CREDIT AGREEMENT


                                      among


                                 UNIDIGITAL INC.


                                  as Borrower,


                      THE BANKS, FINANCIAL INSTITUTIONS AND
                    OTHER INSTITUTIONAL LENDERS NAMED HEREIN,


                               as Initial Lenders,


                                       and


               BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.,


                             as Documentation Agent


                                       and


                                FLEET BANK, N.A.,


        as Initial Issuing Bank, Swing Line Bank and Administrative Agent





                            Dated as of May 12, 1999

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page



PRELIMINARY STATEMENTS.........................................................1

ARTICLE I
     DEFINITIONS AND ACCOUNTING TERMS..........................................3
          Section 1.01.  Certain Defined Terms.................................3
          Section 1.02.  Computation of Time Periods..........................43
          Section 1.03.  Accounting Terms.....................................43

ARTICLE II
     AMOUNTS AND TERMS OF
     THE ADVANCES AND THE LETTERS OF CREDIT...................................43
          Section 2.01.  The Advances.........................................43
                         (a)  The Revolving Credit Advances...................43
                         (b)  The Swing Line Advances.........................44
                         (c)  Letters of Credit...............................44
          Section 2.02.  Making the Advances..................................45
          Section 2.03.  Issuance of and Drawings and
                         Reimbursement Under Letters of Credit................49
                         (a)  Request for Issuance............................49
                         (b)  Letter of Credit Reports........................50
                         (c)  Drawing and Reimbursement.......................50
                         (d)  Failure to Make Letter of Credit Advances.......51
          Section 2.04.  Repayment of Advances................................52
                         (a)  Revolving Credit Advances.......................52
                         (b)  Swing Line Advances.............................52
                         (c)  Letter of Credit Advances.......................52
          Section 2.05.  Termination or Reduction of the Commitments;
                         Increase in the Commitments..........................53
                         (a)  Optional Termination or Reduction
                              of the Commitments..............................53
                         (b)  Mandatory Termination or Reduction
                              of the Commitments..............................54
                         (c)  Increase in the Commitment......................55
          Section 2.06.  Prepayments and Repayments...........................56
                         (a)  Optional........................................56
                         (b)  Mandatory.......................................57
                         (c)  Application of Prepayments and Repayments.......58

                                      -i-
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                                                                            Page

                         (d)  Miscellaneous Provisions Relating to Prepayments,
                              Termination or Reduction of Commitments and
                              Maintenance of L/C Cash Collateral Account......58
          Section 2.07.  Interest.............................................60
                         (a)  Scheduled Interest..............................60
                         (b)  Default Interest................................61
                         (c)  Notice of Interest Rate.........................61
          Section 2.08.  Fees.................................................61
                         (a)  Commitment Fees.................................61
                         (b)  Letter of Credit Fees...........................62
                         (c)  Administrative Agent's Fees.....................63
          Section 2.09.  Conversion of Advances...............................63
                         (a)  Optional........................................63
                         (b)  Mandatory.......................................64
          Section 2.10.  Increased Costs, Etc.................................65
          Section 2.11.  Payments and Computations............................67
          Section 2.12.  Taxes................................................69
          Section 2.13.  Sharing of Payments, Etc.............................73
          Section 2.14.  Use of Proceeds......................................74
          Section 2.15.  Defaulting Lenders...................................74
          Section 2.16.  Regulation U.........................................78

ARTICLE III
     CONDITIONS OF LENDING....................................................78
          Section 3.01.  Conditions Precedent to the Initial Funding Date.....78
                         (a)  Credit Agreement................................78
                         (b)  Resolutions; Incumbency.........................78
                         (c)  Organization Documents; Good Standing...........79
                         (d)  Legal Opinions..................................79
                         (e)  Certificate.....................................79
                         (f)  Pro Forma Balance Sheet; Projections; and
                              Financials......................................80
                         (g)  Solvency Certificates...........................80
                         (h)  [Intentionally Omitted].........................80
                         (i)  Notes...........................................80
                         (j)  Lender Release Letters..........................81
                         (k)  Collateral Documents............................81
                         (l)  Payment of Fees.................................83
                         (n)  Other Documents.................................84

                                      -ii-
<PAGE>

                                                                            Page

          Section 3.02.  Conditions Precedent to All Credit Extensions........84
                         (a)  Notice, Application; Continuation of
                              Representations and Warranties..................84
                         (b)  Permitted Acquisitions..........................85
                         (c)  Other Approvals.................................85
          Section 3.03.  Determinations Under Sections 3.01 and 3.02..........85

ARTICLE IV
     REPRESENTATIONS AND WARRANTIES...........................................86
          Section 4.01.  Representations and Warranties.......................86

ARTICLE V
     COVENANTS OF THE BORROWER AND THE SUBSIDIARIES...........................93
          Section 5.01.  Affirmative Covenants................................93
                         (a)  Compliance with Law.............................93
                         (b)  Payment of Taxes, Etc...........................93
                         (c)  Compliance with Environmental Laws..............93
                         (d)  Maintenance of Insurance........................94
                         (e)  Preservation of Corporate Existence, Etc........94
                         (f)  Visitation Rights...............................94
                         (g)  Keeping of Books................................95
                         (h)  Maintenance of Properties, Etc..................95
                         (i)  Performance of Material Contracts...............95
                         (j)  Transactions with Affiliates....................95
                         (k)  Interest Rate Protection........................95
                         (l)  Year 2000 Compatibility.........................96
                         (m)  Agreement to Grant Additional Security..........96
                         (n)  Foreign Subsidiaries Security...................99
          Section 5.02.  Negative Covenants..................................100
                         (a)  Liens, Etc.....................................100
                         (b)  Debt...........................................101
                         (c)  Fundamental Changes............................104
                         (d)  Sales, Etc.  of Assets.........................104
                         (e)  Investments in Other Persons...................105
                         (f)  Dividends Etc..................................106
                         (g)  Leases.........................................106
                         (h)  Change in Nature of Business...................106
                         (i)  Charter Amendments.............................107
                         (j)  Accounting Changes.............................107
                         (k)  Prepayments, Etc.  of Debt.....................107
                         (l)  Amendment, Etc.  of Material Contracts.........107
                         (m)  Negative Pledge................................107

                                      -iii-
<PAGE>

                                                                            Page

                         (n)  Partnerships, New Subsidiaries.................108
                         (o)  Speculative Transactions.......................108
                         (p)  Capital Expenditures...........................108
                         (q)  Issuance of Stock..............................109
                         (r)  Sale and Leasebacks............................110
          Section 5.03.  Reporting Requirements..............................110
                         (a)  Default Notice.................................110
                         (b)  Annual Financials..............................110
                         (c)  Quarterly Financials...........................110
                         (d)  Monthly Reports................................111
                         (e)  Certificate of Independent Certified
                              Accountants....................................111
                         (f)  Certificate of Responsible Officer.............111
                         (g)  Annual Forecasts...............................112
                         (h)  Insurance......................................112
                         (i)  ERISA Events and ERISA Reports.................112
                         (j)  Plan Terminations..............................112
                         (k)  Litigation.....................................112
                         (l)  Securities Reports.............................113
                         (m)  Agreement Notices..............................113
                         (n)  Environmental Conditions.......................113
                         (o)  Management Letters.............................113
                         (p)  Permitted Acquisition Documents................113
                         (q)  Other Information..............................114
          Section 5.04.  Financial Covenants.................................114
                         (a)  Consolidated Total Funded Debt to
                              Pro Forma EBITDA Ratio.........................114
                         (b)  Consolidated Senior Debt to
                              Pro Forma EBITDA Ratio.........................114
                         (c)  Fixed Charge Coverage Ratio....................115
                         (d)  Minimum Net Worth..............................115

ARTICLE VI
     EVENTS OF DEFAULT.......................................................115
          Section 6.01.  Events of Default...................................116
          Section 6.02.  Actions in Respect of the Letters of Credit
                         upon Default........................................120

ARTICLE VII
     THE ADMINISTRATIVE AGENT AND DOCUMENTATION AGENT........................120
          Section 7.01.  Authorization and Action............................120
          Section 7.02.  Agent's Reliance, Etc...............................121
          Section 7.03.  Fleet and Affiliates................................122
          Section 7.04.  Lender Party Credit Decision........................122

                                      -iv-
<PAGE>

                                                                            Page

          Section 7.05.  Indemnification.....................................122
          Section 7.06.  Successor Administrative Agents.....................124
          Section 7.07.  Documentation Agent.................................125

ARTICLE VIII
     MISCELLANEOUS...........................................................126
          Section 8.01.  Amendments, Etc.....................................126
          Section 8.02.  Notices Etc.........................................127
          Section 8.03.  No Waiver; Remedies.................................129
          Section 8.04.  Costs and Expenses..................................129
          Section 8.05.  Right of Set-off....................................132
          Section 8.06.  Binding Effect......................................133
          Section 8.07.  Assignments and Participations......................134
          Section 8.08.  Execution in Counterparts; Severability.............140
          Section 8.09.  No Liability of the Issuing Bank....................140
          Section 8.10.  Confidentiality.....................................141
          Section 8.11.  Jurisdiction, Etc...................................141
          Section 8.12.  Governing Law.......................................143
          Section 8.13.  Waiver of Jury Trial................................143
          Section 8.14.  Replacement of Items................................143
          Section 8.15.  Certain Payments....................................144


EXHIBITS

     Exhibit A      -      Form of Assignment and Acceptance
     Exhibit B      -      Form of Revolving Credit Note
     Exhibit C      -      Form of Swing Line Note
     Exhibit D      -      Form of Notice of Borrowing

SCHEDULES

     Schedule I            Commitments and Applicable Lending Offices
     Schedule 2.14(a)      Foreign Subsidiary Debt
     Schedule 4.01(b)      Subsidiaries
     Schedule 4.01(d)      Required Authorizations and Approvals
     Schedule 4.01(i)      Disclosed Litigation
     Schedule 4.01(k)      Welfare Plans
     Schedule 4.01(o)      Certain Agreements
     Schedule 4.01(t)      Surviving Debt
     Schedule 5.02(a)(iii) Liens


                                      -v-
<PAGE>

                                CREDIT AGREEMENT
                                ----------------

     CREDIT AGREEMENT, dated as of May 12, 1999, by and among UNIDIGITAL INC., a
Delaware corporation  (together with its successors or assigns, the "Borrower"),
the banks,  financial institutions and other institutional lenders listed on the
signature  pages hereof as the Initial  Lenders  (the  "Initial  Lenders"),  any
Lender  Party  hereto (as  hereinafter  defined),  FLEET  BANK N.A.,  as Initial
Issuing Bank (the "Initial Issuing Bank"),  FLEET BANK, N.A., as Swing Line Bank
(as hereinafter defined), BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC., as
Documentation  Agent,  and FLEET BANK, N.A., as  administrative  agent (together
with any  successor  appointed  pursuant  to  Article VII,  the  "Administrative
Agent") for the Lender Parties and the Hedge Banks (as hereinafter defined).

                             PRELIMINARY STATEMENTS:
                             ----------------------

     The  Borrower  has  requested  that the  Lender  Parties  make loans to the
Borrower  and issue  letters of credit  having an aggregate  principal  and face
amount  at  any  one  time  outstanding  of up  to  Sixty-Five  Million  Dollars
($65,000,000),   which  amount  may  be  increased  to  Eighty  Million  Dollars
($80,000,000) in the event Borrower raises  subordinated  debt with net proceeds
of at  least  Twenty  Million  Dollars  ($20,000,000)  on terms  and  conditions
acceptable to the Administrative Agent as provided for in this Agreement, (i) to
repay all  outstanding  Debt pursuant to the Existing Credit  Facility,  (ii) to
finance future acquisitions by the Borrower or any of its Subsidiaries, (iii) to
provide for working capital and other general corporate purposes of the Borrower
and its  Subsidiaries,  and  (iv)  to pay  fees  and  expenses  relating  to the
financing  set forth in this  Agreement  and the other  Loan  Documents  and the
Lender  Parties  have agreed to make such loans and issue such letters of credit
all on and subject to the terms and conditions of this Agreement.

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

<PAGE>

                                    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):

     "Accounts"  means all  Accounts  referred to in Section 1.1 of the Security
Agreement.

     "Additional  Collateral  Documents"  has the meaning  specified  in section
5.01(n)(v).

     "Acquisition  Rights  Assignment"  has the  meaning  specified  in  section
3.01(k)(iii).

     "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 at its office at Fleet Bank, N.A.,
1185  Avenue  of  the  Americas,   New  York,   new  York  10036,   Account  No.
1510352-03102, Attention: Loan Administration.

     "Advance"  means 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 50% or more of the Voting Stock of such Person or
to direct or cause the direction of the

                                        2
<PAGE>

management and policies of such Person,  whether through the ownership of Voting
Stock, by contract or otherwise.

     "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  at any  date  of  determination  thereof,  the
applicable   percentage  set  forth  below  opposite  the  applicable  ratio  of
Consolidated  Total  Funded  Debt to Pro Forma  EBITDA  determined  as set forth
below:

                APPLICABLE MARGIN FOR REVOLVING CREDIT ADVANCES
                -----------------------------------------------

<TABLE>
<CAPTION>

Ratio of Consolidated Total           Applicable Margin for         Applicable Margin for
Funded Debt/Pro Forma EBITDA          Eurodollar Rate Advances      Prime Rate Advances
----------------------------          ------------------------      -------------------
<S>                                            <C>                           <C>
Equal to or greater than 3.50
to 1.00                                        3.25%                         2.00%

Equal to or greater than 3.00
to 1.00, but less than 3.50 to 1.00            3.00%                         1.75%

Equal to or greater than 2.50 to
1.00, but less than 3.00 to 1.00               2.75%                         1.50%

Equal to or greater  than 2.00 to
1.00, but less than 2.50 to 1.00               2.50%                         1.25%

Less than 2.00 to 1.00                         2.25%                         1.00%
</TABLE>


                                        3
<PAGE>

The Applicable  Margin for each Advance shall be determined on a quarterly basis
by reference to the ratio of Consolidated  Total Funded Debt to Pro Forma EBITDA
for the preceding four (4) full fiscal  quarters,  as reflected on the financial
statements  provided to the Administrative  Agent pursuant to Section 5.03(c) or
(d),  three (3) Business Days after the date on which the  Administrative  Agent
receives the foregoing  financial  statements,  together with a certificate of a
Responsible  Officer of the  Borrower  demonstrating  the ratio of  Consolidated
Total Funded Debt to Pro Forma EBITDA.  If the Borrower has not submitted to the
Administrative Agent the information  described above as and when required under
Section 5.03(b)  or (c), as the case may be, the Applicable Margin in effect for
the  period  commencing  on such  date  shall  be one (1) tier  higher  than the
Applicable Margin in effect during the preceding  calendar  quarter,  until such
time as the Borrower  submits to the  Administrative  Agent the  information  so
required,  and  within  three  (3)  Business  Days  after  receipt  thereof  the
Applicable Margin shall be adjusted retroactively for the relevant period.

Notwithstanding  the  above,  for the  first  six (6)  months  from the  Initial
Facility  Date, the  Applicable  Margin for a Revolving  Credit Advance shall be
3.25% for a Eurodollar Advance and 2.00% for a Prime Rate Advance.

     "Asset Disposition" has the meaning specified in Section 2.06(b).

     "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 8.07,  substantially in the form of Exhibit A
                                                                       ---------
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).

     "Bank Hedge  Agreement"  means any Hedge  Agreement  required or  permitted
under this  Agreement  that is entered  into by and between the Borrower and any
Hedge Bank,  as the same now

                                       4
<PAGE>

exists or may hereinafter be amended, modified, supplemented, extended, renewed,
restated or replaced.

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

     "Borrower's  Account"  means an account of the Borrower  maintained  by the
Borrower with Fleet Bank, N.A.

     "Borrowing" means a Revolving Credit Borrowing or a Swing Line Borrowing.

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

     "Capital Expenditures" means, for any Person for any period, the sum of 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.

     "Capital Stock" means any and all shares, interests, participation or other
equivalents (however designated) of capital stock of a corporation,  any and all
similar  ownership  interests in a Person (other than a corporation) and any and
all warrants or options to purchase any of the foregoing.

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

                                       5
<PAGE>

     "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:

          (i)    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 or any agency or instrumentality  thereof having a maturity of not
greater than twelve (12) months from the date of issuance thereof;

          (ii)   insured certificates of  deposit, bankers' acceptances or  time
deposits  (including,  without  limitation,  Eurodollar  denominated  and Yankee
issues)  having a maturity of not greater  than twelve (12) months from the date
of issuance  thereof with any commercial  bank or financial  institution  having
combined  capital and  surplus of at least $1 billion and either  located in the
U.S.  or with  respect to Foreign  Subsidiaries  organized  under the laws of an
Approved  Country  (as  defined in clause  (ix)  below) and a rating of at least
"P-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 with
respect to banks located in an Approved Country, the equivalent thereof;

          (iii)  corporate securities and commercial  paper having a maturity of
not greater than twelve (12) months from the date of issuance and rated at least
"P-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;

          (iv)   short-term  tax  exempt securities  including municipal  notes,
commercial paper, auction rate floaters,  and floating rate notes rated at least
"P-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,  and bonds
rated at least "AA" (or the then equivalent  grade) by Standard & Poor's Ratings
Group;

                                       6
<PAGE>

          (v)    pre-refunded municipal bonds escrowed to maturity and backed by
U.S. Treasury securities;

          (vi)   repurchase agreements covering U.S. Treasury or U.S. government
agency  securities valued at not less favorably than 102% of market value with a
term of not more than  seven  (7) days with  major  banks and  dealers  that are
recognized as "primary dealers" by the Federal Reserve Bank of New York;

          (vii)  tax exempt preferred stock or  bonds issued  with a  rate-reset
mechanism  and a maximum  term of 180 days and rated at least "AAA" (or the then
equivalent grade) by Moody's Investors Service, Inc.;

          (viii) money  market  mutual  funds  that  offer  daily  purchase  and
redemption,  maintain a constant  share price,  are  'no-load'  funds and have a
constant $1.00 net asset value; or

          (ix)   with respect to Foreign  Subsidiaries,  government  obligations
of (A) the United  Kingdom,  (B) the  country in which such  Foreign  Subsidiary
maintains its chief  executive  office,  (C) any other  country  approved by the
Administrative  Agent,  or (D) any other country whose debt securities are rated
by Standard & Poor's Ratings Group and Moody's  Investors  Service,  Inc. A-1 or
P-1,  respectively,  or the equivalent  thereof (if a short-term  debt rating is
provided  by  either)  or at least AA or AA2,  respectively,  or the  equivalent
thereof (if a long-term  unsecured debt rating is provided by either) (each such
country,  an "Approved  Country"),  in each case with maturities of less than 12
months.

     "CERCLA" means the Comprehensive  Environmental Response,  Compensation and
Liability Act of 1980,  42 U.S.C.  Section 9601 et seq., 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.

                                       7
<PAGE>

     "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.

     "Collateral Documents" means each Security Agreement, each Pledge Agreement
and any other  agreement  that  creates or purports to create a Lien in favor of
the Administrative  Agent for the benefit of the Secured Parties as the same now
exists or may hereinafter be amended, modified, supplemented, extended, renewed,
restated or replaced.

     "Commitment"  means a  Revolving  Credit  Commitment  or a Letter of Credit
Commitment.

     "Confidential Information" means information that the Borrower furnishes to
the  Administrative  Agent  or any  Lender  Party  in a  writing  designated  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 the Borrower  that is not, to the best of the  Administrative
Agent's  or  such  Lender   Party's   knowledge,   acting  in   violation  of  a
confidentiality agreement with the Borrower.

     "Consolidated"  refers to the consolidation of accounts, in accordance with
GAAP, of the Borrower and all of its Subsidiaries.

     "Consolidated Lease Expense" means, for any period, the aggregate amount of
fixed or  contingent  rentals  payable  by the  Borrower  and its  Subsidiaries,
determined on a  consolidated  basis,  in accordance  with GAAP, for such period
with respect to leases of personal property.

     "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.

                                       8
<PAGE>

     "Credit Extension" means (i) the making of any Advances hereunder, and (ii)
the issuance of any Letters of Credit hereunder.

     "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 (a) Debt of such Person,  except
Total Funded Debt,  that by its terms is payable on demand or matures within one
year  after  the  date  of  determination   (excluding  any  Debt  renewable  or
extendible, at the option of such Person, to a date more than one year from such
date or arising under a revolving credit or similar agreement that obligates the
lender or  lenders to extend  credit  during a period of more than one year from
such date),  (b) all amounts of Total Funded Debt of such Person  required to be
paid or  prepaid  within one year  after the date of  determination  and (c) all
other items  (including taxes accrued as estimated) that in accordance with GAAP
would be classified as current liabilities of such Person.

     "Debt" of any Person means, without duplication,

          (i)    all indebtedness of such Person for borrowed money,

          (ii)   all Obligations of such Person for the deferred purchase  price
of property or services,

          (iii)  all  Obligations  of  such  Person  evidenced by  notes, bonds,
debentures or other similar instruments,

          (iv)   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),

                                       9
<PAGE>

          (v)    all  Obligations of  such Person  as lessee  under  Capitalized
Leases,

          (vi)   all  Obligations, contingent  or otherwise,  of such Person  in
respect of letters of credit or similar facilities,

          (vii)  all  Obligations of  such Person to purchase,  redeem,  retire,
defease or  otherwise  make any  payment in respect of any  capital  stock of or
other  ownership  or profit  interest in such Person or any other  Person or any
warrants, rights or options to acquire such capital stock,

          (viii) all  Debt of  others referred to  in clauses (i)  through (vii)
above or clause (ix) below  guaranteed  directly or  indirectly in any manner by
such  Person,  or in effect  guaranteed  directly or  indirectly  by such Person
through an  agreement  (A) to pay or purchase  such Debt or to advance or supply
funds for the payment or purchase of such Debt,  (B) 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,  (C) 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 (D) otherwise to assure a creditor against loss, and

          (ix)   all Debt  referred to  in clauses (i) through  (viii)  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, contract rights or inventory) owned by
such  Person,  even though such Person has not assumed or become  liable for the
payment of such Debt.

                                       10
<PAGE>

     "Debt  Issuance"  means any  issuance  or sale or other  incurrence  by the
Borrower or any of its  Subsidiaries of any Debt;  provided,  however,  that for
                                                   --------   -------
purposes of determination of Net Cash Proceeds under  Section 2.06(b),  the term
"Debt Issuance"  shall not include any Debt Issuance,  the proceeds of which are
used to prepay or refinance the Existing Subordinated Debt.

     "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 2.02  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 2.02 on the same date
as the Defaulted Advance so deemed made in part.

     "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 (i) the Swing
Line Bank pursuant to Section 2.02(b) to repay a portion of a Swing Line Advance
made by the Swing Line Bank,  (ii) the Issuing Bank pursuant to  Section 2.03(c)
to purchase a portion of a Letter of Credit  Advance  made by the Issuing  Bank,
(iii) 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, (iv) any other Lender Party pursuant
to  Section 2.13 to purchase any  participation  in Advances owing to such other
Lender Party and (v) 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

                                       11
<PAGE>

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, (i) owes a Defaulted  Advance or a Defaulted Amount or (ii) 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 4.01(i).

     "Disposal"  means the discharge,  deposit,  injection,  dumping,  spilling,
leaking or placing of any solid  waste or  hazardous  waste,  as those terms are
defined by any  federal,  state,  local or foreign  law,  into or on any land or
water so that such solid waste or hazardous  waste or any  constituents  thereof
may enter the  environment  or be emitted  into the air or  discharged  into any
waters, including ground waters.

     "Dollars",  "dollars"  and the symbol "$" each mean the lawful  currency of
the United States.

     "Domestic  Lending Office" means, with respect to any Lender Party or Hedge
Bank,  the office of such Lender  Party (or,  in the case of a Hedge  Bank,  the
office of the  corresponding  Lender Party)  specified as its "Domestic  Lending
Office"  opposite  such  Lender  Party's  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 or Hedge Bank as such
Lender Party or Hedge Bank may from time to time specify to the Borrower and the
Administrative Agent.

     "Domestic  Subsidiary" means any Subsidiary organized under the laws of the
United  States of  America  or any State  thereof  and any  successor  or assign
thereof.

                                       12
<PAGE>

     "EBITDA" means, for any period, the sum, determined on a Consolidated basis
without duplication,  of (a) net income (or net loss), (b) interest expense, (c)
income tax expense,  (d) depreciation  expense,  (e) amortization  expense,  (f)
non-cash  charges,  (g) the legal  and  accounting  costs  and other  reasonable
expenses incurred in connection with any Permitted  Acquisition  completed after
the date of this Agreement,  in each case determined in accordance with GAAP for
such  period and (h) other  non-recurring,  non-operating  expenses,  including,
without limitation,  restructuring expenses;  provided, however, that net income
                                              --------  -------
(or net loss) shall be computed without giving effect to extraordinary losses or
gains;  provided,  further,  that  EBITDA  shall in any event  exclude  from the
        --------   -------
Initial  Funding Date, the amount of any non-cash income  recognized  during any
period for which EBITDA is determined.

     "Eligible  Assignee"  means with  respect  to the  rights  and  obligations
related to any Facility  (other than the Letter of Credit  Facility)  and all of
the other rights and  obligations  under this  Agreement,  (A) a Lender;  (B) an
Affiliate  of  a  Lender;   and  (C)  subject  to  the  prior  approval  of  the
Administrative  Agent and, so long as no Default or Event of Default  shall have
occurred and be continuing,  the Borrower,  such approval not to be unreasonably
withheld or  delayed,  (i) 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;  (ii) 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;  (iii) 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;  (iv) the central bank of any country that is a member of
the OECD;  and (v) a  finance  company,  insurance  company  or other  financial
institution or fund (whether a corporation,  partnership, trust or other entity)
located in the United States that is engaged in making,  purchasing or otherwise
investing in commercial  loans in the ordinary course of its business and having
total  assets in excess of  $500,000,000;  and,

                                       13
<PAGE>

with  respect  to the  rights  and  obligations  related to the Letter of Credit
Facility,  a Person that is an Eligible Assignee under subclause (i) or (iii) of
clause (C) of this  definition and is approved by the  Administrative  Agent and
the  Borrower,  such  approval not to be  unreasonably  withheld or delayed (and
provided that no such approval shall be necessary if an Eligible  Assignee is an
Affiliate of the Assignor); provided, however, that neither the Borrower, any of
                            --------  -------
its  Subsidiaries  nor any Affiliate of the Borrower or any of its  Subsidiaries
shall qualify as an Eligible Assignee under this definition.

     "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 or arising from alleged injury or threat to public health and
safety  or  the  environment,   including,   without  limitation,   (i)  by  any
governmental or regulatory  authority or third party for  enforcement,  cleanup,
Removal,  Response,  Remedial  or  other  actions  or  damages  and  (ii) by any
governmental or regulatory  authority or third party for damages,  contribution,
indemnification, cost recovery, compensation or injunctive relief.

     "Environmental  Law" means any international or transnational law, federal,
state, local or foreign statute, law, ordinance, rule, regulation,  code, order,
writ, judgment, injunction, decree or judicial or agency interpretation,  policy
or guidelines  relating to pollution or protection of the environment or natural
resources,  including,  without limitation, those relating to the use, handling,
transportation,  treatment,  storage,  disposal,  threatened release, release or
discharge of Hazardous Materials.

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

     "Equity  Issuance" means any issuance or sale by the Borrower or any of its
Subsidiaries  of any of its  capital  stock or other  equity  securities  or any
obligations  convertible into or exchangeable for, or giving any Person a right,
option or warrant to acquire such securities or such convertible or

                                       14
<PAGE>

exchangeable obligations;  provided, however, that for purposes of determination
                           --------  -------
of Net Cash Proceeds under Section 2.06(b), the term "Equity Issuance" shall not
include any issuance or sale of (a) capital  stock of the Borrower to any Person
as consideration paid in connection with any Permitted Acquisition;  (b) capital
stock to qualify any  director of the  Borrower  or any of its  Subsidiaries  if
required by  applicable  law; (c) capital  stock or other equity  securities  to
directors,  management  and employees  and other  eligible  participants  of the
Borrower or any of its Subsidiaries,  pursuant to a stock purchase, stock option
or similar  incentive  plan of the Borrower or any of its  Subsidiaries,  or any
exercise of options issued pursuant thereto; (d) capital stock of any Subsidiary
of the  Borrower to the  Borrower or any other  Wholly-Owned  Subsidiary  of the
Borrower; (e) capital stock of the Borrower to any Person for cash, if, and only
if, in respect of this clause (e);  such Net Cash  Proceeds are applied  towards
the payment of the  Permitted  Acquisition  Purchase  Price as  follows:  if the
offering  documents for such  issuance or sale  identify a specific  acquisition
transaction,  within ten (10) days after the  consummation  of such  acquisition
transaction;  (f) capital stock of the Borrower  issued in  connection  with the
exercise of warrants granted prior to the date hereof;  and (g) capital stock of
the Borrower or other equity  securities or any  obligations  converted  into or
exchangeable  for capital stock of the Borrower  issued in  connection  with the
Subordinated Issuance.

     "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 (i) (y) 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
(z) 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

                                       15
<PAGE>

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;  (ii) the  application  for a minimum funding
waiver with respect to a Plan;  (iii) the provision by the  administrator of any
Plan of a notice of intent to terminate  such Plan under ERISA  Section 4041(c),
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); (iv) 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; (v) 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;  (vi) the conditions for imposition of a lien under  Section 302(f) of
ERISA  shall have been met with  respect to any Plan;  (vii) the  adoption of an
amendment to a Plan requiring the provision of security to such Plan pursuant to
Section 307  of ERISA;  or (viii) 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.

     "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.

     "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

                                       16
<PAGE>

3750 as of 11:00 a.m.  (New York 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 U.S. 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.  (New York  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.  (New York  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 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 Period 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.

                                       17
<PAGE>

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

     "Eurodollar Rate Reserve Percentage" means, for any Interest Period for all
Eurodollar  Rate Advances  comprising  part of the same  Borrowing,  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 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 sum of (a)  EBITDA of the
Borrower and its  Subsidiaries  for such period plus (b) the aggregate amount of
                                                ----
all non-cash charges deducted from Consolidated net income for such period,  but
not added back in arriving at EBITDA less (c) the aggregate  amount of mandatory
                                     ----
and optional prepayments or repayments of principal made by the Borrower and its
Subsidiaries  on any Total  Funded  Debt of the  Borrower  and its  Subsidiaries
during such  period;  provided,  however,  that,  with  respect to any  optional
                      --------   -------
prepayment of the Revolving Credit Advances, the amount of such prepayment shall
be expressly excluded from the determination of the amount in this clause (c) if
the Revolving Credit Facility is not, upon such repayment,  permanently  reduced
by the amount of such prepayment  less (d) Capital  Expenditures of the Borrower
                                  ----
and its  Subsidiaries  during such period less (e) the  aggregate  amount of all
                                          ----
federal,   state,  local  and  foreign  taxes  paid  by  the  Borrower  and  its
Subsidiaries  during such period less (f) the aggregate  amount of interest paid
                                 ----
on any Debt of the Borrower and its Subsidiaries during such period less (g) the
                                                                    ----
aggregate  amount of the cash portion of all  non-recurring  charges included in
arriving at such EBITDA less (h)  dividends  paid by the Borrower to the holders
                        ----
of its common  stock

                                       18
<PAGE>

during such period to the extent that the Borrower is expressly permitted to pay
such  dividends  under this Agreement less (i) all cash paid as part of the cost
                                      ----
of any Permitted Acquisition.

     "Existing Credit Facility" means the credit facilities pursuant to a Credit
Agreement,  dated as of March 24, 1998, by and among the Borrower,  lenders from
time parties to such  agreement  and  Canadian  Imperial  Bank of  Commerce,  as
administrative agent for such lenders and each other agreement,  document and/or
interest related thereto,  in each case as the same exists or may hereinafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

     "Existing  Subordinated  Debt" means the Subordinated  Debt of the Borrower
existing on the date hereof pursuant to the Securities Purchase Agreement, dated
November 25,  1998, among the Borrower, certain Subsidiaries of the Borrower and
CIBC Wood Gundy  Capital Corp.  and any  agreements,  documents and  instruments
related  thereto,  in each case,  as the same now exists or may  hereinafter  be
amended, modified, supplemented, extended, renewed, restated or replaced.

     "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,  pension  plan  reversions,   proceeds  of  casualty  insurance  and
condemnation  awards (and payments in lieu thereof),  excluding  proceeds of any
other insurance;  provided,  however,  that an  Extraordinary  Receipt shall not
                  --------   -------
include cash receipts received from proceeds of casualty insurance, condemnation
awards (or payments in lieu  thereof) or  indemnity  payments to the extent that
such proceeds, awards or payments (i) in respect of loss or damage to equipment,
fixed assets,  inventory or real  property,  are applied (or in respect of which
expenditures  were  previously  incurred)  to replace or repair such  equipment,
fixed assets,  inventory or real property so long as such application is made or
committed  to be made within one hundred  twenty (120) days (or such longer time
as may be  commercially  reasonable  in the  circumstances)  after such Person's
receipt of such proceeds, awards or payments; or (ii) are 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.

                                       19
<PAGE>

     "Facility" means the Revolving Credit Facility,  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.

     "Fee Letter" has the meaning specified in Section 2.08(c).

     "Financing Lease" means any lease of personal property,  the obligations of
the  lessee in  respect  of which are  required  in  accordance  with GAAP to be
capitalized on a balance sheet of the lessee.

     "Fiscal  Year" means a fiscal  year of the  Borrower  and its  Consolidated
Subsidiaries ending on August 31 in any calendar year.

     "Fleet" means Fleet Bank, N.A. in its capacity as a Lender or Issuing Bank.

     "Fleet Base Rate" has the meaning  specified  in the  definition  of "Prime
Rate" herein.

     "Foreign Guarantor" means, collectively, each active Foreign Subsidiary, on
the Initial Funding Date and each Foreign  Subsidiary  created or acquired after
the Initial  Funding Date,  and, in each case,  its  respective  successors  and
assigns.

     "Foreign Guaranty" has the meaning specified in Section 3.02(k)(vi).

                                       20
<PAGE>

     "Foreign  Subsidiary" means any Subsidiary  organized under the laws of any
jurisdiction  other than the United  States of America or any State thereof and,
in each case, successors and assigns thereof.

     "GAAP" has the meaning specified in Section 1.03.

     "Governmental Authority" means any nation or government, any state or other
political  subdivision  thereof,  any  central  bank  (or  similar  monetary  or
regulatory  authority) thereof,  any entity exercising  executive,  legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any  corporation  or other  entity  owned or  controlled,  through  stock or
capital ownership or otherwise, by any of the foregoing.

     "Guaranteed  Obligations"  has  the  meaning  specified  in the  Subsidiary
Guaranty and the Foreign Guaranty.

     "Hazardous   Materials"   means  (i)   petroleum  or  petroleum   products,
by-products or breakdown products,  radioactive  materials,  asbestos-containing
materials,   polychlorinated  biophenyls  and  radon  gas  and  (ii)  any  other
chemicals,  materials  or  substances  designated,  classified  or  regulated as
hazardous or toxic or as a pollutant or contaminant 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 any  Affiliate  thereof,  in its
capacity  as a party to a Bank Hedge  Agreement  and each  Eligible  Assignee to
which rights and obligations  hereunder and other the other Loan  Documents,  as
applicable, have been assigned pursuant to Section 8.07.

                                       21
<PAGE>

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

     "Initial  Extension  of Credit"  means the  earlier to occur of the initial
Borrowing and the initial issuance of a Letter of Credit.

     "Initial  Funding  Date"  means  the  date on which  all of the  conditions
precedent  set forth in  Section 3.01  are  satisfied  or waived by the Required
Lenders and the initial  Advances are made by the Lender  Parties  hereto to the
Borrower.

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

     "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  Expense"  means,  with  respect to any  Person  for any  period,
interest  expense  on all Debt of such  Person for such  period net of  interest
income for such period,  whether paid or accrued,  determined on a  Consolidated
basis for such Person and its  Subsidiaries  and in  accordance  with GAAP,  and
including, without limitation, (i) in the case of the Borrower, interest expense
in respect of Debt resulting from Advances,  (ii) the interest  component of all
obligations under Capitalized  Leases,  (iii)  commissions,  discounts and other
fees and  charges  payable in  connection  with  letters  of credit  (including,
without limitation, Letters of Credit), (iv) the net payment, if any, payable in
connection  with Hedge  Agreements  less the net  credit,  if any,  received  in
connection with Hedge Agreements and (v) all fees paid by the Borrower  pursuant
to Section 2.08(a) (other than non-cash amortization related thereto).

     "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

                                       22
<PAGE>

Conversion of any 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,  as the Borrower
may, upon notice received by the  Administrative  Agent not later than 1:00 p.m.
(New  York  time) on the  third  Business  Day  prior to the  first  day of such
Interest Period, select; provided, however, that:
                         --------  -------

          (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 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)  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;

          (c)  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; and

                                       23
<PAGE>

          (d)  Until  the date on  which the Administrative  Agent notifies  the
Borrower  that  the  syndication  of the  Facilities  has been  completed,  only
Interest  Periods  with a  duration  of seven  days  shall be  available  to the
Borrower for Eurodollar Rate Advances.

     "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"  of any  Person  means  all of  such  Person's  now  owned  and
hereafter acquired inventory,  goods, merchandise,  and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, other materials and supplies of any
kind,  nature or  description  which are or might be consumed  in such  Person's
business or used in connection with the packing, shipping, advertising,  selling
or finishing of such goods,  merchandise and such other personal  property,  and
all documents of title or other documents representing them.

     "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.

     "Issuing Bank" means the Initial Issuing Bank and each Eligible Assignee to
which  the  Letter  of  Credit   Commitment   hereunder  and  other  rights  and
obligations, as applicably have been assigned pursuant to Section 8.07.

     "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(d)(ii)(A).

                                       24
<PAGE>

     "Lender Party" means any Lender, Swing Line Bank, the Issuing Bank and each
Eligible Assignee to which rights and obligations  hereunder and under the other
Loan Documents, as applicable, have been assigned pursuant to Section 8.07.  The
term  "Lender  Party"  shall  include such party in its capacity as a Hedge Bank
unless the surrounding  text (a) indicates  otherwise or (b) indicates that such
term relates solely to the "Lending Party" in its capacity as a lender or issuer
of letters of credit.

     "Lender(s)" means the Initial Lender(s) and each Person that shall become a
Lender hereunder pursuant to Section 8.07.

     "Letter  of  Credit"  means  any  Letter  of Credit  issued  hereunder  (as
specified  in  Section 2.03(a)),  as the same now exists or may  hereinafter  be
amended, modified, supplemented, expanded, renewed, restated or replaced.

     "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, 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 8.07(d) as
the Issuing Bank's "Letter of Credit  Commitment," as such amount may be reduced
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.

                                       25
<PAGE>

     "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  (i) this  Agreement,  (ii) the  Notes,  (iii) the
Collateral Documents,  (iv) each Subsidiary Guaranty, (v) each Foreign Guaranty,
(vi) each  Subsidiary  Guaranty  and  Foreign  Guaranty  delivered  pursuant  to
Section 5.01(m)(ii)  hereof, (vii) each Letter of Credit Agreement,  (viii) each
Bank Hedge Agreement,  and (ix) all other agreements,  instruments and documents
executed in connection  with the foregoing,  in each case as the same may at any
time be amended, supplemented, restated or otherwise modified and in effect.

     "Loan Party" means each of the Borrower and the Subsidiary Guarantors.

     "Margin Stock" has the meaning specified in Regulations T, U and X.

     "Material  Adverse  Effect"  means  any  fact  of  circumstance  which  (a)
materially  and  adversely  affects the business or  financial  condition of the
Borrower and its Subsidiaries, taken as a whole, or (b) materially and adversely
affects the ability of the Borrower and the  Subsidiary  Guarantors,  taken as a
whole, to perform their collective obligations under the Loan Documents.

     "Material  Contract"  means,  with  respect  to any  Person,  each  written
contract which would create a monetary  obligation of such Person, or a right to
receive  funds by such  Person,  and each other  written  contract to which such
Person is a party which is  material  to the  business  and  operations  of such
Person,  the  termination  of which could  reasonably be expected to result in a
Material Adverse Effect.

     "Mortgages" means,  individually and collectively,  each mortgage,  deed to
secure  debt or deed of trust  or other  instrument  at any  time  granting  the
Administrative  Agent,  for itself  and  ratably  for

                                       26
<PAGE>

the  benefit of the Lender  Parties  and the Hedge  Banks,  a lien upon any Real
Property of the Borrower or any of its Subsidiaries.

     "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 (i) 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 (ii) 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 Asset  Disposition,  Debt
Issuance or the Subordinated  Issuance or Equity Issuance by any Person,  or any
Extraordinary  Receipt,  the aggregate amount of cash received from time to time
(whether as initial  consideration or through payment or disposition of deferred
consideration)  in connection with such  transaction  after deducting  therefrom
only (without  duplication) (i) reasonable and customary brokerage  commissions,
underwriting  fees and  discounts,  legal fees,  finder's fees and other similar
fees and commissions  and all other  reasonable  costs and expenses  incurred in
connection  with  any  such  Asset  Disposition,  Debt  Issuance,   Subordinated
Issuance,  Equity Issuance or  Extraordinary  Receipt,  (ii) the amount of taxes
payable in connection with or as a result of such transaction,  (iii) the amount
of any Debt  secured by a Lien on such asset that is  required to be repaid upon
such disposition,  in each case to the extent, but only to the extent,  that the
amounts so deducted are, at the time of receipt of such cash, actually paid to a
Person that is not an  Affiliate  of such  Person or the  Borrower or any of its
Subsidiaries or any Affiliate of any Borrower or any of its Subsidiaries and are
properly  attributable  to such  transaction or to the asset that is the subject
thereof and (iv) the amount to be used to replace any such asset.

                                       27
<PAGE>

     "Note"  means  a  Revolving   Credit  Note  or  a  Swing  Line  Note,   and
collectively, the "Notes".

     "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  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,  is
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 (i) 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 (ii) 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.

     "OECD" means the Organization for Economic  Cooperation and Development (or
any successor).

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

                                       28
<PAGE>

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

     "Permitted Acquisition" means the acquisition by the Borrower or any of its
Subsidiaries of Interface Graphics Ltd., a corporation  organized under the laws
of Scotland,  (ii) Jevons Brown Limited, a corporation  organized under the laws
of the  United  Kingdom  and (iii)  any  Person  or of any  division  or line of
business of any Person or of any Person with (or without) its Subsidiaries  (any
such acquired Person,  division or line or business,  or Person and Subsidiaries
being  herein  called a "Proposed  Business")  either by merger,  consolidation,
purchase of the majority of the Voting Stock,  or purchase of all or any portion
of the assets of such Proposed Business, provided that each of the conditions to
any such  acquisition  set  forth  below  shall  have been  satisfied  as of the
consummation of such acquisition:

          (a)  such  Proposed Business is  principally engaged in  substantially
the same or similar line of business as the Borrower or any of its Subsidiaries;

          (b)  in the  event that the  total consideration paid  by the Borrower
and its  Subsidiaries  (whether in cash, by the assumption or incurrence of Debt
(including seller notes and other liabilities otherwise permitted to be incurred
under this Agreement),  by the transfer of any other assets or properties by the
Borrower  or any of its  Subsidiaries  to the  seller  in  connection  with such
acquisition),  shall  equal or  exceed  (and  including  in the  computation  of
consideration  the amount of any contingent,  earnout and deferred cash payments
reasonably  likely to be paid in the next  succeeding 12 months) (i) Ten Million
Dollars ($10,000,000) in respect of any single acquisition (or series of related
acquisitions  that may reasonably be deemed to constitute a single  transaction)
or (ii) Twenty-Five Million Dollars ($25,000,000) in respect of all acquisitions
in any twelve (12) month  period  ending on the last day of the  calendar  month
immediately  preceding  the closing of the  proposed  acquisition  the  Required
Lenders  shall  have  consented  to  the  acquisition  (such  consent  not to be
unreasonably withheld);

                                       29
<PAGE>

          (c)  after giving  effect to any such  acquisition, there shall be not
less  than  Two  Million  Five  Hundred  Thousand  Dollars  ($2,500,000)  in the
aggregate, of Unused Revolving Credit Commitments and cash on hand;

          (d)  no Event of Default  shall exist or be  continuing or would exist
after giving effect to such acquisition;

          (e)  all  assets  and  properties  acquired  in  connection  with such
proposed  acquisition shall be free and clear of all Liens,  except as otherwise
permitted in this Agreement;

          (f)  concurrently with the  making of such an  acquisition  consisting
of assets,  the  Borrower  shall,  as  additional  collateral  security  for the
Obligations,  grant to the  Administrative  Agent for staff and  ratably for the
benefit of the Lender,  Parties and the Hedge Banks, first priority liens on and
first  priority  security  interests in any of the  acquired  assets of the type
previously granted to the Administrative Agent (subject only to Permitted Liens)
by the execution and delivery to the  Administrative  Agent of such  agreements,
instruments  and documents as shall be satisfactory in form and substance to the
Administrative Agent;

          (g)  each of the  Administrative  Agent and each of the Lender Parties
shall  receive for its review the full text of the  financial  statements of the
Proposed Business,  which demonstrates that the Proposed Business has a positive
Pro Forma EBITDA and all core documentation (or other documentation requested by
the Administrative Agent) with respect to the proposed acquisition; and

          (h)  subject  to Section 5.01(n)  below,  if applicable,  concurrently
with  the  making  of  such  acquisition,  the  Borrower  shall,  as  additional
collateral security for the Obligations,  deliver to the Administrative Agent an
Acquisition  Rights  Assignment,  in  form  and  substance  satisfactory  to the
Administrative  Agent at least five (5) Business Days prior to the  consummation
of an acquisition.

                                       30
<PAGE>

Notwithstanding  the  foregoing,  in no event shall a Permitted  Acquisition  be
deemed to include an unsolicited  tender offer or other  takeover  (other than a
tender  offer) which does not have the approval of the board of directors of the
Proposed  Business  prior to the time the  Borrower  has  taken  control  of the
Proposed Business.

     "Permitted   Acquisition  Documents"  means,  in  respect  of  a  Permitted
Acquisition, the final executed copy of the asset or stock purchase agreement or
the merger  agreement,  as the case may be, and all other  material  agreements,
documents or instruments to be executed and/or  delivered by the Borrower or any
of its Subsidiaries in connection with such Permitted Acquisition.

     "Permitted Acquisition Purchase Price" means, with respect to any Permitted
Acquisition, the cash purchase price (including related reasonable and customary
fees and costs with  respect to such  acquisition)  paid by the  Borrower or its
Subsidiary making such purchase in respect thereof.

     "Permitted  Liens"  means  any of  the  following:  (i)  Liens  for  taxes,
assessments  and  governmental  charges or levies (x) not yet due and payable or
(y) due and payable that are being  contested  in good faith and by  appropriate
proceedings diligently conducted,  provided that in the case of Liens under this
                                   --------
clause (y), reserves or other appropriate provisions shall have been established
therefor  in  accordance   with  GAAP;  (ii)  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  securing  obligations
that are not  overdue  for a period  of more than  sixty  (60) days or which are
being  contested  in  good  faith  and  by  appropriate  proceedings  diligently
conducted,  provided that reserves or other  appropriate  provisions  shall have
            --------
been established  therefor in accordance with GAAP; (iii) pledges or deposits to
secure obligations under workers' compensation laws or similar legislation or to
secure  public  or  statutory  obligations;  and (iv)  Permitted  Real  Property
Encumbrances.

     "Permitted  Real  Property   Encumbrances"   means,  with  respect  to  any
particular real property,  easements, zoning restrictions or other restrictions,
rights-of-way, encroachments, covenants or

                                       31
<PAGE>

encumbrances  on real property  imposed by law or arising in the ordinary course
of  business  that do not  materially  detract  from the  value of the  affected
property or interfere  with the ordinary  conduct of business of the Borrower or
any of its Subsidiaries or materially  impair the use thereof to the Borrower or
any Subsidiary.

     "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(l)(ii).

     "Pledged  Collateral"  means the  "Pledged  Securities"  as  defined in the
relevant Collateral Document.

     "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, which is not necessarily
the lowest or best rate made available by Fleet (the "Fleet Base Rate"); or

          (b)  one-half (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).

                                       32
<PAGE>

     "Pro  Forma  EBITDA"  means,  for any  period,  the  sum,  determined  on a
Consolidated basis without duplication, of (A)(i) net income (or net loss), (ii)
interest  expense,  (iii) income tax expense,  (iv)  depreciation  expense,  (v)
amortization  expense,  (vi) non-cash  charges,  (vii) the legal and  accounting
costs and other  reasonable  expenses  incurred in connection with any Permitted
Acquisition completed after the date of this Agreement,  in each case determined
in  accordance  with  GAAP for  such  period  and  (viii)  other  non-recurring,
non-operating expenses,  including, without limitation,  restructuring expenses;
provided,  however,  that net income  (or net loss)  shall be  computed  without
--------   -------
giving effect to  extraordinary  losses or gains;  provided,  further,  that Pro
                                                   --------   -------
Forma EBITDA shall in any event exclude from the Initial Funding Date the amount
of any non-cash income  recognized  during any period for which Pro Forma EBITDA
is  determined,(B)  the pro  forma  effect  on  EBITDA  for such  period  of any
Permitted  Acquisition  consummated  by the Borrower or any of its  Subsidiaries
during the most recent twelve month period preceding the date of  determination,
but solely for the number of months  immediately  preceding the  consummation of
the applicable Permitted  Acquisition,  which number equals twelve (12) less the
number  of  months  following  the  consummation  of  the  applicable  Permitted
Acquisition  to such  date  of  determination,  plus  (C) the  amount  by  which
Compensation  to  owners,  employees  or agents of a Proposed  Business  will be
reduced following a Permitted Acquisition,  as set forth in a certificate of the
Borrower which is reasonably acceptable to the Administrative Agent.

     "Proposed  Business"  has  the  meaning  specified  in  the  definition  of
"Permitted Acquisition".

     "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.

     "Reduction Amount" has the meaning specified in Section 2.06(d)(iii).

                                       33
<PAGE>

     "Real Property" means all now owned and hereafter acquired real property of
the Borrower and its Subsidiaries,  including leasehold interests, together with
all  buildings,  structures,  and other  improvements  located  thereon  and all
licenses,  easements  and  appurtenances  relating  thereto,  wherever  located,
including  without  limitation,  the  real  property  and  related  assets  more
particularly described in the Mortgages.

     "Register" has the meaning specified in Section 8.07(d).

     "Regulation T" means  Regulation T of the Board of Governors of the Federal
Reserve System,  as the same may be modified and supplemented and in effect from
time to time.

     "Regulation U" means  Regulation U of the Board of Governors of the Federal
Reserve System,  as the same may be modified and supplemented and in effect from
time to time.

     "Regulation X" means  Regulation X of the Board of Governors of the Federal
Reserve System,  as the same may be modified and supplemented and in effect from
time to time.

     "Release" means any release, spill, emission,  leaking,  pumping,  pouring,
emitting,  emptying,  discharging,  injecting,  escaping,  leaching,  dumping or
disposing  into the  environment  (including  the  abandonment  or discarding of
barrels,  containers  and other  closed  receptacles  containing  any  Hazardous
Materials)  or into or from any property,  including,  without  limitation,  the
movement of any Hazardous  Materials  through the air,  soil,  surface waters or
ground water.

     "Remedial"  shall  have the  meaning  as set  forth in  CERCLA at 42 U.S.C.
Section 9601(24) and/or any other applicable Environmental Laws.

     "Removal"  shall  have the  meaning  as set  forth in  CERCLA  at 42 U.S.C.
Section 9601(23) and/or any other applicable Environmental Laws.

                                       34
<PAGE>

     "Required  Lenders" means at any time Lenders owed or holding  greater than
51% of the sum of (i) the aggregate principal amount of the Advances outstanding
at such time and (ii) the  aggregate  Available  Amount of all Letters of Credit
outstanding  at such  time,  or, if no such  principal  amount and no Letters of
Credit are  outstanding at such time,  Lenders  holding  greater than 51% of the
Revolving Credit Commitments;  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 (i) the  aggregate  principal  amount of the
Advances  owing to such Lender (in its capacity as a Lender) and  outstanding at
such time, and (ii) the 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,  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 Revolving Credit Lenders ratably in accordance with
their respective Revolving Credit Commitments.

     "Response"  shall  have the  meaning  as set  forth in  CERCLA at 42 U.S.C.
Section 9601(25) and/or any other applicable Environmental Laws.

     "Responsible  Officer"  means,  in the case of any Loan  Party,  the  chief
executive officer, chief financial officer or the treasurer of such Loan Party.

     "Revolving  Credit Advance" has the meaning  specified in Sections  2.01(a)
and 2.01(b).

     "Revolving Credit  Availability" means the amount (if any) by which, at any
time, the Revolving  Credit Facility  exceeds the aggregate amount of the Unused
Revolving Credit Commitments of the Revolving Credit Lenders at such time.

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

                                       35
<PAGE>

     "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 8.07(d) as such Lender's  "Revolving Credit  Commitment," as such amount
may be reduced at or prior to such time  pursuant to  Sections 2.05  (a) or (b).
The initial  aggregate amount of the Lenders'  Revolving  Credit  Commitments is
$65,000,000.  Notwithstanding  the  foregoing,  upon  the  satisfaction  of  the
conditions set forth in  Section 2.05(c),  the Revolving Credit Commitment shall
increase to $80,000,000  and, 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  (as  increased)"  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 8.07(d)  as such Lender's  "Revolving Credit Commitment (as increased)",
as such  amount  may be reduced at or prior to such time  pursuant  to  Sections
2.05(a)and/or (b).

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

     "Revolving  Credit  Increase"  means the increase in the  Revolving  Credit
Facility in the amount of $15,000,000.

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

     "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 B
                                                                       ---------
hereto,  evidencing  the aggregate  indebtedness  of the Borrower to such Lender
resulting from the Revolving  Credit  Advances made by such Lender,  as each may
hereafter be amended,  restated,  supplemented,  replaced or otherwise  modified
from time to time.

                                       36
<PAGE>

     "Revolving  Credit  Termination  Date"  means the  earlier of (x) the fifth
anniversary of the Initial Funding Date and (y) the Termination Date.

     "Secured  Obligations"  has  the  meaning  of  the  term  "Obligations"  as
specified in the Security Agreement.

     "Secured Parties" means the Administrative  Agent, the Lender Parties,  and
the Hedge Banks and the other Persons whose  Obligations are or are purported to
be secured by the Collateral under the terms of the Collateral Documents.

     "Security Agreement" has the meaning specified in Section 3.02(l)(i).

     "Senior Debt" means, as at any date of determination thereof, the aggregate
outstanding  principal  balance of (a) all Revolving  Credit  Advances and Swing
Line  Advances,  (b) all  Debt of the  Borrower  and its  Subsidiaries,  if any,
secured by purchase money security  interests,  conditional sale arrangements or
other  similar  security  interests,  (c)  obligations  of the  Borrower and its
Subsidiaries,  if any, with respect to Capitalized  Leases and (d) other Debt of
the Borrower and its  Subsidiaries,  if any, which is not  subordinated to other
debt in the priority of payment.

     "Single  Employer  Plan"  means a  single  employer  plan,  as  defined  in
Section 4001(a)(15)  of ERISA,  that (i) 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 (ii) 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,  that on a particular date (a) with respect
to any Person  (other  than a Person  subject to clause (b) below) on such date,
(i) the fair value of the assets of such Person is greater than the total amount
of liabilities,  including, without limitation,  contingent liabilities, of such
Person, (ii) the present fair saleable value of the assets of such Person is not
less than the

                                       37
<PAGE>

amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (iii) 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 (iv) 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 assets would constitute an
unreasonably small capital;  and (b) with respect to any Person  incorporated in
England,  on such date such  Person has the ability to pay its debts as and when
they fall due and could not be deemed to be  insolvent  for the  purposes of the
Insolvency Act 1986 of the United Kingdom. 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  other than a Trade
Letter of Credit.

     "Subordinated Issuance" means the issuance or sale by Borrower of any Debt,
the Net Cash Proceeds of which equal or exceed  $20,000,000,  a portion of which
shall prepay the Existing Subordinated Debt.

     "Subordinated  Debt"  means  any  Debt  of  the  Borrower  or  any  of  its
Subsidiaries  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 Administrative Agent and Required Lenders.

     "Subsidiary"  of any  Person  means  any  corporation,  partnership,  joint
venture,  limited liability company,  trust or estate (a) of which (or in which)
more than 50% of (i) 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),  (ii) the interest in the capital or profits of such  partnership,
joint venture or limited liability  company or (iii) the beneficial  interest in
such trust or estate is at the time directly or  indirectly  owned or controlled

                                       38
<PAGE>

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;  and (b) with respect to any
Person  incorporated in England,  a subsidiary within the meaning of Section 736
of the  Companies Act or, unless the context  otherwise  requires,  a subsidiary
undertaking within the meaning of Section 258 of the Companies Act.

     "Subsidiary Guarantor" means, collectively,  each Subsidiary on the Initial
Funding  Date  providing a  Subsidiary  Guaranty or a Foreign  Guaranty and each
Subsidiary  created  or  acquired  after  the  Initial  Funding  Date,  which is
obligated to provide a  Subsidiary  Guaranty or a Foreign  Guaranty  pursuant to
Section 5.01(m)(iii), and, in each case, its respective successors and assigns.

     "Subsidiary Guaranty" has the meaning specified in Section 3.02(k)(vi).

     "Surviving  Debt" shall mean the Debt which shall remain  outstanding  from
and after the date hereof.

     "Swing Line Advance"  means an advance made by the Swing Line Bank pursuant
to Section 2.01(c).

     "Swing Line Advance  Outstanding"  means the aggregate  amount of all Swing
Line  Advances  outstanding  as at the close of business on the day  immediately
preceding each Swing Line Rollover Date.

     "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(b).

                                       39
<PAGE>

     "Swing Line Note" means a promissory  note of the  Borrower  payable to the
order of the Swing Line Bank,  in  substantially  the form of Exhibit C  hereto,
                                                              ---------
evidencing  the  indebtedness  of the Borrower to such Swing Line Bank resulting
from the Swing Line Advances made by such Swing Line Bank, as it may  hereafter,
be amended, restated, supplemented,  replaced or otherwise modified from time to
time.

     "Swing Line Rate" has the meaning specified in Section 2.01(b).

     "Swing Line  Rollover  Date" means the calendar day  Wednesday  or, if such
Wednesday is not a Business Day, the next succeeding Business Day.

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

     "Termination   Date"  means  the  date  of  termination  in  whole  of  the
Commitments pursuant to Section 2.05 or 6.01.

     "Trade  Letter of Credit" means any Letter of Credit that is issued for the
benefit of a supplier of Inventory to the Borrower or any of its Subsidiaries to
effect payment for such Inventory, the conditions to drawing under which include
the presentation to the Issuing Bank of negotiable bills of lading, invoices and
related documents  sufficient,  in the judgment of the Issuing Bank, to create a
valid and perfected  lien on or security  interest in such  Inventory,  bills of
lading, invoices and related documents in favor of the Issuing Bank.

     "Total  Funded  Debt"  means,  at any date of  determination  thereof,  the
aggregate  outstanding  balance of all Debt of the Borrower and its Subsidiaries
(other than (a) Debt arising from Hedge  Agreements,  (b) guaranties of any such
Debt as described in clauses  (viii) and (ix) of the  definition  "Debt" and (c)
Debt described in Section 5.02(b)(iii)(F)).

                                       40
<PAGE>

     "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 (1) the  aggregate  principal  amount  of all
            -----
Revolving  Credit Advances and Letter of Credit Advances made by such Lender (in
its capacity as a Lender) and  outstanding at such time,  plus (2) such Lender's
                                                          ----
Pro Rata Share of (A) the  aggregate  Available  Amount of all Letters of Credit
outstanding at such time and (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.

     "Voting Stock" means capital stock issued by a  corporation,  or equivalent
interests  in any  other  Person,  including,  without  limitation,  partnership
interests and membership  interests issued by a limited liability  company,  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(l)  of ERISA,
that is  maintained  for  employees of any Loan Party or in respect of which any
Loan Party could have liability.

     "Wholly-Owned Subsidiary" means with respect to any Person, any Subsidiary,
all of the shares of capital stock or other ownership interests of which (except
directors'  qualifying  shares) are at the time directly or indirectly  owned by
such Person.

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

                                       41
<PAGE>

     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 Sections 4.01(f) and (g) ("GAAP").


                                   ARTICLE II
                              AMOUNTS AND TERMS OF
                     THE ADVANCES AND THE LETTERS OF CREDIT
                     --------------------------------------

     SECTION 2.01.  THE ADVANCES.

          (a)  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 Initial  Funding Date until the
Revolving  Credit  Termination  Date in an amount for each such  Advance  not to
exceed such Lender's  Unused  Revolving  Credit  Commitment  at such time.  Each
Revolving  Credit  Borrowing  shall be in an aggregate  amount of $500,000 or an
integral  multiple  of  $100,000  in excess  thereof  in the case of Prime  Rate
Advances  and in an  aggregate  amount of $500,000  or an  integral  multiple of
$100,000 in excess thereof in the case of Eurodollar Rate Advances (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 the Unused  Revolving  Credit  Commitments  in effect from time to
time, the Borrower may borrow, repay and reborrow.

                                       42
<PAGE>

          (b)  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  Initial  Funding  Date until the
Revolving  Credit  Termination  Date in a aggregate  amount not to exceed at any
time  outstanding the lesser of (i)(x)  $3,000,000 (the "Swing Line  Facility"),
minus (y) the aggregate  Swing Line Advances  outstanding at such time, and (ii)
an amount equal to the aggregate of the Unused Revolving  Credit  Commitments of
the Revolving  Credit Lenders at such time.  Each Swing Line Advance shall be in
integral  multiples  of  $50,000.  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 Borrowering shall bear interest at the rate established pursuant
to the Fee Letter (the "Swing Line  Rate").  Within the limits of the Swing Line
Facility and within the limits referred to in this Section 2.01(c), the Borrower
may borrow and reborrow  under this Section  2.01(c) and may repay or prepay the
Swing Line Advances at such time prior to the Revolving Credit Termination Date,
and in such integral multiples, as the Borrower may elect.

          (c)  Letters of Credit.  The  Issuing Bank  agrees, on  the terms  and
               -----------------
conditions  hereinafter set forth, to issue Letters of Credit for the account of
the  Borrower  from time to time on any  Business Day during the period from the
Initial  Funding  Date  until  sixty  (60)  days  before  the Revolving   Credit
Termination Date (A) 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 (B) in an Available Amount for each such Letter of Credit not to exceed
an amount equal to (x) the Unused Revolving Credit  Commitments of the Revolving
Credit  Lenders  at such  time  minus  (y) the  aggregate  Swing  Line  Advances
                                -----
outstanding  at such time.  No Letter of Credit  shall have an  expiration  date
(excluding  all rights of the Borrower or the  beneficiary  to require  renewal)
later than the  earlier of (A) sixty (60) days before the fifth  anniversary  of
the Initial Funding Date, (B) in the case of Standby Letters of Credit, 365 days
after  the date of  issuance  thereof  and (C) in the case of a Trade  Letter of
Credit   180  days  after  the  date  of   issuance   thereof.   The   foregoing
notwithstanding any Standby Letter of Credit may, by its terms, be automatically
renewable  annually  unless such Issuing  Bank shall have  notified the Borrower
(with a copy to the Administrative Agent) on or prior

                                       43
<PAGE>

to the date for notice of termination set forth in such Letter of Credit (but in
any event at least  thirty  (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 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 sixty (60) days  before the  Revolving  Credit
Termination  Date.  If 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.

     SECTION 2.02.  MAKING THE ADVANCES.

          (a)  Except as otherwise  provided in Section 2.03 or, with respect to
Swing Line Advances in  Section 2.02(b)  below,  each Borrowing shall be made on
notice, given not later than 1:00 p.m. (New York time) on the third Business Day
prior to the date of the  proposed  Borrowing  in the  case of  Eurodollar  Rate
Advances and on the Business Day prior to the date of the proposed  Borrowing in
the case of Prime Rate  Advances by the  Borrower to the  Administrative  Agent,
which shall give to each appropriate  Lender same day notice thereof by telex or
telecopier.  Each such notice of a Borrowing (a "Notice of Borrowing") may be by
telephone,   confirmed  immediately  in  writing,  or  telex  or  telecopier  in
substantially the form of Exhibit D 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, (x) before 1:00 p.m. (New York time) on the date of such Borrowing in the
case of Eurodollar Rate Advances and (y) before 3:00 p.m. (New York time) on the
date of such  Borrowing in the case of Prime Rate  Advances,  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

                                       44
<PAGE>

applicable  conditions set forth in Article III,  the Administrative  Agent will
make such funds  available to the Borrower by crediting the Borrower's  Account;
provided,  however,  that in the case of any  Revolving  Credit  Borrowing,  the
--------   -------
Administrative  Agent  shall  first make a portion  of such  funds  equal to the
aggregate  principal  amount of any Swing  Line  Advances  and  Letter of Credit
Advances  made by the  Swing  Line  Bank,  the  Issuing  Bank  and by any  other
Revolving  Credit Lender and  outstanding on the date of such  Revolving  Credit
Borrowing in accordance with the terms of this Agreement,  plus interest accrued
                                                           ----
and unpaid thereon to and as of such date, available to the Swing Line Bank, the
Issuing Bank and such other Revolving Credit Lenders for repayment of such Swing
Line Advances and Letter of Credit Advances.

          (b)  Each  Swing Line  Borrowing shall  be made  either (x) on notice,
given not  later  than 1:00 p.m.  (New  York  time) on the  Business  Day of the
proposed  Swing Line  Borrowing,  by the Borrower to the Swing Line Bank and the
Administrative Agent or (y) pursuant to other arrangements, including, by way of
example and not of limitation,  arrangements for daily repayments and borrowings
on each Business Day, which are  satisfactory in form and substance to the Swing
Line Bank,  the  Administrative  Agent and the Borrower.  Each notice of a Swing
Line Borrowing  pursuant to clause (x) in the immediately  preceding sentence (a
"Notice of Swing Line Borrowing") shall be by telephone,  confirmed  immediately
in writing, or telex or telecopier, specifying therein the requested (i) date of
such Borrowing and (ii) amount of such Borrowing. The Swing Line Bank shall make
the amount of the 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.  If, and to the
extent, any Swing Line Advance shall be outstanding on the date of any Revolving
Credit  Borrowing,  such  Swing  Line  Advance  shall  first be repaid  from the
proceeds  of such  Revolving  Credit  Borrowing  prior  to  disbursement  to the
Borrower pursuant to the proviso in Section 2.02(a)  above. In addition, (x) the
Swing Line Bank may, at any time, in its sole  discretion  by written  notice to
the Borrower and the  Administrative  Agent,  demand repayment of its Swing Line
Advances  or,  (y) in the event  the  Swing  Line  Advance  Outstanding  exceeds
$1,000,000, on

                                       45
<PAGE>

each Swing Line  Rollover  Date such Swing  Line  Advance  Outstanding  shall be
automatically rolled over into the Revolving Credit Facility, and in either case
the  Borrower  shall be deemed to have  requested  a  Revolving  Credit  Advance
hereunder comprised entirely of a Prime Rate Advance in the amount of such Swing
Line Advances from all the Revolving  Credit Lenders based on each such Lender's
Pro Rata Share and the Revolving  Credit  Lenders shall make a Revolving  Credit
Advance  (comprised  entirely  of a Prime  Rate  Advance  and based on each such
Lender's  Pro Rata Share) in an amount equal to (i) all  outstanding  Swing Line
Advances  as of the date of such  demand in the case of clause (x) above or (ii)
the Swing Line Advance  Outstanding in the case of clause (y) above,  by deposit
to the  Administrative  Agent's  Account,  in same day funds, an amount equal to
such  Lender's  Pro Rata  Share  thereof,  without  regard to whether or not the
conditions set forth in Section 3.02 have otherwise been satisfied. The proceeds
from such Revolving  Credit Advance shall be applied  directly to the Swing Line
Bank to repay the Swing Line Bank for such outstanding Swing Line Advances.  The
Borrower hereby agrees to each such automatic rollover into the Revolving Credit
Facility and to each such Revolving Credit Advance. Each Revolving Credit Lender
agrees to each such automatic rollover into the Revolving Credit Facility and to
make each such  Revolving  Credit Advance based on its Pro Rata Share on (i) the
Swing Line Rollover Date or such other Business Day on which demand  therefor is
made by the Swing Line Bank;  provided  that  notice of such demand is given not
                              --------
later than 3:00 P.M.  (New York 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. If and to the extent that any Revolving  Credit Lender shall not have
so made the  amount of such  Lender's  Pro Rata Share of such  Revolving  Credit
Advance  available to the  Administrative  Agent,  such Revolving  Credit Lender
agrees to pay to the  Administrative  Agent,  for the  account of the Swing Line
Bank,  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 Revolving  Credit  Advance made by such Lender on such Business Day
for purposes of this  Agreement,  and the  outstanding  principal  amount of the

                                       46
<PAGE>

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 not select  Eurodollar  Rate Advances if the  obligation of
the appropriate Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.09 or Section 2.10,  and (ii) Eurodollar Rate Advances may
not be outstanding as part of more than ten (10) 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, the Borrower shall indemnify each appropriate Lender against any loss,
cost or expense incurred by such Lender as a result of any failure to fulfill on
or before the date  specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III,  including,  without limitation,
any loss (including loss of anticipated profits as reasonably determined by such
Lender),  cost or expense  incurred by reason of the liquidation or redeployment
of  deposits  or other  funds  acquired by such Lender to fund the Advance to be
made by such Lender as part of such Borrowing when such Advance,  as a result of
such failure, is not made on such date.

          (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

                                       47
<PAGE>

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 AN DRAWINGS AND  REIMBURSEMENT UNDER LETTERS OF
CREDIT.

          (a)  Request for Issuance.  Each Letter of Credit shall be issued upon
               --------------------
notice, given not later than 1:00 p.m. (New York time) on the fifth 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 telex or telecopier.  Each
such notice of issuance of a Letter of Credit (a "Notice of Issuance") may be by
telephone, confirmed immediately in writing, or telex or telecopier,  specifying
therein the requested (i) date of such issuance (which shall be a Business Day),
(ii) Available  Amount of such Letter of Credit,  (iii)  expiration date of such
Letter of Credit,  (iv) name and  address of the  beneficiary  of such Letter of
Credit and (v) form of such Letter of Credit,  and shall be  accompanied by such
customary 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  (as  the  same  now  exists  or may  thereafter  be  amended,  modified,
supplemented,  extended,  renewed,  restated  or  replaced,  a "Letter of Credit
Agreement"). If the requested form of such Letter of Credit is acceptable to the
Issuing  Bank,  in its  reasonable  discretion,  the  Issuing  Bank  will,  upon
fulfillment of the applicable  conditions  set forth

                                       48
<PAGE>

in Article  III,  make such  Letter of Credit  available  to the  Borrower or as
otherwise  directed by the Borrower in  connection  with such  issuance.  In the
event  and to the  extent  that the  provisions  of any such  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 (i) 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 during the
previous week and drawings during such week under all Letters of Credit, (ii) to
the  Administrative  Agent, the Borrower and 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 (iii) to the
Administrative Agent, the Borrower and each Revolving Credit 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  Borrower  shall  be  obligated
               ---------------------------
pursuant to each Letter of Credit Agreement to reimburse the Issuing Bank within
two (2) Business  Days after demand in  immediately  available  funds for drafts
drawn under any Letter of Credit. If any drawing is not so reimbursed,  then 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  (retroactive  to
the  date of the  demand),  in the  amount  of such  draft.  The  Borrower,  the
Administrative  Agent and each Revolving  Credit Lender hereby  acknowledge  and
agree that Letter of Credit Advances may be made, or deemed made, by the Issuing
Bank in  respect of any  Letter of Credit  and to  participate  in all Letter of
Credit  Advances made hereunder as provided  herein.  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

                                       49
<PAGE>

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
                                                                        --------
that notice of such demand is given not later than 1:00 p.m.  (New York 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 its pro rata share of 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  any  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

                                       50
<PAGE>

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.

     SECTION 2.04.  REPAYMENT OF ADVANCES.

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

          (b)  Swing  Line  Advances.  The   Borrower   shall   repay   to   the
               ---------------------
Administrative  Agent for the  account  of the  Swing  Line Bank that has made a
Swing Line Advance the outstanding  principal  amount of each Swing Line Advance
made by such  Swing Line Bank in  accordance  with  Section 2.02(b),  but in any
event no later than the Revolving Credit Termination Date.

          (c)  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  Revolving
Credit  Termination  Date the  outstanding  principal  amount of each  Letter of
Credit Advance made by each of them.

               (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

                                       51
<PAGE>

to any of the foregoing (as the same now exists or may  hereinafter  be amended,
modified,  supplemented,  extended,  renewed,  restated or replaced,  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  should  prove to be  forged,  fraudulent,  invalid  or
insufficient in any respect or any statement  therein being untrue or inaccurate
in any respect; or

                      (E)     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 any Subsidiary Guaranty, Foreign Guaranty or any other
guarantee,  for all or any of the  Obligations of the Borrower in respect of the
L/C Related Documents.

     SECTION 2.05.  TERMINATION OR REDUCTION OF THE COMMITMENTS; INCREASE IN THE
COMMITMENTS.

          (a)  Optional  Termination  or  Reduction  of  the  Commitments.   The
               ----------------------------------------------------------
Borrower   may,   upon  at  least  three  (3)  Business   Days'  notice  to  the
Administrative  Agent,  terminate in whole or

                                       52
<PAGE>

reduce  in part the  unused  portions  of each of the  Unused  Revolving  Credit
Commitments and/or the Letter of Credit Facility;  provided,  however, that each
                                                   --------   -------
partial  reduction of a Facility (i) shall be in an aggregate amount of $500,000
or an integral  multiple of $100,000 in excess  thereof,  and (ii) shall be made
ratably among the appropriate  Lenders in accordance with their Commitments with
respect to such Facility.

          (b)  Mandatory Termination or Reduction of the Commitments.
               -----------------------------------------------------

               (i)  The Revolving Credit Facility shall be automatically and
permanently reduced on each of the following dates (or on the next Business Day,
if any such date is not a Business Day) in the amounts set forth below:


                       Amount (if prior to            Amount (if after
Date                   Revolving Credit Increase)     Revolving Credit Increase)
----                   --------------------------     --------------------------
August 12, 2001        $1,250,000                     $1,250,000
November 12, 2001      $1,250,000                     $1,250,000
February 12, 2002      $1,250,000                     $1,250,000
May 12, 2002           $1,250,000                     $1,250,000
August 12, 2002        $1,250,000                     $2,500,000
November 12, 2002      $1,250,000                     $2,500,000
February 12, 2003      $1,250,000                     $2,500,000
May 12, 2003           $1,250,000                     $2,500,000
August 12, 2003        $3,750,000                     $3,750,000
November 12, 2003      $3,750,000                     $3,750,000
February 12, 2004      $3,750,000                     $3,750,000
May 12, 2004           $3,750,000                     $3,750,000

provided that each such reduction of the Revolving Credit Facility shall be made
--------
ratably among the  Revolving  Credit  Lenders in  accordance  with the Revolving
Credit Commitments.

               (ii) 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

                                       53
<PAGE>

the  amount of the  Letter of  Credit  Facility  exceeds  the  Revolving  Credit
Facility after giving effect to such reduction of the Revolving Credit Facility.

     With respect to Asset  Dispositions  under  Section 2.06(b),  the Revolving
Credit Facility shall be automatically  and permanently  reduced on each date on
which prepayment  thereof is required to be made pursuant to  Section 2.06(b) in
an amount equal to the applicable prepayment,  provided that each such reduction
of the  Revolving  Credit  Facility  shall be made ratably  among the  Revolving
Credit Lenders in accordance with their Revolving Credit Commitments,  provided,
                                                                       --------
further that no such  permanent  reduction  shall be made, if within one hundred
-------
eighty (180) days after the closing of same,  the Net Cash Proceeds of any Asset
Disposition is expended to make a Permitted  Acquisition or to purchase  capital
assets  to be used by  Borrower  or any  Subsidiary  in its  existing  business;
provided, further, that if the Net Cash Proceeds of any Asset Disposition causes
--------  -------
the aggregate Net Cash Proceeds of all Asset  Dispositions in any Fiscal Year to
exceed  $10,000,000,  the  Net  Cash  Proceeds  from  such  disposition  and any
additional  Asset  Dispositions  in such Fiscal Year shall be used to prepay and
permanently reduce the Revolving Credit Facility as provided above.

          (c)  Increase in the Commitment.  Without any  action  by any  Person,
               --------------------------
the Revolving Credit Increase shall occur upon the satisfaction of the following
conditions:

               (i)    the  receipt by the Administrative  Agent of true, correct
and complete copies of the executed  agreements,  documents  and/or  instruments
relating to the Subordinated Issuance, in form and substance satisfactory to the
Administrative Agent;

               (ii)   the receipt by the Administrative Agent of evidence of the
receipt by the Borrower of the Net Cash Proceeds of the  Subordinated  Issuance,
in form and substance satisfactory to the Administrative Agent;

                                       54
<PAGE>

               (iii)  the  receipt by  the  Administrative Agent  of evidence of
the payment in full of the Existing  Subordinated  Debt,  in form and  substance
satisfactory to the Administrative Agent;

               (iv)   the receipt  by  the  Administrative  Agent of the written
request by the Borrower for an increase in the Revolving  Credit Facility in the
amount of $15,000,000 pursuant to this Section 2.05(c);

               (v)    a subordination  agreement with  the lender or  lenders of
the   Subordinated   Issuance  in  form  and  substance   satisfactory  for  the
Administrative  Agent which shall include,  without limitation,  a maturity date
occurring after the fifth anniversary of the Initial Funding Date;

               (vi)   the  receipt  by the  Administrative  Agent of  any  other
agreements,   documents   and/or   instruments   reasonably   requested  by  the
Administrative  Agent in connection  with the purposes of this  Section 2.05(c),
including,  without limitation,  amended and restated Revolving Credit Notes, in
form and substance satisfactory to the Administrative Agent;

               (vii)  the passing of sixty (60) days  following satisfaction  of
the last of the foregoing conditions set forth in this Section 2.05(c); and

               (viii) no Default or Event of Default shall  exist on the date on
which the Revolving Credit Increase would occur if not for the existence of this
condition.

     SECTION 2.06.  PREPAYMENTS AND REPAYMENTS.

          (a)  Optional.  The  Borrower may,  upon  at least  three (3) Business
               --------
Days' notice in the case of Eurodollar  Advances and same day notice in the case
of Prime Rate Advances to the Administrative Agent stating the proposed date and


                                       55
<PAGE>

aggregate  principal amount of the prepayment or repayment,  as the case may be,
and if such notice is given,  the Borrower  shall,  without  premium or penalty,
prepay or repay, as the case may be, the outstanding  aggregate principal amount
of the Advances,  in whole or ratably in part, together with accrued interest to
the date of such prepayment on the aggregate principal amount prepaid or repaid,
as the case may be;  provided,  however,  that (i) each  partial  prepayment  or
repayment,  as the case may be,  shall be in an  aggregate  principal  amount of
$500,000 or an integral  multiple of $100,000 in excess  thereof and (ii) if any
prepayment or repayment,  as the case may be, of a Eurodollar Rate Advance shall
be made on a day other than on the last day of an Interest Period therefor,  the
Borrower shall, together with such prepayment or repayment,  as the case may be,
pay any  Eurodollar  Rate breakage  costs as provided in  Section 8.04(c).  Each
prepayment   or   repayment,   as  the  case  may  be,  made  pursuant  to  this
Section 2.06(a) shall be applied in accordance with the Borrower's direction.

          (b)  Mandatory.  With  respect to  (i) any  sale,  lease,  transfer or
               ---------
other  disposition  of any  property  or  asset  of the  Borrower  or any of its
Subsidiaries  (other than any sale, lease,  transfer or other disposition of any
such property or asset as set forth in Sections 5.02(d)(i) and (d)(iii) (each an
"Asset Disposition", and collectively,  "Asset Dispositions")),  (ii) any Equity
Issuance,  (iii) any Debt Issuance,  (iv) any Extraordinary  Receipt, or (v) any
Excess Cash Flow, the Borrower shall, (w) within fifteen (15) days after receipt
by the Borrower or any of its  Subsidiaries  of the Net Cash  Proceeds from such
Asset  Disposition or  Extraordinary  Receipt,  as the case may be, or, (x) with
respect  to  an  Equity  Issuance,  within  two  (2)  Business  Days  after  the
requirement  set forth in clause  (e) of the  definition  of  "Equity  Issuance"
pertaining to the application  thereof to the applicable  Permitted  Acquisition
Purchase  Price  has not been met,  or (y) with  respect  to any Debt  Issuance,
within two (2) Business Days of receipt by the Borrower of the Net Cash Proceeds
therefrom,  in any case prepay or repay, as the case may be (without  premium or
penalty),  the then  outstanding  Advances in an amount equal to (w) one hundred
percent (100%) of such Net Cash Proceeds  resulting from such Asset  Disposition
or  Extraordinary  Receipt,  (x)  seventy  five  percent  (75%) of such Net Cash
Proceeds resulting from such Equity Issuance,  (y) one hundred percent (100%) of
such Net Cash Proceeds  resulting from such Debt Issuance,  and (z) if the ratio
of Consolidated  Senior Debt to Pro Forma EBITDA, as computed in accordance with
Section 5.04(b),  is greater than

                                       56
<PAGE>

or equal to 2.50:1.00,  75%, and if such ratio is less than 2.50:1.00, 50%. Each
prepayment   or   repayment,   as  the  case  may  be,  made  pursuant  to  this
Section 2.06(b)  shall be subject to the provisions of Section 8.04(c) and shall
be applied as set forth in clause (c) below.

          (c)  Application of Prepayments  and  Repayments.  All  prepayments or
repayments, as the case may be, made pursuant to clause (b) of this Section 2.06
shall be applied to the outstanding Advances as follows:

               (i)     first,  to   prepay  Letter  of   Credit  Advances   then
outstanding until all such Letter of Credit Advances are paid in full; and

               (ii)    second,  to   prepay  Revolving   Credit   Advances  then
outstanding  (whereupon  the  Revolving  Credit  Facility  shall be  permanently
reduced to the extent  set forth in  Section 2.05(b)(iii)  in the amount of such
prepayment) until such Revolving Credit Advances are paid in full; and

               (iii)   third,  deposited in the L/C Cash  Collateral  Account to
cash  collateralize  100% of the Available  Amount of the Letters of Credit then
outstanding.

          (d)  Miscellaneous Provisions Relating to Prepayments,  Termination or
               -----------------------------------------------------------------
Reduction of  Commitments  and  Maintenance of L/C Cash Collateral Account.
--------------------------------------------------------------------------

               (i)     To the extent that any application provided for in clause
(c) of this  Section 2.06  allocable to Eurodollar  Rate Advances shall occur on
other than the last day of an applicable  Interest Period, the Borrower shall be
required to pay the amounts provided for in Section 8.04(c) hereof.

               (ii)    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

                                       57
<PAGE>

Bank or the Revolving Credit Lenders, as applicable. Upon the termination of all
of the Commitments and the payment in full of all  Obligations,  the termination
or  expiration  of all  Letters  of  Credit  and  the  payment  in  full  of all
Obligations in respect of all Letters of Credit,  then all amounts  remaining on
deposit in the L/C Cash Collateral Account shall be returned to the Borrower.

               (iii)   The  amount  remaining  (if  any)  after   the   required
prepayment of the Advances then outstanding and the 100% cash  collateralization
of the  aggregate  Available  Amount of Letters of Credit  then  outstanding  in
accordance  with  clause (c) of this  Section 2.06  (the sum of such  prepayment
amounts  and cash  collateralization  amounts  being  referred  to herein as the
"Reduction Amount") may be retained by the Borrower.

               (iv)    The Borrower  shall, within  fifteen (15)  days following
the end of each month in each Fiscal Year, 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 such  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 day.

               (v)     At any time that the aggregate amount of Revolving Credit
Advances  outstanding  exceeds the Revolving Credit  Availability,  the Borrower
shall  immediately  repay Revolving  Credit Advances to the extent  necessary to
reduce the principal  balance of Revolving Credit Advances to an amount equal to
or less than the Revolving Credit Availability.

               (vi)    The  provisions  of  this  Section  2.06   shall  not  be
construed  to permit any Equity  Issuance,  Debt  Issuance or Asset  Disposition
otherwise prohibited under the terms of this Agreement.

                                       58
<PAGE>

     SECTION 2.07.  INTEREST.


          (a)  Scheduled    Interest.   The   Borrower   shall   pay   to    the
               ---------------------
Administrative  Agent,  for the benefit of the  Lenders,  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 (x) the Prime Rate in effect from time to time plus (y) the Applicable Margin
for such  Advance in effect from time to time,  payable in arrears  quarterly on
the last day of each calendar  quarter  during such periods and on the date such
Prime Rate Advance  shall be  Converted or paid in full.  Changes in the rate of
interest  resulting from changes in the Prime Rate shall take place  immediately
without notice or demand of any kind.

               (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 (x) the Eurodollar Rate for
such Interest  Period for such Advance plus (y) the  Applicable  Margin for such
                                       ----
Advance 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.

               (iii)   Swing Line Advances.  During such periods as such Advance
                       -------------------
is a Swing Line  Advance,  a rate per annum equal at all times to the Swing Line
Rate in effect from time to time,  payable in arrears monthly on the last day of
each month and on the date such Swing Line Advance shall be rolled over into the
Revolving Credit Facility as provided in Section 2.02(b) or paid in full.

                                       59
<PAGE>

          (b)  Default  Interest.  (i) With  respect to any principal  amount of
               -----------------
any Advance not paid when due by the Borrower  (whether at the stated  maturity,
by  acceleration  or otherwise),  the Borrower shall pay interest on such unpaid
principal amount, in arrears on the dates referred to in clause (a)(i),  (a)(ii)
or (a)(iii)  above and on demand,  at a rate per annum equal at all times to two
percent  (2%) per annum  above the rate per  annum  required  to be paid on such
Advance  pursuant to clause (a)(i),  (a)(ii) or (a)(iii) above; and with respect
to the amount of any interest,  fee or other amount  payable  hereunder not paid
when due (whether at the stated  maturity,  by  acceleration  or otherwise)  the
Borrower  shall pay interest on such amount to the fullest  extent  permitted by
law from the date such amount  shall be due until such  amount  shall be paid in
full, 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 two percent (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 Fees. The  Borrower  shall pay  to the  Administrative
               ---------------
Agent,  for the account of the Lenders,  commitment fees on the Unused Revolving
Credit Commitment,  from the earlier of: (i) Initial Funding Date 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,  and (ii) 90 days  after the date  hereof,  until the  Revolving  Credit
Termination  Date payable in arrears  quarterly on the last Business Day of each
March,  June,  September,  and  December,  commencing on the first of such dates
after the Initial Funding Date, and on the Revolving Credit  Termination Date at
the  applicable  percent per annum set forth in the Unused

                                       60
<PAGE>

Commitment  Fee Table set forth below,  determined in the same manner as are the
Applicable Margins for the Facilities, by reference to the ratio of Consolidated
Total  Funded  Debt to Pro  Forma  EBITDA  for the  four  full  fiscal  quarters
preceding  such  determination.  For  purposes of this  clause  (a),  Swing Line
Advances shall not constitute utilization of the Revolving Credit Commitments of
the Revolving Credit Lenders.

     Notwithstanding  the  foregoing,  for the  first six (6)  months  after the
Initial  Funding Date, the rate per annum on the average daily Unused  Revolving
Credit Commitment of each Lender shall be equal to 0.500%.

                           UNUSED COMMITMENT FEE TABLE
                           ---------------------------


        Consolidated Total Funded
        Debt to Pro Forma EBITDA                                Percentage
        ------------------------                                ----------

        Equal to or greater than 3.00 to 1.00                     .500%

        Equal to or greater than 3.00 to 1.00
        but less than 3.00 to 1.00                                .500%

        Equal to or greater than 2.00 to 1 .00,
        but less than 3.00 to 1.00                                .500%

        Equal to or greater than 2.50 to 1 .00,
        but less than 3.00 to 1.00                                .500%

        Less than 2.00 to 1.00                                    .375%

                                       61
<PAGE>

          (b)  Letter of Credit Fees.
               ---------------------

               (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 on the first of such dates after the Initial Funding Date, and on the
Revolving  Credit  Termination  Date,  on such  Lender's  Pro Rata  Share of the
average daily aggregate  Available  Amount during such quarter of all Letters of
Credit  outstanding  from  time to time  at the  rate  per  annum  equal  to the
Applicable  Margin  then in  effect  for  Eurodollar  Rate  Advances  under  the
Revolving Credit Facility.

               (ii)    In  addition to  the foregoing fees described in  Section
2.08(b)(i)  above,  the  Borrower  shall pay to the  Issuing  Bank,  for its own
account,  (x) on the Available  Amount of each Letter of Credit, a fronting fee,
for the  period  from the date of  issuance  of such  Letter  of  Credit  to and
including the  termination  thereof,  computed at the rate of one quarter of one
percent (1/4%) per annum,  payable in arrears quarterly on the last Business Day
of each  March,  June,  September and  December of  each year and on the date of
termination  thereof and (y) transfer fees and other  customary 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,  including,  without
limitation,  the fees specified in that certain letter agreement dated April 15,
1999,  between  Borrower  and Fleet (as such  letter  agreement  may be amended,
supplemented or otherwise  modified from time to time, the "Fee Letter") and due
under and pursuant to such Fee Letter.

                                       62
<PAGE>

     SECTION 2.09.  CONVERSION OF ADVANCES.

          (a)  Optional.  The  Borrower  may  on any  Business Day,  upon notice
               --------
given to the  Administrative  Agent not later than 1:00 p.m.  (New York time) on
the  third  Business  Day  prior  to the  date  of the  proposed  Conversion  to
Eurodollar  Rate  Advances  and by 1:00 p.m.  on the  Business  Day prior to the
proposed  Conversion  to Prime Rate  Advances 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,  no Conversion of any Advances shall be less than the
minimum  amount  applicable  under  Section 2.01(a)  or (b) or  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 $500,000,  such Advances shall
automatically  Convert into Prime Rate  Advances on the last day of the Interest
Period relating thereto.

               (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

                                       63
<PAGE>

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 and the  acceleration of the Notes,  interest thereon and other
amounts  payable  by the  Borrower  under  this  Agreement  and the  other  Loan
Documents  pursuant  to  Article VI,  (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.

     SECTION 2.10.  INCREASED COSTS, ETC.

          (a)  If,  after the  date hereof,  due to (i)  the introduction of any
change  in  reserve  requirements   included  in  the  Eurodollar  Rate  Reserve
Percentage,  any change in the  interpretation  of, or any change in, any law or
regulation,  or (ii) the  compliance  with any  guideline  or  request  from any
central bank or other governmental authority (whether or not having the force of
law made after the date hereof),  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 (x) Taxes or Other Taxes (as to which  Section 2.12 shall govern)
and (y) changes in the 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,  upon  demand by 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 a Lender Party claiming additional
                     --------   -------
amounts under this Section 2.10(a)  agrees to use reasonable efforts (consistent
with legal and  regulatory  restrictions)  to  designate a different  Applicable
Lending Office if the

                                       64
<PAGE>

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,  submitted to the
Borrower by such Lender Party, shall be conclusive and binding for all purposes,
absent manifest error.

          (b)  If,  after the  date hereof,  due to (i) the  introduction of any
change in the  interpretation  of, or any change in, any law or  regulation,  or
(ii) the compliance with any guideline or request from any central bank or other
governmental  authority  (whether  or not having the force of law made after the
date hereof),  there shall be any increase in the amount of capital  required or
reasonably  expected to be  maintained  by any Lender  Party or any  corporation
controlling such Lender Party as a result of or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or the
issuance  or  maintenance  of the Letters of Credit,  then,  upon demand by 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 or such  corporation 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. A certificate as to such amounts 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 greater than 50% 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

                                       65
<PAGE>

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, after
the date  hereof,  the  introduction  of any  change  in,  or any  change in the
interpretation of, any law or regulation shall make it unlawful,  or 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) that  portion of each
Eurodollar Rate Advance made by such Lender under each Facility under which such
Lender has a Commitment  will  automatically,  upon such demand,  Convert into a
Prime Rate Advance and (ii) the obligation of such Lender 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 2.13),  not later than 1:00 p.m. (New York time) on the day
when due in lawful money of the United States to the Administrative Agent at the
Administrative Agent's Account in immediately available funds.

                                       66
<PAGE>

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 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 8.07(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, the Facility or other amount 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 Obligation, 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.

                                       67
<PAGE>

          (d)  With the exception of the calculation  of interest  with  respect
to the Fleet Base Rate which shall be calculated by the Administrative  Agent on
the basis of a year of 365 or 366 days for the actual  number of days  occurring
in the period for which such interest is payable all  computations  of interest,
fees and Letter of Credit commissions shall be made by the Administrative  Agent
on the basis of a year of 360 days,  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 any Note 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
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.

                                       68
<PAGE>

     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,  net income taxes
that are imposed by the United States and net income taxes (or  franchise  taxes
imposed  in  lieu  thereof)  that  are  imposed  on  such  Lender  Party  or the
Administrative  Agent by the local, 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,  net income taxes (or  franchise  taxes imposed in lieu thereof) that are
imposed on such Lender Party by the local, 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 Eligible Assignee, 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").

                                       69
<PAGE>

          (c)  The   Borrower  shall  indemnify   each  Lender  Party  and   the
Administrative  Agent for the full amount of Taxes and Other Taxes,  and for the
full amount of taxes 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,  except
with respect to any Lender Party or the  Administrative  Agent,  as the case may
be, for such a liability arising from such Lender Party's or the  Administrative
Agent's,  as the case may be,  willful  misconduct  or  gross  negligence.  This
indemnification  shall be made within thirty (30) days from the date such Lender
Party or the  Administrative  Agent,  as the case may be, makes  written  demand
specifying in reasonable detail the basis therefor.

          (d)  Within  thirty (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 8.02,  the original receipt of payment thereof or a certified copy
of such receipt.  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 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,  (i) 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 became a Lender Party in the case of each other
Lender Party,  and (ii) from time to time  thereafter as requested in writing by
the Borrower or the Administrative Agent (except to the extent such Lender Party
is unable to do so by reason of a change in the Code, any applicable tax treaty,
or any official interpretation of either occurring after

                                       70
<PAGE>

the Lender Party became such under this  Agreement (a "Change in Law"),  provide
each of the Administrative Agent and the Borrower with two (2) original Internal
Revenue  Service Form 1001 or 4224, as  appropriate,  and two (2) original Forms
W-8 or any successor or other form prescribed by the Internal  Revenue  Service,
certifying  that such Lender is exempt  from or  entitled  to a reduced  rate of
United  States  withholding  tax on payments  pursuant to this  Agreement or the
Notes.  If the forms  provided by a Lender  Party at the time such Lender  Party
first  becomes  a party to this  Agreement  indicate  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.  If any form or  document
referred to in this subsection (e) requires the disclosure of information, other
than information  necessary to compute the tax payable and information  required
on the date hereof by Internal  Revenue Service Form 1001 or 4224, that a Lender
Party  reasonably  considers  to be  confidential,  such Lender Party shall give
notice  thereof to the  Borrower  and shall not be  obligated to include in such
form or document such confidential information.

          (f)  For any  period with respect to which a Lender Party described in
Section 2.12(e)  has failed to provide the Borrower  with the  appropriate  form
described in  Section 2.12(e)  (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),  such Lender  Party shall not be  entitled to  indemnification  under
Sections  2.12(a) or (c) with respect to Taxes  imposed by the United  States by
reason of such failure.

                                       71
<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  Applicable  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.

     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)  (i) on  account of  Obligations  due and
payable to such Lender Party hereunder or under the Notes at such time in excess
of its ratable  share  (according  to the  proportion  of (x) the amount of such
Obligations  due  and  payable  to such  Lender  Party  at such  time to (y) 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 or under the Notes
at such time obtained by all the Lender  Parties at such time or (ii) 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 (x) the amount of such Obligations  owing to such Lender Party
at such time to (y) 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 each 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 (x) the purchase
price paid to such Lender Party to (y) the aggregate  purchase price paid to all
Lender  Parties) of such  recovery  together with an amount equal

                                       72
<PAGE>

to such Lender  Party's  ratable share  (according to the  proportion of (x) the
amount of such other Lender Party's  required  repayment to (y) the total amount
of such required  repayments to 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 and issuances
of  Letters  of  Credit  shall be  available,  and the  Borrower  shall use such
proceeds and Letters of Credit solely for the following purposes:

          (a)  to  refinance or prepay all outstanding  Debt of the Borrower and
its Subsidiaries  under the Existing Credit Facility and the outstanding Debt of
the Foreign Subsidiaries as listed on Schedule 2.14(a) attached hereto.
                                      ----------------

          (b)  to  finance  Permitted  Acquisitions,  to pay  fees and  expenses
relating  to the  financing  set  forth in this  Agreement  and the  other  Loan
Documents,  and to provide  for  working  capital  and other  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 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

                                       73
<PAGE>

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 (i)
the name of the Defaulting  Lender and the Defaulted Advance required to be made
by such Defaulting  Lender and (ii) 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

                                       74
<PAGE>

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, 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 the Lender Parties for any Defaulted  Amounts
then owing to such Lender  Parties,  ratably in accordance  with such respective
Defaulted Amounts then owing to such 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 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

                                       75
<PAGE>

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 the Lender Parties for any amount then due and
payable by such Defaulting Lender to such Lender Parties  hereunder,  ratably in
accordance  with such  respective  amounts  then due and  payable to such Lender
Parties; and

               (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

                                       76
<PAGE>

applied by such Lender  Party to the  Obligations  owing to such Lender Party at
such time under this  Agreement  and the other Loan  Documents in such manner as
the Administrative Agent shall reasonably direct.

          (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.  REGULATION U.  Each  Lender Party  shall be responsible  for
its  compliance  hereunder  with  Regulation  U, if and as  applicable,  and the
Administrative  Agent  shall  have no  responsibility  with  respect to any such
compliance by any Lender Party.

                                   ARTICLE III
                              CONDITIONS OF LENDING
                              ---------------------

     SECTION 3.01.  CONDITIONS  PRECEDENT TO  THE  INITIAL  FUNDING  DATE.   The
obligation of each Lender to make its Initial  Extension of Credit hereunder and
the  effectiveness  of this  Agreement  is  subject  to the  condition  that the
Administrative Agent shall have received each of the following, each in form and
substance satisfactory to the Administrative Agent, and in sufficient copies for
each Lender:

          (a)  Credit Agreement.  This Agreement, which shall have been executed
               ----------------
by each party hereto.

          (b)  Resolutions; Incumbency.  With  respect to each  of the  Borrower
               -----------------------
and each of the Subsidiaries:

                                       77
<PAGE>

               (i)     copies  of the  resolutions of the  board of directors of
such Person  authorizing  the  execution,  delivery and  performance of the Loan
Documents  to which  such  Person is a party and the  transactions  contemplated
hereby and thereby, certified by the Secretary or an Assistant Secretary of such
Person; and

               (ii)    a certificate of the Secretary or Assistant  Secretary of
such Person certifying the names,  titles and true signatures of the officers of
such Person authorized to execute, deliver and perform, as applicable,  the Loan
Documents to be delivered by it hereunder.

          (c)  Organization Documents; Good Standing.  With respect  to each  of
               -------------------------------------
the Borrower and each of the Subsidiaries:

               (i)     the articles or certificate of  incorporation, memorandum
and  articles  of  association,  and  bylaws of such  Person as then in  effect,
certified by the Secretary or Assistant Secretary of such Person; and

               (ii)    a  good standing  certificate for  such Person  from  the
Secretary of State (or similar,  applicable Governmental Authority) of its state
of incorporation and each state where such Person is qualified to do business as
a  foreign  corporation  as  of  a  recent  date,  together  with  a  bring-down
certificate by facsimile.

          (d)  Legal Opinions.  Opinions addressed to the  Administrative  Agent
               --------------
and the Lenders, dated as of the Initial Funding Date, of (i) Buchanan Ingersoll
Professional Corporation, counsel to the Borrower; and (ii) Wilde Sapte, special
English  counsel  to  the  Borrower,   in  each  case,  in  form  and  substance
satisfactory to the Administrative Agent.

          (e)  Certificate.  A  certificate signed by a  Responsible Officer  of
               -----------
the Borrower, stating that:

                                       78
<PAGE>

               (i)     the representations  and warranties  contained in Article
IV are true and correct;

               (ii)    no Default or Event of Default exists;

               (iii)   no event of default or any event that would constitute an
event of default but for the requirement  that notice be given at time elapse or
both, exists under the Existing Credit Facility; and

               (iv)    there  has  not occurred  since February 28,  1999,  with
respect to the Borrower and its Subsidiaries, any event or circumstance that has
resulted or could reasonably be expected to result in a Material Adverse Effect.

          (f)  Pro Forma Balance Sheet; Projections; and Financials.
               ----------------------------------------------------

               (i)     A pro forma  consolidated  balance sheet  of the Borrower
and its Subsidiaries (based on the interim financial  statements of the Borrower
as of February 28,  1999, together with a compliance  certificate  executed by a
Responsible Officer,  demonstrating compliance by the Borrower with Section 5.04
as of the Initial  Funding Date,  which pro forma  balance sheet and  compliance
certificate  shall be in form and substance  satisfactory to the  Administrative
Agent; and

               (ii)    Projections for the period commencing in August 31, 1998,
and  concluding  on the  date  five  years  thereafter  in  form  and  substance
acceptable to the Administrative Agent.

          (g)  Solvency  Certificates.  The  Borrower  shall  have  delivered  a
               ----------------------
written  certificate  of a  Responsible  Officer  of the  Borrower,  in form and
substance  satisfactory to the Administrative Agent with respect to the solvency
of the Borrower and each of the Subsidiaries.

                                       79
<PAGE>

          (h)  [Intentionally Omitted]

          (i)  Notes.  The Notes in the form of Exhibit B and Exhibit C, payable
               -----                            ---------     ---------
to the order of the applicable Lender Parties duly executed by the Borrower.

          (j)  Lender  Release  Letters.  A fully executed,  valid  and  binding
               ------------------------
bank release letter, or other customary  evidence of satisfaction  acceptable to
the Administrative  Agent,  delivered by each lender to the Borrower and each of
its Subsidiaries (which must include the lenders under Existing Credit Facility)
being repaid on the Initial Funding Date stating that the total amount due under
any credit and loan documents or agreements  with such lenders,  as the case may
be, howsoever due and owing (whether as principal, interest or premium) shall be
satisfied (and such  agreements  terminated)  upon payment of an amount certain,
together with such lien releases and other customary payoff documentation as the
Administrative Agent shall reasonably require.

          (k)  Collateral Documents.
               --------------------

               (i)     A  security agreement  duly executed  by the Borrower, in
form and substance  satisfactory to the  Administrative  Agent,  granting to the
Administrative  Agent,  for itself  and  ratably  for the  benefit of the Lender
Parties and the Hedge Banks, a first priority security interest (subject only to
Permitted  Liens)  in the  Collateral  described  therein  (together  with  each
security agreement duly executed and delivered by the Domestic Subsidiaries,  in
form and substance  satisfactory to the  Administrative  Agent,  granting to the
Administrative  Agent,  for itself  and  ratably  for the  benefit of the Lender
Parties and the Hedge Banks, a first priority security interest (subject only to
Permitted Liens) in the Collateral  described therein,  in each case as amended,
supplemented  or otherwise  modified  from time to time in  accordance  with its
terms, a "Security Agreement"), together with:

                    (A)  proper,  duly executed  financing  statements under the
Uniform Commercial Code of all jurisdictions  that the Administrative  Agent may
deem  necessary or desirable

                                       80
<PAGE>

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;

                    (B)  completed   requests   for   information   listing  all
effective  financing  statements  filed that name the  Borrower or any  Domestic
Subsidiary as debtor, together with copies of such financing statements; and

                    (C)  evidence  of the insurance required by the terms of the
Security Agreement.

               (ii)    A pledge agreement duly executed by the Borrower, in form
and  substance  satisfactory  to  the  Administrative  Agent,  granting  to  the
Administrative  Agent,  for itself  and  ratably  for the  benefit of the Lender
Parties and the Hedge Banks, a first priority security interest (subject only to
Permitted Liens) in the Collateral  described therein (together with each pledge
agreement  duly executed and delivered by any Domestic  Subsidiary  which is the
parent  company  of  another   Domestic   Subsidiary,   in  form  and  substance
satisfactory to the Administrative  Agent, granting to the Administrative Agent,
for itself and  ratably  for the  benefit  of the Lender  Parties  and the Hedge
Banks, a first priority  security  interest (subject only to Permitted Liens) in
the  Collateral  described  therein,  in each case as amended,  supplemented  or
otherwise  modified  from time to time in accordance  with its terms,  a "Pledge
Agreement"),  together with  certificates  representing  the Pledged  Securities
referred  to in the  Pledge  Agreement,  accompanied  by  undated  stock  powers
executed in blank and irrevocable proxies.

               (iii)   agreements  with respect to  the Collateral  Agreement of
acquisition  agreements with respect to prior acquisitions (each an "Acquisition
Rights Agreement",  and,  collectively  "Acquisition  Rights  Assignments"),  by
sellers of assets and capital  stock to the  Borrower  and its  Subsidiaries  in
favor of the Administrative Agent, for itself and ratably for the benefit of the
Lender  Parties  and the  Hedge  Banks,  in each  case,  in form  and  substance
satisfactory to the Administrative Agent;

                                       81
<PAGE>

               (iv)    intellectual  property security  agreements in  form  and
substance reasonably acceptable to the Administrative Agent;

               (v)     all   consents,   waivers,  acknowledgments   and   other
agreements from third persons, which the Administrative Agent may deem necessary
or desirable in order to permit,  protect and perfect its security  interest for
and liens upon the  Collateral  (for  itself and  ratably for the benefit of the
Lender  Parties and the Hedge Banks) or to effectuate the provisions or purposes
of this Agreement and the other Loan documents,  including,  without  limitation
acknowledgments  by lessors,  mortgagees and warehousemen of the  Administrative
Agent's security  interests in the Collateral,  for itself,  and ratably for the
benefit of Lender  Parties and the Hedge  Banks,  waivers by such persons of any
security  interests,  liens or other claims by such person to the Collateral and
agreements  permitting  the  Administrative  Agent's access to, and the right to
remain on, the  premises  to  exercise  its and their  rights and  remedies  and
otherwise deal with the Collateral.

               (vi)    (A) A guaranty in form and substance  satisfactory to the
Administrative  Agent, duly executed by each Domestic Subsidiary of the Borrower
(as hereafter  amended,  supplemented or otherwise modified from time to time in
accordance with its terms, the "Subsidiary Guaranty"); and

                    (B) A  guaranty in  form and  substance  satisfactory to the
Administrative  Agent, duly executed by each Foreign  Subsidiary of the Borrower
(as hereafter  amended,  supplemented or otherwise modified from time to time in
accordance with its terms, the "Foreign Guaranty").

               (vii)   Evidence  that  all  other  actions  necessary or, in the
reasonable opinion of the Administrative Agent, customary to perfect and protect
the first priority Lien created by the Collateral Documents has been taken.

                                       82
<PAGE>

          (l)  Payment  of  Fees.  Evidence of  payment by the  Borrower of  all
               -----------------
accrued and unpaid  fees,  costs and expenses to the extent then due and payable
on the Initial Funding Date, including any such costs, fees and expenses arising
under or  referenced  in  Sections 2.08  and 8.04,  and the fees and expenses of
counsel for the Administrative Agent.

          (m)  Post-Closing  Letter Agreement.  A letter  agreement with respect
               ------------------------------
to certain items to be delivered  post-closing,  including,  without limitation,
(i) evidence of and collateral  assignment of life insurance  policy in favor of
the  Borrower  with  respect  to the  life  of  William  Dye,  together  with an
associated life insurance  questionnaire,  in form and substance satisfactory to
the  Administrative  Agent;  and (ii) at the  discretion  of the  Administrative
Agent,  with respect to the  premises of the  Borrower  located at 229 West 28th
Street,  New York,  New York,  including,  without  limitation,  (A) a leasehold
mortgage,  (B) a Phase I  environmental  audit,  (C) a valid and effective title
insurance policy;  all in form and substance  satisfactory to the Administrative
Agent.

          (n)  Other  Documents.  Such   other  customary  approvals,  opinions,
               ----------------
documents or materials as in the Administrative Agent may reasonably request.

     SECTION  3.02.   CONDITIONS  PRECEDENT  TO  ALL  CREDIT  EXTENSIONS.    The
obligation of each Lender to make an Advance (including its initial Advance) and
the  obligation of the Issuing Bank to issue a Letter of Credit  (including  the
initial  issuance  thereof)  or renew a Letter  of  Credit  and the right of the
Borrower to request the issuance or renewal of a Letter of Credit, shall each be
subject  to the  further  conditions  precedent  that on the  date of each  such
Borrowing or issuance or renewal:

          (a)  Notice,   Application;   Continuation  of   Representations   and
               -----------------------------------------------------------------
Warranties.  The following statements shall be true and the Administrative Agent
----------
shall have received  (except in the case of the 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 Swing Line Bank  pursuant to  Section 2.02(b))  a
certificate signed by a duly authorized officer of the Borrower,  dated the date
of such  Borrowing or issuance or renewal,  stating that (and each of the giving
of the applicable Notice

                                       83
<PAGE>

of  Borrowing,  Notice of Swing Line  Borrowing  or Notice of  Issuance  and the
acceptance  by the  Borrower of the  proceeds  of a Borrowing  or of a Letter of
Credit or the renewal of a 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 in all material respects on and as of such date (or, if any
such  representation  or warranty is expressly  stated to have been made as of a
specific date, as of such specific 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; and

               (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 or an Event of Default.

          (b)  Permitted   Acquisitions.   With   respect   to   any   Permitted
               ------------------------
Acquisition, the Administrative Agent shall have received a certificate executed
by  the  Borrower's   Responsible  Officer  showing  the  Borrower's  compliance
(including the computations used by the Borrower in determining such compliance)
with the financial covenants set forth in Sections 5.04(a)  through (c) on a pro
forma basis after giving effect to the proposed Permitted Acquisition.

          (c)  Other  Approvals.  The  Administrative Agent shall have  received
               ----------------
such other  approvals,  opinions or documents as any appropriate  Lender through
the Administrative  Agent may reasonably request, and all legal matters incident
to such  Borrowing  or  issuance of such  Letter of Credit  shall be  reasonably
satisfactory to counsel for the Administrative Agent.

     SECTION 3.03.  DETERMINATIONS UNDER SECTIONS 3.01 AND 3.02. For purposes of
determining  compliance with the conditions  specified in Section 3.01 and 3.02,
each Lender Party shall be deemed to have consented to,  approved or accepted or
to be satisfied  with each  document or other

                                       84
<PAGE>

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  written  notice  from such  Lender  Party  prior to the  Initial
Extension  of Credit  specifying  its  objection  thereto  and,  if the  Initial
Extension of Credit  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.  The Borrower represents and
warrants as follows:

          (a)  The Borrower and each of its Subsidiaries  (i) is duly organized,
validly  existing and in good standing under the laws of the jurisdiction of its
organization,  (ii)  is  duly  qualified  and in good  standing  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  could not  reasonably  be  expected  to have a Material
Adverse  Effect and (iii) has all requisite  power and  authority,  corporate or
otherwise (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.

          (b)  Set forth on Schedule 4.01(b) hereto is a complete  and  accurate
                            ----------------
list of all  Subsidiaries  of the Borrower as of the date hereof,  showing as of
the  date  hereof  (as  to  each  such   Subsidiary)  the  jurisdiction  of  its
organization,  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 the
Borrower or such  Subsidiary and the number of shares covered by all outstanding
options,  warrants,  rights of conversion or purchase and

                                       85
<PAGE>

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 the  Borrower  or such  Subsidiary  or one or  more  of  their
respective  Subsidiaries free and clear of all Liens, except those created under
the Collateral Documents.

          (c)  The  execution, delivery  and performance by  each Loan Party  of
this  Agreement and each other Loan Document to which it is or is to be a party,
and the consummation of transactions contemplated hereby and thereby, are within
such Loan Party's governing  powers,  have been duly authorized by all necessary
corporate  action,  and do not (i)  contravene  such Loan  Party's  organization
documents, (ii) violate any law (including,  without limitation,  the Securities
Act of 1933, as amended,  and the Securities  Exchange Act of 1934, as amended),
rule, regulation (including,  without limitation,  Regulation T, U or X), order,
writ, judgment,  injunction, decree, determination or award, (iii) conflict with
or result in the  breach  of,  or  constitute  a  default  under,  any  Material
Contract,  loan agreement,  indenture,  mortgage,  deed of trust, lease or other
material  instrument  binding  on or  affecting  the  Borrower  or  any  of  its
Subsidiaries or any of their respective  properties or (iv) except for the Liens
created pursuant to the Collateral Documents,  result in or require the creation
or imposition  of any Lien upon or with respect to any of the  properties of the
Borrower  or  any of its  Subsidiaries.  Neither  the  Borrower  nor  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  or agreement,  the violation or breach of which could  reasonably be
expected to have a Material Adverse Effect.

          (d)  No authorization or approval or other action by, and no notice to
or  filing  (other  than  pursuant  to  the  Collateral   Documents)  with,  any
governmental  authority or regulatory  body or any other third party is required
for (i) the due execution, delivery,  recordation,  filing or performance by the
Borrower or any of its Subsidiaries of this Agreement or any other Loan Document
to which it is or is to be a party, or for the  consummation of the transactions
contemplated hereby or thereby, (ii) the grant by any Loan Party of the Liens to
be granted by it pursuant to the

                                       86
<PAGE>

Collateral  Documents,  (iii) the perfection or maintenance of the Liens created
by the Collateral  Documents  (including the first priority  nature  thereof) or
(iv) 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 the authorizations,  approvals, actions,
notices and  filings  listed on  Schedule 4.01(d),  all of which shall have been
                                 ----------------
duly obtained,  taken, given or made on or prior to the Initial Funding Date and
are in full force and  effect.  On the  Initial  Funding  Date,  all  applicable
waiting periods in connection with the transactions contemplated hereby, if any,
will  have  expired  without  any  action  having  been  taken by any  competent
authority restraining, preventing or imposing materially adverse conditions upon
the transactions contemplated hereby or the rights of the Loan Parties 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 and each other Loan
Document has been or when delivered  hereunder will have been, duly executed and
delivered by each Loan Party thereto, as applicable.  This Agreement is and each
of the Notes and each other Loan Document has been or when  delivered  hereunder
will be, the legal, valid and binding obligation of each Loan Party thereto,  as
applicable,  enforceable  against such Loan Party in accordance  with its terms,
except as such  enforceability  may be  limited by (i)  bankruptcy,  insolvency,
reorganization,  moratorium or similar laws of general  applicability  affecting
the  enforcement  of  creditors'  rights  and (ii) the  application  of  general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

          (f)  The   Consolidated  balance   sheet  of  the   Borrower  and  its
Subsidiaries as at August 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  February 28,  1999, and the related
Consolidated statement of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the six (6) months then ended,  duly certified
by the chief  executive  officer  of the  Borrower,  copies  of which

                                       87
<PAGE>

have been furnished to the Administrative  Agent, fairly present in all material
respects,  subject,  in the case of said balance sheet as at February 28,  1999,
and said statement of income and cash flows for the three months then ended,  to
normal year-end audit adjustments and the absence of footnotes, the Consolidated
financial  condition of the Borrower and its  Subsidiaries  as at such dates and
the Consolidated  results of the operations of the Borrower and its Subsidiaries
for the period  ended on such date,  all in  accordance  with GAAP  applied on a
consistent basis, and, since  February 28,  1999, there has been no change which
could reasonably be expected to result in a Material Adverse Effect.

          (g)  The Consolidated pro forma balance  sheet of the Borrower and its
Subsidiaries as at  February 28,  1999, and the related  Consolidated  pro forma
statement  of income of the Borrower  and its  Subsidiaries  for the period then
ended, certified by the chief executive officer of the Borrower, copies of which
have been furnished to the Administrative  Agent, fairly present in all material
respects the Consolidated pro forma financial  condition of the Borrower and its
Subsidiaries  as at  such  date  and  the  Consolidated  pro  forma  results  of
operations  of the  Borrower and its  Subsidiaries  for the period ended on such
date, in each case after giving effect to the transactions  contemplated hereby,
all in accordance with GAAP.

          (h)  No information,  exhibit or report  furnished  by Borrower or any
Person on behalf of Borrower to the Administrative  Agent or any Lender Party in
connection  with  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)  As  of  the date  hereof, other  than  as disclosed  on  Schedule
                                                                        --------
4.01(i) (the "Disclosed Litigation"),  there is no action, suit,  investigation,
-------
litigation  or  proceeding  affecting  the  Borrower or any of its  Subsidiaries
including,  without limitation,  any Environmental Action,  pending or, to their
knowledge,  threatened before or by any court, governmental agency or arbitrator
that could reasonably be expected to have a Material  Adverse Effect,  and there
has been no change

                                       88
<PAGE>

in the status, or financial effect on the Borrower or any of its Subsidiaries of
any of the Disclosed  Litigation which could reasonably be expected to result in
a Material Adverse Effect.

          (j)  Neither  the Borrower nor any of its  Subsidiaries  is engaged in
the  business  of  extending  credit for the purpose of  purchasing  or carrying
Margin  Stock.  No part of the  proceeds  received by the Borrower or any of its
Subsidiaries  from the  Advances  and Letter of Credit will be used  directly or
indirectly (i) for any purpose other than as set forth in Section 2.14,  or (ii)
for the purpose of purchasing or carrying,  or for payment in full or in part of
Debt that was incurred for the purpose of carrying, any Margin Stock.

          (k)  As  of the date hereof,  except as set  forth on Schedule 4.01(k)
                                                                ----------------
hereto,  neither  the  Borrower  nor any of its  Subsidiaries  nor any of  their
respective   ERISA   Affiliates   maintains  or  has  maintained  any  Plans  or
Multiemployer  Plans. Set forth on  Schedule 4.01(k)  is a complete and accurate
                                    ----------------
list of all Welfare Plans and all defined contribution plans in respect of which
any Loan Party could have liability.

          (l)  Except as  set forth in the financial  statements  referred to in
this  Section 4.01  and in  Section 5.03,  neither the  Borrower  nor any of its
Subsidiaries has any liability with respect to "expected post retirement benefit
obligations" within the meaning of Statement of Financial  Accounting  Standards
No. 106 which could reasonably be expected to have a Material Adverse Effect.

          (m)  Neither  the  business  nor the  properties  of the  Borrower  or
any of its  Subsidiaries  have been 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 could  reasonably  be  expected  to have a Material
Adverse Effect.

                                       89
<PAGE>

          (n)  The  operations  and  properties  of the Borrower and each of its
Subsidiaries  comply in all respects with all applicable  Environmental Laws and
Environmental  Permits,  except  where  the  failure  to  so  comply  could  not
reasonably be expected to have a Material  Adverse Effect,  and no circumstances
exist that could  reasonably  be expected to form the basis of an  Environmental
Action  against  the  Borrower  or  any  of its  Subsidiaries  or  any of  their
properties that could reasonably be expected to have a Material Adverse Effect.

          (o)  Except as set forth on Schedule 4.01(o), neither the Borrower 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 could  reasonably  be  expected  to have a Material
Adverse Effect.

          (p)  Each of the  Borrower and its Subsidiaries  has filed,  as caused
to be filed or has been  included in all income and other  material  tax returns
(Federal,  state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due,  together with applicable  interest and penalties or is
contesting  such taxes in good faith and by appropriate  proceedings  diligently
conducted  and  reserves  or other  appropriate  provisions  therefor  have been
established in accordance with GAAP.

          (q)  No  "ownership  change"  as  defined  in  Section  382(g) of  the
Internal  Revenue Code, and no event that would result in the application of the
"separate return  limitation year" or "consolidated  return change of ownership"
limitations under the Federal income tax consolidated  return  regulations,  has
occurred with respect to the Borrower or any of its Subsidiaries.

          (r)  Neither   the  Borrower  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 transactions
contemplated  hereby,

                                       90
<PAGE>

will violate any  provision of such Act or any rule,  regulation or order of the
Securities  and Exchange  Commission  thereunder or any takeover,  disclosure or
other  federal,  state or foreign  securities  law or Regulations T, U or X. The
Borrower  is not  subject  to  regulation  under any  federal,  state or foreign
statute or regulation which limits its ability to incur Debt.

          (s)  The Borrower is, individually and together with its Subsidiaries,
Solvent.

          (t)  Set forth on Schedule 4.01(t) is a complete and accurate  list of
                            ----------------
all Surviving Debt of the Borrower and each of its  Subsidiaries  as of the date
hereof the principal amount of which is greater than $500,000, showing as of the
Initial Funding Date, with respect to the Borrower and each of its Subsidiaries,
the principal amount outstanding thereunder,  the name of the relevant creditor,
the  maturity  date  thereof and if any  promissory  note  exists  with  respect
thereto.  There exists no promissory  notes which  evidence  intercompany  loans
between or among the Borrower or any of its Subsidiaries.

          (u)  Except as could not reasonably  be  expected  to have a  Material
Adverse Effect,  each Material  Contract has been duly authorized,  executed and
delivered by all parties thereto, has not been amended or otherwise modified, is
in full force and effect,  and to the best of Borrower's  knowledge,  is binding
upon and  enforceable  against all parties thereto in accordance with its terms,
except as such  enforceability  may be  limited by (i)  bankruptcy,  insolvency,
reorganization,  moratorium or similar laws of general  applicability  affecting
the  enforcement  of  creditors'  rights  and (ii) the  application  of  general
principles of equity (regardless of whether such enforceability is considered in
a proceeding  in equity or at law).  There exists no default  under any Material
Contract by the Borrower or any of its  Subsidiaries  and, to the best knowledge
of the  Borrower,  there exists no default  under any  Material  Contract by any
other party thereto,  in each case which could  reasonably be expected to have a
Material Adverse Effect.

                                       91
<PAGE>

          (v)  Borrower and each of its Subsidiaries  owns or has  rights to use
all  patents,  trademarks,  trade names,  service  marks,  copyrights  and other
intellectual  property  necessary to conduct its  business as now or  heretofore
conducted by it.

          (w)  The  Collateral Documents create  in favor of the  Administrative
Agent,  for itself and  ratably  for the  benefit of the Lender  Parties and the
Hedge Banks,  a valid and  perfected  first  priority  security  interest in the
Collateral (other than Permitted Liens) securing the payment of the 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
expressly permitted under the Loan Documents.

                                   ARTICLE V
                 COVENANTS OF THE BORROWER AND THE SUBSIDIARIES
                 ----------------------------------------------

     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, the Borrower will:

          (a)  Compliance with Law.  Comply, and cause each of its  Subsidiaries
               -------------------
to comply,  in all respects,  with all applicable laws,  rules,  regulations and
orders,  except to the extent  that the  failure to comply  therewith  could not
reasonably be expected to have a Material Adverse Effect.

          (b)  Payment of Taxes,  Etc.  Timely pay and discharge, and cause each
               -----------------------
of its  Subsidiaries  to timely  pay and  discharge,  (i) all  income  and other
material taxes,  assessments and governmental charges or levies imposed upon its
property and (ii) all lawful claims that, if unpaid,  might by law become a Lien
upon its property;  provided,  however,  that the Borrower and its  Subsidiaries
                    --------   -------
shall not be required to pay or discharge  any such tax,  assessment,  charge or
claim  that

                                       92
<PAGE>

is being  contested  in good  faith and by  appropriate  proceedings  diligently
conducted and as to which reserves or other appropriate provisions therefor have
been established in accordance with GAAP.

          (c)  Compliance  with Environmental  Laws.  (i) Comply, and cause each
               ------------------------------------
of its Subsidiaries and all lessees and other Persons operating or occupying its
properties  to  comply,   in  all  material   respects,   with  all   applicable
Environmental  Laws and Environmental  Permits;  (ii) obtain and renew and cause
each  of  its  Subsidiaries  to  obtain  and  renew  all  Environmental  Permits
reasonably  necessary for its operations and properties;  and (iii) 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,  in accordance  with the  requirements  of all  Environmental  Laws;
except in the case of each of clauses (i),  (ii) and (iii) above,  to the extent
that the failure to comply  therewith could not reasonably be expected to have a
Material  Adverse  Effect;   provided,   however,  that  the  Borrower  and  its
                             --------    -------
Subsidiaries  shall not be  required to  undertake  any such  cleanup,  Removal,
Remedial or Response  action to the extent that its obligation to do so is being
contested  in good faith and by proper  proceedings  and  adequate  reserves are
being maintained with respect to such circumstances.

          (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,  in each case where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.

                                       93
<PAGE>

          (f)  Visitation  Rights. At any reasonable time and from time to time,
               ------------------
upon  reasonable  notice,  permit the  Administrative  Agent,  any of the Lender
Parties or any agents or representatives thereof, (i) to examine and make copies
of and  abstracts  from the  records  and  books of  account  of and  visit  the
properties  of the  Borrower  and its  Subsidiaries  and to discuss the affairs,
finances  and accounts of the  Borrower  and any such  Subsidiaries  with any of
their  officers  or  directors,  and (ii) to  conduct  such  commercial  finance
examinations  and/or  Collateral  audits of the  Borrower  and its  Subsidiaries
during each calendar year as the  Administrative  Agent and any Lender Party may
reasonably  request;  provided,  however,  that so long as no Event  of  Default
                      --------   -------
exists, the Administrative  Agent may make only one such examination per year at
the expense of the Borrower, which expense shall be reasonable and customary for
such examinations.

          (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 GAAP.

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

          (i)  Performance of Material Contracts. Perform and observe, and cause
               ---------------------------------
each of its Subsidiaries to perform and observe, all of the terms and provisions
of each Material Contract to be performed or observed by it, maintain, and cause
each of its Subsidiaries to maintain,  each such Material Contract in full force
and effect,  and enforce,  and cause each of its  Subsidiaries to enforce,  each
such Material  Contract in accordance with its terms,  except in each case where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

          (j)  Transactions  with  Affiliates.  Conduct,  and cause  each of its
               ------------------------------
Subsidiaries to conduct,  all  transactions  otherwise  permitted under the Loan
Documents  with any of its  Affiliates

                                       94
<PAGE>

on terms that are fair and  reasonable  and no less favorable to the Borrower or
such  Subsidiary  than it would obtain in a comparable  arms-length  transaction
with a Person not an Affiliate.

          (k)  Interest Rate  Protection.  Within one hundred  eighty (180) days
               -------------------------
after the Initial Funding Date, obtain and thereafter keep in effect one or more
interest rate Bank Hedge  Agreements (the terms and other provisions of all such
Bank  Hedge  Agreements  to be  subject  to the  prior  written  consent  of the
Administrative  Agent)  covering at least thirty  percent  (30%) of the Advances
made in connection with the Initial Funding for an aggregate  period of not less
than two (2) years.

          (l)  Year 2000 Compatibility. Take, and cause each of its Subsidiaries
               -----------------------
to take,  all  action  necessary  to assure  that its  computer  based  systems,
hardware and software used in their  business and operations are able to operate
and effectively receive,  transmit,  process, store, retrieve or retransmit data
including dates on and after January 1, 2000, on or before June 30, 1999, except
where the  failure  to do so could not  reasonably  be  expected  to result in a
Material Adverse Effect, and, at the request of the Administrative  Agent or the
Lenders,  the Loan  Parties  will provide  evidence to the  satisfaction  of the
Lenders of such year 2000 compatibility.

          (m)  Agreement to Grant Additional Security.
               --------------------------------------

               (i)     Subject to subsection 5.01(n) below, promptly, and in any
event within thirty (30) days after the  acquisition  of assets of the type that
would have constituted Collateral at the Initial Funding Date and investments of
the type that would have  constituted  Collateral  on the Initial  Funding  Date
(other than assets with a fair market value of less than  $100,000),  notify the
Administrative  Agent of the  acquisition of such assets or investments  and, to
the  extent  not  already  Collateral  in which the  Administrative  Agent has a
perfected  security interest pursuant to the Collateral  Documents,  such assets
and investments will become  additional  Collateral  hereunder to the extent the
Administrative   Agent  deems  the  pledge  of  such  assets   practicable  (the
"Additional Collateral"),  and the Borrower will, and will cause each applicable
Subsidiary,  to take all necessary action,  including providing appropriate lien
searches and the filing of appropriate financing

                                       95
<PAGE>

statements  under the  provisions of the UCC,  applicable  foreign,  domestic or
local laws,  rules or  regulations  in each of the offices  where such filing is
necessary or appropriate to (A) grant the  Administrative  Agent, for itself and
ratably for the benefit of the Lender  Parties and the Hedge Banks,  a perfected
first  priority  Lien  (other  than  Permitted  Liens)  in such  Collateral  (or
comparable  interest  under  foreign  law in the  case  of  foreign  Collateral)
pursuant to and to the full extent required by the Collateral Documents and this
Agreement  and (B)  otherwise  to the  Administrative  Agent  any and all  other
agreements,  documents  and/or  contracts  which were similarly  executed and/or
delivered to the  Administrative  Agent at or prior to the Initial  Funding Date
with respect to such grant of a security interest.

               (ii)    Subject  to subsection  5.01(n) below,  contemporaneously
with  the  consummation  of a  Permitted  Acquisition  or the  formation  of any
Subsidiary,  or at the request of the  Administrative  Agent,  cause each of the
Borrower's  Subsidiaries  as the  Administrative  Agent shall  request to become
party to, or to execute and deliver a Subsidiary Guaranty or a Foreign Guaranty,
as the case may be, guarantying to the Administrative  Agent, Lender Parties and
the Hedge Banks the prompt  payment,  when and as due, of all Obligations of the
Loan Parties under the Loan Documents, including all obligations under any Hedge
Agreements or other hedging agreements.

               (iii)   Subject  to   subsection  5.01(n)   below,   cause   each
Subsidiary  Guarantor  created or established  (whether by acquisition,  initial
formation or otherwise) after the date hereof, concurrently with its creation or
establishing,  to grant to the Administrative  Agent, for itself and ratably for
the benefit of the Lender  Parties and the Hedge Banks, a first priority Lien on
all property  (tangible and  intangible)  of such  Guarantor  which  constitutes
Collateral under the Security Agreement,  including,  without limitation, all of
the capital  stock of any of its Domestic  Subsidiaries  and 65% of the stock of
any Foreign  Subsidiaries  organized under the laws of the United Kingdom or any
other foreign  country and owned directly by it, upon terms similar to those set
forth  in the  Collateral  Documents  and  otherwise  satisfactory  in form  and
substance to the Administrative  Agent. The Borrower shall cause each Subsidiary
Guarantor,  at its own  expense,  to become a party to (or  execute a  separate)
Security Agreement and any other Collateral Document and to execute,

                                       96
<PAGE>

acknowledge and deliver, or cause the execution, acknowledgment and delivery of,
and thereafter register, file or record in any appropriate  governmental office,
any document or instrument  reasonably deemed by the Administrative  Agent to be
necessary or desirable for the creation and  perfection of the foregoing  Liens.
The  Borrower  will cause each such  Subsidiary  Guarantor  to take all  actions
requested by the Administrative Agent (including, without limitation, the filing
of UCC-1's,  providing lien releases and payoff  letters) in connection with the
granting of such security interests.

               (iv)    Subject  to subsection  5.01(n) below, (i) deliver to the
Administrative  Agent the  original of all  instruments,  documents  and chattel
paper,  and all other Collateral of which the  Administrative  Agent should have
physical  possession  in order to perfect  and  protect  its  security  interest
therein, duly pledged,  endorsed or assigned to the Administrative Agent without
restriction;  (ii)  use  commercially  reasonable  efforts  to  obtain  landlord
waivers,  in form and substance  satisfactory to the Administrative  Agent, with
respect to any Inventory or other  Collateral  located at a location that is not
owned by the Borrower or a Subsidiary; (iii) deliver to the Administrative Agent
warehouse  receipts  covering any portion of the  Inventory or other  Collateral
located in warehouses and for which warehouse receipts are issued;  (iv) when an
Event of Default  exists,  transfer  Inventory  to locations  designated  by the
Administrative  Agent; (v) if any Collateral is at any time in the possession or
control of any  warehousemen,  bailee or the  Borrower's  agents or  processors,
notify  the  Administrative   Agent  thereof  and  notify  such  person  of  the
Administrative  Agent's  security  interest  in such  Collateral  and  obtain  a
landlord  waiver or bailee  letter,  in form and substance  satisfactory  to the
Administrative Agent, from such person and instruct such person to hold all such
Collateral for the Administrative  Agent's account subject to the Administrative
Agent's  instructions;  (vi) if at any time any Inventory or other Collateral is
located  on any Real  Property  of the  Borrower  or its  Subsidiaries  which is
subject to a mortgage or other  Lien,  obtain a  mortgagee  waiver,  in form and
substance  satisfactory  to the  Administrative  Agent,  from the holder of each
mortgage  or  other  Lien on such  real  property;  (vii)  if  requested  by the
Administrative  Agent,  if any Real  Property  exists  with  respect  to which a
Mortgage  has not been  granted  to the  Administrative  Agent,  for  itself and
ratably for the benefit of the Lender  Parties and the Hedge Banks,  execute and

                                       97
<PAGE>

deliver to the  Administrative  Agent a Mortgage  and  associated  environmental
reports and title insurance policy and UCC-1 financing  statements,  all in form
and substance satisfactory to the Administrative Agent; and (viii) take all such
other actions and obtain all such other agreements as the  Administrative  Agent
may  reasonably  deem  necessary  or  desirable  in  respect  of any  Collateral
including,  without  limitation,  UCC,  federal and state tax lien  searches and
releases and payoff letters. This Section 5.01(m)(iv) shall be applicable to all
Collateral  whether  existing  on  the  Initial  Funding  Date  or at  any  time
thereafter,  and it shall be deemed an Event of Default under this  Agreement if
the actions required by this  Section 5.01(m)(iv)  are not taken by the Borrower
and its Subsidiaries,  as applicable, as soon as practicable with respect to any
such Collateral.

               (v)     Subject  to   subsection  5.01(n)  below,  the   security
interests  required  to be granted  pursuant  to this  Section shall  be granted
pursuant  to  the  Collateral  Documents  or,  in  the  Administrative   Agent's
discretion,  such other  security  documentation  (which shall be  substantially
similar to the  Collateral  Documents  already  executed  and  delivered  by the
Borrower  and the  Guarantors  or is  required  to be  executed  pursuant to the
definition of "Permitted  Acquisition") as is satisfactory in form and substance
to the Administrative  Agent (the "Additional  Collateral  Documents") and shall
constitute  valid and  enforceable  perfected  security  interests  prior to the
rights of all third  Persons  subject to no other Liens except  Liens  permitted
under  Section 5.02(a)  and  shall  be  granted  with  respect  to each  type of
Collateral  which this  Agreement  or the other Loan  Documents  contemplate  as
Collateral.  The Additional  Collateral  Documents and other instruments related
thereto shall be duly recorded or filed in such manner and in such places and at
such times as are required by law to  establish,  perfect,  preserve and protect
the Liens, in favor of the Administrative  Agent, for itself and ratably for the
benefit of the Lender  Parties  and the Hedge  Banks,  granted  pursuant  to the
Additional  Collateral  Documents and, all taxes, fees and other charges payable
in connection  therewith  shall be paid in full by the Borrower.  At the time of
the  execution  and delivery of Additional  Collateral  Documents,  the Borrower
shall  cause  to be  delivered  to the  Administrative  Agent  such  agreements,
opinions of counsel,  and other related documents as may be reasonably requested
by the  Administrative  Agent or the Required Lenders to assure  themselves that
this Section 5.01(m) has been complied with.

                                       98
<PAGE>

          (n)  Foreign   Subsidiaries  Security.  If  the  Administrative  Agent
               --------------------------------
reasonably  believes  that  appropriate  changes  have been made to the relevant
sections of the Internal  Revenue Code as in effect on the Initial Funding Date,
the  regulations  and  rules  promulgated  thereunder  and  any  rulings  issued
thereunder,  the Administrative  Agent may request that counsel for the Borrower
reasonably  acceptable  to the  Administrative  Agent  within 30 days after such
request deliver evidence  satisfactory to the Administrative Agent, with respect
to any Foreign Subsidiary of the Borrower, that (i) a pledge of more than 65% of
the total Voting Stock of such Foreign  Subsidiary  or (ii) the entering into by
such Foreign  Subsidiary of a pledge agreement in substantially  the form of the
Pledge  Agreement,  in either  case would  cause the  earnings  of such  Foreign
Subsidiary  to be  treated as a deemed  dividend  to such  Foreign  Subsidiary's
United States parent or would  otherwise  violate a material  applicable  law or
governmental  or regulatory  restriction  or rule  (including  laws,  rules,  or
restrictions  of, or issued by, a  government  or  regulatory  authorities  of a
foreign  jurisdiction)  or would otherwise cause a material adverse monetary tax
consequence  to the  Borrower,  and in the  case of a  failure  to  deliver  the
evidence  described  in clause  (i)  above,  (A) that  portion  of such  Foreign
Subsidiary's  outstanding  capital  stock and  intercompany  notes,  if any, not
theretofore  pledged  pursuant  to a Pledge  Agreement  shall be  pledged to the
Administrative  Agent,  for itself  and  ratably  for the  benefit of the Lender
Parties or the Hedge Banks  pursuant  to the  Security  Agreement  or the Pledge
Agreement  (or another  pledge  agreement  in  substantially  similar  form,  if
needed),  as  applicable,  and in the case of a failure to deliver the  evidence
described in clause (ii) above,  (B) such Foreign  Subsidiary  shall execute and
deliver a pledge  agreement  granting  the  Administrative  Agent for a security
interest  in all of the  capital  stock  of  each  Subsidiary  of  such  Foreign
Subsidiary and intercompany  notes, if any, payable to such Foreign  Subsidiary,
in each case with all documents delivered pursuant to this Section 5.01(n) to be
in form and substance satisfactory to the Administrative Agent.

     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,  the Borrower will not, at any time, without the prior
consent of the Required Lenders:

                                       99
<PAGE>

          (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 assets and properties of any character (including,
without limitation,  the Collateral) whether now owned or hereafter acquired, or
sign or suffer to exist, or permit any of its  Subsidiaries to sign or suffer to
exist, any security  agreement,  or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, excluding,  however, from
                                                       ---------   -------
the operation of the foregoing restrictions the following:

               (i)     Liens created under the Loan Documents;

               (ii)    Permitted Liens;

               (iii)   Liens  existing  on  the  date  hereof  and  described on
Schedule 5.02(a)(iii);
---------------------

               (iv)    purchase  money  Liens  securing  Debt  permitted   under
Section 5.02(b)(iii)(A)  upon 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  equipment  or to secure Debt  incurred  solely for the purpose of
financing the  acquisition of any such equipment to be subject to such Liens, or
Liens existing on any such 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  other  than the  equipment  being  acquired,
constructed or improved; and

               (v)     Liens  arising  in  connection  with  Capitalized  Leases
permitted under Section 5.02(b)(iii)(B); provided that no such Lien shall extend
                                         --------
to or cover any Collateral or any assets or properties  other than the assets or
properties subject to such Capitalized Leases.

                                      100
<PAGE>

          (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 and the other  Loan Parties,
Debt incurred pursuant to the Loan Documents;

               (ii)    unsecured Debt (v) of the Borrower to any of its Domestic
Subsidiaries,  (w) of any Domestic Subsidiary of the Borrower to the Borrower or
any other Domestic Subsidiary of the Borrower,  (x) of any Wholly-Owned  Foreign
Subsidiary  of the Borrower to the Borrower or any  Domestic  Subsidiary  of the
Borrower;  provided,  however,  that the aggregate of all outstanding  unsecured
           --------   -------
Debt of a Wholly-Owned Foreign Subsidiary of the Borrower to the Borrower or any
Domestic  Subsidiary  of the  Borrower  and  Investments  by the Borrower or any
Domestic  Subsidiary of the Borrower in any Person  organized  under the laws of
any jurisdiction other than the United States of America or any state thereof as
permitted pursuant to Section 5.02(e)(i) herein shall not exceed (A) $10,000,000
in any Fiscal Year or (B) in any event, $15,000,000 in the aggregate outstanding
at any time, (y) of any Wholly-Owned  Foreign  Subsidiary of the Borrower to any
other Wholly-Owned  Foreign Subsidiary of the Borrower,  and (z) of the Borrower
or  any  Domestic  Subsidiary  of  the  Borrower  to  any  Wholly-Owned  Foreign
Subsidiary  of  the  Borrower  not  to  exceed   $15,000,000  in  the  aggregate
outstanding at any time;

               (iii)   in the case of the Borrower and any of its Subsidiaries:

                    (A)  Debt secured by Liens permitted by Section 5.02(a)(iv),
in each case incurred only if, immediately after giving effect to the incurrence
thereof, the limit on Capital  Expenditures set forth in Section 5.02(p)  hereof
would not be breached;

                                      101
<PAGE>

                    (B)  Debt incurred with respect to  Capitalized  Leases,  in
each case incurred only if,  immediately  after giving effect to the  incurrence
thereof, the limit on Capital  Expenditures set forth in Section 5.02(p)  hereof
would not be breached;

                    (C)  the Surviving Debt, and any Debt extending the maturity
of, or  refunding  or  refinancing,  in whole or in part,  the  Surviving  Debt;
provided that the principal amount or interest rate with respect thereto of such
--------
Surviving  Debt  shall not be  increased  above  the  principal  amount  thereof
outstanding and interest rate existing on the date hereof;

                    (D)  endorsement  of negotiable  instruments for  deposit or
 collection or similar transactions in the ordinary course of business;

                    (E)  Subordinated  Debt;   provided,  that  a  subordination
                                               --------
agreement  is in  effect  which  is  in  favor  of  and  is  acceptable  to  the
Administrative Agent;

                    (F)  unsecured  Debt  incurred  in  the  ordinary  course of
business in the form of accounts  payable  arising from the purchase of property
or services, including, without limitation, Inventory acquired for resale;

                    (G)  in  the  case of  Borrower or any of its  Subsidiaries,
Debt of Proposed Businesses,  whether secured or unsecured,  assumed by Borrower
or such  Subsidiary,  as the case may be, in respect of  Permitted  Acquisitions
(subject  to  the   limitations  set  forth  in  the  definition  of  "Permitted
Acquisitions" set forth herein);

                    (H)  in  addition  to Debt that is  otherwise  permitted  in
clauses  (F) and (G) above,  unsecured  Debt that is  incurred  in the  ordinary
course  of  business,  not to  exceed in the  aggregate  $1,500,000  at any time
outstanding;

                                      102
<PAGE>

                    (I)  Debt in respect of Bank Hedge Agreements  provided that
such Debt shall not exceed at any one time eighty percent (80%) of the Revolving
Credit Commitments; or

                    (J)  Existing  Debt   of   others   guaranteed  directly  or
indirectly   by   Borrower   or  any  of  its   Subsidiaries   and   listed   on
Schedule 5.02(b)(iii)(J).

          (c)  Fundamental Changes.
               -------------------

                    (i)     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
(A) the Borrower or any of its Subsidiaries may make Permitted Acquisitions, (B)
any Subsidiary of Borrower may merge or consolidate  with and into the  Borrower
(provided,  the  Borrower  is the  surviving  entity)  or one of the  Borrower's
 --------
Wholly-Owned Domestic Subsidiaries  (provided,  that, if a Loan Party is a party
                                     --------
to such  merger or  consolidation,  a Domestic  Wholly-Owned  Subsidiary  is the
surviving  entity)  and (C) any  Foreign  Subsidiary  of  Borrower  may merge or
consolidate with and into one of the Borrower's Foreign Subsidiaries  (provided,
                                                                       --------
that a Wholly-Owned Foreign Subsidiary is the surviving entity).

                    (ii)    Liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution),  convey, sell, assign, lease, transfer or otherwise
dispose  of (or  agree to do any of the  foregoing  at any  future  time) all or
substantially  all of its  property,  business  or assets,  or permit any of its
Subsidiaries  to do any of the foregoing,  except to the extent such  Subsidiary
liquidates, winds-up or dissolves into or is otherwise sold, leased, transferred
or disposed of to the Borrower or any other wholly-owned  Domestic Subsidiary of
the Borrower, or as otherwise permitted under Section 5.02(e).

                                      103
<PAGE>

               (iii)   Acquire  or  permit  any  Subsidiary to  acquire  all  or
substantially all of the assets of any other Person  (including  capital stock),
except that the Borrower or any Subsidiary of Borrower may consummate  Permitted
Acquisitions.

          (d)  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  in  the  ordinary  course  of
business;

                    (ii)    sales,  leases, transfers  or other dispositions  of
obsolete or redundant equipment in the ordinary course of business;

                    (iii)   the  sale or discount  without  recourse of accounts
receivable  arising in the ordinary  course of business in  connection  with the
compromise or collection thereof; and

                    (iv)    in addition  to sales, leases,  transfers  and other
dispositions   permitted   by   subsections   (i),   (ii)  and   (iii)  of  this
Section 5.02(d),  sales, leases,  transfers and other dispositions  resulting in
Net Cash  Proceeds  not to exceed in the  aggregate  $2,500,000,  which Net Cash
Proceeds shall be applied in accordance with Section 2.05(b)(ii).

          (e)  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  or any of its  Subsidiaries
(x) in Domestic Subsidiaries and (y) in Wholly-Owned Foreign Subsidiaries not to
exceed in the aggregate $15,000,000 provided, however, that the aggregate of all
                                    --------  -------
outstanding  unsecured Debt  permitted  pursuant to  Section 5.02(b)(ii)(y)  and
Investments  from the  Initial  Funding  Date by the  Borrower  or any  Domestic
Subsidiary  of the  Borrower  in any  Person  organized  under  the  laws of any
jurisdiction other than the United States of America or any state thereof, shall
not exceed (A)  $10,000,000 in any Fiscal Year or (B) in any event,  $15,000,000
in the aggregate outstanding at any time.

                                      104
<PAGE>

               (ii)    Loans  and  advances  to  directors,  officers and  other
employees  in the  ordinary  course  of the  business  of the  Borrower  and its
Subsidiaries in an aggregate principal amount not to exceed $750,000 at any time
outstanding;

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

               (iv)    Investments  by the Borrower and its Subsidiaries in Bank
Hedge  Agreements;  provided that such  Investments  shall not exceed at any one
time eighty percent (80%) of the Revolving Credit Commitment;

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

               (vi)    Investments  consisting of accounts receivable arising in
the ordinary course of business; and

               (vii)   Investments in the form of Permitted Acquisitions; and

               (viii)  Investments  in  related  businesses  which do not exceed
$2,500,000 in the aggregate at any one time outstanding for the Borrower and its
Subsidiaries on a Consolidated Basis.

          (f)  Dividends Etc.  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  or  make  any
distribution to its stockholders, except:

               (i)     the  Borrower  may declare  and pay  dividends  and  make
distributions payable solely in common stock of the Borrower;

                                      105
<PAGE>

               (ii)    a  Subsidiary  of  the  Borrower  may  declare  and   pay
dividends and make distributions to the Borrower or to another Loan Party; and

               (iii)   for   issuances  of   stock  or  other  equity  interests
expressly permitted by Section 5.02(q).

          (g)  Leases.  Permit Consolidated  Lease Expenses  (other than Capital
               ------
Leases) for any Fiscal Year to exceed $2,500,000.

          (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 or articles of  incorporation  or by-laws,  in a manner
which would have a Material Adverse Effect except for a charter  amendment which
would increase the authorized  common stock of the Borrower to 25,000,000 shares
and authorized Preferred Stock of the Borrower to 10,000,000 shares.

          (j)  Accounting   Changes.  Make  or  permit,  or  permit any  of  its
               --------------------
Subsidiaries  to make or  permit,  any  change  (i) in  accounting  policies  or
reporting  practices,  except as mandated by GAAP or approved by its independent
auditors for purposes of  consistency  or improved  presentation  or (ii) in its
Fiscal Year.

          (k)  Prepayments, Etc. of Debt.  (i) 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 (A) the  prepayment  of the Advances in  accordance  with the terms of this
Agreement,  (B) regularly  scheduled or required  repayments or  redemptions  of
Surviving Debt which could not reasonably be expected to have a Material Adverse
Effect,  or (ii) amend,  modify or change in any manner any term or condition of
any  Surviving  Debt, or (iii) permit any of its  Subsidiaries  to do any of the
foregoing  other  than to repay any Debt  payable to the  Borrower  or any other
Subsidiary.

                                      106
<PAGE>

          (l)  Amendment,  Etc. of Material  Contracts.  Except in  the ordinary
               ---------------------------------------
course of business or to the extent such would not result in a Material  Adverse
Effect,  either cancel or terminate any Material Contract,  consent to or accept
any cancellation or termination thereof,  amend or otherwise modify any Material
Contract,  give any consent,  waiver or approval  thereunder,  waive any default
under or breach of any Material Contract, or take any other action in connection
with any Material Contract.

          (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
properties or assets  (including,  without limitation the Collateral) other than
as permitted in the Loan Documents.

          (n)  Partnerships,  New  Subsidiaries.  Except as otherwise  permitted
               --------------------------------
under this  Agreement,  (i) become a general  partner in any  general or limited
partnership or joint venture with any unaffiliated  third Person,  or permit any
of its  Subsidiaries  to do so, or (ii) create any new  Subsidiary,  unless such
newly created  Subsidiary  shall become a Guarantor (by executing and delivering
to the  Administrative  Agent a Subsidiary  Guaranty or a Foreign  Guaranty,  as
applicable)  and an  additional  grantor  pursuant to the terms of the  Security
Agreement,  and all shares of the capital stock of such Domestic  Subsidiary are
pledged to the  Administrative  Agent in  accordance  with  Section 5.01(m)  and
pursuant to the Pledge Agreement.

          (o)  Speculative   Transactions.  Engage,   or   permit  any  of   its
               --------------------------
Subsidiaries  to  engage,  in any  transaction  involving  commodity  options or
futures contracts or derivatives or any similar speculative transactions, except
for Bank Hedge Agreements.

          (p)  Capital Expenditures.  Make, or permit any of its Subsidiaries to
               --------------------
make, any Capital Expenditure that would cause the aggregate of all such Capital
Expenditures  made by the Borrower and its  Subsidiaries  in any Fiscal Year set
forth below to exceed the aggregate amount set forth opposite such Fiscal Year:

                                      107
<PAGE>

Fiscal Year            Amount/Category of Expenditures         Total Amount
-----------            -------------------------------         ------------

1999                   Financing Leases -   $4,500,000         $7,000,000
                       Other -               2,500,000

2000                   Financing Leases -   $5,000,000         $7,500,000
                       Other -               2,500,000

2001                   Financing Leases -   $5,500,000         $8,000,000
                       Other -               2,500,000

2002 and each fiscal   Financing Leases -   $6,000,000         $8,500,000
year thereafter        Other -               2,500,000


provided,  however,  that  (a) up to  $500,000  of the  amount  permitted  to be
--------   -------
expended in a Fiscal Year from the "Other" category that is not expended in such
Fiscal Year (not  including  any amount  permitted to be carried  forward from a
prior year) shall be permitted  to be expended  in, but only in, the  subsequent
Fiscal Year, and (b) amounts  representing Capital Expenditures paid or incurred
with respect to a Proposed Business in the ordinary course of its business prior
to consummation of a Permitted  Acquisition  shall not be deemed included in the
calculation  of the  aggregate  amount of Capital  Expenditures  for purposes of
determining  the  maximum  annual  Capital  Expenditures  permitted  to be  made
hereunder,  so  long  as  such  amounts  were  incurred  prior  to the  date  of
consummation of a Permitted Acquisition and were not incurred in anticipation of
such  acquisition,  and otherwise  conform with the terms and conditions of this
clause (o).

          (q)  Issuance of Stock. Except as otherwise specifically  permitted in
               -----------------
this  Agreement,  the  Borrower  will  not,  and  will  not  permit  any  of its
Subsidiaries  to,  directly  or  indirectly,  issue,  sell,  assign,  pledge  or
otherwise  encumber or dispose of any shares of capital stock of the Borrower or
any Subsidiary of the Borrower, except:

                    (A)  to   the   Borrower   or   any  of    its  Wholly-Owned
Subsidiaries;

                                      108
<PAGE>

                    (B)  for issuances or sales of capital stock or other equity
interests of the Borrower;

                    (C)  in  connection  with  the  Borrower's  or  any  of  its
Subsidiaries'  stock purchase,  stock option or similar  incentive plans, or any
exercise  pursuant  thereto,  for the  benefit of the  Borrower's  or any of its
Subsidiaries' directors,  management, employees and other eligible participants;
and

                    (D)  for issuances of capital stock of the  Borrower  to any
Person as consideration paid in connection with any Permitted Acquisition.

          (r)  Sale and Leasebacks.  Enter into any arrangement  with any Person
               -------------------
providing for the leasing by the Borrower or any  Subsidiary of real or personal
property  which has been or is to be sold or transferred by the Borrower or such
Subsidiary  to such  Person or to any other  Person for which Funds have been or
are to be  advanced by such  person or the  granting of such  property or rental
obligation of the Borrower or such Subsidiary.

     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 Administrative Agent
for itself and on behalf of the Lender Parties  (references in this Section 5.03
to any  reports or  statements  being  Consolidated  or  consolidating  shall be
applicable at any time the Borrower has any Subsidiaries):

          (a)  Default Notice.  As soon as possible and in any event within  two
               --------------
(2) Business Days after obtaining  knowledge of the occurrence of any Default or
Event of Default or any event,  development or occurrence  reasonably  likely to
have a Material  Adverse Effect,  a statement of the Responsible  Officer of the
Borrower  setting  forth  details of such  Default or Event of Default or event,
development  or  occurrence  and the  action  that the  Borrower  has  taken and
proposes to take with respect thereto.

                                      109
<PAGE>

          (b)  Annual  Financials.  As soon  as  available,  but  in  any  event
               ------------------
within 90 days after the end of each Fiscal Year, a copy of the Consolidated and
consolidating  balance sheets of the Borrower and it  Subsidiaries as at the end
of such year and the related Consolidated and consolidating statements of income
and  retained  earnings and of cash flows for such year,  setting  forth in each
case in comparative form the figures for the previous year,  reported on without
a "going concern" or like qualification or exception,  or qualification  arising
out of the  scope  of the  audit,  by Ernst &  Young,  LLP or other  independent
certified public accountants of nationality recognized standing; and

          (c)  Quarterly  Financials.  As soon as  available,  but in any  event
               ---------------------
not  later  than 45 days  after  the end of each of the  first  three  quarterly
periods of each  Fiscal  Year,  the  unaudited  Consolidated  and  consolidating
balance sheets for the Borrower and its Consolidated  Subsidiaries as at the end
of such  quarter  and  the  related  unaudited  Consolidated  and  consolidating
statements of income and retained earnings and of cash flows of the Borrower and
its  Consolidated  Subsidiaries  for such  quarter and the portion of the Fiscal
Year through the end of such quarter,  setting forth in each case in comparative
form the figures for the previous  year,  certified by a Responsible  Officer as
being fairly stated in all material  respects  (subject to normal year-end audit
adjustments); and

          (d)  Monthly  Reports.  Within  thirty (30) days after the end of each
               ----------------
calendar  month (i) an accounts  receivable  aging schedule for the Borrower and
its Subsidiaries on a Consolidated and  consolidating  basis and (ii) a schedule
of the Borrower's and each Subsidiary's  billings for the immediately  preceding
calendar month (without giving effect to any intercompany adjustments); and such
financial  statements shall be complete and correct in all material respects and
shall be prepared  in  reasonable  detail and in  accordance  with GAAP  applied
consistently  throughout  the periods  reflected  therein and with prior periods
(except as approved  by such  accountants  or  officer,  as the case may be, and
disclosed therein).

          (e)  Certificate of Independent  Certified  Accountants.  Concurrently
               --------------------------------------------------
with the delivery of the financial statements referred to in Section 5.03(b),  a
certificate of the independent  certified public  accountants  reporting on such
financial  statements stating that in making the

                                      110
<PAGE>

examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate;

          (f)  Certificate  of  Responsible   Officer.   Concurrently  with  the
               --------------------------------------
delivery of the financial  statements  referred to in Section 5.03(b) and (c), a
certificate  of a  Responsible  Officer  (i) stating  that,  to the best of such
Officer's  knowledge,  the Borrower during such period has observed or performed
all of its  covenants  and other  agreements,  and  satisfied  every  condition,
contained  in this  Agreement  and the  other  Loan  Documents  to be  observed,
performed or satisfied by it, and that such Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate and (ii)
showing  in  detail  the  calculations,   including  compliance  with  financial
covenants,  supporting such Officer's certification of the Borrower's compliance
with the requirements of Section 5.04(a) through 5.04(c);

          (g)  Annual Forecasts.  Not later  than  thirty  days prior to the end
               ----------------
of each Fiscal Year, a copy of the  projections by the Borrower of the operating
budget  and cash  flow  budget  of the  Borrower  and its  Subsidiaries  for the
succeeding Fiscal Year on a Consolidated  consolidating  basis, such projections
have been prepared on the basis of sound  financial  planning  practice and that
such Officer has no reason to believe they are  incorrect or  misleading  in any
material respect;

          (h)  Insurance.  During the month of August in  each calendar  year, a
               ---------
report of a reputable insurance broker with respect to the insurance  maintained
by the Borrower and its Subsidiaries in accordance with  Section 5.01(d) of this
Agreement  and  Section 5.2  of the Security  Agreement,  and such  supplemental
reports  with  respect  to  insurance   maintained   by  the  Borrower  and  its
Subsidiaries  as the  Administrative  Agent  may  from  time to time  reasonably
request, and

          (i)  ERISA Events and ERISA  Reports.  (i)  Promptly  and in any event
               -------------------------------
within twenty (20) days after the Borrower or any ERISA  Affiliate  knows or has
reason to know that any ERISA  Event has  occurred,  which could  reasonably  be
expected to have a Material  Adverse Effect,  a statement of the chief financial
officer or chief executive  officer of the Borrower  describing such ERISA Event
and the action,  if any, that the Borrower or such ERISA Affiliate has taken and
proposes  to take  with  respect  thereto  and  (ii) on the  date  any  records,
documents or other information

                                      111
<PAGE>

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.

          (j)  Plan  Terminations.  Promptly  and  in any event  within five (5)
               ------------------
Business  Days after  receipt  thereof by the  Borrower 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 or correspondence from the
PBGC indicating it is considering termination of any Plan.

          (k)  Litigation.  Promptly  after  the  commencement  thereof,  notice
               ----------
of all actions, suits,  investigations,  litigation and proceedings before or by
any court or  governmental  department,  commission,  board,  bureau,  agency or
instrumentality,  Federal,  state,  local or foreign,  that reasonably  could be
expected to have a Material  Adverse  Effect and,  promptly after the occurrence
thereof,  notice of any change in either the status of the Disclosed  Litigation
or the financial effect on the Borrower or any of its Subsidiaries in connection
therewith  from that  described on  Schedule 4.01(i)  which could  reasonably be
                                    ----------------
expected to result in a Material Adverse Effect.

          (l)  Securities Reports. Promptly after the sending or filing thereof,
               ------------------
copies  of all proxy  statements,  financial  statements  and  reports  that the
Borrower or any of its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements, that the
Borrower  or any of its  Subsidiaries  files with the  Securities  and  Exchange
Commission or any other governmental  authority or with any national  securities
exchange.

          (m)  Agreement Notices.  Promptly upon receipt  thereof, copies of all
               -----------------
notices,  requests  and other  documents  received by the Borrower or any of its
Subsidiaries  under or pursuant to any Material  Contract or indenture,  loan or
credit agreement or similar agreement or instrument  regarding or related to any
breach or default by any party thereto or any event that could materially impair
the  value  of  the  interests  or the  rights  of  the  Borrower  or any of its
Subsidiaries  or  otherwise  have a  Material  Adverse  Effect and copies of any
amendment,  modification or waiver of any provision of any Material  Contract or
indenture,  loan or credit agreement or similar agreement or indenture and, from
time to time upon request by the  Administrative  Agent,  such  information  and
reports  regarding  the  foregoing as the  Administrative  Agent may  reasonably
request.

                                      112
<PAGE>

          (n)  Environmental  Conditions.  Promptly  after  the   assertion   or
               -------------------------
occurrence  thereof,  notice  of  any  Environmental  Action  against  or of any
noncompliance by the Borrower or any of its Subsidiaries  with any Environmental
Law or Environmental Permit that could reasonably be expected to have a Material
Adverse Effect.

          (o)  Management Letters.  As soon as available and in any event within
               ------------------
five (5)  Business  Days after the receipt  thereof,  copies of any  "management
letter" or similar letter received by the Borrower or its Board of Directors (or
any Committee thereof) from its independent public accountants.

          (p)  Permitted   Acquisition   Documents.  Within   thirty  (30)  days
               -----------------------------------
following the  consummation of each Permitted  Acquisition for which the related
Permitted  Acquisition  Purchase Price is in excess of $1,000,000,  a reasonably
detailed  description of such Permitted  Acquisition and a copy of the Permitted
Acquisition  Documents,  in  each  case  certified  as  true  and  correct  by a
Responsible Officer of the Borrower.

          (q)  Other  Information.   Such  other   information  respecting   the
               ------------------
business,   condition   (financial  or  otherwise),   operations,   performance,
properties  or  prospects  of the  Borrower  or any of its  Subsidiaries  or the
Collateral  as  the  Administrative  Agent  or any  Lender  Party  (through  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, the Borrower will:

          (a)  Consolidated  Total  Funded  Debt  to  Pro  Forma  EBITDA  Ratio.
               ----------------------------------------------------------------
Maintain as of the last day of each fiscal  quarter of the  Borrower  commencing
with the first complete fiscal quarter after the Initial Funding Date a ratio of
(i)  Consolidated  Total  Funded  Debt to (ii)  Pro  Forma  EBITDA  for the most
recently  completed  four  fiscal  quarters  of the  Borrower  of not more  than
4.25:1.00.

                                      113
<PAGE>

          (b)  Consolidated  Senior  Debt to Pro Forma  EBITDA  Ratio.  Maintain
               ------------------------------------------------------
as of the last day of each fiscal  quarter of the Borrower  commencing  with the
first  complete  fiscal  quarter  after the Initial  Funding Date a ratio of (i)
Consolidated  Senior  Debt to (ii)  Pro  Forma  EBITDA  for  the  most  recently
completed  four fiscal  quarters of the  Borrower of not more than the ratio set
forth below:

          FOUR FISCAL-QUARTERS ENDING ON:                     RATIO
          ------------------------------                      -----
          First Quarter                                       3.50:1.00
          Second Quarter                                      3.50:1.00
          Third Quarter                                       3.50:1.00
          Fourth Quarter                                      3.50:1.00
          Fifth Quarter                                       3.50:1.00
          Sixth Quarter                                       3.50:1.00
          Seventh Quarter                                     3.50:1.00
          Eighth Quarter                                      3.50:1.00
          Each Fiscal Quarter Thereafter                      3.45:1.00

          (c)  Fixed Charge Coverage Ratio.  Maintain as of the last day of each
               ---------------------------
fiscal quarter of the Borrower commencing with the first complete fiscal quarter
after the  Initial  Funding  Date a ratio of (i) Pro Forma  EBITDA  for the most
recently  completed four fiscal quarters of the Borrower,  less (x) cash Capital
                                                           ----
Expenditures  made by the Borrower and its Subsidiaries  during such four fiscal
quarters and less (y) the aggregate amount of federal,  state, local and foreign
             ----
income taxes paid by the Borrower and its  Subsidiaries in cash during such four
fiscal  quarters to the (ii) sum of (x) cash  interest  paid by the Borrower and
its Subsidiaries on all Debt during such four fiscal quarters plus (y) scheduled
                                                              ----
principal  amounts of all Debt paid by the Borrower and its Subsidiaries  during
the  preceding  four  fiscal  quarters  commencing  on such  day,  plus (z) cash
                                                                   ----
dividends,  if any,  paid by the  Borrower  to the  holders of its common  stock
during such four fiscal quarters, at not less than 1.45:1.00.

                                      114
<PAGE>

          (d)  Minimum  Net Worth.  Maintain  as of the last day of each  fiscal
               ------------------
quarter of the Borrower an excess of Consolidated total assets over Consolidated
total  liabilities  of the  Borrower and its  Subsidiaries  of not less than (i)
eighty  percent  (80%)  of  the  excess  of   Consolidated   total  assets  over
Consolidated  total  liabilities  of the  Borrower and its  Subsidiaries  at the
Initial Funding Date plus (ii) eighty percent (80%) of Consolidated positive net
                     ----
income (and excluding one hundred percent (100%) of Consolidated  net losses) of
the Borrower and its  Subsidiaries  plus (iii) one hundred percent (100%) of Net
                                    ----
Proceeds of any Equity  Issuance as at the Initial Funding Date and each June 30
and  December 31  thereafter  computed  on a  cumulative  basis for said  entire
period.

                                   ARTICLE VI
                                EVENTS OF DEFAULT
                                -----------------

     SECTION 6.01.  EVENTS OF DEFAULT.  If  any  of  the  following  ("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 five
(5) 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 confirmed; or

          (c)  The  Borrower shall fail to perform or observe any term, covenant
or agreement  contained  in Sections  2.14,  5.01(1),  5.01(m),  5.01(n),  5.02,
5.03(a) or 5.04; or

          (d)  The Borrower or any of its Subsidiaries shall fail to perform any
other term,  covenant or agreement contained in any Loan Document on its part to
be performed or observed if

                                      115
<PAGE>

such failure shall remain  unremedied  for thirty (30) days after written notice
thereof shall have been given to the Borrower by the Administrative Agent or any
Lender Party; or

          (e)  The  Borrower  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
$250,000 either individually or in the aggregate (but excluding Debt outstanding
hereunder)  of the Borrower 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,  beyond the period of grace, if
any);  or any  other  event  shall  occur or  condition  shall  exist  under any
agreement or instrument relating to any such Debt, in each case 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)  The  Borrower or any of its  Subsidiaries  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
the Borrower 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,
administrative  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 sixty (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 the
Borrower or any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this subsection (f); or

                                      116
<PAGE>

          (g)  Any  judgment  or order  for  the  payment of money  in excess of
$250,000  (other  than  such a  judgment  or order  which is  fully  covered  by
insurance for which the appropriate  insurer has acknowledged  responsibility in
writing) shall be rendered  against the Borrower 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 a period  of thirty  (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

          (h)  Any  material  provision  of any  Loan  Document  after  delivery
thereof  shall for any reason  cease to be valid and  binding on or  enforceable
against  any Loan Party  which is party to it, or any such Loan  Party  shall so
state in writing; or

          (i)  William E.  Dye shall cease to maintain  beneficial  ownership of
5% or more of the  outstanding  class of Capital  Stock having  ordinary  voting
power in the election of directors of the Borrower, unless such cessation is the
result of a testamentary disposition upon his death; or

          (j)  (i) Any Person or "group" (within the meaning of Section 13(d) or
14(d) of the Securities  Exchange Act of 1934, as amended) other than William E.
Dye or Richard J.  Sirota (A) shall have acquired beneficial ownership of 20% or
more of any  outstanding  class of Capital Stock having ordinary voting power in
the election of directors of the Borrower or (B) shall obtain the power (whether
or not  exercised) to elect a majority of the  Borrower's  directors or (ii) the
Board of Directors of the Borrower shall not consist of a majority of Continuing
Directors;  "Continuing  Directors"  shall mean the directors of the Borrower on
the  Initial  Funding  Date and each other  director,  if such other  director's
nomination for election to the Board of Directors of the Borrower is recommended
by a majority of the then Continuing  Directors,  provided that  notwithstanding
anything in this Section 6.01(j) to the contrary,  the transfer of Capital Stock
owned by either William E.  Dye or Richard J.  Sirota upon their death shall not
be deemed an Event of Default hereunder.

          (k)  Any ERISA  Event shall  have  occurred with respect to a Plan and
the sum  (determined  as of the date of occurrence of the last such ERISA Event)
of the  Insufficiency  of such

                                      117
<PAGE>

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 Events) exceeds $100,000;
or

          (l)  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  $100,000,  unless  contested  in  good  faith  and  by
appropriate  proceedings  diligently conducted and reserves or other appropriate
provisions  shall have been  established  therefor in  accordance  with GAAP, or
requires payments exceeding $100,000 per annum; or

          (m)  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 $100,000; or

          (n)  there  shall  occur in the  reasonable  judgment of  the Required
Lenders any Material Adverse Effect; or

          (o)  Any Collateral  Document  after  delivery  thereof shall  for any
reason cease to or otherwise  not create a valid and  perfected  first  priority
Lien on and security  interest in the  Collateral  (subject to Permitted  Liens)
purported  to be  covered  thereby  and could  reasonably  result in a  Material
Adverse Effect; or

                                      118
<PAGE>

          (p)       There  shall be an event of default  under any of  the other
Loan  Documents,  not cured within the  applicable  grace period  thereunder (if
any);  then, and in any such event,  the  Administrative  Agent (i) shall at the
request,  or with  the  consent,  of the  Required  Lenders,  by  notice  to the
Borrower,  declare the Commitments of each appropriate Lender 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 with the consent, of the
Required Lenders, (A) 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  other  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 and (B) by notice to each
party  required  under the terms of any  agreement in support of which a Standby
Letter of Credit is issued, request that all Obligations under such agreement be
declared to be due and payable;  provided,  however, that upon the occurrence of
                                 --------   -------
an Event of Default set forth in  Section 6.01(f),  (x) the  obligation  of each
Lender to make Advances and of the Issuing Bank to issue Letters of Credit 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.  In addition,  upon the occurrence and continuance of an
Event of Default,  the Administrative  Agent shall have the right to require the
establishment of a blocked account  arrangement with respect to the Borrower and
its  Subsidiaries and the Borrower hereby agrees to enter into a blocked account
agreement  or   agreements,   in  form  and   substance   satisfactory   to  the
Administrative Agent upon the occurrence and continuance of an Event of Default.

     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

                                      119
<PAGE>

Collateral  Account are  subject to any right or claim of any Person  other than
the Administrative  Agent and the Lender Parties and the Hedge Banks 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.

                                  ARTICLE VII
                THE ADMINISTRATIVE AGENT AND DOCUMENTATION AGENT
                ------------------------------------------------

     SECTION 7.01.  AUTHORIZATION  AND  ACTION.  Each Lender  Party  (which term
shall mean in its capacity as a Lender,  the Issuing  Bank,  the Swing Line Bank
and/or any Hedge Bank for  purposes of this  Article VII)  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
Revolving  Credit  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,  any other Loan Document 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.  The
Administrative Agent shall not be a trustee or fiduciary for any Lender.

     SECTION 7.02.  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

                                      120
<PAGE>

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

                                      121
<PAGE>

     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
Sections  4.01(f) and (g) 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 any of the Loan
Documents or any action taken or omitted by the  Administrative  Agent under any
of 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 written demand for its ratable share of any
costs and expenses (including, without limitation, fees and expenses of counsel)
payable  by  the   Borrower   under   Section 8.04,   to  the  extent  that  the
Administrative  Agent is not promptly  reimbursed for such costs and expenses by
the Borrower.

          (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

                                      122
<PAGE>

may be imposed on, incurred by, or asserted  against the Issuing Bank in any way
relating to or arising out of any of the Loan  Documents  or any action taken or
omitted by the Issuing Bank under any of 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  written  demand for its
ratable share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrower under  Section 8.04,  to the extent
that the Issuing Bank is not promptly  reimbursed for such costs and expenses by
the Borrower.

          (c)  For purposes of Sections 7.05(a) and 7.05(b), the Lender Parties'
respective  ratable  shares  of any  amount  shall be  determined,  at any time,
according  to the sum of (i) the  aggregate  principal  amount  of the  Advances
outstanding at such time and owing to the respective Lender Parties,  (ii) their
respective Pro Rata Shares of the aggregate  Available  Amount of all Letters of
Credit  outstanding at such time,  (iii) the aggregate  unused portions of their
respective Term Loan Commitments at such time, and (iv) 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 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  Defaulting  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 to the extent of the amount of such Defaulted Advance.  The failure
of any Lender Party to reimburse the  Administrative  Agent or the Issuing Bank,
as the case may be,  promptly  upon written  demand for its ratable share of any
amount required to be paid by the Lender Parties to the Administrative  Agent or
the Issuing Bank,  as the case may be, as provided  herein shall not relieve any
other Lender Party of its obligation  hereunder to reimburse the  Administrative
Agent or the Issuing  Bank,  as the case may be, 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 or the Issuing Bank, as the
case may be, for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreements of any Lender Party hereunder,
the

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<PAGE>

agreement and  obligations of each Lender Party  contained in this  Section 7.05
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 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,  which  successor  shall have been  approved  by the
Borrower,  which approval shall not be unreasonably  withheld or delayed.  If no
successor  Administrative  Agent shall have been so  appointed  by the  Required
Lenders, and shall have accepted such appointment, within thirty (30) days after
the  retiring  Administrative  Agent's  giving of notice of  resignation  or the
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 Lender which is 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 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 all of its duties
and  obligations  under this  Agreement and the other 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  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

                                      124
<PAGE>

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.

     SECTION 7.07.  DOCUMENTATION AGENT.  The  Documentation Agent shall have no
rights, obligations or duties under this Agreement other than in its capacity as
a Lender hereunder.

                                  ACTICLE VIII
                                 MISCELLANEOUS
                                 -------------

     SECTION 8.01.  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 Lender Parties (other
than any Lender Party that is, at such time, a Defaulting Lender), do any of the
following at any time: (i) change 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)  release any
material  portion  of the  Collateral  in any  transaction  or series of related
transactions or permit the creation, incurrence,  assumption or existence of any
Lien on any material  portion of the Collateral in any  transaction or series of
related  transactions  to secure  any  liabilities  or  obligations  other  than
Obligations

                                      125
<PAGE>

owing to the Secured Parties under the Loan Documents;  (iii) release any of the
Subsidiary  Guarantors from their Subsidiary  Guaranty or Foreign  Guaranty,  as
applicable, except as permitted under this Agreement, the Subsidiary Guaranty or
the Foreign  Guaranty;  (iv) amend this Section 8.01 or change the definition of
"Required  Lenders";  or (v) limit the  liability of any Loan Party under any of
the Loan  Documents,  except  as  permitted  under  this  Agreement;  and (b) no
amendment, waiver or consent shall, unless in writing and signed by the Required
Lenders and each Lender Party that has a Commitment  under the Revolving  Credit
Facility  if  affected  by such  amendment,  waiver or  consent,  (i) change the
amounts of the  Commitments of such Lender Party or subject such Lender Party to
any  additional  obligations,  (ii) reduce the principal of, or interest on, the
Notes held by such Lender Party or any fees or other amounts  payable  hereunder
to such Lender Party, (iii) postpone any date fixed for any scheduled payment of
principal of, or interest on, the Notes held by such Lender Party or any fees or
other amounts payable hereunder to such Lender Party or (iv) change the order of
application  of any  prepayment  set forth in  Section 2.06  in any manner  that
materially and adversely affects such Lender Party;  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 the Issuing Bank, as the case may be, under this Agreement or
any other Loan Document;  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  or any other  Loan
Document.

     SECTION 8.02.  NOTICES ETC.  All notices and other communications  provided
for  hereunder  shall be in writing  (including  telegraphic,  telecopy or telex
communication)  and  mailed,  telegraphed,  telecopied,  telexed,  delivered  by
overnight courier service or personally served,

               (i)    if to the Borrower:
                      Unidigital Inc.
                      229 West 28th Street
                      New York, New York 10001
                      Attention: Mr.  William E.  Dye, Chief Executive Officer
                      Telephone No.: (212) 244-7820

                                      126
<PAGE>

                      Facsimile No.: (212) 244-7815

                      with a copy to:

                      Buchanan Ingersoll Professional Corporation
                      College Centre
                      500 College Road East
                      Princeton, New Jersey 08540
                      Attention: David J.  Sorin, Esq.
                      Telephone No.: (609) 987-6800
                      Facsimile No.: (609) 520-0360

               (ii)   if to the Administrative Agent:

                      Fleet Bank, N.A.
                      1185 Avenue of the Americas
                      New York, New York 10036
                      Attention: Alfred R.  Bonfantini, Senior Vice President
                      Telephone No.: (212) 819-5762
                      Facsimile No.: (212) 819-4120
                      Attention: Beth Goodman, Vice President
                      Telephone No.: (212) 819-5769
                      Facsimile No.: (212) 819-4120
                      Attention:  Greg Mathis
                                  Kathleen Buckley
                      Telephone No.: (212) 819-6005
                      Facsimile No.: (212) 819-6213


                      with a copy to:

                      Morrison Cohen Singer & Weinstein, LLP
                      750 Lexington Avenue
                      New York, New York 10022
                      Attention:  David A.  Scherl, Esq.  or
                                  Joel A.  Feldman, Esq.
                      Telephone No.: (212) 735-8600
                      Facsimile No.: (212) 735-8708

               (iii)  if  to any  Initial Lender or the Initial Issuing Bank, at
its Domestic Lending Office specified  opposite its name on Schedule I  attached
                                                            ----------
hereto;

                                      127
<PAGE>

               (iv) 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;

or, as to the Borrower or the  Administrative  Agent,  at such other  address as
shall be designated by such party in a written  notice to the other parties and,
as to each other party,  at such other  address as shall be  designated  by such
party in a written notice to the Borrower and the Administrative Agent. All such
notices and  communications  shall,  (w) when mailed by certified  mail,  return
receipt  requested,  be  effective  three  (3)  days  after  mailing,  (x)  when
telegraphed,  telecopied or telexed, be effective upon delivery to the telegraph
company,   upon  transmission  by  telecopier  or  upon  confirmation  by  telex
answerback,  (y) when  delivered in person,  be effective when delivered and (z)
when  delivered by overnight  courier,  be effective two (2) Business Days after
delivery  to  the  courier   properly   addressed,   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 this Agreement,  the Notes or any other
Loan Document or of any  Exhibit hereto or thereto or of any amendment or waiver
of any  provision  hereof or thereof  shall be as  effective  as  delivery  of a
manually executed counterpart thereof.

     SECTION 8.03.  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 or under any other Loan Document 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 or in equity.

                                      128
<PAGE>

     SECTION 8.04.  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  (including  printing,  distribution  and  bank  meetings),
transportation,  computer, duplication, appraisal, audit, insurance, consultant,
search,  filing,  registration  and  recording  fees and  expenses,  and (B) the
reasonable  fees and  expenses  of  counsel  for the  Administrative  Agent with
respect thereto,  including 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 proceeding  involving
creditors' rights generally and any proceeding  ancillary  thereto) and (ii) all
reasonable 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  or any  bankruptcy,  insolvency or other similar  proceeding
affecting   creditors'  rights  generally  or  otherwise   (including,   without
limitation,  the 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, each Lender Party and each of their respective Affiliates
and their respective officers,

                                      129
<PAGE>

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, or in connection with
the  preparation for a defense of, any  investigation,  litigation or proceeding
arising out of,  related to or in  connection  with (i) any of the  transactions
contemplated by the Loan Documents, (ii) any acquisition or proposed acquisition
or similar business combination or proposed business combination by the Borrower
or any of its  Subsidiaries  or other  Affiliates  of all or any  portion of the
shares of capital stock or all or  substantially  all of the property and assets
of any other  Person,  (iii) the  Facilities,  the actual or proposed use of the
proceeds of the  Advances or the Letters of Credit by the Borrower or any of its
Subsidiaries or other Affiliates and any of the other transactions  contemplated
by the  Loan  Documents,  (iv) the  actual  or  alleged  presence  of  Hazardous
Materials  on any  property of the  Borrower or any of its  Subsidiaries  or any
Environmental  Action  relating  in  any  way  to  the  Borrower  or  any of its
Subsidiaries  or (v) any broker's or finder's fees or commissions or any similar
fees or commissions  which are or will be owed or payable by the Borrower or any
of its  Subsidiaries  in connection  with the incurrence and  maintenance of the
Obligations,  any other  transactions  contemplated by the Loan Documents or any
services rendered in connection with such  transactions,  in the case of each of
clauses (i) through (v) above whether or not such  investigation,  litigation or
proceeding  is  brought by the  Borrower  or any of its  Subsidiaries,  or their
directors,  officers,  managers,  employees,  stockholders,  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,  except to
the extent such claim,  damage,  loss, liability or expense is found in a final,
non-appealable  judgment by a court of competent  jurisdiction  to have resulted
from such

                                      130
<PAGE>

Indemnified  Party's gross negligence or willful  misconduct.  The Borrower also
agrees not to assert any claim  against  the  Administrative  Agent,  any Lender
Party  or any of  their  respective  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, other than claims for direct, as opposed
to  consequential,   damages  which  shall  have  been  determined  in  a  final
nonappealable  judgment by a court of competent  jurisdiction  to have  resulted
from such Person's gross negligence or willful misconduct.

          (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) or a
prepayment  pursuant to Section 2.06,  acceleration of the maturity of the Notes
pursuant to  Section 6.01  or for any other  reason,  the Borrower  shall,  upon
demand by 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 any
amounts  required to  compensate  such Lender Party for any  additional  losses,
costs or  expenses  that it may  reasonably  incur as a result of such  payment,
including,  without limitation,  any loss, cost or expense incurred by reason of
the  liquidation  or  reemployment  of deposits  or other funds  required by any
Lender Party to fund or maintain such Advance.

          (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

                                      131
<PAGE>

expenses of counsel and  indemnities,  such amount may be paid on behalf of such
Loan Party by the Administrative Agent, 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 8.04  shall survive the payment in full of  principal,  interest and all
other amounts payable hereunder and under any of the other Loan Documents.

     SECTION 8.05.  RIGHT  OF   SET-OFF.   Borrower   hereby   grants   to   the
Administrative  Agent for  itself  and  ratably  for the  benefit  of the Lender
Parties and the Hedge Banks,  a lien,  security  interest and right of setoff as
security for all liabilities and obligations to the  Administrative  Agent,  the
Lender Parties and the Hedge Banks,  whether now existing or hereafter  arising,
upon  and  against  all  deposits,  credits,  collateral  and  property,  now or
hereafter  in  the   possession,   custody,   safekeeping   or  control  of  the
Administrative Agent, the Lender Parties and the Hedge Banks or any entity under
the control of Fleet Financial Group, Inc., or in transit to any of them. At any
time, without demand or notice, the Administrative Agent, the Lender Parties and
the Hedge  Banks may set off the same or any part  thereof and apply the same to
any liability or obligation of Borrower due to the appropriate party even though
unmatured  and  regardless  of the  adequacy  of  any  collateral  securing  the
Obligation  of the  Borrower.  ANY AND ALL RIGHTS TO REQUIRE THE  ADMINISTRATIVE
AGENT,  THE LENDER  PARTIES  AND THE HEDGE BANKS TO  EXERCISE  THEIR  RESPECTIVE
RIGHTS OR REMEDIES WITH RESPECT TO ANY COLLATERAL  WHICH SECURES THE OBLIGATIONS
OF THE BORROWER OR ANY OTHER LOAN PARTY, PRIOR TO EXERCISING ITS RIGHT OF

                                      132
<PAGE>

SETOFF WITH RESPECT TO SUCH DEPOSITS,  CREDITS OR OTHER PROPERTY OF THE BORROWER
ARE HEREBY KNOWINGLY,  VOLUNTARILY AND IRREVOCABLY  WAIVED.  Section 1.6 Binding
                                                             -------------------
Effect.
------

     SECTION 8.06.  BINDING EFFECT. This  Agreement shall become effective  when
it shall have been  executed by the  Borrower and the  Administrative  Agent and
when the  Administrative  Agent shall have been notified by each Initial  Lender
and the  Initial  Issuing  Bank that each 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, each Lender Party, each
Hedge Bank and their respective successors and assigns, except that the Borrower
shall not have the right to assign any of its rights  hereunder  or any interest
herein without the prior written consent of the Lender Parties.

     SECTION 8.07.  ASSIGNMENTS AND PARTICIPATIONS.

          (a)  Each Lender  Party may  assign to one or more  Eligible Assignees
all or a 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  hereunder  and  thereunder  (including,   without
limitation,  under and in  respect of the  Facilities)  on a pro rata basis with
respect  thereto,  (ii) except in the case of an  assignment  to a Person  that,
immediately prior to such assignment,  was a Lender or an assignment of all of a
Lender Party's and Hedge Bank's rights and obligations  under this Agreement and
the other Loan  Documents,  as  applicable,  the amount of the

                                      133
<PAGE>

Commitment of the assigning  Lender Party 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) no
such  assignments   shall  be  permitted   without  the  prior  consent  of  the
Administrative Agent (which may be withheld for any reason) until the earlier to
occur of (x) the date on which the Administrative  Agent shall have notified the
Lender Parties that syndication of the Commitments  hereunder has been completed
or (y) the 120th day following the Initial Funding Date, (iv) no such assignment
shall be permitted if,  immediately  after giving effect  thereto,  the Borrower
would be required to make payments to or on behalf of the assignee  Lender Party
pursuant to Section 2.10(a) or (b) or Section 2.12 and the assignor Lender Party
was  not,  at the time of such  assignment,  entitled  to  receive  any  payment
pursuant to Section 2.10(a) or (b) or Section 2.12,  and (v) 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 $3,000.  Swing Line Notes shall not be subject to assignment
and all amounts  owing  thereunder  shall be deemed  owing under the  applicable
Revolving Credit Note at the time of an assignment pursuant to Section 8.07.

          (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 under the other Loan Documents,
as  applicable,  and, to the extent that rights and  obligations  hereunder  and
under the other Loan Documents, as applicable, 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  under  the  other  Loan
Documents, as applicable, and (y) the Lender or Issuing Bank assignor thereunder
shall, to the extent that rights

                                      134
<PAGE>

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 under the other Loan  Documents,  as applicable  (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
and under the other Loan Documents,  as applicable,  such Lender or Issuing Bank
shall  cease to be a party  hereto  and  under  the  other  Loan  Documents,  as
applicable),  except as to Sections 2.10,  2.12 and 8.04 for the period prior to
the effective date of such assignments.

          (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
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 Sections 4.01(f) and (g) and such other documents and information
as it

                                      135
<PAGE>

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;  (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 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;
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 shall  maintain at its address referred
to in  Section 8.02 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 may 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.

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<PAGE>

          (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 and the  appropriate  processing and recordation fee and any
other  agreement,   documents  and  instruments   reasonably  requested  by  the
Administrative  Agent,  the  Administrative  Agent shall, if such Assignment and
Acceptance  has been  completed  and is in  substantially  the form of Exhibit A
                                                                       ---------
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 (5) 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 B.
   ---------

          (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  and its other rights and  obligations  hereunder and under the other
Loan Documents,  as applicable,  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,  with a
processing and recordation

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<PAGE>

fee of $3,000 and any other  agreement,  documents  and  instruments  reasonably
requested by the Administrative Agent.

          (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 and the other Loan Documents,
as  applicable  (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  and the other Loan  Documents  (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 (x) to any payments under  Sections 2.10 or 2.12 (other than to the extent
the Lender Party is entitled  thereto) and (y) to approve any amendment,  waiver
or other  modification  of any  provision  of this  Agreement  or any other Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver, modification 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, or 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, or release all or substantially all of the Collateral.

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<PAGE>

          (h)  Any  Lender Party  may, in  connection  with  any  assignment  or
participation  or  proposed   assignment  or  participation   pursuant  to  this
Section 8.07,  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)  Each  of the  Administrative  Agent,  for itself  and ratably for
the benefit of the Lender Parties and the Hedge Banks, the Administrative  Agent
for itself or any Lender  Party or Hedge Bank may at any time  pledge all or any
portion of its rights under the Loan Documents including any portion of any note
to any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C.  Section 341 (or any successor  provision related
thereto). No such pledge or enforcement thereof shall release the Administrative
Agent or any of the Lender Parties, or any Hedge Bank from its obligations under
any of the Loan Documents.

     SECTION 8.08.  EXECUTION IN COUNTERPARTS; SEVERABILITY.  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 as effective as delivery of a manually executed
counterpart  of  this  Agreement.  The  illegality  or  unenforceability  of any
provision of this  Agreement or any instrument or agreement  required  hereunder
shall not in any way  affect or

                                      139
<PAGE>

impair the  legality  or  enforceability  of the  remaining  provisions  of this
Agreement or any instrument or agreement required hereunder.

     SECTION 8.09.  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,  directors,  employees or agents, any Lender Party
or Hedge Bank 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; or (c)
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
that  the  Borrower  proves  were  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 8.10.  CONFIDENTIALITY.  Neither  the Administrative  Agent nor any
Lender Party shall disclose any  Confidential  Information to any Person without
the consent of the  Borrower,

                                      140
<PAGE>

other than (a) to the  Administrative  Agent's or such Lender Party's Affiliates
and their officers,  directors,  employees, 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,  (c)
as required by the National Association of Insurance  Commissioners,  and (d) as
requested  or required by any state,  federal or foreign  authority  or examiner
regulating banks or banking or insurance companies.

     SECTION 8.11.  JURISDICTION, ETC.

          (a)  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY,  TO THE NON-EXCLUSIVE  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

                                      141
<PAGE>

THIS  AGREEMENT  SHALL AFFECT ANY RIGHT THAT ANY LENDER 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 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 8.12.  GOVERNING LAW.  THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS  SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,  THE LAWS OF
THE STATE OF NEW YORK.

     SECTION 8.13.  WAIVER OF JURY TRIAL.  EACH  OF THE  PARTIES HERETO MUTUALLY
HEREBY KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY  WAIVE THE RIGHT TO A TRIAL BY
JURY  IN  RESPECT  OF ANY  CLAIM  BASED  HEREON,  ARISING  OUT OF,  UNDER  OR IN
CONNECTION  WITH THIS AGREEMENT OR ANY

                                      142
<PAGE>

OTHER LOAN DOCUMENTS  CONTEMPLATED TO BE EXECUTED IN CONNECTION  HEREWITH OR ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY.  THIS WAIVER  CONSTITUTES  A MATERIAL  INDUCEMENT  FOR THE
ADMINISTRATION  AGENT AND THE LENDER  PARTIES TO ACCEPT THIS  AGREEMENT AND MAKE
ADVANCES.

     SECTION 8.14.  REPLACEMENT OF ITEMS.  Upon  receipt of  an affidavit of  an
officer of the Administrative Agent or any of the Lender Parties as to the loss,
theft,  destruction  or mutilation of any of the Notes or any security  document
which  is not of  public  record,  and,  in the case of any  such  loss,  theft,
destruction  or  mutilation,  upon  cancellation  of any such  Note or  security
document,  Borrower will issue and/or will cause any other applicable Loan Party
to issue, in lieu thereof,  a replacement note or security  document in the same
principal amount thereof and otherwise of like tenor.

     SECTION 8.15.  CERTAIN PAYMENTS.  All  Loan Documents are hereby  expressly
limited  so that in no  contingency  or event  whatsoever,  whether by reason of
acceleration  of maturity of the  indebtedness  evidenced  hereby or  otherwise,
shall  the  amount  paid or agreed  to be paid to the  Administrative  Agent for
itself,  and the Agent for itself  ratably for the benefit of the Lender Parties
and the Hedge Banks or any of the Lender  Parties or the Hedge Banks for the use
or the forbearance of the indebtedness  evidenced hereby or otherwise exceed the
maximum  permissible under applicable law. As used herein,  the term "applicable
law" shall mean the law in effect as of the date hereof provided,  however, that
in the event there is a change in the law which results in a higher  permissible
rate of interest,  then the  applicable  Loan Document shall be governed by such
new law as of its effective date. In this regard, it is expressly agreed that it
is the intent of

                                      143
<PAGE>

the parties hereof in the  execution,  delivery and acceptance of this Agreement
to  contract  in strict  compliance  with the laws of the State of New York from
time  to  time  in  effect.  If,  under  or for  any  circumstances  whatsoever,
fulfillment of any provision  hereof or of any of the Loan Documents at the time
of performance of such provision  shall be due, shall involve  transcending  the
limit of such validity  prescribed by applicable  law, then the obligation to be
fulfilled shall automatically be reduced to the limits of such validity,  and if
under or from circumstances  whatsoever the  Administrative  Agent or any of the
Lender  Parties or any of the Hedge  Banks  should  ever  receive as interest an
amount  which would exceed the highest  lawful rate,  such amount which would be
excessive  interest  shall be applied to the reduction of the principal  balance
evidenced  hereby  and not to the  payment of  interest.  This  provision  shall
control every other provision of all Loan Documents.

                            [Signature Pages Follow]

                                      144
<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.

                                    UNIDIGITAL INC.

                                    By: /s/ William E. Dye
                                       ---------------------------------
                                    Name:  William E. Dye
                                    Title:  Chief Executive Officer



                                    FLEET BANK, N.A. as Administrative Agent,
                                        Initial Issuing Bank and Swing Line Bank

                                    By: /s/ Beth Goodman
                                       -----------------------------------------
                                    Name:   Beth Goodman
                                    Title:  Vice President



                                    BANK AUSTRIA CREDITANSTALT
                                    CORPORATE FINANCE, INC. as
                                    Documentation Agent

                                    By: /s/ David E. Yewer
                                       -----------------------------------------
                                    Name:   David E. Yewer
                                    Title:  Vice President


                                    By: /s/ Clifford L. Wells
                                       -----------------------------------------
                                    Name:   Clifford L. Wells
                                    Title:  Vice President





                   [Signature page 1 of 2 to Credit Agreement]


                                      145
<PAGE>

                            INITIAL LENDERS


                                    FLEET BANK, N.A., as a Lender

                                    By: /s/ Beth Goodman
                                       -----------------------------------------
                                    Name:   Beth Goodman
                                    Title:  Vice President

                                    BANK AUSTRIA CREDITANSTALT CORPORATE
                                    FINANCE, INC.

                                    By: /s/ David E. Yewer
                                       -----------------------------------------
                                    Name:   David E. Yewer
                                    Title:  Vice President


                                    By: /s/ Clifford L. Wells
                                       -----------------------------------------
                                    Name:   Clifford L. Wells
                                    Title:  Vice President



                                    MERRILL LYNCH BUSINESS FINANCE
                                    SERVICES, INC.

                                    By: /s/ T.G. Kopezynski
                                       -----------------------------------------
                                    Name:   T.G. Kopezynski
                                    Title:  Vice President



                  [Signature Page 2 of 2 to Credit Agreement]