in sufficient
         copies for each Lender Party:

                                      -52-
<PAGE>

                           (i) The Notes payable to the order of the Lenders.

                           (ii) Certified copies of the resolutions of the Board
                  of  Directors  of the  Borrower  and  each  other  Loan  Party
                  approving the Merger,  this Agreement,  the Notes,  each other
                  Loan  Document and each Related  Document to which it is or is
                  to be a party, and of all documents evidencing other necessary
                  corporate  action  and  governmental  and  other  third  party
                  approvals  and  consents,  if any, with respect to the Merger,
                  this Agreement,  the Notes,  each other Loan Document and each
                  Related Document.

                           (iii) A copy of the charter of the  Borrower and each
                  other Loan Party and each amendment thereto,  certified (as of
                  a date reasonably near the Effective Date) by the Secretary of
                  State of the jurisdiction of its incorporation as being a true
                  and correct copy thereof.

                           (iv) A copy  of a  certificate  of the  Secretary  of
                  State  of  the  jurisdiction  of  its   incorporation,   dated
                  reasonably near the Effective Date, listing the charter of the
                  Borrower and each other Loan Party and each amendment  thereto
                  on file in his office and certifying  that (A) such amendments
                  are the only  amendments to the  Borrower's or such other Loan
                  Party's  charter on file in his office,  (B) the  Borrower and
                  each other Loan  Party  have paid all  franchise  taxes to the
                  date of such  certificate  and (C) the Borrower and each other
                  Loan Party are duly  incorporated  and in good standing  under
                  the   laws  of  the   State   of  the   jurisdiction   of  its
                  incorporation.

                           (v) A copy of a certificate of the Secretary of State
                  of each state where the Borrower and each other Loan Party has
                  a place of business, dated reasonably near the Effective Date,
                  stating  that  the  Borrower  is  duly  qualified  and in good
                  standing as a foreign  corporation in such State and has filed
                  all annual  reports  required  to be filed to the date of such
                  certificate; and

                           (vi) A  certificate  of the  Borrower  and each other
                  Loan Party,  signed on behalf of the  Borrower  and such other
                  Loan  Party  by its  President  or a Vice  President  and  its
                  Secretary or any Assistant Secretary, dated the Effective Date
                  (the statements made in which certificate shall be true on and
                  as of the Effective Date), certifying as to (A) the absence of
                  any  amendments  to the charter of the  Borrower or such other
                  Loan  Party  since  the  date  of  the  Secretary  of  State's
                  certificate  referred to in Section  3.01(j)(iii),  (B) a true
                  and correct  copy of the bylaws of the Borrower and such other
                  Loan  Party as in effect on the  Effective  Date,  (C) the due
                  incorporation and good standing of the Borrower and such other
                  Loan Party as a  corporation  organized  under the laws of the

                                      -53-
<PAGE>

                  State of Delaware,  and the absence of any  proceeding for the
                  dissolution  or  liquidation  of the Borrower,  the Company or
                  such other Loan  Party,  (D) the truth of the  representations
                  and warranties  contained in the Loan Documents as though made
                  on and as of the  Effective  Date and (E) the  absence  of any
                  event occurring and continuing,  or resulting from the initial
                  Borrowing  occurring on the Effective Date, that constitutes a
                  Default.

                           (vii) A certificate  of the Secretary or an Assistant
                  Secretary of the Borrower and each other Loan Party certifying
                  the names and true  signatures of the officers of the Borrower
                  and such other Loan Party  authorized to sign this  Agreement,
                  the Notes,  each other Loan Document and each Related Document
                  to which they are or are to be parties and the other documents
                  to be delivered hereunder and thereunder.

                           (viii) An amended and restated security  agreement in
                  substantially the form of Exhibit D (as amended,  supplemented
                  or otherwise modified from time to time in accordance with its
                  terms,  the  "Security  Agreement"),   duly  executed  by  the
                  Borrower and each Subsidiary Guarantor, together with:

                                    (A)  certificates  representing  the Pledged
                           Shares  referred  to therein  accompanied  by undated
                           stock  powers   executed  in  blank  and  instruments
                           evidencing  the  Pledged  Debt  referred  to  therein
                           indorsed in blank,

                                    (B)  signed  originals  of proper  financing
                           statements,  to be filed on or before  the  Effective
                           Date  under  the  Uniform   Commercial  Code  of  all
                           jurisdictions that the Administrative  Agent may deem
                           necessary  or  desirable  in  order  to  perfect  and
                           protect  the  first   priority   liens  and  security
                           interests  created  under  the  Security   Agreement,
                           covering  the  Collateral  described  in the Security
                           Agreement,

                                    (C)  completed   requests  for  information,
                           dated on or before the  Effective  Date,  listing the
                           financing  statements referred to in clause (B) above
                           and all other effective financing statements filed in
                           the  jurisdictions  referred  to in clause  (B) above
                           that name the Company as debtor, together with copies
                           of such other financing statements,

                                    (D) evidence of the  completion of all other
                           recordings  and  filings  of or with  respect  to the
                           Security Agreement that the Administrative  Agent may
                           deem  necessary  or desirable in order to perfect and
                           protect the Liens created thereby,

                                    (E)  evidence of the  insurance  required by
                           the terms of the Security Agreement,

                                    (F)  copies  of  the   Assigned   Agreements
                           referred to in the Security Agreement, and

                                    (G) evidence  that all other action that the
                           Administrative  Agent may deem necessary or desirable

                                      -54-
<PAGE>

                           in order to perfect and  protect  the first  priority
                           liens  and  security   interests  created  under  the
                           Security Agreement has been taken.

                           (ix) An amended  and  restated  pledge  agreement  in
                  substantially the form of Exhibit E (as amended,  supplemented
                  or otherwise modified from time to time in accordance with its
                  terms,  the  "Pledge  Agreement"),  duly  executed by Holding,
                  together with

                                    (A)  certificates  representing  the Pledged
                           Shares  referred  to therein  accompanied  by undated
                           stock powers executed in blank,

                                    (B)  signed  originals  of proper  financing
                           statements,  to be filed on or before  the  Effective
                           Date  under  the  Uniform   Commercial  Code  of  all
                           jurisdictions that the Administrative  Agent may deem
                           necessary  or  desirable  in  order  to  perfect  and
                           protect  the  first   priority   liens  and  security
                           interest created under the Pledge Agreement, covering
                           the Collateral, described in the Pledge Agreement,

                                    (C)  completed   requests  for  information,
                           dated on or before the  Effective  Date,  listing the
                           financing  statements referred to in clause (B) above
                           and all other effective financing statements field in
                           the  jurisdictions  referred  to in clause  (B) above
                           that name Holding as debtor,  together with copies of
                           such other financing statements, and

                                    (D) evidence  that all other action that the
                           Administrative  Agent may deem necessary or desirable
                           to perfect and protect the first  priority  liens and
                           security interests created under the Pledge Agreement
                           has been taken.

                             (x) An amended and restated  subsidiary guaranty in
                  substantially the form of Exhibit F (as amended,  supplemented
                  or otherwise modified from time to time in accordance with its
                  terms,  the  "Subsidiary  Guaranty"),  duly  executed  by each
                  Subsidiary Guarantor.

                           (xi)   Certified   copies  of  each  of  the  Related
                  Documents  in  existence  on such date,  duly  executed by the
                  parties thereto and in form and substance  satisfactory to the
                  Lender Parties, together with all agreements,  instruments and
                  other  documents  delivered in connection  therewith,  in each
                  case certified by a Responsible Officer.

                           (xii)  Certificates,  in  substantially  the  form of
                  Exhibit G,  attesting to the Solvency of each Loan Party after
                  giving  effect  to  the  Merger  and  the  other  transactions
                  contemplated hereby, from its chief financial officer.

                           (xiii)    Evidence    of    insurance    naming   the
                  Administrative  Agent as  insured  and loss  payee  with  such
                  responsible and reputable insurance companies or associations,
                  and  in  such   amounts  and  covering   such  risks,   as  is
                  satisfactory  to  the  Lender  Parties,   including,   without
                  limitation, business interruption insurance.

                                      -55-
<PAGE>

                           (xiv) Certified  copies of each employment  agreement
                  and other compensation arrangement with each executive officer
                  of any Loan Party or any of its Subsidiaries.

                           (xv)  Certified  copies of all Material  Contracts of
                  each Loan Party and its  Subsidiaries,  in each case certified
                  by  a  Responsible  Officer,  to  the  extent  not  previously
                  furnished.

                           (xvi) A Borrowing Base Certificate.

                           (xvii) A favorable  opinion of Sullivan &  Worcester,
                  counsel for the  Borrower and Holding,  in  substantially  the
                  form of Exhibit H hereto  and as to such  other  matter as any
                  Lender Party through the  Administrative  Agent may reasonably
                  request.

                           (xviii) A  favorable  opinion of Shearman & Sterling,
                  counsel for the  Administrative  Agent,  in form and substance
                  satisfactory to the Administrative Agent.

                  SECTION  3.02.  Conditions  Precedent  to Each  Borrowing  and
Issuance.  The obligation of each  Appropriate  Lender to make an Advance (other
than a Letter of Credit  Advance made by the Issuing Bank or a Revolving  Credit
Lender  pursuant to Section 2.03(c) and a Swing Line Advance made by a Revolving
Credit  Lender  pursuant to Section  2.02(b)) on the occasion of each  Borrowing
(including  the initial  Borrowing),  and the  obligation of the Issuing Bank to
issue a Letter of Credit  (including the initial  issuance) or renew a Letter of
Credit and the right of the Borrower to request a Swing Line Borrowing, shall be
subject to the further  conditions  precedent that on the date of such Borrowing
or issuance or renewal (a) the following  statements  shall be true (and each of
the  giving  of the  applicable  Notice  of  Borrowing,  Notice  of  Swing  Line
Borrowing,  Notice of Issuance or Notice of Renewal  and the  acceptance  by the
Borrower of the  proceeds of such  Borrowing  or of such Letter of Credit or the
renewal of such Letter of Credit shall constitute a representation  and warranty
by the  Borrower  that both on the date of such  notice  and on the date of such
Borrowing or issuance or renewal such statements are true):

                  (i) the representations and warranties  contained in each Loan
         Document  are correct on and as of such date,  before and after  giving
         effect to such Borrowing or issuance or renewal and to the  application
         of the proceeds therefrom,  as though made on and as of such date other
         than any such representations or warranties that, by their terms, refer
         to a specific date other than the date of such Borrowing or issuance or
         renewal, in which case as of such specific date;

                  (ii) no event has occurred and is continuing,  or would result
         from such  Borrowing or issuance or renewal or from the  application of
         the proceeds therefrom, that constitutes a Default; and

                  (iii) for each Revolving  Credit Advance or Swing Line Advance
         made by the Swing  Line Bank or  issuance  or  renewal of any Letter of
         Credit,  the sum of the Loan Values of the Eligible  Collateral exceeds
         the aggregate  principal  amount of the Revolving  Credit Advances plus

                                      -56-
<PAGE>

         Swing Line  Advances plus Letter of Credit  Advances to be  outstanding
         plus the  aggregate  Available  Amount of all  Letters  of Credit  then
         outstanding after giving effect to such Advance or issuance or renewal,
         respectively;

and (b) the  Administrative  Agent  shall have  received  such other  approvals,
opinions or documents as any Appropriate Lender through the Administrative Agent
may reasonably request.

                  SECTION 3.03.  Determinations Under Section 3.01. For purposes
of determining  compliance  with the conditions  specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or  satisfactory to the Lender Parties unless an
officer  of  the   Administrative   Agent   responsible  for  the   transactions
contemplated  by the Loan Documents  shall have received notice from such Lender
Party prior to the earlier of the initial Borrowing or the initial issuance of a
Letter of Credit  specifying  its  objection  thereto and if such earlier  event
consists of a Borrowing,  such Lender Party shall not have made available to the
Administrative Agent such Lender Party's ratable portion of such Borrowing.


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES


                  SECTION 4.01. Representations and Warranties.  Each of Holding
and the Borrower represents and warrants that, immediately following the Merger:

                  (a) Each  Loan  Party  (i) is a  corporation  duly  organized,
         validly   existing  and  in  good  standing   under  the  laws  of  the
         jurisdiction of its  incorporation,  (ii) is duly qualified and in good
         standing as a foreign  corporation in each other  jurisdiction in which
         it owns or leases  property  or in which the  conduct  of its  business
         requires it to so qualify or be licensed except where the failure to so
         qualify  or be  licensed  is not  reasonably  likely to have a Material
         Adverse  Effect  and  (iii)  has  all  requisite  corporate  power  and
         authority (including,  without limitation,  all governmental  licenses,
         permits and other approvals) to own or lease and operate its properties
         and to carry on its  business  as now  conducted  and as proposed to be
         conducted.  All of the  outstanding  capital  stock of the Borrower has
         been validly issued, is fully paid and  non-assessable  and is owned by
         Holding,  free and clear of all Liens,  except those  created under the
         Collateral Documents.

                  (b) Set  forth  on  Schedule  III  hereto  is a  complete  and
         accurate list of all Subsidiaries of each Loan Party, showing as of the
         date  hereof  (as to each  such  Subsidiary)  the  jurisdiction  of its
         incorporation,  the  number of shares of each  class of  capital  stock
         authorized,  and the  number  outstanding,  on the date  hereof and the
         percentage of the outstanding shares of each such class owned (directly
         or  indirectly)  by such Loan Party and the number of shares covered by
         all outstanding options, warrants, rights of conversion or purchase and
         similar rights at the date hereof. All of the outstanding capital stock
         of all of such  Subsidiaries has been validly issued, is fully paid and
         non-assessable  and is owned by such  Loan  Party or one or more of its
         Subsidiaries  free and clear of all Liens,  except those  created under
         the  Collateral  Documents.  Each such  Subsidiary (i) is a corporation
         duly organized, validly existing and in good standing under the laws of
         the  jurisdiction of its  incorporation,  (ii) is duly qualified and in
         good standing as a foreign  corporation in each other  jurisdiction  in
         which  it owns or  leases  property  or in  which  the  conduct  of its

                                      -57-
<PAGE>

         business  requires  it to so qualify or be  licensed  except  where the
         failure to so qualify or be licensed is not reasonably likely to have a
         Material Adverse Effect and (iii) has all requisite corporate power and
         authority (including,  without limitation,  all governmental  licenses,
         permits and other approvals) to own or lease and operate its properties
         and to carry on its  business  as now  conducted  and as proposed to be
         conducted.

                  (c) The execution, delivery and performance by each Loan Party
         of this Agreement, the Notes, each other Loan Document and each Related
         Document to which it is or is to be a party,  and the  consummation  of
         the Merger and the other transactions  contemplated  hereby, are within
         such Loan Party's  corporate  powers,  have been duly authorized by all
         necessary corporate action, and do not (i) contravene such Loan Party's
         charter or bylaws, (ii) violate any law (including, without limitation,
         the  Securities  Exchange Act of 1934 and the Racketeer  Influenced and
         Corrupt  Organizations  Chapter of the  Organized  Crime Control Act of
         1970), rule, regulation (including, without limitation, Regulation X of
         the Board of Governors of the Federal  Reserve  System),  order,  writ,
         judgment,  injunction,  decree,  determination or award, (iii) conflict
         with or result in the breach of, or  constitute  a default  under,  any
         contract, loan agreement,  indenture, mortgage, deed of trust, lease or
         other  instrument  binding on or affecting  any Loan Party,  any of its
         Subsidiaries  or  any of  their  properties  except  as  identified  on
         Schedule  IV or (iv)  except  for the  Liens  created  under  the  Loan
         Documents and other Liens permitted hereunder, result in or require the
         creation or  imposition  of any Lien upon or with respect to any of the
         properties of any Loan Party or any of its Subsidiaries.  No Loan Party
         or any of its  Subsidiaries  is in  violation  of any such  law,  rule,
         regulation, order, writ, judgment, injunction, decree, determination or
         award or in breach of any such  contract,  loan  agreement,  indenture,
         mortgage,  deed of trust,  lease or other instrument,  the violation or
         breach of which is reasonably likely to have a Material Adverse Effect.

                  (d) As of the date hereof and hereafter,  no  authorization or
         approval  or other  action  by,  and no notice to or filing  with,  any
         governmental  authority or regulatory  body or any other third party is
         required for (A) the due execution,  delivery,  recordation,  filing or
         performance by any Loan Party of this Agreement,  the Notes,  any other
         Loan  Document  or any  Related  Document  to which it is or is to be a
         party, or for the consummation of the Merger or the other  transactions
         contemplated  hereby,  (B) the  grant  by any Loan  Party of the  Liens
         granted by it pursuant to the Collateral Documents,  (C) the perfection
         or  maintenance  of  the  Liens  created  by the  Collateral  Documents
         (including  the  priority  nature  thereof  required by the  Collateral
         Documents)  or (D) the  exercise  by the  Administrative  Agent  or any
         Lender Party of its rights under the Loan  Documents or the remedies in
         respect of the Collateral pursuant to the Collateral Documents,  except
         for (i) the  authorizations,  approvals,  actions,  notices and filings
         listed on  Schedule  IV, all of which have been duly  obtained,  taken,
         given  or  made  and  are in  full  force  and  effect,  and  (ii)  any
         authorizations,  approvals,  actions,  notices  and  filings  which the
         failure to obtain,  take, give or make would not, in the aggregate,  be
         reasonably  likely to have a Material  Adverse  Effect.  All applicable

                                      -58-
<PAGE>

         waiting   periods  in   connection   with  the  Merger  and  the  other
         transactions contemplated hereby have expired without any action having
         been  taken  by any  competent  authority  restraining,  preventing  or
         imposing materially adverse conditions upon the Merger or the rights of
         the Loan Parties or their Subsidiaries  freely to transfer or otherwise
         dispose  of,  or to create  any Lien on,  any  properties  now owned or
         hereafter acquired by any of them.

                  (e) This Agreement has been, and each of the Notes, each other
         Loan Document and each Related  Document when delivered  hereunder will
         have been, duly executed and delivered by each Loan Party thereto. This
         Agreement is, and each of the Notes,  each other Loan Document and each
         Related Document when delivered hereunder will be, the legal, valid and
         binding obligation of each Loan Party thereto, enforceable against such
         Loan Party in accordance with its terms.

                  (f) (i) The Consolidated balance sheet of the Borrower and its
         Subsidiaries  as at October  31,  1998,  and the  related  Consolidated
         statement  of income and  Consolidated  statement  of cash flows of the
         Borrower  and  its   Subsidiaries  for  the  fiscal  year  then  ended,
         accompanied  by an opinion of Ernst & Young,  LLP,  independent  public
         accountants, and the Consolidated balance sheet of the Borrower and its
         Subsidiaries  as at  January  30,  1999  and the  related  Consolidated
         statement  of income and  Consolidated  statement  of cash flows of the
         Borrower and its  Subsidiaries  for the three  months then ended,  duly
         certified by the chief  financial  officer of the  Borrower,  copies of
         which  have  been  furnished  to each  Lender  Party,  fairly  present,
         subject,  in the case of such balance sheet as at January 30, 1999, and
         said  statement  of income  and cash  flows for the three  months  then
         ended,  to  year-end  audit  adjustments,  the  Consolidated  financial
         condition of the Borrower and its  Subsidiaries as at such date and the
         Consolidated  results  of  the  operations  of  the  Borrower  and  its
         Subsidiaries  for the period ended on such date, all in accordance with
         generally accepted accounting principles applied on a consistent basis,
         and since October 31, 1998,  there has been no Material  Adverse Change
         in respect of the Borrower and its Subsidiaries, taken as a whole.

                  (ii) The  Consolidated  balance  sheet of the  Company and its
         Subsidiaries  as at January  30,  1999,  and the  related  Consolidated
         statement  of income and  Consolidated  statement  of cash flows of the
         Company  and  its   Subsidiaries   for  the  fiscal  year  then  ended,
         accompanied by an opinion of Deloitte & Touche LLP,  independent public
         accountants,  copies of which have been furnished to each Lender Party,
         fairly present,  subject, in the case of said balance sheet as at April
         3, 1999, and said statement of income and cash flows for the two months
         then ended, to year-end audit adjustments,  the Consolidated  financial
         condition of the Company and its  Subsidiaries  as at such date and the
         Consolidated   results  of  the  operations  of  the  Company  and  its
         Subsidiaries  for the period ended on such date, all in accordance with
         generally accepted accounting principles applied on a consistent basis,
         and since January 30, 1999,  there has been no Material  Adverse Change
         in respect of the Company and its Subsidiaries, taken as a whole.

                  (g)  The  Consolidated   forecasted  balance  sheets,   income
         statements   and  cash  flows   statements  of  the  Borrower  and  its
         Subsidiaries  delivered,  or to be  delivered,  to the  Lender  Parties
         pursuant to Section  3.01(h) or 5.03 were prepared in good faith on the

                                      -59-
<PAGE>

         basis of the assumptions stated therein, which assumptions were fair in
         the  light  of  conditions  existing  at the time of  delivery  of such
         forecasts,  and  represented,  at the time of delivery,  the Borrower's
         reasonable estimate of its future financial  performance  (although the
         actual results during the periods  covered by such forecasts may differ
         materially from the forecasted results).

                  (h) None of the  information,  exhibits or reports (other than
         financial projections and pro forma financial information) furnished by
         any Loan  Party to the  Administrative  Agent  or any  Lender  Party in
         connection  with the  negotiation  of the Loan Documents or pursuant to
         the terms of the Loan  Documents  contained  any untrue  statement of a
         material fact or omitted to state a material fact necessary to make the
         statements made therein not misleading.

                  (i) There is no action,  suit,  investigation,  litigation  or
         proceeding  affecting  any  Loan  Party  or any  of  its  Subsidiaries,
         including any  Environmental  Action,  pending or threatened before any
         court,  governmental  agency or arbitrator that (i) would be reasonably
         likely to have a Material  Adverse  Effect  (other  than the  Disclosed
         Litigation)  or (ii)  purports  to affect  the  legality,  validity  or
         enforceability of the Merger, this Agreement,  any Note, any other Loan
         Document  or  any  Related   Document  or  the   consummation   of  the
         transactions  contemplated hereby, and there has been no adverse change
         in the  status,  or  financial  effect on any Loan  Party or any of its
         Subsidiaries,  of the  Disclosed  Litigation  from  that  described  on
         Schedule II.

                  (j) No proceeds of any Advance or drawings under any Letter of
         Credit will be used to acquire  any equity  security of a class that is
         registered  pursuant to Section 12 of the  Securities  Exchange  Act of
         1934.

                  (k) The  Borrower is not engaged in the  business of extending
         credit for the purpose of purchasing or carrying  Margin Stock,  and no
         proceeds of any Advance or drawings  under any Letter of Credit will be
         used to  purchase  or carry any  Margin  Stock or to  extend  credit to
         others for the purpose of purchasing or carrying any Margin Stock.

                  (l) Following  application  of the proceeds of each Advance or
         drawing  under each  Letter of Credit,  not more than 25 percent of the
         value of the assets (either of the Borrower only or of the Borrower and
         its Subsidiaries on a Consolidated  basis) subject to the provisions of
         Section 5.02(a) or 5.02(e) or subject to any  restriction  contained in
         any agreement or  instrument  between the Borrower and any Lender Party
         or any  Affiliate of any Lender  Party  relating to Debt and within the
         scope of Section 6.01(e) will be Margin Stock.

                  (m) All Plans of the  Borrower  and its ERISA  Affiliates  are
         listed on  Schedule V. No ERISA  Event has  occurred  or is  reasonably
         expected  to occur with  respect to any Plan  listed on Schedule V that
         has  resulted  in or is  reasonably  expected  to result in a  material
         liability of any Loan Party or any ERISA Affiliate.

                  (n) As of the last annual actuarial valuation date, the funded
         current liability percentage, as defined in Section 302(d)(8) of ERISA,
         of each Plan exceeds 90% and there has been no material  adverse change
         in the funding status of any such Plan since such date.

                                      -60-
<PAGE>

                  (o)  Schedule B  (Actuarial  Information)  to the most  recent
         annual  report  (Form 5500  Series) for each Plan listed on Schedule V,
         copies of which have been filed with the Internal  Revenue  Service and
         furnished  to the Lender  Parties,  is complete and accurate and fairly
         presents  the funding  status of such Plan,  and since the date of such
         Schedule B there has been no material  adverse  change in such  funding
         status.

                  (p)  Neither  any  Loan  Party  nor any  ERISA  Affiliate  has
         incurred or is reasonably expected to incur any Withdrawal Liability to
         any Multiemployer Plan listed on Schedule V.

                  (q)  Neither any Loan Party nor any ERISA  Affiliate  has been
         notified  by the sponsor of a  Multiemployer  Plan listed on Schedule V
         that  such   Multiemployer  Plan  is  in  reorganization  or  has  been
         terminated,  within  the  meaning  of  Title IV of  ERISA,  and no such
         Multiemployer Plan is reasonably expected to be in reorganization or to
         be terminated, within the meaning of Title IV of ERISA.

                  (r) Except as set forth in the financial  statements  referred
         to in this Section 4.01 and in Section 5.03, the Loan Parties and their
         respective  Subsidiaries  have no material  liability  with  respect to
         "expected post retirement  benefit  obligations"  within the meaning of
         Statement of Financial Accounting Standards No. 106.

                  (s) Neither the business nor the  properties of any Loan Party
         or  any of its  Subsidiaries  are  affected  by  any  fire,  explosion,
         accident, strike, lockout or other labor dispute, drought, storm, hail,
         earthquake,  embargo,  act  of  God or of the  public  enemy  or  other
         casualty (whether or not covered by insurance) that would be reasonably
         likely to have a Material Adverse Effect.

                  (t) Except as disclosed  in the  Environmental  Due  Diligence
         Investigation,  Country  General  Stores  dated June 1997  prepared  by
         O'Brien & Gere  Engineers,  Inc.,  or the  Environmental  Due Diligence
         Investigation: Quality Stores, Inc. dated April, 1999 by O'Brien & Gere
         Engineers,  Inc.,  or  as  otherwise  disclosed  on  Schedule  XV,  the
         operations   and  properties  of  each  Loan  Party  and  each  of  its
         Subsidiaries  comply  in all  material  respects  with  all  applicable
         Environmental Laws and Environmental  Permits,  all past non-compliance
         with  such  Environmental  Laws  and  Environmental  Permits  has  been
         resolved  without  material  ongoing   obligations  or  costs,  and  no
         circumstances  exist  that would be  reasonably  likely to (i) form the
         basis of an  Environmental  Action against any Loan Party or any of its
         Subsidiaries  or any of  their  properties  that  could  reasonably  be
         expected  to have a  Material  Adverse  Effect  or (ii)  cause any such
         property to be subject to any restrictions on ownership, occupancy, use
         or transferability under any Environmental Law that could reasonably be
         expected to have a Material Adverse Effect.

                  (u)  Except as  disclosed  in the Phase I  Environmental  Site
         Assessment Reports prepared by Dames & Moore for the properties at 3915
         Delaware Avenue,  Des Moines,  Iowa and 650 Meridian Road,  Youngstown,
         Ohio,  dated  November 15, 1996,  in the  Environmental  Due  Diligence

                                      -61-
<PAGE>

         Investigation,  Country  General  Stores  dated June 1997  prepared  by
         O'Brien & Gere  Engineers,  Inc., or as disclosed in the  Environmental
         Due Diligence Investigation:  Quality Stores, Inc. dated April, 1999 by
         O'Brien & Gere Engineers,  Inc., or as otherwise  disclosed on Schedule
         XV, none of the  properties  currently or formerly owned or operated by
         any Loan Party or any of its  Subsidiaries  is listed or  proposed  for
         listing on the NPL or on the CERCLIS or any analogous foreign, state or
         local  list or is  adjacent  to any such  property  other than any such
         properties  that, in the aggregate,  would not be reasonably  likely to
         have a Material  Adverse  Effect;  there are no and never have been any
         underground  or  aboveground  storage  tanks on any property  currently
         owned or  operated by any Loan Party or any of its  Subsidiaries  other
         than any such storage tanks that would not be reasonably likely to have
         a Material Adverse Effect; there are no and never have been any surface
         impoundments,  septic tanks,  pits, sumps or lagoons in which Hazardous
         Materials  are being or have been  treated,  stored or  disposed on any
         property  currently  or, to the best  knowledge of the Loan Parties and
         their Subsidiaries, formerly owned or operated by any Loan Party or any
         of its Subsidiaries in a manner that would be reasonably likely to have
         a Material Adverse Effect; there is no asbestos or  asbestos-containing
         material on any property  currently owned or operated by any Loan Party
         or any of its Subsidiaries in a manner that would be reasonably  likely
         to have a Material  Adverse  Effect;  and Hazardous  Materials have not
         been released,  discharged or disposed of on any property currently or,
         to the best  knowledge  of the Loan  Parties  and  their  Subsidiaries,
         formerly owned or operated by any Loan Party or any of its Subsidiaries
         in a manner,  quantity or concentration that would be reasonably likely
         to have a Material Adverse Effect.

                  (v)  Except  for any  such  actions  that  could  not,  either
         individually  or in the  aggregate,  be  reasonably  likely  to  have a
         Material Adverse Effect,  and except as disclosed in the  Environmental
         Due Diligence  Investigation,  Country  General  Stores dated June 1997
         prepared by O'Brien & Gere Engineers,  Inc., or the  Environmental  Due
         Diligence  Investigation:  Quality  Stores,  Inc. dated April,  1999 by
         O'Brien & Gere Engineers,  Inc., or as otherwise  disclosed on Schedule
         XV, neither any Loan Party nor any of its  Subsidiaries is undertaking,
         and has not  completed,  either  individually  or  together  with other
         potentially  responsible  parties,  any  investigation or assessment or
         remedial  or  response  action  relating  to any  actual or  threatened
         release,  discharge  or disposal of  Hazardous  Materials  at any site,
         location or operation,  either  voluntarily or pursuant to the order of
         any  governmental  or regulatory  authority or the  requirements of any
         Environmental  Law;  and  all  Hazardous  Materials  generated,   used,
         treated,  handled or stored at, or transported to or from, any property
         currently or formerly owned or operated by any Loan Party or any of its
         Subsidiaries have been disposed of in a manner not reasonably  expected
         to  result  in  material  liability  to any  Loan  Party  or any of its
         Subsidiaries.

                  (w)  Neither any Loan Party nor any of its  Subsidiaries  is a
         party to any indenture,  loan or credit agreement or any lease or other
         agreement  or  instrument  or  subject  to  any  charter  or  corporate
         restriction that would be reasonably  likely to have a Material Adverse
         Effect.

                                      -62-
<PAGE>

                  (x)  Upon the  filing  of UCC-1  financing  statements  in the
         appropriate  offices and the taking of all action  contemplated  by the
         Loan Documents,  the Security Agreement will create valid and perfected
         security  interests in the Collateral  having the priority set forth in
         such  Collateral  Documents,   securing  the  payment  of  the  Secured
         Obligations.  The Loan Parties are the legal and  beneficial  owners of
         the  Collateral  free and clear of any Lien,  except  for the liens and
         security interests created or permitted under the Loan Documents.

                  (y) The Borrower has filed, has caused to be filed or has been
         included in all Federal tax returns and all material  other tax returns
         (state,  local and foreign) required to be filed and has paid all taxes
         shown  thereon  to  be  due,  together  with  applicable  interest  and
         penalties,  except for any such taxes,  assessments,  levies,  fees and
         other charges, the amount,  applicability or validity of which is being
         contested  in good  faith  and by  appropriate  proceedings  diligently
         conducted  and with  respect  to which  the  Borrower  has  established
         appropriate and adequate reserves in accordance with GAAP.

                  (z) The aggregate  unpaid  amount,  as of the date hereof,  of
         adjustments  to the  Federal  income  tax  liability  of  the  Borrower
         proposed by the  Internal  Revenue  Service  with respect to Open Years
         does not exceed $1,000,000.  No issues have been raised by the Internal
         Revenue Service in respect of Open Years that, in the aggregate,  would
         be reasonably likely to have a Material Adverse Effect.

                  (aa) The aggregate  unpaid amount,  as of the date hereof,  of
         adjustments  to the  state,  local and  foreign  tax  liability  of the
         Borrower  proposed by all state,  local and foreign taxing  authorities
         (other than amounts  arising  from  adjustments  to Federal  income tax
         returns) does not exceed $1,000,000. No issues have been raised by such
         taxing  authorities that, in the aggregate,  would be reasonably likely
         to have a Material Adverse Effect.

                  (bb) Neither any Loan Party nor any of its  Subsidiaries is an
         "investment  company",  or an "affiliated  person" of, or "promoter" or
         "principal underwriter" for, an "investment company," as such terms are
         defined in the Investment Company Act of 1940, as amended.  Neither the
         making of any Advances,  nor the issuance of any Letters of Credit, nor
         the  application of the proceeds or repayment  thereof by the Borrower,
         nor the  consummation of the other  transactions  contemplated  hereby,
         will violate any provision of such Act or any rule, regulation or order
         of the Securities and Exchange Commission thereunder.

                  (cc) Each Loan Party is,  individually  and together  with its
         Subsidiaries, Solvent.

                  (dd)  Set  forth on  Schedule  VI  hereto  is a  complete  and
         accurate list of all Existing Debt that will be outstanding immediately
         following  the  Merger,  showing  the  principal  amount  that  will be
         outstanding thereunder at such time.

                  (ee) Set  forth on  Schedule  VII  hereto  is a  complete  and
         accurate  list of all real  property  owned in fee by any Loan Party or
         any of its Subsidiaries immediately following the Merger, showing as of

                                      -63-
<PAGE>

         such date the street  address,  county or other relevant  jurisdiction,
         state,  record owner and book and estimated  fair value  thereof.  Each
         Loan Party or such  Subsidiary  has good,  marketable and insurable fee
         simple title to such real property,  free and clear of all Liens, other
         than Liens created or permitted by the Loan Documents.

                  (ff) Set  forth on  Schedule  VIII  hereto is a  complete  and
         accurate list of all leases of real property under which any Loan Party
         or any of its  Subsidiaries  is the lessee  immediately  following  the
         Merger,  showing  as of such date the street  address,  county or other
         relevant  jurisdiction,  state,  lessor,  lessee,  expiration  date and
         annual rental cost thereof.  To the best of the  Borrower's  knowledge,
         each such  lease is the  legal,  valid and  binding  obligation  of the
         lessor thereof, enforceable in accordance with its terms.

                  (gg)  Set  forth on  Schedule  IX  hereto  is a  complete  and
         accurate  list of all  Material  Contracts  of each Loan  Party and its
         Subsidiaries  immediately following the Merger, showing as of such date
         the  parties,  subject  matter  and  term  thereof.  To the best of the
         Borrower's  knowledge  (with  respect  to  parties  other than the Loan
         Parties  and  their  Subsidiaries),  as of the date  hereof  each  such
         Material  Contract has been duly authorized,  executed and delivered by
         all parties  thereto,  has not been amended or otherwise  modified in a
         manner  adverse to the  interests of such Loan Party,  is in full force
         and effect and is binding  upon and  enforceable  against  all  parties
         thereto in accordance  with its terms,  and as of the date hereof there
         exists no default under any Material Contract by any party thereto.

                  (hh) Set forth on Schedule X hereto is a complete and accurate
         list  of  all  Investments  held  by  any  Loan  Party  or  any  of its
         Subsidiaries  immediately following the Merger, showing as of such date
         the amount, obligor or issuer and maturity, if any, thereof.

                  (ii)  Set  forth on  Schedule  XI  hereto  is a  complete  and
         accurate list of all patents,  trademarks,  trade names,  service marks
         and copyrights,  and all applications therefor and licenses thereof, of
         each Loan Party or any of its  Subsidiaries  immediately  following the
         Merger, showing the jurisdiction in which registered,  the registration
         number, the date of registration and the expiration date.


                                    ARTICLE V

                            COVENANTS OF THE BORROWER

                  SECTION 5.01.  Affirmative  Covenants.  So long as any Advance
shall remain  unpaid,  any Letter of Credit shall be  outstanding  or any Lender
Party shall have any  Commitment  hereunder,  each of Holding  and the  Borrower
will:

                  (a) Compliance with Laws, Etc.  Comply,  and cause each of its
         Subsidiaries to comply, in all material  respects,  with all applicable
         laws,  rules,  regulations  and  orders,  such  compliance  to include,
         without limitation,  compliance with ERISA and the Racketeer Influenced
         and Corrupt Organizations Chapter of the Organized Crime Control Act of
         1970.

                                      -64-
<PAGE>

                  (b) Payment of Taxes,  Etc. Pay and discharge,  and cause each
         of its Subsidiaries to pay and discharge,  before the same shall become
         delinquent,  (i) all taxes,  assessments  and  governmental  charges or
         levies  imposed upon it or upon its property and (ii) all lawful claims
         that,  if unpaid,  might by law become a Lien upon its property  (other
         than Permitted Liens); provided, however, that neither the Borrower nor
         any of its Subsidiaries  shall be required to pay or discharge any such
         tax, assessment,  charge or claim that is being contested in good faith
         and by proper  proceedings  and as to which  appropriate  reserves  are
         being maintained.

                  (c) Compliance with Environmental Laws. Comply, and cause each
         of its Subsidiaries and use all reasonable efforts to cause all lessees
         and other Persons  operating or occupying its properties to comply,  in
         all  material  respects,  with all  applicable  Environmental  Laws and
         Environmental  Permits;   obtain  and  renew  and  cause  each  of  its
         Subsidiaries  to obtain and renew all  material  Environmental  Permits
         necessary for its operations  and  properties;  and conduct,  and cause
         each of its Subsidiaries to conduct, any investigation, study, sampling
         and testing,  and  undertake  any cleanup,  removal,  remedial or other
         action  necessary to remove and clean up all Hazardous  Materials  from
         any of its  properties,  to the extent  required by, and in  accordance
         with, the  requirements  of applicable  Environmental  Laws;  provided,
         however, that neither the Borrower nor any of its Subsidiaries shall be
         required to  undertake  any such  cleanup,  removal,  remedial or other
         action to the extent that its obligation to do so is being contested in
         good faith and by proper proceedings and appropriate reserves are being
         maintained with respect to such circumstances or to the extent that its
         failure to do so could not  reasonably  be  expected to have a Material
         Adverse Effect.

                  (d) Maintenance of Insurance.  Maintain, and cause each of its
         Subsidiaries  to maintain,  insurance  with  responsible  and reputable
         insurance  companies or  associations in such amounts and covering such
         risks as is usually carried by companies engaged in similar  businesses
         and owning  similar  properties  in the same general areas in which the
         Borrower or such Subsidiary operates.

                  (e)  Preservation of Corporate  Existence,  Etc.  Preserve and
         maintain,  and cause each of its Subsidiaries to preserve and maintain,
         its  existence,  legal  structure,  legal  name,  rights  (charter  and
         statutory),  permits, licenses,  approvals,  privileges and franchises;
         provided,  however, that the Borrower and any Subsidiary may merge with
         or into any Person to the extent permitted by Section 5.02(d), provided
         further that neither the Borrower nor any of its Subsidiaries  shall be
         required to preserve any right, permit, license, approval, privilege or
         franchise if the Board of Directors of the Borrower or such  Subsidiary
         shall determine that the preservation thereof is no longer desirable in
         the conduct of the business of the Borrower or such Subsidiary,  as the
         case may be, and that the loss  thereof is not  disadvantageous  in any
         material  respect  to the  Borrower,  such  Subsidiary  or  the  Lender
         Parties.

                                      -65-
<PAGE>

                  (f) Visitation Rights. At any reasonable time and from time to
         time, permit the  Administrative  Agent or any of the Lender Parties or
         any agents or  representatives  thereof,  to examine and make copies of
         and  abstracts  from the records and books of account of, and visit the
         properties of, the Borrower and any of its Subsidiaries, and to discuss
         the  affairs,  finances  and  accounts of the  Borrower  and any of its
         Subsidiaries  with any of their  officers or  directors  and with their
         independent  certified public  accountants,  provided that the Borrower
         shall  have  received  prior  notice of any such  discussion  with such
         independent   certified   public   accountants   and  shall   have  the
         opportunity, at its option, to participate in such discussion.

                  (g) Keeping of Books. Keep, and cause each of its Subsidiaries
         to keep, proper books of record and account,  in which full and correct
         entries shall be made of all financial  transactions and the assets and
         business of the Borrower and each such  Subsidiary in  accordance  with
         generally accepted accounting principles in effect from time to time.

                  (h) Maintenance of Properties, Etc. Maintain and preserve, and
         cause each of its  Subsidiaries  to maintain and  preserve,  all of its
         properties  that are used or useful in the  conduct of its  business in
         good working order and condition, ordinary wear and tear excepted.

                  (i) Performance of Related Documents.  Perform and observe all
         of the terms and provisions of each Related Document to be performed or
         observed by it,  maintain each such Related  Document in full force and
         effect,  enforce such Related  Document in  accordance  with its terms,
         take all such action to such end as may be from time to time  requested
         by the  Administrative  Agent and,  upon request of the  Administrative
         Agent,  make to each other  party to each such  Related  Document  such
         demands and requests for  information  and reports or for action as the
         Borrower is entitled to make under such Related Document.

                  (j) Transactions with Affiliates.  Conduct,  and cause each of
         its Subsidiaries to conduct, all transactions otherwise permitted under
         the Loan Documents with any of their  Affiliates on terms that are fair
         and reasonable and no less favorable to the Borrower or such Subsidiary
         than it would obtain in a comparable  arm's-length  transaction  with a
         Person not an Affiliate,  other than the performance of its obligations
         under the Management  Agreement and the Fenway Management Agreement and
         Stockholders Agreement.

                  (k)  Cash   Concentration   Accounts.   Maintain   main   cash
         concentration  accounts  with Fleet or one or more banks  acceptable to
         the  Administrative  Agent that have  accepted the  assignment  of such
         accounts  to  the   Administrative   Agent  pursuant  to  the  Security
         Agreement.

                  (l) Termination of Financing  Statements.  Upon the request of
         the Administrative Agent, and at the expense of the Borrower, within 10
         days after such  request,  furnish to the  Administrative  Agent proper
         termination statements on Form UCC-3 covering such financing statements
         as the Administrative  Agent may reasonably request that were listed in
         the  completed  requests  for  information   referred  to  in  Sections
         3.01(n)(viii)(C) and 3.01(n)(ix)(C).

                                      -66-
<PAGE>

                  (m) Deposit  Accounts.  Instruct  each bank at which a deposit
         account is maintained to transfer to a main cash concentration  account
         at the end of each Business Day, in same day funds,  an amount equal to
         the credit balance of such deposit account.

                  (n)  Mortgages.  On or prior to  August  7,  1999,  and at the
         expense of the Borrower,  deliver to the Administrative  Agent deeds of
         trust, trust deeds, mortgages,  leasehold mortgages and leasehold deeds
         of  trust  in  form  and  substance  reasonably   satisfactory  to  the
         Administrative  Agent (as amended,  supplemented or otherwise  modified
         from time to time in accordance with their terms,  the "Mortgages") and
         covering the properties that the  Administrative  Agent determines,  in
         its  reasonable  judgment,  to be necessary or desirable in  connection
         with the Facilities  (provided that, in no event,  shall the book value
         of any such  property be less than  $1,500,000),  duly  executed by the
         Company, together with:

                           (A) evidence that  counterparts of the Mortgages have
                  been duly  recorded on or before  August 7, 1999 in all filing
                  or recording  offices that the  Administrative  Agent may deem
                  necessary  or  desirable  in order to create a valid first and
                  subsisting Lien on the property  described therein in favor of
                  the Lender Parties and that all filing and recording taxes and
                  fees have been paid,

                           (B)  fully  paid  American  Land  Title   Association
                  Lender's  Extended  Coverage  title  insurance  policies  (the
                  "Mortgage Policies") in form and substance,  with endorsements
                  and in amounts  reasonably  acceptable  to the  Administrative
                  Agent,  issued,  coinsured  and  reinsured by title  insurers,
                  reasonably  acceptable to the Administrative  Agent,  insuring
                  the  Mortgages to be valid first and  subsisting  Liens on the
                  property  described  therein,  free and  clear of all  defects
                  (including,  but not limited to,  mechanics' and materialmen's
                  Liens)   and    encumbrances,    excepting    only   Permitted
                  Encumbrances,   and  providing  for  such  other   affirmative
                  insurance  (including  endorsements  for future advances under
                  the Loan Documents and for mechanics' and materialmen's Liens)
                  and such  coinsurance  and direct  access  reinsurance  as the
                  Administrative   Agent  may   reasonably   deem  necessary  or
                  desirable,

                           (C) American  Land Title  Association  form  surveys;
                  certified  to the  Administrative  Agent and the issuer of the
                  Mortgage Policies in a manner  reasonably  satisfactory to the
                  Administrative  Agent by a land surveyor duly  registered  and
                  licensed in the States in which the property described in such
                  surveys  in  located   and   reasonably   acceptable   to  the
                  Administrative   Agent,   showing  all   buildings  and  other
                  improvements,  any off-site improvements,  the location of any
                  easements,  parking spaces,  rights of way,  building set-back
                  lines and other  dimensional  regulations  and the  absence of
                  encroachments,  either  by  such  improvements  or on to  such
                  property,  and other  defects,  other than  encroachments  and
                  other defects reasonably acceptable to the Agent,

                                      -67-
<PAGE>

                           (D) the  Assignments  of Leases and Rents referred to
                  in the Mortgages, duly executed by the Company,

                           (E) such consents and agreements of lessors and other
                  third   parties,   and  such   estoppel   letters   and  other
                  confirmations, as the Administrative Agent may reasonably deem
                  necessary  or desirable  and as the Borrower  shall be able to
                  obtain (using all reasonable efforts),

                           (F) evidence of the  insurance  required by the terms
                  of the Mortgages, and

                           (G)   evidence   that  all  other   action  that  the
                  Administrative   Agent  may   reasonably   deem  necessary  or
                  desirable in order to create valid first and subsisting  Liens
                  on the property described in the Mortgages has been taken.

                  (o)  Landlord  Consents.  In the case of the  Borrower and its
         Subsidiaries,  use their reasonable efforts to deliver,  on or prior to
         August 7, 1999, at the expense of the Borrower,  to the  Administrative
         Agent consents,  in form and substance  reasonably  satisfactory to the
         Administrative Agent, from the landlord under each leasehold in respect
         of  which  the  Administrative  Agent  determines,  in  its  reasonable
         judgment,  that such a consent is necessary or desirable in  connection
         with  the   Facilities,   which   consents   shall   provide  that  the
         Administrative  Agent has a right to repossess the Inventory located on
         such leasehold  upon the  occurrence  and during the  continuance of an
         Event of Default and such other rights as may be reasonably  acceptable
         to the Administrative Agent.

                  (p)  Interest  Rate  Hedging.  Enter into prior to October 30,
         1999,  interest rate Hedge  Agreements  with Persons  acceptable to the
         Administrative  Agent,  covering  a  notional  amount  of not less than
         $65,000,000 and providing for such Persons to make payments  thereunder
         for a period of no less than 2 years to the extent that interest  rates
         exceed 7.0%.

                  SECTION 5.02. Negative Covenants. So long as any Advance shall
remain  unpaid,  any Letter of Credit shall be  outstanding  or any Lender Party
shall have any Commitment hereunder,  each of Holding and the Borrower will not,
at any time:

                  (a) Liens, Etc. Create,  incur,  assume or suffer to exist, or
         permit any of its  Subsidiaries to create,  incur,  assume or suffer to
         exist,  any Lien on or with  respect  to any of its  properties  of any
         character (including,  without limitation,  accounts) whether now owned
         or hereafter  acquired,  or sign or file or suffer to exist,  or permit
         any of its  Subsidiaries to sign or file or suffer to exist,  under the
         Uniform  Commercial  Code of any  jurisdiction,  a financing  statement
         (other than any  precautionary  filings  filed  under ss.  9-408 of the
         Uniform  Commercial Code of any jurisdiction)  that names Holding,  the
         Borrower  or any of its  Subsidiaries  as debtor,  or sign or suffer to
         exist,  or permit any of its  Subsidiaries  to sign or suffer to exist,
         any security agreement authorizing any secured party thereunder to file
         such financing statement,  or assign, or permit any of its Subsidiaries
         to assign,  any accounts or other right to receive  income  (other than
         assignments  for  collection  purposes  and  other  assignments  in the
         ordinary course of business), excluding, however, from the operation of
         the foregoing restrictions the following:

                                      -68-
<PAGE>

                           (i) Liens created under the Loan Documents;

                           (ii)   in  the   case   of  the   Borrower   and  its
                  Subsidiaries, Permitted Liens;

                           (iii) Liens existing on the date hereof and described
                  on Schedule XIII hereto;

                           (iv)   in  the   case   of  the   Borrower   and  its
                  Subsidiaries, purchase money Liens upon or in real property or
                  equipment  acquired  or  held  by the  Borrower  or any of its
                  Subsidiaries  in the ordinary course of business to secure the
                  purchase price of such property or equipment or to secure Debt
                  incurred solely for the purpose of financing the  acquisition,
                  construction  or improvement of any such property or equipment
                  to be subject to such  Liens,  or Liens  existing  on any such
                  property or equipment at the time of  acquisition  (other than
                  any such Liens created in  contemplation  of such  acquisition
                  that  do  not  secure  the  purchase  price),  or  extensions,
                  renewals or  replacements of any of the foregoing for the same
                  or a lesser amount; provided, however, that no such Lien shall
                  extend to or cover any  property or  equipment  other than the
                  property or equipment being acquired, constructed or improved,
                  and no such extension,  renewal or replacement shall extend to
                  or cover any property or equipment not theretofore  subject to
                  the Lien being  extended,  renewed or  replaced;  and provided
                  further that such Debt shall not  otherwise be  prohibited  by
                  the terms of the Loan Documents; and

                           (v) in the case of the Borrower and its Subsidiaries,
                  Liens arising in connection with Capitalized  Leases permitted
                  under Section 5.02(b)(v)(C),  provided that no such Lien shall
                  extend to or cover any  Collateral  or assets  other  than the
                  assets subject to such Capitalized Leases.

                  (b) Debt. Create,  incur, assume or suffer to exist, or permit
         any of its  Subsidiaries to create,  incur,  assume or suffer to exist,
         any Debt other than:

                           (i) In the case of the  Borrower,  Debt in respect of
                  Hedge  Agreements  designed to hedge against  fluctuations  in
                  interest rates incurred in the ordinary course of business and
                  consistent with prudent  business  practice with the aggregate
                  Agreement  Value thereof not to exceed  $2,500,000 at any time
                  outstanding;

                           (ii) in the case of Holding,  (A) Debt under the Loan
                  Documents,  (B) Debt in an aggregate  principal  amount not to
                  exceed   $10,000,000  at  any  time  issued  pursuant  to  the
                  Stockholders  Agreement or an  Employment  Agreement  provided
                  that  (w)  such  Debt is  evidenced  by a  promissory  note in
                  substantially  the  form  of  Exhibit  B to  the  Stockholders
                  Agreement or otherwise subordinated in right of payment to the
                  Obligations  of Holding under the Loan  Documents on terms and
                  conditions reasonably  satisfactory to the Lender Parties, (x)
                  such Debt shall not bear interest on a cash basis prior to the
                  Termination Date, (y) the final maturity of such Debt is after

                                      -69-
<PAGE>

                  the Termination  Date and (z) amortization of such Debt is not
                  required prior to the Termination Date, and (C) Debt under the
                  13% Subordinated Notes due May 31, 2009 issued by Holding;

                           (iii)   in  the   case  of  the   Borrower   and  its
                  Subsidiaries,  the  Permanent  Debt in an aggregate  principal
                  amount not to exceed $105,000,000;

                           (iv) Debt owed to the  Borrower  by any  wholly-owned
                  Subsidiary  of the  Borrower  or Debt  owed to a  wholly-owned
                  Subsidiary  of the  Borrower  by  the  Borrower  or any  other
                  wholly-owned Subsidiary of the Borrower; and

                           (v)  in  the  case  of the  Borrower  and  any of its
                  Subsidiaries,

                                    (A) Debt under the Loan Documents,

                                    (B)  Debt  secured  by  Liens  permitted  by
                           Section  5.02(a)(iv)  not to exceed in the  aggregate
                           $10,000,000 at any time outstanding,

                                    (C) Capitalized  Leases not to exceed in the
                           aggregate $20,000,000 at any time outstanding,

                                    (D) unsecured  Debt incurred in the ordinary
                           course of business for the deferred purchase price of
                           property or services,  maturing  within one year from
                           the date created, and aggregating,  on a Consolidated
                           basis,  not  more  than  $7,500,000  at any one  time
                           outstanding,

                                    (E)  indorsement  of negotiable  instruments
                           for deposit or collection or similar  transactions in
                           the ordinary course of business, and

                                    (F)  Debt  (other  than  Debt  comprised  of
                           senior  bank  financing  or  other  similar   working
                           capital  financing)  of any  Person  that  becomes  a
                           Subsidiary  of the Borrower  after the date hereof in
                           accordance  with the terms of Section 5.02(f) that is
                           existing at the time such Person becomes a Subsidiary
                           of the Borrower  (other than Debt incurred  solely in
                           contemplation of such Person becoming a Subsidiary of
                           the Borrower),  provided that the aggregate principal
                           amount of any such Debt of a Person  acquired  in any
                           Fiscal Year  (together  with the aggregate  amount of
                           Capital  Expenditures made in such Fiscal Year) shall
                           not exceed  the  amount set forth in Section  5.02(p)
                           for such Fiscal Year.

                                    (G)  other  Debt in an  aggregate  principal
                           amount   not  to  exceed   $7,500,000   at  any  time
                           outstanding.

                  (c) Lease Obligations.  Create, incur, assume,  extend, renew,
         modify or amend, or permit any of its  Subsidiaries  to create,  incur,
         assume,  extend,  renew, modify or amend, any obligations as lessee (i)
         for the rental or hire of real or personal  property in connection with
         any sale and leaseback  transaction,  or (ii) for the rental or hire of
         other real or personal  property of any kind under leases or agreements

                                      -70-
<PAGE>

         to lease (including  Capitalized Leases) having an original term of one
         year or more that would cause the direct and contingent  liabilities of
         the Borrower and its Subsidiaries,  on a Consolidated basis, in respect
         of all such  obligations  to exceed,  in the 12 month period  following
         incurrence,  assumption, extension, renewal, modification or amendment,
         5.0% of Consolidated sales of the Borrower and its Subsidiaries for the
         12 month period  immediately  prior thereto (giving pro forma effect to
         all acquisitions during such period).

                  (d) Mergers, Etc. Merge into or consolidate with any Person or
         permit any  Person to merge into it, or permit any of its  Subsidiaries
         to do so,  except  that (i) the  Company  may  merge  with and into the
         Borrower,   provided   that  the  Borrower   shall  be  the   surviving
         corporation,  and (ii) any Subsidiary of the Borrower may merge into or
         consolidate  with the Borrower or any other Subsidiary of the Borrower,
         provided  that,  in the case of any such merger or  consolidation,  the
         Person formed by such merger or consolidation  shall be the Borrower or
         a  wholly  owned  Subsidiary  of the  Borrower,  as the  case  may  be;
         provided,  however, that in each case,  immediately after giving effect
         thereto,  no event shall occur and be  continuing  that  constitutes  a
         Default.

                  (e) Sales, Etc. of Assets. Sell, lease,  transfer or otherwise
         dispose of, or permit any of its Subsidiaries to sell, lease,  transfer
         or otherwise dispose of, any assets, or grant any option or other right
         to purchase, lease or otherwise acquire any assets, except:

                           (i)  sales  of  Inventory  by the  Borrower  and  its
                  Subsidiaries  in the ordinary course of its business and sales
                  or  other  disposals  of  obsolete,  damaged  or  unmarketable
                  inventory,

                           (ii) sales or other  disposals of obsolete,  worn-out
                  or surplus equipment or other assets in the ordinary course of
                  business,

                           (iii) in a transaction  authorized by subsection  (d)
                  of this Section,

                           (iv)  sales  of  assets  by  the   Borrower   or  any
                  Subsidiary  of the  Borrower for cash and for fair value in an
                  aggregate amount not to exceed  $5,000,000 in any Fiscal Year,
                  provided that the Borrower  shall,  to the extent  required by
                  Section  2.06(b)(ii),  prepay the Advances pursuant to, and in
                  the amount and order of priority  set forth in,  such  Section
                  2.06(b)(ii),

                           (v)  sales  or other  transfers  of  assets  from the
                  Borrower or any of the Borrower's Subsidiaries to the Borrower
                  or  a  wholly-owned   domestic  Subsidiary  of  the  Borrower,
                  provided  that such  wholly-owned  domestic  Subsidiary  shall
                  become  an  additional  grantor  pursuant  to the terms of the
                  Security  Agreement  and shall become a  Subsidiary  Guarantor
                  pursuant to the terms of the Subsidiary Guaranty,

                           (vi) leases or  subleases  of assets in the  ordinary
                  course of business by the Borrower or any of its  Subsidiaries
                  as lessor or sublessor, as the case may be,

                           (vii) sales or other disposals of Cash Equivalents in
                  the ordinary course of business, and

                                      -71-
<PAGE>

                           (viii)  sales  of  assets  by  the  Borrower  or  any
                  Subsidiary  of the  Borrower for cash and for fair value in an
                  aggregate amount not to exceed $10,000,000 in any Fiscal Year,
                  provided that,  within nine months  following the date of such
                  sale,  the Borrower or such  Subsidiary  shall lease back such
                  asset.

                  (f) Investments in Other Persons.  Make or hold, or permit any
         of its Subsidiaries to make or hold, any Investment in any Person other
         than:

                           (i) Investments by the Borrower and its  Subsidiaries
                  in  their  Subsidiaries  outstanding  on the date  hereof  and
                  additional   investments  in  wholly  owned   Subsidiaries  in
                  existence immediately after the Merger;

                           (ii)  Investments by the Borrower in Hedge Agreements
                  permitted under Section 5.02(b)(i) or Section 5.02(b)(v)(A);

                           (iii)  (A)   promissory   notes   issued  to  Holding
                  representing  the unpaid  purchase  price of capital  stock of
                  Holding issued to managers of Holding or its Subsidiaries, and
                  secured by a perfected  pledge of such capital stock,  and (B)
                  loans  and  advances  to  employees  of the  Borrower  and its
                  Subsidiaries  in an aggregate  principal  amount not to exceed
                  $1,500,000 at any time outstanding;

                           (iv) Investments by the Borrower and its Subsidiaries
                  in Cash Equivalents;

                           (v)  Investments   consisting  of  intercompany  Debt
                  permitted under Section 5.02(b)(iv);

                           (vi)  Investments  existing  on the date  hereof  and
                  described on Schedule X hereto;

                           (vii)  Investments  in the capital  stock of a Person
                  that, as a result of such  investment  or purchase,  becomes a
                  wholly-owned   Subsidiary  of  the  Borrower,  to  the  extent
                  permitted by Section  5.02(p);  provided  that with respect to
                  Investments  made  under  this  clause  (vii):  (1) any  newly
                  acquired or created  Subsidiary  of the Borrower or any of its
                  Subsidiaries shall be a wholly-owned Subsidiary thereof, shall
                  become  an  additional  grantor  pursuant  to the terms of the
                  Security  Agreement and shall become an additional  subsidiary
                  guarantor  pursuant to the terms of the  Subsidiary  Guaranty;
                  (2)  immediately  before and after giving effect  thereto,  no
                  Default  shall have occurred and be continuing or would result
                  therefrom;  and (3)  any  business  acquired  or  invested  in
                  pursuant  to this  clause  (vii)  shall be in the same line of
                  business  as  the  business  of  the  Borrower  or  any of its
                  Subsidiaries;

                           (viii)   in  the  case  of  the   Borrower   and  its
                  Subsidiaries,  other  Investments in an aggregate  outstanding
                  amount not to exceed $10,000,000.

                           (ix)  Investments  by Holding in the capital stock of
                  the Borrower; and

                                      -72-
<PAGE>

                           (x) in the case of Holding, Investments by Holding in
                  its capital stock as a result of the transactions described in
                  Section 5.02(b)(ii)(B).

                  (g)  Dividends,  Etc. In the case of the Borrower,  declare or
         pay any  dividends,  purchase,  redeem,  retire,  defease or  otherwise
         acquire for value any of its capital stock or any  warrants,  rights or
         options to acquire such capital  stock,  now or hereafter  outstanding,
         return any capital to its  stockholders as such, make any  distribution
         of assets, capital stock,  warrants,  rights,  options,  obligations or
         securities  to its  stockholders  as such or issue or sell any  capital
         stock or any warrants,  rights or options to acquire such capital stock
         (other than to Holding), or permit any of its Subsidiaries to do any of
         the foregoing or permit any of its  Subsidiaries  to purchase,  redeem,
         retire, defease or otherwise acquire for value any capital stock of the
         Borrower or any  warrants,  rights or options to acquire  such  capital
         stock or to issue or sell any capital stock or any warrants,  rights or
         options to acquire  such capital  stock  (other than to the  Borrower),
         except  that,  so  long  as no  Default  shall  have  occurred  and  be
         continuing  at the time of any action  described in clauses (A) through
         (C) below or would result  therefrom,  (i) the Borrower may (A) declare
         and pay dividends and distributions payable only in common stock of the
         Borrower,  (B) except to the extent the Net Cash  Proceeds  thereof are
         required to be applied to the  prepayment  of the Advances  pursuant to
         Section 2.06(b), purchase, redeem, retire, defease or otherwise acquire
         shares of its capital  stock with the proceeds  received from the issue
         of new  shares of its  capital  stock  with  equal or  inferior  voting
         powers,  designations,  preferences and rights, and (C) declare and pay
         cash dividends to Holding  solely to make payments  required to be made
         by  Holding  under  the  Stockholders   Agreement  and  the  Employment
         Agreements  (and  promissory   notes  issued  pursuant   thereto),   to
         repurchase  shares of common stock of Holdings from certain  members of
         management and to permit Holding to pay its current  obligations in the
         ordinary course of business, provided, that the aggregate payments made
         pursuant to this clause (C) shall not exceed (x)  $5,000,000  in Fiscal
         Year 2000 and (y)  thereafter,  the sum of  $7,500,000  plus any amount
         permitted  to be paid  pursuant  to clause (x) and not so used and (ii)
         any  Subsidiary of the Borrower may (A) declare and pay cash  dividends
         to the  Borrower  and (B) declare and pay cash  dividends  to any other
         wholly-owned Subsidiary of the Borrower of which it is a Subsidiary.

                  (h) Change in Nature of Business.  Make,  or permit any of its
         Subsidiaries to make, any material change in the nature of its business
         as carried on at the date hereof.

                  (i)  Charter   Amendments.   Amend,   or  permit  any  of  its
         Subsidiaries  to amend,  its  certificate of  incorporation  or bylaws,
         unless such amendment would not have a Material Adverse Effect and does
         not  adversely  affect the rights and  remedies  of the  Administrative
         Agent or any  Lender  Party  under  any Loan  Document  or any  Related
         Document.

                  (j) Accounting  Changes.  Make or permit, or permit any of its
         Subsidiaries to make or permit,  any change in (i) accounting  policies
         or  reporting  practices,  except as required or permitted by generally
         accepted accounting principles or (ii) Fiscal Year.

                                      -73-
<PAGE>

                  (k)  Prepayments,  Etc.  of Debt.  Prepay,  redeem,  purchase,
         defease or otherwise satisfy prior to the scheduled maturity thereof in
         any manner, or make any payment in violation of any subordination terms
         of,  any  Debt,  other  than  the  prepayment  of (i) the  Advances  in
         accordance  with the terms of this  Agreement  or (ii) any  Capitalized
         Leases  or Debt of the type  described  in  Section  5.02(b)(v)(B),  or
         amend,  modify or change in any  manner  any term or  condition  of the
         Permanent Debt Documents that would impair the value of the interest or
         rights of the Loan Parties  thereunder  or that would impair the rights
         or interests of the Administrative Agent or any Lender Party, or permit
         any of its Subsidiaries to do any of the foregoing other than to prepay
         any Debt payable to the Borrower.

                  (l) Amendment, Etc. of Related Documents.  Cancel or terminate
         any  Related  Document  or  consent to or accept  any  cancellation  or
         termination thereof,  amend, modify or change in any manner any term or
         condition of any such Related  Document or give any consent,  waiver or
         approval thereunder,  waive any default under or any breach of any term
         or condition of any such Related  Document,  agree in any manner to any
         other amendment, modification or change of any term or condition of any
         such Related  Document or take any other action in connection  with any
         such  Related  Document  that could,  in any such case,  reasonably  be
         expected  to have a Material  Adverse  Effect or that would  materially
         adverse effect the rights or interests of the  Administrative  Agent or
         any Lender Party,  or permit any of its  Subsidiaries  to do any of the
         foregoing.

                  (m) Negative Pledge.  Enter into or suffer to exist, or permit
         any of its Subsidiaries to enter into or suffer to exist, any agreement
         prohibiting or conditioning the creation or assumption of any Lien upon
         any of its  property  or assets  other than (i) in favor of the Secured
         Parties or (ii) any prohibition or condition contained in the Permanent
         Debt  Documents  or (iii)  any Debt  that is  permitted  to be  secured
         hereunder (including Capital Leases).

                  (n) Partnerships, Etc. Become a general partner in any general
         or limited  partnership,  or permit any of its  Subsidiaries  to do so,
         other  than any  Subsidiary  the sole  assets of which  consist  of its
         interest in such partnership.

                  (o)  Speculative  Transactions.  Engage,  or permit any of its
         Subsidiaries to engage, in any transaction  involving commodity options
         or  futures   contracts   or  any  similar   speculative   transactions
         (including,  without  limitation,  take-or-pay  contracts),  except for
         Hedge Agreements required under Section 5.01(p).

                  (p) Capital Expenditures.  In the case of the Borrower,  make,
         or permit any of its  Subsidiaries  to make,  any Capital  Expenditures
         (excluding  the  lease of any asset  sold in  accordance  with  Section
         5.02(e)(viii))  that  would  cause the  aggregate  of all such  Capital
         Expenditures  made by the Borrower and its  Subsidiaries  in any period
         set forth below  (together  with the aggregate  amount of Debt incurred
         during such period  pursuant  to Section  5.02(b)(v)(F))  to exceed the
         amount set forth below for such period:

                                      -74-
<PAGE>


                   Fiscal Year Ending In         Amount
                   ---------------------         ------
                          2000                 $30,000,000
                          2001                 $30,000,000
                          2002                 $35,000,000
                          2003                 $35,000,000
                          2004                 $38,000,000
                          2005                 $40,000,000
                          2006                 $41,000,000

         ; provided,  however,  that if, in any Fiscal Year specified above, the
         amount of Capital  Expenditures set forth above for such period exceeds
         the amount of Capital  Expenditures  actually  made by the Borrower and
         its Subsidiaries in such Fiscal Year, the Borrower and its Subsidiaries
         shall be entitled to make additional  Capital  Expenditures in the next
         Fiscal Year up to the amount of such excess.

                  SECTION 5.03. Reporting  Requirements.  So long as any Advance
shall remain  unpaid,  any Letter of Credit shall be  outstanding  or any Lender
Party shall have any  Commitment  hereunder,  the  Borrower  will furnish to the
Lender Parties:

                  (a)  Default  Notice.  As soon as  possible  and in any  event
         within two Business  Days after a  Responsible  Officer of a Loan Party
         knows,  or has reason to know,  of the  occurrence  of a Default or any
         event,  development or occurrence  reasonably likely to have a Material
         Adverse Effect continuing on the date of such statement, a statement of
         the chief  financial  officer of the Borrower  setting forth details of
         such Default and the action that the Borrower has taken and proposes to
         take with respect thereto.

                  (b) Monthly Financials.  As soon as available and in any event
         within 30 days after the end of each month  (other than any month which
         is the last month of a fiscal quarter), a Consolidated balance sheet of
         the  Borrower  and its  Subsidiaries  as of the end of such month and a
         Consolidated  statement of income and a Consolidated  statement of cash
         flows of the Borrower and its Subsidiaries for the period commencing at
         the end of the previous month and ending with the end of such month and
         a  Consolidated  statements of income and a  Consolidated  statement of
         cash  flows  of the  Borrower  and  its  Subsidiaries  for  the  period
         commencing  at the end of the previous  Fiscal Year and ending with the
         end of such month,  setting forth in each case in comparative  form the
         corresponding  figures  for the  corresponding  month of the  preceding
         Fiscal Year,  all in reasonable  detail and duly certified by the chief
         financial officer of the Borrower.

                  (c)  Quarterly  Financials.  As soon as  available  and in any
         event within 45 days after the end of each of the first three  quarters
         of each Fiscal Year, a  Consolidated  balance sheet of the Borrower and
         its  Subsidiaries  as of  the  end of  such  quarter  and  Consolidated
         statement of income and a  Consolidated  statement of cash flows of the
         Borrower and its Subsidiaries  for the period  commencing at the end of
         the  previous  fiscal  quarter  and ending  with the end of such fiscal
         quarter  and a  Consolidated  statement  of income  and a  Consolidated
         statement of cash flows of the Borrower  and its  Subsidiaries  for the
         period  commencing  at the end of the  previous  Fiscal Year and ending
         with the end of such quarter, setting forth in each case in comparative
         form the  corresponding  figures  for the  corresponding  period of the
         preceding  Fiscal Year,  all in  reasonable  detail and duly  certified

                                      -75-
<PAGE>

         (subject to year-end audit  adjustments) by the chief financial officer
         of the  Borrower  as having  been  prepared  in  accordance  with GAAP,
         together with (i) a certificate of said officer stating that no Default
         has  occurred  and is  continuing  or, if a Default has occurred and is
         continuing,  a statement  as to the nature  thereof and the action that
         the Borrower  has taken and  proposes to take with respect  thereto and
         (ii) a schedule in form satisfactory to the Administrative Agent of the
         computations  used by the Borrower in determining  compliance  with the
         covenants  contained in Sections 5.04(a) through (d),  provided that in
         the  event  of any  change  in  GAAP  used in the  preparation  of such
         financial statements, the Borrower shall also provide, if necessary for
         the  determination  of  compliance  with  Section  5.04, a statement of
         reconciliation conforming such financial statements to GAAP.

                  (d) Annual  Financials.  As soon as available and in any event
         within 90 days after the end of each Fiscal  Year, a copy of the annual
         audit  report  for such  year for the  Borrower  and its  Subsidiaries,
         including therein a Consolidated  balance sheet of the Borrower and its
         Subsidiaries  as of the  end of such  Fiscal  Year  and a  Consolidated
         statement of income and a  Consolidated  statement of cash flows of the
         Borrower  and its  Subsidiaries  for such  Fiscal  Year,  in each  case
         accompanied by an unqualified opinion of Ernst & Young, LLP or Deloitte
         Touche  LLP or  other  independent  public  accountants  of  nationally
         recognized standing, together with (i) a certificate of such accounting
         firm to the Lender  Parties  stating  that in the course of the regular
         audit of the business of the Borrower and its Subsidiaries, which audit
         was  conducted by such  accounting  firm in accordance  with  generally
         accepted  auditing  standards,  such  accounting  firm has  obtained no
         knowledge  that a Default has occurred and is continuing  under Section
         5.02(p) or Section 5.04, or if, in the opinion of such accounting firm,
         such a Default has  occurred and is  continuing,  a statement as to the
         nature   thereof,   (ii)  a  schedule  in  form   satisfactory  to  the
         Administrative  Agent  of the  computations  used  by the  Borrower  in
         determining,  as of the end of such Fiscal  Year,  compliance  with the
         covenants  contained in Sections 5.04(a) through (d),  provided that in
         the  event  of any  change  in  GAAP  used in the  preparation  of such
         financial statements, the Borrower shall also provide, if necessary for
         the  determination  of  compliance  with  Section  5.04, a statement of
         reconciliation conforming such financial statements to GAAP and (iii) a
         certificate of the chief financial officer of the Borrower stating that
         no Default has occurred and is continuing or, if a default has occurred
         and is continuing,  a statement as to the nature thereof and the action
         that the Borrower has taken and proposes to take with respect thereto.

                  (e) Annual Forecasts. As soon as available and in any event no
         later  than  30 days  after  the end of  each  Fiscal  Year,  forecasts
         prepared by management of the Borrower, in form reasonably satisfactory
         to the Administrative  Agent, of balance sheets,  income statements and
         cash flow  statements on a monthly basis for the Fiscal Year  following
         such Fiscal Year then ended.

                  (f) ERISA Events and ERISA Reports.  Promptly and in any event
         within 10 days after any Loan Party or any ERISA Affiliate knows or has
         reason to know that any ERISA Event has  occurred  that has resulted or
         is  reasonably  expected  to result in a  Material  Adverse  Effect,  a
         statement of the chief  financial  officer of the  Borrower  describing

                                      -76-
<PAGE>

         such ERISA Event and the action,  if any,  that such Loan Party or such
         ERISA Affiliate has taken and proposes to take with respect thereto and
         on the  date  any  records,  documents  or  other  information  must be
         furnished to the PBGC with respect to any Plan pursuant to Section 4010
         of ERISA, a copy of such records, documents and information.

                  (g) Plan  Terminations.  Promptly  and in any event within two
         Business  Days  after  receipt  thereof  by any Loan Party or any ERISA
         Affiliate, copies of each notice from the PBGC stating its intention to
         terminate  any Plan or to have a trustee  appointed to  administer  any
         Plan.

                  (h) Actuarial  Reports.  Promptly upon the request therefor by
         any Lender Party, a copy of the annual  actuarial  valuation report for
         any Plan.

                  (i)  Multiemployer  Plan  Notices.  Promptly  and in any event
         within five Business  Days after  receipt  thereof by any Loan Party or
         any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
         each notice  concerning (i) the  imposition of Withdrawal  Liability by
         any such  Multiemployer  Plan, (ii) the  reorganization or termination,
         within the meaning of Title IV of ERISA, of any such Multiemployer Plan
         or (iii) the amount of liability incurred,  or that may be incurred, by
         such Loan Party or any ERISA  Affiliate  in  connection  with any event
         described in clause (i) or (ii);  provided,  however,  that such copies
         must be  provided  only if such  imposition  of  Withdrawal  Liability,
         reorganization or termination has resulted or is reasonably expected to
         result in a Material  Adverse Affect,  or otherwise upon the request of
         any Lender Party (through the Administrative Agent).

                  (j)  Litigation.  Promptly  after  the  commencement  thereof,
         notice  of  all  actions,   suits,   investigations,   litigation   and
         proceedings  before any court or governmental  department,  commission,
         board,  bureau,   agency  or  instrumentality,   domestic  or  foreign,
         affecting  any  Loan  Party  or  any of its  Subsidiaries  of the  type
         described  in  Section  4.01(i),  and  promptly  after  the  occurrence
         thereof,  notice of any adverse  change in the status or the  financial
         effect on any Loan Party or any of its  Subsidiaries  of the  Disclosed
         Litigation from that described on Schedule II which could reasonably be
         expected to have a Material Adverse Effect.

                  (k) Securities  Reports.  Promptly after the sending or filing
         thereof,  copies  of all proxy  statements,  financial  statements  and
         reports that Holding sends to its stockholders generally, and copies of
         all  regular,  periodic  and  special  reports,  and  all  registration
         statements,  that any Loan Party or any of its Subsidiaries  files with
         the Securities and Exchange  Commission or any  governmental  authority
         that  may be  substituted  therefor,  or with any  national  securities
         exchange.

                  (l) Agreement Notices.  Promptly upon receipt thereof,  copies
         of all notices, requests and other documents received by any Loan Party
         or any of its Subsidiaries under or pursuant to any Related Document or
         indenture,  loan or credit or similar agreement  relating to Debt in an
         aggregate principal amount in excess of $2,500,000 regarding or related
         to any breach or default by any party  thereto or any other  event that
         could materially impair the value of the interests or the rights of any
         Loan Party or otherwise  have a Material  Adverse  Effect and copies of

                                      -77-
<PAGE>

         any amendment,  modification  or waiver of any provision of any Related
         Agreement or Material Contract or indenture,  loan or credit or similar
         agreement  and,  from time to time upon  request by the  Administrative
         Agent, such information and reports regarding the Related Documents and
         the  Material  Contracts  as the  Administrative  Agent may  reasonably
         request.

                  (m) Environmental Conditions.  Promptly after the assertion or
         occurrence  thereof,  notice of any Environmental  Action against or of
         any noncompliance by any Loan Party or any of its Subsidiaries with any
         Environmental Law or Environmental  Permit that (i) could reasonably be
         expected to have a Material  Adverse  Effect or (ii) cause any property
         described  in  the  Mortgages  to be  subject  to any  restrictions  on
         ownership,  occupancy,  use or transferability  under any Environmental
         Law that  could  reasonably  be  expected  to have a  Material  Adverse
         Effect.

                  (n)  Real  Property.  As soon as  available  and in any  event
         within  90  days  after  the  end  of  each  Fiscal   Year,   a  report
         supplementing  Schedules  4.01(gg)  and 4.01(hh)  hereto,  including an
         identification  of all real and  leased  property  (with a fair  market
         value of at least $1,500,000) disposed of by the Borrower or any of its
         Subsidiaries during such Fiscal Year, a list and description (including
         the  street  address,  county or other  relevant  jurisdiction,  state,
         record  owner,  book  value  thereof,  and in the  case  of  leases  of
         property,  lessor,  lessee,  expiration  date and  annual  rental  cost
         thereof) of all real  property  (with a fair  market  value of at least
         $1,500,000)   acquired  or  leased   during  such  Fiscal  Year  and  a
         description of such other changes in the  information  included in such
         Schedules  as may be  necessary  for such  Schedules to be accurate and
         complete.

                  (o) Insurance. As soon as available and in any event within 90
         days  after  the end of each  Fiscal  Year,  a report  summarizing  the
         insurance coverage  (specifying type, amount and carrier) in effect for
         the  Borrower  and its  Subsidiaries  and  containing  such  additional
         information as the Administrative Agent may reasonably specify.

                  (p) Borrowing  Base  Certificate.  As soon as available and in
         any event within 15 days after the end of each month,  a Borrowing Base
         Certificate,  as at the end of the  previous  month,  certified  by the
         chief financial officer of the Borrower.

                  (q) Plan  Schedule.  As soon as  practicable  and in any event
         within  10 days  after  the  Borrower  or one of its  ERISA  Affiliates
         becomes a party to a Plan,  an updated  Schedule V listing all Plans of
         the Borrower and its ERISA Affiliates.

                  (r) Other Information.  Such other information  respecting the
         business, condition (financial or otherwise), operations,  performance,
         properties or prospects of any Loan Party or any of its Subsidiaries as
         the Administrative Agent may from time to time reasonably request.

                  SECTION  5.04.  Financial  Covenants.  So long as any  Advance
shall remain  unpaid,  any Letter of Credit shall be  outstanding  or any Lender
Party shall have any Commitment hereunder, Holding will:

                  (a) Fixed Charge Coverage  Ratio.  Maintain at the end of each
         fiscal  quarter of Holding a Fixed Charge  Coverage  Ratio for the most

                                      -78-
<PAGE>

         recently completed four fiscal quarters of Holding and its Subsidiaries
         of not less than the amount set forth below for such period.

          Four Fiscal Quarters Ending Closest To                      Ratio
          --------------------------------------                      -----

                      July 31, 1999                                    1.05
                      October 31, 1999                                 1.05
                      January 31, 2000                                 1.05
                      April 30, 2000                                   1.05
                      July 31, 2000                                    1.05
                      October 31, 2000                                 1.05
                      January 31, 2001                                 1.05
                      April 30, 2001                                   1.05
                      July 31, 2001                                    1.05
                      October 31, 2001                                 1.05
                      January 31, 2002                                 1.10
                      April 30, 2002                                   1.10
                      July 31, 2002                                    1.10
                      October 31, 2002                                 1.10
                      January 31, 2003                                 1.10
                      April 30, 2003                                   1.10
                      July 31, 2003                                    1.10
                      October 31, 2003                                 1.10
                      January 31, 2004                                 1.10
                      April 30, 2004                                   1.10
                      July 31, 2004                                    1.10
                      October 31, 2004                                 1.10
                      January 31, 2005                                 1.00
                      April 30, 2005                                   1.00
                      July 31, 2005                                    1.00
                      October 31, 2005                                 1.00
                      January 31, 2006                                 1.00
                      April 30, 2006                                   1.00

                  (b)  Interest  Coverage  Ratio.  Maintain  at the  end of each
         fiscal quarter of Holding a ratio of  Consolidated  EBITDA for the most
         recently completed four fiscal quarters of Holding and its Subsidiaries
         to  cash  interest  payable  on  all  Debt  of  the  Borrower  and  its
         Subsidiaries  during such four fiscal  quarter  period of not less than
         the ratio set forth below for such fiscal quarter:

               Four Fiscal Quarters Ending Closest To                 Ratio
               --------------------------------------                 -----

                             July 31, 1999                             2.00
                             October 31, 1999                          2.00
                             January 31, 2000                          2.00
                             April 30, 2000                            2.00
                             July 31, 2000                             2.25
                             October 31, 2000                          2.50

                                      -79-
<PAGE>

                             January 31, 2001                          2.50
                             April 30, 2001                            2.50
                             July 31, 2001                             2.50
                             October 31, 2001                          2.75
                             January 31, 2002                          2.75
                             April 30, 2002                            2.75
                             July 31, 2002                             2.75
                             October 31, 2002                          3.00
                             January 31, 2003                          3.00
                             April 30, 2003                            3.00
                             July 31, 2003                             3.00
                             October 31, 2003                          3.25
                             January 31, 2004                          3.25
                             April 30, 2004                            3.25
                             July 31, 2004                             3.25
                             October 31, 2004                          3.25
                             January 31, 2005                          3.25
                             April 30, 2005                            3.25
                             July 31, 2005                             3.25
                             October 31, 2005                          3.25
                             January 31, 2006                          3.25
                             April 30, 2006                            3.25

         ; provided,  however,  that for each fiscal  quarter of Holding  ending
         closest to July 31, 1999,  October 31, 1999, January 31, 2000 and April
         30, 2000,  cash interest  payable for such four fiscal  quarter  period
         shall be the actual cash interest  payable during such period since the
         date of the  consummation  of the Merger  multiplied  by a fraction the
         numerator of which is twelve and the denominator of which is the number
         of fiscal months that have elapsed since such date.

                  (c) Debt to EBITDA  Ratio.  Maintain at the end of each fiscal
         quarter  of  Holding  a  Debt  to  EBITDA  Ratio  of  Holding  and  its
         Subsidiaries of not more than the ratio set forth below for each period
         set forth below.

             Four Fiscal Quarters Ending Closest To                   Ratio
             --------------------------------------                   -----

                        July 31, 1999                                  5.00
                        October 31, 1999                               4.75
                        January 31, 2000                               4.75
                        April 30, 2000                                 4.75
                        July 31, 2000                                  4.25
                        October 31, 2000                               4.00
                        January 31, 2001                               4.00
                        April 30, 2001                                 4.00

                                      -80-
<PAGE>

                        July 31, 2001                                  3.75
                        October 31, 2001                               3.50
                        January 31, 2002                               3.50
                        April 30, 2002                                 3.50
                        July 31, 2002                                  3.50
                        October 31, 2002                               3.00
                        January 31, 2003                               3.00
                        April 30, 2003                                 3.00
                        July 31, 2003                                  3.00
                        October 31, 2003                               3.00
                        January 31, 2004                               3.00
                        April 30, 2004                                 3.00
                        July 31, 2004                                  3.00
                        October 31, 2004                               3.00
                        January 31, 2005                               3.00
                        April 30, 2005                                 3.00
                        July 31, 2005                                  3.00
                        October 31, 2005                               3.00
                        January 31, 2006                               3.00
                        April 30, 2006                                 3.00

                                   ARTICLE VI

                                EVENTS OF DEFAULT

                  SECTION  6.01.  Events  of  Default.  If any of the  following
events ("Events of Default") shall occur and be continuing:

                  (a) (i) the  Borrower  shall fail to pay any  principal of any
         Advance when the same shall become due and payable or (ii) the Borrower
         shall fail to pay any interest on any Advance,  or any Loan Party shall
         fail to make any other  payment under any Loan  Document,  in each case
         under  this  clause  (ii)  within  three  Business  Days after the same
         becomes due and payable; or

                  (b) any  representation or warranty made by any Loan Party (or
         any of its  officers)  under or in  connection  with any Loan  Document
         shall prove to have been  incorrect in any material  respect when made;
         or

                  (c) (i) any Loan Party  shall  fail to perform or observe  any
         term, covenant or agreement contained in Section 2.14, 5.01(f), 5.02 or
         5.04 or (ii)  any Loan  Party  shall  fail to  maintain  its  corporate
         existence  or to perform or observe  any term,  covenant  or  agreement
         contained in Section  5.03(a),  (b),  (c) or (d) if such failure  shall
         remain unremedied for 10 days; or

                  (d) any Loan  Party  shall  fail to  perform  any other  term,
         covenant or agreement  contained in any Loan Document on its part to be
         performed or observed if such failure  shall remain  unremedied  for 30
         days after the earlier of the date on which (A) a  Responsible  Officer
         of the Borrower  becomes  aware of such  failure or (B) written  notice
         thereof  shall have been given to the  Borrower  by the  Administrative
         Agent or the Required Lenders; or

                                      -81-
<PAGE>

                  (e) any Loan  Party or any of its  Subsidiaries  shall fail to
         pay any  principal  of,  premium  or  interest  on or any other  amount
         payable in respect of any Debt that is  outstanding  in a principal  or
         notional amount of at least  $5,000,000  either  individually or in the
         aggregate (but excluding Debt outstanding hereunder) of such Loan Party
         or such  Subsidiary (as the case may be), when the same becomes due and
         payable   (whether  by   scheduled   maturity,   required   prepayment,
         acceleration,  demand or  otherwise),  and such failure shall  continue
         after the applicable grace period,  if any,  specified in the agreement
         or instrument  relating to such Debt; or any other event shall occur or
         condition shall exist under any agreement or instrument relating to any
         such Debt and shall continue after the applicable grace period, if any,
         specified in such agreement or instrument,  if the effect of such event
         or condition is to accelerate,  or to permit the  acceleration  of, the
         maturity of such Debt or  otherwise  to cause,  or to permit the holder
         thereof  to cause,  such  Debt to  mature;  or any such  Debt  shall be
         declared  to be due and  payable or  required to be prepaid or redeemed
         (other  than  by  a  regularly   scheduled   required   prepayment   or
         redemption),  purchased  or  defeased,  or an offer to prepay,  redeem,
         purchase or defease  such Debt shall be  required  to be made,  in each
         case prior to the stated maturity thereof; or

                  (f) any Loan Party or any of its Subsidiaries  shall generally
         not pay its debts as such debts  become  due, or shall admit in writing
         its  inability  to pay its  debts  generally,  or shall  make a general
         assignment  for the benefit of creditors;  or any  proceeding  shall be
         instituted  by or  against  any Loan  Party or any of its  Subsidiaries
         seeking  to  adjudicate   it  a  bankrupt  or  insolvent,   or  seeking
         liquidation,  winding  up,  reorganization,   arrangement,  adjustment,
         protection,  relief,  or  composition  of it or its debts under any law
         relating  to  bankruptcy,  insolvency  or  reorganization  or relief of
         debtors, or seeking the entry of an order for relief or the appointment
         of a receiver,  trustee,  or other  similar  official for it or for any
         substantial  part  of its  property  and,  in  the  case  of  any  such
         proceeding  instituted  against it (but not  instituted  by it) that is
         being diligently  contested by it in good faith, either such proceeding
         shall remain  undismissed or unstayed for a period of 60 days or any of
         the actions sought in such proceeding  (including,  without limitation,
         the entry of an order  for  relief  against,  or the  appointment  of a
         receiver,  trustee,  custodian or other similar official for, it or any
         substantial part of its property) shall occur; or any Loan Party or any
         of its Subsidiaries shall take any corporate action to authorize any of
         the actions set forth above in this subsection (f); or

                  (g) any  judgment  or order for the payment of money in excess
         of  $5,000,000  shall be rendered  against any Loan Party or any of its
         Subsidiaries  and either (i)  enforcement  proceedings  shall have been
         commenced  by any  creditor  upon such  judgment or order or (ii) there
         shall be any  period  of 30  consecutive  days  during  which a stay of
         enforcement of such judgment or order, by reason of a pending appeal or
         otherwise,  shall not be in effect;  provided,  however,  that any such
         judgment,  order or payment  shall be  disregarded  for the purposes of
         this  paragraph (g) to the extent that (A) the amount of such judgment,
         order or payment is covered by a valid and binding  policy of insurance

                                      -82-
<PAGE>

         between the defendant and the insurer  covering payment thereof and (B)
         such  insurer has been  notified,  and,  in the case of such  judgment,
         order or payment,  has not disputed the claim made for payment,  or the
         amount of such judgment or order or payment; or

                  (h) any  non-monetary  judgment  or order  shall  be  rendered
         against  any  Loan  Party  or  any  of  its  Subsidiaries  that  can be
         reasonably  expected to have a Material Adverse Effect, and there shall
         be any period of 30 consecutive days during which a stay of enforcement
         of such judgment or order,  by reason of a pending appeal or otherwise,
         shall not be in effect; or

                  (i) any Loan  Document,  or any  material  provision  thereof,
         after delivery thereof  pursuant to Section 3.01 or 5.01(l),  shall for
         any reason (other than pursuant to the provisions  thereof) cease to be
         valid and binding on or enforceable against any Loan Party party to it,
         or any such Loan Party shall so state in writing; or

                  (j) any Collateral Document after delivery thereof pursuant to
         Section 3.01 or 5.01(p)  shall for any reason  (other than  pursuant to
         the terms  thereof)  cease to create a valid and perfected  lien on and
         security  interest in the  Collateral  purported to be covered  thereby
         with the priority required thereunder; or

                  (k) J.W.  Childs and its  Affiliates  and  co-investors  shall
         cease to have beneficial ownership (within the meaning of Rule 13d-3 of
         the Securities and Exchange  Commission  under the Securities  Exchange
         Act of  1934),  directly  or  indirectly,  of Voting  Stock of  Holding
         representing  25% or more of the  combined  voting  power of all Voting
         Stock  of  Holding  so long  as J.W.  Childs  and  its  Affiliates  and
         co-investors  shall have voting  control of the Board of  Directors  of
         Holding; or

                  (l) any ERISA Event shall have occurred with respect to a Plan
         and the sum  (determined  as of the date of  occurrence  of such  ERISA
         Event) of the  Insufficiency of such Plan and the  Insufficiency of any
         and all other  Plans with  respect to which an ERISA  Event  shall have
         occurred  and then exist (or the  liability of the Loan Parties and the
         ERISA Affiliates related to such ERISA Event) exceeds $5,000,000; or

                  (m) any Loan  Party or any  ERISA  Affiliate  shall  have been
         notified by the sponsor of a  Multiemployer  Plan that it has  incurred
         Withdrawal Liability to such Multiemployer Plan in an amount that, when
         aggregated with all other amounts  required to be paid to Multiemployer
         Plans  by the Loan  Parties  and the  ERISA  Affiliates  as  Withdrawal
         Liability  (determined  as of the date of such  notification),  exceeds
         $5,000,000 or requires payments exceeding $1,000,000 per annum; or

                  (n) any Loan  Party or any  ERISA  Affiliate  shall  have been
         notified by the sponsor of a Multiemployer Plan that such Multiemployer
         Plan is in reorganization or is being terminated, within the meaning of
         Title  IV  of  ERISA,  and  as  a  result  of  such  reorganization  or
         termination the aggregate annual  contributions of the Loan Parties and
         the  ERISA  Affiliates  to all  Multiemployer  Plans  that  are then in
         reorganization  or being terminated have been or will be increased over
         the amounts  contributed to such Multiemployer Plans for the plan years
         of such  Multiemployer  Plans  immediately  preceding  the plan year in
         which such  reorganization or termination occurs by an amount exceeding
         $5,000,000; or

                                      -83-
<PAGE>

                  (o)  any  Borrowing  Base   Deficiency   shall  occur  and  be
         continuing for more than five Business Days;

then, and in any such event, the Administrative  Agent (i) shall at the request,
or may with the consent,  of the Required  Lenders,  by notice to the  Borrower,
declare the obligation of each  Appropriate  Lender to make Advances (other than
Letter of Credit  Advances by the  Issuing  Bank or a  Revolving  Credit  Lender
pursuant to Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender
pursuant to Section  2.02(b)) and of the Issuing Bank to issue Letters of Credit
to be terminated,  whereupon the same shall forthwith terminate,  and (ii) shall
at the request,  or may with the consent,  of the Required Lenders, by notice to
the  Borrower,  declare the Notes,  all interest  thereon and all other  amounts
payable under this  Agreement  and the other Loan  Documents to be forthwith due
and payable,  whereupon the Notes,  all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further  notice of any kind,  all of which are  hereby  expressly  waived by the
Borrower;  provided,  however, that in the event of an actual or deemed entry of
an order for relief with  respect to the Borrower  under the Federal  Bankruptcy
Code, (x) the  obligation of each Lender to make Advances  (other than Letter of
Credit  Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c) and
Swing Line Advances by a Revolving  Credit Lender  pursuant to Section  2.02(b))
and of the  Issuing  Bank to issue  Letters of Credits  shall  automatically  be
terminated  and (y) the Notes,  all such  interest  and all such  amounts  shall
automatically  become  and be due  and  payable,  without  presentment,  demand,
protest or any notice of any kind, all of which are hereby  expressly  waived by
the Borrower.

                  SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default.  If any Event of Default  shall have  occurred and be  continuing,  the
Administrative  Agent  may,  or shall at the  request of the  Required  Lenders,
irrespective  of whether it is taking any of the  actions  described  in Section
6.01 or  otherwise,  make demand upon the Borrower to, and  forthwith  upon such
demand  the  Borrower  will,  pay to the  Administrative  Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office designated
in such demand, for deposit in the L/C Cash Collateral  Account, an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding.  If
at any time the  Administrative  Agent determines that any funds held in the L/C
Cash  Collateral  Account are subject to any right or claim of any Person  other
than the Administrative Agent and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative  Agent,  as additional  funds to be deposited and held in the L/C
Cash  Collateral  Account,  an amount equal to the excess of (a) such  aggregate
Available  Amount over (b) the total amount of funds,  if any,  then held in the
L/C Cash Collateral Account that the Administrative  Agent determines to be free
and clear of any such right and claim.


                                      -84-
<PAGE>

                                   ARTICLE VII

                            THE ADMINISTRATIVE AGENT

                  SECTION 7.01.  Authorization and Action. Each Lender Party (in
its capacities as a Lender,  the Swing Line Bank (if applicable) and the Issuing
Bank (if applicable) hereby appoints and authorizes the Administrative  Agent to
take  such  action  as agent on its  behalf  and to  exercise  such  powers  and
discretion under this Agreement and the other Loan Documents as are delegated to
the  Administrative  Agent by the terms hereof and thereof,  together  with such
powers and discretion as are reasonably  incidental  thereto.  As to any matters
not expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the  Administrative  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 upon all Lender Parties and all holders of Notes;
provided,  however,  that the Administrative Agent shall not be required to take
any action that exposes the  Administrative  Agent to personal liability or that
is contrary to this Agreement or applicable law. The Administrative Agent agrees
to give to each Lender  Party  prompt  notice of each notice  given to it by the
Borrower pursuant to the terms of this Agreement.

                  SECTION 7.02.  Administrative  Agent's Reliance,  Etc. Neither
the Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action  taken or omitted to be taken by it or them under
or in  connection  with the Loan  Documents,  except  for its or their own gross
negligence or willful  misconduct.  Without  limitation of the generality of the
foregoing,  the Administrative Agent: (a) may treat the payee of any Note as the
holder thereof until the Administrative Agent receives and accepts an Assignment
and  Acceptance  entered  into by the Lender that is the payee of such Note,  as
assignor,  and an Eligible Assignee,  as assignee,  as provided in Section 8.07;
(b) may consult  with legal  counsel  (including  counsel  for any Loan  Party),
independent public accountants and other experts selected by it and shall not be
liable  for any  action  taken or  omitted  to be  taken in good  faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or  representation  to any Lender Party and shall not be responsible to
any Lender Party for any  statements,  warranties  or  representations  (whether
written or oral) made in or in connection with the Loan Documents; (d) shall not
have any duty to ascertain or to inquire as to the  performance or observance of
any of the terms,  covenants or  conditions  of any Loan Document on the part of
any Loan Party or to inspect the property  (including  the books and records) of
any Loan Party;  (e) shall not be  responsible  to any Lender  Party for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the  perfection or priority of any lien or security  interest  created or
purported to be created  under or in connection  with,  any Loan Document or any
other instrument or document furnished pursuant thereto;  and (f) shall incur no
liability  under or in respect of any Loan  Document  by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram or
telecopy) believed by it to be genuine and signed or sent by the proper party or
parties.

                  SECTION  7.03.  Fleet  and  Affiliates.  With  respect  to its
Commitments,  the  Advances  made by it and the Notes  issued to it, Fleet shall
have the same rights and powers  under the Loan  Documents  as any other  Lender
Party and may exercise the same as though it were not the Administrative  Agent;
and the term  "Lender  Party"  or  "Lenders  Parties"  shall,  unless  otherwise
expressly  indicated,  include Fleet in its individual  capacity.  Fleet and its
affiliates  may accept  deposits  from,  lend  money to,  act as  trustee  under

                                      -85-
<PAGE>

indentures of, accept investment  banking  engagements from and generally engage
in any kind of business with, any Loan Party,  any of its  Subsidiaries  and any
Person who may do business with or own  securities of any Loan Party or any such
Subsidiary,  all as if Fleet were not the  Administrative  Agent and without any
duty to account therefor to the Lender Parties.

                  SECTION 7.04. Lender Party Credit Decision.  Each Lender Party
acknowledges   that  it  has,   independently  and  without  reliance  upon  the
Administrative  Agent or any  other  Lender  Party  and  based on the  financial
statements  referred to in Section 4.01 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into  this  Agreement.  Each  Lender  Party  also  acknowledges  that  it  will,
independently  and without reliance upon the  Administrative  Agent or any other
Lender  Party and  based on such  documents  and  information  as it shall  deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking action under this Agreement.

                  SECTION 7.05. Indemnification. (a) Each Lender Party severally
agrees to  indemnify  the  Administrative  Agent  (to the  extent  not  promptly
reimbursed by the Borrower) from and against such Lender  Party's  ratable share
(determined as provided below) of any and all liabilities,  obligations, losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
of any kind or  nature  whatsoever  that may be  imposed  on,  incurred  by,  or
asserted against the Administrative  Agent in any way relating to or arising out
of the Loan Documents or any action taken or omitted by the Administrative Agent
under the Loan  Documents;  provided,  however,  that no Lender  Party  shall be
liable  for any  portion  of such  liabilities,  obligations,  losses,  damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent's gross negligence or willful misconduct.  Without
limitation  of  the  foregoing,  each  Lender  Party  agrees  to  reimburse  the
Administrative Agent promptly upon demand for its ratable share of any costs and
expenses (including,  without limitation,  fees and expenses of counsel) payable
by the Borrower under Section 9.04, to the extent that the Administrative  Agent
is not  promptly  reimbursed  for such costs and expenses by the  Borrower.  For
purposes of this Section 7.05(a),  the Lender Parties' respective ratable shares
of any amount shall be determined,  at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and owing to
the  respective  Lender  Parties,  (b) their  respective  Pro Rata Shares of the
aggregate  Available  Amount of all Letters of Credit  outstanding at such time,
(c) the aggregate  unused portion of their  respective Term  Commitments at such
time and (d) their respective Unused Revolving Credit  Commitments at such time;
provided,  that the aggregate  principal  amount of Swing Line Advances owing to
the Swing Line Bank and of Letter of Credit  Advances  owing to the Issuing Bank
shall be  considered  to be owed to the  Revolving  Credit  Lenders  ratably  in
accordance with their respective Revolving Credit Commitments. In the event that
any Defaulted  Advance shall be owing by any Defaulting Lender at any time, such
Lender  Party's  Commitment  with  respect  to the  Facility  under  which  such
Defaulted  Advance  was  required  to have been made shall be  considered  to be
unused for purposes of this Section  7.05(a) to the extent of the amount of such
Defaulted   Advance.   The  failure  of  any  Lender  Party  to  reimburse   the
Administrative  Agent  promptly  upon demand for its ratable share of any amount
required to be paid by the Lender Party to the Administrative  Agent as provided
herein shall not relieve any other Lender Party of its  obligation  hereunder to
reimburse the Administrative  Agent for its ratable share of such amount, but no
Lender Party shall be  responsible  for the failure of any other Lender Party to
reimburse the  Administrative  Agent for such other Lender Party's ratable share
of such amount.  Without prejudice to the survival of any other agreement of any
Lender Party  hereunder,  the  agreement  and  obligations  of each Lender Party
contained  in  this  Section  7.05(a)  shall  survive  the  payment  in  full of
principal,  interest and all other amounts payable hereunder and under the other
Loan Documents.

                                      -86-
<PAGE>

                  (b) Each  Lender  Party  severally  agrees  to  indemnify  the
Issuing Bank (to the extent not promptly  reimbursed by the  Borrower)  from and
against such Lender Party's ratable share  (determined as provided below) of any
and  all  liabilities,   obligations,   losses,  damages,  penalties,   actions,
judgments,  suits,  costs,  expenses  or  disbursements  of any  kind or  nature
whatsoever that may be imposed on, incurred by, or asserted  against the Issuing
Bank in any way  relating to or arising out of the Loan  Documents or any action
taken or  omitted  by the  Issuing  Bank  under  the Loan  Documents;  provided,
however,  that  no  Lender  Party  shall  be  liable  for  any  portion  of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses  or  disbursements  resulting  from the  Issuing  Bank's  gross
negligence or willful  misconduct.  Without  limitation of the  foregoing,  each
Lender Party agrees to reimburse  the Issuing Bank  promptly upon demand for its
ratable share of any costs and expenses (including, without limitation, fees and
expenses of counsel)  payable by the Borrower  under Section 9.04, to the extent
that the Issuing Bank is not promptly  reimbursed for such costs and expenses by
the  Borrower.  For  purposes  of this  Section  7.05(b),  the  Lender  Parties'
respective  ratable  shares  of any  amount  shall be  determined,  at any time,
according  to the sum of (a) the  aggregate  principal  amount  of the  Advances
outstanding at such time and owing to the respective  Lender Parties,  (b) their
respective Pro Rata Shares of the aggregate  Available  Amount of all Letters of
Credit  outstanding  at such time,  (c) the  aggregate  unused  portion of their
respective  Term  Commitments  at such  time plus (d)  their  respective  Unused
Working Revolving Credit  Commitments at such time;  provided that the aggregate
principal  amount of Swing  Line  Advances  owing to the Swing  Line Bank and of
Letter of Credit  Advances  owing to the Issuing Bank shall be  considered to be
owed to the Revolving Credit Lenders ratably in accordance with their respective
Revolving Credit  Commitments.  In the event that any Defaulted Advance shall be
owing by any Defaulting Lender at any time, such Lender Party's  Commitment with
respect to the Facility under which such Defaulted  Advance was required to have
been made shall be considered to be unused for purposes of this Section  7.05(b)
to the extent of the amount of such Defaulted Advance. The failure of any Lender
Party to reimburse  the Issuing Bank  promptly upon demand for its ratable share
of any amount  required to be paid by the Lender  Parties to the Issuing Bank as
provided  herein  shall not relieve  any other  Lender  Party of its  obligation
hereunder  to reimburse  the Issuing Bank for its ratable  share of such amount,
but no Lender  Party shall be  responsible  for the failure of any other  Lender
Party to reimburse the Issuing Bank for such other Lender Party's  ratable share
of such amount.  Without prejudice to the survival of any other agreement of any
Lender Party  hereunder,  the  agreement  and  obligations  of each Lender Party
contained  in  this  Section  7.05(b)  shall  survive  the  payment  in  full of
principal,  interest and all other amounts payable hereunder and under the other
Loan Documents.

                  SECTION   7.06.   Successor    Administrative    Agents.   The
Administrative  Agent may resign as to any or all of the  Facilities at any time
by giving  written notice thereof to the Lender Parties and the Borrower and may
be removed as to all of the  Facilities at any time with or without cause by the
Required  Lenders.  Upon any such  resignation or removal,  the Required Lenders
shall have the right to appoint a successor  Administrative  Agent as to such of
the  Facilities  as to which  the  Administrative  Agent  has  resigned  or been
removed.  If no successor  Administrative  Agent shall have been so appointed by
the Required Lenders,  and shall have accepted such appointment,  within 30 days
after the retiring Administrative Agent's giving of notice of resignation or the

                                      -87-
<PAGE>

Required  Lenders'  removal  of the  retiring  Administrative  Agent,  then  the
retiring  Administrative  Agent may, on behalf of the Lender Parties,  appoint a
successor Administrative Agent, which shall be a commercial bank organized under
the laws of the  United  States or of any State  thereof  and  having a combined
capital  and  surplus  of at  least  $250,000,000.  Upon the  acceptance  of any
appointment  as  Administrative  Agent  hereunder by a successor  Administrative
Agent as to all of the Facilities and upon the execution and filing or recording
of such financing  statements,  or amendments  thereto,  and such  amendments or
supplements to the Mortgages,  and such other instruments or notices,  as may be
necessary  or  desirable,  or as the Required  Lenders may request,  in order to
continue the  perfection  of the Liens granted or purported to be granted by the
Collateral Documents,  such successor  Administrative Agent shall succeed to and
become vested with all the rights, powers, discretion,  privileges and duties of
the retiring  Administrative Agent, and the retiring  Administrative Agent shall
be discharged from its duties and obligations under the Loan Documents. Upon the
acceptance of any appointment as  Administrative  Agent hereunder by a successor
Administrative  Agent  as to  less  than  all of the  Facilities  and  upon  the
execution and filing or recording of such  financing  statements,  or amendments
thereto,  and such  amendments or supplements  to the Mortgages,  and such other
instruments  or notices,  as may be necessary or  desirable,  or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported  to  be  granted  by  the   Collateral   Documents,   such   successor
Administrative  Agent  shall  succeed to and become  vested with all the rights,
powers,  discretion,  privileges and duties of the retiring Administrative Agent
as to such  Facilities,  other than with  respect to funds  transfers  and other
similar  aspects of the  administration  of  Borrowings  under such  Facilities,
issuances   of   Letters  of  Credit   (notwithstanding   any   resignation   as
Administrative Agent with respect to the Letter of Credit Facility) and payments
by the Borrower in respect of such Facilities,  and the retiring  Administrative
Agent shall be discharged from its duties and  obligations  under this Agreement
as  to  such   Facilities,   other  than  as   aforesaid.   After  any  retiring
Administrative  Agent's resignation or removal hereunder as Administrative Agent
as to all of the  Facilities,  the provisions of this Article VII shall inure to
its  benefit as to any  actions  taken or omitted to be taken by it while it was
Administrative Agent as to any Facilities under this Agreement.


                                  ARTICLE VIII

                                    GUARANTY

                  SECTION   8.01.   Guaranty.    Holding   unconditionally   and
irrevocably guarantees (the undertaking by Holding under this Article VIII being
the "Guaranty") the punctual payment when due,  whether at stated  maturity,  by
acceleration  or otherwise,  of all  Obligations of each other Loan Party now or
hereafter  existing under the Loan Documents,  whether for principal,  interest,
fees, commissions, expenses or otherwise (such Obligations being the "Guaranteed
Obligations"),  and  agrees  to pay  any and all  expenses  (including,  without
limitation,   reasonable   fees  and  expenses  of  counsel)   incurred  by  the
Administrative  Agent or any other Lender  Party in  enforcing  any rights under
this  Guaranty.  Without  limiting the  generality of the  foregoing,  Holding's
liability  shall extend to all amounts that  constitute  part of the  Guaranteed
Obligations  and would be owed by any  other  Loan  Party to the  Administrative
Agent or any other Lender Party under the Loan  Documents  but for the fact that
they are  unenforceable  or not  allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.

                                      -88-
<PAGE>

                  SECTION 8.02.  Guaranty Absolute.  Holding guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents,  regardless of any law,  regulation or order now or hereafter in
effect in any  jurisdiction  affecting  any of such  terms or the  rights of the
Administrative  Agent or any other  Secured  Party  with  respect  thereto.  The
Obligations  of Holding under this Guaranty are  independent  of the  Guaranteed
Obligations or any other Obligations of any Loan Party under the Loan Documents,
and a separate  action or actions may be brought and prosecuted  against Holding
to enforce this Guaranty,  irrespective of whether any action is brought against
any other  Loan  Party or  whether  any other  Loan  Party is joined in any such
action or  actions.  The  liability  of  Holding  under this  Guaranty  shall be
absolute,  unconditional  and  irrevocable  irrespective  of, and Holding hereby
irrevocably waives any defenses it may now or hereafter have in any way relating
to, any and all of the following:

                  (a)  any  lack  of  validity  or  enforceability  of any  Loan
         Document or any other agreement or instrument relating thereto;

                  (b) any change in the time,  manner or place of payment of, or
         in any other term of, all or any of the  Guaranteed  Obligations or any
         other  Obligations of any Loan Party under the Loan  Documents,  or any
         other  amendment or waiver of or any consent to departure from any Loan
         Document (including, without limitation, any increase in the Guaranteed
         Obligations  resulting  from the extension of additional  credit to any
         Loan Party or any of its Subsidiaries or otherwise);

                  (c) any  taking,  exchange,  release or  nonperfection  of any
         Collateral, or any taking, release or amendment or waiver of or consent
         to departure from any other guarantee, for all or any of the Guaranteed
         Obligations;

                  (d) any  manner of  application  of  Collateral,  or  proceeds
         thereof, to all or any of the Guaranteed Obligations,  or any manner of
         sale  or  other  disposition  of any  Collateral  for all or any of the
         Guaranteed Obligations or any other Obligations of any Loan Party under
         the Loan Documents,  or any other property and assets of any other Loan
         Party or any of its Subsidiaries;

                  (e) any change,  restructuring or termination of the corporate
         structure  or  existence  of  any  other  Loan  Party  or  any  of  its
         Subsidiaries;

                  (f) any  failure  of the  Administrative  Agent or any  Lender
         Party to  disclose  to any Loan Party any  information  relating to the
         financial condition,  operations,  properties or prospects of any other
         Loan Party now or hereafter known to the  Administrative  Agent or such
         Lender Party, as the case may be; or

                  (g) any other circumstance (including, without limitation, any
         statute  of  limitations  or  any  existence  of  or  reliance  on  any
         representation  by the  Administrative  Agent or any Lender Party) that
         might otherwise  constitute a defense  available to, or a discharge of,
         Holding, any other Loan Party or any other guarantor or surety.

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<PAGE>

This Guaranty shall  continue to be effective or be reinstated,  as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any Lender Party or
by any other Person upon the  insolvency,  bankruptcy or  reorganization  of any
other Loan Party or otherwise, all as though such payment had not been made.

                  SECTION 8.03. Waivers and Acknowledgments.  (a) Holding hereby
unconditionally  and  irrevocably  waives  promptness,   diligence,   notice  of
acceptance  and  any  other  notice  with  respect  to  any  of  the  Guaranteed
Obligations and this Guaranty, and any requirement that the Administrative Agent
or any Lender Party protect,  secure, perfect or insure any Lien or any property
or assets  subject  thereto or exhaust any right or take any action  against any
other Loan Party or any other Person or any Collateral.

                  (b) Holding hereby  unconditionally and irrevocably waives any
duty on the  part of the  Administrative  Agent  or any  other  Lender  Party to
disclose  to  Holding  any  matter,  fact or  thing  relating  to the  business,
operation or condition of any other Loan Party or any of its Subsidiaries or its
property and assets now or hereafter known by the  Administrative  Agent or such
Lender Party.

                  (c) Holding hereby  unconditionally waives any right to revoke
this Guaranty,  and acknowledges  that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.

                  (d)  Holding  acknowledges  that it will  receive  substantial
direct and indirect benefits from the financing arrangements contemplated by the
Loan Documents and that the waivers set forth in this Section 8.03 are knowingly
made in contemplation of such benefits.

                  SECTION 8.04. Subrogation.  Holding hereby unconditionally and
irrevocably  agrees  not to  exercise  any  rights  that it may now  have or may
hereafter  acquire  against any other Loan Party or any other insider  guarantor
that  arise from the  existence,  payment,  performance  or  enforcement  of its
Obligations  under this  Guaranty or under any other Loan  Document,  including,
without  limitation,  any  right  of  subrogation,  reimbursement,  exoneration,
contribution  or  indemnification  and any right to  participate in any claim or
remedy of the  Administrative  Agent or any Lender against such other Loan Party
or any other  insider  guarantor or any  Collateral,  whether or not such claim,
remedy  or right  arises in equity or under  contract,  statute  or common  law,
including, without limitation, the right to take or receive from such other Loan
Party or any other insider guarantor,  directly or indirectly,  in cash or other
property or by setoff or in any other manner,  payment or security on account of
such  claim,  remedy  or  right,  until  such  time  as all  of  the  Guaranteed
Obligations  and all other amounts  payable under this Guaranty  shall have been
paid  in full  in  cash,  all of the  Letters  of  Credit  shall  have  expired,
terminated  or  been  cancelled  and  the  Commitments  shall  have  expired  or
terminated.  If any  amount  shall  be  paid  to  Holding  in  violation  of the
immediately  preceding  sentence  at any  time  prior to the  latest  of (a) the
payment  in  full in cash of all of the  Guaranteed  Obligations  and all  other
amounts  payable  under  this  Guaranty,  (b)  the  full  drawing,  termination,
expiration  or  cancellation  of all Letters of Credit and, (c) the  Termination
Date,  such amount shall be held in trust for the benefit of the  Administrative
Agent  and  the  other  Lender  Parties  and  shall  forthwith  be  paid  to the

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Administrative  Agent to be credited and applied to the  Guaranteed  Obligations
and all other amounts payable under this Guaranty, whether matured or unmatured,
in accordance with the terms of the Loan Documents,  or to be held as Collateral
for any  Guaranteed  Obligations  or other  amounts  payable under this Guaranty
thereafter arising. If (i) Holding shall pay to the Administrative  Agent all or
any part of the Guaranteed  Obligations,  (ii) all of the Guaranteed Obligations
and all other amounts  payable under this Guaranty  shall have been paid in full
in cash,  (iii) all of the Letters of Credit shall have  expired,  terminated or
been  cancelled,  and  (iv)  the  Termination  Date  shall  have  occurred,  the
Administrative  Agent and the Lender  Parties  will,  at  Holding's  request and
expense, execute and deliver to Holding appropriate documents,  without recourse
and without  representation  or warranty,  necessary to evidence the transfer of
subrogation  to Holding of an interest in the Guaranteed  Obligations  resulting
from the payment made by Holding.

                  SECTION 8.05. Continuing Guarantee; Assignments. This Guaranty
is a continuing guaranty and shall (a) remain in full force and effect until the
latest of (i) the payment in full in cash of all of the  Guaranteed  Obligations
and all other  amounts  payable  under  this  Guaranty,  (ii) the full  drawing,
termination,  expiration or cancellation of all Letters of Credit, and (iii) the
Termination Date, (b) be binding upon Holding and its successors and assigns and
(c) inure to the benefit of, and be enforceable by, the Administrative Agent and
the Lender Parties and their  respective  successors,  transferees  and assigns.
Without  limiting  the  generality  of clause (c) of the  immediately  preceding
sentence,  any Lender Party may assign or otherwise  transfer all or any portion
of  its  rights  and  obligations  under  this  Agreement  (including,   without
limitation,  all or any portion of its Commitment or  Commitments,  the Advances
owing to it and the Notes held by it) to any other Person, and such other Person
shall  thereupon  become vested with all the benefits in respect thereof granted
to such  Lender  Party under this  Article  VIII or  otherwise,  in each case as
provided in Section 9.07.


                                   ARTICLE IX

                                  MISCELLANEOUS

                  SECTION 9.01.  Amendments,  Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any  departure  by the  Borrower  therefrom,  shall in any event be effective
unless  the  same  shall  be in  writing  and  signed  (or,  in the  case of the
Collateral  Documents,  consented  to) by the  Required  Lenders,  and then such
waiver or consent shall be effective  only in the specific  instance and for the
specific  purpose for which given;  provided,  however,  that (a) no  amendment,
waiver or  consent  shall,  unless in writing  and signed by all of the  Lenders
(other than any Lender Party that is, at such time, a Defaulting Lender), do any
of the following at any time: (i) change the number of Lenders or the percentage
of (x) the  Commitments,  (y)  the  aggregate  unpaid  principal  amount  of the
Advances or (z) the aggregate  Available Amount of outstanding Letters of Credit
that, in each case, shall be required for the Lenders or any of them to take any
action hereunder,  (ii) reduce or limit the obligations of Holding under Section
8.01 or otherwise  limit  Holding's  liability  with respect to the  Obligations
owing to the Administrative  Agent and the Lender Parties,  (iii) release all or
substantially  all of the  Collateral  in any  transaction  or series of related

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transactions,  and (iv) amend this Section 9.01 and (b) no amendment,  waiver or
consent  shall,  unless in writing and signed by the  Required  Lenders and each
Lender that has a  Commitment  under the Term  Facilities  or  Revolving  Credit
Facility if directly affected by such amendment, waiver or consent, (i) increase
the  Commitments  of such  Lender  or  subject  such  Lender  to any  additional
obligations,  (ii) reduce the  principal  of, or interest  on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, (iii)
postpone  any date fixed for any payment of  principal  of, or interest  on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender or (iv) change the order of  application  of any  prepayment set forth in
Section 2.06 in any manner that materially affects such Lender; provided further
that no amendment,  waiver or consent shall, unless in writing and signed by the
Swing Line Bank or the  Issuing  Bank,  as the case may be, in  addition  to the
Lenders required above to take such action,  affect the rights or obligations of
the Swing  Line Bank or of the  Issuing  Bank,  as the case may be,  under  this
Agreement;  and provided  further that no  amendment,  waiver or consent  shall,
unless in writing  and signed by the  Administrative  Agent in  addition  to the
Lenders  required above to take such action,  affect the rights or duties of the
Administrative Agent under this Agreement.

                  SECTION   9.02.   Notices,   Etc.   All   notices   and  other
communications  provided for hereunder shall be in writing  (including  telecopy
communication) and mailed,  telecopied or delivered,  if to the Borrower, at its
address at 3915  Delaware  Avenue,  Des  Moines,  Iowa  50313,  Attention:  Dean
Longnecker;  if to any  Initial  Lender  or the  Initial  Issuing  Bank,  at its
Domestic Lending Office specified  opposite its name on Schedule I hereto; if to
any  other  Lender  Party,  at its  Domestic  Lending  Office  specified  in the
Assignment and Acceptance  pursuant to which it became a Lender Party; and if to
the  Administrative  Agent,  at its address at One Federal  Street,  Boston,  MA
02110,  Attention:  Steve Curran; or, as to each party, at such other address as
shall be designated by such party in a written notice to the other parties.  All
such notices and communications  shall, when mailed or telecopied,  be effective
when deposited in the mails or transmitted by telecopier,  respectively,  except
that notices and communications to the Administrative  Agent pursuant to Article
II,  III or VII shall not be  effective  until  received  by the  Administrative
Agent.  Delivery by  telecopier of an executed  counterpart  of any amendment or
waiver of any provision of this  Agreement or the Notes or of any Exhibit hereto
to be executed  and  delivered  hereunder  shall be  effective  as delivery of a
manually executed counterpart thereof.

                  SECTION 9.03. No Waiver;  Remedies.  No failure on the part of
any  Lender  Party  or the  Administrative  Agent to  exercise,  and no delay in
exercising,  any right  hereunder  or under any Note  shall  operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or  further  exercise  thereof or the  exercise  of any other  right.  The
remedies  herein  provided  are  cumulative  and not  exclusive  of any remedies
provided by law.

                  SECTION 9.04.  Costs and Expenses.  (a) The Borrower agrees to
pay on demand (i) all reasonable costs and expenses of the Administrative  Agent
in  connection  with  the  preparation,   execution,  delivery,  administration,
modification and amendment of the Loan Documents (including, without limitation,
(A)  all  due  diligence,   collateral  review,   syndication,   transportation,
duplication,  appraisal,  search, filing and recording fees and expenses and (B)
the reasonable  fees and expenses of counsel for the  Administrative  Agent with
respect  thereto,  with respect to advising the  Administrative  Agent as to its
rights and  responsibilities,  or the perfection,  protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations with
any  Loan  Party  or  with  other  creditors  of any  Loan  Party  or any of its
Subsidiaries  arising out of any Default or any events or circumstances that may
give rise to a Default and with  respect to  presenting  claims in or  otherwise
participating  in or  monitoring  any  bankruptcy,  insolvency  or other similar

                                      -92-
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proceeding  involving  creditors' rights generally and any proceeding  ancillary
thereto)  and (ii) all costs and  expenses of the  Administrative  Agent and the
Lender Parties in connection with the enforcement of the Loan Documents, whether
in any action, suit or litigation,  any bankruptcy,  insolvency or other similar
proceeding affecting creditors' rights generally (including, without limitation,
the  reasonable  fees and expenses of counsel for the  Administrative  Agent and
each Lender Party with respect thereto).

                  (b) The  Borrower  agrees to indemnify  and hold  harmless the
Administrative  Agent, the Syndication  Agent,  the  Documentation  Agent,  each
Lender  Party  and each of  their  Affiliates  and  their  officers,  directors,
employees,  agents and advisors (each, an "Indemnified  Party") from and against
any and all  claims,  damages,  losses,  liabilities  and  expenses  (including,
without  limitation,  reasonable  fees  and  expenses  of  counsel)  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 a defense in connection therewith) (i) the Facilities, the actual
or proposed use of the  proceeds of the  Advances or the Letters of Credit,  the
Loan  Documents  or any of the  transactions  contemplated  thereby,  including,
without limitation, any acquisition or proposed acquisition (including,  without
limitation, the Merger and any of the other transactions contemplated hereby) by
Holding,  the  Equity  Investors  or any of  their  respective  Subsidiaries  or
Affiliates of all or any portion of the stock or substantially all the assets of
the Company or any of its Subsidiaries or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its Subsidiaries
or any Environmental  Action relating in any way to any Loan Party or any of its
Subsidiaries,  except to the extent  such  claim,  damage,  loss,  liability  or
expense  results  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  9.04(b)  applies,  such indemnity  shall be
effective whether or not such investigation, litigation or proceeding is brought
by any Loan Party,  its directors,  shareholders  or creditors or an Indemnified
Party or any  Indemnified  Party is otherwise a party thereto and whether or not
the transactions  contemplated hereby are consummated.  The Borrower also agrees
not to assert any claim against the Administrative Agent, the Syndication Agent,
the Documentation Agent, any Lender Party or any of their Affiliates,  or any of
their respective officers,  directors,  employees,  attorneys and agents, on any
theory of liability,  for special,  indirect,  consequential or punitive damages
arising out of or otherwise  relating to the Facilities,  the actual or proposed
use of the proceeds of the Advances or the Letters of Credit, the Loan Documents
or any of the transactions contemplated thereby.

                  (c) If any  payment of  principal  of, or  Conversion  of, any
Eurodollar  Rate  Advance  is made by the  Borrower  to or for the  account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a  payment  or  Conversion  pursuant  to  Section  2.09(b)(i)  or
2.10(d),  acceleration  of the maturity of the Notes pursuant to Section 6.01 or
for any other reason,  the Borrower  shall pay to the  Administrative  Agent for
each  Appropriate  Lender an amount equal to the present  value  (calculated  in
accordance with this Section  9.04(c)) of interest for the remaining  portion of
the relevant Interest Period on the amount of such Advance,  at a rate per annum
equal to the  excess of (a) the  existing  Eurodollar  Rate  applicable  to such
Advance over (b) the Eurodollar Rate then applicable to a deemed Interest Period
ending  on the last  day of such  Interest  Period.  The  present  value of such

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additional  interest  shall be  calculated  by  discounting  the  amount of such
interest for each day in the remaining portion of such Interest Period from such
date of payment or  Conversion  at a rate per annum equal to the  interest  rate
determined  pursuant to the preceding  sentence,  and by adding all such amounts
for all such days during such period.  The  determination by the  Administrative
Agent of such amount of interest  shall,  in the absence of manifest  error,  be
conclusive.

                  (d) If any  Loan  Party  fails  to pay  when  due  any  costs,
expenses  or other  amounts  payable by it under any Loan  Document,  including,
without  limitation,  fees and expenses of counsel and indemnities,  such amount
may be paid on  behalf  of such Loan  Party by the  Administrative  Agent or any
Lender Party, in its sole discretion.

                  (e) Without  prejudice to the survival of any other  agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
9.04 shall  survive the  payment in full of  principal,  interest  and all other
amounts payable hereunder and under any of the other Loan Documents.

                  SECTION 9.05.  Right of Set-off.  Upon (a) the  occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the  granting of the  consent  specified  by Section  6.01 to  authorize  the
Administrative  Agent to  declare  the Notes  due and  payable  pursuant  to the
provisions  of  Section  6.01,  each  Lender  Party  and each of its  respective
Affiliates  is  hereby  authorized  at any time and  from  time to time,  to the
fullest  extent  permitted  by law, to set off and  otherwise  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  Party or such
Affiliate  to or for the credit or the account of the  Borrower  against any and
all of the  Obligations  of the Borrower now or  hereafter  existing  under this
Agreement and the Note or Notes (if any) held by such Lender Party, irrespective
of whether such Lender Party shall have made any demand under this  Agreement or
such Note or Notes and although such  obligations may be unmatured.  Each Lender
Party  agrees  promptly  to  notify  the  Borrower  after any such  set-off  and
application;  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
Party and its respective  Affiliates under this Section are in addition to other
rights and remedies  (including,  without  limitation,  other rights of set-off)
that such Lender Party and its respective Affiliates may have.

                  SECTION 9.06.  Binding  Effect.  This  Agreement  shall become
effective when it shall have been executed by the Borrower,  the  Administrative
Agent,  the  Syndication  Agent  and  the  Documentation   Agent  and  when  the
Administrative  Agent shall have been  notified by each  Initial  Lender and the
Initial  Issuing Bank that such Initial Lender and the Initial  Issuing Bank has
executed it and thereafter shall be binding upon and inure to the benefit of the
Borrower,  the  Administrative  Agent and each Lender Party and their respective
successors  and assigns,  except that the  Borrower  shall not have the right to
assign its rights  hereunder or any interest  herein  without the prior  written
consent of the Lender Parties.

                  SECTION 9.07. Assignments and Participations.  (a) Each Lender
may and, if demanded by the Borrower (following a demand to such Lender pursuant
to  Section  2.16),  will,  assign to one or more  Eligible  Assignees  all or a

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portion of its rights and obligations under this Agreement  (including,  without
limitation,  all or a portion of its  Commitment  or  Commitments,  the Advances
owing to it and the Note or Notes held by it); provided,  however, that (i) each
such  assignment  shall be of a uniform,  and not a varying,  percentage  of all
rights and  obligations  under and in respect  of one or more  Facilities,  (ii)
except in the case of an assignment to a Person that,  immediately prior to such
assignment,  was a Lender or an Affiliate of a Lender or an assignment of all of
a  Lender's  rights and  obligations  under  this  Agreement,  the amount of the
Commitment  of the  assigning  Lender  being  assigned  pursuant  to  each  such
assignment  (determined as of the date of the  Assignment  and  Acceptance  with
respect to such  assignment)  shall in no event be less than  $5,000,000,  (iii)
each such assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the Borrower  pursuant to this  Section  9.07(a)
shall be arranged by the Borrower  after  consultation  with the  Administrative
Agent and shall be either an assignment of all of the rights and  obligations of
the assigning  Lender under this Agreement or an assignment of a portion of such
rights and obligations made  concurrently  with another such assignment or other
such  assignments  that together cover all of the rights and  obligations of the
assigning Lender under this Agreement,  (v) no Lender shall be obligated to make
any such  assignment  as a result of a demand by the  Borrower  pursuant to this
Section  9.07(a)  unless and until such Lender  shall have  received one or more
payments  from  either the  Borrower  or one or more  Eligible  Assignees  in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal  amount and all other amounts  payable to such
Lender under this Agreement,  and (vi) the parties to each such assignment shall
execute  and  deliver  to the  Administrative  Agent,  for  its  acceptance  and
recording in the Register, an Assignment and Acceptance,  together with any Note
or Notes subject to such  assignment  and a processing  and  recordation  fee of
$3500.00.

                  (b) Upon such execution,  delivery,  acceptance and recording,
from and after the effective date specified in such  Assignment and  Acceptance,
(x) the  assignee  thereunder  shall be a party  hereto  and, to the extent that
rights and  obligations  hereunder  have been  assigned  to it  pursuant to such
Assignment  and  Acceptance,  have the  rights  and  obligations  of a Lender or
Issuing Bank,  as the case may be,  hereunder and (y) the Lender or Issuing Bank
assignor  thereunder shall, to the extent that rights and obligations  hereunder
have been assigned by it pursuant to such Assignment and Acceptance,  relinquish
its rights and be released from its  obligations  under this Agreement  (and, in
the case of an Assignment and Acceptance  covering all or the remaining  portion
of an assigning  Lender's or Issuing  Bank's rights and  obligations  under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).

                  (c) By executing and delivering an Assignment and  Acceptance,
the Lender Party assignor  thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation  or warranty  and assumes no  responsibility  with respect to any
statements,  warranties or  representations  made in or in connection  with this
Agreement  or any other Loan  Document  or the  execution,  legality,  validity,
enforceability,  genuineness,  sufficiency  or value  of, or the  perfection  or
priority of any lien or security  interest  created or  purported  to be created
under or in connection  with,  this  Agreement or any other Loan Document or any
other  instrument or document  furnished  pursuant hereto or thereto;  (ii) such

                                      -95-
<PAGE>

assigning  Lender  Party  makes no  representation  or  warranty  and assumes no
responsibility  with respect to the  financial  condition of the Borrower or any
other Loan Party or the  performance  or  observance by any Loan Party of any of
its  obligations  under any Loan  Document or any other  instrument  or document
furnished pursuant thereto;  (iii) such assignee confirms that it has received a
copy of  this  Agreement,  together  with  copies  of the  financial  statements
referred to in Section 4.01 and such other  documents and  information as it has
deemed  appropriate  to make its own credit  analysis and decision to enter into
such  Assignment  and  Acceptance;  (iv) such assignee will,  independently  and
without reliance upon the  Administrative  Agent, such assigning Lender Party or
any other Lender Party and based on such  documents and  information as it shall
deem  appropriate  at the time,  continue  to make its own credit  decisions  in
taking or not taking action under this  Agreement;  (v) such  assignee  confirms
that it is an Eligible  Assignee (or the Agent and Borrower shall have consented
to  such   assignment);   (vi)  such  assignee   appoints  and   authorizes  the
Administrative  Agent to take such action as agent on its behalf and to exercise
such powers and  discretion  under the Loan  Documents  as are  delegated to the
Administrative  Agent  by the  terms  hereof,  together  with  such  powers  and
discretion as are reasonably  incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.

                  (d) The  Administrative  Agent,  acting for this  purpose (but
only for this  purpose)  as the agent of the  Borrower,  shall  maintain  at its
address  referred to in Section 9.02 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 Lender Parties and the  Commitment  under each Facility of,
and principal  amount of the Advances  owing under each Facility to, each Lender
Party 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  Administrative  Agent and the Lender  Parties  shall  treat each
Person whose name is recorded in the Register as a Lender  Party  hereunder  for
all purposes of this  Agreement.  The Register shall be available for inspection
by the Borrower or any Lender Party at any reasonable time and from time to time
upon reasonable prior notice.

                  (e) Upon its receipt of an Assignment and Acceptance  executed
by an assigning  Lender Party and an assignee,  together  with any Note or Notes
subject to such assignment,  the Administrative  Agent shall, if such Assignment
and Acceptance has been completed and is in substantially  the form of Exhibit C
hereto,  (i) accept such Assignment and Acceptance,  (ii) record the information
contained  therein in the Register and (iii) give prompt  notice  thereof to the
Borrower.  In the case of any assignment by a Lender,  within five Business Days
after its  receipt of such  notice,  the  Borrower,  at its own  expense,  shall
execute and deliver to the Administrative  Agent in exchange for the surrendered
Note or Notes a new Note to the  order of such  Eligible  Assignee  in an amount
equal  to the  Commitment  assumed  by it  under  a  Facility  pursuant  to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder under such Facility,  a new Note to the order of the assigning  Lender
in an amount equal to the Commitment retained by it hereunder.  Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered  Note or Notes,  shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially  the form
of Exhibit A-1, A-2 or A-3 hereto, as the case may be.

                                      -96-
<PAGE>

                    (f) The Issuing Bank may assign to an Eligible  Assignee all
of its rights and obligations  under the undrawn portion of its Letter of Credit
Commitment at any time; provided,  however,  that (i) each such assignment shall
be to an Eligible  Assignee and (ii) the parties to each such  assignment  shall
execute  and  deliver  to the  Administrative  Agent,  for  its  acceptance  and
recording  in the  Register,  an  Assignment  and  Acceptance,  together  with a
processing and recordation fee of $3500.00.

                  (g) Each Lender Party may sell  participations  to one or more
Persons  (other than any Loan Party or any of its  Affiliates) in or to all or a
portion of its rights and obligations under this Agreement  (including,  without
limitation,  all or a portion of its  Commitments,  the Advances owing to it and
the Note or Notes (if any) held by it); provided,  however, that (i) such Lender
Party's obligations under this Agreement  (including,  without  limitation,  its
Commitments) shall remain unchanged,  (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii)  such  Lender  Party  shall  remain  the  holder  of any such Note for all
purposes of this Agreement,  (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and  obligations  under this
Agreement and (v) no  participant  under any such  participation  shall have any
right to approve any amendment or waiver of any provision of any Loan  Document,
or any  consent  to any  departure  by any Loan Party  therefrom,  except to the
extent that such amendment,  waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable  hereunder,  in each
case to the extent  subject to such  participation,  postpone any date fixed for
any  payment of  principal  of, or  interest  on, the Notes or any fees or other
amounts  payable  hereunder,  in  each  case  to  the  extent  subject  to  such
participation.

                  (h) Any Lender Party may, in connection with any assignment or
participation or proposed  assignment or participation  pursuant to this Section
9.07,   disclose  to  the  assignee  or  participant  or  proposed  assignee  or
participant,  any information  relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower;  provided,  however,  that,  prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve  the  confidentiality  of any  Confidential  Information
received by it from such Lender Party.

                  (i)  Notwithstanding  any  other  provision  set forth in this
Agreement, any Lender Party may at any time pledge or create a security interest
in all or any portion of its rights  under this  Agreement  (including,  without
limitation,  the Advances  owing to it and the Note or Notes held by it), but no
such  pledge  or grant of a  security  interest  shall  relieve  a Lender of its
Obligations hereunder.

                  SECTION 9.08. Execution in Counterparts. This Agreement may be
executed  in any  number of  counterparts  and by  different  parties  hereto in
separate  counterparts,  each of which when so executed shall be deemed to be an
original  and all of which  taken  together  shall  constitute  one and the same
agreement.  Delivery of an  executed  counterpart  of a  signature  page to this
Agreement by  telecopier  shall be effective as delivery of a manually  executed
counterpart of this Agreement.

                                      -97-
<PAGE>

                  SECTION 9.09.  No Liability of the Issuing Bank.  The Borrower
assumes all risks of the acts or omissions of any  beneficiary  or transferee of
any Letter of Credit with  respect to its use of such Letter of Credit.  Neither
the  Issuing  Bank nor any of its  officers  or  directors  shall be  liable  or
responsible  for:  (a) the use that may be made of any  Letter  of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith;  (b)
the validity,  sufficiency or genuineness  of documents,  or of any  endorsement
thereon,  even if  such  documents  should  prove  to be in any or all  respects
invalid,  insufficient,  fraudulent  or forged;  (c) payment by the Issuing Bank
against  presentation of documents that do not comply with the terms of a Letter
of Credit,  including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances  whatsoever in
making or failing to make  payment  under any Letter of Credit,  except that the
Borrower shall have a claim against the Issuing Bank, and the Issuing Bank shall
be liable to the Borrower,  to the extent of any direct,  but not consequential,
damages  suffered by the Borrower to the extent caused by (i) the Issuing Bank's
willful  misconduct  or  gross  negligence  in  determining   whether  documents
presented  under any  Letter of Credit  comply  with the terms of the  Letter of
Credit or (ii) the Issuing Bank's willful failure to make lawful payment under a
Letter  of  Credit  after the  presentation  to it of a draft  and  certificates
strictly  complying  with the terms and  conditions of the Letter of Credit.  In
furtherance and not in limitation of the foregoing,  the Issuing Bank may accept
documents that appear on their face to be in order,  without  responsibility for
further investigation, regardless of any notice or information to the contrary.

                  SECTION  9.10.  Confidentiality.  Neither  the  Administrative
Agent nor any Lender Party shall  disclose any  Confidential  Information to any
Person without the consent of the Borrower, other than (a) to the Administrative
Agent's  or such  Lender  Party's  Affiliates  and  their  officers,  directors,
employees,  investors, agents and advisors and to actual or prospective Eligible
Assignees  and  participants,  and then  only on a  confidential  basis,  (b) as
required by any law, rule or regulation or judicial process and (c) as requested
or required by any state,  federal or foreign  authority or examiner  regulating
any Lender.

                  SECTION  9.11.  Jurisdiction,  Etc.  (a)  Each of the  parties
hereto  hereby  irrevocably  and  unconditionally  submits,  for  itself and its
property,  to the  nonexclusive  jurisdiction  of any New  York  State  court or
federal court of the United States of America  sitting in New York City, and any
appellate court from any thereof,  in any action or proceeding arising out of or
relating to this  Agreement or any of the other Loan  Documents to which it is a
party,  or for  recognition  or  enforcement  of any  judgment,  and each of the
parties hereto hereby irrevocably and unconditionally  agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent  permitted by law, in such federal court.
Each of the parties  hereto  agrees that a final  judgment in any such action or
proceeding  shall be conclusive  and may be enforced in other  jurisdictions  by
suit on the  judgment or in any other  manner  provided by law.  Nothing in this
Agreement  shall affect any right that any party may otherwise have to bring any
action  or  proceeding  relating  to this  Agreement  or any of the  other  Loan
Documents in the courts of any jurisdiction.

                  (b) Each of the parties hereto irrevocably and unconditionally
waives,  to the  fullest  extent  it may  legally  and  effectively  do so,  any
objection  that it may now or hereafter have to the laying of venue of any suit,
action or proceeding  arising out of or relating to this Agreement or any of the

                                      -98-
<PAGE>

other  Loan  Documents  to which it is a party in any New York  State or federal
court.  Each of the parties  hereto hereby  irrevocably  waives,  to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

                  SECTION  9.12.  Governing  Law.  This  Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.

                  SECTION 9.13. Waiver of Jury Trial. Each of the Borrower,  the
Administrative  Agent, the Syndication  Agent, the  Documentation  Agent and the
Lender  Parties  irrevocably  waives  all right to trial by jury in any  action,
proceeding  or  counterclaim  (whether  based on  contract,  tort or  otherwise)
arising  out of or relating to any of the Loan  Documents,  the  Advances or the
actions of the  Administrative  Agent, the Syndication  Agent, the Documentation
Agent or any Lender Party in the  negotiation,  administration,  performance  or
enforcement thereof.


                                      -99-
<PAGE>

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

                              CENTRAL TRACTOR FARM & COUNTRY, INC.


                              By: /s/ Adam Suttin
                                  Title: Vice President


                              CT HOLDING, INC.


                              By: /s/ Adam Suttin
                                  Title: Vice President


                              FLEET NATIONAL BANK, as
                                  Administrative Agent


                              By: /s/ John A. Skrobe
                                  Title: Vice President


                              NATIONSBANK, N.A., as
                                 Syndication Agent


                              By: /s/ Johns Ellington
                                  Title: Vice President


                              DLJ CAPITAL FUNDING, INC., as
                                  Documentation Agent


                              By: /s/ Dana F. Klein
                                  Title: Vice President



                                -100-
<PAGE>

                              FIRST UNION NATIONAL BANK, as
                              Co-Agent


                              By: /s/ Jorge A. Gonzalez
                                  Title:  Senior Vice President



                              THE HUNTINGTON NATIONAL BANK, as
                              Co-Agent


                              By: /s/ John Norkus
                                  Title: Asst. Vice President



                              U.S. BANK NATIONAL ASSOCIATION, as
                              Co-Agent


                              By: /s/ Elliot Jaffee
                                  Title: Vice President


                               -101-
<PAGE>


                           Initial Issuing Bank

                              FLEET NATIONAL BANK


                              By: /s/ John A. Skrobe
                                  Title: Vice President


                           Initial Lenders

                              FLEET NATIONAL BANK


                              By: /s/ John A. Skrobe
                                  Title: Vice President


                              NATIONSBANK, N.A.


                              By:  /s/ Johns Ellington
                                   Title: Vice President


                              DLJ CAPITAL FUNDING, INC.


                              By:  /s/ Dana F. Klein
                                   Title: Vice President

                                      -102-
<PAGE>
                              FIRST UNION NATIONAL BANK


                              By: /s/ Jorge A. Gonzalez
                                  Title:  Senior Vice President


                              THE HUNTINGTON NATIONAL BANK


                              By: /s/ John Norkus
                                  Title: Asst. Vice President


                              U.S. BANK NATIONAL ASSOCIATION


                              By: /s/ Elliot Jaffee
                                  Title: Vice President


                              HELLER FINANCIAL, INC.


                              By: /s/ Sheila C. Weimer
                                  Title: Vice President


                              HARRIS TRUST AND SAVINGS BANK


                              By: /s/ Christopher Fisher
                                  Title: Vice President


                              COMERICA BANK


                              By: /s/ Robert Porterfield
                                  Title: Vice President

                                      -103-


<PAGE>



                              NATIONAL CITY BANK


                              By: /s/ Wilmer J. Jacobs
                                  Title: Officer


                              STEIN ROE FLOATING RATE LIMITED
                              LIABILITY COMPANY


                              By: /s/ Brian W. Good
                                  Title:  Vice President and Portfolio Manager
                                          Stein Roe & Farnham Incorporated, as
                                          Advisor to the Stein Roe Floating Rate
                                          Limited Liability Company


                              KEY CORPORATE CAPITAL INC.


                              By: /s/ Alexander Strazella
                                  Title:  Vice president


                              UNION BANK OF CALIFORNIA, N.A.


                              By: /s/ J. William Bloore
                                  Title:  Vice President


                              FIRSTAR BANK, NATIONAL ASSOCIATION


                              By: /s/ Thomas Gibbons
                                  Title: Vice President




                                      -104-


<PAGE>
                                                             EXECUTION COPY


                             AMENDMENT NO. 1 TO THE
                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

                                                           As of March 31, 2000

         AMENDMENT NO. 1 (this  "Amendment") to the Credit Agreement (as defined
herein) among Quality Stores,  Inc., a Delaware  corporation  (formerly known as
"Central Tractor Farm & Country, Inc.") (the "Borrower"),  QSI Holdings, Inc., a
Delaware corporation (formerly known as "CT Holding, Inc.") ("Holding"), certain
of the banks,  financial  institutions and other institutional lenders listed on
the signature pages hereof, and Fleet National Bank ("Fleet"), as administrative
agent (the  "Administrative  Agent")  for the Lender  Parties (as defined in the
Credit Agreement).


                             PRELIMINARY STATEMENTS

         (1) The Borrower,  Holding,  the Initial  Lenders,  the Initial Issuing
Bank,  the Swing Line Bank and the Agents have entered into a Second Amended and
Restated  Credit  Agreement  dated as of May 7, 1999 (the  "Credit  Agreement").
Capitalized  terms defined in the Credit Agreement and not otherwise  defined in
this Amendment are used herein as therein defined.

         (2) The Borrower has requested  that the Revolving  Credit  Facility be
increased  by  $60,000,000  (the  "Increase  Amount")  from  $100,000,000.00  to
$160,000,000.00.

         (3) The  Lenders  set  forth  on  Schedule  I  hereto  (the  "Amendment
Lenders") are willing,  on the terms and conditions  stated below,  to commit to
make, or increase their  commitment to make (as  applicable),  Revolving  Credit
Advances in the aggregate amount of the Increase Amount.

         (4) The  Borrower  and the  Lenders  have  agreed to amend  the  Credit
Agreement as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises and of the mutual
covenants and agreements  contained  herein,  the parties hereto hereby agree as
follows:

         SECTION 1.  Amendments of Certain  Provisions of the Credit  Agreement.
The Credit  Agreement  is, upon the  Amendment  Effective  Date (as  hereinafter
defined), hereby amended as follows:
<PAGE>
                                      -2-

         (a) Section 1.01 of the Credit Agreement is hereby amended as follows:

                  (i) The definition of "Applicable Margin" set forth therein is
         hereby  amended  by  amending  the  table  therein  in  full to read as
         follows:
<TABLE>
<CAPTION>

                                      Tranche A Term Facility/                      Tranche B Term Facility
                                     Revolving Credit Facility
                                 -----------------------------------          ------------------------------------
                                 Prime Rate          Eurodollar Rate          Prime Rate          Eurodollar Rate
                                  Advances               Advances              Advances              Advances
                                  --------               --------              --------              --------
<S>                                <C>                    <C>                    <C>                  <C>
Level I                              .625%                 1.875%                 2.0%                 3.25%
less than 2.5:1

Level II                             .875%                 2.125%                 2.0%                 3.25%
2.5:1 or greater,
but less than 3.0:1

Level III                           1.125%                 2.375%                 2.25%                3.50%
3.0:1 or greater,
but less than 3.5:1

Level IV                            1.50%                  2.75%                  2.25%                3.50%
3.5:1 or greater,
but less than 4.0:1

Level V                             1.75%                  3.0%                   2.25%                3.50%
4.0:1 or greater
</TABLE>

                  (ii) The definition of "Fixed Charge Coverage Ratio" set forth
         therein is hereby  amended by  inserting,  before the period at the end
         thereof, the following proviso:

                  "provided,  further, however, that for purposes of determining
         the amount referred to in clause (a)(ii) herein,  Capital  Expenditures
         made by Holding and its Subsidiaries  during each  four-quarter  period
         ending at the end of each  fiscal  quarter,  beginning  with the fiscal
         quarter  period  ending on April 30,  2000 and  ending  with the fiscal
         quarter  period  ending  on  July  31,  2002,  shall  be  deemed  to be
         $18,000,000".
<PAGE>
                                      -3-


                  (iii) The  definition of "Lenders" set forth therein is hereby
         amended in full to read as follows:

                  " Lenders"  means the  Initial  Lenders  and each  Person that
         shall  become a Lender  hereunder  pursuant  to  Section  9.07,  or any
         amendment hereto.

         (b) The table set forth in Section  5.02(p) of the Credit  Agreement is
hereby amended by deleting the second line thereof and substituting therefor the
following:


               "2001                            $43,500,000".

         (c) Section 5.04 of the Credit Agreement is hereby amended as follows:

                  (i) The table set forth in Section  5.04(b) is amended in full
         to read as follows:

Four Fiscal Quarters Ending Closest To                                Ratio
--------------------------------------                             ----------

July 31, 1999                                                          2.00
October 31, 1999                                                       2.00
January 31, 2000                                                       2.00
April 30, 2000                                                         2.00
July 31, 2000                                                          2.20
October 31, 2000                                                       2.25
January 31, 2001                                                       2.25
April 30, 2001                                                         2.25
July 31, 2001                                                          2.50
October 31, 2001                                                       2.50
January 31, 2002                                                       2.75
April 30, 2002                                                         2.75
July 31, 2002                                                          2.75
October 31, 2002                                                       3.00
January 31, 2003                                                       3.00
April 30, 2003                                                         3.00
July 31, 2003                                                          3.00
October 31, 2003                                                       3.25
January 31, 2004                                                       3.25
April 30, 2004                                                         3.25
July 31, 2004                                                          3.25
<PAGE>
                                      -4-


October 31, 2004                                                       3.25
January 31, 2005                                                       3.25
April 30, 2005                                                         3.25
July 31, 2005                                                          3.25
October 31, 2005                                                       3.25
January 31, 2006                                                       3.25
April 30, 2006                                                         3.25

                  (ii) The table set forth in Section 5.04(c) is amended in full
         to read as follows:

Four Fiscal Quarters Ending Closest To                                Ratio
--------------------------------------                             ----------

July 31, 1999                                                          5.00
October 31, 1999                                                       4.75
January 31, 2000                                                       4.75
April 30, 2000                                                         5.25
July 31, 2000                                                          4.75
October 31, 2000                                                       4.50
January 31, 2001                                                       4.35
April 30, 2001                                                         4.25
July 31, 2001                                                          4.15
October 31, 2001                                                       4.00
January 31, 2002                                                       3.75
April 30, 2002                                                         3.75
July 31, 2002                                                          3.50
October 31, 2002                                                       3.00
January 31, 2003                                                       3.00
April 30, 2003                                                         3.00
July 31, 2003                                                          3.00
October 31, 2003                                                       3.00
January 31, 2004                                                       3.00
April 30, 2004                                                         3.00
July 31, 2004                                                          3.00
October 31, 2004                                                       3.00
January 31, 2005                                                       3.00
April 30, 2005                                                         3.00
July 31, 2005                                                          3.00
October 31, 2005                                                       3.00
January 31, 2006                                                       3.00
<PAGE>
                                      -5-


April 30, 2006                                                         3.00

         (c) Section 5.04 of the Credit Agreement is hereby amended to add after
subsection (c) thereof the following new subsection (d):

                  "(d) Revolver Paydown. Maintain outstanding, for any period of
         30 consecutive  calendar days,  Revolving  Credit  Advances of not more
         than the amount set forth below for each corresponding period set forth
         below:

Period                                                               Amount
-------                                                            ----------

June 15, 2000 - August 15, 2000                                   $125,000,000
December 15, 2000 - February 15, 2001                             $105,000,000
June 15, 2001 - August 15, 2001                                   $115,000,000
December 15, 2001 - February 15, 2002                              $95,000,000
June 15, 2002 - August 15, 2002                                   $105,000,000
December 15, 2002 - February 15, 2003                              $85,000,000
June 15, 2003 - August 15, 2003                                   $100,000,000
December 15, 2003 - February 15, 2004                              $80,000,000
June 15, 2004 - August 15, 2004                                   $100,000,000".

         (d)  Schedule I to the Credit  Agreement  is hereby  amended in full to
read as set forth on Exhibit A hereto.

         SECTION  3.  Conditions  of  Effectiveness  of  this  Amendment.   This
Amendment  shall  become  effective  as of the date first  above  written on the
Business  Day when,  and only when,  the  following  conditions  shall have been
satisfied (such date being the "Amendment Effective Date").

                  (a) The  Administrative  Agent shall have  received  Revolving
         Credit  Notes  payable  to the  order  of the  Amendment  Lenders  (the
         "Additional  Revolving  Credit  Notes") in an amount equal to each such
         Amendment  Lender's Revolving Credit Commitment (after giving effect to
         this Amendment),  (ii)  counterparts of this Amendment  executed by the
         Borrower,  Holding,  the  Required  Lenders  and each of the  Amendment
         Lenders or, as to any of the Lender Parties, advice satisfactory to the
         Administrative Agent that such Lender Party has executed this Amendment
         and (iii) the  Consent  dated as of the date hereof (a copy of which is
         attached hereto), executed by each of the Loan Parties.

                  (b) All of the consents,  approvals and authorizations of, and
         notices and filings to or with, and other actions by, any  governmental
         or  regulatory  authority or any other Person  necessary in  connection
         with any aspect of the Transactions,  the Related
<PAGE>
                                      -6-


         Documents,  any of the Loan Documents or any of the other  transactions
         contemplated  thereby shall have been obtained  (without the imposition
         of any  conditions  that are not  reasonably  acceptable to the Lenders
         party hereto) and shall remain in full force and effect; all applicable
         waiting  periods  shall have expired  without any action being taken by
         any  competent  authority;  and no law,  rule or  regulation  shall  be
         applicable  in the  reasonable  judgment  of any of the  Lenders  party
         hereto  that  restrains,   prevents  or  imposes   materially   adverse
         conditions upon any aspect of the Transactions,  the Related Documents,
         or  any of  the  Loan  Documents  or  any  of  the  other  transactions
         contemplated thereby.

                  (c) Before giving effect to this  Amendment,  there shall have
         occurred no Material Adverse Change since January 31, 2000.

                  (d) The  representations  and warranties  contained in each of
         the Loan Documents (including, without limitation, in Section 4 of this
         Amendment)  shall be correct in all material  respects on and as of the
         Amendment  Effective  Date,  before  and  after  giving  effect  to the
         additional  Revolving  Credit  Borrowing  contemplated  hereby  and the
         application  of  proceeds  therefrom,  as though made on and as of such
         date (other than any such  representations or warranties that, by their
         terms,  refer to a specific  date other  than the  Amendment  Effective
         Date, in which case as of such specific date).

                  (e) No event shall have occurred and be  continuing,  or shall
         result from any Revolving  Credit  Borrowing or the  application of the
         proceeds therefrom, that would constitute a Default.

                  (f) All of the accrued fees and expenses of the Administrative
         Agent and the Lender Parties (including,  without limitation,  all such
         fees  described  in  Section  3(h)  hereto,  and the  accrued  fees and
         expenses of counsel for the Administrative  Agent) shall have been paid
         in full.

                  (g) The Administrative  Agent shall have received on or before
         the  Amendment  Effective  Date the  following,  each  dated  such date
         (unless otherwise specified), in form and substance satisfactory to the
         Lenders party hereto  (unless  otherwise  specified)  and in sufficient
         copies for each Lender Party:

                           (i) Certified  copies of the resolutions of the Board
                  of  Directors  of the  Borrower  and  each  other  Loan  Party
                  approving  this  Amendment,  and of all  documents  evidencing
                  other necessary  corporate  action and  governmental and other
                  third party  approvals and  consents,  if any, with respect to
                  this Amendment.

                           (ii)  A  certificate  of  each  of the  Borrower  and
                  Holding,  signed on behalf of the  Borrower  and  Holding  (as
                  guarantor under the Credit  Agreement),  respectively,  by its
                  President  or a  Vice  President  and  its  Secretary  or  any
                  Assistant
<PAGE>
                                      -7-


                  Secretary,  dated the Amendment Effective Date (the statements
                  made  in  which  certificate  shall  be  true on and as of the
                  Amendment Effective Date), certifying as to (A) the absence of
                  any amendments to the charter of such Person since the date of
                  the  Secretary of State's  certificate  referred to in Section
                  3.01(i)(iv) of the Credit Agreement, or any steps taken by the
                  board of  directors  or the  shareholders  of such  Person  to
                  effect or authorize any further amendment, supplement or other
                  modification thereto; (B) the accuracy and completeness of the
                  bylaws  of such  Person  as in effect on the date on which the
                  resolutions  of the board of directors (or persons  performing
                  similar  functions) of such Person  referred to in clause (ii)
                  of  this  Section  3(g)  were  adopted  and on  the  Amendment
                  Effective Date (a copy of which,  if different from the bylaws
                  of  such  Person  delivered  to  the  Lender  Parties  on  the
                  Effective Date of the Credit  Agreement,  shall be attached to
                  such certificate); (C) the due incorporation and good standing
                  of such Person as a  corporation  organized  under the laws of
                  the  jurisdiction  of  its   incorporation,   and  each  other
                  jurisdiction  where such Person has a place of  business,  and
                  the absence of any proceeding (either pending or contemplated)
                  for the dissolution,  liquidation or other  termination of the
                  existence of such Person or any of its  Subsidiaries;  (D) the
                  accuracy in all material respects of the  representations  and
                  warranties   made  by  such  Person  in  the  Loan   Documents
                  (including,  without limitation,  Section 4 of this Amendment)
                  to which it is or is to be a party as though made on and as of
                  the Amendment  Effective Date,  before and after giving effect
                  to this Amendment and to the  application of proceeds from the
                  Revolving  Credit  Facility,  as though made on and as of such
                  date (other than any such  representations or warranties that,
                  by  their  terms,  refer to a  specific  date  other  than the
                  Amendment  Effective  Date,  in which case as of such specific
                  date);  and  (E)  the  absence  of  any  event  occurring  and
                  continuing,  or resulting from the Revolving  Credit Borrowing
                  contemplated  hereby or the application of proceeds therefrom,
                  that would constitute a Default.

                           (iii) A certificate  of the Secretary or an Assistant
                  Secretary of each of the Borrower and Holding  certifying  the
                  names and true  signatures  of the officers of the Borrower or
                  Holding  authorized  to sign this  Amendment,  the  Additional
                  Revolving Credit Notes and the other documents to be delivered
                  hereunder and thereunder.

                           (iv) Such financial,  business and other  information
                  regarding  the  Borrower  and  Holding  and  their  respective
                  property, assets and businesses as the Administrative Agent or
                  the Lender Parties shall have  requested,  including,  without
                  limitation,   (A)   information  as  to  possible   contingent
                  liabilities,  tax matters,  environmental matters, obligations
                  under Plans, Multiemployer Plans and Welfare Plans, collective
                  bargaining  agreements and other  arrangements  with employees

<PAGE>
                                      -8-


                  and  (B) a pro  forma  Consolidated  financial  statements  of
                  Holding and its Subsidiaries.

                           (v)  Certificates,  in form and substance  reasonably
                  satisfactory  to the Lenders  party  hereto,  attesting to the
                  Solvency   of  Holding   and  the   Borrower,   in  each  case
                  individually  and together with its  Subsidiaries,  taken as a
                  whole,  from the chief financial officer (or person performing
                  similar functions) of each of Holding and the Borrower.

                           (vi) A duly executed Notice of Borrowing.

                           (vii) A favorable  opinion of  Sullivan &  Worcester,
                  counsel for the Borrower and  Holding,  in form and  substance
                  reasonably satisfactory to the Administrative Agent.

                           (viii) Such other opinions,  certificates,  documents
                  and  information  as the  Administrative  Agent  or any of the
                  Lenders  party  hereto  through the  Administrative  Agent may
                  reasonably request.

         (h) The Administrative Agent shall have received from the Borrower,  on
or before the Amendment Effective Date, the following:

                           (i) an amendment fee equal to 0.25% of the Commitment
                  of each Lender party hereto; and

                           (ii) payment in full of all amounts outstanding under
                  the Credit  Agreement  dated as of March 6, 2000  between  the
                  Borrower and Fleet National Bank, as lender thereunder.

         (i) The Administrative  Agent shall have received evidence that neither
the Credit Agreement (as amended hereby), nor the Advances  contemplated therein
will contravene any provision of any of the Permanent Debt Documents,  including
without limitation Section 4.14 of the Indenture dated as of March 27, 1997 (the
"Indenture").

The effectiveness of this Amendment is further  conditioned upon the accuracy of
all of the factual matters described  herein.  This Amendment is further subject
to the provisions of Section 9.01 of the Credit Agreement.

         SECTION 4.  Representations  and  Warranties.  Each of Holding  and the
Borrower hereby represents and warrants as follows:
<PAGE>
                                      -9-


                  (a) The execution, delivery and performance by each Loan Party
         of any of this Amendment, the Additional Revolving Credit Notes and the
         Consent,  in each  case to  which  it is or is to be a  party,  and the
         consummation of the transactions  contemplated hereby and thereby,  are
         within such Loan Party's corporate powers, have been duly authorized by
         all necessary  corporate  action,  and do not (i) contravene  such Loan
         Party's  charter or bylaws,  (ii) violate any law  (including,  without
         limitation,  the  Securities  Exchange Act of 1934),  rule,  regulation
         (including, without limitation,  Regulation X of the Board of Governors
         of the Federal Reserve  System),  order,  writ,  judgment,  injunction,
         decree,  determination  or award  applicable to such Loan Party,  (iii)
         conflict  with or result in the  breach  of,  or  constitute  a default
         under,  any contract,  loan  agreement,  indenture  (including  without
         limitation  the  Indenture),  mortgage,  deed of trust,  lease or other
         instrument  binding  on  or  affecting  any  Loan  Party,  any  of  its
         Subsidiaries or any of their  properties other than as specified in the
         Credit  Agreement,  or (iv) except for the Liens created under the Loan
         Documents,  result in or require the creation or imposition of any Lien
         upon or with respect to any of the  properties of any Loan Party or any
         of its  Subsidiaries.  No Loan Party or any of its  Subsidiaries  is in
         violation of any such law, rule,  regulation,  order,  writ,  judgment,
         injunction,  decree,  determination  or award or in  breach of any such
         contract, loan agreement,  indenture, mortgage, deed of trust, lease or
         other  instrument,  the  violation  or  breach  of which is  reasonably
         expected to have a Material Adverse Effect.

                  (b) Other than those that have  already  been  obtained and as
         set forth in Schedule IV to the Credit  Agreement and are in full force
         and effect,  or as would not  reasonably be expected to have a Material
         Adverse Effect, no authorization or approval or other action by, and no
         notice to or filing with, any governmental authority or regulatory body
         or any other third party is required to be obtained by the Loan Parties
         for (i) the due execution, delivery, recordation, filing or performance
         by any Loan Party of any of this  Amendment,  the Additional  Revolving
         Credit  Notes and the Consent to which it is or is to be a party,  (ii)
         the grant by any Loan Party of the Liens  granted by it pursuant to the
         Collateral Documents,  (iii) the perfection or maintenance of the Liens
         created  by the  Collateral  Documents  (including  the first  priority
         nature  thereof  subject  only  to the  Liens  and  security  interests
         permitted in the Loan  Documents)  or (iv) the exercise by the Agent or
         any Lender Party of its rights  under this  Amendment,  the  Additional
         Revolving  Credit Notes,  the Consent or the remedies in respect of the
         Collateral pursuant to the Collateral Documents.

                  (c) This  Amendment  has been,  and the  Additional  Revolving
         Credit Notes and the Consent,  when delivered hereunder will have been,
         duly executed and delivered by each Loan Party thereto.  This Amendment
         is, and the  Additional  Revolving  Credit Notes and the Consent,  when
         delivered hereunder will be, the legal, valid and binding obligation of
         each  Loan  Party  thereto,  enforceable  against  such  Loan  Party in
         accordance  with its
<PAGE>
                                      -10-


         terms   except   as  may  be   limited   by   bankruptcy,   insolvency,
         reorganization,  moratorium  or  other  laws  relating  to or  limiting
         creditors' rights or by equitable principles generally.

                  (d) There is no action,  suit,  investigation,  litigation  or
         proceeding  affecting any Loan Party or any of its Subsidiaries pending
         or threatened before any court,  governmental agency or arbitrator that
         (i) is reasonably  expected to have a Material  Adverse  Effect or (ii)
         purports to affect the  legality,  validity or  enforceability  of this
         Amendment,  the Additional Revolving Credit Notes or the Consent or the
         consummation of the transactions contemplated hereby.

         SECTION 5.  Reference to and Effect on the Loan  Documents.  (a) On and
after the Amendment  Effective Date,  each reference in the Credit  Agreement to
"this Agreement", "hereunder", "hereof" or words of like import referring to the
Credit  Agreement,  and each reference in the Notes and the other Loan Documents
to "the  Credit  Agreement",  "thereunder",  "thereof"  or words of like  import
referring to the Credit  Agreement,  shall mean and be a reference to the Credit
Agreement, as amended and otherwise modified hereby.

         (b)  The  Credit  Agreement,  the  Notes  and  each of the  other  Loan
Documents,  except to the  extent  of the  amendments  and  other  modifications
specifically  provided  above,  are and shall  continue  to be in full force and
effect and are hereby in all respects  ratified and confirmed.  Without limiting
the  generality  of the  foregoing,  the  Collateral  Documents  and  all of the
Collateral  described therein do and shall continue to secure the payment of all
Obligations of the Loan Parties under and in respect of the Loan  Documents,  as
amended and otherwise modified by this Amendment.

         (c) Each of the Amendment Lenders (if any) which was not a Lender prior
to the  effectiveness  of this  Amendment,  shall be deemed to be a Lender and a
Revolving Credit Lender under the Credit Agreement.

         (d) Each of the Revolving  Credit  Advances  outstanding at the time of
the  effectiveness  of  this  Amendment  (the  "Existing   Advances")  shall  be
re-distributed   among  the   Revolving   Credit   Lenders   subsequent  to  the
effectiveness of this Amendment (the "Post-Amendment Revolving Credit Lenders"),
ratably  according  to  each  such  Post-Amendment   Revolving  Credit  Lender's
Revolving Credit Commitment (after giving effect to this Amendment).

         (e) The execution,  delivery and  effectiveness of this Amendment shall
not,  except as  expressly  provided  herein,  operate as a waiver of any right,
power  or  remedy  of any  Lender  Party  or any  Agent  under  any of the  Loan
Documents,  nor  constitute  a  waiver  of any  provision  of  any  of the  Loan
Documents.
<PAGE>
                                      -11-


         SECTION 6. Costs and Expenses.  The Borrower hereby agrees to pay, upon
demand, all costs and expenses of the Administrative  Agent (including,  without
limitation,  the reasonable fees and expenses of counsel for the  Administrative
Agent) in connection with the preparation,  execution, delivery, administration,
syndication,  modification  and  amendment  of  this  Amendment  and  the  other
documents,  instruments  and  agreements  to  be  delivered  hereunder,  all  in
accordance with the terms of Section 9.04 of the Credit Agreement.

         SECTION 7. Execution in Counterparts. This Amendment may be executed in
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts,  each of which when so executed  shall be deemed to be an original
and all of which taken  together shall  constitute  one and the same  agreement.
Delivery of an executed  counterpart  of a signature  page to this  Amendment by
telecopier shall be effective as delivery of a manually executed  counterpart of
this Amendment.

         SECTION 8.  Governing  Law.  This  Amendment  shall be governed by, and
construed in accordance with, the laws of the State of New York.
<PAGE>
                                      -12-

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized,  as of the date
first above written.


                                    QUALITY STORES, INC. (FORMERLY KNOWN AS
                                    CENTRAL TRACTOR FARM & COUNTRY, INC.)


                                    By: /s/ Denny L. Starr
                                        Title:  Senior Vice President and CFO


                                    QSI HOLDINGS, INC. (FORMERLY KNOWN AS CT
                                    HOLDING, INC.)


                                    By: /s/ Denny L. Starr
                                        Title:  Senior Vice President and CFO


                                    FLEET NATIONAL BANK, as
                                    Administrative Agent


                                    By: /s/ Stephen M. Curran
                                        Title:  Vice President


                                    BANK OF AMERICA, N.A., as
                                    Syndication Agent


                                    By: /s/ David H. Strickland
                                        Title:  Principal


                               Initial Issuing Bank

                                    FLEET NATIONAL BANK


                                    By: /s/ Stephen M. Curran
                                        Title:  Vice President


                               Initial Lenders

                                    FLEET NATIONAL BANK


                                    By: /s/ Stephen M. Curran
                                        Title:  Vice President


                                    BANK OF AMERICAN, N.A.


                                    By: /s/ David H. Strickland
                                        Title:  Principal


                               LENDERS

                                    FLEET NATIONAL BANK


                                    By: /s/ Stephen M. Curran
                                        Title:  Vice President
<PAGE>
                                      -13-


                                    BANK OF AMERICA, N.A.


                                    By: /s/ David H. Strickland
                                        Title:  Principal


                                    FIRST UNION NATIONAL BANK


                                    By: /s/ Susan T. Vitale
                                        Title:  Assistant Vice President


                                    THE HUNTINGTON NATIONAL BANK


                                    By: /s/ M. W. De Loeb
                                        Title: Vice President


                                    U.S. BANK NATIONAL ASSOCIATION


                                    By: /s/ Elliot Jaffee
                                        Title: Senior Vice President


                                    HELLER FINANCIAL, INC.


                                    By: /s/ Sheila C. Weimer
                                        Title: Vice President


                                    HARRIS TRUST AND SAVINGS BANK


                                    By: /s/ Christopher Fisher
                                        Title: Vice President


                                    COMERICA BANK


                                    By: /s/ Robert Porterfield
                                        Vice President


                                    STEIN ROE FLOATING RATE LIMITED
                                    LIABILITY COMPANY


                                    By: /s/ James R. Fellows
                                        Title:  Vice President
                                          Stein Roe & Farnham Incorporated, as
                                          Advisor to the Stein Roe Floating Rate
                                          Limited Liability Company


                                    KEY CORPORATE CAPITAL INC.


                                    By: /s/ Alexander Strazella
                                        Title:  Vice President


                                    UNION BANK OF CALIFORNIA, N.A.


                                    By: /s/ J. William Bloore
                                        Title:  Vice President
<PAGE>
                                      -14-

                                    NATIONAL CITY BANK


                                    By: /s/ Wilmer J. Jacobs
                                        Title: Assistant Vice President


                                    FIRSTAR BANK, NATIONAL ASSOCIATION


                                    By: /s/ Thomas D. Gibbons
                                        Title: Senior Vice President


                                    STEIN ROE & FARNHAM  CLO 1 LIMITED
                                        by Stein Roe & Farnham Incorporated,
                                        as Portfolio Manager


                                    By: /s/ James R. Fellows
                                        Title: Vice President


                                    BHP (USA) CAPITAL CORPORATION


                                    By: /s/ Dana L. McDougall
                                        Title:  Vice President


                                    By: /s/ Richard Cameron
                                        Title: Associate


                                    THE FUJI BANK, LIMITED


                                    By: /s/ James Fayan
                                        Title:  Senior Vice President and
                                                  Senior Team Leader


                                    STATE STREET BANK AND TRUST COMPANY,
                                    as Trustee for GNERAL MOTORS EMPLOYEES
                                    GLOBAL GROUP PENSION TRUST


                                    By: /s/ Adam Antonik
                                        Title: Assistant Secretary


                                    STATE STREET BANK AND TRUST COMPANY,
                                    as Trustee for GNERAL MOTORS WELFARE
                                    BENEFIT TRUST


                                    By: /s/ Adam Antonik
                                        Title: Assistant Secretary


                                    SEQUILS - PILGRIM I, LTD.
                                        By: Pilgrim Investment, Inc.
                                             as its investment manager

                                    By: /s/ Elizabeth O. MacLean
                                        Title:  Vice President

<PAGE>
                                      -15-


                                    PERSEUS CDO I, LIMITED

                                        By: Massachusetts Mutual Life Insurance
                                             as Collateral Manager

                                    By: /s/ Steven J. Katz
                                        Title:


                                    SENIOR DEBT PORTFOLIO

                                        By: Boston Management and Research
                                              as Investment Advisor

                                    By: /s/ Payson F. Swaffield
                                        Title: Vice President


                                    SAAR HOLDING CDO, LIMITED


                                        By: Massachusetts Mutual Life Insurance
                                             as Collateral Manager

                                    By: /s/ Steven J. Katz
                                        Title:


                                    KZH CYPRESSTREE - 1 LLC


                                    By: /s/ Virginia Conway
                                        Title: Authorized Agent


                                    ML CBO IV (CAYMAN) LIMITED

                                    By: /s/ Mark K. Okeda, CFA
                                        Title:  Executive Vice President
                                                Highland Capital Management L.P.


                                    BALANCE HIGH YIELD FUND II, LTD.

                                       By: BHF (USA) Capital Corporation, as its
                                             attorney-in-fact


                                    By: /s/ Dana L. McDougall
                                          Title:  Vice President


                                    By: /s/ Richard Cameron
                                        Title: Associate


                                    CYPRESSTREE INSTITUTIONAL FUND, LLC

                                        By: CypressTree Investment Management
                                             Company, as Portfolio Manager


                                    By: /s/ Jeffery W. Heuer
                                        Title: Principal


                                    NORTH AMERICAN SENIOR FLOATING RATE
                                    FUND

                                        By: CypressTree Investment Management
                                             Company, as Portfolio Manager


                                    By: /s/ Jeffery W. Heuer
                                        Title: Principal
<PAGE>
                                      -16-


                                    Sankaty Advisors, Inc. as Collateral
                                        Manager for

                                    GREAT POINT CLO 1999-1 LTD.


                                    By: /s/ Diane J. Exter
                                        Title:  Executive Vice President
                                                Portfolio Manager


                                    Sankaty Advisors, Inc. as Collateral
                                        Manager for

                                    BRANT POINT CLO 1999-1 LTD.


                                    By: /s/ Diane J. Exter
                                        Title:  Executive Vice President
                                                Portfolio Manager


                                    MONUMENT CAPITAL LTD., as Assignee

                                        By: Alliance Capital Management L.P., as
                                               Investment Manager

                                        By: Alliance Capital Management
                                               Corporation, as General Partner

                                    By: /s/ Svenker M. M. Johannson
                                        Title: Vice President


                                    KZH WATERSIDE LLC


                                    By: /s/ Virginia Conway
                                        Title:  Authorized Agent


                                    ELC CAYMAN LTD. 1999 - III

                                    By: /s/ Joseph H. Tower
                                        Title: Senior Vice President


                                    PILGRIM CLO 1999-1, LTD.
                                        By: Pilgrim Investment, Inc.
                                             as its investment manager

                                    By: /s/ Elizabeth O. MacLean
                                        Title:  Vice President


                                    GLENEAGLES TRADING LLC


                                    By: /s/ Kelly C. Walker
                                        Title: Vice President
<PAGE>

                                     CONSENT

         Reference is made to (a) Amendment No. 1 to the Credit  Agreement dated
as of May 7, 1999  (the  "Credit  Agreement")  among  Quality  Stores,  Inc.,  a
Delaware corporation (formerly known as "Central Tractor Farm & Country,  Inc.")
(the "Borrower"),  QSI Holdings, Inc., a Delaware corporation (formerly known as
"CT Holding,  Inc.") ("Holding"),  the banks,  financial  institutions and other
institutional  lenders listed on the signature pages thereof, and Fleet National
Bank ("Fleet"),  as administrative  agent (the  "Administrative  Agent") for the
Lender  Parties  (as  defined  in the Credit  Agreement)  and (b) the other Loan
Documents referred to therein. Capitalized terms defined in the Credit Agreement
and not otherwise defined in this Consent are used herein as therein defined.

         Each of the  undersigned,  in its  capacity as (a) a Grantor  under the
Security  Agreement,  (b) a Pledgor  under the  Pledge  Agreement,  and/or (c) a
Subsidiary Guarantor under the Subsidiary  Guaranty,  as the case may be, hereby
consents to the execution and delivery of the Amendment and the  performance  of
the Amendment and agrees that:

                  (A) each of the Security  Agreement,  the Pledge Agreement and
         the  Subsidiary  Guaranty to which it is a party is, and shall continue
         to be, in full force and effect and is hereby in all respects  ratified
         and  confirmed on the  Amendment  Effective  Date,  except that, on and
         after the  Amendment  Effective  Date,  each  reference  to "the Credit
         Agreement", "thereunder",  "thereof", "therein" or words of like import
         referring to the Credit  Agreement shall mean and be a reference to the
         Credit Agreement,  as amended and otherwise  modified by the Amendment;
         and

                  (B) as of the Amendment Effective Date, the Security Agreement
         and  the  Pledge  Agreement  to  which  it is a  party  and  all of the
         Collateral  of  such  Person  described  therein,  and  the  Subsidiary
         Guaranty and the guaranty provided  thereunder,  do, and shall continue
         to, secure the payment of all of the Secured Obligations.

         This Consent shall be governed by, and  construed in  accordance  with,
the laws of the State of New York.

         Delivery of an executed counterpart of a signature page of this Consent
by  telecopier  shall  be  effective  as the  delivery  of a  manually  executed
counterpart of this Consent.



<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized,  as of the date
first above written.

                            QUALITY STORES, INC. (FORMERLY KNOWN AS
                            CENTRAL TRACTOR FARM & COUNTRY, INC.)


                            By:  /s/ James McKitrick
                                 Title:


                            QSI HOLDINGS, INC. (FORMERLY KNOWN AS CT
                            HOLDING, INC.)


                            By:  /s/ James McKitrick
                                 Title:



                            COUNTRY GENERAL, INC.


                            By:  /s/ James McKitrick
                                 Title:



                            QUALITY FARM & FLEET, INC.


                            By:  /s/ James McKitrick
                                 Title:



                             QUALITY INVESTMENTS, INC.


                             By:  /s/ James McKitrick
                                  Title:





<PAGE>


                            QSI TRANSPORTATION, INC.


                            By:  /s/ James McKitrick
                                 Title:


                            VISION TRANSPORTATION, INC.


                            By:  /s/ James McKitrick
                                 Title: