Exhibit 10.8 
 
CREDIT AGREEMENT 
 
 
 
	This Agreement, dated as of December 6, 1996, is among PETCO  
ANIMAL SUPPLIES, INC., a Delaware corporation (the "Borrower"),  
the Lenders and UNION BANK OF CALIFORNIA, N.A. ("UBOC"), as  
Agent.  The parties hereto agree as follows: 
 
RECITALS 
 
	WHEREAS, UBOC (as successor by merger to Union Bank) and the  
Borrower are parties to that Loan Agreement dated as of May 10,  
1995 (the "Prior Loan Agreement"); and 
 
	WHEREAS, the Lenders have agreed, on the terms and  
conditions herein set forth, to extend credit to the Borrower for  
the purposes of repaying all amounts under the Prior Loan  
Agreement and making permitted acquisitions and capital  
expenditures and for general working capital purposes;  
 
	NOW, THEREFORE, in consideration of the premises and the  
mutual covenants herein contained, the parties hereto hereby  
agree as follows: 
 
ARTICLE 1 
 
DEFINITIONS 
 
	As used in this Agreement: 
 
	"Acquisition" means any transaction, or any series of  
related transactions, consummated on or after the date of this  
Agreement, by which the Borrower or any of its Subsidiaries (i)  
acquires any going business in the pet food and supply business  
or related fields or all or substantially all of the assets of  
any firm, corporation or division thereof in the pet food and  
supply business or related fields, whether through purchase of  
assets, merger or otherwise or (ii) directly or indirectly  
acquires (in one transaction or as the most recent transaction in  
a series of transactions) at least a majority (in number of  
votes) of the securities of a corporation in the pet food and  
supply business or related fields which have ordinary voting  
power for the election of directors (other than securities having  
such power only by reason of the happening of a contingency) or a  
majority (by percentage or voting power) of the outstanding  
partnership interests of a partnership in the pet food and supply  
business or related fields. 
 
	"Acquisition Documents" means the purchase agreement,  
together with all schedules and exhibits referenced therein and  
the legal opinions delivered in connection therewith in  
connection with any Acquisition. 
 
	"Advance" means a borrowing hereunder consisting of the  
aggregate amount of the several Loans made by the Lenders to the  
Borrower of the same Type and, in the case of a LIBOR Loan, for  
the same Interest Period. 
 
	"Affiliate" of any Person means any other Person directly or  
indirectly controlling, controlled by or under common control  
with such Person.  A Person shall be deemed to control another  
Person if the controlling Person possesses, directly or  
indirectly, the power to direct or cause the direction of the  
management or policies of the controlled Person, whether through  
ownership of stock, by contract or otherwise. 
 
	"Agent" means Union Bank of California, N.A. in its capacity  
as administrative agent for the Lenders pursuant to Article 10,  
and not in its individual capacity as a Lender, and any successor  
Agent appointed pursuant to Article 10. 
 
	"Aggregate Available Commitment" means the aggregate of the  
Available Commitments of all the Lenders. 
 
	"Aggregate Commitment" means the aggregate of the  
Commitments of all the Lenders. 
 
	"Agreement" means this Credit Agreement, as it may be  
amended or modified and in effect from time to time. 
 
	"Agreement Accounting Principles" means generally accepted  
accounting principles as in effect from time to time, applied in  
a manner consistent with that used in preparing the financial  
statements referred to in Section 5.6 (except for changes  
concurred on by the Borrower's independent public accountants and  
the Required Lenders). 
 
	"Applicable Lending Office" means for any Lender, its  
offices for LIBOR Loans and Base Rate Loans, specified in  
Schedule 1 or in the Assignment and Acceptance pursuant to which  
it became a party hereto, as the case may be, any of which  
offices may, upon 10 days' prior written notice to the Agent and  
the Borrower, be changed by such Lender. 
 
	"Applicable Margin": for each LIBOR Loan and for each Base  
Rate Loan as set forth below: 
 
                                        LIBOR          Base  
          Leverage Ratio Level          Margin     Rate Margin  
 
               1                         .375%           0% 
               2                         .50%            0% 
               3                         .625%           0% 
               4                         .75%            0% 
               5                        1.00%            0% 
 
	"Article" means an article of this Agreement unless another  
document is specifically referenced. 
 
	"Assignment and Acceptance" means an Assignment and  
Acceptance in the form of Exhibit C hereto. 
 
	"Authorized Officer" means any of the chief executive  
officer, chief financial officer or any senior vice president  
(specifically authorized by the Borrower) of the Borrower, acting  
singly. 
 
	"Available Commitment" means, with respect to each Lender,  
the amount by which (i) the Commitment of each Lender on such  
date exceeds (ii) the sum of (a) the aggregate principal sum of  
such Lender's Loans outstanding, (b) such Lender's Commitment  
Percentage of the aggregate Letter of Credit Amount of all  
Letters of Credit outstanding and (c) such Lender's Commitment  
Percentage of the aggregate amount of unreimbursed drawings under  
all Letters of Credit on such date. 
 
	"Base Rate" means, for any day, a rate per annum equal to  
(i) the Corporate Base Rate for such day plus (ii) the Applicable  
Margin, in each case changing when and as the Corporate Base Rate  
changes. 
 
	"Base Rate Loan" means a Loan when it bears interest at the  
Base Rate. 
 
	"Borrower" means Petco Animal Supplies, Inc., a Delaware  
corporation, and its successors and assigns. 
 
	"Borrowing Date" means a date on which an Advance is made  
hereunder. 
 
	"Business Day" means any day (a) other than a Saturday,  
Sunday or other day on which commercial banks are authorized or  
required by law to close in Los Angeles, California and (b) if  
the applicable Business Day relates to a LIBOR Loan, on which  
dealings are carried on in the London interbank market.  
 
	"Capital Expenditures" means, for any period, for any person  
or entity, the aggregate of all expenditures which are made  
during such period (whether paid in cash or accrued as  
liabilities), by such person or entity, for property, plant or  
equipment and which would be reflected as additions to property,  
plant or equipment on a balance sheet of such person or entity  
prepared in accordance with Agreement Accounting Principles  
(including, without limitation, all such property held under  
Capitalized Leases). 
 
	"Capitalized Lease" of a Person means any lease of Property  
by such Person as lessee which would be capitalized on a balance  
sheet of such Person prepared in accordance with Agreement  
Accounting Principles. 
 
	"Closing Date" means the date on which all the conditions  
precedent set forth in Section 4.1 shall have been satisfied. 
 
	"Code" means the Internal Revenue Code of 1986, as amended,  
reformed or otherwise modified from time to time. 
 
	"Commitment" means, for each Lender, the obligation of such  
Lender to make Loans not exceeding the amount set forth opposite  
its name on Schedule 1 hereto or as set forth in any Assignment  
and Acceptance relating to any assignment that has become  
effective pursuant to Section 12.3, as such amount may be  
modified from time to time pursuant to the terms hereof. 
 
	"Commitment Percentage" means as to any Lender at any time,  
the percentage of the Aggregate Commitments then constituted by  
such Lender's Commitments. 
 
	"Compliance Certificate" has the meaning set forth in  
Section 6.1(v). 
 
	"Consideration" means, with respect to any Acquisition, the  
aggregate consideration, in whatever form (including, without  
limitation, cash payments, the principal amount of promissory  
notes and Debt assumed, the aggregate amounts payable to acquire,  
extend and exercise any option, the aggregate amount payable  
under non-compete agreements and management agreements and the  
fair market value of other property delivered) paid, delivered or  
assumed by the Borrower and its Subsidiaries for such Acquisition  
and the expenses associated therewith, including all brokerage  
commissions, legal fees and similar expenses.  Notwithstanding  
anything herein to the contrary, no Acquisition involving the  
assumption of Debt by the Borrower or its Subsidiaries shall be  
permitted if such assumption would violate the terms of this  
Agreement. 
 
	"Consolidated Fixed Charges" means, for the Borrower and its  
Subsidiaries, on a consolidated basis, for any period of four  
consecutive fiscal quarters, the sum (without duplication) of (i)  
Interest Expense for such period, (ii) the aggregate principal  
amount of all scheduled payments of Debt (including the principal  
portion of rentals under Capitalized Leases) required to be made  
during such period and (iii) all taxes required to be paid during  
such period. 
 
	"Consolidated Net Worth" means with respect to the Borrower  
and its Subsidiaries, the excess of total assets over total  
liabilities, all to be determined on a consolidated basis in  
accordance with Agreement Accounting Principles.  
 
	"Control" means the power to direct or cause the direction  
of the management or policies of a person, whether through rights  
of ownership under voting securities, under contract or  
otherwise, and "Controlling" and "Controlled" shall have meanings  
correlative thereto. 
 
	"Controlled Group" means all members of a controlled group  
of corporations and all trades or businesses (whether or not  
incorporated) under common control which, together with the  
Borrower or any of its Subsidiaries, are treated as a single  
employer under Section 414 of the Code. 
 
	"Conversion/Continuation Notice" is the notice referred to  
in Section 2.12. 
 
	"Corporate Base Rate" means a rate per annum equal to the  
corporate base rate of interest announced by UBOC from time to  
time, changing when and as said corporate base rate changes. 
 
	"Debt" of any person or entity means (i) all indebtedness of  
such person or entity for borrowed money or for the deferred  
purchase price of property or services, (ii) all obligations of  
such person or entity evidenced by notes, bonds, debentures or  
other similar instruments, (iii) all indebtedness created or  
arising under any conditional-sale or other title-retention  
agreement with respect to property acquired by such person or  
entity, (iv) all obligations of such person or entity as lessee  
under leases that have been or should be, in accordance with  
Agreement Accounting Principles, recorded as Capitalized Leases,  
(v) all obligations of such person or entity under direct or  
indirect guaranties in respect of, and obligations (contingent or  
otherwise) to purchase or otherwise acquire, or otherwise to  
secure a credit against loss in respect of, indebtedness or  
obligations of others of the kinds referred to in clause (i),  
(ii), (iii) or (iv) above and (vi) liabilities in respect of  
unfunded vested benefits under plans covered by Title IV of  
ERISA. 
 
	"Default" means any Event of Default and any default, event  
or condition that would, with the giving of any requisite notice  
and the passage of any requisite period of time, constitute an  
Event of Default. 
 
	"Drawing Lender" has the meaning set forth in Section  
2.10(iii). 
 
	"EBITDA" means for any period, for the fiscal quarter most  
recently ended and the immediately preceding three fiscal  
quarters, Net Income after eliminating extraordinary gains and  
losses, plus (i) provisions for taxes, (ii) depreciation and  
amortization, (iii) Interest Expense and (iv) all non-cash  
Acquisition-related costs (including charges related to fixed  
asset write-downs, lease cancellations and Acquisition-specific  
non-cash charges; provided that with regard to lease  
cancellations and other types of non-cash Acquisition costs, the  
Borrower may include initial non-cash reserves and deduct, in the  
following quarters, any cash payments made on the related  
reserves). 
 
	"Eligible Assignee" means (i) a commercial bank organized  
under the laws of the United States, or any State thereof, and  
having total assets in excess of $250,000,000; (ii) a commercial  
bank organized under the laws of any other country which is a  
member of the Organization for Economic Cooperation and  
Development, or a political subdivision of any such country, and  
having total assets in excess of $250,000,000, provided that such  
bank is acting through a branch or agency located in the United  
States; (iii) an insurance company or other financial institution  
or an investment fund 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 $250,000,000;  
(iv) any Affiliate of an existing Lender; and (v) any other  
Person approved by the Agent and, in the absence of any Default,  
the Borrower. 
 
	"ERISA" means the Employee Retirement Income Security Act of  
1974, as amended from time to time, and any rule or regulation  
issued thereunder. 
 
	"Eurocurrency Liabilities" has the meaning set forth in  
Regulation D of the Board of Governors of the Federal Reserve  
System. 
 
	"Event of Default" has the meaning set forth in Section 7. 
 
	"Facility Termination Date" means December 6, 1998. 
 
	"Federal Funds Effective Rate" means, for any day, an  
interest rate per annum equal to the weighted average of the  
rates on overnight Federal funds transactions with members of the  
Federal Reserve System arranged by Federal funds brokers on such  
day, as published for such day (or, if such day is not a Business  
Day, for the immediately preceding Business Day) by the Federal  
Reserve Bank of New York, or, if such rate is not so published  
for any day which is a Business Day, the average of the  
quotations at approximately 10 a.m., Los Angeles time, on such  
day on such transactions received by the Agent from three Federal  
funds brokers of recognized standing selected by the Agent in its  
sole discretion. 
 
	"Funded Debt" means the sum of the outstanding principal  
balance of all Debt of the Borrower and its Subsidiaries  
described in clauses (i), (ii), (iii) and (iv) of the definition  
of "Debt" set forth herein. 
 
	"Governmental Person" means, whether domestic or foreign,  
any national, federal, state or local government, any political  
subdivision thereof or any governmental, quasi-governmental,  
judicial, public or regulatory instrumentality, authority, body  
or entity, including the Federal Deposit Insurance Corporation,  
the Comptroller of the Currency, the Board of Governors of the  
Federal Reserve System, any central bank and any comparable  
authority. 
 
	"Governmental Rule" means any treaty, law, rule, regulation,  
ordinance, order, code, judgment, decree, directive,  
interpretation, request, guideline, policy or similar form of  
decision of any Governmental Person. 
 
	"Guarantors" means International Pet Supplies and  
Distribution, Inc., a California corporation, and Pet Nosh,  
Consolidated Co., Inc., a New York corporation. 
 
	"Guaranties" means, collectively, each Guaranty dated as of  
even date herewith executed by a Guarantor in favor of the Agent,  
for the benefit of the Lenders, and in form and substance  
satisfactory to the Agent, as it may be amended from time to  
time. 
 
	"Interest Expense" means as of any date, for the fiscal  
quarter most recently ended and the immediately preceding three  
fiscal quarters, the sum of (i) the amount of all interest on  
Funded Debt which was paid, payable and/or accrued for such  
period (without duplication of previous amounts) and (ii) all  
commitment, letter of credit or line of credit fees paid, payable  
and/or accrued for such period (without duplication of previous  
amounts) to any lender in exchange for such lender's commitment  
to lend. 
 
	"Interest Period" means, with respect to a LIBOR Loan, a  
period of one, two, three or six months, commencing on a Business  
Day selected by the Borrower pursuant to this Agreement.  Such  
Interest Period shall end on (but exclude) the day which  
corresponds numerically to such date one, two or three or six  
months thereafter, provided, however, that if there is no such  
numerically corresponding day in such next, second or third or  
sixth succeeding month, such Interest Period shall end on the  
last Business Day of such next, second or third or sixth  
succeeding month.  If an Interest Period would otherwise end on a  
day which is not a Business Day, such Interest Period shall end  
on the next succeeding Business Day, provided, however, that if  
said next succeeding Business Day falls in a new calendar month,  
such Interest Period shall end on the immediately preceding  
Business Day.  No Interest Period may end after the Facility  
Termination Date. 
 
	"Lenders" means the lending institutions listed on the  
signature pages of this Agreement and their respective successors  
and assigns. 
 
	"Letter of Credit Amount" means the stated maximum amount  
available to be drawn under a particular Letter of Credit, as  
such amount may be reduced or reinstated from time to time in  
accordance with the terms of such Letter of Credit. 
 
	"Letter of Credit Request" means a request by the Borrower  
for the issuance of a Letter of Credit, on the Agent's standard  
form of standby or commercial letter of credit application and  
agreement, the current form of which is attached hereto as  
Exhibit E, and containing terms and conditions satisfactory to  
the Agent in its sole discretion. 
 
	"Letter of Credit" shall have the meaning set forth in  
Section 2.1. 
 
	"Leverage Ratio Level":  if the Total Debt Ratio shall be  
less than or equal to 1.49:1.00, the Leverage Ratio Level shall  
be 1; if the Total Debt Ratio shall be equal to or greater than  
1.50:1.00 and equal to or less than 1.99:1.00, the Leverage Ratio  
Level shall be 2; if the Total Debt Ratio shall be equal to or  
greater than 2.00:1.00 and equal to or less than 2.49:1.00, the  
Leverage Ratio Level shall be 3; if the Total Debt Ratio shall be  
equal to or greater than 2.50:1.00 and equal to or less than  
2.75:1.00, the Leverage Ratio Level shall be 4; and if the Total  
Debt Ratio shall be equal to or greater than 2.76:1.00, the  
Leverage Ratio Level shall be 5. 
 
	"Leverage Ratio Level Certificate" is defined in Section  
2.13. 
 
	"LIBOR" means, for any Interest Period for any LIBOR Loan,  
the interest rate per annum obtained by dividing (a) the average  
of the respective rates per annum at which deposits in United  
States dollars are offered to the Agent in London, England in the  
London interbank market at 11 a.m., London time, two Business  
Days before the first day of such Interest Period in an amount  
substantially equal to the amount of such Loan and for a period  
equal to such Interest Period by (b) a percentage equal to 100%  
minus the LIBOR Reserve Percentage for such Interest Period. 
 
	"LIBOR Loan" means a Loan when it bears interest at the  
LIBOR Rate. 
 
	"LIBOR Rate" means, with respect to a LIBOR Loan for the  
relevant Interest Period, the sum of (i) LIBOR applicable to such  
Interest Period, plus (ii) the Applicable Margin.  The LIBOR Rate  
shall be rounded to the next higher multiple of 1/100 of 1% if  
the rate is not such a multiple. 
 
	"LIBOR Reserve Percentage" means, for any Interest Period  
for any LIBOR Loan, 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 for determining the maximum reserve  
requirements (including any emergency, supplemental or other  
marginal reserve requirement) for the Bank 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  
such LIBOR Loan is determined) having a term equal to such  
Interest Period. 
 
	"Lien" means any lien, security interest or other charge or  
encumbrance of any kind, or any other type of preferential  
arrangement, including the lien or retained title of a  
conditional vendor and any easement, right of way or other  
encumbrance on title to real property. 
 
	"Loan" means, with respect to a Lender, a LIBOR Loan or a  
Base Rate Loan. 
 
	"Loan Documents" means this Agreement, any Letter of Credit  
Requests, the Letters of Credit, the Notes and the Guaranties  
executed by the Borrower or any Guarantor in connection herewith  
and any other agreement executed by the Borrower or any Guarantor  
in connection herewith, as such agreements and documents may be  
amended, supplemented and otherwise modified from time to time in  
accordance with the terms hereof. 
 
	"Material Adverse Effect" means a material adverse effect on  
(i) the business, Property, condition (financial or otherwise) or  
results of operations of the Borrower and its Subsidiaries taken  
as a whole, (ii) the ability of the Borrower to perform its  
obligations under the Loan Documents or (iii) the validity or  
enforceability of any of the Loan Documents or the rights or  
remedies of the Agent or the Lenders thereunder. 
 
	"Multiemployer Plan" means a Plan that is a "multiemployer  
plan" as defined in Section 3(37) or 4001(i)(3) of the Borrower's  
ERISA Plan. 
 
	"Net Income" means for the Borrower and its Subsidiaries on  
a consolidated basis, net income as determined in accordance with  
Agreement Accounting Principles. 
 
	"Note" means a promissory note, in substantially the form of  
Exhibit A hereto, duly executed by the Borrower and payable to  
the order of a Lender in the amount of its Commitment, including  
any amendment, modification, renewal or replacement of such  
promissory note. 
	"Notice of Assignment" is defined in Section 12.3(ii). 
 
	"Obligations" means all unpaid principal of and accrued and  
unpaid interest on the Notes, the obligation to reimburse  
drawings under Letters of Credit (including the contingent  
obligation to reimburse any drawings under outstanding Letters of  
Credit), all accrued and unpaid fees and all expenses,  
reimbursements, indemnities and other obligations of the Borrower  
to the Lenders or to any Lender, the Agent or any indemnified  
party hereunder arising under the Loan Documents. 
 
	"Participants" is defined in Section 12.2(i). 
 
	"Payment Date" means the first day of each January, April,  
July and October in each calendar year. 
 
	"PBGC" means the Pension Benefit Guaranty Corporation, or  
any successor thereto. 
 
	"Person" means any natural person, corporation, firm,  
limited liability company, joint venture, partnership,  
association, enterprise, trust or other entity or organization,  
or any government or political subdivision or any agency,  
department or instrumentality thereof. 
 
	"Plan" means an employee pension benefit plan which is  
covered by Title IV of ERISA or subject to the minimum funding  
standards under Section 412 of the Code maintained by or  
contributed to by the Borrower or any member of the Controlled  
Group. 
 
	"Prior Loan Agreement" is defined in the first Recital. 
 
	"Property" of a Person means any and all property, whether  
real, personal, tangible, intangible, or mixed, of such Person,  
or other assets owned, leased or operated by such Person. 
 
	"Purchasers" is defined in Section 12.3(i). 
 
	"Regulation D" means Regulation D of the Board of Governors  
of the Federal Reserve System as from time to time in effect and  
any successor thereto or other regulation or official  
interpretation of said Board of Governors relating to reserve  
requirements applicable to member banks of the Federal Reserve  
System. 
 
	"Regulation U" means Regulation U of the Board of Governors  
of the Federal Reserve System as from time to time in effect and  
any successor or other regulation or official interpretation of  
said Board of Governors relating to the extension of credit by  
banks for the purpose of purchasing or carrying margin stocks  
applicable to member banks of the Federal Reserve System. 
 
	"Reportable Event" means a reportable event as defined in  
Section 4043 of ERISA and the regulations issued under such  
section, with respect to a Single Employer Plan, excluding,  
however, such events as to which the PBGC by regulation waived  
the requirement of Section 4043(a) of ERISA that it be notified  
within 30 days of the occurrence of such event, provided,  
however, that a failure to meet the minimum funding standard of  
Section 412 of the Code and of Section 302 of ERISA shall be a  
Reportable Event regardless of the issuance of any such waiver of  
the notice requirement in accordance with either Section 4043(a)  
of ERISA or Section 412(d) of the Code. 
 
	"Required Lenders" means Lenders in the aggregate having at  
least 76% of the Aggregate Commitment or, if the Aggregate  
Commitment has been terminated, Lenders in the aggregate holding  
at least 76% of the aggregate unpaid principal amount of the  
outstanding Loans. 
 
	"SEC" means the United States Securities and Exchange  
Commission. 
 
	"SEC Report" means a Current Report on Form 8-K pursuant to  
the Securities Exchange Act of 1934. 
 
	"Section" means a numbered section of this Agreement, unless  
another document is specifically referenced. 
 
	"Single Employer Plan" means a Plan other than a  
Multiemployer Plan. 
 
	"Subsidiary" of a Person means (i) any corporation more than  
50% of the outstanding securities having ordinary voting power of  
which shall at the time be owned or controlled, directly or  
indirectly, by such Person or by one or more of its Subsidiaries  
or by such Person and one or more of its Subsidiaries, or (ii)  
any partnership, association, joint venture or similar business  
organization more than 50% of the ownership interests having  
ordinary voting power of which shall at the time be so owned or  
controlled.  Unless otherwise expressly provided, all references  
herein to a "Subsidiary" shall mean a Subsidiary of the Borrower. 
 
	"Taxes" is defined in Section 3.2. 
 
	"Total Debt Ratio" means for the Borrower and its  
Subsidiaries on a consolidated basis, determined as of the end of  
each fiscal quarter for the period of four fiscal quarters then  
ended, the ratio of Funded Debt (including obligations under  
Capitalized Leases) outstanding at such time to EBITDA. 
 
	"Transferee" is defined in Section 12.4. 
 
	"Type" means, with respect to a Loan, its nature as a Base  
Rate Loan or a LIBOR Loan.   
	"UBOC" means Union Bank of California, N.A. in its  
individual capacity, and its successors. 
 
	"Unfunded Liabilities" means the amount (if any) by which  
the present value of all nonforfeitable benefits under all Single  
Employer Plans exceeds the fair market value of all such Plan  
assets allocable to such benefits, all determined in accordance  
with the respective most recent valuations for such Plans. 
 
	The foregoing definitions shall be equally applicable to  
both the singular and plural forms of the defined terms. 
 
 
ARTICLE 2 
 
THE CREDIT 
 
	2.1	Commitment.  Each Lender severally agrees, on the terms and  
conditions set forth in this Agreement, to make Loans on a  
revolving credit basis to the Borrower from time to time and to  
participate in standby and/or commercial letters of credit issued  
for the account of the Borrower pursuant to Section 2.10 from  
time to time (each a "Letter of Credit" and, collectively, the  
"Letters of Credit"), from and including the Closing Date to but  
excluding the Facility Termination Date in an amount not to  
exceed the amount of its Commitment.  The sum of (i) the  
aggregate principal amount of all Loans outstanding, (ii) the  
aggregate Letter of Credit Amount of all Letters of Credit  
outstanding and (iii) the aggregate amount of unreimbursed  
drawings under all Letters of Credit shall not exceed, at any  
time, the amount of the Aggregate Commitment.  Further, the sum  
of (a) the aggregate Letter of Credit Amount of all Letters of  
Credit outstanding and (b) the aggregate amount of unreimbursed  
drawings under all Letters of Credit shall not exceed $3,500,000  
at any time.  Within the limit of each Lender's Commitment, the  
Borrower may borrow, have Letters of Credit issued and/or renewed  
for the Borrower's account, prepay Loans, reborrow and have  
additional Letters of Credit issued for the Borrower's account. 
 
	2.2	Commitment Percentage.  The principal amount of each  
Lender's Loan and participation in a Letter of Credit shall be in  
an amount equal to the product of (i) such Lender's Commitment  
Percentage (expressed as a fraction) and (ii) the total amount of  
the Loan or Loans or Letters of Credit requested; provided that  
in no event shall any Lender be obligated to make a Loan if after  
giving effect to such Loan such Lender's Loans, Commitment  
Percentage of the aggregate Letter of Credit Amount of all  
Letters of Credit outstanding and Commitment Percentage of the  
aggregate amount of unreimbursed drawings under all Letters of  
Credit outstanding would exceed its Commitment or if the amount  
of such requested Loan is in excess of such Lender's Available  
Commitment. 
	2.3	Types of Loans.  The Loans may from time to time be (i)  
LIBOR Loans, (ii) Base Rate Loans or (iii) a combination thereof,  
as determined by the Borrower and notified to the Agent in  
accordance with Section 2.12.  Notwithstanding the foregoing, the  
initial Loans made on the Closing Date shall be made as Base Rate  
Loans and shall be subject to conversion to LIBOR Loans pursuant  
to Section 2.12.  Each Lender may make or maintain its Loans to  
the Borrower by or through any Applicable Lending Office.  At no  
time shall more than ten Advances be outstanding. 
 
	2.4	Notes.  The Loans made by each Lender to the Borrower shall  
be evidenced by a Note, with appropriate insertions therein as to  
payee, date and principal amount, payable to the order of such  
Lender and representing the obligation of the Borrower to pay the  
aggregate unpaid principal amount of all Loans made by such  
Lender to the Borrower, with interest thereon as prescribed in  
Sections 2.13 and 2.14.  Each Lender is hereby authorized (but  
not required) to record the date and amount of each payment or  
prepayment of principal of its Loans made to the Borrower, each  
continuation thereof, each conversion of all or a portion thereof  
to another Type and, in the case of LIBOR Loans, the length of  
each Interest Period with respect thereto, in the books and  
records of such Lender, and any such recordation shall constitute  
prima facie evidence of the accuracy of the information so  
recorded.  The failure of any Lender to make any such recordation  
or notation in the books and records of the Lender (or any error  
in such recordation or notation) shall not affect the obligations  
of the Borrower hereunder or under the Notes.  Each Note shall  
(i) be dated the Closing Date, (ii) provide for the payment of  
interest in accordance with Sections 2.13 and 2.14 and (iii) be  
stated to be payable on the Facility Termination Date. 
 
	2.5	Notice of Borrowing.  The Borrower shall give the Agent  
irrevocable written notice substantially in the form of Exhibit F  
attached hereto (which notice must be received by the Agent prior  
to 12:00 noon, Los Angeles time, on the proposed Borrowing Date  
or, if all or any part of the Loans are requested to be made as  
LIBOR Loans, three Business Days prior to each proposed Borrowing  
Date) requesting that the Lenders make the Loans on the proposed  
Borrowing Date and specifying (i) the aggregate amount of Loans  
requested to be made (which must be in an aggregate amount equal  
to at least $1,000,000 or an integral multiple of $1,000,000),  
(ii) subject to Section 2.3, whether the Loans are to be LIBOR  
Loans, Base Rate Loans or a combination thereof and (iii) if the  
Loans are to be entirely or partly LIBOR Loans, the respective  
amounts of each such Type of Loan and the respective lengths of  
the Interest Periods therefor.  On receipt of such notice, the  
Agent shall promptly notify each Lender thereof not later than  
10:30 a.m., Los Angeles time, on the date of receipt of such  
notice.  On the proposed Borrowing Date, not later than 1:00  
p.m., Los Angeles time, each Lender shall make available to the  
Agent at its office specified in Section 13.1 such Lender's  
Commitment Percentage of the aggregate borrowing amount (as  
determined in accordance with Section 2.2) in immediately  
available funds.  Not later than 1:30 p.m., Los Angeles time, on  
the date of such Loans and upon fulfillment of the applicable  
conditions set forth in Section 4, the Agent shall make such  
Loans available to the Borrower in immediately available funds.   
Each notice pursuant to this Section 2.5 shall be irrevocable and  
binding on the Borrower.  The Agent may, in the absence of  
notification from any Lender that such Lender has not made its  
pro rata share available to the Agent, on such date, credit the  
account of the Borrower on the books of such office of the Agent  
with the aggregate amount of Loans. 
 
	2.6	Commitment Reduction.  At the Borrower's option and upon at  
least five Business Days' prior irrevocable written notice to the  
Agent, with such notice specifying the amount and the date of  
such reduction, the Borrower may permanently reduce the Aggregate  
Commitment in whole at any time or in part from time to time;  
provided, however, that each partial reduction of the Aggregate  
Commitment shall be in an aggregate amount equal to at least  
$1,000,000 or an integral multiple of $1,000,000.  The Agent  
shall promptly notify each Lender (by telecopy or by telephone)  
of such requested Commitment reduction. 
 
	Reductions of the Aggregate Commitment pursuant to this Section  
2.6 shall automatically effect a reduction of the Commitment of  
each Lender to an amount equal to the product of (i) the  
Aggregate Commitment of all Lenders, as reduced pursuant to this  
Section 2.6 and (ii) the Commitment Percentage of such Lender, in  
each case determined immediately prior to such reduction of the  
Aggregate Commitment on such date. 
 
	Upon each reduction of the Aggregate Commitment, the Borrower  
shall (i) pay the unused commitment fee, payable pursuant to  
Section 2.11(i), accrued on the amount of the Aggregate  
Commitment so reduced through the date of such reduction, (ii)  
prepay the amount, if any, by which the sum of (a) the aggregate  
unpaid principal amount of the Loans, (b) the aggregate Letter of  
Credit Amount of all Letters of Credit outstanding and (c) the  
aggregate amount of unreimbursed drawings under all Letters of  
Credit exceeds the amount of the Aggregate Commitment as so  
reduced, together with accrued interest on the amount being  
prepaid to the date of such prepayment (or, with respect to  
outstanding Letters of Credit, make a cash collateral deposit in  
an amount equal to such excess to the extent such excess is not  
corrected by the foregoing prepayment) and (d) compensate the  
Lenders for their funding costs, if any, in accordance with  
Section 3.1. 
 
	2.7	Commitment Obligations.  Neither the Agent nor any Lender  
shall be responsible for the obligation or Available Commitment  
of any other Lender hereunder, nor will the failure of any Lender  
to comply with the terms of this Agreement relieve any other  
Lender or the Borrower of its obligations under this Agreement  
and the Notes.  Nothing herein shall be deemed to relieve any  
Lender from its obligation to fulfill its Commitments hereunder  
or to prejudice any rights which the Borrower may have against  
any Lender as a result of any default by such Lender hereunder. 
 
	2.8	Commitment Termination.  The Commitment of each Lender and  
the Aggregate Commitment shall terminate on the Facility  
Termination Date. 
 
	2.9	Required Payments.  The outstanding Loans and all other  
unpaid Obligations shall be paid in full by the Borrower on the  
Facility Termination Date. 
 
	2.10	Issuance of Letters of Credit. 
 
	(i)	The Borrower shall be entitled to request the issuance of  
standby and/or commercial Letters of Credit from time to time  
from and including the Closing Date to but excluding the date  
which is seven Business Days prior to the Facility Termination  
Date by giving the Agent (a) a standby Letter of Credit Request  
at least three Business Days before the requested date of  
issuance of such standby Letter of Credit and (b) a commercial  
Letter of Credit Request no later than the requested date of  
issuance of such commercial Letter of Credit (provided that such  
Letter of Credit Request is received by the Agent no later than  
11:00 a.m., Los Angeles time and any Letter of Credit Request  
received after such time shall be deemed to have been received on  
the next Business Day) (which date of issuance shall be a  
Business Day).  All letters of credit outstanding on the Closing  
Date which were issued under the Prior Loan Agreement shall be  
deemed to have been issued hereunder on and as of the Closing  
Date and shall be subject to the terms and conditions hereof.  No  
Letter of Credit shall have an expiration date more than one year  
from its date of issuance.  The aggregate Letter of Credit  
Amounts under all outstanding Letters of Credit and the aggregate  
amount of unreimbursed drawings under Letters of Credit shall  
reduce, dollar for dollar, Aggregate Available Commitment.  The  
sum of (a) the aggregate Letter of Credit Amount of all Letters  
of Credit outstanding and (b) the aggregate amount of  
unreimbursed drawings under all Letters of Credit shall not at  
any time exceed $3,500,000.  In addition, the sum of (i) the  
aggregate principal amount of all Loans outstanding, (ii) the  
aggregate Letter of Credit Amount of all Letters of Credit  
outstanding and (iii) the aggregate amount of unreimbursed  
drawings under all Letters of Credit shall not exceed, at any  
time, the Aggregate Commitment.  Any Letter of Credit Request  
received by the Agent later than 10:00 a.m., Los Angeles time,  
shall be deemed to have been received on the next Business Day.   
Each Letter of Credit Request shall be made in writing, shall be  
signed by an Authorized Officer, shall be irrevocable and shall  
be effective upon receipt by the Agent.  Provided that a valid  
Letter of Credit Request has been received by the Agent and upon  
fulfillment of the other applicable conditions set forth in  
Section 4.3, the Agent will issue the requested Letter of Credit  
from its office specified in Section 13.1. 
 
	Commercial Letters of Credit shall be used only for the purpose  
of supporting purchases of inventory by the Borrower and standby  
Letters of Credit shall be used solely to provide support for  
leasing (including Capitalized Leases) and insurance obligations  
of the Borrower. 
 
	(ii)	Immediately upon the issuance of each Letter of Credit, the  
Agent shall be deemed to have sold and transferred to each  
Lender, and each Lender shall be deemed to have purchased and  
received from the Agent, in each case irrevocably and without any  
further action by any party, an undivided interest and  
participation in such Letter of Credit, each drawing thereunder  
and the obligations of the Borrower under this Agreement in  
respect thereof in an amount equal to the product of (i) such  
Lender's Commitment Percentage and (ii) the maximum amount  
available to be drawn under such Letter of Credit (assuming  
compliance with all conditions to drawing).  The Agent shall  
promptly advise each Lender of the issuance of each Letter of  
Credit, the Letter of Credit Amount of such Letter of Credit, any  
change in the face amount or expiration date of such Letter of  
Credit, the cancellation or other termination of such Letter of  
Credit and any drawing under such Letter of Credit. 
 
	(iii)	The payment by the Agent of a draft drawn under any  
Letter of Credit shall first be made from any cash collateral  
deposit held by the Agent with respect to such Letter of Credit.   
After any such cash collateral deposit has been applied, the  
payment by the Agent of a draft drawn under any Letter of Credit  
shall constitute for all purposes of this Agreement the making by  
the Agent in its individual capacity as a Lender hereunder (in  
such capacity, the "Drawing Lender") of a Base Rate Loan in the  
amount of such payment (but without any requirement of compliance  
with the conditions set forth in Section 4.3).  In the event that  
any such Loan by the Drawing Lender resulting from a drawing  
under any Letter of Credit is not repaid by the Borrower by 12:00  
noon, Los Angeles time, on the day of payment of such drawing,  
the Agent shall promptly notify each other Lender.  Each Lender  
shall, on the day of such notification (or if such notification  
is not given by 1:00 p.m., Los Angeles time, on such day, then on  
the next succeeding Business Day), make a Base Rate Loan, which  
shall be used to repay the applicable portion of the  Base Rate  
Loan of the Drawing Lender with respect to such Letter of Credit  
drawing, in an amount equal to the amount of such Lender's  
participation in such drawing for application to repay the  
Drawing Lender (but without any requirement of compliance with  
the applicable conditions set forth in Section 4.3) and shall  
deliver to the Agent for the account of the Drawing Lender, on  
the day of such notification (or if such notification is not  
given by 1:00 p.m., Los Angeles time, on such day, then on the  
next succeeding Business Day) and in immediately available funds,  
the amount of such  Base Rate Loan.  In the event that any Lender  
fails to make available to the Agent for the account of the  
Drawing Lender the amount of such Base Rate Loan, the Drawing  
Lender shall be entitled to recover such amount on demand from  
such Lender together with interest thereon at the Federal Funds  
Effective Rate for each day such amount remains outstanding. 
 
	(iv)	The obligations of the Borrower with respect to any Letter  
of Credit, any Letter of Credit Request and any other agreement  
or instrument relating to any Letter of Credit and any  Base Rate  
Loan made under Section 2.10(iii) shall be absolute,  
unconditional and irrevocable and shall be paid strictly in  
accordance with the terms of the aforementioned documents under  
all circumstances, including the following: 
 
		(a)  any lack of validity or enforceability of any Letter  
of Credit, this Agreement or any other Loan Document; 
 
		(b)  the existence of any claim, setoff, defense or other  
right that the Borrower may have at any time against any  
beneficiary or transferee of any Letter of Credit (or any Person  
for whom any such beneficiary or transferee may be acting), the  
Agent, any Lender (other than the defense of payment to a Lender  
in accordance with the terms of this Agreement) or any other  
Person, whether in connection with this Agreement, any other Loan  
Document, the transactions contemplated hereby or thereby or any  
unrelated transaction; 
 
		(c)  any statement or other document presented under any  
Letter of Credit proving to be forged, fraudulent, invalid or  
insufficient in any respect, or any statement therein being  
untrue or inaccurate in any respect whatsoever; 
 
		(d)  payment by the Agent under any Letter of Credit  
against presentation of a draft or certificate that does not  
comply on its face with the terms of such Letter of Credit; 
 
		(e)  any exchange, release or nonperfection of any  
collateral, or any release, amendment or waiver of or consent to  
departure from any Guaranty, other Loan Document or other  
guaranty, for any of the Obligations of the Borrower in respect  
of the Letters of Credit; and  
 
		(f)  any other circumstance or happening whatsoever,  
whether or not similar to any of the foregoing. 
 
	(v)	The Borrower shall pay to the Agent with respect to each  
Letter of Credit issued hereunder, the following fees: 
 
		(a)	for each commercial Letter of Credit for the period  
from and including the day such commercial Letter of Credit is  
issued to but excluding the day such commercial Letter of Credit  
expires, a letter of credit fee to the Agent for the benefit of  
the Lenders equal to the amount set forth on the Agent's  
published Schedule of International Fees (such fee to be payable  
on the date of issuance) except for payment fees, which shall be  
equal to the greater of (x) the product of (i) .125% and (ii) the  
Letter of Credit Amount of such Letter of Credit paid or (y) $100  
(such payment fee to be payable on the date such Letter of Credit  
is paid); 
 
		(b)	for each commercial Letter of Credit, a fronting  
fee to the Agent for its benefit alone equal to (x) $100, if the  
commercial Letter of Credit Amount is less than $500,000 or (y)  
 .125% of the Letter of Credit Amount, if the commercial Letter of  
Credit Amount is equal to or more than $500,000 (such fee to be  
payable on the date of issuance); 
 
		(c)	for each standby Letter of Credit, for the period  
from and including the day such standby Letter of Credit is  
issued to but excluding the day such standby Letter of Credit  
expires, a letter of credit fee to the Agent for the benefit of  
the Lenders equal to 1% per annum of the Letter of Credit Amount  
(such fee to be payable on the date of issuance); 
 
		(d)	for each standby Letter of Credit, a fronting fee  
to the Agent for its benefit alone equal to .25% of the Letter of  
Credit Amount (such fee to be payable on date of issuance); and 
 
		(e) from time to time, such additional fees and charges  
(including cable charges) as are generally associated with  
letters of credit, in accordance with the Agent's standard  
internal charge guidelines and the related Letter of Credit  
Request. 
 
	(vi)	The Borrower agrees to the provisions in the Letter of  
Credit Request form; provided, however, that the terms of the  
Loan Documents shall take precedence if there is any  
inconsistency between the terms of the Loan Documents and the  
terms of said form. 
 
	(vii)	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 Agent nor any Lender nor any of their respective officers or  
directors shall be liable or responsible for (i) the use that may  
be made of any Letter of Credit or any acts or omissions of any  
beneficiary or transferee in connection therewith; (ii) the  
validity, sufficiency or genuineness of documents, or of any  
endorsement thereof, even if such documents should prove to be in  
any or all respects invalid, insufficient, fraudulent or forged;  
(iii) in the absence of any gross negligence or wilful misconduct  
by the Agent, payment by the Agent against presentation of  
documents that do not comply with the terms of any Letter of  
Credit, including failure of any documents to bear any reference  
or adequate reference to any Letter of Credit; or (iv) any other  
circumstance whatsoever in making or failing to make payment  
under any Letter of Credit.  In furtherance and not in limitation  
of the foregoing, the Agent may accept any document that appears  
on its face to be in order, without responsibility for further  
investigation, regardless of any notice or information to the  
contrary. 
 
	2.11	Fees.  The Borrower agrees to pay to the Lenders an unused  
commitment fee to be shared among Lenders on the basis of their  
respective Commitment Percentages with respect to the Commitments  
for the period from and including the Closing Date to but  
excluding the Facility Termination Date, computed at the  
applicable percentage set forth below of the average daily  
aggregate amount of the Aggregate Available Commitment from time  
to time in effect, to be payable quarterly in arrears on each  
Payment Date and on the Facility Termination Date, commencing on  
the first such date to occur after the Closing Date. 
 
                                           Commitment 
      Leverage Ratio Level                     Fee    
 
              1                               .125% 
              2                               .175% 
              3                               .250% 
              4                               .375% 
              5                               .500% 
 
	2.12	Voluntary Conversion of Advances.  The Borrower may on any  
Business Day, upon written notice given to the Agent not later  
than 12:00 noon, Los Angeles time, on the third Business Day  
before the date of the proposed conversion and subject to the  
provisions of Section 3.1(c), convert any Advance into an Advance  
of another Type; provided, however, that, with respect to a  
conversion from a LIBOR Loan into a Base Rate Loan, any such  
conversion shall be made on, and only on, the last day of the  
Interest Period for such Loan.  Each such notice of a conversion  
shall, within the restrictions specified above, specify (a) the  
Loan to be converted, (b) the type of Loan into which such Loan  
is to be converted and (c) the requested date for such  
conversion.  Upon receipt of any such notice the Agent shall  
promptly notify each Lender thereof.  Any part of outstanding  
LIBOR Loans and Base Rate Loans may be converted as provided  
herein, provided (i) no Loan may be converted into a LIBOR Loan  
after the date that is one month prior to the Facility  
Termination Date and (ii) the Borrower shall not have the right  
to continue or convert to a LIBOR Loan if a Default shall have  
occurred and be continuing.  However, if the Borrower shall fail  
to give any required notices described above in this Section or  
if such continuation is not permitted pursuant to the preceding  
sentence, such Loans shall be automatically converted to Base  
Rate Loans on the last day of such then-expiring Interest Period. 
 
	2.13	Interest.  A Base Rate Loan shall bear interest on the  
outstanding principal amount thereof, for each day from and  
including the date such Loan is made or is converted from a LIBOR  
Loan into a Base Rate Loan pursuant to Section 2.12 to (but not  
including) the date it becomes due or is converted into a LIBOR  
Loan pursuant to Section 2.12 hereof, at a rate per annum equal  
to the Base Rate for such day.  Changes in the rate of interest  
on any Loan maintained as a Base Rate Loan will take effect  
simultaneously with each change in the Corporate Base Rate.  Each  
LIBOR Loan shall bear interest from and including the first day  
of the Interest Period applicable thereto to (but not including)  
the last day of such Interest Period at the LIBOR Rate determined  
as applicable to such LIBOR Loan. 
 
	For purposes of determining the Applicable Margin for all Loans,  
interest rates on the Loans shall be calculated on the basis of  
the Total Debt Ratio set forth in the most recent certificate of  
an Authorized Officer of the Borrower delivered pursuant to  
Section 6.1(v) (a "Leverage Ratio Level Certificate").  For  
accrued and unpaid interest only (no changes being made for  
interest payments previously made), changes in interest rates on  
the Loans attributable to changes in the Applicable Margin caused  
by changes in the applicable Leverage Ratio Level shall be  
calculated upon the delivery of a Leverage Ratio Level  
Certificate and such change shall be effective (y) in the case of  
a Base Rate Loan, on the day subsequent to the delivery of the  
Leverage Ratio Level Certificate and (z) in the case of a LIBOR  
Loan, from the first day of the Interest Period applicable to  
such LIBOR Loans subsequent to the delivery of the Leverage Ratio  
Level Certificate.  If, for any reason, the Borrower shall fail  
to deliver a Leverage Ratio Level Certificate when due in  
accordance with Section 6.1(v), and such failure shall continue  
for a period of twenty days, the Leverage Ratio Level shall be  
deemed to be Level 5, retroactive to the date on which the  
Borrower should have delivered such Leverage Ratio Level  
Certificate and shall continue until a Leverage Ratio Level  
Certificate indicating a different Leverage Ratio Level is  
delivered to the Agent. 
 
	2.14	Rates Applicable After Default.  Notwithstanding anything  
to the contrary contained in Section 2.3 or 2.12, during the  
continuance of an Event of Default no Loan may be made as,  
converted into or continued as a LIBOR Loan.  During the  
continuance of an Event of Default each Loan shall bear interest  
at a rate per annum equal to the Base Rate otherwise applicable  
to the Base Rate Loan plus 3% per annum.  All such interest shall  
be payable on demand of the Agent. 
 
	2.15	Method of Payment.  All payments of the Obligations  
hereunder shall be made, without setoff, deduction, or  
counterclaim, in immediately available funds to the Agent at the  
Agent's address specified pursuant to Article 13, or at any other  
Applicable Lending Office of the Agent specified in writing by  
the Agent to the Borrower, by 2:00 p.m., Los Angeles time, on the  
date when due and shall be applied ratably by the Agent among the  
Lenders.  Each payment delivered to the Agent for the account of  
any Lender shall be delivered promptly by the Agent to such  
Lender in the same type of funds that the Agent received at its  
address specified pursuant to Article 13 or at any Applicable  
Lending Office specified in a notice received by the Agent from  
such Lender.  The Agent is hereby authorized (but not obligated)  
to charge the account of the Borrower maintained with UBOC for  
each payment of principal, interest and fees as it becomes due  
hereunder. 
 
	2.16	Telephonic Notices.  The Borrower hereby authorizes the  
Lenders and the Agent to convert or continue Loans and effect  
selections of Types of Loans based on telephonic notices made by  
any person or persons the Agent or any Lender in good faith  
believes to be acting on behalf of the Borrower.  The Borrower  
agrees to deliver promptly to the Agent a written confirmation,  
if such confirmation is requested by the Agent or any Lender, of  
each telephonic notice signed by an Authorized Officer.  If the  
written confirmation differs in any material respect from the  
action taken by the Agent and the Lenders, the records of the  
Agent and the Lenders shall govern absent manifest error. 
 
	2.17	Interest Payment Dates; Interest and Fee Basis.  Interest  
accrued on each Base Rate Loan shall be payable on each Payment  
Date, commencing with the first such date to occur after the date  
hereof, on any date on which a Base Rate Loan is prepaid, whether  
due to acceleration or otherwise, and at maturity.  Interest  
accrued on that portion of the outstanding principal amount of  
any Base Rate Loan converted into a LIBOR Loan on a day other  
than a Payment Date shall be payable on the date of conversion.   
Interest accrued on each LIBOR Loan shall be payable on the last  
day of its applicable Interest Period, on any date on which the  
LIBOR Loan is prepaid, whether by acceleration or otherwise, and  
at maturity.  Interest accrued on each LIBOR Loan having an  
Interest Period longer than three months shall also be payable on  
the last day of each three-month interval during such Interest  
Period.   
 
	Interest on Loans and commitment fees shall be calculated for  
actual days elapsed on the basis of a 360-day year.  Interest  
shall be payable for the day a Loan is made but not for the day  
of any payment on the amount paid if payment is received prior to  
2:00 p.m., Los Angeles time, at the place of payment.  Whenever  
any payment to be made hereunder shall be stated to be due on a  
day that is not 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;  
provided, however, that, if such extension would cause any  
payment of interest on or principal of any LIBOR Loan to be made  
in the next following calendar month, then such payment shall  
instead be made on the next preceding Business Day, and such  
shortened time shall in such case be used in the computation of  
payment of interest.  Each determination by the Bank of an  
interest rate hereunder shall be conclusive and binding for all  
purposes, absent manifest error. 
 
	2.18	Notification of Loan, Interest Rates, Prepayments and  
Commitment Reductions.  Promptly after receipt thereof, the Agent  
will notify each Lender of the contents of a borrowing notice,  
Conversion/Continuation Notice and repayment notice received by  
it hereunder.  The Agent will notify each Lender of the interest  
rate applicable to each LIBOR Loan promptly upon determination of  
such interest rate and will give each Lender prompt notice of  
each change in the Corporate Base Rate. 
 
	Each determination of an interest rate by the Agent pursuant to  
any provision of this Agreement shall be conclusive and binding  
on the Borrower and the Lenders in the absence of manifest error. 
 
	2.19	Applicable Lending Offices.  Each Lender may book its Loans  
at any Applicable Lending Office selected by such Lender and may  
change its Applicable Lending Office from time to time.  All  
terms of this Agreement shall apply to any such Applicable  
Lending Office and the Note shall be deemed held by each Lender  
for the benefit of such Applicable Lending Office.  Each Lender  
may, by written or telex notice to the Agent and the Borrower,  
designate an Applicable Lending Office through which the Loans  
will be made by it and for whose account Loan payments are to be  
made. 
 
	2.20	Non-Receipt of Funds by the Agent.  Unless the Borrower or  
a Lender, as the case may be, notifies the Agent prior to the  
date on which it is scheduled to make payment to the Agent of (i)  
in the case of a Lender, the proceeds of a Loan or (ii) in the  
case of the Borrower, a payment of principal, interest or fees to  
the Agent for the account of the Lenders, that it does not intend  
to make such payment, the Agent may assume that such payment has  
been made.  The Agent may, but shall not be obligated to, make  
the amount of such payment available to the intended recipient in  
reliance upon such assumption.  If such Lender or the Borrower,  
as the case may be, has not in fact made such payment to the  
Agent, the recipient of such payment shall, on demand by the  
Agent, repay to the Agent the amount so made available together  
with interest thereon in respect of each day during the period  
commencing on the date such amount was so made available by the  
Agent until the date the Agent recovers such amount at a rate per  
annum equal to (a) in the case of payment by a Lender, the  
Federal Funds Effective Rate for such day or (b) in the case of  
payment by the Borrower, the interest rate applicable to the  
relevant Loan. 
 
	2.21	Withholding Tax Exemption. At least five Business Days  
prior to the first date on which interest or fees are payable  
hereunder for the account of any Lender, each Lender that is not  
incorporated under the laws of the United States of America, or a  
state thereof, agrees that it will deliver to each of the  
Borrower and the Agent two duly completed copies of United States  
Internal Revenue Service Form 1001 or 4224, certifying in either  
case that such Lender is entitled to receive payments under this  
Agreement and the Note without deduction or withholding of any  
United States federal income taxes.  Each Lender which so  
delivers a Form 1001 or 4224 further undertakes to deliver to  
each of the Borrower and the Agent two additional copies of such  
form (or a successor form) on or before the date that such form  
expires (currently, three successive calendar years for Form 1001  
and one calendar year for Form 4224) or becomes obsolete or after  
the occurrence of any event requiring a change in the most recent  
forms so delivered by it, and such amendments thereto or  
extensions or renewals thereof as may be reasonably requested by  
the Borrower or the Agent, in each case certifying that such  
Lender is entitled to receive payments under this Agreement and  
the Note without deduction or withholding of any United States  
federal income taxes, unless an event (including without  
limitation any change in treaty, law or regulation) has occurred  
prior to the date on which any such delivery would otherwise be  
required which renders all such forms inapplicable or which would  
prevent such Lender from duly completing and delivering any such  
form with respect to it and such Lender advises the Borrower and  
the Agent that it is not capable of receiving payments without  
any deduction or withholding of United States federal income tax. 
 
	2.22	Optional Prepayments.  The Borrower may on the last day of  
any Interest Period with respect thereto, in the case of LIBOR  
Loans, or at any time and from time to time, in the case of Base  
Rate Loans, prepay the Loans, in whole or in part, without  
premium or penalty, upon at least three Business Days'  
irrevocable written notice, in the case of LIBOR Loans, and upon  
at least one Business Day's irrevocable written notice, in the  
case of Base Rate Loans, from the Borrower to the Agent,  
specifying the date and amount of prepayment and whether the  
prepayment is of LIBOR Loans, Base Loans or a combination  
thereof, and, if a combination thereof, the amount allocable to  
each.  Upon receipt of any such notice from the Borrower, the  
Agent shall promptly notify each Lender thereof.  If any such  
notice is given, the amount specified in such notice shall be due  
and payable by the Borrower on the date specified therein,  
together with accrued interest to such date on the amount  
prepaid.  Partial prepayments of Loans shall be in an aggregate  
principal amount of $1,000,000 or an integral multiple thereof. 
 
 
ARTICLE 3 
 
CHANGE IN CIRCUMSTANCES 
 
 
	3.1	Yield Protection.   
 
		(i)	If any repayment of principal of, or conversion of,  
any LIBOR Loan is made other than on the last day of an Interest  
Period therefor, as a result of a prepayment, payment or  
conversion, or an acceleration of the maturity of the Loan  
pursuant to Section 8, or for any other reason, or if the  
Borrower shall fail to borrow a LIBOR Loan after requesting one,  
then the Borrower shall, upon demand by the Agent pay to the  
Lenders any amounts required to compensate them for any  
additional losses, costs or expenses that they may reasonably  
incur as a result of such repayment, conversion or failure to  
borrow, including any loss (including loss of anticipated  
profits), cost or expense incurred by reason of the liquidation  
or reemployment of deposits or other funds acquired by a Lender  
to fund or maintain such LIBOR Loan. 
 
	    (ii)	If, due to either (a) the introduction of or any  
change in or in the interpretation of any Governmental Rule or  
(b) the compliance by the Lenders with any Governmental Rule  
(whether or not having the force of law), there is any increase  
in the cost to the Lenders of agreeing to make, making, funding  
or maintaining any LIBOR Loan, then the Borrower shall from time  
to time, upon written demand by the Agent, pay to the Agent  
additional amounts sufficient to compensate the Lenders for such  
increased cost.  A certificate as to the amount of such increased  
cost, submitted to the Borrower by the Agent, shall be conclusive  
and binding for all purposes, absent manifest error. 
 
	   (iii)	Notwithstanding any other provision of this  
Agreement, if the introduction of or any change in or in the  
interpretation of any Governmental Rule makes it unlawful, or any  
Governmental Person asserts that it is unlawful, for any Lender  
to perform its obligations hereunder to make LIBOR Loans or to  
continue to fund or maintain LIBOR Loans hereunder, then, on  
notice thereof and demand therefor by the Agent to the Borrower,  
(a) the obligation of such Lender to make LIBOR Loans and to  
convert Base Rate Loans into LIBOR Loans shall terminate and (b)  
the Borrower shall forthwith prepay in full all LIBOR Loans then  
outstanding, together with interest accrued thereon, unless the  
Borrower, within five Business Days of such notice and demand,  
converts all LIBOR Loans then outstanding into Base Rate Loans in  
accordance with Section 2.12. 
 
	    (iv)	If, with respect to any LIBOR Loan, the Agent  
notifies the Borrower that LIBOR for such Loan will not  
adequately reflect the cost to one or more Lenders (as determined  
by such Lender(s) in good faith on the basis of market conditions  
then in effect) of making, funding or maintaining such Loan, then  
(a) such Loan will automatically, on the last day of the then  
existing Interest Period therefor, convert into a Base Rate Loan  
and (b) the obligation of the affected Lender to make, or to  
convert Base Rate Loans into LIBOR Loans shall be suspended until  
the Agent notifies the Borrower that the circumstances causing  
such suspension no longer exist. 
 
	3.2	Taxes.  All payments by or on behalf of the Borrower  
hereunder shall be made without set-off or counterclaim and in  
such amounts as may be necessary in order that all such payments  
(after deduction or withholding for or on account of any present  
or future taxes, levies, imposts, duties or other charges of  
whatsoever nature imposed by any Governmental Person, other than  
any tax on or measured by the overall net income of the Agent or  
a Lender pursuant to the income tax laws of the United States,  
the jurisdiction where the Agent's or such Lender's principal  
office is located or any political subdivision thereof  
(collectively, the "Taxes")) shall not be less than the amounts  
otherwise specified to be paid hereunder.  A certificate as to  
any additional amounts payable to the Agent or a Lender hereunder  
submitted to the Borrower by the Agent shall show in reasonable  
detail the amount payable to the Agent or a Lender and the  
calculations used to determine in good faith such amount and  
shall be conclusive absent manifest error.  Any amounts payable  
by the Borrower hereunder with respect to past payments shall be  
due within ten days following receipt by the Borrower of such  
certificate from the Agent; and such amounts payable with respect  
to future payments shall be due concurrently with such future  
payments.  With respect to each deduction or withholding for or  
on account of any Taxes, the Borrower shall promptly furnish to  
the Agent such certificates, receipts and other documents as may  
be required (in the reasonable judgment of the Agent) to  
establish any tax credit to which a Lender may be entitled.  The  
agreements and obligations of the Borrower under this paragraph  
shall survive the payment in full of the Loans. 
 
 
ARTICLE 4 
 
CONDITIONS PRECEDENT 
 
	4.1	Initial Loan or Letter of Credit.  The Lenders shall not be  
required to make their initial Loans or participate in the  
initial Letter of Credit hereunder unless the Borrower has  
furnished to the Agent: 
 
	      (i)  this Agreement and the Notes, duly executed by the  
Borrower; 
 
	     (ii)  the Guaranties, duly executed by each Guarantor; 
 
	    (iii)  Articles of Incorporation and Bylaws of the Borrower  
and each Guarantor certified by the Secretary of State of the  
relevant state of incorporation; 
 
	     (iv)  Resolutions of the Board of Directors of the Borrower  
and of the executive officers of each Guarantor approving the  
execution, delivery and performance by the Borrower and each  
Guarantor, of the Loan Documents to which the Borrower and each  
Guarantor is a party, certified by the Secretary of the Borrower  
and each Guarantor to be true and correct and in full force and  
effect; 
 
	      (v)  an Incumbency Certificate of the Borrower and each  
Guarantor; 
 
	     (vi)  a favorable legal opinion (in form and substance  
satisfactory to the Agent) of counsel to the Borrower and each  
Guarantor; 
 
	    (vii)  evidence that all amounts outstanding under the Prior  
Loan Agreement have been paid in full and that such agreement has  
been terminated; 
 
	   (viii)  a duly completed Leverage Ratio Level Certificate in  
substantially the form of Exhibit D hereto; 
 
	     (ix)  all fees and expenses to be paid on the Closing Date  
(including, but not limited to, amounts due to UBOC in  
reimbursement of costs and expenses under the Prior Loan  
Agreement); 
 
	      (x)  no statute, rule, regulation, order, decree or  
preliminary or permanent injunction of any court or  
administrative agency or, to the best knowledge of the Borrower,  
any such action threatened by any Person, shall be in effect that  
prohibits the Lenders from consummating the transactions  
contemplated by this Agreement and the other Loan Documents; 
 
	     (xi)  copies of the Borrower's consolidated audited  
financial statements for the period ending February 3, 1996,  
together with any management letter prepared by the accountants,  
and unaudited financial statements for the period ending August  
3, 1996; 
 
	    (xii)	evidence satisfactory to the Agent that there shall  
have been no material adverse change to the syndication markets  
for credit facilities similar to this Agreement and there shall  
not have occurred and be continuing a material disruption of or  
material adverse change in financial, banking or capital markets  
which would have an adverse effect on such syndication market, as  
determined by the Agent in its sole discretion; and 
 
	   (xiii)	such other documents, instruments and opinions as  
the Agent or its counsel may have reasonably requested. 
 
	4.2	All Loans.  The Lenders shall not be required to make any  
Loan (including the initial Loan) hereunder unless the Borrower  
has furnished to the Agent with sufficient copies for the  
Lenders: 
 
		(i)		a duly completed certificate executed by an  
Authorized Officer of the Borrower certifying that: 
 
			(a)	there exists no Default or Event of  
Default; 
 
			(b)	the representations and warranties  
contained in Article 5 hereof are true and correct as of  
the Borrowing Date except to the extent any such  
representation or warranty is stated to relate solely to an  
earlier date, in which case such representation or warranty  
shall be true and correct on and as of such earlier date;  
and 
 
			(c)	no event has occurred, or condition  
exists, which could have a Material Adverse Effect. 
 
		(ii)	in the case where Loan proceeds are to be used for  
an Acquisition and such Acquisition will result in the Borrower  
being required to file an SEC Report, executed copies of each of  
the Acquisition Documents, certified by an Authorized Officer,  
together with the other documents required by Section 6.14; 
 
		(iii)	in the case where Loan proceeds are to be used for  
an Acquisition, evidence satisfactory to the Agent that the  
Acquisition contemplated by the relevant Acquisition Documents  
will immediately be consummated upon the funding of the Loan; and 
 
		(iv)	such other documents as the Agent or its counsel  
may have reasonably requested. 
 
	4.3	All Letters of Credit.  The Agent shall not be required to  
issue any Letter of Credit and the Lenders shall not be required  
to participate in any Letter of Credit (including the initial  
Letter of Credit) hereunder unless the Borrower has furnished to  
the Agent with sufficient copies for the Lenders: 
 
		(i)	a completed Letter of Credit Request with regard to  
each such Letter of Credit;   
 
		(ii)	all fees to be paid to the Agent in connection with  
each Letter of Credit shall have been paid; and 
 
		(iii)	such other documents as the Agent, any Lender or  
its respective counsel may have reasonably requested. 
 
	Any Letter of Credit Request delivered to the Agent shall be  
deemed a representation and warranty to the Agent and the Lenders  
that: 
 
		(i)  there exists no Default or Event of Default; 
 
		(ii)  the representations and warranties contained in  
Article 5 hereof are true and correct as of the issuance date of  
each Letter of Credit except to the extent any such  
representation or warranty is stated to relate solely to an  
earlier date, in which case such representation or warranty shall  
be true and correct on and as of such earlier date; and 
 
		(iii)  no event has occurred, or condition exists, which  
could have a Material Adverse Effect.   
 
 
ARTICLE 5 
 
REPRESENTATIONS AND WARRANTIES 
 
	The Borrower represents and warrants to the Lenders that: 
 
	5.1	Authorization.  The execution, delivery and performance by  
the Borrower of the Loan Documents to which the Borrower is a  
party are within the Borrower's corporate powers, have been duly  
authorized by all necessary corporate action and do not  
contravene any applicable law, rule, regulation or order or any  
contractual restriction binding on or affecting the Borrower or  
its Subsidiaries. 
 
	5.2	Governmental Action.  No authorization, approval or other  
action by, or notice to or filing with, any Governmental Person  
is required for the due execution, delivery and performance by  
the Borrower of the Loan Documents to which the Borrower is a  
party. 
 
	5.3	Enforceability.  Each Loan Document to which the Borrower  
is a party is the legal, valid and binding obligation of the  
Borrower, enforceable against the Borrower in accordance with its  
terms, except as the enforceability thereof may be limited by  
bankruptcy, insolvency, reorganization, moratorium or other  
similar laws affecting creditors' rights generally. 
 
	5.4	Use of Proceeds.  The Borrower will use the proceeds of the  
Loans solely for the (a) repayment of amounts outstanding under  
the Prior Loan Agreement, (b) to make permitted Acquisitions, (c)  
to make permitted Capital Expenditures and (d) for other general  
working capital purposes.  No action has been taken or is  
currently planned by the Borrower, or any agent acting on its  
behalf, which would cause this Agreement or the Notes to violate  
Regulation U or any other regulation of the Board of Governors of  
the Federal Reserve System or to violate the Securities and  
Exchange Act of 1934, in each case as in effect now or as the  
same may hereafter be in effect.  The Borrower is not engaged in  
the business of extending credit for the purpose of purchasing or  
carrying margin stock as one of its important activities and none  
of the proceeds of the Loans or Letters of Credit will be used  
directly or indirectly for such purpose. 
 
	5.5	Litigation.  There is no litigation, tax claim, proceeding,  
arbitration or dispute pending, or, to the best knowledge of the  
Borrower, threatened against or affecting the Borrower or its  
Property, an adverse determination in which could have a Material  
Adverse Effect. 
 
	5.6	Financial Statements.  The consolidated financial  
statements of the Borrower dated February 3, 1996 and August 3,  
1996, copies of which have been delivered to the Lenders, fairly  
and accurately reflect the financial condition of the Borrower  
and its Subsidiaries as of such date, and since such date there  
has been no Material Adverse Effect. 
 
	5.7	Taxes.  The Borrower and each Subsidiary has filed all tax  
returns and reports required to be filed and has paid all  
applicable federal, state and local franchise and income taxes  
which are due and payable. 
 
	5.8	Subsidiaries.  Schedule 2 hereto contains an accurate list  
of all of the presently existing Subsidiaries of the Borrower,  
setting forth their respective jurisdictions of incorporation or  
organization and the percentage of their respective capital stock  
or ownership interests owned by the Borrower or other  
Subsidiaries.  All of the issued and outstanding shares of  
capital stock of such Subsidiaries have been duly authorized and  
issued and are fully paid and non-assessable. 
 
	5.9	ERISA.  The Unfunded Liabilities do not in the aggregate  
exceed $1,000,000.  Each Single Employer Plan complies in all  
material respects with all applicable requirements of law and  
regulations, except to the extent that the failure to comply  
therewith does not have a Material Adverse Effect.  No Reportable  
Event has occurred with respect to any Single Employer Plan,  
except to the extent that such Reportable Event has no Material  
Adverse Effect.  Neither the Borrower nor any Subsidiary (a) is a  
party to any Multiemployer Plan or (b) has withdrawn from any  
Multiemployer Plan, except to the extent such actions do not have  
a Material Adverse Effect. 
 
	5.10	Accuracy of Information.  No information, exhibit or report  
furnished by the Borrower or any of its Subsidiaries to the Agent  
or to any Lender in connection with the negotiation of, or  
compliance with, the Loan Documents contained any material  
misstatement of fact or omitted to state a material fact or any  
fact necessary to make the statements contained therein not  
misleading in any material respect. 
 
	5.11	Organization and Existence.  The Borrower is duly  
organized, validly existing and in good standing under the laws  
of the State of Delaware and it has the corporate power and  
authority, and the legal right, to own and operate its Properties  
and to conduct the business in which it is currently engaged and  
in which it proposes to be engaged after the Closing Date and is  
duly qualified as a foreign entity and in good standing under the  
laws of each jurisdiction where its ownership, lease or operation  
of Property or the conduct of its business requires such  
qualification except to the extent that the failure to comply  
thereunder could not, in the aggregate, reasonably be expected to  
have a Material Adverse Effect and is in compliance with all  
Requirements of Law except to the extent that the failure to  
comply therewith could not, in the aggregate, reasonably be  
expected to have a Material Adverse Effect. 
 
	5.12	Consents.  No consent or authorization of, or filing with  
or other act by or in respect of, any Governmental Authority, or  
any other Person is required in connection with the Loans  
hereunder or with the execution, delivery, performance, validity  
or enforceability of this Agreement, the Notes or the other Loan  
Documents.  The execution, delivery and performance of this  
Agreement, the Notes and the other Loan Documents, the Loans, the  
Letters of Credit and the use of the proceeds thereof will not  
violate any Requirement of Law or contractual obligations of the  
Borrower or any of its Subsidiaries which could be reasonably  
expected to have a Material Adverse Effect and will not result  
in, or require, the creation or imposition of any Lien on any of  
its or their respective Properties or revenues pursuant to any  
such Requirement of Law or contractual obligation, except  
pursuant to the Loan Documents or otherwise as permitted  
hereunder, which Lien could reasonably be expected to have a  
Material Adverse Effect. 
 
	5.13	Intellectual Property.  The Borrower and each of its  
Subsidiaries owns, or is licensed to use, all trademarks,  
tradenames, patents, copyrights, material permits, licenses or  
other intangibles necessary for the conduct of its business as  
currently conducted, except to the extent that the failure to own  
or license such property could not reasonably be expected to have  
a Material Adverse Effect. 
 
	5.14	Default.  There exists no Default or Event of Default. 
 
	5.15	Nature of Business.  Neither the Borrower nor any of its  
Subsidiaries is engaged in any material business other than the  
ownership and operation of pet food and supply retail stores and  
the manufacture or procurement of pet food and supplies. 
 
	5.16	Ranking of Loans.  This Agreement and the other Loan  
Documents to which the Borrower is a party, when executed, and  
the Loans, when borrowed are and will be the direct and general  
obligations of the Borrower.  The Borrower's obligations  
hereunder and thereunder will rank at least pari passu in  
priority of payment with all other senior Debt, except to the  
extent otherwise permitted hereunder. 
 
	5.17	Compliance with Laws.  The Borrower and each of its  
Subsidiaries is in compliance with all Governmental Rules except  
to the extent that the failure to comply therewith could not, in  
the aggregate, reasonably be expected to have a Material Adverse  
Effect. 
 
	5.18	Investment Company Acts; Other Regulations.  Neither the  
Borrower nor any of its Subsidiaries is an "investment company,"  
or a company "controlled" by an "investment company," within the  
meaning of the Investment Company Act of 1940, as amended. 
 
	5.19	Environmental Matters.  The Borrower and its Subsidiaries  
are in compliance in all material respects with all applicable  
environmental laws, and there is no contamination at, under or  
about any of their respective Properties, or violation of any  
environmental law with respect to any of their respective  
Properties or the business conducted at any of their respective  
Properties which involves a matter or matters which has caused or  
reasonably likely to cause a Material Adverse Effect. 
 
	5.20	Title.  Except for assets which may have been disposed of  
in the ordinary course of business, the Borrower has good and  
marketable title to all of the property reflected in its  
financial statements delivered to the Lenders and to all property  
acquired by the Borrower since the date of said financial  
statements, free and clear of all Liens, encumbrances, security  
interests and adverse claims except (a) those specifically  
referred to in said financial statements, (b) those permitted by  
Section 6.22 hereof and (c) those that could not, in the  
aggregate, reasonably be expected to have a Material Adverse  
Effect. 
 
 
ARTICLE 6 
 
COVENANTS 
 
 
	During the term of this Agreement, unless the Required Lenders  
shall otherwise consent in writing: 
 
	6.1	Financial Reporting.  The Borrower will maintain, for  
itself and each Subsidiary, a system of accounting established  
and administered in accordance with Agreement Accounting  
Principles, and furnish to the Lenders: 
 
	   (i)	As soon as available and in any event within 45  
days after the end of each quarterly fiscal period  
of each fiscal year of the Borrower (except the  
last fiscal quarter), consolidated statements of  
income, retained earnings and cash flow of the  
Borrower and its consolidated Subsidiaries for such  
period and for the period from the beginning of the  
respective fiscal year to the end of such period,  
and the related consolidated balance sheets of the  
Borrower and its consolidated Subsidiaries as at  
the end of such period, setting forth in each case  
in comparative form the corresponding consolidated  
figures for the corresponding period in the  
preceding fiscal year, accompanied by a certificate  
of an Authorized Officer of the Borrower, which  
certificate shall state that those consolidated  
financial statements fairly present the  
consolidated financial condition and results of  
operations of the Borrower and its consolidated  
Subsidiaries, in each case in accordance with  
Agreement Accounting Principles, consistently  
applied, as at the end of, and for, such period  
(subject to normally recurring audit adjustments). 
 
	  (ii)	As soon as available and in any event within 90  
days after the end of each fiscal year of the  
Borrower consolidated statements of income,  
retained earnings and cash flow of the Borrower and  
its consolidated Subsidiaries for such fiscal year  
and the related consolidated balance sheets of the  
Borrower and its consolidated Subsidiaries as at  
the end of such fiscal year, setting forth in each  
case in comparative form the corresponding  
consolidated figures for the preceding fiscal year,  
and accompanied, in the case of those consolidated  
statements and balance sheet of the Borrower, by a  
unqualified opinion of independent certified public  
accountants of recognized national standing, which  
opinion shall state that those consolidated  
financial statements fairly present the  
consolidated financial condition and results of  
operations of the Borrower and its consolidated  
Subsidiaries as at the end of, and for, such fiscal  
year in accordance with Agreement Accounting  
Principles, consistently applied. 
 
	 (iii)	At any time that 50% or more of the Aggregate  
Commitment has been utilized, as soon as available  
and in any event within 30 days after the end of  
each fiscal month (except the last fiscal month in  
a fiscal year), consolidated statements of income  
and cash flow of the Borrower and its Consolidated  
Subsidiaries for such period and the related  
consolidated balance sheets of the Borrower and its  
Consolidated Subsidiaries as at the end of such  
period, accompanied by a certificate of an  
Authorized Officer of the Borrower, which  
certificate shall state that those consolidated  
financial statements fairly present the  
consolidated financial condition and results of  
operations of the Borrower and its Consolidated  
Subsidiaries, in each case in accordance with  
Agreement Accounting Principles, consistently  
applied, as at the end of, and for, such period  
(subject to normally recurring audit adjustments). 
 
	  (iv)	As soon as available, but in any event no later  
than 45 days subsequent to the beginning of each  
fiscal year of the Borrower, based on the best  
information then currently available, a copy of the  
plan and forecast (including a projected  
consolidated balance sheet, income statement and  
funds flow statement), prepared on a quarterly  
format basis, of the Borrower and its Subsidiaries  
for such fiscal year. 
 
	   (v)	Together with the financial statements required in  
Section 6.1(i) and (ii), a compliance certificate  
in substantially the form of Exhibit B hereto (a  
"Compliance Certificate") signed by an Authorized  
Officer showing the calculations necessary to  
determine compliance with this Agreement and  
stating that no Default or Event of Default exists,  
or if any Default or Event of Default exists,  
stating the nature and status thereof. 
 
	  (vi)	As soon as possible, but in any event within 45  
days after the end of each quarter (except the last  
fiscal quarter, in which case within 90 days after  
the end of such quarter), a Leverage Ratio Level  
Certificate in substantially the form of Exhibit D  
hereto signed by an Authorized Officer. 
 
	 (vii)	As soon as possible and in any event within 10 days  
after the Borrower knows that any Reportable Event  
has occurred with respect to any Single Employer  
Plan, a statement, signed by an Authorized Officer,  
describing said Reportable Event and the action  
which the Borrower proposes to take with respect  
thereto. 
 
	(viii)	As soon as possible and in any event within 10 days  
after receipt by the Borrower, a copy of (a) any  
notice or claim to the effect that the Borrower or  
any of its Subsidiaries is or may be liable to any  
Person as a result of the release by the Borrower,  
any of its Subsidiaries, or any other Person of any  
toxic or hazardous waste or substance into the  
environment, and (b) any notice alleging any  
violation of any federal, state or local  
environmental, health or safety law or regulation  
by the Borrower or any of its Subsidiaries, which,  
in either case, could have a Material Adverse  
Effect. 
 
	  (ix)	Promptly upon the furnishing thereof to the  
shareholders of the Borrower, copies of all  
financial statements, reports and proxy statements  
so furnished. 
 
	   (x)	Promptly upon the filing thereof, copies of all  
registration statements and annual, quarterly,  
monthly or other regular reports or statutory  
statements which the Borrower or any of its  
Subsidiaries files with the SEC or any insurance or  
regulatory agency.  
 
	  (xi)	Such other information (including non-financial  
information) as the Agent may from time to time  
reasonably request. 
 
	6.2	Use of Proceeds.  The Borrower will use the proceeds of the  
Loans (a) for the repayment of amounts outstanding under the  
Prior Loan Agreement, (b) to make permitted Acquisitions, (c) to  
make permitted Capital Expenditures and (d) for other general  
working capital purposes.  The Borrower will not, nor will it  
permit any Subsidiary to, use any of the proceeds of the Loans to  
purchase or carry any "margin stock" (as defined in Regulation  
U). 
 
	6.3	Notice of Default.  The Borrower will, and will cause each  
Subsidiary to, give prompt (but in any case, within 5 Business  
Days) notice in writing to the Lenders of the occurrence of any  
Default or Event of Default and of any other development,  
financial or otherwise, which could have a Material Adverse  
Effect. 
 
	6.4	Conduct of Business.  The Borrower will, and will cause  
each Subsidiary to, carry on and conduct its business in the pet  
food and supply business and related fields and to do all things  
necessary to remain  in good standing in its jurisdiction of  
organization and maintain all requisite authority to conduct its  
business in each jurisdiction in which its business is conducted.   
The Borrower shall not, and shall not permit any of its  
Subsidiaries to, make any material change in the nature of its  
business as presently conducted; provided that the foregoing  
shall not be construed as a limitation on Acquisitions permitted  
hereunder. 
 
	6.5	Records.  The Borrower will, and will cause each Subsidiary  
to, keep adequate records and books of account, in which full and  
correct entries shall be made in accordance with Agreement  
Accounting Principles of all financial transactions of the  
Borrower, its Subsidiaries, their respective assets and their  
respective business. 
 
	6.6	Insurance.  The Borrower will, and will cause each  
Subsidiary to, maintain insurance on all their Property in such  
amounts and covering such risks as is consistent with sound  
business practice, and the Borrower will furnish to any Lender  
upon request full information as to the insurance carried.  
 
	6.7	Compliance with Laws.  The Borrower will, and will cause  
each Subsidiary to, comply in all material respects with all  
applicable laws, rules, regulations and orders, such compliance  
to include, without limitation, paying before the same become  
delinquent, all taxes, assessments and governmental charges  
imposed upon it or upon its property, except such taxes,  
assessments and governmental charges as are being contested in  
good faith by appropriate proceedings and as to which appropriate  
reserves are maintained.  
 
	6.8	Maintenance of Properties.  The Borrower will, and will  
cause each Subsidiary to, do all things necessary to maintain,  
preserve, protect and keep its Property in good repair, working  
order and condition, and make all necessary and proper repairs,  
renewals and replacements so that its business carried on in  
connection therewith may be properly conducted at all times. 
 
	6.9	Inspection.  At any reasonable time and from time to time  
upon reasonable notice, the Borrower will, and will cause each  
Subsidiary to, permit the Agent, by its respective  
representatives and agents, to inspect any of the Property,  
corporate books and financial records of the Borrower and each  
Subsidiary, to examine and make copies of the books of accounts  
and other financial records of the Borrower and each Subsidiary,  
and to discuss the affairs, finances and accounts of the Borrower  
and each Subsidiary with, and to be advised as to the same by,  
their respective officers at such reasonable times and intervals  
as the Lenders may designate. 
 
	6.10	Debt.  The Borrower will not, nor will it permit any  
Subsidiary to, create, incur or suffer to exist any Debt, except: 
 
	(i)	Debt of the Borrower under the Loan Documents; 
 
	(ii)	Debt in existence on the date hereof, as set forth on  
Schedule 3; 
	(iii)	trade Debt incurred to acquire goods, supplies, and  
services and incurred in the ordinary course of business; 
 
	(iv)	Debt incurred to refinance all or a portion of the Loans  
and/or Letters of Credit as long as all proceeds are used to  
repay the Loans (or apply as cash collateral for outstanding  
Letters of Credit), the Debt is not senior or pari passu in any  
way to the Loans or the Letters of Credit remaining outstanding  
and such Debt does not mature prior to the maturity of Loans  
and/or Letters of Credit remaining outstanding; and 
 
	(v)	Debt secured by Liens permitted pursuant to Section 6.22. 
 
	6.11	Merger.  The Borrower will not, nor will it permit any  
Subsidiary to, enter into any merger, consolidation or  
amalgamation, or liquidate, wind up or dissolve itself (or suffer  
any liquidation or dissolution), or convey, sell, lease, assign,  
transfer or otherwise dispose of, all or substantially all of its  
property, business or assets; provided that the Borrower may  
merge or consolidate with another Person if (i) the Borrower is  
the surviving corporation, (ii) the Borrower will be in pro forma  
compliance with all provisions of this Agreement subsequent to  
such merger or consolidation and (iii) the Borrower has filed the  
SEC Report (if required to do so by law). 
 
	6.12	Sale of Assets.  The Borrower will not, nor will it permit  
any Subsidiary to, lease, sell or otherwise dispose of its  
Property, to any other Person except for (i) sales of inventory  
in the ordinary course of business and (ii) leases, sales or  
other dispositions of its Property that, together with all other  
Property of the Borrower and its Subsidiaries previously leased,  
sold or disposed of (other than inventory in the ordinary course  
of business) as permitted by this Section during the term of this  
Agreement do not require the Borrower to file an SEC Report;  
provided that the foregoing shall not be construed as prohibiting  
a transfer of assets from a Subsidiary to the Borrower or the  
merger of a Subsidiary into the Borrower. 
 
	6.13	Sale of Accounts.  The Borrower will not, nor will it  
permit any Subsidiary to, sell or otherwise dispose of any notes  
receivable or accounts receivable, with or without recourse,  
except the Borrower or any Subsidiary may assign accounts  
receivable (previously expensed by the Borrower as bad debts) for  
collection, with or without recourse. 
 
	6.14	Acquisitions.  The Borrower will not, nor will it permit  
any Subsidiary to, enter into any agreement, contract, binding  
commitment or other arrangement providing for any Acquisition, or  
take any action to solicit the tender of securities or proxies in  
respect thereof in order to effect any Acquisition, unless: 
 
	(i)	the Person to be (or whose assets are to be) acquired does  
not oppose such Acquisition and the line or lines of business of  
the Person to be acquired are substantially the same as one or  
more line or lines of business conducted by the Borrower and its  
Subsidiaries, 
 
    (ii)	no Default or Event of Default shall have occurred  
and be continuing either immediately prior to or immediately  
after giving effect to such Acquisition, 
 
   (iii)	if any Acquisition would require the Borrower to  
file an SEC Report, the Borrower shall have furnished to the  
Agent (A) pro forma historical financial statements as of the end  
of the most recently completed fiscal year of the Borrower and  
most recent interim fiscal quarter, if applicable, giving effect  
to such Acquisition and (B) a Compliance Certificate prepared on  
a historical pro forma basis giving effect to such Acquisition,  
which certificate shall demonstrate that no Default or Event of  
Default would exist immediately after giving effect thereto  
(provided, however, that in each case if such information is not  
then available for such periods with respect to Borrower, any  
Subsidiary or the Person being acquired (or from whom assets are  
being acquired), then such statements may be based instead upon  
reasonable estimates made by Borrower as to the financial  
performance of such Persons for such periods) and 
 
    (iv)	the Person acquired shall be a Subsidiary, or be  
merged into the Borrower or a Subsidiary, immediately upon  
consummation of the Acquisition (or if assets are being acquired,  
the acquiror shall be the Borrower or a Subsidiary). 
 
	6.15	Affiliates.  The Borrower will not, and will not permit any  
Subsidiary to, enter into any transaction (including, without  
limitation, the purchase or sale of any Property or service)  
with, or make any payment or transfer to, any Affiliate except in  
the ordinary course of business and pursuant to the reasonable  
requirements of the Borrower's or such Subsidiary's business and  
upon fair and reasonable terms no less favorable to the Borrower  
or such Subsidiary than the Borrower or such Subsidiary would  
obtain in a comparable arms-length transaction; provided that the  
foregoing shall not be construed as prohibiting a transfer of  
assets from a Subsidiary to the Borrower or the merger of a  
Subsidiary into the Borrower.   
 
	6.16	ERISA.  The Borrower will not, and will not permit any  
Subsidiary to, become a party to any Multiemployer Plan. 
 
	6.17	Capital Expenditures.  The Borrower will not, and will not  
permit any Subsidiary to, make or commit to make (by way of the  
acquisition of securities of a person or entity or otherwise) any  
Capital Expenditure, except for Capital Expenditures not  
exceeding (i) in fiscal year 1996, $40,000,000 in the aggregate  
and (ii) in fiscal year 1997, the sum of $50,000,000 in the  
aggregate, plus an aggregate amount equal to the amount (if any)  
by which the actual Capital Expenditures in 1996 were less than  
those permitted under (i) hereof.  Notwithstanding the foregoing,  
any Capital Expenditure made by a Person which is the subject of  
an Acquisition by the Borrower, prior to such Acquisition, shall  
not be included in determining compliance by the Borrower and its  
Subsidiaries with this Section. 
 
	6.18	Total Debt Ratio.  The Borrower and its Subsidiaries on a  
consolidated basis shall not permit, as of the end of each fiscal  
quarter for the four consecutive fiscal quarters then ended, the  
Total Debt Ratio to be greater than 3.0:1.0. 
 
	6.19	Payment of Obligations.  The Borrower and each Subsidiary  
will pay and discharge promptly all taxes, assessments and other  
governmental charges and claims levied or imposed upon it or its  
Property, or any part thereof, provided, however, that the  
Borrower and its Subsidiaries shall have the right in good faith  
to contest any such taxes, assessments, charges or claims and,  
pending the outcome of such contest, to delay or refuse payment  
thereof provided that adequately funded reserves are established  
by it to pay and discharge any such taxes assessments, charges  
and claims. 
 
	6.20	Consolidated Net Worth.  The Borrower and its Subsidiaries  
shall at all times maintain Consolidated Net Worth, determined as  
of the end of each fiscal quarter, of not less than $150,000,000  
plus 50% of cumulative Net Income for the period commencing on  
August 3, 1996 through the end of such fiscal quarter plus 75% of  
any net proceeds obtained from any public equity offering.  (In  
the event that the Borrower and its Subsidiaries have a  
consolidated net loss for any fiscal quarter, Net Income for  
purposes of this Section shall be deemed zero for such fiscal  
quarter). 
 
	6.21	Minimum Interest Coverage Ratio.  The Borrower shall  
maintain a ratio, determined as of the end of each fiscal  
quarter, for the four consecutive fiscal quarters then ended, of  
EBITDA to Interest Expense of not less than 4.0:1.0. 
 
	6.22	Encumbrances and Liens.  The Borrower will not create,  
assume or suffer to exist any Lien (other than for taxes not  
delinquent and for taxes and other items being contested in good  
faith) on Property of any kind, whether real, personal or mixed,  
now owned or hereafter acquired, or upon the income or profits  
thereof, except for (i) minor encumbrances and easements on real  
property which do not materially affect its market value, (ii)  
existing Liens on the Borrower's personal property; (iii) future  
purchase money security interests encumbering only the property  
purchased; (iv) statutory liens of bankers, carriers,  
warehousemen, mechanics, materialmen, and other similar Liens  
imposed by law, which are incurred in the ordinary course of  
business for sums not more than 30 days delinquent or which are  
being contested in good faith by appropriate proceedings; (v)  
deposits made in the ordinary course of business to secure  
liability to insurance carriers; (vi) attachment and judgment  
Liens securing claims less than $1,000,000 in the aggregate  
(excluding for purposes of said calculation any such Liens for  
which execution has been stayed, payment is covered in full by  
insurance, or the Borrower is prosecuting an appeal in good faith  
by appropriate proceedings); and (vii) monetary obligations of  
the Borrower under any leasing or similar arrangement which, in  
accordance with Agreement Accounting Principles, is classified as  
a Capitalized Lease.  Notwithstanding the foregoing: (i) the  
Borrower shall not at any time encumber any real property with a  
purchase money security interest if (A) immediately after giving  
effect to such encumbrances, the purchase money Debt secured by  
said encumbrance will exceed 75% of the fair market value of the  
Property encumbered by the encumbrance or (B) immediately after  
giving effect to such encumbrance, the aggregate Debt of the  
Borrower secured by purchase money security interests in real  
property will exceed 5% of total assets of the Borrower and its  
Subsidiaries on a consolidated basis; and (ii) the Borrower shall  
not at any time encumber its Property with an additional Lien or  
encumbrance if, immediately after giving effect to such  
encumbrance, the Borrower would be required to file an SEC  
Report. 
 
	6.23	Loans, Advances and Guaranties.  The Borrower will not, and  
will not permit any Subsidiary to, except in the ordinary course  
of business as currently conducted, make any loans or advances,  
become a guarantor or surety, pledge its credit or properties in  
any manner or extend credit; provided that the foregoing shall  
not be construed as a limitation on guaranties or any Liens  
permitted hereunder. 
 
	6.24	Investments.  The Borrower will not purchase the Debt of  
another Person or entity except for: 
 
	(i)	certificates of deposit, time deposits, Eurodollar time  
deposits, repurchase agreements, reverse repurchase agreements,  
or bankers' acceptances, having in each case a maturity date of  
not more than twelve months from the date of acquisition by the  
Borrower, issued by a Lender or any U.S. commercial bank or any  
branch or agency of a non-U.S. bank licensed to conduct business  
in the U.S. having combined capital and surplus or not less than  
$50,000,000 whose short term securities are rated at least "A" by  
Standard & Poor's Corporation (or the equivalent rating provided  
by any of Moody's Investors Service, Inc., Duff & Phelps Credit  
Rating Co. or Fitch Investors Services, Inc.); 
 
	(ii)	interest bearing or discounted obligations of the United  
States Government, any agency thereof (including without  
limitation the Federal Home Loan Mortgage Corporation, the  
Government National Mortgage Association, the Federal National  
Mortgage Association and the Federal Farm Credit System) or any  
entities or pools of mortgages or other instruments formed by the  
United States Government or any such agencies, and in any case  
only if such obligation has a maturity date not more than twelve  
months from the date of acquisition by the Borrower; 
 
	(iii)	obligations issued by states and local governments  
or their agencies, instrumentalities, authorities or  
subdivisions, if such issuer has received a rating of at least  
"A" by Standard & Poor's Corporation (or the equivalent rating  
provided by any of Moody's Investors Service, Inc., Duff & Phelps  
Credit Rating Co. or Fitch Investors Services, Inc.), and in any  
case only if such obligation has a maturity date of not more than  
twelve months from the date of acquisition by Borrower; 
 
	(iv)	commercial paper of an issuer rated at least "A" by  
Standard & Poor's Corporation (or the equivalent rating provided  
by any of Moody's Investors Service, Inc., Duff & Phelps Credit  
Rating Co. or Fitch Investors Services, Inc.), and in any case  
only if such obligation has a maturity date not more than twelve  
months from the date of acquisition by Borrower; 
 
	(v)	investments in money market funds including short-term  
adjustable rate money market funds; or  
 
	(vi)	inter-company Debt otherwise permitted by Section 6.10(iii)  
hereof. 
 
	6.25	Minimum Fixed Charge Coverage Ratio.  The Borrower shall at  
all times maintain a ratio, determined as of the end of each  
fiscal quarter, for the four consecutive fiscal quarters then  
ended, of EBITDA to Consolidated Fixed Charges of not less than  
2.0:1.0. 
 
	6.26	Guaranties, Etc.  The Borrower will cause each of its  
Subsidiaries hereafter formed or acquired to execute and deliver  
to the Agent promptly upon the formation or acquisition thereof a  
Guaranty in form and substance satisfactory to the Agent,  
guaranteeing the Obligations on substantially the same terms as  
the other Guarantors. 
 
 
ARTICLE 7 
 
DEFAULTS 
 
 
	The occurrence of any one or more of the following events shall  
constitute an "Event of Default": 
 
	7.1	Payment Defaults.  The Borrower shall fail to pay when due  
any payment of principal of any Loan, or the Borrower shall fail  
to pay within 3 days of the date when due any reimbursement  
obligation (with respect to a drawing under a Letter of Credit)  
or interest or other charge or fee required under the terms of  
this Agreement or the other Loan Documents. 
 
	7.2	Representations and Warranties.  Any representation or  
warranty made by the Borrower or any Guarantor under any Loan  
Document shall prove to have been incorrect or misleading in any  
material respect when made. 
 
	7.3	Other Loan Document Defaults.  The Borrower or any  
Guarantor shall fail to perform (a) any obligation set forth in  
subsections 6.1, 6.3, 6.10, 6.11, 6.12, 6.13, 6.14, 6.17, 6.18,  
6.21, 6.22, 6.23, 6.24 or 6.25 of the Agreement; (b) any  
obligation set forth in subsection 6.20 of the Agreement and such  
failure shall continue for 14 days following the occurrence  
thereof; or (c) any other obligation contained in the Agreement  
or the other Loan Documents, and such failure shall continue for  
30 days after written notice thereof from the Lenders. 
 
	7.4	Bankruptcy.  (a) The Borrower or any Guarantor shall fail  
to pay its Debts generally as they become due or shall file any  
petition or action for relief under any bankruptcy, insolvency,  
reorganization, moratorium, creditor composition law, or any  
other law for the relief of or relating to debtors; (b) an  
involuntary petition under any bankruptcy law shall be filed  
against the Borrower or any Guarantor and shall not be dismissed  
or discharged within 60 days of filing; or (c)a custodian,  
receiver, trustee, assignee for the benefit or creditors, or  
other similar official, shall be appointed to take possession,  
custody or control of the properties of the Borrower or any  
Guarantor and not be dismissed or discharged with 60 days of  
appointment. 
 
	7.5	Other Agreements.  The Borrower shall fail to pay when due  
principal or interest payments required under the terms of any  
bonds, notes, debentures or other agreements evidencing, in the  
aggregate, at least $5,000,000 of indebtedness (excluding, for  
purposes of this calculation, payments required under this  
Agreement or any of the other Loan Documents) and such non- 
payment shall continue beyond any period of grace provided with  
respect thereto, or the Borrower shall default in the observance  
or performance of any other agreement contained in any such  
bonds, notes, debentures or other agreements evidencing  
indebtedness, and the effect of such failure or default is to  
cause the indebtedness evidenced thereby to become due prior to  
its stated date of maturity. 
 
	7.6	ERISA.  Any Governmental Person shall take any action under  
ERISA, with respect to any Plan, that could have a Material  
Adverse Effector that the unfunded liabilities exceed $1,000,000. 
 
	7.7	Judgments.  A final judgment or order for the payment of  
money in excess of $5,000,000 (exclusive of amounts covered by  
insurance) shall be rendered against the Borrower or any  
Guarantor and the same shall remain undischarged for a period of  
30 days during which execution shall not be effectively stayed,  
or any judgment, writ, warrant of attachment, or execution or  
similar process, shall be issued or levied against a substantial  
part of the Borrower's or any Guarantor's property and such  
judgment, writ, warrant of attachment, or execution or similar  
process, shall not be released, stayed, vacated, bonded or  
otherwise dismissed within 20 days after its issue or levy. 
 
	7.8	Loan Documents.  The Guaranties or any other Loan Document  
shall fail to remain in full force or effect or any action shall  
be taken by the Borrower or any Guarantor to discontinue or to  
assert the invalidity or unenforceability of any Guaranty or any  
other Loan Document, or any Guarantor denies that it has any  
further liability under any Guaranty to which it is a party, or  
gives notice to such effect. 
 
 
 
ARTICLE 8 
 
ACCELERATION, WAIVERS AND AMENDMENTS 
 
 
	8.1	Acceleration.  If any Event of Default described in Section  
7.4 occurs with respect to the Borrower, the obligations of the  
Lenders to make Loans and issue and participate in Letters of  
Credit hereunder shall automatically terminate and the  
Obligations shall immediately become due and payable without any  
election or action on the part of the Agent or any Lender.  If  
any other Event of Default occurs, the Required Lenders may  
terminate or suspend the obligations of the Lenders to make Loans  
and issue and participate in Letters of Credit hereunder, or  
declare the Obligations to be due and payable, or both, whereupon  
the Obligations shall become immediately due and payable, without  
presentment, demand, protest or notice of any kind, all of which  
the Borrower hereby expressly waives. 
 
	8.2	Cash Collateral.  To the extent that any Letters of Credit  
are outstanding at the time of any Event of Default, the Borrower  
shall deliver to the Agent, for the benefit of the Lenders, a  
cash collateral deposit in an amount equal to the aggregate  
Letter of Credit Amount for all Letters of Credit then  
outstanding. 
 
	8.3	Additional Remedies.  The rights, powers and remedies given  
to the Agent and the Lenders hereunder shall be cumulative and  
not alternative and shall be in addition to all rights, powers  
and remedies given to the Agent and the Lenders by law against  
the Borrower or any other person, including but not limited to  
any Lender's right of setoff or banker's lien. 
 
	8.4	Amendments.  Subject to the provisions of this Article 8,  
the Required Lenders (or the Agent with the consent in writing of  
the Required Lenders) and the Borrower may enter into agreements  
supplemental hereto for the purpose of adding or modifying any  
provisions to the Loan Documents or changing in any manner the  
rights of the Lenders or the Borrower hereunder or waiving any  
Default hereunder; provided, however, that no such supplemental  
agreement shall, without the consent of each Lender affected  
thereby: 
 
	(i)	Extend the maturity of any Loan or Note or forgive all or  
any portion of the principal amount thereof, or  
reduce the rate or extend the time of payment of  
interest or fees thereon. 
 
	(ii)	Reduce the percentage specified in the definition of  
Required Lenders. 
 
	(iii)	Increase the amount of the Commitment of any Lender  
hereunder or permit the Borrower to assign its  
rights under this Agreement. 
 
	(iv)	Amend this Section 8.4. 
 
	(v)	Release any guarantor of the Loans or modify any guaranty  
in any material respect. 
 
No amendment of any provision of this Agreement relating to the  
Agent shall be effective without the written consent of the  
Agent.  The Agent may waive payment of the fees required under  
Section 12.3(ii) without obtaining the consent of any other party  
to this Agreement. 
 
	8.5	Preservation of Rights.  No delay or omission of the  
Lenders or the Agent to exercise any right under the Loan  
Documents shall impair such right or be construed to be a waiver  
of any Default or an acquiescence therein, and the making of a  
Loan notwithstanding the existence of a Default or the inability  
of the Borrower to satisfy the conditions precedent to such Loan  
shall not constitute any waiver or acquiescence.  Any single or  
partial exercise of any such right shall not preclude other or  
further exercise thereof or the exercise of any other right, and  
no waiver, amendment or other variation of the terms, conditions  
or provisions of the Loan Documents whatsoever shall be valid  
unless in writing signed by the Lenders required pursuant to  
Section 8.4, and then only to the extent in such writing  
specifically set forth.  All remedies contained in the Loan  
Documents or by law afforded shall be cumulative and all shall be  
available to the Agent and the Lenders until the Obligations have  
been paid in full. 
 
ARTICLE 9 
 
GENERAL PROVISIONS 
 
 
	9.1	Survival of Representations.  All representations and  
warranties of the Borrower contained in this Agreement shall  
survive delivery of the Notes and the making of the Loans and  
issuance of the Letters of Credit herein contemplated. 
 
	9.2	Governmental Regulation.  Anything contained in this  
Agreement to the contrary notwithstanding, no Lender shall be  
obligated to extend credit to the Borrower in violation of any  
limitation or prohibition provided by any applicable statute or  
regulation. 
 
	9.3	Headings.  Section headings in the Loan Documents are for  
convenience of reference only, and shall not govern the  
interpretation of any of the provisions of the Loan Documents. 
 
	9.4	Entire Agreement.  The Loan Documents embody the entire  
agreement and understanding among the Borrower, the Agent and the  
Lenders and supersede all prior agreements and understandings  
among the Borrower, the Agent and the Lenders relating to the  
subject matter thereof. 
 
	9.5	Several Obligations; Benefits of this Agreement.  The  
respective obligations of the Lenders hereunder are several and  
not joint and no Lender shall be the partner or agent of any  
other (except to the extent to which the Agent is authorized to  
act as such).  The failure of any Lender to perform any of its  
obligations hereunder shall not relieve any other Lender from any  
of its obligations hereunder.  This Agreement shall not be  
construed so as to confer any right or benefit upon any Person  
other than the parties to this Agreement and their respective  
successors and assigns. 
 
	9.6	Expenses; Indemnification.  The Borrower shall reimburse  
the Agent for any costs, internal charges and out-of-pocket  
expenses (including reasonable attorneys' fees and time charges  
of attorneys for the Agent, not to exceed, however, amounts set  
forth in a letter to the Borrower by UBOC dated September 26,  
1996) paid or incurred by the Agent in connection with the  
negotiation and documentation of this Agreement.  The Borrower  
shall also reimburse the Agent and each Lender for any costs,  
internal charges and out-of-pocket expenses (including reasonable  
attorneys' fees and time charges of attorneys for the Agent and  
each Lender) paid or incurred by the Agent or any Lender in  
connection with the collection and enforcement of the Loan  
Documents.  The Borrower further agrees to indemnify the Agent  
and each Lender, its directors, officers and employees against  
all losses, claims, damages, penalties, judgments, liabilities  
and expenses (including, without limitation, all expenses of  
litigation or preparation therefor whether or not the Agent or  
any Lender is a party thereto) which any of them may pay or incur  
arising out of or relating to this Agreement, the other Loan  
Documents, the transactions contemplated hereby or the direct or  
indirect application or proposed application of the proceeds of  
any Loan or Letter of Credit hereunder, provided that no Person  
shall have the right to be indemnified hereunder for such  
Person's own gross negligence or willful misconduct as determined  
by a court of competent jurisdiction.   
 
	9.7	Numbers of Documents.  All statements, notices, closing  
documents, and requests hereunder shall be furnished to the Agent  
with sufficient counterparts so that the Agent may furnish one to  
each of the Lenders. 
 
	9.8	Accounting.  Except as provided to the contrary herein, all  
accounting terms used herein shall be interpreted and all  
accounting determinations hereunder shall be made in accordance  
with Agreement Accounting Principles; provided that, if the  
Borrower notifies the Agent that the Borrower wishes to amend any  
covenant contained in Article 6 to eliminate the effect of any  
change after the date hereof in Agreement Accounting Principles  
(which, for purposes of this proviso shall include the generally  
accepted application or interpretation thereof) on the operation  
of such covenants (or if the Agent notifies the Borrower that the  
Required Lenders wish to amend any such covenant for such  
purpose), then the Borrower's compliance with such covenant shall  
be determined on the basis of Agreement Accounting Principles in  
effect immediately before the relevant change in Agreement  
Accounting Principles became effective, until either such notice  
is withdrawn or such covenant is amended in a manner satisfactory  
to the Borrower and the Required Lenders. 
 
	9.9	Severability of Provisions.  Any provision in any Loan  
Document that is held to be inoperative, unenforceable, or  
invalid in any jurisdiction shall, as to that jurisdiction, be  
inoperative, unenforceable, or invalid without affecting the  
remaining provisions in that jurisdiction or the operation,  
enforceability, or validity of that provision in any other  
jurisdiction, and to this end the provisions of all Loan  
Documents are declared to be severable. 
 
	9.10	Nonliability of Lenders.  The relationship between the  
Borrower and the Lenders and the Agent shall be solely that of  
borrower and lender.  Neither the Agent nor any Lender shall have  
any fiduciary responsibilities to the Borrower.  Neither the  
Agent nor any Lender undertakes any responsibility to the  
Borrower to review or inform the Borrower of any matter in  
connection with any phase of the Borrower's business or  
operations. 
 
	9.11	CHOICE OF LAW.  THE LOAN DOCUMENTS (OTHER THAN THOSE  
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE  
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW  
OF CONFLICTS) OF THE STATE OF CALIFORNIA, BUT GIVING EFFECT TO  
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. 
 
	9.12	CONSENT TO JURISDICTION.  THE BORROWER HEREBY IRREVOCABLY  
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES  
FEDERAL OR CALIFORNIA STATE COURT SITTING IN LOS ANGELES IN ANY  
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN  
DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL  
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND  
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION  
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,  
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT  
IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT  
OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE  
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL  
PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY  
AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR  
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR  
CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT  
IN LOS ANGELES, CALIFORNIA. 
 
	9.13	WAIVER OF JURY TRIAL.  THE BORROWER, THE AGENT AND EACH  
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING  
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING  
IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,  
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE  
RELATIONSHIP ESTABLISHED THEREUNDER. 
 
	9.14	Integration Clause.  Except for documents and instruments  
specifically referenced herein, this Agreement constitutes the  
entire agreement among the Agent, the Lenders and the Borrower  
regarding the Loans and Letters of Credit and all prior  
communications verbal or written between the Borrower and the  
Agent or any Lender shall be of no further effect or evidentiary  
value. 
 
	9.15	Confidentiality.  The Lenders shall take normal and  
reasonable precautions to maintain the confidentiality of all  
non-public information obtained pursuant to the requirements of  
this Agreement which has been identified as such by the Borrower  
but may, in any event, make disclosures (i) reasonably required  
by any bona fide transferee, assignee or participant in  
connection with the contemplated transfer or assignment of any of  
the Commitments or Loans or participations therein or  
participations in Letters of Credit or (ii) as required or  
requested by any governmental agency or representative thereof or  
as required pursuant to any legal process or (iii) to its  
attorneys and accountants or (iv) as required by law or (v) in  
connection with litigation involving any Lender. 
 
 
ARTICLE 10 
 
THE AGENT 
 
 
	10.1	Appointment.  UBOC is hereby appointed Agent hereunder and  
under each other Loan Document, and each of the Lenders  
irrevocably authorizes the Agent to act as the agent of such  
Lender.  The Agent agrees to act as such upon the express  
conditions contained in this Article 10.  The Agent shall not  
have a fiduciary relationship in respect of the Borrower or any  
Lender by reason of this Agreement. 
 
	10.2	Powers.  The Agent shall have and may exercise such powers  
under the Loan Documents as are specifically delegated to the  
Agent by the terms of each thereof, together with such powers as  
are reasonably incidental thereto.  The Agent shall have no  
implied duties to the Lenders, or any obligation to the Lenders  
to take any action thereunder except any action specifically  
provided by the Loan Documents to be taken by the Agent. 
 
	10.3	General Immunity.  Neither the Agent nor any of its  
directors, officers, agents or employees shall be liable to the  
Borrower or any Lender for any action taken or omitted to be  
taken by it or them hereunder or under any other Loan Document or  
in connection herewith or therewith except for its or their own  
gross negligence or willful misconduct. 
 
	10.4	No Responsibility for Loans, Recitals, etc.  Neither the  
Agent nor any of its directors, officers, agents or employees  
shall be responsible for or have any duty to ascertain, inquire  
into, or verify (i) any statement, warranty or representation  
made in connection with any Loan Document or any borrowing  
hereunder; (ii) the performance or observance of any of the  
covenants or agreements of any obligor under any Loan Document,  
including, without limitation, any agreement by an obligor to  
furnish information directly to each Lender; (iii) the  
satisfaction of any condition specified in Article 4 except  
receipt of items required to be delivered to the Agent; or (iv)  
the validity, effectiveness or genuineness of any Loan Document  
or any other instrument or writing furnished in connection  
therewith.  The Agent shall have no duty to disclose to the  
Lenders information that is not required to be furnished by the  
Borrower to the Agent at such time, but is voluntarily furnished  
by the Borrower to the Agent (either in its capacity as Agent or  
in its individual capacity). 
 
	10.5	Action on Instructions of Lenders.  The Agent shall in all  
cases be fully protected in acting, or in refraining from acting,  
hereunder and under any other Loan Document in accordance with  
written instructions signed by the Required Lenders, and such  
instructions and any action taken or failure to act pursuant  
thereto shall be binding on all of the Lenders and on all holders  
of Notes.  The Agent shall be fully justified in failing or  
refusing to take any action hereunder and under any other Loan  
Document unless it shall first be indemnified to its satisfaction  
by the Lenders pro rata against any and all liability, cost and  
expense that it may incur by reason of taking or continuing to  
take any such action. 
 
	10.6	Employment of Agents and Counsel.  The Agent may execute  
any of its duties as Agent hereunder and under any other Loan  
Document by or through employees, agents, and attorneys-in-fact  
and shall not be answerable to the Lenders, except as to money or  
securities received by it or its authorized agents, for the  
default or misconduct of any such agents or attorneys-in-fact  
selected by it with reasonable care.  The Agent shall be entitled  
to advice of counsel concerning all matters pertaining to the  
agency hereby created and its duties hereunder and under any  
other Loan Document. 
 
	10.7	Reliance on Documents; Counsel.  The Agent shall be  
entitled to rely upon any Note, notice, consent, certificate,  
affidavit, letter, telegram, statement, paper or document  
believed by it to be genuine and correct and to have been signed  
or sent by the proper person or persons, and, in respect to legal  
matters, upon the opinion of counsel selected by the Agent, which  
counsel may be employees of the Agent. 
 
	10.8	Agent's Reimbursement and Indemnification.  The Lenders  
agree to reimburse and indemnify the Agent ratably in proportion  
to their respective Commitments (i) for any other expenses  
incurred by the Agent on behalf of the Lenders, in connection  
with the preparation, execution, delivery, administration and  
enforcement of the Loan Documents and (ii) for any liabilities,  
obligations, losses, damages, penalties, actions, judgments,  
suits, costs, expenses or disbursements of any kind and nature  
whatsoever which may be imposed on, incurred by or asserted  
against the Agent in any way relating to or arising out of the  
Loan Documents or any other document delivered in connection  
therewith or the transactions contemplated thereby, or the  
enforcement of any of the terms thereof or of any such other  
documents, provided that no Lender shall be liable for any of the  
foregoing to the extent they arise from the gross negligence or  
willful misconduct of the Agent.  The obligations of the Lenders  
under this Section 10.8 shall survive payment of the Obligations  
and termination of this Agreement. 
 
	10.9	Rights as a Lender.  In the event the Agent is a Lender,  
the Agent shall have the same rights and powers hereunder and  
under any other Loan Document as any Lender and may exercise the  
same as though it were not the Agent, and the term "Lender" or  
"Lenders" shall, at any time when the Agent is a Lender, unless  
the context otherwise indicates, include the Agent in its  
individual capacity.  The Agent may accept deposits from, lend  
money to, and generally engage in any kind of trust, debt, equity  
or other transaction, in addition to those contemplated by this  
Agreement or any other Loan Document, with the Borrower or any of  
its Subsidiaries in which the Borrower or such Subsidiary is not  
restricted hereby from engaging with any other Person.  The Agent  
shall, as long as it shall be the Agent, retain at least a 25%  
interest in the Commitment or, if the Commitment has been  
terminated at least a 25% interest in Loans outstanding. 
 
	10.10	Lender Credit Decision.  Each Lender acknowledges  
that it has, independently and without reliance upon the Agent or  
any other Lender and based on the financial statements prepared  
by the Borrower and such other documents and information as it  
has deemed appropriate, made its own credit analysis and decision  
to enter into this Agreement and the other Loan Documents.  Each  
Lender also acknowledges that it will, independently and without  
reliance upon the Agent or any other Lender and based on such  
documents and information as it shall deem appropriate at the  
time, continue to make its own credit decisions in taking or not  
taking action under this Agreement and the other Loan Documents. 
 
	10.11	Successor Agent.  The Agent may resign at any time  
by giving written notice thereof to the Lenders and the Borrower,  
such resignation to be effective upon the appointment of a  
successor Agent or, if no successor Agent has been appointed,  
forty-five days after the retiring Agent gives notice of its  
intention to resign.  Upon any such resignation, the Required  
Lenders shall have the right to appoint, with the consent (which  
shall not be unreasonably withheld) of the Borrower, if no  
Default has occurred and is continuing, on behalf of the Borrower  
and the Lenders, a successor Agent.  If no successor Agent shall  
have been so appointed by the Required Lenders within thirty days  
after the resigning Agent's giving notice of its intention to  
resign, then the resigning Agent may appoint, on behalf of the  
Borrower and the Lenders, a successor Agent.  If the Agent has  
resigned and no successor Agent has been appointed, the Lenders  
may perform all the duties of the Agent hereunder and the  
Borrower shall make all payments in respect of the Obligations to  
the applicable Lender and for all other purposes shall deal  
directly with the Lenders.  No successor Agent shall be deemed to  
be appointed hereunder until such successor Agent has accepted  
the appointment.  Any such successor Agent shall be a commercial  
bank having capital and retained earnings of at least  
$50,000,000.  Upon the acceptance of any appointment as Agent  
hereunder by a successor Agent, such successor Agent shall  
thereupon succeed to and become vested with all the rights,  
powers, privileges and duties of the resigning Agent.  Upon the  
effectiveness of the resignation of the Agent, the resigning  
Agent shall be discharged from its duties and obligations  
hereunder and under the Loan Documents.  After the effectiveness  
of the resignation of an Agent, the provisions of this Article 10  
shall continue in effect for the benefit of such Agent in respect  
of any actions taken or omitted to be taken by it while it was  
acting as the Agent hereunder and under the other Loan Documents.  
 
 
ARTICLE 11 
 
SETOFF; RATABLE PAYMENTS 
 
 
	11.1	Setoff.  Upon the occurrence and during the continuance of  
any Event of Default, the Lenders are hereby authorized at any  
time and from time to time, to the fullest extent permitted by  
law, to set off and apply any and all deposits (general or  
special, time or demand, provisional or final) at any time held  
and other indebtedness at any time owing by any Lender to or for  
the credit or the account of the Borrower against any and all  
obligations of the Borrower now or hereafter existing under the  
Loan Documents, irrespective of whether or not any Lender shall  
have made any demand under this Agreement and although such  
obligations may be unmatured.  The Agent agrees to notify the  
Borrower promptly after any such setoff and application;  
provided, however, that the failure to give such notice shall not  
affect the validity of such setoff and application.  The rights  
of the Lenders under this Section are in addition to other rights  
and remedies (including other rights of setoff) that the Lenders  
may have.  
 
	11.2	Ratable Payments.  If any Lender, whether by setoff or  
otherwise, has payment made to it upon its Loans (other than  
payments received pursuant to Section 3.1 or 3.2) in a greater  
proportion than that received by any other Lender, such Lender  
agrees, promptly upon demand, to purchase a portion of the Loans  
held by the other Lenders so that after such purchase each Lender  
will hold its ratable proportion of Loans.  If any Lender,  
whether in connection with setoff or amounts which might be  
subject to setoff or otherwise, receives collateral or other  
protection for its Obligations or such amounts which may be  
subject to setoff, such Lender agrees, promptly upon demand, to  
take such action necessary such that all Lenders share in the  
benefits of such collateral ratably in proportion to their Loans.   
In case any such payment is disturbed by legal process, or  
otherwise, appropriate further adjustments shall be made. 
 
 
ARTICLE 12 
 
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 
 
 
	12.1	Successors and Assigns.  The terms and provisions of the  
Loan Documents shall be binding upon and inure to the benefit of  
the Borrower and the Lenders and their respective successors and  
assigns, except that (i) the Borrower shall not have the right to  
assign its rights or obligations under the Loan Documents and  
(ii) any assignment by any Lender must be made in compliance with  
Section 12.3.  Notwithstanding clause (ii) of this Section, any  
Lender may at any time, without the consent of the Borrower or  
the Agent, assign all or any portion of its rights under this  
Agreement and its Notes to a Federal Reserve Bank; provided,  
however, that no such assignment shall release the transferor  
Lender from its obligations hereunder.  The Agent may treat the  
payee of any Note as the owner thereof for all purposes hereof  
unless and until such payee complies with Section 12.3 in the  
case of an assignment thereof or, in the case of any other  
transfer, a written notice of the transfer is filed with the  
Agent.  Any assignee or transferee of a Note agrees by acceptance  
thereof to be bound by all the terms and provisions of the Loan  
Documents.  Any request, authority or consent of any Person, who  
at the time of making such request or giving such authority or  
consent is the holder of any Note, shall be conclusive and  
binding on any subsequent holder, transferee or assignee of such  
Note or of any Note or Notes issued in exchange therefor. 
 
	12.2	Participations. 
 
	(i)		Permitted Participants; Effect.  Any Lender  
may, in the ordinary course of its business and in  
accordance with applicable law, at any time sell to one or  
more banks or other entities ("Participants") participating  
interests in any Loan owing to such Lender, any Note held  
by such Lender, any Commitment of such Lender or any other  
interest of such Lender under the Loan Documents.  In the  
event of any such sale by a Lender of participating  
interests to a Participant, such Lender's obligations under  
the Loan Documents shall remain unchanged, such Lender  
shall remain solely responsible to the other parties hereto  
for the performance of such obligations, such Lender shall  
remain the holder of any such Note for all purposes under  
the Loan Documents, all amounts payable by the Borrower  
under this Agreement shall be determined as if such Lender  
had not sold such participating interests, and the Borrower  
and the Agent shall continue to deal solely and directly  
with such Lender in connection with such Lender's rights  
and obligations under the Loan Documents. 
 
	(ii)	 Voting Rights.  Each Lender shall retain  
the sole right to approve, without the consent of any  
Participant, any amendment, modification or waiver of any  
provision of the Loan Documents other than any amendment,  
modification or waiver with respect to any Loan or  
Commitment in which such Participant has an interest which  
forgives principal, interest or fees or reduces the  
interest rate or fees payable with respect to any such Loan  
or Commitment, postpones any date fixed for any regularly- 
scheduled payment of principal of, or interest or fees on,  
any such Loan or Commitment, or releases any guarantor of  
any such Loan or any substantial amount of Collateral  
securing any such Loan. 
 
	(iii)	Benefit of Setoff.  The Borrower agrees that  
each Participant shall be deemed to have the right of  
setoff provided in Section 11.1 in respect of its  
participating interest in amounts owing under the Loan  
Documents to the same extent as if the amount of its  
participating interest were owing directly to it as a  
Lender under the Loan Documents, provided that each Lender  
shall retain the right of setoff provided in Section 11.1  
with respect to the amount of participating interests sold  
to each Participant.  The Lenders agree to share with each  
Participant, and each Participant, by exercising the right  
of setoff provided in Section 11.1, agrees to share with  
each Lender, any amount received pursuant to the exercise  
of its right of setoff, such amounts to be shared in  
accordance with Section 11.2 as if each Participant were a  
Lender. 
 
	12.3	Assignments. 
 
	(i)		Permitted Assignments.  Any Lender may, in  
the ordinary course of its business and in accordance with  
applicable law, at any time assign to one or more Eligible  
Assignees ("Purchasers") all or any part of its rights and  
obligations under the Loan Documents, provided, however,  
such assignments must be in a minimum amount at least equal  
to $5,000,000; provided, however, that if such Purchaser is  
a Lender or an Affiliate thereof, no minimum amount shall  
be applicable.  Such assignment shall be substantially in  
the form of Exhibit C hereto or in such other form as may  
be agreed to by the parties thereto.  The consent of the  
Borrower and the Agent shall be required prior to an  
assignment becoming effective with respect to a Purchaser  
which is not a Lender or an Affiliate thereof; provided,  
however, that if a Default has occurred and is continuing,  
the consent of the Borrower shall not be required.  Such  
consent shall not be unreasonably withheld. 
 
	(ii)	Effect; Effective Date.  Upon (i) delivery  
to the Agent of a notice of assignment, substantially in  
the form attached as Exhibit I to Exhibit C hereto (a  
"Notice of Assignment"), together with any consents  
required by Section 12.3(i), and (ii) payment of a $2,500  
fee to the Agent for processing such assignment, such  
assignment shall become effective on the effective date  
specified in such Notice of Assignment.  The Notice of  
Assignment shall contain a representation by the Purchaser  
to the effect that it is an Eligible Assignee and that none  
of the consideration used to make the purchase of the  
Commitment and Loans under the applicable assignment  
agreement are "plan assets" as defined under ERISA and that  
the rights and interests of the Purchaser in and under the  
Loan Documents will not be "plan assets" under ERISA.  On  
and after the effective date of such assignment, such  
Purchaser shall for all purposes be a Lender party to this  
Agreement and any other Loan Document executed by the  
Lenders and shall have all the rights and obligations of a  
Lender under the Loan Documents, to the same extent as if  
it were an original party hereto, and no further consent or  
action by the Borrower, the Lenders or the Agent shall be  
required to release the transferor Lender with respect to  
the percentage of the Aggregate Commitment and Loans  
assigned to such Purchaser.  Upon the consummation of any  
assignment to a Purchaser pursuant to this Section  
12.3(ii), the transferor Lender, the Agent and the Borrower  
shall make appropriate arrangements so that replacement  
Notes are issued to such transferor Lender and new Notes  
or, as appropriate, replacement Notes, are issued to such  
Purchaser, in each case in principal amounts reflecting  
their Commitment, as adjusted pursuant to such assignment. 
 
	12.4	Dissemination of Information.  The Borrower authorizes each  
Lender to disclose to any Participant or Purchaser or any other  
Person acquiring an interest in the Loan Documents by operation  
of law (each a "Transferee") and any prospective Transferee any  
and all information in such Lender's possession concerning the  
creditworthiness of the Borrower and its Subsidiaries, provided  
that each prospective Transferee shall execute and deliver to the  
Agent a confidentiality agreement (in form and substance  
reasonably satisfactory to the Borrower and the Agent). 
 
	12.5	Tax Treatment.  If any interest in any Loan Document is  
transferred to any Transferee which is organized under the laws  
of any jurisdiction other than the United States or any State  
thereof, the transferor Lender shall cause such Transferee,  
concurrently with the effectiveness of such transfer, to comply  
with the provisions of Section 2.21. 
 
 
ARTICLE 13 
 
NOTICES 
 
 
	13.1	Giving Notice.  Except as otherwise permitted by Section  
2.11 with respect to notices regarding conversion or continuation  
of Advances, all notices and other communications provided to any  
party hereto under this Agreement or any other Loan Document  
shall be in writing or by facsimile and addressed or delivered to  
the Borrower and the Agent at their respective addresses set  
forth below its signature hereto and to each Lender at its  
address set forth on Schedule 1 hereto or at such other address  
as may be designated by such party in a notice to the other  
parties.  Any notice, if mailed and properly addressed with  
postage prepaid, shall be deemed given when received; any notice,  
if transmitted by facsimile, shall be deemed given when  
transmitted (answerback confirmed in the case of telexes). 
 
	13.2	Change of Address.  The Borrower, the Agent and any Lender  
may each change the address for service of notice upon it by a  
notice in writing to the other parties hereto. 
 
 
ARTICLE 14 
 
COUNTERPARTS 
 
 
	This Agreement may be executed in any number of counterparts,  
all of which taken together shall constitute one agreement, and  
any of the parties hereto may execute this Agreement by signing  
any such counterpart.  This Agreement shall be effective when it  
has been executed by the Borrower, the Agent and the Lenders and  
each party has notified the Agent by telex or telephone, that it  
has taken such action. 
 
 
 
 
	IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have  
executed this Agreement as of the date first above written. 
 
                      PETCO ANIMAL SUPPLIES, INC. 
 
 
 
                      By: /s/ James M. Myers 
                      Print Name:  James M. Myers 
                      Title:  Senior Vice President- 
                              Finance 
 
                      9125 Rehco Road 
                      San Diego, California 92121 
                      Attention:  James M. Myers 
                                  Senior Vice President - 
                                  Finance 
 
                      Telecopier: (619) 638-2154 
 
 
                      UNION BANK OF CALIFORNIA, N.A., 
                      as Agent and Lender 
 
 
 
                      By: /s/Patricia C. Rohling 
                      Print Name:  Patricia C. Rohling 
                      Title:  Senior Vice President 
 
 
 
                      By: /s/ Kurt M. Hocker 
                      Print Name:  Kurt M. Hocker 
                      Title:  Assistant Vice President 
 
                      445 So. Figueroa Street, 16th Floor 
                      Los Angeles, California 90071-1655 
                      Attention:  Kurt M. Hocker 
                                  Assistant Vice President 
                      Telecopier: (213) 236-7636 
 
 
                      UNITED STATES NATIONAL BANK OF OREGON, as  
Lender 
 
 
 
                       By: /s/Janet Jordan 
                       Print Name:  Janet Jordan 
                       Title:  Vice President 
 
                       Corporate Banking 
                       111 Southwest 5th Pl. 4 
                       Portland, Oregon 97204 
                       Attention:  Janet Jordan 
                                   Vice President 
                       Telecopier:  (503) 275-5428 
 
 
 
 
SCHEDULE 1 
 
LENDERS AND APPLICABLE LENDING OFFICES 
 
 
 
      Lender         Commitment    Applicable Lending Office 
 
Union Bank of       $30,000,000    445 So. Figueroa Street 
  California, N.A.                 16th Floor 
  Agent and Lender                 Los Angeles, CA 90071-1655 
  
                                   Attention:  Kurt Hocker 
                                               Assistant Vice 
                                               President 
                                   Telecopier:  (213) 236-7636 
 
 
 
United States       $10,000,000    Corporate Banking 
  National Bank                    111 Southwest 5th Pl.4 
  of Oregon                        Portland, Oregon 97204 
 
                                   Attention:  Janet Jordan 
                                               Vice President 
                                   Telecopier:  (503) 275-5428 
 
 
 
SCHEDULE 2 
 
SUBSIDIARIES 
(See Section 5.8) 
 
 
                                                    Jurisdiction 
Investment     Owned      Amount of     Percent          of 
  In            By        Investment   Ownership    Organization 
 
International  Borrower     $100          100%       California 
  Pet Supplies 
  and 
  Distribution, 
  Inc. 
 
 
Pet Nosh,      Borrower     $100          100%       New York 
  Consolidated 
  Co., Inc. 
 
 
 
 
 
 
TABLE OF CONTENTS 
 
Page 
 
ARTICLE 1 
 
                        DEFINITIONS                           1 
 
ARTICLE 2 
 
                        THE CREDIT                            12 
2.1  Commitment                                              12 
2.2  Commitment Percentage                                   12 
2.3  Types of Loans                                          13 
2.4  Notes                                                   13 
2.5  Notice of Borrowing                                     13 
2.6  Commitment Reduction                                    14 
2.7  Commitment Obligations                                  14 
2.8  Commitment Termination                                  15 
2.9  Required Payments                                       15 
2.10 Issuance of Letters of Credit                           15 
2.11 Fees                                                    19 
2.12 Voluntary Conversion of Advances                        19 
2.13 Interest.                                               20 
2.14 Rates Applicable After Default                          20 
2.15 Method of Payment                                       20 
2.16 Telephonic Notices                                      21 
2.17 Interest Payment Dates; Interest and Fee Basis          21 
2.18 Notification of Loan, Interest Rates, Prepayments and    
     Commitment Reductions                                   22 
2.19 Applicable Lending Offices                              22 
2.20 Non-Receipt of Funds by the Agent                       22 
2.21 Withholding Tax Exemption                               22 
2.22 Optional Prepayments                                    23 
ARTICLE 3 
 
                    CHANGE IN CIRCUMSTANCES                  24 
3.1  Yield Protection                                        24 
3.2  Taxes                                                   25 
 
ARTICLE 4 
 
                     CONDITIONS PRECEDENT                    25 
4.1  Initial Loan or Letter of Credit                        25 
4.2  All Loans                                               27 
4.3  All Letters of Credit                                   27 
 
ARTICLE 5 
 
                REPRESENTATIONS AND WARRANTIES               28 
5.1  Authorization                                           28 
5.2  Governmental Action                                     28 
5.3  Enforceability                                          28 
5.4  Use of Proceeds                                         28 
5.5  Litigation                                              29 
5.6  Financial Statements                                    29 
5.7  Taxes                                                   29 
5.8  Subsidiaries                                            29 
5.9  ERISA                                                   29 
5.10 Accuracy of Information                                 29 
5.11 Organization and Existence                              30 
5.12 Consents                                                30 
5.13 Intellectual Property                                   30 
5.14 Default                                                 30 
5.15 Nature of Business                                      30 
5.16 Ranking of Loans                                        31 
5.17 Compliance with Laws                                    31 
5.18 Investment Company Acts; Other Regulations              31 
5.19 Environmental Matters                                   31 
5.20 Title                                                   31 
 
ARTICLE 6 
 
                           COVENANTS                         31 
6.1  Financial Reporting                                     32 
6.2  Use of Proceeds                                         34 
6.3  Notice of Default                                       34 
6.4  Conduct of Business                                     34 
6.5  Records                                                 35 
6.6  Insurance                                               35 
6.7  Compliance with Laws                                    35 
6.8  Maintenance of Properties                               35 
6.9  Inspection                                              35 
6.10 Debt                                                    35 
6.11 Merger                                                  36 
6.12 Sale of Assets                                          36 
6.13 Sale of Accounts                                        36 
6.14 Acquisitions                                            36 
6.15 Affiliates                                              37 
6.16 ERISA                                                   37 
6.17 Capital Expenditures                                    37 
6.18 Total Debt Ratio                                        38 
6.19 Payment of Obligations                                  38 
6.20 Consolidated Net Worth                                  38 
6.21 Minimum Interest Coverage Ratio                         38 
6.22 Encumbrances and Liens                                  38 
6.23 Loans, Advances and Guaranties                          39 
6.24 Investments                                             39 
6.25 Minimum Fixed Charge Coverage Ratio                     40 
6.26 Guaranties, Etc                                         40 
 
ARTICLE 7 
 
                             DEFAULTS                        40 
7.1  Payment Defaults.                                       40 
7.2  Representations and Warranties.                         41 
7.3  Other Loan Document Defaults.                           41 
7.4  Bankruptcy.                                             41 
7.5  Other Agreements.                                       41 
7.6  ERISA.                                                  41 
7.7  Judgments.                                              42 
7.8  Loan Documents                                          42 
 
ARTICLE 8 
 
               ACCELERATION, WAIVERS AND AMENDMENTS          42 
8.1  Acceleration                                            42 
8.2  Cash Collateral                                         42 
8.3  Additional Remedies                                     42 
8.4  Amendments                                              43 
8.5  Preservation of Rights                                  43 
 
ARTICLE 9 
 
                       GENERAL PROVISIONS                    44 
9.1  Survival of Representations                             44 
9.2  Governmental Regulation                                 44 
9.3  Headings                                                44 
9.4  Entire Agreement                                        44 
9.5  Several Obligations; Benefits of this Agreement         44 
9.6  Expenses; Indemnification                               44 
9.7  Numbers of Documents                                    45 
9.8  Accounting                                              45 
9.9  Severability of Provisions                              45 
9.10 Nonliability of Lenders                                 45 
9.11 CHOICE OF LAW                                           45 
9.12 CONSENT TO JURISDICTION                                 46 
9.13 WAIVER OF JURY TRIAL                                    46 
9.14 Integration Clause                                      46 
9.15 Confidentiality                                         46 
 
ARTICLE 10 
 
                         THE AGENT                           47 
10.1  Appointment                                            47 
10.2  Powers                                                 47 
10.3  General Immunity                                       47 
10.4  No Responsibility for Loans, Recitals, etc.            47 
10.5  Action on Instructions of Lenders                      47 
10.6  Employment of Agents and Counsel                       48 
10.7  Reliance on Documents; Counsel                         48 
10.8  Agent's Reimbursement and Indemnification              48 
10.9  Rights as a Lender                                     48 
10.10 Lender Credit Decision                                 49 
10.11 Successor Agent                                        49 
 
ARTICLE 11 
 
                   SETOFF; RATABLE PAYMENTS                  50 
11.1  Setoff                                                 50 
11.2  Ratable Payments                                       50 
 
ARTICLE 12 
 
        BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS    50 
12.1  Successors and Assigns                                 50 
12.2  Participations                                         51 
12.3  Assignments                                            52 
12.4  Dissemination of Information                           53 
12.5  Tax Treatment                                          53 
 
ARTICLE 13 
 
                           NOTICES                           53 
13.1  Giving Notice                                          53 
13.2  Change of Address                                      54 
 
ARTICLE 14 
 
                         COUNTERPARTS                        54 
 
 
SCHEDULE 1 - LENDERS AND APPLICABLE LENDING OFFICES 
SCHEDULE 2 - SUBSIDIARIES 
SCHEDULE 3 - DEBT 
 
 
EXHIBIT A - FORM OF NOTE 
EXHIBIT B - COMPLIANCE CERTIFICATE 
EXHIBIT C - ASSIGNMENT AGREEMENT 
EXHIBIT D - LEVERAGE RATIO LEVEL CERTIFICATE 
EXHIBIT E - FORM OF LETTER OF CREDIT REQUEST 
EXHIBIT F - FORM OF NOTICE OF BORROWING 
 
 
 
 
 
$40,000,000 
 
 
 
CREDIT AGREEMENT 
 
 
 
=============================================== 
 
 
 
PETCO ANIMAL SUPPLIES, INC. 
 
BORROWER 
 
 
 
THE BANKS NAMED HEREIN 
 
LENDERS 
 
 
 
AND 
 
 
 
UNION BANK OF CALIFORNIA, N.A. 
 
Agent 
 
 
 
=============================================== 
 
 
 
Dated as of December 6, 1996