5-YEAR REVOLVING CREDIT AGREEMENT

                          DATED AS OF DECEMBER 3, 2004

                                      AMONG

                         APPLEBEE'S INTERNATIONAL, INC.
                                 as the Borrower

                  THE LENDERS FROM TIME TO TIME PARTIES HERETO,

                           JPMORGAN CHASE BANK, N.A.,
                             as Administrative Agent

                                       and

         FLEET NATIONAL BANK, SUNTRUST BANK, CITICORP LEASING, INC. and
               THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH,
                              as Syndication Agents





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

                          J.P. MORGAN SECURITIES INC.,
                   as Sole Lead Arranger and Sole Book Runner

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




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<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

                                                                                                               Page
<S>                                                                                                            <C>
ARTICLE I     DEFINITIONS......................................................................................1

         1.1.      Certain Defined Terms.......................................................................1

         1.2.      References..................................................................................17


ARTICLE II    THE CREDITS......................................................................................17

         2.1.      Commitment..................................................................................17

         2.2.      Swing Line Loans............................................................................17

              2.2.1.    Amount of Swing Line Loans.............................................................17

              2.2.2.    Borrowing Notice.......................................................................17

              2.2.3.    Making of Swing Line Loans.............................................................18

              2.2.4.    Repayment of Swing Line Loans..........................................................18

         2.3.      Required Payments; Termination..............................................................19

              2.3.1.    Required Payments......................................................................19

              2.3.2.    Termination............................................................................19

         2.4.      Ratable Loans...............................................................................19

         2.5.      Types of Advances...........................................................................19

         2.6.      Commitment Fee; Reductions in Aggregate Commitment; Increases in Aggregate Commitment.......19

              2.6.1.    Commitment Fee.........................................................................19

              2.6.2.    Reductions in Aggregate Commitment.....................................................19

              2.6.3.    Increase of Aggregate Commitment.......................................................20

         2.7.      Minimum Amount of Each Advance..............................................................22

         2.8.      Optional Principal Payments.................................................................22

         2.9.      Method of Selecting Types and Interest Periods for New Advances; Method of Borrowing........22

              2.9.1.    Method of Selecting Types and Interest Periods for New Advances........................22

              2.9.2.    Method of Borrowing....................................................................23

         2.10.     Conversion and Continuation of Outstanding Advances.........................................23

         2.11.     Changes in Interest Rate, etc...............................................................24

         2.12.     Rates Applicable After Default..............................................................24

         2.13.     Method of Payment...........................................................................24



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<PAGE>


         2.14.     Noteless Agreement; Evidence of Indebtedness................................................25

         2.15.     Telephonic Notices..........................................................................25

         2.16.     Interest Payment Dates; Interest and Fee Basis..............................................26

         2.17.     Notification of Advances, Interest Rates, Prepayments and Commitment Reductions.............26

         2.18.     Lending Installations.......................................................................26

         2.19.     Non-Receipt of Funds by the Administrative Agent............................................27

         2.20.     Replacement of Lender.......................................................................27

         2.21.     Facility LCs................................................................................28

              2.21.1.   Issuance; Transitional Facility LCs....................................................28

              2.21.2.   Participations.........................................................................28

              2.21.3.   Notice.................................................................................28

              2.21.4.   LC Fees................................................................................29

              2.21.5.   Administration; Reimbursement by Lenders...............................................29

              2.21.6.   Reimbursement by Borrower..............................................................30

              2.21.7.   Obligations Absolute...................................................................30

              2.21.8.   Actions of LC Issuers..................................................................30

              2.21.9.   Indemnification........................................................................31

              2.21.10.  Lenders' Indemnification...............................................................31

              2.21.11.  Facility LC Collateral Account.........................................................32

              2.21.12.  Rights as a Lender.....................................................................32


ARTICLE III   YIELD PROTECTION; TAXES..........................................................................32

         3.1.      Yield Protection............................................................................32

         3.2.      Changes in Capital Adequacy Regulations.....................................................33

         3.3.      Availability of Types of Advances...........................................................34

         3.4.      Funding Indemnification.....................................................................34

         3.5.      Taxes.......................................................................................34

         3.6.      Lender Statements; Survival of Indemnity....................................................36


ARTICLE IV    CONDITIONS PRECEDENT.............................................................................36

         4.1.      Initial Credit Extension....................................................................36

         4.2.      Each Credit Extension.......................................................................38


ARTICLE V     REPRESENTATIONS AND WARRANTIES...................................................................38

         5.1.      Existence and Standing......................................................................38



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         5.2.      Authorization and Validity..................................................................38

         5.3.      No Conflict; Government Consent.............................................................39

         5.4.      Financial Statements........................................................................39

         5.5.      Material Adverse Change.....................................................................39

         5.6.      Taxes.......................................................................................39

         5.7.      Litigation and Contingent Obligations.......................................................40

         5.8.      Subsidiaries................................................................................40

         5.9.      Accuracy of Information.....................................................................40

         5.10.     Regulation U................................................................................40

         5.11.     Material Agreements.........................................................................40

         5.12.     Compliance With Laws........................................................................40

         5.13.     Ownership of Properties.....................................................................41

         5.14.     ERISA; Foreign Pension Matters..............................................................41

         5.15.     Plan Assets; Prohibited Transactions........................................................41

         5.16.     Environmental Matters.......................................................................41

         5.17.     Investment Company Act......................................................................42

         5.18.     Public Utility Holding Company Act..........................................................42

         5.19.     Insurance...................................................................................42


ARTICLE VI    COVENANTS........................................................................................42

         6.1.      Financial Reporting.........................................................................42

         6.2.      Use of Proceeds.............................................................................43

         6.3.      Notice of Default...........................................................................44

         6.4.      Conduct of Business.........................................................................44

         6.5.      Taxes.......................................................................................44

         6.6.      Insurance...................................................................................44

         6.7.      Compliance with Laws........................................................................44

         6.8.      Maintenance of Properties...................................................................44

         6.9.      Inspection; Keeping of Books and Records....................................................44

         6.10.     Addition of Guarantors......................................................................45

         6.11.     Dividends and Distributions.................................................................45

         6.12.     Intentionally Omitted.......................................................................45

         6.13.     Merger......................................................................................45

         6.14.     Sale of Assets..............................................................................45

         6.15.     Investments and Acquisitions................................................................46


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         6.16.     Liens.......................................................................................48

         6.17.     Transactions with Affiliates................................................................48

         6.18.     Financial Contracts.........................................................................49

         6.19.     ERISA.......................................................................................49

         6.20.     Environmental Compliance....................................................................49

         6.21.     Financial Covenants.........................................................................50

              6.21.1.   Maximum Leverage Ratio.................................................................50

              6.21.2.   Minimum Fixed Charge Coverage Ratio....................................................50

              6.21.3.   Maximum Ratio of Indebtedness to Total Capitalization..................................50


ARTICLE VII   DEFAULTS.........................................................................................50

         7.1.      Breach of Representations or Warranties.....................................................50

         7.2.      Failure to Make Payments When Due...........................................................50

         7.3.      Breach of Covenants.........................................................................50

         7.4.      Other Breaches..............................................................................50

         7.5.      Default as to Other Indebtedness............................................................50

         7.6.      Voluntary Bankruptcy; Appointment of Receiver; Etc..........................................51

         7.7.      Involuntary Bankruptcy; Appointment of Receiver; Etc........................................51

         7.8.      Custody or Control of Property..............................................................51

         7.9.      Judgments...................................................................................52

         7.10.     Unfunded Liabilities........................................................................52

         7.11.     Other ERISA Liabilities.....................................................................52

         7.12.     Environmental Matters.......................................................................52

         7.13.     Change in Control...........................................................................52

         7.14.     The Guaranty................................................................................52

         7.15.     The Loan Documents..........................................................................52


ARTICLE VIII  ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...................................................52

         8.1.      Acceleration................................................................................52

         8.2.      Amendments..................................................................................54

         8.3.      Preservation of Rights......................................................................55


ARTICLE IX    GENERAL PROVISIONS...............................................................................55

         9.1.      Survival of Representations.................................................................55

         9.2.      Governmental Regulation.....................................................................55


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         9.3.      Headings....................................................................................55

         9.4.      Entire Agreement............................................................................55

         9.5.      Several Obligations; Benefits of this Agreement.............................................55

         9.6.      Expenses; Indemnification...................................................................56

         9.7.      Numbers of Documents........................................................................56

         9.8.      Accounting..................................................................................56

         9.9.      Severability of Provisions..................................................................57

         9.10.     Nonliability of Lenders.....................................................................57

         9.11.     Confidentiality.............................................................................57

         9.12.     Lenders Not Utilizing Plan Assets...........................................................58

         9.13.     Nonreliance.................................................................................58

         9.14.     Disclosure..................................................................................58

         9.15.     Subordination of Intercompany Indebtedness..................................................58

         9.16.     USA Patriot Act.............................................................................59


ARTICLE X     THE AGENTS.......................................................................................59

         10.1.     Appointment; Nature of Relationship.........................................................59

         10.2.     Powers......................................................................................60

         10.3.     General Immunity............................................................................60

         10.4.     No Responsibility for Loans, Recitals, etc..................................................60

         10.5.     Action on Instructions of Lenders...........................................................60

         10.6.     Employment of Agents and Counsel............................................................61

         10.7.     Reliance on Documents; Counsel..............................................................61

         10.8.     Agents' Reimbursement and Indemnification...................................................61

         10.9.     Notice of Default...........................................................................61

         10.10.    Rights as a Lender..........................................................................62

         10.11.    Lender Credit Decision......................................................................62

         10.12.    Successor Agents............................................................................62

         10.13.    Agent and Arranger Fees.....................................................................63

         10.14.    Delegation to Affiliates....................................................................63

         10.15.    Release of Guarantors.......................................................................63


ARTICLE XI    SETOFF; RATABLE PAYMENTS.........................................................................63

         11.1.     Setoff......................................................................................63

         11.2.     Ratable Payments............................................................................63


                                       v
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ARTICLE XII  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.................................................64

         12.1.     Successors and Assigns; Designated Lenders..................................................64

              12.1.1.   Successors and Assigns.................................................................64

              12.1.2.   Designated Lenders.....................................................................64

         12.2.     Participations..............................................................................65

              12.2.1.   Permitted Participants; Effect.........................................................66

              12.2.2.   Voting Rights..........................................................................66

              12.2.3.   Benefit of Certain Provisions..........................................................66

         12.3.     Assignments.................................................................................66

              12.3.1.   Permitted Assignments..................................................................67

              12.3.2.   Effect; Effective Date.................................................................67

              12.3.3.   The Register...........................................................................67

         12.4.     Dissemination of Information................................................................68

         12.5.     Tax Treatment...............................................................................68


ARTICLE XIII  NOTICES..........................................................................................68

         13.1.     Notices.....................................................................................68

         13.2.     Change of Address...........................................................................68


ARTICLE XIV   COUNTERPARTS.....................................................................................69


ARTICLE XV    CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.....................................69

         15.1.     CHOICE OF LAW...............................................................................69

         15.2.     CONSENT TO JURISDICTION.....................................................................69

         15.3.     WAIVER OF JURY TRIAL........................................................................69
</TABLE>



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EXHIBITS

Exhibit A-1       -       Form of Borrower's and Guarantors' Counsel's Opinion

Exhibit A-2       -       Form of Administrative Agent's Counsel's Opinion

Exhibit B         -       Form of Compliance Certificate

Exhibit C         -       Form of Assignment Agreement

Exhibit D         -       Form of Loan/Credit Related Money Transfer Instruction

Exhibit E         -       Form of Promissory Note (if requested)

Exhibit F         -       List of Closing Documents

Exhibit G         -       Form of Designation Agreement

Exhibit H         -       Form of Guaranty

Exhibit I         -       Form of Commitment and Acceptance



                                    SCHEDULES

Pricing Schedule

Commitment Schedule

Schedule 2.21     -       Existing Letters of Credit

Schedule 5.8      -       Subsidiaries

Schedule 5.16     -       Environmental Matters

Schedule 6.15     -       Existing Investments

Schedule 6.16     -       Existing Liens



                                      vii
<PAGE>


                        5-YEAR REVOLVING CREDIT AGREEMENT

This 5-Year Revolving Credit  Agreement,  dated as of December 3, 2004, is among
APPLEBEE'S  INTERNATIONAL,  INC.,  the  institutions  from time to time  parties
hereto as Lenders  (whether by  execution  of this  Agreement  or an  assignment
pursuant  to Section  12.3),  JPMORGAN  CHASE  BANK,  N.A.,  a national  banking
association,  as Swing Line Lender, LC Issuer and  Administrative  Agent,  Fleet
National  Bank,  SunTrust  Bank,   Citicorp  Leasing,   Inc.  and  The  Bank  of
Tokyo-Mitsubishi,  Ltd.,  Chicago  Branch,  as Syndication  Agents.  The parties
hereto agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

         1.1.      Certain Defined Terms. As used in this Agreement:

         "Accounting Changes" is defined in Section 9.8 hereof.

         "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 or all or
substantially  all of the assets of any  Person,  or division  thereof,  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  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 of voting power) of the  outstanding
ownership interests of a partnership or limited liability company.

         "Administrative  Agent"  means  JPMCB in its  capacity  as  contractual
representative  of the Lenders  pursuant to Article X, and not in its individual
capacity as a Lender, and any successor  Administrative Agent appointed pursuant
to Article X.

         "Advance"  means a  borrowing  hereunder  consisting  of the  aggregate
amount  of  several  Loans  (i) made by some or all of the  Lenders  on the same
Borrowing  Date, or (ii)  converted or continued by the Lenders on the same date
of  conversion  or  continuation,  consisting,  in either case, of the aggregate
amount of the  several  Loans of the same Type  and,  in the case of  Eurodollar
Loans, for the same Interest Period. The term "Advance" shall include Swing Line
Loans unless otherwise expressly provided.

         "Affected Lender" is defined in Section 2.20.

         "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 is the



<PAGE>


"beneficial  owner" (as defined in Rule 13d-3 under the Securities  Exchange Act
of 1934) of ten  percent  (10%) or more of any  class of voting  securities  (or
other voting  interests)  of the  controlled  Person or  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  voting
securities, by contract or otherwise. Notwithstanding the previous sentence, any
institutional  investors who purchase their interest in the Borrower in a public
market shall not be considered Affiliates of the Borrower.

         "Agent"  means  any of the  Administrative  Agent  and the  Syndication
Agents, as appropriate,  and "Agents" means,  collectively,  the  Administrative
Agent and the Syndication Agents.

         "Aggregate  Commitment"  means the aggregate of the  Commitments of all
the Lenders,  as may be adjusted from time to time pursuant to the terms hereof.
The initial Aggregate Commitment is $150,000,000.

         "Aggregate  Outstanding  Credit  Exposure"  means,  at  any  time,  the
aggregate of the Outstanding Credit Exposure of all the Lenders.

         "Agreement" means this 5-Year Revolving Credit Agreement,  as it may be
amended, restated, supplemented or otherwise modified and as in effect from time
to time.

         "Agreement  Accounting  Principles" means generally accepted accounting
principles  as in effect in the United  States  from time to time,  applied in a
manner  consistent  with that used in preparing the financial  statements of the
Borrower referred to in Section 5.4; provided,  however, that except as provided
in Section 9.8, with respect to the  calculation  of financial  ratios and other
financial tests required by this Agreement,  "Agreement  Accounting  Principles"
means generally accepted accounting principles as in effect in the United States
as of the date of this Agreement,  applied in a manner consistent with that used
in preparing the financial statements of the Borrower referred to in Section 5.4
hereof.

         "Alternate Base Rate" means,  for any day, a rate of interest per annum
equal to the  higher of (i) the Prime  Rate for such day and (ii) the sum of (a)
the Federal  Funds  Effective  Rate for such day and (b) one-half of one percent
(0.5%) per annum.

         "Applicable Fee Rate" means, at any time, the percentage rate per annum
at which  Commitment  Fees are accruing on the unused  portion of the  Aggregate
Commitment at such time as set forth in the Pricing Schedule.

         "Applicable  Margin" means, with respect to Advances of any Type at any
time,  the  percentage  rate per  annum  which is  applicable  at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.

         "Arranger" means J.P. Morgan  Securities  Inc., and its successors,  in
its capacity as Lead Arranger and Sole Book Runner.

         "Article" means an article of this Agreement unless another document is
specifically referenced.

         "Assignment Agreement" is defined in Section 12.3.1.


                                       2
<PAGE>


         "Authorized  Officer" means any of the chief executive  officer,  chief
financial officer, chief accounting officer or treasurer of the Borrower, acting
singly.

         "Available  Aggregate  Commitment"  means,  at any time,  the Aggregate
Commitment  then in effect minus the Aggregate  Outstanding  Credit  Exposure at
such time.

         "Borrower"   means   Applebee's   International,   Inc.,   a   Delaware
corporation,  and its  permitted  successors  and  assigns  (including,  without
limitation, a debtor-in-possession on its behalf).

         "Borrowing Date" means a date on which an Advance is made hereunder.

         "Borrowing Notice" is defined in Section 2.9.1.

         "Business Day" means (i) with respect to any borrowing, payment or rate
selection  of  Eurodollar  Advances,  a day (other than a Saturday or Sunday) on
which banks are not authorized or required to close in Chicago,  Illinois or New
York City for the  conduct  of  substantially  all of their  commercial  lending
activities,  interbank  wire  transfers  can be made on the  Fedwire  system and
dealings in United States dollars are carried on in the London  interbank market
and (ii) for all other  purposes,  a day (other  than a  Saturday  or Sunday) on
which banks are not authorized or required to close in Chicago,  Illinois or New
York City for the  conduct  of  substantially  all of their  commercial  lending
activities and interbank wire transfers can be made on the Fedwire system.

         "Buying Lender" is defined in Section 2.6.3(ii).

         "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.

         "Capitalized  Lease  Obligations"  of a Person  means the amount of the
obligations  of such Person under  Capitalized  Leases which would be shown as a
liability  on a  balance  sheet  of such  Person  prepared  in  accordance  with
Agreement Accounting Principles.

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

         "Cash Equivalent  Investments"  means, as to any Person, (i) securities
issued or directly and fully  guaranteed  or insured by the United States or any
agency or  instrumentality  thereof  (provided that the full faith and credit of
the United States is pledged in support  thereof) having  maturities of not more
than one year from the date of acquisition,  (ii) time deposits and certificates
of deposit of any  investment  grade  commercial  bank  having,  or which is the
principal  banking  subsidiary  of an  investment  grade  bank  holding  company


                                       3
<PAGE>


organized under the laws of the United States,  any State thereof,  the District
of Columbia or any foreign  jurisdiction  having capital,  surplus and undivided
profits aggregating in excess of $500,000,000,  with maturities of not more than
one  year  from  the  date of  acquisition  by  such  Person,  (iii)  repurchase
obligations  with a term of not  more  than  ninety  (90)  days  for  underlying
securities of the types described in clause (i) above entered into with any bank
meeting the  qualifications  specified in clause (ii) above,  provided that such
repurchase obligations are secured by a first priority security interest in such
underlying securities which have, on the date of purchase thereof, a fair market
value  of at  least  100% of the  amount  of the  repurchase  obligations,  (iv)
commercial paper issued by any Person incorporated in the United States rated at
least A-1 by S&P or P-1 by Moody's and in each case  maturing  not more than 270
days after the date of  acquisition  by such Person,  (v) municipal or preferred
short term auction rate securities that are rated at least A by S&P,  Moody's or
Fitch, Inc., a wholly-owned subsidiary of Fimalac S.A., and in each case with an
interest  rate re-set  auction  date of not more than 270 days after the date of
acquisition by such Person (vi) investments in money market funds  substantially
all of the assets of which are comprised of securities of the types described in
clauses (i) through (v) above, and (vii) demand deposit  accounts  maintained in
the ordinary course of business.

         "Change" is defined in Section 3.2.

         "Change in Control" means (i) the acquisition by any Person,  or two or
more Persons acting in concert,  of beneficial  ownership (within the meaning of
Rule  13d-3 of the  Securities  and  Exchange  Commission  under the  Securities
Exchange Act of 1934), directly or indirectly,  of thirty-three percent (33%) or
more of the  outstanding  shares of voting  stock of the  Borrower;  or (ii) the
majority  of the  Board  of  Directors  of the  Borrower  fails  to  consist  of
Continuing Directors;  or (iii) except as expressly permitted under the terms of
this Agreement,  the Borrower consolidates with or merges into another Person or
conveys,  transfers  or leases all or  substantially  all of its property to any
Person, or any Person  consolidates with or merges into the Borrower,  in either
event  pursuant to a transaction in which the  outstanding  Capital Stock of the
Borrower is  reclassified  or changed into or exchanged for cash,  securities or
other property.

         "Closing Date" means December 3, 2004.

         "Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise  modified  from  time to  time,  and any  rule  or  regulation  issued
thereunder.

         "Collateral Shortfall Amount" is defined in Section 8.1(i).

         "Commitment"  means, for each Lender,  the obligation of such Lender to
make Revolving Loans to, and participate in Swing Line Loans and in Facility LCs
issued  upon the  application  of,  the  Borrower  in an  aggregate  amount  not
exceeding  the amount set forth on the  Commitment  Schedule or in an Assignment
Agreement  executed  pursuant to Section 12.3 or in a Commitment  and Acceptance
executed  pursuant  to Section  2.6.3,  as it may be modified as a result of any
assignment that has become effective  pursuant to Section 12.3.2 or as otherwise
modified from time to time pursuant to the terms hereof.

         "Commitment and Acceptance" is identified in Section 2.6.3.

         "Commitment Fee" is defined in Section 2.6.1.


                                       4
<PAGE>


         "Commitment Increase Notice" is defined in Section 2.6.3(i) hereof.

         "Commitment  Schedule"  means the Schedule  identifying  each  Lender's
Commitment as of the Closing Date attached hereto and identified as such.

         "Consolidated  Funded  Indebtedness"  means  at  any  time  the  Funded
Indebtedness of the Borrower and its  Subsidiaries  calculated on a consolidated
basis as of such time.

         "Consolidated  Indebtedness"  means at any time the Indebtedness of the
Borrower and its  Subsidiaries  calculated  on a  consolidated  basis as of such
time.

         "Consolidated  Interest Expense" means, for any period, the total gross
interest  expense  of  the  Borrower  and  its  Subsidiaries   calculated  on  a
consolidated basis for such period, whether paid or accrued, including,  without
duplication, the interest component of Capitalized Leases, commitment and letter
of credit fees, the discount or implied interest  component of Off-Balance Sheet
Liabilities,   capitalized  interest  expense,   pay-in-kind  interest  expense,
amortization  of debt  documents and net payments (if any) pursuant to Financial
Contracts  relating to interest  rate  protection  (other than any such payments
pursuant to  Financial  Contracts  in effect  prior to the date hereof which are
being  terminated  substantially  concurrently  with the  execution and delivery
hereof).

         "Consolidated Net Income" means, with reference to any period,  the net
after-tax income (or loss) of the Borrower and its Subsidiaries  calculated on a
consolidated basis for such period, excluding the net after-tax income (or loss)
allocated  to  minority  interests  in  accordance  with  Agreement   Accounting
Principles.

         "Consolidated   Net   Worth"   means  at  any  time  the   consolidated
stockholders'  equity  of the  Borrower  and its  Subsidiaries  calculated  on a
consolidated basis as of such time.

         "Consolidated  Rentals"  means,  for any  period,  the  Rentals  of the
Borrower  and its  Subsidiaries  calculated  on a  consolidated  basis  for such
period.

         "Consolidated  Total  Assets" means at any time the total assets of the
Borrower and its  Subsidiaries  calculated  on a  consolidated  basis as of such
time.

         "Consolidated  Total  Capitalization"  means  at any  time  the  sum of
Consolidated  Indebtedness  plus  Consolidated Net Worth,  each calculated as of
such time.

         "Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person  assumes,  guarantees,  endorses,  contingently
agrees to purchase or provide funds for the payment of, or otherwise  becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other  Person,  or  otherwise  assures any  creditor of such other Person
against loss,  including,  without  limitation,  any comfort  letter,  operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership  with respect to the  liabilities  of the  partnership.
When measuring "Contingent Obligations", the amount of any Contingent Obligation


                                       5
<PAGE>


will be (i) the fair market value thereof as determined in accordance  with, and
as  permitted  by,  Agreement  Accounting  Principles,  as so  reported  in  the
Borrower's annual and quarterly  financial  statements  required to be delivered
under  Section 6.1 or (ii) the full amount of the total  obligation  in the case
that the  Borrower  has not  performed  a fair  market  value  assessment  under
Agreement Accounting Principles.

         "Continuing  Director" means, with respect to any Person as of any date
of  determination,  any member of the board of  directors of such Person who (a)
was a  member  of such  board  of  directors  on the  Closing  Date,  or (b) was
nominated  for election or elected to such board of directors  with the approval
of the required  majority of the  Continuing  Directors who were members of such
board at the time of such nomination or election.

         "Contractual  Obligation" of any Person shall mean any provision of any
security  issued by such Person or of any  agreement,  instrument or undertaking
under which such Person is obligated or by which it or any of the property owned
by it is bound.

         "Controlled   Group"  means  all  members  of  a  controlled  group  of
corporations or other business entities 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 defined in Section 2.10.

         "Credit  Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.

         "Credit  Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.

         "Default" means an event described in Article VII.

         "Designated  Lender" means,  with respect to each  Designating  Lender,
each Eligible Designee designated by such Designating Lender pursuant to Section
12.1.2.

         "Designating Lender" means, with respect to each Designated Lender, the
Lender that designated such Designated Lender pursuant to Section 12.1.2.

         "Designation Agreement" is defined in Section 12.1.2.

         "Domestic  Subsidiary"  means a Subsidiary  of the  Borrower  organized
under the laws of a jurisdiction located in the United States of America.

         "EBITDA" means,  for any period,  Consolidated  Net Income plus, to the
extent  deducted  from  revenues in  determining  Consolidated  Net Income,  (i)
Consolidated  Interest  Expense,  (ii) expense for taxes paid or accrued,  (iii)
depreciation, (iv) amortization, (v) extraordinary losses incurred other than in
the ordinary  course of business,  and (vi) other  non-cash  losses  (except any
non-cash losses that require  accrual of a reserve for  anticipated  future cash
payments for any period other than accrual for future  obligations made pursuant
to SFAS No. 87, No. 112 or No.  116, as amended)  deducted  in  calculating  net


                                       6
<PAGE>


income (or net loss) (including,  without limitation, loss on the disposition of
assets),  minus,  to  the  extent  included  in  Consolidated  Net  Income,  (x)
extraordinary gains realized other than in the ordinary course of business,  (y)
the  income of any joint  venture,  except to the  extent of cash  dividends  or
distributions  actually paid by such joint venture to the Borrower or any of its
Subsidiaries and (z) other non-cash gains (including,  without limitation,  gain
on  the  disposition  of  assets),   in  each  case  of  the  Borrower  and  its
Subsidiaries,  determined in accordance with Agreement Accounting Principles for
such period.

         "EBITR"  means,  for any period,  Consolidated  Net Income plus, to the
extent  deducted  from  revenues in  determining  Consolidated  Net Income,  (i)
Consolidated  Interest  Expense,  (ii) expense for taxes paid or accrued,  (iii)
Consolidated  Rentals,  (iv)  extraordinary  losses  incurred  other than in the
ordinary course of business,  and (v) other non-cash losses (except any non-cash
losses that require  accrual of a reserve for  anticipated  future cash payments
for any period other than accrual for future  obligations  made pursuant to SFAS
No. 87, No. 112 or No. 116, as amended)  deducted in calculating  net income (or
net loss) (including,  without  limitation,  loss on the disposition of assets),
minus,  to the extent  included in Consolidated  Net Income,  (x)  extraordinary
gains realized other than in the ordinary course of business,  (y) the income of
any joint  venture,  except to the  extent of cash  dividends  or  distributions
actually paid by such joint  venture to the Borrower or any of its  Subsidiaries
and  (z)  other  non-cash  gains  (including,  without  limitation,  gain on the
disposition  of  assets),  in each case of the  Borrower  and its  Subsidiaries,
determined in accordance with Agreement Accounting Principles for such period.

         "Effective Commitment Amount" is defined in Section 2.6.3(i) hereof.

         "Eligible Designee" means a special purpose  corporation,  partnership,
limited  partnership  or limited  liability  company that is  administered  by a
Lender or an Affiliate  of a Lender and (i) is  organized  under the laws of the
United  States of America or any state  thereof,  (ii) is engaged  primarily  in
making,  purchasing or otherwise  investing in commercial  loans in the ordinary
course  of its  business  and  (iii)  issues  (or the  parent  of which  issues)
commercial paper rated at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody's.

         "Environmental  Laws"  means  any and all  federal,  state,  local  and
foreign statutes,  laws, judicial  decisions,  regulations,  ordinances,  rules,
judgments, orders, decrees, plans, injunctions,  permits,  concessions,  grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the  protection of the  environment,  (ii) the effect of the  environment on
human  health,   (iii)   emissions,   discharges  or  releases  of   pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land,  or  (iv)  the  manufacture,  processing,  distribution,  use,  treatment,
storage, disposal, transport or handling of pollutants,  contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended from time to time, including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.

         "Eurodollar  Advance"  means an  Advance  which,  except  as  otherwise
provided in Section 2.12, bears interest at the applicable Eurodollar Rate.


                                       7
<PAGE>


         "Eurodollar Base Rate" means, with respect to a Eurodollar  Advance for
the relevant Interest Period, the applicable British Bankers'  Association LIBOR
rate for deposits in U.S.  dollars as reported by Bloomberg  or, if Bloomberg is
not available,  by any other generally recognized financial  information service
as of 11:00 a.m.  (London time) two Business Days prior to the first day of such
Interest Period,  and having a maturity equal to such Interest Period,  provided
that,  if no such British  Bankers'  Association  LIBOR rate is available to the
Administrative  Agent,  the  applicable  Eurodollar  Base Rate for the  relevant
Interest Period shall instead be the rate determined by the Administrative Agent
to be the rate at which  JPMCB or one of its  Affiliate  banks  offers  to place
deposits in U.S. dollars with  first-class  banks in the London interbank market
at  approximately  11:00 a.m. (London time) two Business Days prior to the first
day of such  Interest  Period,  in the  approximate  amount of JPMCB's  relevant
Eurodollar Loan and having a maturity equal to such Interest Period.

         "Eurodollar Loan" means a Loan which,  except as otherwise  provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.

         "Eurodollar Rate" means,  with respect to a Eurodollar  Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate  applicable to such Interest  Period,  divided by (b) one minus the Reserve
Requirement  (expressed as a decimal)  applicable to such Interest Period,  plus
(ii) the then  Applicable  Margin,  changing as and when the  Applicable  Margin
changes.

         "Excluded  Taxes"  means,  in the  case of each  Lender  or  applicable
Lending  Installation  and each Agent,  taxes imposed on its overall net income,
and  franchise  taxes imposed on it, by (i) the  jurisdiction  under the laws of
which  such  Lender  or Agent is  incorporated  or  organized  or any  political
combination or subdivision or taxing authority  thereof or (ii) the jurisdiction
in which such Agent's or Lender's  principal  executive  office or such Lender's
applicable  Lending  Installation is located or in which, other than as a direct
result of the  transaction  evidenced  by this  Agreement,  such Agent or Lender
otherwise is, or at any time was, engaged in business.

         "Exhibit"  refers  to an  exhibit  to this  Agreement,  unless  another
document is specifically referenced.

         "Existing Credit  Agreement" means that certain 3-Year Credit Agreement
dated as of November 5, 2001 among the Borrower, the lenders parties thereto and
JPMorgan  Chase Bank,  N.A.  (successor  by merger to Bank One, NA (Main  Office
Chicago)),  as Administrative Agent, as the same has been amended,  supplemented
or otherwise modified from time to time prior to the Closing Date.

         "Facility LC" is defined in Section 2.21.1.

         "Facility LC Application" is defined in Section 2.21.3.

         "Facility LC Collateral Account" is defined in Section 2.21.11.

         "Facility  Termination Date" means the earlier of (a) December 3, 2009,
and (b) the date of termination in whole of the Aggregate Commitment pursuant to
Section 2.6.2 hereof or the Commitments pursuant to Section 8.1 hereof.


                                       8
<PAGE>


         "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 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three   Federal  funds   brokers  of   recognized   standing   selected  by  the
Administrative Agent in its sole discretion.

         "Financial  Contract"  of a Person  means  (i) any  exchange-traded  or
over-the-counter  futures,  forward,  swap or option contract or other financial
instrument  with  similar  characteristics  or (ii)  any  agreement,  device  or
arrangement  providing for payments  related to  fluctuations of interest rates,
exchange rates,  forward rates or commodity prices,  including,  but not limited
to,  interest  rate  swap or  exchange  agreements,  forward  currency  exchange
agreements,  interest  rate cap or collar  protection  agreements,  forward rate
currency and interest rate options, puts or warrants.

         "Floating  Rate" means,  for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin,  changing when
and as the Alternate Base Rate changes.

         "Floating  Rate Advance"  means an Advance  which,  except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.

         "Floating Rate Loan" means a Loan or portion thereof,  which, except as
otherwise provided in Section 2.12, bears interest at the Floating Rate.

         "Foreign  Pension Plan" means any employee benefit plan as described in
Section  3(3) of ERISA for which the  Borrower  or any member of its  Controlled
Group is a sponsor or  administrator  and which (i) is maintained or contributed
to for  the  benefit  of  employees  of  the  Borrower,  any  of its  respective
Subsidiaries or any member of its Controlled Group, (ii) is not covered by ERISA
pursuant to Section 4(b)(4) of ERISA,  and (iii) under  applicable local law, is
required to be funded through a trust or other funding vehicle.

         "Foreign  Subsidiary" means a Subsidiary of the Borrower which is not a
Domestic Subsidiary.

         "Funded  Indebtedness" means at any time the aggregate dollar amount of
(i) Indebtedness which has actually been funded and is outstanding at such time,
whether or not such  amount is due or payable  at such  time,  (ii) the  undrawn
amount of  standby  letters  of credit  and (iii)  Contingent  Obligations  with
respect to the Funded Indebtedness of any other Person.

         "Guarantor"  shall  mean  each  Subsidiary  of the  Borrower  that is a
Domestic  Subsidiary as of the Closing Date and each other  Subsidiary  that has
become a guarantor of the Obligations  hereunder in accordance with the terms of
Section 6.10.

         "Guaranty"  means that certain  Guaranty  (and any and all  supplements
thereto)  executed  from  time  to  time  by  each  Guarantor  in  favor  of the


                                       9
<PAGE>

Administrative Agent for the benefit of itself and the Lenders, in substantially
the form of Exhibit H attached  hereto,  as amended,  restated,  supplemented or
otherwise modified from time to time.

         "Indebtedness" of a Person means,  without  duplication,  such Person's
(i) obligations for borrowed money,  (ii) obligations  representing the deferred
purchase price of Property or services  (other than accounts  payable arising in
the ordinary course of such Person's  business payable on terms customary in the
trade), (iii) obligations,  whether or not assumed,  secured by Liens or payable
out of the  proceeds or  production  from  Property  now or  hereafter  owned or
acquired  by such  Person,  (iv)  obligations  which  are  evidenced  by  notes,
acceptances,  or other  instruments,  (v) obligations of such Person to purchase
securities or other  Property  arising out of or in connection  with the sale of
the same or substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) obligations, contingent or otherwise, with respect to letters
of credit and bankers'  acceptances,  (viii)  Contingent  Obligations,  (ix) Net
Mark-to-Market  Exposure  under  Financial  Contracts,   (x)  Off-Balance  Sheet
Liabilities, and (xi) any other obligation for borrowed money or other financial
accommodation which in accordance with Agreement Accounting  Principles would be
shown  as  a  liability  on  a  consolidated   balance  sheet  of  such  Person.
"Indebtedness"  of the Borrower  includes the Indebtedness of any joint venture,
unless it is nonrecourse to the Borrower and its Subsidiaries.

         "Interest Period" means, with respect to a Eurodollar Advance, a period
of one,  two,  three or six months or such other period agreed to by the Lenders
and the Borrower, 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, three or six months or such other
agreed  upon  period  thereafter,  provided,  however,  that if there is no such
numerically  corresponding day in such next,  second,  third or sixth succeeding
month or such other  succeeding  period,  such Interest  Period shall end on the
last Business Day of such next, second,  third or sixth succeeding month or such
other  succeeding  period.  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.

         "Investment" of a Person means any loan,  advance,  extension of credit
(other than accounts  receivable  arising in the ordinary  course of business on
terms  customary in the trade,  but  including  accounts  receivable  from other
Persons  which are not current  assets or did not arise from sales to such other
Person in the ordinary  course of business) or  contribution  of capital by such
Person; stocks, bonds, mutual funds, partnership interests, notes, debentures or
other  securities  owned by such Person;  and any  structured  notes,  Financial
Contracts,  derivative  financial  instruments and other similar  instruments or
contracts owned by such Person.  Notwithstanding  the foregoing,  an Acquisition
shall not be deemed to be an Investment.

         "JPMCB"  means   JPMorgan   Chase  Bank,   N.A.,  a  national   banking
association, in its individual capacity, and its successors.

         "LC Fee" is defined in Section 2.21.4.


                                       10
<PAGE>


         "LC Issuer" means JPMCB (or any Affiliate of JPMCB designated by JPMCB)
or any of the other Lenders, as applicable, in its respective capacity as issuer
of Facility LCs hereunder.

         "LC Obligations" means, at any time, the sum, without  duplication,  of
(i) the aggregate  undrawn stated amount of all Facility LCs outstanding at such
time plus (ii) the  aggregate  unpaid  amount at such time of all  Reimbursement
Obligations.

         "LC Payment Date" is defined in Section 2.21.5.

         "Lender Increase Notice" is defined in Section 2.6.3(i) hereof.

         "Lenders" means the lending  institutions listed on the signature pages
of this Agreement and their respective successors and assigns.  Unless otherwise
specified,  the term  "Lender"  includes  JPMCB in its  capacity  as Swing  Line
Lender.

         "Lending Installation" means, with respect to a Lender or an Agent, the
office,  branch,  subsidiary  or affiliate of such Lender or Agent listed on the
administrative  information  sheets  provided  to the  Administrative  Agent  in
connection  herewith,  or on a Schedule or otherwise  selected by such Lender or
Agent pursuant to Section 2.18.

         "Leverage Ratio" is defined in Section 6.21.1.

         "Lien"  means  any  lien  (statutory  or  other),   mortgage,   pledge,
hypothecation,  assignment,  deposit  arrangement,  encumbrance  or  preference,
priority or other security  interest or preferential  arrangement of any kind or
nature whatsoever  (including,  without limitation,  the interest of a vendor or
lessor under any conditional  sale,  Capitalized  Lease or other title retention
agreement,  and, in the case of stock,  stockholders  agreements,  voting  trust
agreements and all similar arrangements).

         "Loan" means a Revolving Loan or a Swing Line Loan, as applicable.

         "Loan  Documents"  means this Agreement,  the Facility LC Applications,
the Guaranty, and all other documents,  instruments,  notes (including any Notes
issued  pursuant to Section  2.14,  if  requested)  and  agreements  executed in
connection  therewith  or  contemplated  thereby,  as the same  may be  amended,
restated or otherwise modified and in effect from time to time.

         "Loan Party" is defined in Section 4.1(i).

         "Material  Adverse  Effect" means a material  adverse effect on (i) the
business, Property, condition (financial or otherwise), operations, performance,
properties,  results  of  operations  or  prospects  of  the  Borrower  and  its
Subsidiaries  taken as a whole,  (ii) the ability of the  Borrower or any of its
Subsidiaries to perform its respective  obligations  under the Loan Documents to
which it is a party, or (iii) the validity or  enforceability of any of the Loan
Documents or the rights or remedies of the Agents, the LC Issuers or the Lenders
thereunder.

         "Material  Indebtedness" means Indebtedness in an outstanding principal
amount of $20,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).


                                       11
<PAGE>

         "Material  Indebtedness  Agreement" means any agreement under which any
Material  Indebtedness  was  created or is governed  or which  provides  for the
incurrence  of  Indebtedness  in  an  amount  which  would  constitute  Material
Indebtedness  (whether or not an amount of  Indebtedness  constituting  Material
Indebtedness is outstanding thereunder).

         "Modify" and "Modification" are defined in Section 2.21.1.

         "Moody's"  means  Moody's  Investors  Service,  Inc. and any  successor
thereto.

         "Multiemployer  Plan" means a Plan maintained  pursuant to a collective
bargaining  agreement  or any other  arrangement  to which the  Borrower  or any
member of the  Controlled  Group is a party to which more than one  employer  is
obligated to make contributions.

         "Net  Mark-to-Market  Exposure"  of a Person  means,  as of any date of
determination,  the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from  Financial  Contracts.  "Unrealized  losses"
means  the fair  market  value  of the cost to such  Person  of  replacing  each
Financial  Contract as of the date of  determination  (assuming  such  Financial
Contract were to be terminated as of that date), and "unrealized  profits" means
the fair market  value of the gain to such Person of  replacing  such  Financial
Contract as of the date of determination  (assuming such Financial Contract were
to be terminated as of that date).

         "Non-U.S. Lender" is defined in Section 3.5(iv).

         "Note" is defined in Section 2.14(iv).

         "Obligations"  means all Loans,  Reimbursement  Obligations,  advances,
debts, liabilities,  obligations,  covenants and duties owing by the Borrower to
any of the Agents, any LC Issuer, any Lender, the Arranger, any affiliate of the
Agents, any LC Issuer, or any Lender, the Arranger,  or any indemnitee under the
provisions of Section 9.6 or any other provisions of the Loan Documents, in each
case of any kind or nature,  present or future,  arising under this Agreement or
any other Loan Document, whether or not evidenced by any note, guaranty or other
instrument,  whether or not for the payment of money,  whether arising by reason
of  an  extension   of  credit,   loan,   foreign   exchange   risk,   guaranty,
indemnification,  or in any other manner,  whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired.  The term includes,  without
limitation,   all  interest,   charges,  expenses,  fees,  attorneys'  fees  and
disbursements,  paralegals' fees (in each case whether or not allowed),  and any
other sum  chargeable  to the  Borrower  or any of its  Subsidiaries  under this
Agreement or any other Loan Document.

         "Off-Balance  Sheet  Liability"  of a Person  means (i) any  repurchase
obligation  or  liability  of such  Person  with  respect to  accounts  or notes
receivable sold by such Person,  (ii) any liability under any Sale and Leaseback
Transaction  which is not a Capitalized  Lease,  (iii) any  liability  under any
so-called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of borrowing but which does not constitute a liability on the balance
sheets of such Person, but excluding from this clause (iv) Operating Leases.


                                       12
<PAGE>


         "Operating Lease" of a Person means any lease of Property (other than a
Capitalized  Lease)  by  such  Person  as  lessee  which  has an  original  term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

         "Other Taxes" is defined in Section 3.5(ii).

         "Outstanding  Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate  principal amount of its Revolving Loans outstanding at
such time, plus (ii) an amount equal to its Pro Rata Share of the obligations to
purchase  participations  in Swing Line Loans, plus (iii) an amount equal to its
Pro Rata Share of the LC Obligations at such time.

         "Participants" is defined in Section 12.2.1.

         "Payment  Date" means the last day of each March,  June,  September and
December and the Facility Termination Date.

         "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

         "Permitted Acquisition" is defined in Section 6.15(vii).

         "Person" means any natural person,  corporation,  firm,  joint venture,
partnership, limited liability company, 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  benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding  standards under Section 412 of the Code
as to which the  Borrower  or any  member of the  Controlled  Group may have any
liability.

         "Pricing Schedule" means the Schedule identifying the Applicable Margin
and Applicable Fee Rate attached hereto and identified as such.

         "Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by JPMCB or its parent (which is not necessarily the
lowest  rate  charged  to any  customer),  changing  when and as said prime rate
changes.

         "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.

         "Proposed New Lender" is defined in Section 2.6.3(i) hereof.

         "Pro Rata Share" means,  with respect to a Lender, a portion equal to a
fraction the  numerator of which is such  Lender's  Commitment  at such time (in
each case, as adjusted from time to time in  accordance  with the  provisions of
this Agreement) and the denominator of which is the Aggregate Commitment at such
time,  or, if the  Aggregate  Commitment  has been  terminated,  a fraction  the
numerator of which is such Lender's Outstanding Credit Exposure at such time and
the  denominator  of  which  is  the  sum of the  Aggregate  Outstanding  Credit
Exposure.


                                       13
<PAGE>

         "Purchase  Price"  means the  total  consideration  and  other  amounts
payable in connection with any Acquisition,  including,  without limitation, any
portion of the consideration  payable in cash, the value of any Capital Stock or
other  equity  interests  of the  Borrower  (other  than  treasury  stock of the
Borrower  repurchased  prior to the Closing  Date) or any  Subsidiary  issued as
consideration  for  such  Acquisition,   all  Indebtedness  and  other  monetary
liabilities  incurred or assumed in  connection  with such  Acquisition  and all
transaction costs and expenses incurred in connection with such Acquisition.

         "Purchasers" is defined in Section 12.3.1.

         "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  T" means  Regulation  T 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 and to brokers and dealers of securities  for the purpose
of purchasing or carrying margin stock (as defined therein).

         "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,  non-banks and non-broker  lenders for the purpose
of  purchasing  or carrying  margin  stocks  applicable  to member  banks of the
Federal Reserve System.

         "Regulation  X" means  Regulation  X 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 foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).

         "Reimbursement Obligations" means with respect to any LC Issuer, at any
time, the aggregate of all  obligations of the Borrower then  outstanding  under
Section 2.21 to  reimburse  such LC Issuer for amounts paid by such LC Issuer in
respect of any one or more drawings under Facility LCs issued by such LC Issuer;
or,  as the  context  may  require,  all  such  Reimbursement  Obligations  then
outstanding to reimburse all of the LC Issuers.

         "Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.

         "Reportable Event" means a reportable event, as defined in Section 4043
of ERISA and the regulations issued under such section,  with respect to a Plan,
excluding,  however,  such  events  as to which  the PBGC has by  regulation  or
otherwise waived the requirement of Section 4043(a) of ERISA that it be notified
within thirty (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.


                                       14
<PAGE>

         "Required  Lenders"  means  Lenders  in the  aggregate  having at least
fifty-one  percent  (51%)  of the  Aggregate  Commitment  or,  if the  Aggregate
Commitment  has been  terminated,  Lenders  in the  aggregate  holding  at least
fifty-one percent (51%) of the Aggregate Outstanding Credit Exposure.

         "Reserve  Requirement"  means, with respect to an Interest Period,  the
maximum  aggregate  reserve  requirement  (including  all  basic,  supplemental,
marginal and other reserves) which is imposed under  Regulation D on "Eurodollar
liabilities" (as defined in Regulation D).

         "Revolving  Loan" means,  with  respect to a Lender,  each loan made by
such Lender  pursuant to its commitment to lend set forth in Section 2.1 (or any
conversion or continuation thereof).

         "Risk   Based   Capital   Guidelines"   is  defined  in  Section   3.2.

         "S&P" means  Standard and Poor's  Ratings  Services,  a division of The
McGraw-Hill Companies, Inc. and any successor thereto.

         "Sale and Leaseback  Transaction"  means any sale or other  transfer of
Property by any Person with the intent to lease such Property as lessee.

         "Schedule"  refers to a specific  schedule  to this  Agreement,  unless
another document is specifically referenced.

         "Section" means a numbered  section of this  Agreement,  unless another
document is specifically referenced.

         "Selling Lender" is defined in Section 2.6.3(ii).

         "Single  Employer Plan" means a Plan  maintained by the Borrower or any
member of the  Controlled  Group for  employees of the Borrower or any member of
the Controlled Group.

         "Subsidiary"  of a Person  means (i) any  corporation  more than  fifty
percent (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,  limited  liability  company,
association,  joint  venture or similar  business  organization  more than fifty
percent (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.

         "Substantial  Portion"  means,  with  respect  to the  Property  of the
Borrower  and its  Subsidiaries,  Property  which (i)  represents  more than ten
percent (10%) of the consolidated assets of the Borrower and its Subsidiaries as
would be shown in the consolidated  financial statements of the Borrower and its
Subsidiaries  as at the end of the four fiscal  quarter  period  ending with the
fiscal  quarter   immediately   prior  to  the  fiscal  quarter  in  which  such


                                       15
<PAGE>

determination is made, or (ii) is responsible for more than ten percent (10%) of
the Consolidated Net Income of the Borrower and its Subsidiaries as reflected in
the financial statements referred to in clause (i) above.

         "Swing   Line   Borrowing   Notice"  is   defined  in  Section   2.2.2.

         "Swing Line Lender"  means JPMCB or such other Lender which may succeed
to its rights and obligations as Swing Line Lender pursuant to the terms of this
Agreement.

         "Swing Line Loan" means a Loan made  available  to the  Borrower by the
Swing Line Lender pursuant to Section 2.2.

         "Syndication  Agent" means each of Fleet National Bank,  SunTrust Bank,
Citicorp Leasing,  Inc. and The Bank of Tokyo-Mitsubishi,  Ltd., Chicago Branch,
in each case in its capacity as the syndication  agent for the Lenders  pursuant
to Article X, and not in its individual  capacity as a Lender, and any successor
Syndication  Agent  appointed  pursuant to Article X. "Taxes"  means any and all
present  or future  taxes,  duties,  levies,  imposts,  deductions,  charges  or
withholdings,  and any and all  liabilities  with respect to the foregoing,  but
excluding Excluded Taxes.

         "Transferee" is defined in Section 12.4.

         "Transferred Credit" is defined in Section 2.6.3(ii).

         "Type"  means,  with respect to any  Advance,  its nature as a Floating
Rate Advance or a Eurodollar  Advance,  and with respect to any Loan, its nature
as a Floating Rate Loan or a Eurodollar Loan.

         "Unfunded  Liabilities"  means the amount (if any) by which the present
value of all vested and  unvested  accrued  benefits  under all Single  Employer
Plans  exceeds the fair market  value of all such Plan assets  allocable to such
benefits,  all  determined  as of the then most recent  valuation  date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.

         "Unmatured  Default"  means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.

         "Wholly-Owned  Subsidiary"  of a Person means (i) any Subsidiary all of
the  outstanding  voting  securities  of  which  shall  at the  time be owned or
controlled,  directly or indirectly,  by such Person or one or more Wholly-Owned
Subsidiaries  of such  Person,  or by such  Person and one or more  Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association,  joint  venture  or  similar  business  organization  100%  of  the
ownership  interests  having ordinary voting power of which shall at the time be
so owned or controlled.

         The  foregoing  definitions  shall be  equally  applicable  to both the
singular and plural forms of the defined terms.


                                       16
<PAGE>


         Any accounting  terms used in this Agreement which are not specifically
defined herein shall have the meanings customarily given them in accordance with
Agreement Accounting Principles.

         1.2.      References.  Any  references to the  Borrower's  Subsidiaries
shall not in any way be  construed as consent by the Administrative Agent or any
Lender to  the  establishment,  maintenance  or  acquisition of any  Subsidiary,
except as may otherwise be permitted hereunder.

                                   ARTICLE II

                                   THE CREDITS

         2.1.      Commitment. From and including the date of this Agreement and
prior to the Facility  Termination Date, upon the satisfaction of the conditions
precedent  set  forth  in  Sections  4.1 and 4.2,  as  applicable,  each  Lender
severally and not jointly agrees,  on the terms and conditions set forth in this
Agreement,  to (i) make Revolving Loans to the Borrower,  (ii) to participate in
Swing Line Loans and (iii)  participate  in Facility LCs issued upon the request
of the  Borrower,  provided  that,  after  giving  effect to the  making of each
Revolving Loan, the making of each Swing Line Loan and the issuance of each such
Facility LC, such  Lender's  Outstanding  Credit  Exposure  shall not exceed its
Commitment.  Subject to the terms of this  Agreement,  the  Borrower may borrow,
repay and reborrow Revolving Loans at any time prior to the Facility Termination
Date.  The  Commitments  to lend  hereunder  shall expire  automatically  on the
Facility  Termination  Date. The LC Issuers will issue Facility LCs hereunder on
the terms and conditions set forth in Section 2.21.

         2.2.      Swing Line Loans.

         2.2.1.    Amount of Swing Line  Loans.  Upon  the  satisfaction  of the
conditions precedent set forth in Section 4.2 and, if such Swing Line Loan is to
be made on the date of the initial Advance  hereunder,  the  satisfaction of the
conditions  precedent  set forth in Section 4.1 as well,  from and including the
date of this  Agreement and prior to the Facility  Termination  Date,  the Swing
Line Lender, on the terms and conditions set forth in this Agreement, shall make
Swing Line Loans to the  Borrower  from time to time in an  aggregate  principal
amount not to exceed $10,000,000, provided that the Aggregate Outstanding Credit
Exposure  shall not at any time exceed the  Aggregate  Commitment,  and provided
further  that at no time shall the sum of (i) the Swing Line  Lender's  share of
the  obligations  to  participate  in  the  Swing  Line  Loans,  plus  (ii)  the
outstanding  Revolving  Loans made by the Swing Line Lender  pursuant to Section
2.1,  plus (iii) the Swing Line  Lender's Pro Rata Share of the LC  Obligations,
exceed the Swing Line Lender's  Commitment at such time. Subject to the terms of
this Agreement,  the Borrower may borrow, repay and reborrow Swing Line Loans at
any time prior to the Facility Termination Date.

         2.2.2.    Borrowing Notice.  The   Borrower   shall   deliver   to  the
Administrative Agent and the Swing Line Lender irrevocable notice (a "Swing Line
Borrowing  Notice") not later than 12:00 noon  (Chicago  time) on the  Borrowing
Date of each Swing Line  Loan,  specifying  (i) the  applicable  Borrowing  Date
(which date shall be a Business Day), and (ii) the amount of the requested Swing
Line Loan which shall be an amount not less than $300,000 and integral multiples


                                       17
<PAGE>


of $100,000 in excess  thereof.  Each Swing Line Loan shall bear interest on the
outstanding  principal  amount thereof,  for each day from and including the day
such Swing Line Loan is made to but excluding the date it is paid, at a rate per
annum equal,  at the  Borrower's  option,  to the Floating Rate or at a rate per
annum  agreed  to by the  Borrower  and the  Swing  Line  Lender  at the time of
borrowing.

         2.2.3.    Making of Swing Line Loans. Promptly after receipt of a Swing
Line Borrowing Notice, the Administrative Agent shall notify each Lender by fax,
or other similar form of  transmission,  of the requested  Swing Line Loan.  Not
later than 2:00 p.m. (Chicago time) on the applicable  Borrowing Date, the Swing
Line  Lender  shall make  available  the Swing Line Loan,  in funds  immediately
available  in Chicago,  to the  Administrative  Agent at its  address  specified
pursuant to Article XIII.  The  Administrative  Agent will promptly  deposit the
funds so received from the Swing Line Lender in the Borrower's  account with the
Administrative Agent on the Borrowing Date.

         2.2.4.    Repayment of Swing Line  Loans. Each Swing Line Loan shall be
paid in full by the Borrower on or before the fifth (5th) Business Day after the
Borrowing Date for such Swing Line Loan. In addition,  the Swing Line Lender (i)
may at any time in its sole  discretion  with respect to any  outstanding  Swing
Line Loan,  or (ii) shall on the fifth (5th)  Business  Day after the  Borrowing
Date of any Swing Line  Loan,  require  each  Lender  (including  the Swing Line
Lender)  to make a  Revolving  Loan  (subject  to the  limitations  set forth in
Section  2.1) in the amount of such  Lender's  Pro Rata Share of such Swing Line
Loan (including,  without limitation,  any interest accrued and unpaid thereon),
for the  purpose  of  repaying  such Swing Line  Loan.  Each  Lender  shall make
available its required Revolving Loan, in funds immediately available in Chicago
to the  Administrative  Agent at its address specified pursuant to Article XIII,
by no later than (i) 4:00 p.m. (Chicago time) on the date of any notice received
on or before 2:00 p.m.  (Chicago  time) on such date  pursuant  to this  Section
2.2.4  and (ii)  10:00  a.m.  (Chicago  time) on the  Business  Day  immediately
following the date of any such notice received after 2:00 p.m. (Chicago time) on
such date.  Revolving  Loans made pursuant to this Section 2.2.4 shall initially
be Floating Rate Loans and thereafter may be continued as Floating Rate Loans or
converted  into  Eurodollar  Loans in the manner  provided  in Section  2.10 and
subject to the other  conditions and  limitations  set forth in this Article II.
Unless a Lender shall have  notified the Swing Line Lender,  prior to its making
any Swing  Line  Loan,  that any  applicable  condition  precedent  set forth in
Sections 4.1 or 4.2 had not then been  satisfied,  such  Lender's  obligation to
make  Revolving  Loans  pursuant to this Section 2.2.4 to repay Swing Line Loans
shall be  unconditional,  continuing,  irrevocable and absolute and shall not be
affected by any circumstances,  including,  without limitation, (a) any set-off,
counterclaim,  recoupment,  defense or other  right  which such  Lender may have
against any Agent, the Swing Line Lender or any other Person, (b) the occurrence
or continuance of a Default or Unmatured Default,  (c) any adverse change in the
condition   (financial  or  otherwise)  of  the  Borrower,   or  (d)  any  other
circumstances, happening or event whatsoever. In the event that any Lender fails
to make payment to the Administrative Agent of any amount due under this Section
2.2.4, the Administrative  Agent shall be entitled to receive,  retain and apply
against such  obligation  the principal and interest  otherwise  payable to such
Lender hereunder until the Administrative  Agent receives such payment from such
Lender or such  obligation  is  otherwise  fully  satisfied.  In addition to the
foregoing,  if for any reason any Lender fails to make,  or is  prohibited  from
making, payment to the Administrative Agent of any amount due under this Section
2.2.4, such Lender shall be deemed, at the option of the  Administrative  Agent,
to have  unconditionally  and irrevocably  purchased from the Swing Line Lender,


                                       18
<PAGE>


without  recourse or warranty,  an undivided  interest and  participation in the
applicable  Swing  Line Loan in the  amount  of such  Revolving  Loan,  and such
interest and  participation  may be  recovered  from such Lender  together  with
interest  thereon at the Federal  Funds  Effective  Rate for each day during the
period  commencing  on the date of demand and ending on the date such  amount is
received. On the Facility Termination Date, the Borrower shall repay in full the
outstanding principal balance of the Swing Line Loans.

         2.3.      Required Payments; Termination.

         2.3.1.    Required Payments. The  Aggregate Outstanding Credit Exposure
and all other  unpaid  Obligations  (other than LC  Obligations  that  have been
cash  collateralized  pursuant  to  Section 8.1),  shall be paid  in full by the
Borrower on the Facility Termination Date.

         2.3.2.    Termination.  Notwithstanding   the   termination   of   this
Agreement on the Facility Termination Date, until all of the Obligations  (other
than contingent indemnity  obligations) shall have been fully paid and satisfied
and all financing arrangements among the Borrower and the Lenders  hereunder and
under the other Loan Documents shall have been terminated, all of the rights and
remedies under this Agreement and the other Loan Documents shall survive and the
Administrative Agent shall be entitled to retain its security interest in and to
all existing and future collateral (if any).

         2.4.      Ratable Loans.  Each Advance  hereunder (other than any Swing
Line Loan) shall  consist of  Revolving  Loans  made  from  the several  Lenders
ratably according to their Pro Rata Shares.

         2.5.      Types  of Advances.  The  Advances  may  be  Revolving  Loans
consisting of Floating  Rate  Advances or Eurodollar  Advances, or a combination
thereof,  selected by the Borrower in  accordance with Sections 2.9 and 2.10, or
Swing Line Loans selected by the Borrower in accordance with Section 2.2.

         2.6.      Commitment Fee; Reductions in Aggregate Commitment; Increases
in Aggregate Commitment.

         2.6.1.    Commitment  Fee.  The   Borrower   agrees   to  pay   to  the
Administrative  Agent for  the  account of  each  Lender a commitment  fee  (the
"Commitment Fee")  at a per annum rate  equal to the Applicable  Fee Rate on the
daily unused portion of such  Lender's  Commitment  from the Closing Date to and
including the Facility Termination  Date,  payable  quarterly in arrears on each
Payment Date hereafter including,  without  limitation,  the Facility  Terminate
Date. Swing Line Loans shall count as  usage of any Lender's  Commitment (in the
amount of such Lender's Pro Rata Share  thereof) for the purpose of  calculating
the Commitment Fee due hereunder.

         2.6.2.    Reductions  in   Aggregate  Commitment.  The   Borrower   may
permanently reduce the Aggregate  Commitment in whole,  or in part ratably among
the Lenders in a minimum  amount of  $3,000,000  (and in multiples of $3,000,000
if in excess thereof),  upon at least  three (3) Business  Days'  prior  written
notice to the Administrative Agent of such reduction, which notice shall specify
the amount of any such reduction; provided,  however,  that  the  amount  of the
Aggregate Commitment may not be reduced below the Aggregate  Outstanding  Credit


                                       19
<PAGE>


Exposure. All  accrued  Commitment Fees  shall be payable on the effective  date
of any termination  of all of  the  obligations of the  Lenders to  make  Credit
Extensions hereunder.

         2.6.3.    Increase  of  Aggregate  Commitment.  (i)  At  any  time, the
Borrower may request that the Aggregate Commitment be increased,  provided that,
without the  prior written   consent of all of the  Lenders,  (a) the  Aggregate
Commitment  shall at no  time exceed  $200,000,000; (b) the  Borrower  shall not
previously have reduced the Aggregate Commitment; and (c) the Borrower shall not
be entitled to make such  request  more than  twice. Such  request shall be made
in a written notice  given to  the  Administrative  Agent and the Lenders by the
Borrower not less than twenty (20) Business Days prior to the proposed effective
date  of  such  increase, which  notice (a "Commitment  Increase  Notice") shall
specify the amount of the proposed increase in the Aggregate  Commitment and the
proposed  effective date of  such increase.  In the  event of such a  Commitment
Increase  Notice,  each  of the  Lenders  shall  be  given  the  opportunity  to
participate  in  the  requested  increase  ratably  in  proportions  that  their
respective Commitments bear to the Aggregate  Commitment.  No Lender  shall have
any  obligation to increase its  Commitment  pursuant to a  Commitment  Increase
Notice. On or prior to the date that is fifteen (15) Business Days after receipt
of   the  Commitment   Increase   Notice, each   Lender  shall   submit  to  the
Administrative  Agent a  notice  indicating  the  maximum  amount by which it is
willing to increase its Commitment in connection with  such Commitment  Increase
Notice (any  such  notice to the  Administrative Agent  being  herein  a "Lender
Increase Notice"). Any Lender which does not submit a Lender  Increase Notice to
the Administrative Agent prior  to the expiration of such  fifteen (15) Business
Day period shall be deemed to have denied any increase in its Commitment. In the
event that the increases of Commitments set forth in the Lender Increase Notices
exceed the amount requested  by the Borrower in the  Commitment Increase Notice,
the Administrative Agent and the Arranger shall have the right, in  consultation
with the  Borrower, to allocate  the amount of increases  necessary  to meet the
Borrower's  Commitment Increase  Notice. In the event  that the Lender  Increase
Notices are less than the amount requested by the Borrower, not later than three
(3) Business Days  prior to the proposed effective date  the Borrower may notify
the Administrative Agent of any  financial institution that shall have agreed to
become a "Lender" party hereto (a "Proposed  New Lender") in connection with the
Commitment Increase Notice. Any Proposed New  Lender  shall  be  subject  to the
consent of the  Administrative  Agent (which  consent shall not be  unreasonably
withheld). If the Borrower shall not have  arranged any  Proposed New  Lender(s)
to commit to the shortfall (if any) from the Lender  Increase  Notices, then the
Borrower shall have the option to reduce the amount of its  Commitment  Increase
Notice to the aggregate  amount set forth in the Lender  Increase  Notices or to
withdraw  its  Commitment  Increase  Notice.  Based  upon  the  Lender  Increase
Notices, any allocations  made in connection  therewith and any notice regarding
any Proposed New Lender, if applicable,  the  Administrative  Agent shall notify
the Borrower and the Lenders on or before the Business Day immediately  prior to
the proposed effective date of the amount of  each  Lender's  and  Proposed  New
Lenders' Commitment (the "Effective  Commitment  Amount") and the  amount of the
Aggregate Commitment, which amount shall be effective on the following  Business
Day. Any increase in the Aggregate Commitment shall be subject to the  following
conditions  precedent:  (A) the Borrower shall have obtained the consent thereto
of each Guarantor and its reaffirmation of the Loan Document(s)  executed by it,
which  consent and  reaffirmation  shall be in writing and in form and substance
reasonably  satisfactory to the Administrative  Agent, (B) as of the date of the
Commitment Increase Notice and as of the proposed effective date of the increase
in the Aggregate Commitment, all representations and warranties made by any Loan
Party in any Loan Document shall be true and correct in all material respects as
though made on such date and no event shall have occurred and then be continuing
which  constitutes  a  Default  or  Unmatured  Default,  (C) the  Borrower,  the
Administrative  Agent and each  Proposed  New  Lender or Lender  that shall have


                                       20
<PAGE>


agreed to provide a  "Commitment"  in support of such  increase in the Aggregate
Commitment  shall have  executed and  delivered a  "Commitment  and  Acceptance"
substantially in the form of Exhibit I hereto,  (D) counsel for the Borrower and
for the Guarantors shall have provided to the Administrative  Agent supplemental
opinions in form and substance  reasonably  satisfactory  to the  Administrative
Agent and (E) the Borrower and each  Proposed  New Lender shall  otherwise  have
executed and delivered such other  instruments  and documents as may be required
under  Article  IV or  that  the  Administrative  Agent  shall  have  reasonably
requested in connection  with such increase.  If any fee shall be charged by the
Lenders whose  Commitment is  increasing in connection  with any such  increase,
such fee shall be in accordance with then prevailing  market  conditions,  which
market  conditions shall have been reasonably  documented by the  Administrative
Agent to the Borrower.  Upon  satisfaction  of the  conditions  precedent to any
increase in the Aggregate  Commitment,  the Administrative  Agent shall promptly
advise the Borrower and each Lender of the effective date of such increase. Upon
the effective date of any increase in the Aggregate  Commitment that is provided
by a Proposed  New Lender,  such  Proposed  New Lender  shall be a party to this
Agreement  as a Lender and shall have the  rights  and  obligations  of a Lender
hereunder.  Nothing contained herein shall constitute, or otherwise be deemed to
be, a commitment on the part of any Lender to increase its Commitment  hereunder
at any time.

         (ii)      For  purposes  of  this  clause (ii), (A)  the  term  "Buying
Lender(s)" shall mean (1) each Lender the Effective  Commitment  Amount of which
is greater than  its Commitment prior  to the effective date of  any increase in
the Aggregate Commitment and (2) each Proposed  New Lender that is allocated  an
Effective Commitment Amount in  connection with any  Commitment Increase Notice,
and (b) the term "Selling  Lender(s)" shall mean each Lender whose Commitment is
not being increased from that in effect prior to such increase in the  Aggregate
Commitment.  Effective on the  effective  date of any increase in the  Aggregate
Commitment  pursuant to clause (i) above,  each  Selling  Lender  hereby  sells,
grants, assigns and conveys to each Buying Lender,  without recourse,  warranty,
or  representation  of any kind,  except as  specifically  provided  herein,  an
undivided  percentage of such Selling Lender's right,  title and interest in and
to its Outstanding Credit Exposure (the "Transferred  Credit") in the respective
dollar amounts and percentages necessary so that, from and after such sale, each
such  Selling  Lender's  Outstanding  Credit  Exposure  shall equal such Selling
Lender's Pro Rata Share (calculated based upon the Effective Commitment Amounts)
of the Aggregate Outstanding Credit Exposure. Effective on the effective date of
the  increase in the  Aggregate  Commitment  pursuant to clause (i) above,  each
Buying Lender hereby purchases and accepts such grant, assignment and conveyance
of the Transferred  Credit from the Selling  Lenders.  Each Buying Lender hereby
agrees that its respective  purchase price for the Transferred  Credit purchased
hereby shall equal the  respective  dollar  amount  necessary so that,  from and
after such payments,  each Buying  Lender's  Outstanding  Credit  Exposure shall
equal such Buying Lender's Pro Rata Share  (calculated  based upon the Effective
Commitment  Amounts) of the Aggregate  Outstanding Credit Exposure.  Such amount
shall  be  payable  on the  effective  date  of the  increase  in the  Aggregate
Commitment by wire transfer of immediately available funds to the Administrative
Agent.  The  Administrative  Agent, in turn,  shall wire transfer any such funds
received to the Selling Lenders,  in same day funds, for the sole account of the
Selling  Lenders.  Each Selling  Lender hereby  represents  and warrants to each
Buying  Lender that such Selling  Lender owns the  Outstanding  Credit  Exposure
being sold and assigned hereby for its own account and has not sold, transferred


                                       21
<PAGE>


or encumbered any or all of its interest in such  Outstanding  Credit  Exposure,
except for  participations  which will be  extinguished  upon payment to Selling
Lender of an amount  equal to the  portion of the  Outstanding  Credit  Exposure
being sold by such Selling Lender.  Each Buying Lender hereby  acknowledges  and
agrees that,  except for each Selling  Lender's  representations  and warranties
contained in the  foregoing  sentence,  each such Buying Lender has entered into
its Commitment and Acceptance  with respect to such increase on the basis of its
own independent  investigation  and has not relied upon, and will not rely upon,
any  explicit  or  implicit  written or oral  representation,  warranty or other
statement  of  the  Lenders  or  the   Administrative   Agent   concerning   the
authorization,   execution,  legality,  validity,  effectiveness,   genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents. The
Borrower  hereby  agrees to  compensate  each  Selling  Lender  for all  losses,
expenses and liabilities incurred by each Lender in connection with the sale and
assignment of any  Eurodollar  Loan  hereunder on the terms and in the manner as
set forth in Section 3.4.

         2.7.      Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in  the minimum  amount of $3,000,000  (and in multiples of  $1,000,000 if in
excess  thereof), and each Floating  Rate Advance shall be in the minimum amount
of $3,000,000 (and in multiples of $1,000,000 if in excess  thereof),  provided,
however,  that any Floating  Rate Advance may be in the amount of the  Available
Aggregate Commitment.

         2.8.      Optional  Principal  Payments. The Borrower  may from time to
time pay, without penalty or premium, all outstanding Floating Rate Advances, or
any portion  of the outstanding  Floating Rate Advances, in a  minimum aggregate
amount of $3,000,000 or any integral multiple of  $1,000,000 in excess  thereof,
upon prior notice to the  Administrative  Agent at or before 10:00 a.m. (Chicago
time) on  the date of  such payment.  The Borrower  may from  time to  time pay,
subject  to  the  payment of any  funding  indemnification  amounts  required by
Section 3.4 but without penalty or  premium, all outstanding Eurodollar Advances
or, in a minimum  aggregate  amount of  $3,000,000  or any integral  multiple of
$1,000,000  in  excess  thereof,  any  portion  of  the  outstanding  Eurodollar
Advances upon three (3) Business Days' prior notice to the Administrative Agent.
The Borrower  may at any time pay,  without penalty or premium,  all outstanding
Swing Line Loans or, in a minimum  amount of $300,000 and increments of $100,000
in excess thereof, any portion of the outstanding Swing Line Loans,  with notice
to the  Administrative  Agent and the  Swing  Line Lender by 11:00 a.m. (Chicago
time) on the date of repayment.

         2.9.      Method  of  Selecting  Types  and  Interest  Periods  for New
Advances; Method of Borrowing.

         2.9.1.    Method  of  Selecting  Types  and  Interest  Periods for  New
Advances. Other than with  respect to  Swing Line Loans (which shall be governed
by Section 2.2), the Borrower shall  select the Type of Advance and, in the case
of each Eurodollar Advance, the Interest Period applicable  thereto from time to
time; provided  that  there shall be no more than seven (7) Interest  Periods in
effect with respect to all of the Revolving Loans at any time, unless such limit


                                       22
<PAGE>


has  been  waived  by  the  Administrative  Agent in its  sole  discretion.  The
Borrower shall give the  Administrative  Agent irrevocable  notice (a "Borrowing
Notice") not later than 10:00 a.m.  (Chicago time) on the Borrowing Date of each
Floating Rate  Advance and three (3)  Business  Days before the  Borrowing  Date
for each Eurodollar Advance, specifying:

         (i)       the  Borrowing  Date,  which shall be a Business Day, of such
                   Advance,

         (ii)      the aggregate amount of such Advance,

         (iii)     the Type of Advance selected, and

         (iv)      in the case of each Eurodollar  Advance,  the Interest Period
                   applicable thereto.

         2.9.2.    Method  of  Borrowing. On each  Borrowing  Date, each  Lender
shall make  available its Loan or Loans  not later  than noon,  Chicago time, in
Federal or other funds immediately  available  to the  Administrative  Agent, in
Chicago, Illinois at its address specified in or pursuant to Article  XIII.  The
Administrative  Agent will deposit the funds so received from the Lenders in the
Borrower's account with the Administrative  Agent at the Administrative  Agent's
aforesaid  address.  Notwithstanding  the  foregoing  provisions of this Section
2.9.2,  to the extent that a Loan made by a Lender matures on the Borrowing Date
of a requested Loan, such Lender shall apply the proceeds of the Loan it is then
making to the repayment of principal of the maturing Loan.

         2.10.     Conversion and Continuation of Outstanding Advances. Floating
Rate Advances  shall  continue as Floating  Rate Advances  unless and until such
Floating Rate Advances are converted into Eurodollar  Advances  pursuant to this
Section  2.10 or are repaid in  accordance  with Section  2.8.  Each  Eurodollar
Advance  shall  continue  as a  Eurodollar  Advance  until  the end of the  then
applicable Interest Period therefor,  at which time each such Eurodollar Advance
shall be  automatically  converted  into a Floating Rate Advance unless (x) such
Eurodollar  Advance is or was repaid in  accordance  with Section 2.8 or (y) the
Borrower  shall have given the  Administrative  Agent a  Conversion/Continuation
Notice (as defined below)  requesting  that, at the end of such Interest Period,
such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest  Period.  Subject to the terms of Section  2.7,  the Borrower may elect
from time to time to convert all or any part of a Floating  Rate Advance  (other
than a Swing Line Loan) into a Eurodollar Advance,  provided that any conversion
of any  Eurodollar  Advance  shall be made on,  and only on, the last day of the
Interest Period applicable  thereto.  The Borrower shall give the Administrative
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of a Floating  Rate  Advance  into a  Eurodollar  Advance or  continuation  of a
Eurodollar  Advance not later than 10:00 a.m.  (Chicago time) at least three (3)
Business  Days prior to the date of the requested  conversion  or  continuation,
specifying:

         (i)       the  requested  date,  which shall be a Business Day, of such
                   conversion or continuation,

         (ii)      the  aggregate  amount and Type of the Advance which is to be
                   converted or continued, and

         (iii)     the amount of such Advance  which is to be converted  into or
                   continued  as a  Eurodollar  Advance and the  duration of the
                   Interest Period applicable thereto.


                                       23
<PAGE>


Promptly after receipt of any Conversion/Continuation Notice, the Administrative
Agent shall provide the Lenders with notice thereof.

         2.11.     Changes in  Interest Rate, etc.  Each  Floating  Rate Advance
shall bear interest on the  outstanding  principal amount  thereof, for each day
from and  including the date such  Advance is made or is automatically converted
from a Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.10,
to but excluding  the date it is paid  or is converted into a Eurodollar Advance
pursuant to Section 2.10 hereof,  at a rate per annum equal to the Floating Rate
for such day.  Changes  in the rate of  interest on that  portion of any Advance
maintained as a Floating Rate Advance will take effect simultaneously  with each
change in the  Alternate Base Rate. Each  Eurodollar Advance shall bear interest
on the outstanding principal amount thereof 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 interest rate determined by the Administrative Agent
as applicable  to such Eurodollar Advance based  upon the Borrower's  selections
under Sections 2.9 and 2.10 and otherwise in accordance  with the terms  hereof.
No Interest Period may end after the Facility Termination Date.

         2.12.     Rates Applicable After Default.  Notwithstanding  anything to
the contrary contained in Section 2.9, 2.10 or 2.11, during the continuance of a
Default or Unmatured  Default the  Required  Lenders  may, at their  option,  by
notice  to the  Borrower  (which  notice  may be  revoked  at the  option of the
Required  Lenders   notwithstanding  any  provision  of  Section  8.2  requiring
unanimous consent of the Lenders to changes in interest rates),  declare that no
Advance may be made as,  converted  into or continued  as a Eurodollar  Advance.
During the  continuance of a Default the Required  Lenders may, at their option,
by notice to the  Borrower  (which  notice  may be  revoked at the option of the
Required  Lenders   notwithstanding  any  provision  of  Section  8.2  requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar  Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum,  (ii) each  Floating  Rate Advance  shall bear interest at a rate per
annum equal to the  Floating  Rate in effect from time to time plus 2% per annum
and (iii) the LC Fee shall be increased by 2% per annum,  provided that,  during
the  continuance  of a Default under Section 7.6 or 7.7, the interest  rates set
forth in clauses (i) and (ii) above and the  increase in the LC Fee set forth in
clause  (iii) above shall be  applicable  to all Credit  Extensions  without any
election or action on the part of the Administrative Agent or any Lender.

         2.13.     Method of Payment. All payments of the Obligations  hereunder
shall be made,  without  setoff,  deduction,  or  counterclaim,  in  immediately
available  funds  to the  Administrative  Agent  at the  Administrative  Agent's
address specified pursuant to Article XIII, or at any other Lending Installation
of the Administrative  Agent specified in writing by the Administrative Agent to
the  Borrower,  by 12:00  noon  (Chicago  time) on the date  when due and  shall
(except (i) in the case of Reimbursement Obligations for which the applicable LC
Issuer has not been fully  indemnified  by the  Lenders or (ii) with  respect to
repayments of Swing Line Loans) be applied ratably by the  Administrative  Agent
among the Lenders.  Each payment delivered to the  Administrative  Agent for the
account of any Lender shall be delivered promptly by the Administrative Agent to
such Lender in the same type of funds that the



                                       24
<PAGE>

Administrative Agent received at such Lender's  address  specified   pursuant to
Article  XIII  or  at  any  Lending Installation specified in a notice  received
by   the  Administrative  Agent  from   such  Lender.  Each  reference   to  the
Administrative  Agent in this Section  2.13 shall also be  deemed to refer,  and
shall  apply equally, to  the  applicable LC Issuer, in  the  case  of  payments
required to  be  made by the  Borrower to such  LC  Issuer  pursuant  to Section
2.21.6. The Administrative Agent is hereby authorized,  upon the occurrence  and
during the  continuance of a Default,  to charge the  account  of  the  Borrower
maintained  with JPMCB or any of its  Affiliates for  each payment of principal,
interest and fees as it becomes due hereunder.

         2.14.     Noteless Agreement; Evidence of Indebtedness.

         (i)       Each  Lender shall  maintain  in accordance  with  its  usual
practice an account or accounts  evidencing the  indebtedness of the Borrower to
such Lender  resulting from each  Loan made by such  Lender  from  time to time,
including the amounts of principal and interest  payable and paid to such Lender
from time to time hereunder.

         (ii)      The  Administrative  Agent  shall  also  maintain accounts in
which it will  record (a) the date and the amount of  each  Revolving  Loan made
hereunder, the Type thereof and the Interest Period, if any, applicable thereto,
(b) the amount of any principal or interest due and payable or to become due and
payable from the  Borrower to each  Lender hereunder, (c) the effective date and
amount of each Assignment  Agreement  delivered  to and  accepted  by it and the
parties thereto  pursuant  to  Section  12.3,  (d) the  original  stated  amount
of each Facility LC and the amount of LC  Obligations  outstanding  at any time,
(e) the amount  of any sum received by the  Administrative Agent  hereunder from
the Borrower  and  each Lender's share  thereof, and (f)  all  other appropriate
debits and credits as provided in this Agreement, including, without limitation,
all fees, charges, expenses and interest.

         (iii)     The entries maintained in the accounts maintained pursuant to
clauses (i) and (ii) above shall be prima facie  evidence of the  existence  and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner  affect the  obligation of the Borrower to repay
the Obligations in accordance with their terms.

         (iv)      Any  Lender may  request  that  its  Loans be  evidenced by a
promissory  note  or, in the  case of the  Swing Line  Lender, promissory  notes
representing   its   Revolving   Loans  and   Swing  Line  Loans,  respectively,
substantially in the  form of  Exhibit E,  with  appropriate  changes for  notes
evidencing Swing Line Loans (each, a "Note"). In such event,  the Borrower shall
prepare,  execute and deliver to  such Lender such Note or  Notes payable to the
order of  such Lender. Thereafter,  the  Loans evidenced by  each such  Note and
interest thereon shall at all times (prior to any assignment pursuant to Section
12.3) be  represented by one or more  Notes payable to  the  order of the  payee
named  therein, except to the  extent that any such  Lender subsequently returns
any such Note  for  cancellation  and requests  that  such Loans  once again  be
evidenced as described in clauses (i) and (ii) above.

         2.15.     Telephonic  Notices.   The  Borrower  hereby  authorizes  the
Lenders  and the Administrative Agent to extend,  convert or continue  Advances,
effect selections of Types of  Advances and transfer  funds  based on telephonic
notices made by any person or persons the Administrative  Agent or any Lender in
good faith believes to be acting on behalf of the Borrower,  it being understood


                                       25
<PAGE>


that the  foregoing  authorization is specifically  intended to allow  Borrowing
Notices and  Conversion/Continuation  Notices to be  given  telephonically.  The
Borrower  agrees  to  deliver  promptly to the  Administrative  Agent a  written
confirmation, signed by an Authorized Officer, if such confirmation is requested
by the  Administrative  Agent or any  Lender, of each telephonic  notice. If the
written  confirmation differs in any  material respect from  the action taken by
the  Administrative  Agent and the  Lenders, the  records of the  Administrative
Agent and the Lenders shall govern absent manifest error.

         2.16.     Interest  Payment Dates;  Interest  and Fee  Basis.  Interest
accrued on  each Floating Rate Advance  and Swing Line Loan shall be  payable in
arrears on each Payment Date, commencing with the first such date to occur after
the  Closing Date, on any date on which the Floating Rate Advance or  Swing Line
Loan is  prepaid, whether  due to  acceleration  or otherwise, and at  maturity.
Interest  accrued on that  portion of the  outstanding  principal  amount of any
Floating Rate Advance converted into a Eurodollar  Advance on a day other than a
Payment  Date shall be payable on the  date of  conversion. Interest  accrued on
each  Eurodollar  Advance shall be  payable on the  last  day of its  applicable
Interest  Period,  on any  date on  which  the  Eurodollar  Advance is  prepaid,
whether by acceleration or  otherwise,  and at maturity;  provided that interest
accrued on each Eurodollar Advance  having an Interest Period  longer than three
(3) months shall also be payable on the last  day of each  three-month  interval
during  such Interest  Period.  Interest  on  Eurodollar  Advances,  Swing  Line
Loans, LC Fees and Commitment  Fees shall be  calculated for actual days elapsed
on the  basis of a 360-day year;  interest on  Floating Rate  Advances shall  be
calculated for actual days elapsed on the basis of a 365/366-day  year. Interest
shall  be payable for  the day an  Advance  is made but not  for the day of  any
payment on the amount paid if  payment is received prior to 12:00  noon (Chicago
time) at the place of payment.  If any payment of principal of or interest on an
Advance,  any  fees or any other  amounts  payable to any  Agent  or any  Lender
hereunder shall become due on a day which is not a Business  Day,  such  payment
shall  be  made on the  next  succeeding  Business  Day and, in the  case  of  a
principal  payment, such  extension of  time  shall be   included  in  computing
interest, fees and commissions in connection with such payment.

         2.17.     Notification of Advances,  Interest  Rates,  Prepayments  and
Commitment Reductions.  Promptly after receipt thereof, the Administrative Agent
will notify each Lender of the contents of each Aggregate  Commitment  reduction
notice,  Borrowing Notice, Swing Line Borrowing Notice,  Conversion/Continuation
Notice,  and repayment  notice  received by it hereunder.  Promptly after notice
from the applicable LC Issuer, the Administrative  Agent will notify each Lender
of the  contents of each request for  issuance of a Facility LC  hereunder.  The
Administrative  Agent will notify each Lender of the interest rate applicable to
each Eurodollar  Advance  promptly upon  determination of such interest rate and
will give each Lender prompt notice of each change in the Alternate Base Rate.

         2.18.     Lending  Installations.  Subject  to Section 3.6, each Lender
may book its  Loans and its  participation in any LC  Obligations and Swing Line
Loans and the LC Issuers may book the Facility LCs at any  Lending  Installation
selected by such Lender or the applicable LC Issuer, as the case may be, and may
change its Lending  Installation  from time to time. All terms of this Agreement
shall  apply to any such  Lending  Installation  and the  Loans,  Facility  LCs,
participations  in LC  Obligations  and Swing  Line  Loans and any Notes  issued
hereunder  shall be deemed held by each Lender or the  applicable LC Issuer,  as


                                       26
<PAGE>


the case may be, for the benefit of any such Lending  Installation.  Each Lender
and each LC Issuer may, by written  notice to the  Administrative  Agent and the
Borrower in accordance  with Article XIII,  designate  replacement or additional
Lending  Installations through which Loans will be made or participated in by it
or  Facility  LCs will be issued by it and for whose  account  Loan  payments or
payments with respect to Facility LCs are to be made.

         2.19.     Non-Receipt of Funds by the Administrative  Agent. Unless the
Borrower or a Lender,  as the case may be,  notifies  the  Administrative  Agent
prior to the time on which it is scheduled to make payment to the Administrative
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 Administrative
Agent  for the  account  of the  Lenders,  that it does not  intend to make such
payment,  the  Administrative  Agent may assume that such payment has been made.
The Administrative  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  Administrative  Agent,  the  recipient of such payment
shall, on demand by the Administrative  Agent, repay to the Administrative 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  Administrative  Agent until the date the  Administrative  Agent recovers
such amount at a rate per annum equal to (x) in the case of payment by a Lender,
the Federal Funds  Effective Rate for such day for the first three (3) days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower,  the interest rate  applicable to the relevant Loan,
including the interest rate applicable pursuant to Section 2.12.

         2.20.     Replacement of Lender. The Borrower  shall have the right, in
its sole  discretion, at any  time  and from  time  to  time  to  terminate  the
Commitment of any Lender (an "Affected Lender"),  in whole, upon at least thirty
(30) days' prior notice to the Administrative Agent and such Lender, (a) if such
Lender has failed or refused to make available the full amount of any  Revolving
Loan as required by its Commitment hereunder, or (b) if such Lender has demanded
that the Borrower make any additional payment to such Lender pursuant to Section
3.1, 3.2 or 3.5, or if such Lender's obligation to make or continue,  or convert
Floating Rate Advances into,  Eurodollar Advances has been suspended pursuant to
Section 3.3;  provided that no Default or Unmatured  Default shall have occurred
and be continuing at the time of such replacement,  and that,  concurrently with
such  replacement,  (i)  another  bank  or  other  entity  which  is  reasonably
satisfactory  to the Borrower and the  Administrative  Agent shall agree,  as of
such date,  to purchase for cash the Advances and other  Obligations  due to the
Affected Lender pursuant to an Assignment Agreement substantially in the form of
Exhibit C and to become a Lender for all purposes  under this  Agreement  and to
assume all  obligations of the Affected  Lender to be terminated as of such date
and to comply with the  requirements  of Section 12.3 applicable to assignments,
and (ii) the Borrower shall pay to such Affected Lender in immediately available
funds on the day of such  replacement  (A) all interest,  fees and other amounts
then accrued but unpaid to such Affected Lender by the Borrower hereunder to and
including the date of termination,  including without limitation payments due to
such Affected Lender under Sections 3.1, 3.2 and 3.5, to the extent  applicable,
and (B) an amount,  if any,  equal to the  payment  which would have been due to
such Lender on the day of such  replacement  under  Section 3.4 had the Loans of
such  Affected  Lender  been  prepaid  on  such  date  rather  than  sold to the
replacement Lender.


                                       27
<PAGE>


         2.21.     Facility LCs.

         2.21.1.   Issuance; Transitional Facility LCs.

         (i)       Issuance.  The  LC  Issuers  hereby  agree, on the  terms and
conditions set forth in this Agreement, to issue standby and performance letters
of credit (each, together with the  letters  of credit  deemed  issued by the LC
Issuers hereunder pursuant to Section 2.21.1(ii), a "Facility LC") and to renew,
extend, increase,  decrease or otherwise  modify each Facility LC ("Modify," and
each such  action a "Modification"), from  time to time  from and  including the
date of this  Agreement  and  prior to the  Facility  Termination  Date upon the
request of the  Borrower; provided that  immediately after each such Facility LC
is  issued  or  Modified,  (i)  the  aggregate  amount  of  the  outstanding  LC
Obligations  shall not  exceed  $40,000,000 and (ii) the  Aggregate  Outstanding
Credit Exposure shall not exceed the Aggregate Commitment.  No Facility LC shall
have an  expiry date later than  one year after its issuance;  provided that any
Facility LC may provide for the renewal thereof for additional one-year periods.
If any  Facility  LCs remain  outstanding  five (5) days  prior to the  Facility
Termination  Date, the  Borrower shall  comply with  Sections  2.21.11  and  8.1
(whether or not any Default exists at such time) with  respect to such  Facility
LCs and the Facility LC Collateral Account.

         (ii)      Transitional Provision. Schedule 2.21 contains a schedule  of
certain  letters of credit issued by JPMCB for the account of the Borrower prior
to the Closing Date. Subject to the satisfaction of the conditions  contained in
Sections  4.1 and 4.2,  from and after the Closing  Date such  letters of credit
shall be deemed to be Facility LCs issued pursuant to this Section 2.21.

         2.21.2.   Participations.  On the  date of this Agreement, with respect
to the Facility LCs identified  on  Schedule  2.21,  and  upon the  issuance  or
Modification  by the  applicable LC Issuer of a Facility LC in  accordance  with
this Section 2.21, such LC Issuer shall be deemed, without further action by any
party hereto, to have  unconditionally  and irrevocably sold to each Lender, and
each Lender shall be deemed, without further action by any party hereto, to have
unconditionally  and irrevocably  purchased from such LC Issuer, a participation
in  such  Facility  LC (and  each  Modification  thereof)  and  the  related  LC
Obligations in proportion to its Pro Rata Share.

         2.21.3.   Notice.  Subject to  Section  2.21.1, the Borrower shall give
the  applicable  LC Issuer notice  prior  to 10:00 a.m. (Chicago  time) at least
three (3)  Business Days prior to  the proposed date of issuance or Modification
of  each  Facility  LC,  specifying   the  beneficiary,  the  proposed  date  of
issuance  (or Modification)   and the  expiry   date of  such  Facility  LC, and
describing  the proposed terms of  such  Facility  LC  and  the  nature  of  the
transactions proposed to be supported thereby.  Upon receipt of such notice, the
applicable  LC Issuer shall promptly  notify the  Administrative  Agent, and the
Administrative Agent shall promptly notify each Lender,  of the contents thereof
and of the amount of such Lender's participation in such proposed  Facility  LC.
The issuance or  Modification  by any LC Issuer of  any  Facility  LC shall,  in
addition to the  conditions precedent set forth in  Article IV (the satisfaction
of which  such LC Issuer  shall have no  duty to ascertain),  be  subject to the
conditions  precedent that such  Facility LC  shall be  satisfactory to  such LC
Issuer and that the Borrower shall have executed and delivered such  application
agreement and/or such other instruments and agreements relating to such Facility
LC  as  the  applicable  LC  Issuer  shall have  reasonably  requested  (each, a


                                       28
<PAGE>


"Facility LC  Application"). In the  event of any conflict  between the terms of
this Agreement  and the terms of any Facility LC Application,  the terms of this
Agreement shall control.

         2.21.4.   LC Fees. The Borrower shall pay to the  Administrative Agent,
for the account of the Lenders ratably in accordance  with their  respective Pro
Rata Shares,  (i) with  respect to each standby  Facility LC, a letter of credit
fee at a per annum rate equal to the Applicable  Margin for Eurodollar  Loans in
effect from time to time on the average daily  undrawn  stated amount under such
standby  Facility LC, such fees to be payable in arrears on each  Payment  Date,
and (ii) with  respect to each  commercial  Facility  LC, a  one-time  letter of
credit fee in an amount equal to the product of (A) 50% of the Applicable Margin
for  Eurodollar  Loans in effect from time to time times (B) the initial  stated
amount (or, with respect to a Modification  of any such  commercial  Facility LC
which increases the stated amount  thereof,  such increase in the stated amount)
thereof,  such fee to be payable on the date of such issuance or increase  (each
such fee described in this sentence being an "LC Fee").  The Borrower shall also
pay to each LC Issuer for its own  account  (x) at the time of such LC  Issuer's
issuance  of each  standby  Facility  LC, a fronting  fee equal to 0.125% of the
initial  stated amount (or, with respect to a  Modification  of any such standby
Facility LC which  increases  the stated  amount  thereof,  such increase in the
stated amount) of such Facility LC issued by such LC Issuer, and (y) documentary
and processing  charges in connection  with the issuance or  Modification of and
draws under Facility LCs in accordance with the applicable LC Issuer's  standard
schedule for such charges as in effect from time to time.

         2.21.5.   Administration;  Reimbursement by  Lenders. Upon receipt from
the beneficiary of any Facility LC of any demand for payment under such Facility
LC, the applicable LC Issuer shall  notify  the  Administrative  Agent  and  the
Administrative Agent shall promptly notify the Borrower and each other Lender as
to the  amount to be paid by such LC Issuer as a result of such  demand  and the
proposed  payment date (the "LC Payment Date").  The  responsibility  of each LC
Issuer to the  Borrower  and each  Lender  shall be only to  determine  that the
documents  (including each demand for payment)  delivered under each Facility LC
issued  by such LC  Issuer  in  connection  with  such  presentment  shall be in
conformity in all material  respects with such Facility LC. Each LC Issuer shall
endeavor to exercise  the same care in the issuance  and  administration  of the
Facility  LCs  issued by such LC Issuer as it does with  respect  to  letters of
credit in which no participations  are granted,  it being understood that in the
absence of any gross  negligence  or willful  misconduct  by the  applicable  LC
Issuer,  each Lender shall be  unconditionally  and  irrevocably  liable without
regard to the  occurrence of any  Unmatured  Default or Default or any condition
precedent  whatsoever,  to  reimburse  such LC  Issuer  on  demand  for (i) such
Lender's  Pro Rata  Share of the amount of each  payment  made by such LC Issuer
under each Facility LC issued by such LC Issuer to the extent such amount is not
reimbursed by the Borrower  pursuant to Section 2.21.6 below, plus (ii) interest
on the foregoing  amount to be reimbursed by such Lender,  for each day from the
date of the applicable LC Issuer's  demand for such  reimbursement  (or, if such
demand is made after  11:00  a.m.  (Chicago  time) on such  date,  from the next
succeeding  Business Day) to the date on which such Lender pays the amount to be
reimbursed  by it, at a rate of interest  per annum  equal to the Federal  Funds
Effective Rate for the first three days and,  thereafter,  at a rate of interest
equal to the rate applicable to Floating Rate Advances.


                                       29
<PAGE>


         2.21.6.   Reimbursement  by Borrower. The Borrower shall be irrevocably
and  unconditionally  obligated  to  reimburse  each LC Issuer on or before  the
applicable LC Payment Date for any amounts to be paid by such LC Issuer upon any
drawing  under any  Facility LC issued by such LC Issuer,  without  presentment,
demand,  protest or other  formalities  of any kind;  provided  that neither the
Borrower nor any Lender shall hereby be precluded  from  asserting any claim for
direct (but not  consequential)  damages suffered by the Borrower or such Lender
to the extent,  but only to the extent,  caused by (i) the willful misconduct or
gross  negligence of the applicable LC Issuer in  determining  whether a request
presented  under any  Facility LC issued by it  complied  with the terms of such
Facility LC or (ii) the applicable LC Issuer's failure to pay under any Facility
LC issued by it after the  presentation  to it of a request  strictly  complying
with the terms and  conditions of such Facility LC. All such amounts paid by any
LC Issuer and remaining  unpaid by the Borrower shall bear interest,  payable on
demand,  for  each day  until  paid at a rate  per  annum  equal to (x) the rate
applicable to Floating Rate Advances for such day if such day falls on or before
the applicable LC Payment Date and (y) the sum of 2% plus the rate applicable to
Floating  Rate  Advances  for such day if such day falls  after  such LC Payment
Date.  Each LC Issuer will pay to each Lender ratably in accordance with its Pro
Rata Share all  amounts  received by it from the  Borrower  for  application  in
payment, in whole or in part, of the Reimbursement  Obligation in respect of any
Facility  LC issued by such LC Issuer,  but only to the extent  such  Lender has
made  payment to such LC Issuer in  respect  of such  Facility  LC  pursuant  to
Section 2.21.5. Subject to the terms and conditions of this Agreement (including
without  limitation  the  submission of a Borrowing  Notice in  compliance  with
Section 2.9 and the  satisfaction  of the  applicable  conditions  precedent set
forth in Article  IV), the  Borrower  may request an Advance  hereunder  for the
purpose of satisfying any Reimbursement Obligation.

         2.21.7.   Obligations  Absolute.  The Borrower's obligations under this
Section 2.21 shall be absolute and unconditional under any and all circumstances
and  irrespective  of any setoff,  counterclaim  or defense to payment which the
Borrower  may  have or  have  had  against  any LC  Issuer,  any  Lender  or any
beneficiary  of a Facility LC. The Borrower  further  agrees with the LC Issuers
and the Lenders  that the LC Issuers and the  Lenders  shall not be  responsible
for, and the Borrower's  Reimbursement  Obligation in respect of any Facility LC
shall not be affected by, among other  things,  the validity or  genuineness  of
documents or of any endorsements  thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among the Borrower,  any of its  Affiliates,  the  beneficiary of any
Facility LC or any financing institution or other party to which any Facility LC
may be  transferred  or any claims or defenses  whatsoever of the Borrower or of
any of its  Affiliates  against the  beneficiary  of any Facility LC or any such
transferee.  No LC Issuer shall be liable for any error, omission,  interruption
or delay in transmission, dispatch or delivery of any message or advice, however
transmitted,  in connection  with any Facility LC. The Borrower  agrees that any
action  taken or omitted by any LC Issuer or any Lender  under or in  connection
with any Facility LC and the related drafts and documents, if done without gross
negligence or willful  misconduct,  shall be binding upon the Borrower and shall
not put any LC Issuer or any Lender under any liability to the Borrower. Nothing
in this Section  2.21.7 is intended to limit the right of the Borrower to make a
claim  against any LC Issuer for damages as  contemplated  by the proviso to the
first sentence of Section 2.21.6.

         2.21.8.   Actions of LC Issuers.  Each LC Issuer  shall be  entitled to
rely,  and shall be fully  justified in relying,  upon any  Facility LC,  draft,


                                       30
<PAGE>


writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram,  telecopy,  telex  or  teletype  message,  statement,  order  or other
document believed by it in good faith to be genuine and correct and to have been
signed,  sent or made by the  proper  Person or  Persons,  and upon  advice  and
statements of legal counsel,  independent accountants and other experts selected
by such LC  Issuer.  Each LC  Issuer  shall be fully  justified  in  failing  or
refusing  to take any action  under this  Agreement  unless it shall  first have
received  such advice or  concurrence  of the Required  Lenders as it reasonably
deems   appropriate   or  it  shall  first  be  indemnified  to  its  reasonable
satisfaction  by the Lenders against any and all liability and expense which may
be incurred  by it by reason of taking or  continuing  to take any such  action.
Notwithstanding  any other  provision of this Section 2.21, each LC Issuer shall
in all cases be fully justified in acting,  or in refraining from acting,  under
this Agreement in accordance  with a request of the Required  Lenders,  and such
request and any action taken or failure to act pursuant thereto shall be binding
upon the Lenders and any future holders of a participation in any Facility LC.

         2.21.9.   Indemnification. The Borrower  hereby agrees to indemnify and
hold  harmless each Lender,  each LC Issuer and the  Administrative  Agent,  and
their respective directors,  officers, agents and employees from and against any
and all claims and damages,  losses,  liabilities,  costs or expenses which such
Person  may  incur (or which may be  claimed  against  such  Person by any other
Person  whatsoever) by reason of or in connection  with the issuance,  execution
and  delivery or transfer of or payment or failure to pay under any  Facility LC
or any actual or proposed use of any Facility LC, including, without limitation,
any claims, damages, losses, liabilities,  costs or expenses which any LC Issuer
may incur by reason of or in  connection  with (i) the  failure of any Lender to
fulfill or comply with its obligations to such LC Issuer  hereunder (but nothing
herein  contained  shall  affect any rights the  Borrower  may have  against any
defaulting  Lender) or (ii) by reason of or on account of such LC Issuer issuing
any Facility LC which  specifies that the term  "Beneficiary"  included  therein
includes any successor by operation of law of the named  Beneficiary,  but which
Facility LC does not require that any drawing by any such successor  Beneficiary
be accompanied by a copy of a legal  document,  satisfactory  to such LC Issuer,
evidencing  the  appointment of such  successor  Beneficiary;  provided that the
Borrower  shall not be  required  to  indemnify  any such Person for any claims,
damages, losses,  liabilities,  costs or expenses to the extent, but only to the
extent,  caused  by (x)  the  willful  misconduct  or  gross  negligence  of the
applicable  LC Issuer in  determining  whether  a  request  presented  under any
Facility LC issued by such LC Issuer complied with the terms of such Facility LC
or (y) any LC  Issuer's  failure to pay under any  Facility LC issued by such LC
Issuer after the  presentation  to it of a request  strictly  complying with the
terms and  conditions  of such  Facility LC.  Nothing in this Section  2.21.9 is
intended to limit the  obligations of the Borrower under any other  provision of
this Agreement.

         2.21.10.  Lenders'  Indemnification.  Each  Lender  shall,  ratably  in
accordance with its Pro Rata Share, indemnify each LC Issuer, its affiliates and
their respective  directors,  officers,  agents and employees (to the extent not
reimbursed  by the Borrower)  against any cost,  expense  (including  reasonable
counsel  fees and  disbursements),  claim,  demand,  action,  loss or  liability
(except  such as result  from such  indemnitees'  gross  negligence  or  willful
misconduct or the  applicable  LC Issuer's  failure to pay under any Facility LC
issued by such LC  Issuer  after the  presentation  to it of a request  strictly
complying  with  the  terms  and  conditions  of such  Facility  LC)  that  such
indemnitees  may suffer or incur in  connection  with this  Section  2.21 or any
action taken or omitted by such indemnitees hereunder.


                                       31
<PAGE>


         2.21.11.  Facility LC Collateral  Account.  The Borrower agrees that it
will,  as  required by Section  8.1 and until the final  expiration  date of any
Facility LC and thereafter as long as any amount is payable to the LC Issuers or
the Lenders in respect of any Facility LC, maintain a special collateral account
pursuant to arrangements satisfactory to the Administrative Agent (the "Facility
LC  Collateral  Account") at the  Administrative  Agent's  office at the address
specified  pursuant to Article  XIII, in the name of such Borrower but under the
sole dominion and control of the  Administrative  Agent,  for the benefit of the
Lenders  and in which such  Borrower  shall have no  interest  other than as set
forth in Section  8.1. The Borrower  hereby  pledges,  assigns and grants to the
Administrative  Agent,  on behalf of and for the ratable  benefit of the Lenders
and the LC Issuers,  a security interest in all of the Borrower's  right,  title
and  interest  in and to all funds  which may from time to time be on deposit in
the Facility LC Collateral Account to secure the prompt and complete payment and
performance of the Obligations.  The Administrative  Agent will invest any funds
on  deposit  from  time  to  time  in the  Facility  LC  Collateral  Account  in
certificates  of  deposit  of JPMCB  having a maturity  not  exceeding  30 days.
Nothing in this Section 2.21.11 shall either obligate the  Administrative  Agent
to require  the  Borrower to deposit  any funds in the  Facility  LC  Collateral
Account or limit the right of the Administrative Agent to release any funds held
in the  Facility  LC  Collateral  Account in each case other than as required by
Section 8.1.

         2.21.12.  Rights  as a Lender.  In its  capacity  as a Lender,  each LC
Issuer shall have the same rights and obligations as any other Lender.

                                  ARTICLE III

                             YIELD PROTECTION; TAXES

         3.1.      Yield Protection. If, on or after the date of this Agreement,
the  adoption  of  any  law or  any  governmental  or  quasi-governmental  rule,
regulation,  policy,  guideline or directive (whether or not having the force of
law), or any  change in any such  law,  rule, regulation,  policy,  guideline or
directive  or  in  the   interpretation   or   administration   thereof  by  any
governmental or quasi-governmental  authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance  by any
Lender or applicable  Lending  Installation or any LC Issuer with any request or
directive (whether  or  not  having  the  force  of  law) of any such authority,
central bank or comparable agency:

         (i)       subjects any Lender or any applicable Lending Installation or
                   any LC Issuer to any Taxes,  or changes the basis of taxation
                   of payments  (other than with  respect to Excluded  Taxes) to
                   any  Lender  or any LC Issuer in  respect  of its  Eurodollar
                   Loans, Facility LCs or participations therein, or

         (ii)      imposes  or  increases  or  deems   applicable  any  reserve,
                   assessment,  insurance  charge,  special  deposit  or similar
                   requirement  against  assets  of,  deposits  with  or for the
                   account  of,  or  credit  extended  by,  any  Lender  or  any
                   applicable Lending  Installation or any LC Issuer (other than
                   reserves and  assessments  taken into account in  determining
                   the interest rate applicable to Eurodollar Advances), or


                                       32
<PAGE>


         (iii)     imposes  any  other  condition  the  result  of  which  is to
                   increase  the cost to any  Lender or any  applicable  Lending
                   Installation   or  any  LC  Issuer  of  making,   funding  or
                   maintaining its Eurodollar  Loans or Commitment or of issuing
                   or  participating  in  Facility  LCs,  or reduces  any amount
                   receivable   by  any   Lender  or  any   applicable   Lending
                   Installation   or  any  LC  Issuer  in  connection  with  its
                   Eurodollar    Loans   or   Commitment,    Facility   LCs   or
                   participations   therein,  or  requires  any  Lender  or  any
                   applicable Lending  Installation or any LC Issuer to make any
                   payment  calculated  by reference to the amount of Eurodollar
                   Loans or Commitment,  Facility LCs or participations  therein
                   held or  interest  or LC Fees  received  by it,  by an amount
                   deemed  material by such Lender or such LC Issuer as the case
                   may be,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or such LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility  LCs or to reduce the return  received by such Lender or  applicable
Lending  Installation or such LC Issuer,  as the case may be, in connection with
such Eurodollar  Loans or Commitment,  Facility LCs or  participations  therein,
then,  within fifteen (15) days of demand by such Lender or such LC issuer,  the
Borrower  shall  pay such  Lender or such LC Issuer  such  additional  amount or
amounts as will  compensate  such Lender or such LC Issuer,  as the case may be,
for such increased cost or reduction in amount received.

         3.2.      Changes in  Capital Adequacy  Regulations. If a Lender or any
LC Issuer determines the amount of capital required or expected to be maintained
by such Lender, such LC Issuer, any Lending  Installation of such Lender or such
LC Issuer, or any corporation controlling  such  Lender  or such LC  Issuer,  is
increased as a result of a Change,  then,  within fifteen (15) days of demand by
such  Lender or such LC Issuer,  the  Borrower  shall pay such Lender or such LC
Issuer the amount  necessary  to  compensate  for any  shortfall  in the rate of
return on the  portion of such  increased  capital  which such Lender or such LC
Issuer  determines is  attributable to this  Agreement,  its Outstanding  Credit
Exposure or its  Commitment to make Loans and issue or  participate  in Facility
LCs, as the case may be,  hereunder  (after taking into account such Lender's or
such LC Issuer's policies as to capital adequacy). "Change" means (i) any change
after the date of this  Agreement in the Risk-Based  Capital  Guidelines or (ii)
any adoption of, change in, or change in the interpretation or administration of
any other law,  governmental or  quasi-governmental  rule,  regulation,  policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement which affects the amount of capital required or
expected  to be  maintained  by  any  Lender  or any LC  Issuer  or any  Lending
Installation  or any  corporation  controlling  any  Lender  or  any LC  Issuer.
"Risk-Based  Capital  Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement,  including transition
rules, and (ii) the corresponding capital regulations  promulgated by regulatory
authorities  outside the United States  implementing the July 1988 report of the
Basle  Committee  on  Banking  Regulation  and  Supervisory  Practices  Entitled
"International  Convergence  of Capital  Measurements  and  Capital  Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.


                                       33
<PAGE>


         3.3.      Availability  of  Types  of   Advances.  If  (x)  any  Lender
determines  that  maintenance  of  its  Eurodollar  Loans at a suitable  Lending
Installation  would violate any  applicable law, rule,  regulation or directive,
whether or  not having the force  of law, or (y) the  Required Lenders determine
that (i) deposits  of a type,  currency and  maturity  appropriate to match fund
Eurodollar  Advances are not  available or (ii) the interest rate  applicable to
Eurodollar  Advances  does  not   accurately  reflect  the  cost  of  making  or
maintaining Eurodollar Advances, then the Administrative Agent shall suspend the
availability of Eurodollar Advances and require any affected Eurodollar Advances
to be  repaid or  converted to Floating Rate Advances, subject to the payment of
any funding indemnification amounts required by Section 3.4.

         3.4.      Funding  Indemnification.  If  any  payment  of  a Eurodollar
Advance  occurs on a date which is not the last day of the  applicable  Interest
Period,   whether  because  of  acceleration,  prepayment  or  otherwise,  or  a
Eurodollar  Advance is not  made on the date  specified  by the Borrower for any
reason  other than default  by the  Lenders, or  a  Eurodollar  Advance  is  not
prepaid,  converted or  continued on the date  specified by the Borrower for any
reason, the Borrower will indemnify each Lender for any loss or cost incurred by
it resulting  therefrom,  including,   without  limitation,  any loss or cost in
liquidating or  employing deposits  acquired to fund or maintain such Eurodollar
Advance.

         3.5.      Taxes.

         (i)       All   payments by the  Borrower to or for the  account of any
Lender,  LC  Issuer  or  Agent  hereunder  or  under  any  Note or  Facility  LC
Application  shall  be made free and clear of and  without deduction for any and
all Taxes. If the  Borrower shall be required by law to deduct any Taxes from or
in respect  of any sum payable  hereunder to any Lender, LC Issuer or Agent, (a)
the sum  payable shall be  increased as  necessary  so  that  after  making  all
required deductions (including deductions  applicable to additional sums payable
under this  Section 3.5)  such  Lender,  LC Issuer or Agent (as the case may be)
receives  an  amount  equal  to  the  sum  it  would  have  received had no such
deductions  been made,  (b) the  Borrower shall  make  such  deductions, (c) the
Borrower  shall pay the  full  amount  deducted  to the  relevant  authority  in
accordance  with applicable  law and  (d) the  Borrower  shall  furnish  to  the
Administrative  Agent the original copy of a  receipt evidencing payment thereof
within thirty (30) days after such payment is made.

         (ii)      In addition, the Borrower hereby agrees to pay any present or
future  stamp or  documentary  taxes and any other  excise  or  property  taxes,
charges or similar  levies which arise from any payment made  hereunder or under
any Note or Facility LC  Application  or from the  execution  or delivery of, or
otherwise with respect to, this Agreement or any Note or Facility LC Application
("Other Taxes").

         (iii)     The Borrower hereby agrees to indemnify  the  Agents,  the LC
Issuers and each Lender for the full amount of Taxes or Other Taxes  (including,
without  limitation,  any Taxes or Other Taxes imposed on amounts  payable under
this Section 3.5) paid by the Agents,  the LC Issuers or such Lender as a result
of its  Commitment,  any Loans made by it hereunder,  or otherwise in connection
with its participation in this Agreement and any liability (including penalties,
interest and expenses) arising  therefrom or with respect thereto.  Payments due
under this indemnification shall be made within thirty (30) days of the date the
Agents,  the LC Issuers or such Lender makes demand therefor pursuant to Section
3.6.


                                       34
<PAGE>


         (iv)      Each  Lender that  is not  organized  under the  laws of  the
United States of America or a state  thereof (each a "Non-U.S.  Lender")  agrees
that it will,  not more than ten (10)  Business Days after the  date on which it
becomes a party to this Agreement,  (i) deliver to the  Administrative Agent two
(2) duly completed copies of United States Internal Revenue Service Form  W-8BEN
or W-8ECI, certifying in either case that such  Lender is  entitled  to  receive
payments  under this  Agreement  without  deduction or withholding of any United
States  federal  income taxes,  and (ii) deliver to the  Administrative  Agent a
United States Internal  Revenue Form W-8 or W-9, as the case may be, and certify
that it is entitled to an exemption from United States backup  withholding  tax.
Each Non-U.S.  Lender further  undertakes to deliver to each of the Borrower and
the Administrative  Agent (x) renewals or additional copies of such form (or any
successor  form) on or  before  the date  that  such  form  expires  or  becomes
obsolete,  and (y) after the  occurrence of any event  requiring a change in the
most recent  forms so  delivered  by it,  such  additional  forms or  amendments
thereto as may be  reasonably  requested by the  Borrower or the  Administrative
Agent. All forms or amendments described in the preceding sentence shall certify
that such Lender is entitled to receive  payments under this  Agreement  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 or  amendment  with
respect to it and such Lender advises the Borrower and the Administrative  Agent
that  it  is  not  capable  of  receiving  payments  without  any  deduction  or
withholding of United States federal income tax.

         (v)       For any period during  which a Non-U.S. Lender  has failed to
provide the  Borrower with an  appropriate form  pursuant to  clause (iv), above
(unless such  failure is due to a  change in treaty,  law or  regulation, or any
change in  the  interpretation or  administration  thereof  by any  governmental
authority,  occurring  subsequent to the  date on  which a  form  originally was
required  to be provided),  such  Non-U.S.  Lender  shall  not  be  entitled  to
indemnification  under  this Section 3.5  with  respect to Taxes  imposed by the
United States; provided that, should a Non-U.S. Lender which is otherwise exempt
from or  subject to a  reduced   rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (iv), above,  the
Borrower shall take such steps as such Non-U.S. Lender shall reasonably  request
to assist such Non-U.S. Lender to recover such Taxes.

         (vi)      Any Lender that is entitled to an exemption from or reduction
of withholding tax with respect to  payments  under this  Agreement  or any Note
pursuant to the law of any relevant  jurisdiction or any treaty shall deliver to
the Borrower  (with a copy to the  Administrative  Agent),  at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed  by  applicable  law as will permit such  payments to be made without
withholding or at a reduced rate.

         (vii)     If   the  U.S.  Internal   Revenue  Service  or   any   other
governmental  authority  of  the  United  States  or any  other  country or  any
political subdivision thereof asserts a claim that the Administrative  Agent did
not properly withhold tax from amounts paid to or for the account of any  Lender
(because the appropriate form was not delivered or properly  completed,  because
such  Lender  failed  to  notify  the   Administrative  Agent  of  a  change  in


                                       35
<PAGE>


circumstances which rendered its exemption from withholding ineffective,  or for
any other  reason), such  Lender shall  indemnify the Administrative Agent fully
for all  amounts paid, directly or  indirectly, by the  Administrative  Agent as
tax, withholding therefor, or otherwise,  including penalties and interest,  and
including  taxes  imposed   by  any  jurisdiction  on  amounts  payable  to  the
Administrative Agent under this subsection, together with all costs and expenses
related  thereto  (including  reasonable  attorneys'  fees  and  time charges of
attorneys for the Administrative  Agent, which attorneys may be employees of the
Administrative   Agent); provided that no  Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final, non-appealable
judgment in a  court of competent  jurisdiction to have  resulted from the gross
negligence or willful misconduct of the Administrative  Agent.  The  obligations
of the Lenders  under this Section  3.5(vii) shall  survive  the  payment of the
Obligations and termination of this Agreement.

         3.6.      Lender  Statements;  Survival of  Indemnity.  To  the  extent
reasonably   possible,  each   Lender  shall  designate  an   alternate  Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrower to such  Lender  under   Sections  3.1,  3.2  and 3.5 or to  avoid  the
unavailability  of  Eurodollar  Advances  under Section  3.3,  so long  as  such
designation is not, in the good faith  judgment of such Lender,  disadvantageous
to such Lender. Each Lender shall deliver a written  statement of such Lender to
the Borrower (with a copy to the  Administrative Agent) as to the amount due, if
any, under Section 3.1, 3.2, 3.4 or  3.5. Such written statement shall set forth
in reasonable  detail the calculations  upon which such  Lender determined  such
amount and shall be final, conclusive and binding on the Borrower in the absence
of manifest  error. Determination  of  amounts payable  under  such  Sections in
connection  with a  Eurodollar  Loan  shall be calculated as  though each Lender
funded its  Eurodollar Loan  through  the  purchase of a  deposit of  the  type,
currency and  maturity corresponding  to  the deposit  used  as a  reference  in
determining the Eurodollar Rate applicable to such Loan, whether in fact that is
the case or not. Unless otherwise  provided  herein, the amount specified in the
written statement of any Lender shall be payable on demand after  receipt by the
Borrower  of such  written  statement. The  obligations  of the  Borrower  under
Section 3.1,  3.2,  3.4 or  3.5 shall  survive  payment of the  Obligations  and
termination of this Agreement. If any Lender fails to notify the Borrower of any
event or circumstance that will entitle such Lender to compensation  pursuant to
Sections 3.1,  3.2 or 3.5 within  90 days after such Lender obtains knowledge of
such event or  circumstance, then  such Lender shall  not be entitled to receive
such  compensation from the  Borrower for any  amount arising  prior to the date
that is 90 days  before the date on  which such Lender  notifies the Borrower of
such event or circumstance.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

         4.1.      Initial  Credit  Extension. The Lenders shall not be required
to make the initial Credit  Extension hereunder  unless (a) the  representations
and  warranties contained in  Article V are true and correct as of such date and
(b) the  Borrower has furnished to  the Agents with  sufficient  copies for  the
Lenders:

         (i)       Copies of the articles or certificates of  incorporation  (or
                   similar  constitutive  documents)  of the  Borrower  and each
                   Guarantor (each a "Loan Party"), together with all amendments
                   thereto,  and a certificate of good standing,  each certified
                   by the appropriate  governmental  officer in its jurisdiction
                   of organization.


                                       36
<PAGE>


         (ii)      Copies,  certified by the Secretary or Assistant Secretary of
                   each Loan  Party,  of such Loan  Party's  by-laws (or similar
                   constitutive  documents)  and  of  its  Board  of  Directors'
                   resolutions  and of  resolutions or actions of any other body
                   authorizing  the execution of the Loan  Documents to which it
                   is a party.

         (iii)     An  incumbency  certificate,  executed  by the  Secretary  or
                   Assistant  Secretary of each Loan Party, which shall identify
                   by name and title and bear the  signatures of the  Authorized
                   Officers and any other officers of such Loan Party authorized
                   to sign the Loan Documents to which it is a party and, in the
                   case of the Borrower, to request Credit Extensions hereunder,
                   upon which  certificate  the  Agents,  the LC Issuers and the
                   Lenders  shall be  entitled  to rely  until  informed  of any
                   change in writing by the applicable Loan Party.

         (iv)      An opening  compliance  certificate in substantially the form
                   of Exhibit B, signed by the chief  financial  officer,  chief
                   accounting officer or treasurer of the Borrower,  showing the
                   calculations  necessary  to  determine  compliance  with this
                   Agreement as of the Borrower's fiscal quarter ended September
                   26, 2004 and stating  that on the  initial  Credit  Extension
                   Date no Default or  Unmatured  Default  has  occurred  and is
                   continuing.

         (v)       (A) A written opinion of the Borrower's and each  Guarantor's
                   counsel  and  (B) a  written  opinion  of the  Administrative
                   Agent's  counsel with respect to the  enforceability  of this
                   Agreement,  the Notes and the Guaranty,  in each case in form
                   and substance satisfactory to the Agents and addressed to the
                   Lenders in substantially  the form of Exhibit A-1 and Exhibit
                   A-2 respectively.

         (vi)      Any Notes  requested  by a Lender  pursuant  to Section  2.14
                   payable to the order of each such requesting Lender.

         (vii)     If the initial  Credit  Extension  shall be the issuance of a
                   Facility LC, a properly completed Facility LC Application.

         (viii)    Written money transfer  instructions,  in  substantially  the
                   form of Exhibit D, addressed to the Administrative  Agent and
                   signed by an  Authorized  Officer,  together  with such other
                   related money transfer  authorizations as the  Administrative
                   Agent may have reasonably requested.

         (ix)      Evidence  satisfactory to the Agents that the Existing Credit
                   Agreement  shall  have  been or shall  simultaneously  on the
                   Closing Date be terminated  (except for those provisions that
                   expressly  survive  the  termination  thereof)  and all loans
                   outstanding  and other  amounts owed to the lenders or agents
                   thereunder shall have been or shall  simultaneously  with the
                   initial Advance hereunder be paid in full.

         (x)       Such other  documents  as any Lender or its  counsel may have
                   reasonably  requested,  including,  without limitation,  each
                   document identified on the List of Closing Documents attached
                   hereto as Exhibit F.


                                       37
<PAGE>


         4.2.      Each  Credit  Extension.   The  Lenders  shall not (except as
otherwise set forth in Section  2.2.4 with  respect to  Revolving  Loans for the
purpose of repaying  Swing Line Loans) be required to make any Credit  Extension
unless on the applicable Credit Extension Date:

         (i)       There exists no Default or Unmatured Default.

         (ii)      The representations and warranties contained in Article V are
                   true and correct as of such Credit  Extension  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 have been true and correct
                   on and as of such earlier date.

         (iii)     All legal  matters  incident  to the  making  of such  Credit
                   Extension  shall be  satisfactory  to the  Lenders  and their
                   counsel.

         Each  Borrowing  Notice or request for  issuance  of a Facility  LC, or
Swing Line  Borrowing  Notice,  as the case may be, with  respect to each Credit
Extension shall  constitute a  representation  and warranty by the Borrower that
the conditions contained in Section 4.2(i) and (ii) have been satisfied.

                                   ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         The Borrower  represents and warrants as follows to each Lender and the
Agents as of the  Closing  Date,  on the date of the  initial  Credit  Extension
hereunder  (if different  from the Closing Date) and  thereafter on each date as
required by Section 4.2:

         5.1.      Existence  and   Standing.  The  Borrower  and  each  of  its
Subsidiaries (other than  Rio Bravo Restaurant,  Inc.  which is to be  dissolved
within 180 days after the Closing Date) is a corporation, partnership or limited
liability  company duly and properly  incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity)  in
good  standing  under  the  laws  of   its  jurisdiction  of   incorporation  or
organization  and has all  requisite  authority  to conduct its business in each
jurisdiction in which its business is  conducted,  except to the extent that the
failure  to have such  authority  could not  reasonably  be  expected  to have a
Material Adverse Effect.

         5.2.      Authorization and Validity. The  Borrower  and  each  of  its
Subsidiaries  (to the extent  applicable)  has the power and authority and legal
right to execute and deliver  the Loan  Documents  to which it is a party and to
perform its obligations  thereunder.  The execution and delivery by the Borrower
and any such  Subsidiary  of the Loan  Documents  to which it is a party and the
performance of its  obligations  thereunder  have been duly authorized by proper
corporate  proceedings,  and the Loan  Documents to which such entity is a party
constitute  legal,  valid and binding  obligations  of such  entity  enforceable
against such entity in accordance with their terms, except as enforceability may
be limited by bankruptcy,  insolvency or similar laws affecting the  enforcement
of creditors' rights generally.


                                       38
<PAGE>


         5.3.      No Conflict; Government Consent. Neither  the  execution  and
delivery by the Borrower or any of its  Subsidiaries of the Loan Documents,  nor
the consummation of the transactions therein  contemplated,  nor compliance with
the provisions thereof will violate (i) any law, rule, regulation,  order, writ,
judgment,  injunction,  decree or award  binding on the  Borrower  or any of its
Subsidiaries or (ii) the Borrower's or any Subsidiary's  articles or certificate
of incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, or operating agreement or other management
agreement,  as the  case may be,  or  (iii)  the  provisions  of any  indenture,
instrument  or agreement to which the Borrower or any of its  Subsidiaries  is a
party or is  subject,  or by which it, or its  Property,  is bound,  or conflict
with, or constitute a default under,  or result in, or require,  the creation or
imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary
pursuant to the terms of, any such indenture, instrument or agreement. No order,
consent, adjudication,  approval, license,  authorization,  or validation of, or
filing,  recording or  registration  with,  or exemption  by, or other action in
respect of any  governmental  or public body or  authority,  or any  subdivision
thereof, which has not been obtained by the Borrower or any of its Subsidiaries,
is  required  to be  obtained  by the  Borrower  or any of its  Subsidiaries  in
connection  with the  execution and delivery of the Loan  Documents,  the Credit
Extensions under this Agreement,  the payment and performance by the Borrower of
the Obligations or the legality,  validity,  binding effect or enforceability of
any of the Loan Documents.

         5.4.      Financial Statements. The December 28, 2003 and September 26,
2004 consolidated financial statements of  the  Borrower  and  its  Subsidiaries
heretofore delivered to the Arranger and the Lenders were prepared in accordance
with  generally  accepted  accounting  principles  in  effect  on the date  such
statements were prepared and fairly present the consolidated financial condition
and  operations  of the  Borrower  and its  Subsidiaries  at such  dates and the
consolidated  results of their operations and cash flows for the fiscal year and
nine-month  period,  respectively,  then  ended,  subject,  in the  case  of the
September 26, 2004 financial statements,  to normal year-end adjustments and the
absence of notes.

         5.5.      Material  Adverse  Change. Since  December 28, 2003 there has
been no change in the business, Property, condition  (financial  or  otherwise),
operations,  performance  or prospects of the Borrower,  or the Borrower and its
Subsidiaries  taken as a whole,  which  could  reasonably  be expected to have a
Material Adverse Effect.

         5.6.      Taxes.  The Borrower and  its  Subsidiaries  have  filed  all
United States federal tax returns  and all other tax  returns which are required
to be filed and have paid all taxes due pursuant to said  returns or pursuant to
any assessment received by the Borrower or any of its Subsidiaries,  except such
taxes,  if any, as are being  contested  in good faith and as to which  adequate
reserves have been provided in accordance with Agreement Accounting  Principles.
Each of the  Borrower's and its  Subsidiaries'  federal income tax years through
December  26,  1999  have  closed  and  neither  the  Borrower  nor  any  of its
Subsidiaries  has  executed,  or has been  requested to execute,  extensions  of
statutes  of  limitation  on  assessment  for any  completed  fiscal year of the
Borrower or any of its Subsidiaries.  No tax liens have been filed and no claims
are being  asserted  with respect to any such taxes.  The charges,  accruals and
reserves on the books of the  Borrower  and its  Subsidiaries  in respect of any
taxes or other governmental charges are reasonably adequate.


                                       39
<PAGE>


         5.7.      Litigation   and   Contingent   Obligations.   There   is  no
litigation,  arbitration,  governmental  investigation,  proceeding  or  inquiry
pending or, to the  knowledge of any  of their  Authorized  Officers or  general
counsel, threatened against or affecting the Borrower or any of its Subsidiaries
which could  reasonably be expected  to have a Material  Adverse Effect or which
seeks to prevent,  enjoin or delay the  making of any  Credit  Extensions. Other
than any  liability incident to any  litigation, arbitration or proceeding which
could not reasonably be expected to have a Material Adverse Effect,  neither the
Borrower nor any of its Subsidiaries has any contingent obligations not provided
for or disclosed in the financial statements referred to in Section 5.4.

         5.8.      Subsidiaries. Schedule 5.8 (as supplemented from time to time
by the Borrower promptly after the formation,  acquisition or dissolution of any
Subsidiary as permitted under this  Agreement)  contains an accurate list of all
Subsidiaries  of the Borrower as of the date of this  Agreement,  setting  forth
their  respective  jurisdictions  of  organization  and the  percentage of their
respective  capital stock or other ownership  interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other  ownership  interests of such  Subsidiaries  have been (to the extent such
concepts are relevant with respect to such ownership  interests) duly authorized
and issued and are fully paid and non-assessable.

         5.9.      Accuracy of Information. No information, schedule, exhibit or
report furnished by the Borrower or any of its Subsidiaries to the Arranger, any
Agent or Lender (including,  without  limitation,  the Confidential  Information
Memorandum  dated  October  2004) 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, in the light of the circumstances under which they were made,
not misleading;  provided that, with respect to projected financial information,
the Borrower  represents  only that such  information was prepared in good faith
based upon assumptions believed to be reasonable at such time.

         5.10.     Regulation   U.   Neither   the   Borrower  nor  any  of  its
Subsidiaries is engaged principally,  or as one of its important activities,  in
the business of extending credit for the purpose, whether immediate,  incidental
or  ultimate  of  buying  or  carrying  margin  stock  (within  the  meaning  of
Regulations U or X); and after applying the  proceeds  of each  Advance,  margin
stock  (as  defined  in  Regulation U) constitutes less than twenty-five percent
(25%) of the  value of those  assets of the  Borrower and its Subsidiaries which
are subject  to any limitation  on sale or  pledge,  or  any  other  restriction
hereunder.

         5.11.     Material Agreements.  Neither the Borrower nor any Subsidiary
is a party to any agreement or instrument or  subject  to any  charter  or other
corporate  restriction  which  could  reasonably  be expected to have a Material
Adverse  Effect.  Neither the Borrower nor any  Subsidiary  is in default in the
performance,  observance or fulfillment of any of the obligations,  covenants or
conditions  contained in (i) any agreement to which it is a party, which default
could  reasonably  be  expected  to have a Material  Adverse  Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.

         5.12.     Compliance With Laws. The Borrower and its Subsidiaries  have
complied  in  all  material  respects  with  all  applicable  statutes,   rules,


                                       40
<PAGE>


regulations,  orders and  restrictions of any domestic or foreign  government or
any  instrumentality  or agency thereof having  jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property.

         5.13.     Ownership of Properties. On the date of this  Agreement,  the
Borrower and its Subsidiaries will have good title, free of all Liens other than
those permitted by Section 6.16, to all of the Property and assets  reflected in
the Borrower's most recent  consolidated  financial  statements  provided to the
Arranger and the Lenders as owned by the Borrower  and its  Subsidiaries,  other
than Property and assets sold or otherwise disposed of in the ordinary course of
business.

         5.14.     ERISA; Foreign Pension  Matters. The sum of (a) the  Unfunded
Liabilities  of all Plans and (b) the present  value of the  aggregate  unfunded
liabilities to provide the accrued  benefits under all Foreign  Pension Plans do
not in the aggregate  exceed an amount equal to the sum of (i) five percent (5%)
of the value (as of any date of  determination)  of all Plan assets allocable to
Plan benefits  guaranteed by ERISA and (ii) five percent (5%) of the fair market
value of the assets held in trust or other funding vehicles for accrued benefits
under all  Foreign  Pension  Plans.  Each  Plan and each  Foreign  Pension  Plan
complies in all material  respects with all applicable  requirements  of law and
regulations,  no Reportable Event has occurred with respect to any Plan, neither
the Borrower nor any other member of the Controlled Group has withdrawn from any
Multiemployer  Plan or initiated steps to do so, and no steps have been taken to
terminate any Plan.

         5.15.     Plan  Assets; Prohibited Transactions. The Borrower is not an
entity  deemed to hold  "plan  assets"  within  the  meaning  of 29  C.F.R.  ss.
2510.3-101  of an employee  benefit  plan (as defined in Section  3(3) of ERISA)
which is subject to Title I of ERISA or any plan  (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Loans  hereunder  gives rise to a prohibited  transaction  within the meaning of
Section 406 of ERISA or Section 4975 of the Code.

         5.16.     Environmental Matters.

         (a)       In  the  ordinary  course  of  its  business,  the Authorized
Officers  and   general  counsel  of  the   Borrower  consider   the  effect  of
Environmental Laws on the business of the Borrower and its Subsidiaries,  in the
course of which  they identify and  evaluate  potential  risks  and  liabilities
accruing to the Borrower and its Subsidiaries due to Environmental Laws. On  the
basis of this consideration, the Borrower has concluded that Environmental  Laws
cannot reasonably  be expected to have a  Material Adverse Effect. Except as set
forth on Schedule 5.16, neither the Borrower nor any Subsidiary has received any
notice to the effect that its operations are not in compliance  with  any of the
requirements of applicable  Environmental Laws or are the subject of any federal
or state  investigation  evaluating  whether  any  remedial  action is needed to
respond  to a release  of any toxic or  hazardous  waste or  substance  into the
environment,  which  non-compliance  or  remedial  action  could  reasonably  be
expected to have a Material Adverse Effect.

         (b)       The Borrower and each of its Subsidiaries have  obtained  all
necessary governmental permits, licenses and approvals which are material to the
operations   conducted  on  their  respective   properties,   including  without
limitation, all required permits, licenses and approvals for (i) the emission of


                                       41
<PAGE>


air pollutants or contaminates, (ii) the treatment or pretreatment and discharge
of waste  water or storm  water,  (iii)  the  treatment,  storage,  disposal  or
generation of hazardous wastes, (iv) the withdrawal and usage of ground water or
surface water,  and (v) the disposal of solid wastes,  except where a failure to
obtain  such  permits,  licenses  and  approvals  would not result in a Material
Adverse Effect.

         5.17.     Investment   Company  Act.   Neither  the  Borrower  nor  any
Subsidiary  is  an  "investment  company"   or  a  company  "controlled"  by  an
"investment company", within the  meaning of the Investment Company Act of 1940,
as amended.

         5.18.     Public Utility  Holding Company Act. Neither the Borrower nor
any Subsidiary is a "holding company" or a  "subsidiary  company"  of a "holding
company",  or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

         5.19.     Insurance. The Property  of the Borrower and its Subsidiaries
is insured with reputable insurance companies not Affiliates of the Borrower, in
such amounts,  with such deductibles and covering such risks as are commercially
reasonable.

                                   ARTICLE VI

                                    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 generally  accepted  accounting  principles,  and furnish to the
Lenders:

         (i)       Within ninety (90) days after the close of each of its fiscal
                   years, an unqualified  audit report  certified by independent
                   certified  public  accountants  acceptable  to  the  Lenders,
                   prepared in accordance with Agreement  Accounting  Principles
                   on a  consolidated  basis for  itself  and its  Subsidiaries,
                   including  a  balance  sheet  as of the end of  such  period,
                   related statements of income,  shareholders'  equity and cash
                   flows, accompanied by a certificate of said accountants that,
                   in the  course  of  their  examination  necessary  for  their
                   certification  of  the  foregoing,   they  have  obtained  no
                   knowledge of any Default or Unmatured Default,  or if, in the
                   opinion of such accountants, any Default or Unmatured Default
                   shall exist, stating the nature and status thereof.

         (ii)      Within  forty-five  (45)  days  after  the close of the first
                   three (3) quarterly  periods of each of its fiscal years, for
                   itself and its Subsidiaries, a consolidated unaudited balance
                   sheet as at the close of each such  period  and  consolidated
                   statements of income, shareholders' equity and cash flows for
                   the period from the  beginning of such fiscal year to the end
                   of  such  quarter,  all  certified  by  its  chief  financial
                   officer, chief accounting officer or treasurer.


                                       42
<PAGE>


         (iii)     Together  with  the  financial   statements   required  under
                   Sections  6.1(i)  and  (ii),  a  compliance   certificate  in
                   substantially  the  form of  Exhibit  B signed  by its  chief
                   financial  officer,  chief  accounting  officer or  treasurer
                   showing the  calculations  necessary to determine  compliance
                   with this  Agreement and stating that no Default or Unmatured
                   Default  exists,  or if  any  Default  or  Unmatured  Default
                   exists, stating the nature and status thereof.

         (iv)      As soon as available, but in any event within sixty (60) days
                   after the  beginning of each fiscal year of the  Borrower,  a
                   copy of the projected  consolidated and consolidating balance
                   sheet,  income  statement  and  cash  flow  statement  of the
                   Borrower for such fiscal year.

         (v)       As soon as practicable  after receipt thereof by the Borrower
                   but in any event within 270 days after the close of each plan
                   year for each Plan, a statement  of any Unfunded  Liabilities
                   of such Plan,  certified  as  correct by an actuary  enrolled
                   under ERISA.

         (vi)      As soon as  possible  and in any event  within  ten (10) days
                   after  the  Borrower  knows  that any  Reportable  Event  has
                   occurred with respect to any Plan,  or any material  unfunded
                   liability  has arisen  with  respect to any  Foreign  Pension
                   Plan, a statement,  signed by the chief financial  officer or
                   treasurer of the Borrower,  describing said Reportable  Event
                   or  material  unfunded  liability  and the  action  which the
                   Borrower proposes to take with respect thereto.

         (vii)     As soon as  possible  and in any event  within  ten (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 reasonably be
                   expected to have a Material Adverse Effect.

         (viii)    Promptly upon the furnishing  thereof to the  shareholders of
                   the Borrower, copies of all financial statements, reports and
                   proxy statements so furnished.

         (ix)      Promptly upon the filing thereof,  copies of all registration
                   statements  or other regular  reports not otherwise  provided
                   pursuant to this Section 6.1 which the Borrower or any of its
                   Subsidiaries   files  with  the   Securities   and   Exchange
                   Commission.

         (x)       Such other information (including non-financial  information)
                   as any  Agent  or  Lender  may from  time to time  reasonably
                   request.

         6.2.      Use  of  Proceeds.  The  Borrower  will, and  will cause each
Subsidiary  to, use the proceeds of the Credit Extensions for general  corporate
purposes, including for working capital, refinancing the Indebtedness  under the
Existing   Credit   Agreement,   dividends,   stock  repurchases  and  Permitted


                                       43
<PAGE>


Acquisitions.  The Borrower  shall use  the  proceeds of  Credit  Extensions  in
compliance with all  applicable legal and regulatory  requirements and  any such
use shall not result in a violation of any such requirements, including, without
limitation,  Regulations  T, U  and X,  the  Securities  Act  of  1933  and  the
Securities  Exchange  Act  of  1934  and the regulations promulgated thereunder.

         6.3.      Notice of Default. The Borrower  will,  and will  cause  each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or  Unmatured  Default and of any other  development,  financial  or
otherwise, which could reasonably be expected to 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  substantially  the same
manner and only in lines of  business  similar  or related to lines of  business
conducted  by the  Borrower or its  Subsidiaries  as of the Closing  Date,  and,
except as otherwise permitted by Section 6.13, do all things necessary to remain
duly incorporated or organized, validly existing and (to the extent such concept
applies to such  entity)  in good  standing  as a  corporation,  partnership  or
limited  liability company in its jurisdiction of incorporation or organization,
as the case may be, and maintain all requisite authority to conduct its business
in each  jurisdiction  in which its  business is  conducted;  provided  that any
Subsidiary  may  liquidate  or dissolve if (i) the Borrower  determines  in good
faith that such  liquidation  or  dissolution  is in the best  interests  of the
Borrower  and  (ii)  such   liquidation   or   dissolution   is  not  materially
disadvantageous  to the Lenders.  6.5. Taxes.  The Borrower will, and will cause
each  Subsidiary  to, file on a timely basis  complete and correct United States
federal and applicable foreign,  state and local tax returns required by law and
pay when due all taxes,  assessments and governmental charges and levies upon it
or its income,  profits or Property,  except those which are being  contested in
good  faith by  appropriate  proceedings  and  with  respect  to which  adequate
reserves have been set aside in accordance with Agreement Accounting Principles.

         6.6.      Insurance. The Borrower  will, and will cause each Subsidiary
to, maintain with reputable  insurance companies  insurance on their Property in
such amounts and  covering such risks as  is  commercially  reasonable,  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  laws,   rules,
regulations,  orders, writs, judgments,  injunctions, decrees or awards to which
it may be subject including, without limitation, all Environmental Laws.

         6.8.      Maintenance of Properties.  The Borrower will, and will cause
each Subsidiary  to, do all things  necessary  in  its  commercially  reasonable
judgement 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;  Keeping of Books and Records. The Borrower will,
and will cause each Subsidiary to, permit the Agents and the  Lenders,  by their


                                       44
<PAGE>


respective representatives and agents, to inspect any of the Property, 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 Administrative
Agent or any Lender may  designate.  The Borrower  shall keep and maintain,  and
cause each of its Subsidiaries to keep and maintain,  in all material  respects,
proper books of record and account in which entries in conformity with Agreement
Accounting Principles shall be made of all dealings and transactions in relation
to their respective businesses and activities.  If a Default has occurred and is
continuing,  the Borrower,  upon the Administrative  Agent's request, shall turn
over  copies  of  any  such   records  to  the   Administrative   Agent  or  its
representatives.

         6.10.     Addition of  Guarantors.  As  promptly as possible but in any
event within ninety (90) days (or such  later  date  as  is  agreed  to  by  the
Administrative  Agent) after any Domestic Subsidiary becomes a Subsidiary of the
Borrower,  the Borrower shall cause each such Domestic  Subsidiary to deliver to
the Administrative  Agent a duly executed supplement to the Guaranty pursuant to
which  such  Subsidiary  agrees to be bound by the terms and  provisions  of the
Guaranty.

         6.11.     Dividends and Distributions.  The Borrower will not, nor will
it permit  any of its  Subsidiaries to,  declare or pay  any  dividends  on  its
capital stock (other than dividends payable in its own capital stock), make  any
distributions  to any of its equity  owners,  redeem,  repurchase  or  otherwise
acquire or retire any of its capital stock or other equity interests at any time
outstanding,  except that (i) any Subsidiary  may, at any time,  declare and pay
dividends or make distributions to the Borrower or to a Wholly-Owned  Subsidiary
of the  Borrower  and (ii) the  Borrower  may declare and pay  dividends  on its
capital stock and may repurchase its capital stock, provided, in each case, that
no Default or Unmatured  Default  shall exist  before or after giving  effect to
such dividends or repurchase or be created as a result thereof.

         6.12.     Intentionally Omitted.

         6.13.     Merger.  The Borrower  will  not,  nor  will  it  permit  any
Subsidiary to, merge or consolidate with or into any other Person,  except that,
if after  giving effect to any  such  merger  or  consolidation  no  Default  or
Unmatured Default  would exist, a Subsidiary may  merge or  consolidate (i) into
the Borrower  or a Wholly-Owned  Subsidiary  such  that  the  Borrower  or  such
Wholly-Owned  Subsidiary is the surviving entity, provided that in any merger or
consolidation  involving a  Domestic  Subsidiary and a  Foreign  Subsidiary, the
Domestic Subsidiary shall  be the surviving entity, or (ii) in connection with a
Permitted Acquisition.

         6.14.     Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell, transfer or otherwise dispose of its Property to any
other Person, except:

         (i)       Sales of  inventory  and  obsolete  or  excess  assets in the
                   ordinary course of business.

         (ii)      Sales, leases and transfers of Property (a) from the Borrower
                   to any Guarantor, and (b) from any Subsidiary of the Borrower
                   to the Borrower or any Guarantor.


                                       45
<PAGE>


         (iii)     Other sales, assignments,  transfers,  leases, conveyances or
                   other  dispositions  of its Property,  provided that (a) such
                   disposition  is for  consideration  consisting  of  cash or a
                   combination of cash and notes,  the principal amount of which
                   notes shall not exceed the greater of $25,000,000  and 25% of
                   the total consideration, (b) such disposition is for not less
                   than fair market  value (as  determined  in good faith by the
                   Borrower's board of directors if the total  consideration for
                   such  disposition  is equal to or greater than  $20,000,000),
                   (c) after giving  effect to such  disposition,  no Default or
                   Unmatured   Default  shall  exist,  and  (d)  such  Property,
                   together  with all other  Property  of the  Borrower  and its
                   Subsidiaries  previously  leased,  sold or disposed of (other
                   than  inventory and obsolete or excess assets in the ordinary
                   course of business)  calculated  at book value (i) during the
                   immediately  preceding  twelve-month  period,  represents the
                   disposition  of  not  greater  than  10%  of  the  Borrower's
                   Consolidated  Total  Assets  at the  end of the  fiscal  year
                   immediately  preceding  that in  which  such  transaction  is
                   proposed to be entered into,  and (ii) during the period from
                   the Closing  Date to the date of such  proposed  transaction,
                   represents  the  disposition  of not greater  than 30% of the
                   Borrower's Consolidated Total Assets at the end of the fiscal
                   year immediately  preceding that in which such transaction is
                   proposed to be entered into.

         6.15.     Investments and Acquisitions. The Borrower will not, nor will
it permit any Subsidiary to, make or suffer to exist any Investments (including,
without   limitation,   loans  and  advances  to,  and  other   Investments  in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or  remain  a  partner  in any  partnership  or  joint  venture,  or to make any
Acquisition, except:

         (i)       Cash Equivalent Investments.

         (ii)      Existing Investments in Subsidiaries and other Investments in
                   existence on the date hereof and described in Schedule 6.15.

         (iii)     Investments   by  any  Subsidiary  in  the  Borrower  or  any
                   Guarantor,  and  Investments by any Subsidiary  that is not a
                   Guarantor in any other Subsidiary that is not a Guarantor.

         (iv)      Investments  of insurance  premium  revenues by  Neighborhood
                   Insurance, Inc.

         (v)       Investments resulting from the transfers permitted by Section
                   6.14(iii).

         (vi)      Investments  resulting from Financial  Contracts entered into
                   in the  ordinary  course of business and which do not violate
                   the terms of Section 6.18.

         (vii)     Acquisitions meeting the following  requirements or otherwise
                   approved  by the  Required  Lenders  (each  such  Acquisition
                   constituting a "Permitted Acquisition"):

                   (a) as of the date of the  consummation of such  Acquisition,
                   no Default or Unmatured  Default  shall have  occurred and be


                                       46
<PAGE>


                   continuing  or would  result from such  Acquisition,  and the
                   representation  and warranty  contained in Section 5.10 shall
                   be  true  both  before  and  after  giving   effect  to  such
                   Acquisition;

                   (b) such  Acquisition is  consummated on a non-hostile  basis
                   pursuant to a negotiated  acquisition  agreement  approved by
                   the board of directors or other applicable  governing body of
                   the  seller  or  entity  to  be  acquired,  and  no  material
                   challenge  to such  Acquisition  (excluding  the  exercise of
                   appraisal  rights)  shall be  pending  or  threatened  by any
                   shareholder  or  director  of  the  seller  or  entity  to be
                   acquired;

                   (c) the  business  to be  acquired  in  such  Acquisition  is
                   similar or related to one or more of the lines of business in
                   which the  Borrower and its  Subsidiaries  are engaged on the
                   Closing Date;

                   (d) as of the date of the  consummation of such  Acquisition,
                   all material approvals required in connection therewith shall
                   have been obtained;

                   (e) during any fiscal year, the aggregate Purchase Price paid
                   in   connection   with   Acquisitions    shall   not   exceed
                   $200,000,000; and

                   (f) in  the  case  of  any  Permitted  Acquisition  having  a
                   Purchase Price  (including the value of treasury stock of the
                   Borrower  repurchased prior to the Closing Date) greater than
                   $50,000,000,  not  less  than  ten  (10)  days  prior  to the
                   consummation  of such  Permitted  Acquisition,  the  Borrower
                   shall have delivered to the Administrative Agent, a pro forma
                   compliance certificate in the form of Exhibit B hereto, which
                   shall reflect that, on a pro forma basis,  the Borrower would
                   have been in  compliance  with the  financial  covenants  set
                   forth in  Section  6.21 for the four  fiscal  quarter  period
                   reflected  in  the  compliance   certificate   most  recently
                   delivered  to the  Administrative  Agent  pursuant to Section
                   6.1(iii)  prior  to  the   consummation   of  such  Permitted
                   Acquisition (giving effect to such Permitted  Acquisition and
                   all Credit  Extensions  funded in connection  therewith as if
                   made on the first day of such period).

         (viii)    Investments,  either in the form of loans to  franchisees  or
                   reimbursement  obligations  from  franchisees,  arising  from
                   obligations  under  (a)  the  Master  Agreement  and  Limited
                   Guaranty  dated as of June 1, 2004,  executed by the Borrower
                   in favor of  Citicorp  Leasing,  Inc.  or (b)  other  similar
                   programs,  to the  extent  the  aggregate  amount of all such
                   investments   does  not  exceed   $25,000,000   at  any  time
                   outstanding.

         (ix)      Investments   by  the  Borrower  or  any   Guarantor  in  any
                   Subsidiary  that is not a  Guarantor,  Investments  in  joint
                   ventures,  Investments  in franchisees of the Borrower or any
                   Subsidiary and other Investments in any other Persons,  loans
                   or advances  made by the Borrower or any of its  Subsidiaries
                   to  employees  and  officers of the Borrower or of any of the
                   Borrower's  Subsidiaries  or to any other  Persons,  provided
                   that all of the  foregoing  shall not  exceed  the  amount of
                   $25,000,000 in the aggregate at any one time outstanding.


                                       47
<PAGE>


         6.16.     Liens.  The  Borrower  will  not,  nor  will  it  permit  any
Subsidiary  to,  create,  incur,  or  suffer  to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:

         (i)       Liens for  taxes,  assessments  or  governmental  charges  or
                   levies on its  Property  if the same shall not at the time be
                   delinquent or thereafter can be paid without penalty,  or are
                   being contested in good faith and by appropriate  proceedings
                   and for which adequate  reserves in accordance with Agreement
                   Accounting Principles shall have been set aside on its books.

         (ii)      Liens  imposed by law (and exactly  similar  Liens imposed by
                   contract  in the same  jurisdiction  where  any such  Lien is
                   imposed   by  law),   such  as   carriers',   warehousemen's,
                   landlords'  and  mechanics'  liens  and other  similar  liens
                   arising  in the  ordinary  course of  business  which  secure
                   payment of obligations not more than sixty (60) days past due
                   or which are being  contested  in good  faith by  appropriate
                   proceedings  and for which  adequate  reserves in  accordance
                   with  Agreement  Accounting  Principles  shall  have been set
                   aside on its books.

         (iii)     Liens  arising  out of pledges  or  deposits  under  workers'
                   compensation laws, unemployment insurance,  old age pensions,
                   or other social security or retirement  benefits,  or similar
                   legislation.

         (iv)      Utility  easements,  building  restrictions  and  such  other
                   encumbrances  or charges  against  real  property as are of a
                   nature  generally  existing  with respect to  properties of a
                   similar character and which do not in any material way affect
                   the  marketability  of the  same or  interfere  with  the use
                   thereof in the business of the Borrower or its Subsidiaries.

         (v)       Liens  arising out of deposits to secure the  performance  of
                   bids, trade contracts (other than for borrowed money), surety
                   and  appeal  bonds,   performance  bonds  and  other  similar
                   obligations incurred in the ordinary course of business.

         (vi)      Liens  existing on the date hereof and  described on Schedule
                   6.16 and renewals and  continuations of such Liens so long as
                   the Liens so renewed or continued are limited to the Property
                   which was subject to the Lien so renewed or continued  and do
                   not exceed the principal  amount of obligations so secured at
                   the time of such renewal or extension.

         (vii)     Liens,  if any,  securing  the Loans  and  other  Obligations
                   hereunder.

         (viii)    Other Liens not reflected in clauses (i)-(vii) above securing
                   Indebtedness  or other  obligations  in the  aggregate at any
                   time not in excess of an  amount,  at any time the same is to
                   be determined,  equal to twenty percent (20%) of Consolidated
                   Net Worth as  determined at the end of the then most recently
                   completed fiscal quarter of the Borrower.

         6.17.     Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, enter  into any  transaction  (including,  without


                                       48
<PAGE>


limitation,  the purchase or sale of any Property or service)  with, or make any
payment or transfer to, any Affiliate except (i) transactions  with the Borrower
or any  Guarantor,  (ii)  transactions  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  arm's-length  transaction  or (iii)  transactions  disclosed  in the
Borrower's  Form 10K for fiscal year 2003 and the proxy statement filed with the
Securities  and Exchange  Commission  for the annual  meeting of the  Borrower's
shareholders held on May 13, 2004.

         6.18.     Financial  Contracts.  The  Borrower shall not, and shall not
permit any  of its  consolidated  Subsidiaries  to,  enter  into  any  Financial
Contract, other than Financial  Contracts pursuant to which the Borrower or such
Subsidiary hedges its actual or anticipated interest rate,  foreign  currency or
commodity exposure existing or anticipated at the time thereof.

         6.19.     ERISA.  Except to the  extent that such act or failure to act
would not  result singly, or in the  aggregate, after  taking  into  account all
other such acts or failures to act, in a  liability  which  might be  reasonably
expected  materially to  adversely affect the  ability of the  Borrower and  the
members of the  Controlled  Group,  taken  as  a  whole,  to  carry  on business
substantially as now being or heretofore conducted, or to  materially  adversely
affect the financial condition of the Borrower and the members of the Controlled
Group taken  as a whole,  the  Borrower  shall  not (i) engage,  or  permit  any
Controlled  Group member to engage, in any  prohibited  transaction described in
Sections  406 of ERISA or  4975 of the  Code for  which  a  statutory  or  class
exemption  is not  available or a  private  exemption has  not  been  previously
obtained  from the  United States Department of  Labor; (ii) permit to exist any
accumulated funding  deficiency (as  defined in Sections 302 of ERISA and 412 of
the Code); (iii) fail, or permit any member of the Controlled Group to fail,  to
pay timely required contributions or annual installments due with respect to any
waived funding  deficiency of any Plan; (iv)  terminate, or permit any member of
the Controlled Group to terminate,  any Plan which would result in any liability
of the Borrower  or any member of the Controlled  Group under Title IV of ERISA;
(v) fail, or permit any member  of the  Controlled  Group to  fail,  to make any
contribution  or payment to any  Multiemployer  Plan which the  Borrower  or any
member of the  Controlled  Group may be  required  to make  under any  agreement
relating to such Multiemployer Plan, or any law pertaining  thereto;  (vi) fail,
or  permit  any  member of the  Controlled  Group to fail,  to pay any  required
installment  or any other payment  required  under Section 412 of the Code on or
before the due date for such  installment or other payment;  or (vii) amend,  or
permit any  member of the  Controlled  Group to amend,  a Plan  resulting  in an
increase in current  liability  for the plan year such that the  Borrower or any
member of the  Controlled  Group is  required  to provide  security to such Plan
under Section 401(a)(29) of the Code.

         6.20.     Environmental  Compliance.  The  Borrower will not become, or
permit any Subsidiary to become, subject to any liabilities or costs which might
be reasonably  expected materially  to  adversely  affect  the  ability  of  the
Borrower  and  its  Subsidiaries,  taken  as  a  whole,  to  carry  on  business
substantially as  now being or heretofore  conducted, or to materially adversely
affect the financial condition of the  Borrower and its Subsidiaries  taken as a
whole, arising out of or related to (i) the release or threatened release at any
location of any  contaminant  into the  environment,  or any remedial  action in


                                       49
<PAGE>


response  thereto or (ii) any violation of any  environmental,  health or safety
requirements of law (including,  without  limitation,  any Environmental  Laws).
6.21. Financial Covenants.

         6.21.1.   Maximum  Leverage  Ratio. As of the last  day of each  fiscal
quarter,  the Borrower shall not permit the ratio (the "Leverage  Ratio") of (i)
Consolidated  Funded  Indebtedness  to  (ii)  EBITDA  of the  Borrower  and  its
Subsidiaries,  as at the end of and for the  period of four  consecutive  fiscal
quarters ending on such day, to be greater than (i) 2.00 to 1.00.

         6.21.2.   Minimum  Fixed Charge Coverage  Ratio. As of the  last day of
each fiscal  quarter, the Borrower shall  not permit the  ratio of (i) EBITR  to
(ii) the sum of (a) Consolidated Interest Expense plus (b) Consolidated Rentals,
in each case for the period of four  consecutive fiscal  quarters ending on such
day, to be less than 4.00 to 1.00.

         6.21.3.   Maximum Ratio of  Indebtedness  to Total Capitalization.  The
Borrower  shall not permit the ratio of (i)  Consolidated  Indebtedness  to (ii)
Consolidated Total Capitalization at any time to be greater than 0.50 to 1.00.

                                   ARTICLE VII

                                    DEFAULTS

         The  occurrence  of any  one or  more  of the  following  events  shall
constitute a Default:

         7.1.      Breach of  Representations or  Warranties. Any representation
or warranty made or deemed made by or on behalf  of the  Borrower  or any of its
Subsidiaries to the Lenders,  any LC Issuer or the Agents under or in connection
with this  Agreement,  any Credit  Extension,  or any certificate or information
delivered in connection  with this Agreement or any other Loan Document shall be
false in any material respect on the date as of which made.

         7.2.      Failure  to  Make   Payments  When  Due.  Nonpayment  of  (i)
principal of any Loan when due, (ii) any Reimbursement Obligation within one (1)
Business  Day after the  same becomes  due, or  (iii)  interest upon any Loan or
Reimbursement  Obligation or any  Commitment Fee, LC  Fee or  other  Obligations
under  any of the  Loan Documents  within five  (5)  Business  Days  after  such
interest, fee or other Obligation becomes due.

         7.3.      Breach of Covenants. (i) The breach by the Borrower of any of
the terms or provisions of Section  6.3 or Sections  6.10 through  6.21; or (ii)
the breach by the Borrower of any of the other terms or provisions of Article VI
which is not  remedied  within  five (5)  Business  Days  after  the  occurrence
thereof.

         7.4.      Other   Breaches.  The breach by the  Borrower  (other than a
breach which constitutes a Default under another Section of this Article VII) of
any of the  terms or  provisions of this  Agreement or any other  Loan  Document
which is not remedied within thirty (30) days after the occurrence thereof.

         7.5.      Default as to Other Indebtedness.


                                       50
<PAGE>


         (i)       Failure  of the  Borrower or  any of its  Subsidiaries to pay
when due any Material Indebtedness; or

         (ii)      Any Material Indebtedness of  the  Borrower  or  any  of  its
Subsidiaries  shall be  declared to be due and payable or required to be prepaid
or repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or

         (iii)     The Borrower or any of its Subsidiaries shall fail to pay, or
shall admit in writing its inability to pay, its debts  generally as they become
due; or

         (iv)      The default by the Borrower or any of its Subsidiaries in the
performance (beyond the applicable grace period with respect thereto, if any) of
any  term,  provision  or  condition  contained  in  any  Material  Indebtedness
Agreement,  or any other  event shall occur or  condition  exist,  the effect of
which  default,  event or condition is to cause,  or to permit the  holder(s) of
such  Material  Indebtedness  or the lender(s)  under any Material  Indebtedness
Agreement to cause such Material  Indebtedness to become due prior to its stated
maturity or any commitment to lend under any Material Indebtedness  Agreement to
be terminated prior to its stated expiration date.

         7.6.      Voluntary  Bankruptcy;   Appointment of  Receiver;   Etc. The
Borrower or any of its Subsidiaries shall (i) have an order for  relief  entered
with respect to it under the  Federal  bankruptcy laws  as  now or  hereafter in
effect, (ii) make an assignment for  the benefit of creditors,  (iii) apply for,
seek, consent  to, or acquiesce  in, the appointment  of a receiver,  custodian,
trustee, examiner,  liquidator  or  similar  official for it or  any Substantial
Portion of its  Property, (iv) institute  any  proceeding seeking  an  order for
relief under the  Federal bankruptcy  laws as  now or  hereafter  in  effect  or
seeking to  adjudicate  it a  bankrupt  or  insolvent,  or seeking  dissolution,
winding up,  liquidation, reorganization, arrangement, adjustment or composition
of it or  its  debts  under  any  law  relating  to  bankruptcy,  insolvency  or
reorganization or relief of debtors or fail to file an answer or other  pleading
denying  the material  allegations of  any such proceeding filed against it, (v)
take any  corporate or partnership  action to  authorize  or  effect any  of the
foregoing actions set forth in this Section 7.6, or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.

         7.7.      Involuntary Bankruptcy; Appointment of Receiver; Etc. Without
the application, approval or consent of the Borrower or any of its Subsidiaries,
a receiver, trustee, examiner, liquidator or similar official shall be appointed
for the Borrower or any of its  Subsidiaries or any  Substantial  Portion of its
Property,  or a proceeding  described  in Section  7.6(iv)  shall be  instituted
against the Borrower or any of its Subsidiaries  and such appointment  continues
undischarged or such proceeding  continues  undismissed or unstayed for a period
of thirty (30) consecutive days.

         7.8.      Custody or Control of Property.  Any  court,   government  or
governmental  agency  shall  condemn,  seize or otherwise  appropriate,  or take
custody or control of, all or any portion of the  Property of the  Borrower  and
its  Subsidiaries  which,  when taken  together  with all other  Property of the
Borrower and its  Subsidiaries  so  condemned,  seized,  appropriated,  or taken
custody or control of, during the  twelve-month  period ending with the month in
which any such action occurs, constitutes a Substantial Portion.


                                       51
<PAGE>


         7.9.      Judgments. The Borrower or any of its Subsidiaries shall fail
within  thirty (30) days to pay,  bond or  otherwise  discharge  one or more (i)
judgments  or orders for the payment of money  (except to the extent  covered by
independent  third-party  insurance  as to which the insurer has not  disclaimed
coverage)  in  excess  of  $20,000,000  (or the  equivalent  amount  thereof  in
currencies  other  than U.S.  dollars)  in the  aggregate,  or (ii)  nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being  appropriately  contested in good
faith.

         7.10.     Unfunded Liabilities. The sum of (a) the Unfunded Liabilities
of all Plans and (b) the present value of the aggregate unfunded liabilities  to
provide the accrued  benefits  under all Foreign  Pension  Plans  exceeds in the
aggregate  an amount  equal to the sum of (i) five percent (5%) of the value (as
of any date of  determination)  of all Plan assets  allocable  to Plan  benefits
guaranteed  by ERISA and (ii) five  percent (5%) of the fair market value of the
assets held in trust or other funding  vehicles for accrued  benefits  under all
Foreign  Pension Plans,  or any Reportable  Event shall occur in connection with
any Plan.

         7.11.     Other ERISA Liabilities.  The Borrower or any other member of
the Controlled  Group has incurred withdrawal  liability or become  obligated to
make contributions to a Multiemployer  Plan in an amount which,  when aggregated
with all other  amounts required to  be  paid  to  Multiemployer  Plans  by  the
Borrower or any  other member of  the  Controlled  Group,  could  reasonably  be
expected to have a Material Adverse Effect.

         7.12.     Environmental  Matters.  The   Borrower   or   any   of   its
Subsidiaries  shall (i) be the  subject of  any   proceeding   or  investigation
pertaining to the release by the  Borrower, any of its Subsidiaries or any other
Person of any  toxic or hazardous  waste or  substance into  the environment, or
(ii) violate any Environmental Law, which, in the case of an event  described in
clause  (i) or clause  (ii), could  reasonably be  expected to  have a  Material
Adverse Effect.

         7.13.     Change in Control. Any Change in Control shall occur.

         7.14.     The  Guaranty.  The  Guaranty  shall  for any  reason fail to
remain in full force or effect or any action shall be taken to discontinue or to
assert the  invalidity or  unenforceability of the  Guaranty, or  any  Guarantor
shall fail to  comply with any of the  terms or  provisions of  Guaranty, or any
Guarantor  shall deny that  it has any further  liability under the G uaranty or
shall give notice to such effect.

         7.15.     The  Loan  Documents.  Any Loan Document shall for any reason
fail  to  remain  in  full  force  or  effect  or  any  action shall be taken to
discontinue  or to  assert  the  invalidity  or  unenforceability  of  any  Loan
Document.

                                  ARTICLE VIII

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

         8.1. Acceleration. Facility LC Collateral Account.


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<PAGE>


         (i)       If any  Default described  in Section  7.6 or 7.7 occurs with
respect to the  Borrower, the obligations of the Lenders to make Loans hereunder
and the  obligation and  power of the LC Issuers  to issue  Facility  LCs  shall
automatically  terminate and the  Obligations shall  immediately  become due and
payable without any  election or action on the part of the Administrative Agent,
any LC  Issuer or any  Lender, and the  Borrower  will  be  and  become  thereby
unconditionally obligated, without any further notice, act or demand, to pay  to
the Administrative Agent an  amount in immediately  available funds, which funds
shall be held in the Facility LC  Collateral Account, equal to the difference of
(x) the amount of LC  Obligations at such time plus the aggregate  amount of all
fees and expenses that may accrue or arise until all  Facility  LCs have expired
or been terminated, less (y) the amount on deposit in the Facility LC Collateral
Account  at such time  which is free and clear of all rights and claims of third
parties and has not been applied against the Obligations (such  difference,  the
"Collateral  Shortfall  Amount").  If any other  Default  occurs,  the  Required
Lenders (or the  Administrative  Agent with the consent of the Required Lenders)
may (a)  terminate  or  suspend  the  obligations  of the  Lenders to make Loans
hereunder and the  obligation and power of the LC Issuers to issue Facility LCs,
or declare  the  Obligations  to be due and  payable,  or both,  whereupon  such
obligations  and power shall  immediately  terminate or be suspended  and/or 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,  and (b) upon notice to the  Borrower  and in addition to the
continuing  right to demand payment of all amounts payable under this Agreement,
make demand on the Borrower to pay, and the Borrower  will,  forthwith upon such
demand and without any further  notice or act, pay to the  Administrative  Agent
the Collateral  Shortfall Amount, which funds shall be deposited in the Facility
LC Collateral Account.

         (ii)      If  at  any  time  while   any  Default  is  continuing,  the
Administrative  Agent determines that the  Collateral  Shortfall  Amount at such
time is greater  than  zero,  the Administrative  Agent may make  demand on  the
Borrower to  pay, and the Borrower will,  forthwith upon such demand and without
any further  notice  or act, pay to  the  Administrative  Agent  the  Collateral
Shortfall Amount,  which funds shall be  deposited in the Facility LC Collateral
Account.

         (iii)     The Administrative Agent may at any time while any Default is
continuing and funds are deposited in the Facility LC Collateral Account,  apply
such funds to the payment of the Obligations and any other amounts as shall from
time to time have become due and  payable by the  Borrower to the Lenders or the
LC Issuers under the Loan Documents.

         (iv)      At  any time while  any Default  is  continuing,  neither the
Borrower nor any Person claiming on behalf of or through the Borrower shall have
any  right to  withdraw  any of the funds  held in the  Facility  LC  Collateral
Account.  After all of the  Obligations have been  indefeasibly paid in full and
the  Aggregate  Commitment has been  terminated,  any  funds  remaining  in  the
Facility  LC Collateral Account shall be returned by the Administrative Agent to
the Borrower or  paid to whomever may be legally  entitled thereto at such time.

         (v)       If,  within  thirty  (30)  days  after  acceleration  of  the
maturity of the Obligations or  termination of the obligations of the Lenders to
make Loans and the obligation and power of the  LC Issuers to issue Facility LCs
hereunder as  a result of any  Default (other  than any Default  as described in


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Section 7.6  or 7.7 with  respect to the  Borrower) and  before any  judgment or
decree  for  the  payment  of the Obligations  due shall  have been  obtained or
entered, the  Required Lenders (in their  sole discretion) shall so  direct, the
Administrative  Agent shall, by  notice to the Borrower,  rescind and annul such
acceleration and/or termination.

         8.2.      Amendments.  Subject to the  provisions of this  Section 8.2,
the Required Lenders (or the Administrative 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  thereunder  or  waiving  any  Default  hereunder  or  thereunder;
provided,  however,  that  no  such  supplemental  agreement  shall, without the
consent of each Lender affected thereby:

         (i)       Extend  the final  maturity  of any Loan to a date  after the
                   Facility  Termination  Date or forgive  all or any portion of
                   the principal amount thereof or any Reimbursement  Obligation
                   related  thereto,  or reduce  the rate or extend  the time of
                   payment  of  interest  or  fees   thereon  or   Reimbursement
                   Obligations  related  thereto  (other  than a  waiver  of the
                   application  of the  default  rate of  interest  pursuant  to
                   Section 2.12 hereof).

         (ii)      Change the percentage specified in the definition of Required
                   Lenders or any other  percentage  of Lenders  specified to be
                   the  applicable  percentage  in  this  Agreement  to  act  on
                   specified  matters  or  otherwise  amend the  definitions  of
                   "Required Lenders" or "Pro Rata Share".

         (iii)     Extend the Facility  Termination Date, or increase the amount
                   or otherwise  extend the term of the Commitment of any Lender
                   hereunder or the commitment to issue Facility LCs.

         (iv)      Permit the Borrower to assign its rights or obligations under
                   this Agreement.

         (v)       Other than pursuant to a  transaction  permitted by the terms
                   of this  Agreement,  release any guarantor of the Obligations
                   or  all or  substantially  all of  the  collateral,  if  any,
                   securing the Obligations.

         (vi)      Amend this Section 8.2.

         (vii)     Alter  the  manner  in  which   payments  or  prepayments  of
                   principal, interest or other amounts under the Loan Documents
                   shall be applied as among the Lenders.

No amendment of any provision of this  Agreement  relating to any Agent shall be
effective  without  the  written  consent of such  Agent.  No  amendment  of any
provision of this Agreement relating to any LC Issuer shall be effective without
the written  consent of such LC Issuer.  No amendment  of any  provision of this
Agreement  relating  to the Swing Line  Lender or any Swing Line Loans  shall be
effective   without  the  written   consent  of  the  Swing  Line  Lender.   The
Administrative  Agent may waive payment of the fee required under Section 12.3.2
without obtaining the consent of any other party to this Agreement.


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<PAGE>


         8.3.      Preservation of Rights. No  delay or omission of the Lenders,
the LC Issuers or  Agents 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 Credit  Extension notwithstanding the
existence of a  Default or Unmatured Default or the inability of the Borrower to
satisfy the  conditions precedent to  such Credit Extension 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, or by the  Administrative  Agent with the consent of, the
requisite  number of Lenders  required pursuant to Section 8.2, 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  Agents, the  LC  Issuers and the  Lenders  until  all  of the
Obligations have been paid in full.

                                   ARTICLE IX

                               GENERAL PROVISIONS

         9.1.      Survival   of   Representations.  All   representations   and
warranties of the Borrower  contained in this Agreement shall survive the making
of the Credit Extensions herein contemplated.

         9.2.      Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, neither  any LC Issuer nor any 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  Agents, the LC Issuers and
the Lenders and  supersede all prior  agreements  and  understandings  among the
Borrower,  the Agents,  the LC Issuers and the  Lenders  relating to the subject
matter thereof other than the fee letter described in Section 10.13.

         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 Agents are 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, provided, however, that the parties
hereto  expressly  agree  that the  Arranger  shall  enjoy the  benefits  of the
provisions of Sections 9.6, 9.10,  10.11,  and 10.13 and each Person entitled to
indemnification  under  Sections  2.21.9 and 9.6(ii) shall enjoy the benefits of
such provisions,  in each case to the extent  specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.


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<PAGE>


         9.6.      Expenses; Indemnification.

         (i)       The  Borrower  shall reimburse the  Administrative  Agent and
the Arranger  for  any  reasonable  costs, internal  charges  and  out-of-pocket
expenses (including reasonable attorneys' and paralegals' fees, time charges and
expenses of attorneys and paralegals for the Administrative  Agent and Arranger,
which attorneys and paralegals may (if outside counsel is not used) be employees
of the Administrative Agent or the Arranger,  and expenses of and fees for other
advisors and professionals  engaged by the Administrative Agent or the Arranger)
paid or incurred by the Administrative  Agent or the Arranger in connection with
the investigation, preparation, negotiation, documentation, execution, delivery,
syndication,  distribution  (including,  without limitation,  via the internet),
review,  amendment,  modification,  administration  and  collection  of the Loan
Documents.  The Borrower also agrees to reimburse the Agents, the Arranger,  the
LC Issuers  and the  Lenders  for any  reasonable  costs,  internal  charges and
out-of-pocket  expenses (including  reasonable  attorneys' and paralegals' fees,
time  charges and  expenses of  attorneys  and  paralegals  for the Agents,  the
Arranger,  the LC Issuers and the Lenders,  which  attorneys and  paralegals (if
outside counsel is not used) may be employees of the Agents,  the Arranger,  the
LC Issuers or the Lenders) paid or incurred by the Agents, the Arranger,  any LC
Issuers or any Lender in connection  with the collection and  enforcement of the
Loan Documents.

         (ii)      The Borrower  hereby further agrees to  indemnify the Agents,
the Arranger, the LC Issuers, each Lender, their respective affiliates, and each
of their directors, officers and employees against all losses, claims,  damages,
penalties,  judgments,  liabilities and expenses (including, without limitation,
all reasonable expenses of litigation or preparation therefor whether or not the
Agents, the Arranger,  the LC Issuers, any Lender or any affiliate of any of the
foregoing is a party  thereto,  and all reasonable  attorneys'  and  paralegals'
fees, time charges and expenses of attorneys and paralegals of the party seeking
indemnification,  which  attorneys and paralegals may (if outside counsel is not
used) be employees of such party seeking  indemnification) 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 Credit  Extension
hereunder,   except  to  the  extent  that  they  are  determined  in  a  final,
non-appealable  judgment by a court of competent  jurisdiction  to have resulted
from  the  gross   negligence  or  willful   misconduct  of  the  party  seeking
indemnification.  The  obligations  of the Borrower under this Section 9.6 shall
survive the termination of this Agreement.

         9.7.      Numbers   of  Documents.  All  statements,  notices,  closing
documents,  and requests  hereunder  shall be  furnished  to the  Administrative
Agent with  sufficient counterparts so that the Administrative Agent may furnish
one to each of the  Lenders, to the  extent that the  Administrative Agent deems
necessary.

         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.  If any changes in  generally  accepted  accounting  principles  are


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<PAGE>


hereafter  required or  permitted  and are adopted by the Borrower or any of its
Subsidiaries with the agreement of its independent  certified public accountants
and such changes  result in a change in the method of  calculation of any of the
financial covenants,  tests,  restrictions or standards herein or in the related
definitions  or terms used therein  ("Accounting  Changes"),  the parties hereto
agree, at the Borrower's request, to enter into negotiations,  in good faith, in
order to amend  such  provisions  in a credit  neutral  manner so as to  reflect
equitably  such changes with the desired result that the criteria for evaluating
the Borrower's and its Subsidiaries' financial condition shall be the same after
such changes as if such changes had not been made; provided, however, until such
provisions are amended in a manner reasonably satisfactory to the Administrative
Agent and the Required  Lenders,  no Accounting  Change shall be given effect in
such  calculations  and all  financial  statements  and  reports  required to be
delivered  hereunder shall be prepared in accordance  with Agreement  Accounting
Principles  without taking into account such  Accounting  Changes.  In the event
such  amendment is entered into,  all  references in this Agreement to Agreement
Accounting  Principles shall mean generally accepted accounting principles as of
the date of such amendment.

         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 on the one hand and the Lenders,  the LC Issuers  and the Agents on the
other hand shall be solely that of borrower and lender. None of the Agents,  the
Arranger, the LC Issuers or any Lender shall have any fiduciary responsibilities
to the Borrower. None of the Agents, the Arranger, the LC Issuers or 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.  The Borrower agrees that none of the Agents,  the Arranger,  the LC
Issuers or any Lender shall have liability to the Borrower  (whether sounding in
tort,  contract or otherwise) for losses  suffered by the Borrower in connection
with,  arising out of, or in any way related to, the  transactions  contemplated
and the relationship  established by the Loan Documents, or any act, omission or
event  occurring in  connection  therewith,  unless it is determined in a final,
non-appealable  judgment by a court of competent  jurisdiction  that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought.  None of the  Agents,  the  Arranger,  the LC Issuers or any
Lender shall have any liability with respect to, and the Borrower hereby waives,
releases  and agrees not to sue for,  any special,  indirect,  consequential  or
punitive damages suffered by the Borrower in connection with, arising out of, or
in any way  related  to the  Loan  Documents  or the  transactions  contemplated
thereby.

         9.11.     Confidentiality. Each Lender agrees to hold any  confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their  respective  Affiliates,  (ii) to legal  counsel,  accountants,  and other
professional  advisors  to  such  Lender  or  to  a  Transferee  or  prospective
Transferee,  (iii) to  regulatory  officials,  (iv) to any  Person as  requested
pursuant to or as  required by law,  regulation,  or legal  process,  (v) to any


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<PAGE>


Person in connection with any legal  proceeding to which such Lender is a party,
(vi) to such  Lender's  direct or indirect  contractual  counterparties  in swap
agreements or to legal counsel,  accountants and other professional  advisors to
such counterparties, and (vii) permitted by Section 12.4.

         9.12.     Lenders Not Utilizing Plan Assets. Each of the Lenders and LC
Issuers hereby represents to parties hereto that none of the consideration  used
by any of the Lenders,  any LC Issuer or  Designated  Lenders to make its Credit
Extensions  constitutes  for any  purpose of ERISA or  Section  4975 of the Code
assets of any "plan" as defined in Section  3(3) of ERISA or Section 4975 of the
Code and the  rights  and  interests  of each of the  Lenders,  LC  Issuers  and
Designated  Lenders in and under the Loan Documents  shall not  constitute  such
"plan assets" under ERISA.

         9.13.     Nonreliance.  Each Lender  hereby  represents  that it is not
relying on or  looking to  any  margin  stock (as  defined  in  Regulation U) as
collateral in the extension or maintenance of the credit provided for herein.

         9.14.     Disclosure.  The Borrower and  each Lender hereby acknowledge
and agree that JPMCB and/or its respective Affiliates  and  certain of the other
Lenders  and/or  their  respective   Affiliates  from  time  to  time  may  hold
investments  in,  make  other  loans  to or have  other  relationships  with the
Borrower and its Affiliates.

         9.15.     Subordination  of  Intercompany  Indebtedness.  The  Borrower
agrees  that  any  and all  claims of the  Borrower  against any  Guarantor with
respect to  any "Intercompany  Indebtedness" (as  hereinafter  defined) shall be
subordinate and subject in right of payment to the prior payment, in full and in
cash,  of  all   obligations  of  such   Guarantor  pursuant  to  the  Guaranty.
Notwithstanding  any right of the  Borrower to  ask,  demand,  sue for,  take or
receive any payment from any Guarantor, all rights, liens and security interests
of the Borrower, whether now or hereafter arising and howsoever existing, in any
assets of any  Guarantor (whether  constituting part of any  collateral given to
any Agent or any Lender to secure  payment of all or any part of the obligations
of  such  Guarantor  pursuant to the  Guaranty or  otherwise)  shall be  and are
subordinated  to the rights of the  Agents, the  LC Issuers  and the  Lenders in
those assets.  The Borrower shall not  have any right to possession  of any such
asset  or  to foreclose  upon  any such  asset,  whether by  judicial  action or
otherwise,  unless and  until  all of the  Obligations  (other  than  contingent
indemnity  obligations) shall  have been fully paid  and satisfied (in cash) and
all financing arrangements pursuant to  any Loan Document among the Borrower and
the Agents, the LC Issuers and the Lenders have been  terminated.  If all or any
part of the assets of any Guarantor, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of any Guarantor, whether
partial  or  complete,  voluntary  or  involuntary, and  whether  by  reason  of
liquidation,  bankruptcy,  arrangement, receivership, assignment for the benefit
of creditors  or  any  other action or  proceeding,  or if the  business of  any
Guarantor is  dissolved or if  substantially all of the  assets of any Guarantor
are sold, then, and in any such event (such events being herein  referred  to as
an "Insolvency  Event"), any payment or distribution  of any kind or  character,
either in  cash,  securities or  other  property,  which  shall  be  payable  or
deliverable  upon or with respect to  any  indebtedness of any  Guarantor to the
Borrower  ("Intercompany Indebtedness")  shall be paid or  delivered directly to
the Administrative  Agent for application  on any of the Obligations,  due or to
become   due,   until   such  Obligations  (other  than   contingent   indemnity
obligations)  shall have first been  fully paid and  satisfied (in cash). Should
any payment,  distribution,  security  or  instrument  or  proceeds  thereof  be
received by the Borrower upon or with respect to the Intercompany   Indebtedness
after  any Insolvency  Event  and  prior  to  the  satisfaction of  all  of  the
Obligations (other  than  contingent  indemnity obligations) and the termination
of all  financing arrangements  pursuant to any Loan Document among the Borrower
and the Agents,  the LC Issuers and the Lenders, the Borrower shall  receive and
hold  the  same in trust, as  trustee, for  the  benefit  of the  Agents, the LC


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<PAGE>


Issuers  and  the  Lenders  and   shall  forthwith  deliver  the   same  to  the
Administrative  Agent, for the  benefit of the  Agents, the LC  Issuers and  the
Lenders,  in  precisely  the  form  received  (except  for  the  endorsement  or
assignment  of the Borrower where necessary),  for application  to  any  of  the
Obligations, due or not due, and, until  so delivered, the same shall be held in
trust by the  Borrower as the property of  the Agents, the  LC Issuers  and  the
Lenders. If the Borrower fails to make any such endorsement or assignment to the
Administrative  Agent,  the   Administrative  Agent  or  any of its  officers or
employees is irrevocably authorized  to make the same. The Borrower agrees  that
until the  Obligations (other than the contingent  indemnity  obligations)  have
been paid  in  full (in cash)  and  satisfied  and  all  financing  arrangements
pursuant  to any Loan Document among the Borrower and the Agents, the LC Issuers
and the Lenders have been  terminated, the Borrower  will not assign or transfer
to any  Person (other than the  Administrative Agent) any claim the Borrower has
or may have against any Guarantor.

         9.16.     USA  Patriot  Act.   Each  Lender  that  is  subject  to  the
requirements  of the USA Patriot  Act (Title III of Pub. L.  107-56 (signed into
law October 26, 2001)) (the "Act") hereby notifies the Borrower that pursuant to
the  requirements of the  Act, it  is required  to  obtain,  verify  and  record
information  that identifies the Borrower,  which information  includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Act.

                                    ARTICLE X

                                   THE AGENTS

         10.1.     Appointment;   Nature   of   Relationship.  JPMCB  is  hereby
appointed by each of the Lenders as the Administrative Agent hereunder and under
each other  Loan Document, and each of  the Lenders irrevocably  authorizes  the
Administrative  Agent to act as the  contractual  representative of such  Lender
with the rights  and duties expressly  set forth  herein and  in the other  Loan
Documents. Each of Fleet National Bank, SunTrust Bank,  Citicorp  Leasing,  Inc.
and The  Bank of Tokyo-Mitsubishi,  Ltd., Chicago  Branch is hereby appointed by
each of the  Lenders as a Syndication Agent hereunder  and under each other Loan
Document, and each of the Lenders irrevocably  authorizes each Syndication Agent
to act as the  contractual  representative  of such  Lender with  the rights and
duties  expressly set forth  herein and in the other Loan Documents.  Each Agent
agrees to act  as such  contractual  representative upon the  express conditions
contained  in this  Article  X. Notwithstanding  the  use of  the  defined  term
"Administrative  Agent" or  "Syndication  Agent", it is expressly understood and
agreed that no  Agent shall have any fiduciary responsibilities to any Lender by
reason of  this  Agreement or any  other Loan  Document and  that each  Agent is
merely acting  as the contractual  representative of the Lenders with only those
duties  as  are  expressly  set  forth in  this  Agreement  and the  other  Loan
Documents. In their capacities as the  Lenders' contractual representative,  the
Agents (i) do  not hereby assume  any fiduciary duties  to any of  the  Lenders,
(ii) are  "representatives"  of  the Lenders  within  the  meaning of  the  term
"secured party" as defined in the Illinois Uniform Commercial Code and (iii) are
acting as independent contractors, the rights and duties of which are limited to


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<PAGE>


those expressly  set forth in this Agreement  and the other Loan Documents. Each
of the Lenders hereby agrees to assert no claim  against any Agent on any agency
theory or any other theory of liability  for breach of  fiduciary  duty,  all of
which claims each Lender hereby waives.

         10.2.     Powers.  Each  Agent shall have and  may exercise such powers
under the  Loan  Documents as are  specifically  delegated to such  Agent by the
terms of each thereof, together, in the  Administrative  Agent's case, with such
powers as are reasonably incidental thereto. The Agents  shall  have no  implied
duties or fiduciary 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 applicable Agents.

         10.3.     General   Immunity.   No  Agent  or  any  of  its  respective
directors,  officers, agents or employees  shall be liable to the Borrower,  the
Lenders 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 to the extent such action or inaction is determined in a final,
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.

         10.4.     No Responsibility  for Loans, Recitals, etc. No  Agent or any
of its respective directors,  officers, agents or employees shall be responsible
for or have any  duty to ascertain, inquire into, or  verify (a) any  statement,
warranty or  representation  made in  connection  with  any Loan Document or any
borrowing hereunder; (b) 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;  (c) the  satisfaction of any condition  specified in Article IV, except
receipt of items  required to be delivered  solely to the Agents or any of them;
(d) the existence or possible existence of any Default or Unmatured Default; (e)
the validity, enforceability,  effectiveness,  sufficiency or genuineness of any
Loan  Document  or any other  instrument  or  writing  furnished  in  connection
therewith; (f) the value, sufficiency,  creation,  perfection or priority of any
Lien in any collateral security;  or (g) the financial condition of the Borrower
or any guarantor of any of the  Obligations  or of any of the  Borrower's or any
such  guarantor's  respective  Subsidiaries.  The  Agents  shall have no duty to
disclose to the Lenders  information that is not required to be furnished by the
Borrower to any Agent at such time, but is voluntarily furnished by the Borrower
to  such  Agent  (either  in its  capacity  as an  Agent  or in  its  individual
capacity).

         10.5.     Action on  Instructions of  Lenders.  Each 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 (or all of the Lenders in the event that and to the extent
that this Agreement  expressly  requires  such), and  such  instructions and any
action taken or  failure to act pursuant thereto shall be  binding on all of the
Lenders. The Lenders  hereby acknowledge that the  Agents shall be under no duty
to take any  discretionary action  permitted to be taken by any of them pursuant
to the provisions of this Agreement or any other Loan Document unless they shall
be requested in writing to do so by the Required  Lenders (or all of the Lenders
in the event  that and to the extent  that  this  Agreement  expressly  requires
such). Each 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.


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         10.6.     Employment of  Agents and  Counsel. Any Agent may execute any
of its respective duties as an 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.  Each  Agent  shall be
entitled to  advice of counsel  concerning the  contractual  arrangement between
such Agent  and the Lenders and  all matters  pertaining to such  Agent's duties
hereunder and under any other Loan Document.

         10.7.     Reliance on  Documents; Counsel. Each Agent shall be entitled
to  rely  upon  any  Note,  notice,  consent,  certificate,  affidavit,  letter,
telegram,  statement,  paper or document reasonably 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 such
Agent, which counsel may be employees of such Agent.

         10.8.     Agents' Reimbursement and Indemnification.  The Lenders agree
to reimburse and indemnify each Agent  ratably in proportion to the Lenders' Pro
Rata Shares (i) for any amounts not  reimbursed  by the  Borrower for which such
Agent is entitled to  reimbursement  by the Borrower  under the Loan  Documents,
(ii) for any other expenses incurred by such Agent on behalf of the Lenders,  in
connection  with  the  preparation,   execution,  delivery,  administration  and
enforcement of the Loan Documents  (including,  but not limited to, any expenses
incurred by such Agent in connection with any dispute between such Agent and any
Lender or between  two or more of the  Lenders)  and (iii) 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 such 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  (including,   without
limitation,  for any such amounts  incurred by or asserted against such Agent in
connection  with any dispute between such Agent and any Lender or between two or
more  of the  Lenders),  or the  enforcement  of any of the  terms  of the  Loan
Documents or of any such other  documents,  provided that (i) no Lender shall be
liable for any of the foregoing to the extent any of the foregoing is found in a
final,  non-appealable  judgment in a court of  competent  jurisdiction  to have
resulted from the gross negligence or willful  misconduct of such Agent and (ii)
any indemnification required pursuant to Section 3.5(vii) shall, notwithstanding
the  provisions  of  this  Section  10.8,  be  paid by the  relevant  Lender  in
accordance  with the provisions  thereof.  The  obligations of the Lenders under
this Section 10.8 shall survive  payment of the  Obligations  and termination of
this Agreement.

         10.9.     Notice of Default. No Agent shall be deemed to have knowledge
or notice of  the  occurrence of any  Default  or  Unmatured  Default  hereunder
unless such Agent has received written notice from a Lender or LC  Issuer or the
Borrower  referring  to this  Agreement  describing  such  Default or  Unmatured
Default and stating that such notice is a "notice of default". In the event that
any Agent receives such a notice, such Agent shall give prompt notice thereof to
the Lenders and the LC Issuers.


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<PAGE>


         10.10.    Rights as a Lender. In the event any Agent is a Lender,  such
Agent shall have the same rights and powers  hereunder  and under any other Loan
Document with respect to its Commitment and its Credit  Extensions as any Lender
and may exercise the same as though it were not an Agent,  and the term "Lender"
or "Lenders"  shall, at any time when any Agent is a Lender,  unless the context
otherwise indicates,  include such Agent in its individual capacity.  Each Agent
and its Affiliates 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.

         10.11.    Lender Credit Decision. Each Lender acknowledges that it has,
independently  and without  reliance  upon any Agent,  the Arranger 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 any Agent,  the  Arranger  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.

         10.12.    Successor Agents. Any 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 (45) days after the retiring Agent gives notice
of its  intention to resign.  Upon any such  resignation,  the Required  Lenders
shall have the right (with,  so long as no Default has occurred or is continuing
at such time, the approval of the Borrower; such approval not to be unreasonably
withheld) to appoint,  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 (30) 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.  Notwithstanding  the  previous
sentence,  any Agent may at any time  without the consent of the Borrower or any
Lender,  appoint  any  of its  Affiliates  which  is a  commercial  bank  as its
successor Agent  hereunder.  If an Agent has resigned and no successor Agent has
been  appointed,  the Lenders may perform all the duties of such 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 $100,000,000.
Upon the  acceptance  of any  appointment  as an 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 an 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 X 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 an Agent  hereunder and under the other Loan  Documents.  In the event
that  there  is a  successor  to the  Administrative  Agent  by  merger,  or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 10.12,  then (a) the term "Prime Rate" as used in this Agreement
shall  mean  the  prime  rate,  base  rate or  other  analogous  rate of the new
Administrative  Agent and (b) the  references to "JPMCB" in the  definitions  of
"Eurodollar Base Rate" and "Prime Rate" and in the last sentence of Section 2.13
shall be deemed to be a reference to such successor  Administrative Agent in its
individual capacity.


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<PAGE>


         10.13.    Agent and Arranger Fees.  The  Borrower  agrees to pay to the
Administrative Agent and the Arranger,  for their respective accounts,  the fees
agreed to by the Borrower, the Administrative Agent and the Arranger pursuant to
that certain letter agreement dated October 14, 2004 or as otherwise agreed from
time to time.

         10.14.    Delegation to Affiliates.  The Borrower and the Lenders agree
that any Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees)  which performs duties in connection with this Agreement shall be
entitled  to  the  same  benefits  of  the  indemnification,  waiver  and  other
protective  provisions to which the applicable  Agent is entitled under Articles
IX and X.

         10.15.    Release of Guarantors. Upon the liquidation or dissolution of
any Guarantor, or sale of the Capital Stock of any Guarantor, in each case which
is  permitted  pursuant  to the terms of any Loan  Document or  consented  to in
writing by the Required Lenders or all of the Lenders,  as applicable,  and upon
at least five (5) Business  Days' prior  written  request by the  Borrower,  the
Administrative Agent shall (and is hereby irrevocably  authorized by the Lenders
to) execute  such  documents  as may be necessary to evidence the release of the
applicable Guarantor from its obligations under the Guaranty; provided, however,
that (i) the  Administrative  Agent  shall not be  required  to execute any such
document on terms which, in the Administrative Agent's opinion, would expose the
Administrative  Agent to  liability  or create  any  obligation  or  entail  any
consequence  other  than the  release  of such  Guarantor  without  recourse  or
warranty,  and (ii) such release  shall not in any manner  discharge,  affect or
impair the Obligations,  any other  Guarantor's  obligations under the Guaranty,
or, if applicable,  any obligations of the Borrower or any Subsidiary in respect
of the proceeds of any such sale retained by the Borrower or any Subsidiary.

                                   ARTICLE XI

                            SETOFF; RATABLE PAYMENTS

         11.1.     Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent,  however
evidenced,  or any Default occurs,  any and all deposits  (including all account
balances,  whether  provisional  or  final  and  whether  or  not  collected  or
available) and any other Indebtedness at any time held or owing by any Lender or
any  Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and  applied  toward  the  payment  of the  Obligations  owing to such
Lender, whether or not the  Obligations, or any part thereof, shall then be due.

         11.2.     Ratable  Payments.  If  any  Lender,  whether  by  setoff  or
otherwise,  has payment made to  it upon its Outstanding  Credit Exposure (other
than payments  received pursuant to Section 3.1,  3.2, 3.4 or 3.5) in a  greater
proportion than that received by any other Lender, such Lender agrees,  promptly
upon demand, to purchase a  participation in the  Aggregate  Outstanding  Credit


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<PAGE>


Exposure held by the other Lenders  so that after such purchase each Lender will
hold its Pro  Rata Share of the  Aggregate  Outstanding Credit Exposure.  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 respective  Pro Rata
Shares of the Aggregate Outstanding Credit Exposure. In case any such payment is
disturbed by legal process, or otherwise,  appropriate further adjustments shall
be made.

                                  ARTICLE XII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

         12.1.     Successors and Assigns; Designated Lenders.

         12.1.1.   Successors  and Assigns. The terms and provisions of the Loan
Documents  shall be binding upon and inure to the benefit of the  Borrower,  the
Agents,  the LC Issuers  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 without the consent of all of the
Lenders,  and any such  assignment in violation of this Section  12.1.1 shall be
null and void,  and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. The parties to this Agreement acknowledge that clause (ii) of
this Section 12.1.1 relates only to absolute  assignments  and does not prohibit
assignments creating security interests,  including, without limitation, (x) any
pledge or  assignment  by any Lender of all or any  portion of its rights  under
this  Agreement  and any Note to a Federal  Reserve Bank or (y) in the case of a
Lender which is a fund,  any pledge or  assignment  of all or any portion of its
rights  under  this  Agreement  and any Note to its  trustee  in  support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security  interest  shall  release  the  transferor  Lender  from its
obligations  hereunder  unless and until the parties  thereto have complied with
the  provisions of Section 12.3. The  Administrative  Agent may treat the Person
which  made any Loan or  which  holds  any  Note as the  owner  thereof  for all
purposes  hereof  unless and until  such  Person  complies  with  Section  12.3;
provided,  however,  that the  Administrative  Agent may in its discretion  (but
shall not be required  to) follow  instructions  from the Person  which made any
Loan or which holds any Note to direct payments relating to such Loan or Note to
another  Person.  Any  assignee  of the rights to any Loan or any Note agrees by
acceptance of such assignment to be bound by all the terms and provisions of the
Loan Documents.  Any request,  authority or consent of any Person,  which at the
time of making such request or giving such  authority or consent is the owner of
the  rights  to any Loan  (whether  or not a Note has been  issued  in  evidence
thereof),  shall be conclusive and binding on any subsequent  holder or assignee
of the rights to such Loan.

         12.1.2.   Designated Lenders.

         (i)       Subject to the terms and conditions set forth in this Section
12.1.2, any Lender may from time to time elect to designate an Eligible Designee
to  provide  all or any part of the  Revolving  Loans to be made by such  Lender
pursuant  to this  Agreement;  provided  that  the  designation  of an  Eligible
Designee by any Lender for purposes of this  Section  12.1.2 shall be subject to


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the  approval  of  the   Administrative   Agent  (which  consent  shall  not  be
unreasonably  withheld or  delayed).  Upon the  execution by the parties to each
such designation of an agreement in the form of Exhibit G hereto (a "Designation
Agreement") and the acceptance thereof by the Administrative Agent, the Eligible
Designee shall become a Designated  Lender for purposes of this  Agreement.  The
Designating  Lender  shall  thereafter  have the right to permit the  Designated
Lender to  provide  all or a portion  of the  Revolving  Loans to be made by the
Designating Lender pursuant to the terms of this Agreement and the making of the
Revolving  Loans  or  portion  thereof  shall  satisfy  the  obligations  of the
Designating  Lender to the same extent,  and as if, such Revolving Loan was made
by the Designating  Lender. As to any Revolving Loan made by it, each Designated
Lender shall have all the rights which a Lender making such Revolving Loan would
have under this  Agreement and otherwise;  provided,  (x) that all voting rights
under this Agreement shall be exercised  solely by the Designating  Lender,  (y)
each  Designating  Lender shall remain solely  responsible  to the other parties
hereto for its obligations under this Agreement,  including the obligations of a
Lender in respect of Revolving  Loans made by its  Designated  Lender and (z) no
Designating  Lender shall be entitled to reimbursement  under Article III hereof
for any amount which would exceed the amount that would have been payable by the
Borrower to the Designating Lender from which the Designated Lender obtained any
interests  hereunder.  No  additional  Notes shall be required  with  respect to
Revolving  Loans  provided by a Designated  Lender;  provided,  however,  to the
extent any Designated  Lender shall advance funds, the Designating  Lender shall
be deemed to hold the Notes in its  possession  as an agent for such  Designated
Lender to the extent of the  Revolving  Loan funded by such  Designated  Lender.
Such  Designating  Lender shall act as  administrative  agent for its Designated
Lender and give and receive notices and communications  hereunder.  Any payments
for the account of any Designated Lender shall be paid to its Designating Lender
as administrative  agent for such Designated Lender and neither the Borrower nor
the  Administrative  Agent shall be  responsible  for any  Designating  Lender's
application of such payments.  In addition,  any Designated  Lender may (1) with
notice to, but without the consent of the Borrower or the Administrative  Agent,
assign  all  or  portions  of  its  interests  in  any  Revolving  Loans  to its
Designating  Lender  or  to  any  financial  institution  consented  to  by  the
Administrative  Agent providing liquidity and/or credit facilities to or for the
account of such  Designated  Lender and (2) subject to advising  any such Person
that such  information is to be treated as  confidential in accordance with such
Person's  customary   practices  for  dealing  with   confidential,   non-public
information,  disclose  on  a  confidential  basis  any  non-public  information
relating to its Revolving Loans to any rating agency, commercial paper dealer or
provider of any  guarantee,  surety or credit or liquidity  enhancement  to such
Designated Lender.

         (ii)      Each party to this Agreement hereby agrees  that it shall not
institute  against,  or join  any  other  Person  in  instituting  against,  any
Designated  Lender any bankruptcy,  reorganization,  arrangement,  insolvency or
liquidation   proceeding  or  other  proceedings  under  any  federal  or  state
bankruptcy  or similar  law for one year and a day after the  payment in full of
all outstanding senior indebtedness of any Designated Lender;  provided that the
Designating  Lender for each Designated Lender hereby agrees to indemnify,  save
and hold harmless each other party hereto for any loss, cost, damage and expense
arising out of its  inability  to  institute  any such  proceeding  against such
Designated  Lender.  This Section  12.1.2 shall survive the  termination of this
Agreement.

         12.2.     Participations.


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<PAGE>


         12.2.1.   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  Outstanding  Credit Exposure of 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  owner of its  Outstanding Credit Exposure and the
holder of any Note issued to it in  evidence thereof 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 Administrative  Agent  shall continue  to deal  solely and
directly  with  such  Lender  in  connection  with  such  Lender's   rights  and
obligations under the Loan Documents.

         12.2.2.   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 Credit  Extension or  Commitment  in
which such  Participant  has an interest which (i) extends the final maturity of
any Loan or any Facility LC beyond the Facility Termination Date or forgives all
or a portion of the principal  amount  thereof or interest or fees  thereon,  or
reduces  the rate or extends the time of payment of interest or fees on any such
Loan, any Reimbursement Obligation or the related Commitment or (ii) extends the
Facility  Termination  Date, or (iii) releases any guarantor of the  Obligations
(except as permitted hereby) or all or substantially  all of the collateral,  if
any, securing the Obligations.

         12.2.3.   Benefit of Certain Provisions.  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.
The  Borrower  further  agrees  that each  Participant  shall be entitled to the
benefits of Sections  3.1,  3.2,  3.4 and 3.5 to the same extent as if it were a
Lender and had  acquired its interest by  assignment  pursuant to Section  12.3,
provided  that (i) a  Participant  shall not be  entitled to receive any greater
payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such  Participant  would have received had it retained such interest
for its own account,  unless the sale of such  interest to such  Participant  is
made with the prior written  consent of the Borrower,  and (ii) any  Participant
organized  under the laws of any  jurisdiction  other than the United  States of
America or any state thereof agrees to comply with the provisions of Section 3.5
to the same extent as if it were a Lender.

         12.3.     Assignments.


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<PAGE>


         12.3.1.   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 banks or other entities ("Purchasers") all or any part of its rights and
obligations  under the Loan  Documents.  Such  assignment  shall evidenced by an
agreement be substantially in the form of Exhibit C or in such other form as may
be agreed  to by the  parties  thereto  (each  such  agreement,  an  "Assignment
Agreement").  The  consent  of (i) the  Borrower  and the LC  Issuers  shall  be
required prior to an Assignment  Agreement  becoming effective with respect to a
Purchaser which is not a Lender,  an Affiliate  thereof or a Designated  Lender;
provided, however, that if a Default has occurred and is continuing, the consent
of the Borrower shall not be required and (ii) the Administrative Agent shall be
required prior to an Assignment Agreement becoming effective.  Each such consent
shall not be unreasonably withheld or delayed. Each such assignment with respect
to a  Purchaser  which is not a Lender,  an  Affiliate  thereof or a  Designated
Lender shall (unless each of the Borrower and the Administrative Agent otherwise
consents)  be in an  amount  not less  than the  lesser  of (i)  $5,000,000  and
integral  multiples of $1,000,000 in excess thereof or (ii) the remaining amount
of the  assigning  Lender's  Commitment  (calculated  as at  the  date  of  such
assignment),  or, if the Facility  Termination Date has occurred,  the remaining
amount of the assigning Lender's Outstanding Credit Exposure.

         12.3.2.   Effect;   Effective   Date.   Upon   (i)  delivery   to   the
Administrative  Agent  of an  Assignment  Agreement,  together with any consents
required  by  Section  12.3.1,  and   (ii)  payment  of  a  $3,000  fee  to  the
Administrative  Agent for  processing such assignment (unless such fee is waived
by the  Administrative  Agent),  such  assignment  shall become effective on the
effective date  specified in such  assignment.  The  Assignment  Agreement shall
contain a  representation  by  the  Purchaser  to the  effect  that  none of the
consideration used to make the purchase of the Commitment and Outstanding Credit
Exposure under the applicable Assignment Agreement  constitutes "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 or on
behalf of 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
Administrative Agent  shall be required to release  the  transferor  Lender with
respect to the  percentage of the  Aggregate  Commitment and  Outstanding Credit
Exposure assigned to such Purchaser.  Upon the consummation of any assignment to
a  Purchaser  pursuant  to  this  Section  12.3.2, the  transferor  Lender,  the
Administrative  Agent and the  Borrower  shall, if the  transferor Lender or the
Purchaser  desires  that its  Loans be  evidenced  by  Notes,  make  appropriate
arrangements so that new  Notes or, as appropriate, 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
respective Commitments (or, if the Facility Termination Date has occurred, their
respective Outstanding Credit Exposure, as adjusted pursuant to such assignment.

         12.3.3.   The  Register.  Notwithstanding  anything to the  contrary in
this Agreement, the Borrower hereby designates the Administrative Agent, and the
Administrative  Agent,  hereby  accepts  such  designation,   to  serve  as  the
Borrower's  contractual  representative  solely  for  purposes  of this  Section
12.3.3.  In this  connection,  the  Administrative  Agent shall  maintain at its


                                       67
<PAGE>


address  referred  to in  Section  13.1  a copy  of  each  Assignment  Agreement
delivered to and  accepted by it pursuant to this Section  12.3.3 and a register
(the  "Register")  for the recordation of the names and addresses of the Lenders
and the Commitment of,  principal  amount of and interest on the Revolving Loans
owing to, each  Lender from time to time and whether  such Lender is an original
Lender or the assignee of another  Lender  pursuant to an assignment  under this
Section 12.3.  The entries in the Register  shall be conclusive  and binding for
all  purposes,  absent  manifest  error,  and  the  Borrower  and  each  of  its
Subsidiaries,  the Agents,  the LC Issuers and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this  Agreement.  The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.

         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,  including
without limitation any information contained in any reports or other information
delivered by the Borrower pursuant to Section 6.1; provided that each Transferee
and prospective Transferee agrees to be bound by Section 9.11 of this Agreement.

         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 3.5(iv).

                                  ARTICLE XIII

                                     NOTICES

         13.1.     Notices. Except as otherwise permitted  by Section  2.14 with
respect to borrowing notices, all notices,  requests and other communications to
any party  hereunder  shall be in writing  (including  electronic  transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the  Borrower,  the Agents and any Lender  party hereto as of the
Closing Date,  at its  respective  address or facsimile  number set forth on the
signature pages hereof or (y) in the case of any party, at such other address or
facsimile  number as such party may hereafter  specify for the purpose by notice
to the  Administrative  Agent and the Borrower in accordance with the provisions
of this Section 13.1. Each such notice,  request or other communication shall be
effective  (i) if given  by  facsimile  transmission,  when  transmitted  to the
facsimile  number  specified  in this  Section  and  confirmation  of receipt is
received,  (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid,  addressed as aforesaid, or (iii)
if given by any other  means,  when  delivered  (or,  in the case of  electronic
transmission,  received) at the address specified in this Section; provided that
notices to the  Administrative  Agent  under  Article II shall not be  effective
until received.

         13.2.     Change of Address.  The Borrower and the Administrative Agent
may each change the address for service of notice upon it by a notice in writing
to the other parties hereto. Any Lender may change its  address  for  service of
notice  upon it by a notice in writing to the  Borrower  and the  Administrative
Agent.


                                       68
<PAGE>


                                  ARTICLE XIV

                                  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
Agents, the LC Issuers and the Lenders and each party has notified the Agents by
facsimile transmission or telephone that it has taken such action.

                                   ARTICLE XV

          CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

         15.1.     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  (INCLUDING,  WITHOUT  LIMITATION, 735 ILCS
105/5-1  ET  SEQ.,  BUT  OTHERWISE  WITHOUT  REGARD  TO  THE  CONFLICT  OF  LAWS
PROVISIONS)  OF  THE  STATE  OF  ILLINOIS,  BUT  GIVING  EFFECT  TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

         15.2.     CONSENT  TO  JURISDICTION.  THE  BORROWER  HEREBY IRREVOCABLY
SUBMITS  TO THE  NON-EXCLUSIVE  JURISDICTION OF ANY  UNITED  STATES  FEDERAL  OR
ILLINOIS STATE  COURT SITTING IN CHICAGO,  ILLINOIS 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 AGENTS, ANY LC ISSUER OR ANY  LENDER
TO  BRING  PROCEEDINGS   AGAINST  THE  BORROWER  IN  THE  COURTS  OF  ANY  OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENTS, ANY LC
ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENTS, ANY LC ISSUER 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
CHICAGO,  ILLINOIS  OR  THE  CITY  IN WHICH THE  PRINCIPAL OFFICE OF SUCH AGENT,
LENDER OR AFFILIATE, AS THE CASE MAY BE, IS LOCATED.

         15.3.     WAIVER  OF  JURY  TRIAL.  THE BORROWER,  THE  AGENTS, EACH LC
ISSUER 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.


                                       69
<PAGE>


                            [Signature Pages Follow]




                                       70
<PAGE>




         IN WITNESS WHEREOF,  the Borrower,  the Lenders, the LC Issuers and the
Agents have executed this Agreement as of the date first above written.

                                       APPLEBEE'S INTERNATIONAL, INC., as the
                                       Borrower



                                       By:/s/ Steven K. Lumpkin
                                       -----------------------------------------
                                       Name: Steven K. Lumpkin
                                       Title: Executive Vice President and Chief
                                              Financial Officer and Treasurer



                                       4551 W. 107th Street
                                       Overland Park, KS 66207

                                       Attention:  Chief Financial Officer
                                       Phone: (913) 967-4197
                                       Fax: (913) 967-2334

                                       With a copy
                                       (in the case of notices of Default) to:

                                       Attention: General Counsel
                                       Fax: (913) 341-4970

                                       and

                                       Blackwell Sanders Peper Martin LLP
                                       2300 Main Street, Suite 1000
                                       Kansas City, MO 64108
                                       Attention:  James Ash
                                       Fax:  (816) 983-8080



                               Signature Page to
                       5-Year Revolving Credit Agreement
                         Applebee's International, Inc.



<PAGE>


                                       JPMORGAN CHASE BANK, N.A., as the
                                       Administrative Agent, as Swing Line
                                       Lender, as LC Issuer and as a Lender



                                       By:/s/ Suzanne Ergastolo
                                       -----------------------------------------
                                       Name: Suzanne Ergastolo
                                       Title:  Director

                                       1 Bank One Plaza
                                       Chicago, IL  60670

                                       Attention: Suzanne Ergastolo

                                       Phone: (312) 325-3221
                                       Fax:  (312) 325-3239
                                       E-mail:  suzanne_ergastolo@bankone.com



                                Signature Page to
                       5-Year Revolving Credit Agreement
                         Applebee's International, Inc.


<PAGE>

                                       FLEET NATIONAL BANK, as a Syndication
                                       Agent and as a Lender



                                       By:/s/ Heidi Tyng
                                       -----------------------------------------
                                       Name:  Heidi Tyng
                                       Title: Vice President

                                       _________________________________________
                                       _________________________________________

                                       Attention: ______________________________
                                       Phone: __________________________________
                                       Fax: ____________________________________
                                       E-mail: _________________________________



                               Signature Page to
                       5-Year Revolving Credit Agreement
                         Applebee's International, Inc.

<PAGE>

                                       SUNTRUST BANK, as a Syndication Agent
                                       and as a Lender



                                       By:/s/ Susan M. Hall
                                       -----------------------------------------
                                       Name:  Susan M. Hall
                                       Title: Managing Director

                                       _________________________________________
                                       _________________________________________

                                       Attention: ______________________________
                                       Phone: __________________________________
                                       Fax: ____________________________________
                                       E-mail: _________________________________



                               Signature Page to
                       5-Year Revolving Credit Agreement
                         Applebee's International, Inc.

<PAGE>


                                       CITICORP LEASING, INC., as a Syndication
                                       Agent and as a Lender



                                       By:/s/ David Carr
                                       -----------------------------------------
                                       Name:  David Carr
                                       Title: Vice President

                                       _________________________________________
                                       _________________________________________

                                       Attention: ______________________________
                                       Phone: __________________________________
                                       Fax: ____________________________________
                                       E-mail: _________________________________


                               Signature Page to
                       5-Year Revolving Credit Agreement
                         Applebee's International, Inc.

<PAGE>



                                       THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                       CHICAGO BRANCH, as a Syndication Agent
                                       and as a Lender



                                       By:/s/ Shinichire Muneohika
                                       -----------------------------------------
                                       Name:  Shinichire Muneohika
                                       Title: Deputy General Manager

                                       _________________________________________
                                       _________________________________________

                                       Attention: ______________________________
                                       Phone: __________________________________
                                       Fax: ____________________________________
                                       E-mail: _________________________________


                               Signature Page to
                       5-Year Revolving Credit Agreement
                         Applebee's International, Inc.

<PAGE>

                                       WACHOVIA BANK, NATIONAL ASSOCIATION, as a
                                       Lender



                                       By:/s/ Aaron H. Headley
                                       -----------------------------------------
                                       Name:  Aaron H. Headley
                                       Title: Associate

                                       _________________________________________
                                       _________________________________________

                                       Attention: ______________________________
                                       Phone: __________________________________
                                       Fax: ____________________________________
                                       E-mail: _________________________________


                               Signature Page to
                       5-Year Revolving Credit Agreement
                         Applebee's International, Inc.

<PAGE>


                                       WELLS FARGO BANK, N.A., as a Lender



                                       By:/s/ Kathleen Savard
                                       -----------------------------------------
                                       Name:  Kathleen Savard
                                       Title: Vice President

                                       _________________________________________
                                       _________________________________________

                                       Attention: ______________________________
                                       Phone: __________________________________
                                       Fax: ____________________________________
                                       E-mail: _________________________________


                               Signature Page to
                       5-Year Revolving Credit Agreement
                         Applebee's International, Inc.

<PAGE>


                                       FIFTH THIRD BANK, as a Lender



                                       By:/s/ Kevin C. M. Jones
                                       -----------------------------------------
                                       Name:  Kevin C. M. Jones
                                       Title: Vice President

                                       _________________________________________
                                       _________________________________________

                                       Attention: ______________________________
                                       Phone: __________________________________
                                       Fax: ____________________________________
                                       E-mail: _________________________________


                               Signature Page to
                       5-Year Revolving Credit Agreement
                         Applebee's International, Inc.


<PAGE>


                                PRICING SCHEDULE
<TABLE>
<CAPTION>
============================= ====================== ======================= ====================== ======================
<S>                           <C>                    <C>                     <C>                    <C>
         APPLICABLE                  LEVEL I                LEVEL II               LEVEL III               LEVEL IV
           MARGIN                     STATUS                 STATUS                  STATUS                 STATUS
----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
       Eurodollar Rate                 0.50%                  0.625%                  0.75%                 0.875%
----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
             ABR                        0%                      0%                     0%                     0%
============================= ====================== ======================= ====================== ======================


============================= ====================== ======================= ====================== ======================
       APPLICABLE FEE                LEVEL I                LEVEL II               LEVEL III               LEVEL IV
            RATE                      STATUS                 STATUS                  STATUS                 STATUS
----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
       Commitment Fee                  0.10%                  0.125%                  0.15%                 0.175%
----------------------------- ---------------------- ----------------------- ---------------------- ----------------------
    Letter of Credit Fee               0.50%                  0.625%                  0.75%                 0.875%
============================= ====================== ======================= ====================== ======================
</TABLE>

         For the  purposes  of this  Schedule,  the  following  terms  have  the
following meanings, subject to the final paragraph of this Schedule:

         "Financials" means the annual or quarterly financial  statements of the
Borrower delivered pursuant to the Credit Agreement.

         "Level I  Status"  exists  at any  date  if,  as of the last day of the
fiscal quarter of the Borrower  referred to in the most recent  Financials,  the
Leverage Ratio is less than or equal to 0.50 to 1.00.

         "Level  II  Status"  exists  at any date if,  as of the last day of the
fiscal quarter of the Borrower  referred to in the most recent  Financials,  (i)
the Borrower has not qualified for Level I Status and (ii) the Leverage Ratio is
less than or equal to 1.00 to 1.00.

         "Level  III  Status"  exists  at any date if, as of the last day of the
fiscal quarter of the Borrower  referred to in the most recent  Financials,  (i)
the  Borrower has not  qualified  for Level I Status or Level II Status and (ii)
the Leverage Ratio is less than or equal to 1.50 to 1.00.

         "Level  IV  Status"  exists  at any date if,  as of the last day of the
fiscal quarter of the Borrower  referred to in the most recent  Financials,  the
Borrower  has not  qualified  for Level I  Status,  Level II Status or Level III
Status.

         "Status"  means  Level I Status,  Level II Status,  Level III Status or
Level IV Status.

         The  Applicable  Margin and  Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Borrower's  Status as reflected
in the then most  recent  Financials.  Adjustments,  if any,  to the  Applicable
Margin or  Applicable  Fee Rate shall be effective  five Business Days after the
Administrative  Agent has received the  applicable  Financials.  If the Borrower
fails to deliver the Financials to the Administrative Agent at the time required
pursuant to the Credit Agreement,  then the Applicable Margin and Applicable Fee
Rate shall be the highest Applicable Margin and Applicable Fee Rate set forth in
the  foregoing  table until five days after such  Financials  are so  delivered.


                                       1
<PAGE>


Subject  to the  immediately  preceding  sentence,  the  Applicable  Margin  and
Applicable  Fee Rate shall be based on Level I Status for the period  commencing
on the  Closing  Date to but not  including  the  fifth  Business  Day after the
Administrative  Agent has received the Financials for the period ending December
26, 2004.





                                      2
<PAGE>



                               COMMITMENT SCHEDULE



LENDER                                                     COMMITMENT

JPMorgan Chase Bank, N.A.                                  $25,000,000

Fleet National Bank                                        $20,000,000

SunTrust Bank                                              $20,000,000

Citicorp Leasing, Inc.                                     $20,000,000

The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch         $20,000,000

Wachovia Bank, National Association                        $15,000,000

Wells Fargo Bank, N.A.                                     $15,000,000

Fifth Third Bank                                           $15,000,000

AGGREGATE COMMITMENT                                       $150,000,000.00





                                       3
<PAGE>



                                  SCHEDULE 2.21

                           EXISTING LETTERS OF CREDIT
<TABLE>
<CAPTION>
<S>               <C>                              <C>                 <C>                          <C>
           Beneficiary                            Expiration           Auto Renews                         Amount
                                                      Date                (Y/N)
National Union Fire Insurance Co.                   09/17/05                Y                             $363,824.00
National Union Fire Insurance Co.                   09/17/05                Y                             $940,000.00
Lumbermens Mutual Casualty Company                  09/17/05                Y                             $900,000.00
Lumbermens Mutual Casualty Company                  09/22/05                Y                             $900,000.00
Lumbermens Mutual Casualty Company                  01/01/06                Y                           $1,000,000.00
Zurich American Insurance Co                        12/31/05                Y                           $2,000,000.00
Lumbermens Mutual Casualty Company                  01/01/06                Y                           $1,030,000.00
Lumbermens Mutual Casualty Company                  03/31/05                Y                             $827,000.00
Lumbermens Mutual Casualty Company                  12/19/04                Y                           $2,500,000.00
Commissioner of Insurance State of Vermont          10/21/05                Y                           $1,400,000.00
Board of County Supervisors of Prince William       07/27/05                Y                              $56,718.00
County
City of Cottage Grove                               12/30/04                N                              $31,420.50
Maryland Dept of Transportation                     06/18/05                Y                              $24,000.00
                                                                                                           ----------
                                         Total:                                                        $11,972,962.50
                                                                                                       ==============
</TABLE>


                                       4
<PAGE>


                                  SCHEDULE 5.8

                                  SUBSIDIARIES

<TABLE>
<CAPTION>
<S>                                                    <C>              <C>
------------------------------------------------------ ---------------- ---------------------------------------------------
Subsidiary                                                  State                             Owner
------------------------------------------------------ ---------------- ---------------------------------------------------
ACMC, Inc.                                                    CO        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
AII Services, Inc.                                            KS        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Anne Arundel Apple Holding Corporation                        MD        Applebee's International, Inc. (89%)
                                                                        Barry Huffman (10%)
                                                                        John Elias (1%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Apple American Limited Partnership of Minnesota               MN        Applebee's of Minnesota, Inc. (25%LP interest);
                                                                        Gourmet Systems of Minnesota, Inc. (75%GP
                                                                        interest)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's Beverage, Inc.                                     TX        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's Neighborhood Grill & Bar of Georgia, Inc.          GA        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's Northeast, Inc. (formerly Pub Ventures of          MA        Applebee's International, Inc. (100%)
New England, Inc.) (Currently d/b/a as Gourmet
Systems of Main, Inc. in State of Maine)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of Michigan, Inc.                                  MI        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of Minnesota, Inc.                                 MN        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of New Mexico, Inc.                                NM        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of New York, Inc.                                  NY        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of Nevada, Inc.                                    NV        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of Pennsylvania, Inc.                              PA        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of Texas, Inc.                                     TX        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of Virginia, Inc.                                  VA        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's UK, LLC                                            KS        Applebee's International, Inc. (Sole Member)
------------------------------------------------------ ---------------- ---------------------------------------------------
Apple Vermont Restaurants, Inc.                               VT        Applebee's Northeast, Inc. (formerly Pub Ventures
                                                                        of New England, Inc.) (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Gourmet Systems of Arizona, Inc.                              AZ        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Gourmet Systems of California, Inc.                           CA        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- --------------------------------------------------
Gourmet Systems of Georgia, Inc.                              GA        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
</TABLE>


                                       5
<PAGE>


<TABLE>
<CAPTION>
<S>                                                    <C>              <C>
------------------------------------------------------ ---------------- ---------------------------------------------------
Gourmet Systems, Inc.                                         MO        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Gourmet Systems of Kansas, Inc.                               KS        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Gourmet Systems of Minnesota, Inc.                            MN        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Gourmet Systems of Nevada, Inc.                               NV        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Gourmet Systems of Tennessee, Inc.                            TN        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
GourmetWest of Nevada, Limited Liability Company              NV        Gourmet Systems of Nevada, Inc. (Managing Member)
                                                                        [50%]; Applebee's of Nevada, Inc. (Non-Managing
                                                                        Member) [50%]
------------------------------------------------------ ---------------- ---------------------------------------------------
Innovative Restaurant Concepts, Inc.                          GA        RB International, Inc. (formerly Rio Bravo
                                                                        International, Inc.) (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
IRC Kansas, Inc.                                              KS        Innovative Restaurant Concepts, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
RB International, Inc. (formerly Rio Bravo                    KS        Applebee's International, Inc. (100%)
International, Inc.)
------------------------------------------------------ ---------------- ---------------------------------------------------
Rio Bravo Restaurant, Inc.                                    NY        RB International, Inc. (formerly Rio Bravo
                                                                        International, Inc.) (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Rio Bravo Services, Inc.                                      KS        RB International, Inc. (formerly Rio Bravo
                                                                        International, Inc.) (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Summit Restaurants, Inc.                                      GA        Innovative Restaurant Concepts, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
AFSS, Inc.                                                    CO        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's Michigan Services, LLC                             MI        Applebee's of Michigan, Inc. (Sole Member)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of Calvert County, Inc.                            MD        Applebee's of Virginia, Inc. (88%)
                                                                        Robert Swarts (1%)
                                                                        John Lunsmann (1%)
                                                                        Tammy Britt (10%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of Maryland, Inc.                                  MD        Applebee's of Virginia, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Applebee's of St. Mary's County, Inc.                         MD        Applebee's of Virginia, Inc. (83%)
                                                                        Robert Swarts (1%)
                                                                        John Lunsmann (1%)
                                                                        Cheryl Kimberly Smith Morris (15%)
------------------------------------------------------ ---------------- ---------------------------------------------------
Neighborhood Insurance, Inc.                                  VT        Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
</TABLE>


                                       6
<PAGE>


<TABLE>
<CAPTION>
<S>                                                    <C>              <C>
------------------------------------------------------ ---------------- ---------------------------------------------------
A.I.I. Euro Services (Holland) B.V.                         Holland     Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
AII Services - Europe, Limited                              England     Applebee's International, Inc. (100%)
------------------------------------------------------ ---------------- ---------------------------------------------------
3057649 Nova Scotia Unlimited Liability Company          Nova Scotia,   Gourmet Systems of Tennessee, Inc. (100%)
                                                            Canada
------------------------------------------------------ ---------------- ---------------------------------------------------
</TABLE>




                                       7
<PAGE>



                                  SCHEDULE 5.16

                              ENVIRONMENTAL MATTERS

                                      None



                                       8
<PAGE>



                                  SCHEDULE 6.15

                              EXISTING INVESTMENTS

                                      None



                                       9
<PAGE>



                                  SCHEDULE 6.16

                                 EXISTING LIENS

                                      None


                                       10

<PAGE>




                                   EXHIBIT A-1

              FORM OF BORROWER'S AND GUARANTORS' COUNSEL'S OPINION

                                   [Attached]


                                       1
<PAGE>


                                December 3, 2004



To the Administrative Agent, the Syndication Agents, the LC Issuer, the
    Documentation Agents,  and each of the Lenders under the hereinafter defined
    Credit Agreement
c/o JPMorgan Chase Bank, N.A.
One Bank One Plaza
Chicago, Illinois 60670


Ladies and Gentlemen:

         We have acted as counsel to Applebee's International,  Inc., a Delaware
corporation (the "Borrower"),  and the other Loan Parties in connection with the
making of loans and the extension of certain other financial  accommodations  by
the Lenders under the Credit  Agreement to the Borrower.  All terms used and not
defined herein shall have the meanings assigned to them in the Credit Agreement.

         In such capacity we have examined the following agreements, instruments
and documents (collectively, the "Loan Documents"):

         1.   5-Year Revolving  Credit  Agreement  dated as of December 3, 2004,
among the Borrower,  the financial  institutions from time to time party thereto
as Lenders and JPMorgan Chase Bank, N.A., as  Administrative  Agent (the "Credit
Agreement");

         2.   Guaranty dated December 3, 2004 (the "Guaranty"), executed by each
of the Guarantors in favor of the Holders of Obligations  (as defined  therein);
and

         3.   [_____] Notes (collectively, the "Notes"),  one payable to each of
[_________________________].

         We have also examined such other corporate records of the Loan Parties,
certificates  of public  officials  and of  officers  of the Loan  Parties,  and
agreements, instruments and other documents as we have deemed necessary in order
to render the opinions expressed below. As to questions of fact material to such
opinions, we have, when relevant facts were not independently established by us,
relied upon  certificates of officers of the Borrower and the other Loan Parties
and upon the representations of the Borrower in the Credit Agreement.

         We have assumed the  genuineness  of all  signatures  on all  documents
examined by us, the  authenticity of all documents  submitted to us as originals
and the  conformity to authentic  originals of all documents  submitted to us as
certified or photostatic  copies,  the legal capacity of all natural persons and
the accuracy and  completeness of all corporate  records made available to us by


                                       2
<PAGE>


the Loan  Parties.  We have also assumed  that each party to the Loan  Documents
(other than the Loan Parties) has satisfied the legal requirements applicable to
it to the extent necessary to make the Loan Documents enforceable against it.

    Based  upon  and  subject  to the  other  paragraphs  hereof,  we are of the
    opinions that:

         a.   Each Loan Party other than Apple American Limited  Partnership  of
    Minnesota,  GourmetWest of Nevada,  Limited Liability Company and Applebee's
    UK, LLC (i) is a corporation duly incorporated, validly existing and in good
    standing under the laws of the jurisdiction of its  incorporation,  and (ii)
    has all requisite corporate power to own or lease and operate its properties
    and to carry on its business as now conducted.

         b.   Each  of  Apple  American  Limited   Partnership   of   Minnesota,
    GourmetWest of Nevada, Limited Liability Company and Applebee's  UK, LLC (i)
    is duly organized, validly existing and in good standing  under  the laws of
    the  jurisdiction of its organization,  and (ii) has all  requisite power to
    own or lease and operate its properties and to carry on its business  as now
    conducted.

         c.   The execution, delivery and  performance by each Loan Party of the
    Credit  Agreement,  the Notes, each other Loan Document to which it is or is
    to be a party, are within such Loan Party's corporate powers, have been duly
    authorized by all necessary corporate action, and do not (i) contravene such
    Loan Party's  charter or bylaws,  (ii) violate any statutory law (including,
    without  limitation,  the Securities  Exchange Act of 1934 and the Racketeer
    Influenced and Corrupt  Organizations Chapter of the Organized Crime Control
    Act of 1970),  any rule or  regulation  promulgated  thereunder  (including,
    without  limitation,  Regulation  X of the Board of Governors of the Federal
    Reserve System), or any order, writ, judgment, injunction or decree known to
    us,  (iii)  result in the  breach of, or  constitute  a default  under,  any
    contract, loan agreement, indenture, mortgage, deed of trust, lease or other
    instrument known to us (including, without limitation, the agreements listed
    as material  contracts on the Borrower's  Annual Report on Form 10-K for the
    fiscal year ended December 31, 2003,  filed with the Securities and Exchange
    Commission  (the "Material  Contracts"))  to be binding on any Loan Party or
    any of  its  properties  or  (iv)  result  in or  require  the  creation  or
    imposition of any Lien upon or with respect to any of the  properties of any
    Loan Party under any such contract,  loan  agreement,  indenture,  mortgage,
    deed of trust, lease or other instrument.

         d.   No authorization or  approval or other action by, and no notice to
    or filing  with, any governmental  authority or regulatory  body is required
    for (i) the due execution, delivery,  recordation,  filing or performance by
    any Loan Party of the Credit Agreement,  the Notes,  any other Loan Document
    to  which it  is or  is  to  be  a  party,  or  (ii)  the  exercise  by  the
    Administrative  Agent or  any  Lender  Party of  its rights  under the  Loan
    Documents.

         e.   The Credit Agreement and each other Loan  Document  have been duly
    executed and delivered by each Loan Party thereto.

         f.   To  the  best  of  our  knowledge,  there  is  no  action,   suit,
    investigation,  litigation or proceeding  against any Loan Party,  including
    any action under the  Environmental  Laws,  pending or threatened before any


                                       3
<PAGE>


    court,  governmental  agency  or  arbitrator  that (i) could  reasonably  be
    expected to have a Material  Adverse  Effect or (ii)  purports to  adversely
    affect the legality, validity or enforceability of the Credit Agreement, any
    other Loan Document or the  consummation  of the  transactions  contemplated
    thereby.

         g.   None of  Material  Contracts  contains any provision that requires
    the consent of the other  parties thereto for the  transactions contemplated
    under the Loan Documents.

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

         i.   Although the Loan Documents contain  choice of law provisions that
    state that they shall be governed by and  construed in  accordance  with the
    laws of the State of  Illinois,  in the event  that the laws of the State of
    Kansas (the  "State")  were applied to govern any Loan  Document,  each such
    Loan Document would be the legal,  valid and binding  obligation of the Loan
    Parties  party  thereto,   enforceable  against  each  such  Loan  Party  in
    accordance with its terms.

         j.   All taxes and governmental fees and charges,  the payment of which
    are required in the State in  connection  with the  execution,  delivery and
    recording of the Loan Documents have been paid.

         k.   Neither  any Agent nor any  Lender is required  to  qualify  to do
    business  in the State or to comply  with the  requirements  of any  foreign
    lender statute in order to carry out the  transactions  contemplated  by the
    Credit  Agreement  or  the  other  transactions  contemplated  by  the  Loan
    Documents or to avail themselves of the remedies provided thereby,  nor will
    any such Agent or Lender be subject to taxation  in the State,  in each case
    solely as the result of the performance of the transactions  contemplated by
    the Credit Agreement and such other transactions.

         l.   The choice of Illinois law to govern the Loan  Documents  in which
    such  choice of law is  stipulated  is a valid and  effective  choice of law
    under the laws of the State and under the State's principles of conflicts of
    laws, a federal court sitting in its diversity  capacity in the State or any
    of the  State's  state  courts  will  apply  Illinois  law in an  action  or
    proceeding  arising out of any Loan  Document to the extent that the parties
    thereto have agreed to its  application  therein,  except to the extent that
    the State's or federal procedural or remedial law shall apply.

    The opinions set forth above are subject to the following qualifications:


                                       4
<PAGE>


    (1)  Our opinion in the last sentence of paragraph 8 above is subject to the
         effect  of  any  applicable  bankruptcy,  insolvency,   reorganization,
         fraudulent conveyance,  moratorium or similar laws affecting creditors'
         rights generally.

    (2)  Our opinion in the last sentence of paragraph 8 above is subject to the
         effect of general principles of equity,  including without  limitation,
         concepts of  materiality,  reasonableness,  good faith and fair dealing
         (regardless of whether considered in a proceeding in equity or at law).

    (3)  We express no opinion  herein as to (i) the  availability  of  specific
         performance or other equitable  remedies,  (ii) the  enforceability  of
         waivers by parties of their  respective  rights and remedies under law,
         (iii) the  enforceability  of  provisions  purporting  to grant a party
         conclusive  rights of  determination,  (iv) the  enforceability  of any
         prepayment or yield maintenance  premium or penalty, to the extent that
         a court of  competent  jurisdiction  may hold it to be a penalty  or an
         unreasonable  approximation of the Lender's actual loss or damages as a
         result of prepayment of indebtedness under the Loan Documents,  whether
         by   acceleration,   voluntary   prepayment  or   otherwise,   (v)  the
         enforceability   of  any  provisions  that  limit  the  effect  of  any
         applicable  statutes  of  limitation,  (vi) the  enforceability  of any
         provisions  providing for  indemnification  insofar as  indemnification
         would  violate  public  policy,  (vii) title to, or the  perfection  or
         priority of any security interests or liens on, any property, or (viii)
         the  enforceability  of any provision for the  collection of attorneys'
         fees.

    The  phrases  "known to us" and "to our  knowledge"  as used herein mean the
current  actual  knowledge  of the  attorneys  of this  firm  who  have  devoted
substantive  attention  to matters for the Loan Parties in  connection  with the
Loan  Documents.  Except to the extent  expressly set forth herein,  we have not
undertaken any independent  investigation  to determine the existence or absence
of any fact, and no inference as to our knowledge of the existence or absence of
any fact  should be drawn  from our  representation  of the Loan  Parties or the
rendering of the opinions set forth above.

    Our opinions are limited to the law of the State of Kansas,  the Federal law
of the United States of America,  and the Delaware General  Corporation Law, and
we do not express any opinion herein concerning any other law.

    We disclaim any  responsibility  to update or  supplement  this opinion with
respect  to any  changes  in law or future  events  affecting  the  transactions
contemplated  by the Loan  Documents.  This opinion letter may be relied upon by
you and any  other  Lenders  who are  from  time  to time  party  to the  Credit
Agreement  only in  connection  with the  transactions  provided for in the Loan
Documents  and may not be used or relied  upon by you or such other  Lenders for
any other purpose or by any other person for any purpose whatsoever,  without in
each instance our prior written consent.

                                       Very truly yours,


                                       5
<PAGE>


2
1

                                   EXHIBIT A-2

                FORM OF ADMINISTRATIVE AGENT'S COUNSEL'S OPINION



                                December 3, 2004


To each of the Lenders party to
the Credit Agreement referred to
below and to JPMorgan Chase Bank, N.A., as
Administrative Agent

and to

J.P. Morgan Securities Inc., as Sole Lead
Arranger and Sole Book Runner


                   Re:  Applebee's International, Inc.

Ladies and Gentlemen:

                   We have acted as counsel to  JPMorgan  Chase Bank,  N.A.,  as
Administrative  Agent, in connection with that certain 5-Year  Revolving  Credit
Agreement,  dated  as of  December  3,  2004  (the  "Credit  Agreement"),  among
Applebee's  International,  Inc., a Delaware  corporation (the "Borrower"),  the
financial  institutions  from time to time party thereto as Lenders and JPMorgan
Chase Bank, N.A., as Administrative Agent. Capitalized terms used herein and not
otherwise defined are used as defined in the Credit Agreement.

                   In connection with this opinion,  we have examined  originals
or copies, certified or otherwise, of the following documents,  each dated as of
the date hereof:

                   (a) the Credit Agreement;

                   (b) the Notes  executed by the  Borrower to the order of each
                   of [________________]; and

                   (c) the Guaranty executed by the Initial  Guarantors (as such
                   term is defined in the Guaranty).

The  documents  described  in items  (a)  through  (c)  above  are  referred  to
hereinafter as the "Loan Documents," and the Borrower and the Initial Guarantors
are referred to  hereinafter  as the "Loan  Parties." In our  examination of the
Loan Documents, we have assumed the authenticity of all such documents submitted
to us as originals,  the conformity to authentic originals of all such documents


                                       1
<PAGE>


submitted  to  us  as  copies,  the  genuineness  of  all  signatures,  the  due
authorization,  execution  and  delivery by each of the parties  executing  such
documents and such other legal and factual  assumptions  as are described in the
Opinion.

              In rendering the opinions set forth herein, we have assumed that:

              (i)    each  of  the  Loan  Parties  is  duly  organized,  validly
existing and in good standing under the laws of its respective  jurisdiction  of
organization  and has the  requisite  corporate,  limited  liability  company or
partnership  power (as  applicable) to enter into the Loan Documents to which it
is a party;  and the  execution  and delivery of each of the Loan  Documents has
been duly authorized by all necessary  corporate,  limited  liability company or
partnership  action (as  applicable)  and  proceedings  on the part of each Loan
Party party thereto;

              (ii)   the  execution,   delivery  and  performance  of  the  Loan
Documents  by the  Loan Parties  do not  require any  action by any governmental
agency or  private party  except for those  which  have been  obtained,  do  not
violate any provision of law applicable to the Loan Parties, and do not conflict
with, result in a breach of or constitute a default under the  charter  or other
organizational document, code of regulations or by-laws of any Loan Party or any
indenture,  agreement, or other instrument to which any Loan Party is a party or
by which any Loan Party is bound;

              (iii)  each Loan Party has duly executed and delivered each of the
Loan Documents to which it is a party; and

              (iv)   the  Credit Agreement constitutes  the  valid  and  binding
obligation  of each  party  thereto  other  than the Loan  Parties,  enforceable
against such parties in accordance with its terms.

              Based upon the foregoing  assumptions and examination of documents
and upon such  investigation  as we have  deemed  necessary,  and subject to the
qualifications  set forth in subparagraphs  (a) through (d) below, we are of the
opinion as of the date  hereof  that the Loan  Documents  constitute  the legal,
valid and binding  obligations  of the  respective  Loan Parties  party  thereto
enforceable  against  such  respective  Loan  Parties in  accordance  with their
respective terms.

              Our opinion is expressly qualified as follows:

              (a)  Our   opinion  is   subject  to  the   effect  of  applicable
bankruptcy, insolvency, reorganization,  fraudulent  conveyance  and other  laws
affecting  creditors' rights  generally and to the  effect of general  equitable
principles (whether considered in a proceeding in equity or at law). In applying
such principles, a court, among other things,  might  not  allow a  creditor  to
accelerate maturity of a debt upon the occurrence of a default deemed immaterial
or for  non-credit  reasons  or  might  decline  to order a  debtor  to  perform
covenants. Such principles applied by a court might include a requirement that a
creditor act with  reasonableness  and in good faith.  Furthermore,  a court may
refuse to enforce a covenant or any provision  providing for  indemnification if
and to the extent that it deems such covenant or indemnification provision to be
violative of applicable public policy.


                                       2
<PAGE>


              (b)  We render no opinion  with respect to the  enforceability  of
Section 12.2.3 of the Credit Agreement.

              (c)  Our opinions expressed are limited to the law of the State of
Illinois  and the federal laws of the United  States,  and we do not express any
opinion herein concerning any other laws.

              (d)  We express no opinion as to the effect of the  compliance  or
noncompliance  by any Agent or any of the Lenders with any federal or state laws
or regulations applicable to any Agent or any of the Lenders because of any such
entity's legal or regulatory  status or the nature of such entity's  business or
requiring any Agent or any of the Lenders to qualify to conduct  business in any
jurisdiction.

              The opinions expressed herein are being delivered to you as of the
date hereof and are solely for your benefit in connection with the  transactions
contemplated in the Credit  Agreement and, except as set forth above, may not be
relied on in any manner or for any purpose by any other  person,  nor any copies
published,  communicated  or otherwise made available in whole or in part to any
other person or entity  without our express prior written  consent,  except that
you may furnish  copies thereof (1) to any party that becomes a Lender after the
date hereof  pursuant to the Credit  Agreement and to a prospective  assignee of
the Loans, (2) to your independent auditors and attorneys,  (3) upon the request
of any state or federal  authority or official  having  regulatory  jurisdiction
over  you,  and  (4)  pursuant  to  order  or  legal  process  of any  court  or
governmental  agency or in any legal proceedings  involving the Credit Agreement
or this opinion. We do not express any opinion,  either implicitly or otherwise,
on any issue not expressly  addressed  above.  The opinions  expressed above are
based solely on factual  matters in existence as of the date hereof and laws and
regulations  in effect on the date hereof.  We assume no obligation to revise or
supplement  this opinion should such factual  matters change or should such laws
or regulations be changed by legislative or regulatory action, judicial decision
or otherwise.


                                       Very truly yours,


                                       3
<PAGE>


                                    EXHIBIT B

                             COMPLIANCE CERTIFICATE

To:      The Lenders parties to the
         Credit Agreement described below

              This Compliance  Certificate is furnished pursuant to that certain
5-Year  Revolving  Credit  Agreement  dated as of December 3, 2004 (as  amended,
modified,  renewed  or  extended  from  time to  time,  the  "Agreement")  among
Applebee's  International,  Inc., a Delaware  corporation (the "Borrower"),  the
lenders party thereto,  and JPMorgan Chase Bank, N.A., as  Administrative  Agent
for the Lenders. Unless otherwise defined herein, capitalized terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.

              THE UNDERSIGNED HEREBY CERTIFIES THAT:

              1. I am the duly elected ________________________ of the Borrower;

              2. I have  reviewed the terms of the Agreement and I have made, or
have  caused  to be  made  under  my  supervision,  a  detailed  review  of  the
transactions  and  conditions  of the Borrower and its  Subsidiaries  during the
accounting period covered by the attached financial statements;

              3. The examinations described in paragraph 2 did not disclose, and
I  have  no  knowledge  of,  the  existence  of any  condition  or  event  which
constitutes  a  Default  or  Unmatured  Default  during  or at  the  end  of the
accounting period covered by the attached financial statements or as of the date
of this Certificate, except as set forth below; and

              4. Schedule  I  attached  hereto  sets  forth  financial  data and
computations  evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct and
have been computed in accordance with the terms and conditions of the Agreement.

              5. Schedule II attached hereto sets forth the determination of the
Applicable  Margin  and the  Applicable  Fee Rate  commencing  on the  fifth day
following the delivery hereof.

              6. Schedule III attached hereto sets forth the various reports and
deliveries  which are required at this time under  Section 6.1 of the  Agreement
and the status of compliance.

              Described  below are the  exceptions,  if any,  to  paragraph 3 by
listing,  in detail,  the nature of the  condition or event,  the period  during
which it has existed and the action which the Borrower has taken, is taking,  or
proposes to take with respect to each such condition or event:


                                       1
<PAGE>


              The foregoing  certifications,  together with the computations set
forth  in  Schedule  I and  Schedule  II  hereto  and the  financial  statements
delivered with this  Certificate in support hereof,  are made and delivered this
day of , .



                                       By:______________________________________
                                       Name:
                                       Title:


                                       2
<PAGE>


Applebee's International, Inc.
Schedule I to Compliance Certificate
Financial Covenant Calculations
Quarter Ended _____________________
(Dollars in thousands)


<TABLE>
<CAPTION>
<S>        <C>                                                                  <C>
6.21.1     MAXIMUM LEVERAGE RATIO

           Consolidated Funded Indebtedness
                                                                                ==========================

           EBITDA (last four fiscal quarters)
                                                                                ==========================

           Consolidated Funded Indebtedness to EBITDA                                     to 1.0
                                                                                ==========================

           Maximum Consolidated Funded Indebtedness to EBITDA                           2.0 to 1.0
                                                                                ==========================

           Compliant with Section 6.21.1                                                  YES/NO

6.21.2     MINIMUM FIXED CHARGE COVERAGE RATIO

           EBITR (last four fiscal quarters)
                                                                                ==========================

           Consolidated Interest Expense (last four fiscal quarters)
           Consolidated Rentals (last four fiscal quarters)
                                                                                ==========================


           Fixed Charge Coverage Ratio                                                    to 1.0
                                                                                ==========================

           Minimum Fixed Charge Coverage Ratio                                          4.0 to 1.0
                                                                                ==========================

           Compliant with Section 6.21.2                                                  YES/NO

6.21.3     MAXIMUM RATIO OF INDEBTEDNESS TO TOTAL CAPITALIZATION

           Consolidated Indebtedness
                                                                                ==========================

           Consolidated Total Capitalization
                                                                                ==========================

           Ratio of Consolidated Indebtedness to
           Consolidated Total Capitalization                                              to 1.0
                                                                                ==========================

           Maximum Consolidated Indebtedness to
           Consolidated Total Capitalization                                            0.50 to 1.0
                                                                                ==========================

           Compliant with Section 6.21.3
                                                                                --------------------------
                                                                                          YES/NO
</TABLE>


                                       3
<PAGE>


<TABLE>
<CAPTION>
<S>        <C>                                                                  <C>
6.14       ASSET SALES

           Notes Receivable
           (Max. of $25 MM or 25% of purchase price)                                         -
                                                                                --------------------------

           Other Sales Permitted under 6.14(iii)                                $            -
                                                                                ==========================

           Maximum Limits
           Annual:  Maximum of 10% of Consolidated Total Assets (preceding year)
                    Actual:
                                                                                ==========================

           Lifetime:  Maximum of 30% of Consolidated Total Assets (preceding year)
                      Actual:
                                                                                ==========================

           Any other asset sales other than those permitted
           in Section 6.14 (i) and (ii)                                                   YES/NO

6.15       INVESTMENTS AND ACQUISITIONS

           (vii) Acquisition Purchase Price
                 Cash
                 Value of Stock (excluding stock repurchased
                 prior to closing)                                    -
                 Assumed liabilities/Other                            -
                 Indebtedness
                                                              ------------------

           Total Purchase Price
                                                                                ==========================

           Total Acquisition Limit - Annual                                     $                200,000
                                                                                ==========================

           (vii) Loans to Franchisees or Reimbursement Obligations from
                 Franchisees in connection (a) with Master Agreement and Limited
                 Guaranty dated as of June 1, 2004, executed by the Borrower in
                 favor of Citicorp Leasing, Inc. or (b) other similar programs

                 Maximum Limit:                                                 $                 25,000
                                                                                ==========================

           (ix)  Other Investments
                  Investments in Joint Ventures                $      -
                  Investments in Franchisees                          -
                  Investments in Other Persons
                  Loans and advances to employees
                  Loans and advances to Other Persons                 -
                                                              ------------------

                  Total Other Investments                                       $            -
                                                                                ==========================

                  Maximum Limit:                                                $                 25,000
                                                                                ==========================
</TABLE>


                                       4
<PAGE>


6.10       GUARANTORS
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------- -----------------------------
                                                                                                  Signatory to
Name of Domestic Subsidiaries and Jurisdiction of Formation                                        Guaranty
---------------------------------------------------------------------------------------- -----------------------------
<S>                                                                                      <C>





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



</TABLE>



                                       5
<PAGE>



Applebee's International, Inc.
Schedule II to Compliance Certificate
Financial Covenant Calculations
Quarter Ended _____________________
(Dollars in thousands)

<TABLE>
<CAPTION>
<S>        <C>              <C>         <C>          <C>                   <C>                    <C>
           ------------------------------------------------------------------------------------------------
           Applicable Margin
           ------------------------------------------------------------------------------------------------

           ------------------------------------------------------------------------------------------------
           Applicable Fee Rate
           ------------------------------------------------------------------------------------------------


--------------------------------------- --------------------------------
                                                 LEVERAGE RATIO
--------------------------------------- --------------------------------
LEVEL I STATUS                            <=0.50
LEVEL II STATUS                           <=1.00 and > 0.50
LEVEL III STATUS                          <=1.50 and > 1.00
LEVEL IV STATUS                           >1.50

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

--------------------------- ------------------------ --------------------- ---------------------- --------------------
        APPLICABLE                  LEVEL I                 LEVEL II             LEVEL III              LEVEL IV
          MARGIN                     STATUS                  STATUS                STATUS                STATUS
--------------------------- ------------------------ --------------------- ---------------------- --------------------
      Eurodollar Rate           0.50%                       0.625%                 0.75%                 .875%
--------------------------- ------------------------ --------------------- ---------------------- --------------------
       ABR                      0.00%                       0.00%                  0.00%                 0.00%
--------------------------- ------------------------ --------------------- ---------------------- --------------------

--------------------------- ------------------------ --------------------- ---------------------- --------------------
        APPLICABLE                  LEVEL I                 LEVEL II             LEVEL III              LEVEL IV
         FEE RATE                    STATUS                  STATUS                STATUS                STATUS
--------------------------- ------------------------ --------------------- ---------------------- --------------------
      Commitment Fee            0.10%                       0.125%                 0.15%                 0.175%
--------------------------- ------------------------ --------------------- ---------------------- --------------------
   Letter of Credit Fee         0.50%                       0.625%                 0.75%                 0.875%
--------------------------- ------------------------ --------------------- ---------------------- --------------------
</TABLE>






                                       1
<PAGE>



                     SCHEDULE III TO COMPLIANCE CERTIFICATE

                      Reports and Deliveries Currently Due




                                       1
<PAGE>




                                    EXHIBIT C

                              ASSIGNMENT AGREEMENT

         This  Assignment   Agreement  (this  "Assignment   Agreement")  between
____________________  (the "Assignor") and ____________________ (the "Assignee")
is dated as of __________, 20__. The parties hereto agree as follows:

    1.   PRELIMINARY  STATEMENT.  The Assignor is a party to a Credit  Agreement
         (which, as it may be amended,  modified,  renewed or extended from time
         to time is herein called the "Credit Agreement") described in Item 1 of
         Schedule 1  attached  hereto  ("Schedule  1").  Capitalized  terms used
         herein  and not  otherwise  defined  herein  shall  have  the  meanings
         attributed to them in the Credit Agreement.

    2.   ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to the
         Assignee,  and the  Assignee  hereby  purchases  and  assumes  from the
         Assignor,  an interest in and to the Assignor's  rights and obligations
         under the  Credit  Agreement  and the other Loan  Documents,  such that
         after  giving  effect  to  such  assignment  the  Assignee  shall  have
         purchased pursuant to this Assignment Agreement the percentage interest
         specified  in  Item 3 of  Schedule  1 of  all  outstanding  rights  and
         obligations  under the Credit  Agreement  and the other Loan  Documents
         relating  to the  facilities  listed  in  Item  3 of  Schedule  1.  The
         Commitment  (or  Outstanding   Credit   Exposure,   if  the  applicable
         Commitment has been terminated)  purchased by the Assignee hereunder is
         set forth in Item 4 of Schedule 1.

    3.   EFFECTIVE  DATE. The effective date of this  Assignment  Agreement (the
         "Effective Date") shall be the later of the date specified in Item 5 of
         Schedule 1 or two (2) Business  Days (or such shorter  period agreed to
         by the Administrative Agent) after this Assignment Agreement,  together
         with any consents required under the Credit Agreement, are delivered to
         the Administrative  Agent. In no event will the Effective Date occur if
         the payments required to be made by the Assignee to the Assignor on the
         Effective Date are not made on the proposed Effective Date.

    4.   PAYMENT  OBLIGATIONS.  In consideration  for the sale and assignment of
         the  Commitment  and/or  Outstanding  Credit  Exposure  hereunder,  the
         Assignee  shall pay the  Assignor,  on the Effective  Date,  the amount
         agreed to by the Assignor and the Assignee.  On and after the Effective
         Date, the Assignee shall be entitled to receive from the Administrative
         Agent all payments of principal,  interest and fees with respect to the
         interest  assigned  hereby.  The Assignee  will  promptly  remit to the
         Assignor any interest on Outstanding  Credit Exposure and fees received
         from the  Administrative  Agent  which  relate  to the  portion  of the
         Commitment  or  Outstanding  Credit  Exposure  assigned to the Assignee
         hereunder for periods prior to the  Effective  Date and not  previously
         paid by the  Assignee to the  Assignor.  In the event that either party
         hereto receives any payment to which the other party hereto is entitled
         under this Assignment  Agreement,  then the party receiving such amount
         shall promptly remit it to the other party hereto.


                                       1
<PAGE>


    5.   RECORDATION  FEE. The Assignor and Assignee  each agree to pay one-half
         of the recordation fee required to be paid to the Administrative  Agent
         in connection with this Assignment Agreement unless otherwise specified
         in Item 6 of Schedule 1.

    6.   REPRESENTATIONS   OF  THE  ASSIGNOR;   LIMITATIONS  ON  THE  ASSIGNOR'S
         LIABILITY.  The Assignor  represents  and  warrants  that (i) it is the
         legal  and  beneficial  owner  of the  interest  being  assigned  by it
         hereunder,  (ii) such  interest is free and clear of any adverse  claim
         created by the  Assignor and (iii) the  execution  and delivery of this
         Assignment  Agreement  by  the  Assignor  is  duly  authorized.  It  is
         understood and agreed that the assignment and assumption  hereunder are
         made without  recourse to the  Assignor and that the Assignor  makes no
         other  representation or warranty of any kind to the Assignee.  Neither
         the Assignor nor any of its officers,  directors,  employees, agents or
         attorneys  shall be responsible  for (i) the due  execution,  legality,
         validity, enforceability, genuineness, sufficiency or collectability of
         any Loan Document,  including,  without limitation,  documents granting
         the Assignor and the other Lenders a security interest in assets of the
         Borrower  or  any  guarantor,  (ii)  any  representation,  warranty  or
         statement  made in or in  connection  with any of the  Loan  Documents,
         (iii) the financial  condition or  creditworthiness  of the Borrower or
         any guarantor,  (iv) the  performance of or compliance  with any of the
         terms or provisions of any of the Loan Documents, (v) inspecting any of
         the  property,  books or records of the  Borrower,  (vi) the  validity,
         enforceability,  perfection,  priority, condition, value or sufficiency
         of any  collateral  securing or purporting to secure the Loans or (vii)
         any mistake,  error of judgment, or action taken or omitted to be taken
         in connection with the Loans or the Loan Documents.

    7.   REPRESENTATIONS  AND  UNDERTAKINGS  OF THE  ASSIGNEE.  The Assignee (i)
         confirms that it has received a copy of the Credit Agreement,  together
         with copies of the financial  statements  requested by the Assignee and
         such other  documents and  information as it has deemed  appropriate to
         make its own credit analysis and decision to enter into this Assignment
         Agreement, (ii) agrees that it will, independently and without reliance
         upon any Agent,  the  Arranger,  the  Assignor or any other  Lender and
         based on such documents and information at it shall deem appropriate at
         the time,  continue to make its own credit  decisions  in taking or not
         taking action under the Loan  Documents,  (iii) appoints and authorizes
         each Agent to take such  action as agent on its behalf and to  exercise
         such powers under the Loan  Documents as are delegated to such Agent by
         the  terms  thereof,  together  with  such  powers  as  are  reasonably
         incidental  thereto,  (iv)  confirms that the execution and delivery of
         this  Assignment  Agreement  by the  Assignee is duly  authorized,  (v)
         agrees that it will perform in  accordance  with their terms all of the
         obligations which by the terms of the Loan Documents are required to be
         performed by it as a Lender, (vi) agrees that its payment  instructions
         and notice  instructions are as set forth in the attachment to Schedule
         1,  (vii)  confirms  that none of the  funds,  monies,  assets or other
         consideration being used to make the purchase and assumption  hereunder
         are "plan assets" as defined under ERISA and that its rights,  benefits
         and interests in and under the Loan Documents will not be "plan assets"
         under ERISA,  (viii) agrees to indemnify and hold the Assignor harmless
         against all losses, costs and expenses (including,  but not limited to,
         reasonable attorneys' fees) and liabilities incurred by the Assignor in
         connection   with  or  arising  in  any  manner  from  the   Assignee's
         non-performance  of  the  obligations  assumed  under  this  Assignment
         Agreement, and (ix) if applicable, attaches the forms prescribed by the


                                       2
<PAGE>


         Internal  Revenue  Service of the  United  States  certifying  that the
         Assignee  is  entitled  to receive  payments  under the Loan  Documents
         without  deduction or  withholding  of any United States federal income
         taxes.

    8.   GOVERNING  LAW.  This  Assignment  Agreement  shall be  governed by the
         internal law, including 735 ILCS 105/5-1 et seq., but otherwise without
         regard to the law of conflicts, of the State of Illinois.

    9.   NOTICES.  Notices shall be given under this Assignment Agreement in the
         manner set forth in the Credit Agreement.  For the purpose hereof,  the
         addresses of the parties hereto (until notice of a change is delivered)
         shall be the addresses set forth in the attachment to Schedule 1.

    10.  COUNTERPARTS;  DELIVERY BY FACSIMILE.  This Assignment Agreement may be
         executed in  counterparts.  Transmission  by  facsimile  of an executed
         counterpart of this Assignment  Agreement shall be deemed to constitute
         due and  sufficient  delivery of such  counterpart  and such  facsimile
         shall  be  deemed  to be an  original  counterpart  of this  Assignment
         Agreement.

         IN WITNESS WHEREOF,  the duly authorized officers of the parties hereto
have executed this Assignment Agreement by executing Schedule 1 hereto as of the
date first above written.




                                       3
<PAGE>


                                   SCHEDULE I
                             to Assignment Agreement

1.  Description and Date of Credit Agreement: 5-Year Revolving Credit Agreement,
dated  December  3,  2004,  among  Applebee's  International,  Inc.,  a Delaware
corporation  (the  "Borrower"),  the Lenders named  therein,  and JPMorgan Chase
Bank, N.A., as the Administrative  Agent, as the same may be amended,  restated,
supplemented  or  otherwise  modified  from time to time

2.  Date of Assignment Agreement: _________, 200_

3.  Percentage  (As of Date of Item 2 above):
                                                 Revolving  Credit

    a.   Assignee's percentage of  Revolving
         Credit Facility purchased under the
         Assignment Agreement*                    -----%

4.  Assignee's   Commitment   (or  Outstanding
    Credit Exposure with respect to terminated
    Commitments) purchased hereunder:            $___________

5.  Proposed Effective Date:                      __________

6.  Non-standard  Recordation  Fee
    Arrangement                                  N/A**
                                                 [Assignor/Assignee to pay
                                                 100% of fee]



                                       4
<PAGE>



Accepted and Agreed:
[NAME OF ASSIGNOR]                     [NAME OF ASSIGNEE]
By:_______________________________     By:______________________________________
Title:                                 Title:


ACCEPTED AND CONSENTED TO***           ACCEPTED AND CONSENTED TO
BY                                     BY

APPLEBEE'S INTERNATIONAL, INC.         JPMORGAN CHASE BANK, N.A., as
                                       Administrative Agent

By:_______________________________     By:______________________________________
Title:                                 Title:

                     * Percentage taken to 10 decimal places
                  ** If fee is split 50-50, pick N/A as option
                 *** Delete if not required by Credit Agreement




                                       5
<PAGE>


                Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

                        ADMINISTRATIVE INFORMATION SHEET

         Attach Assignor's Administrative Information Sheet, which must
           include notice addresses for the Assignor and the Assignee
                            (Sample form shown below)

                              ASSIGNOR INFORMATION

Contact:

Name:                                  Telephone No.:
Fax No.:                               Telex No.:
                                       Answerback:


Payment Information:

Name & ABA # of Destination Bank:

Account Name & Number for Wire Transfer:

Other Instructions:

Address for Notices for Assignor:



ASSIGNEE INFORMATION

Credit Contact:

Name:                                  Telephone No.:
Fax No.:                               Telex No.:
                                       Answerback:


Key Operations Contacts:

Booking Installation:                  Booking Installation:
Name:                                  Name:
Telephone No.:                         Telephone No.:
Fax No.:                               Fax No.:
Telex No.:                             Telex No.:
Answerback:                            Answerback:




                                       6
<PAGE>


Payment Information:

Name & ABA # of Destination Bank:



Account Name & Number for Wire Transfer:



Other Instructions:



Address for Notices for Assignee:




                                       7
<PAGE>



                      JPMORGAN CHASE BANK, N.A. INFORMATION

     Assignee will be called promptly upon receipt of the signed agreement.

Initial Funding Contact:               Subsequent Operations Contact:
-----------------------                -----------------------------
Name:                                  Name:
Telephone No.:  (312)                  Telephone No.:  (312)
Fax No.:  (312)                        Fax No.:  (312)
                                       JPMorgan Chase Bank, N.A. Telex No.:
                                       190201 (Answerback: FNBC UT)


Initial Funding Standards:

Libor - Fund 2 days after rates are set.

JPMorgan Chase Bank, N.A.              JPMorgan Chase Bank, N.A. ABA # 071000013
Instructions:                          LS2 Incoming Account # ____________
                                       Ref: Applebee's International, Inc.

Address for Notices  for  JPMorgan     1 Bank One Plaza, Chicago, IL  60670
Chase Bank, N.A.                       Attn: Agency Compliance Division,
                                       Suite IL1-0353
                                       Fax No. (312) 732-2038 or (312) 732-4339



                                       8
<PAGE>


                                    EXHIBIT D

                 LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION


                   To:  JPMorgan Chase Bank, N.A.,
                        as Administrative Agent (the "Administrative Agent")
                        under the Credit Agreement Described Below.

                   Re:  5-Year  Revolving  Credit  Agreement,  dated December 3,
                        2004 (as the same may be amended, restated, supplemented
                        or otherwise modified,  the "Credit  Agreement"),  among
                        Applebee's  International,  Inc., a Delaware corporation
                        (the  "Borrower"),  the Lenders named  therein,  and the
                        Administrative Agent.

         Capitalized  terms used herein and not otherwise  defined  herein shall
have the meanings assigned thereto in the Credit Agreement.

         The Administrative Agent is specifically authorized and directed to act
upon the following  standing  money  transfer  instructions  with respect to the
proceeds  of  Advances  or other  extensions  of credit  from time to time until
receipt by the  Administrative  Agent of a specific  written  revocation of such
instructions by the Borrower,  provided,  however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 13.1 of the Credit  Agreement or based on any telephonic
notice made in accordance with Section 2.15 of the Credit Agreement.

Facility Identification Number(s):

Customer/Account Name:  Applebee's International, Inc.

Transfer Funds To:  JPMorgan Chase Bank, N.A., Chicago

For Account No.:  5120314

Reference/Attention To:

Authorized Officer (Customer Representative):    Date:

(Please Print):________________________     Signature___________________________

Bank Officer Name______________________     Date:_______________________________

(Please Print)_________________________     Signature___________________________

(Deliver Completed Form to Credit Support Staff For Immediate Processing)




<PAGE>




                                    EXHIBIT E

                                      NOTE

                                                                          [Date]

         Applebee's International, Inc., a Delaware corporation (the "Borrower")
promises  to pay  to  the  order  of  ____________________________________  (the
"Lender") the aggregate  unpaid principal amount of all Loans made by the Lender
to the  Borrower  pursuant  to  Article  II of  the  Agreement  (as  hereinafter
defined),  in immediately  available  funds at the main office of JPMorgan Chase
Bank, N.A. in Chicago, Illinois, as Administrative Agent, together with interest
on the unpaid principal amount hereof at the rates and on the dates set forth in
the  Agreement.  The Borrower  shall pay the principal of and accrued and unpaid
interest on the Loans in full on the Facility Termination Date.

         The Lender shall,  and is hereby  authorized to, record on the schedule
attached  hereto,  or to otherwise record in accordance with its usual practice,
the date and  amount  of each  Loan and the date and  amount  of each  principal
payment hereunder.

         This Note is one of the Notes  issued  pursuant  to, and is entitled to
the benefits of, the 5-Year  Revolving  Credit Agreement dated as of December 3,
2004 (which, as it may be amended, restated,  supplemented or otherwise modified
and in effect from time to time,  is herein called the  "Agreement"),  among the
Borrower,  the lenders party thereto,  including the Lender,  and JPMorgan Chase
Bank, N.A., as Administrative Agent, to which Agreement reference is hereby made
for a statement of the terms and conditions  governing this Note,  including the
terms and  conditions  under which this Note may be prepaid or its maturity date
accelerated.  Capitalized terms used herein and not otherwise defined herein are
used with the meanings attributed to them in the Agreement.

         The Borrower hereby waives presentment,  demand, protest and any notice
of any kind.  No  failure to  exercise  and no delay in  exercising,  any rights
hereunder  on the part of the holder  hereof  shall  operate as a waiver of such
rights.

         This Note shall be governed by and  construed  in  accordance  with the
internal laws of the State of Illinois,  but giving effect to applicable federal
laws.

                                       APPLEBEE'S INTERNATIONAL, INC.

                                       By:/s/___________________________________
                                       Print Name:
                                       Title:



<PAGE>




                         SCHEDULE OF LOANS AND PAYMENTS
                              OF PRINCIPAL TO NOTE

                           DATED ____________________

                 Principal          Maturity         Principal
                 Amount of         of Interest        Amount            Unpaid
 Date              Loan              Period            Paid             Balance
 ----              ----              ------            ----             -------




<PAGE>



                                    EXHIBIT F

                            LIST OF CLOSING DOCUMENTS

                                  $ 150,000,000

                                CREDIT FACILITIES

                                       TO

                         APPLEBEE'S INTERNATIONAL, INC.

                                December 3, 2004

                           LIST OF CLOSING DOCUMENTS1

         A.   LOAN DOCUMENTS

1.       1. 5-Year Revolving  Credit  Agreement (the "Credit  Agreement") by and
         among  Applebee's  International,  Inc.,  a Delaware  corporation  (the
         "Borrower"),  the  institutions  from time to time  parties  thereto as
         lenders (the "Lenders") and JPMorgan Chase Bank,  N.A., in its capacity
         as contractual representative (the "Administrative Agent"),  evidencing
         a $150,000,000  5-year  revolving  credit facility to the Borrower from
         the Lenders.

EXHIBITS

EXHIBIT A         --      Form of Borrower's Counsel's Opinion

EXHIBIT B         --      Form of Compliance Certificate

EXHIBIT C         --      Form of Assignment Agreement

EXHIBIT D         --      Form of Loan/Credit Related Money Transfer Instruction

EXHIBIT E         --      Form of Promissory Note

EXHIBIT F         --      List of Closing Documents

EXHIBIT G         --      Form of Designation Agreement

EXHIBIT H         --      Form of Guaranty

EXHIBIT I         --      Form of Commitment and Acceptance


---------------------------------
1        Capitalized  terms used  herein and not defined  herein  shall have the
         meanings   assigned   to   such   terms   in  the   Credit   Agreement.
         Bold/italicized  documents  to  be  prepared  and/or  provided  by  the
         Borrower or the Borrower's counsel.

<PAGE>


SCHEDULES

PRICING SCHEDULE

COMMITMENT SCHEDULE

SCHEDULE 2.21                          Existing Letters of Credit


SCHEDULE 5.8                           Subsidiaries


SCHEDULE 5.16                          Environmental Matters


SCHEDULE 6.15                          Existing Investments


SCHEDULE 6.16                          Existing Liens


2.       Guaranty  (the   "Guaranty")   executed  by  each  of  the  Guarantors,
         constituting all of Domestic Subsidiaries of the Borrower identified on
         Appendix A attached hereto, in favor of the Administrative Agent.

3.       Notes executed by the Borrower in favor of each of the Lenders, if any,
         which has  requested  a note  pursuant  to  Section  2.14 of the Credit
         Agreement.

         B.   CORPORATE DOCUMENTS

4.       Certificates  of the  Secretary or Assistant  Secretary of the Borrower
         and each of the  Guarantors  identified  on Appendix A attached  hereto
         certifying  (i)  the  Articles  or  Certificates  of  Incorporation  or
         comparable  charter  documents  (certified,  only  in the  case  of the
         Borrower,  as of a recent date by the appropriate  governmental officer
         in its jurisdiction of incorporation and attached thereto) as in effect
         on the date of such  certification,  (ii)  the  By-Laws  or  comparable
         governance  documents  (attached thereto) of the Borrower and each such
         Guarantor  as in  effect  on the  date  of  such  certification,  (iii)
         resolutions of the Board of Directors (or other similar governing body)
         of the Borrower and each such  Guarantor  authorizing,  inter alia, the
         execution,  delivery and  performance of each Loan Document to which it
         is a party,  and (iv) the names and true  signatures  of the  incumbent
         officers of the Borrower and each such Guarantor authorized to sign the
         Loan Documents to which it is a party and, in the case of the Borrower,
         authorized to request Credit Extensions under the Credit Agreement.

5.       Good  Standing  Certificates  as of a recent date for the  Borrower and
         each Guarantor from the office of the appropriate  governmental officer
         of their respective jurisdictions of organization.


                                       2
<PAGE>


         D.   OPINIONS

6.       Opinion of counsel to the Borrower and the  Guarantors  with respect to
         the Credit Agreement, the Notes and the Guaranty.

7.       Opinion   of   counsel  to   Administrative   Agent  with   respect  to
         enforceability of the Credit Agreement, the Notes and the Guaranty.

         E.   CLOSING CERTIFICATES AND MISCELLANEOUS

8.       Opening Compliance  Certificate executed by the chief financial officer
         or treasurer of the  Borrower,  showing the  calculations  necessary to
         determine  compliance  with the Credit  Agreement as of the  Borrower's
         fiscal quarter ended September 30, 2004.

9.       Written Money Transfer Instructions.

10.      Certificate of the chief financial officer or treasurer of the Borrower
         certifying  that on the closing date and initial  Borrowing Date (i) no
         Default or Unmatured Default has occurred and is continuing, (ii) as of
         such date the  representations and warranties of the Borrower contained
         in the Credit  Agreement  are true and  correct,  (iii) as of such date
         there has been no material  adverse  change in the  business  condition
         (financial  or  otherwise),  operations,   performance,  properties  or
         prospects of the Borrower and its Subsidiaries,  considered as a whole,
         from that reflected in the financial  statements referred to in Section
         5.4 of the Credit Agreement.

11.      Payoff Letter from JPMorgan  Chase Bank,  N.A.  (successor by merger to
         Bank One,  NA (Main  Office  Chicago))  as  Administrative  Agent under
         Existing Credit Agreement evidencing terms and conditions for repayment
         of indebtedness thereunder.




                                       3
<PAGE>


                                                                      APPENDIX A



                                   Guarantors

<TABLE>
<CAPTION>
<S>                                                            <C>
                      Subsidiary Name                                         Jurisdiction of Organization

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

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

-----------------------------------------------------------    ---------------------------------------------------------
</TABLE>



                                       4
<PAGE>



                                    EXHIBIT G

                          FORM OF DESIGNATION AGREEMENT

                             Dated __________, 20__

              Reference is made to the 5-Year  Revolving  Credit Agreement dated
as of December 3, 2004 (as amended or otherwise  modified from time to time, the
"Credit Agreement") among Applebee's International, Inc., a Delaware corporation
(the  "Borrower"),  the lenders from time to time party thereto (the  "Lenders")
and JPMorgan Chase Bank,  N.A., as  Administrative  Agent.  Terms defined in the
Credit Agreement are used herein as therein defined.

              _________ (the "Designating Lender"), ___________ (the "Designated
Lender"), and the Borrower agree as follows:

1.       The Designating Lender hereby designates the Designated Lender, and the
         Designated  Lender hereby accepts such  designation,  as its Designated
         Lender under the Credit Agreement.

2.       The Designating Lender makes no representations or warranty and assumes
         no  responsibility  with  respect  to the  financial  condition  of the
         Borrower or the performance or observance by the Borrower of any of its
         obligations  under the  Credit  Agreement  or any other  instrument  or
         document furnished pursuant thereto.

3.       The  Designated  Lender (i) confirms that it has received a copy of the
         Credit  Agreement,  together  with copies of the  financial  statements
         referred  to in  Article  V and  Article  VI  thereof  and  such  other
         documents and information as it has deemed  appropriate to make its own
         credit analysis and decision to enter into this Designation  Agreement;
         (ii) agrees that it will,  independently  and without reliance upon the
         Administrative  Agent,  the Designating  Lender 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  any  action  it may be  permitted  to  take  under  the  Credit
         Agreement;  (iii)  confirms  that  it is  an  Eligible  Designee;  (iv)
         appoints and authorizes the  Designating  Lender as its  administrative
         agent  and  attorney-in-fact  and  grants  the  Designating  Lender  an
         irrevocable  power of attorney to receive payments made for the benefit
         of the Designated  Lender under the Credit Agreement and to deliver and
         receive all communications  and notices under the Credit Agreement,  if
         any, that Designated Lender is obligated to deliver or has the right to
         receive thereunder; (v) acknowledges that it is subject to and bound by
         the  confidentiality  provisions  of the  Credit  Agreement  (except as
         permitted under Section 12.4 thereof);  and (vi)  acknowledges that the
         Designating  Lender retains the sole right and  responsibility  to vote
         under the Credit Agreement, including, without limitation, the right to
         approve any amendment,  modification  or waiver of any provision of the
         Credit Agreement,  and agrees that the Designated Lender shall be bound
         by all such votes, approvals, amendments, modifications and waivers and
         all  other  agreements  of the  Designating  Lender  pursuant  to or in
         connection with the Credit Agreement.



<PAGE>


4.       Following   the  execution  of  this   Designation   Agreement  by  the
         Designating Lender, the Designated Lender and the Borrower,  it will be
         delivered to the  Administrative  Agent for acceptance and recording by
         the  Administrative  Agent.  The  effective  date of  this  Designation
         Agreement shall be the date of acceptance thereof by the Administrative
         Agent,  unless  otherwise  specified on the signature  page hereto (the
         "Effective Date").

5.       Upon such acceptance and recording by the  Administrative  Agent, as of
         the Effective  Date (a) the  Designated  Lender shall have the right to
         make Loans as a Lender  pursuant to Article II of the Credit  Agreement
         and the rights of a Lender  related  thereto  and (b) the making of any
         such Loans by the  Designated  Lender shall satisfy the  obligations of
         the Designating  Lender under the Credit  Agreement to the same extent,
         and as if, such Loans were made by the Designating Lender.

6.       Each party to this  Designation  Agreement  hereby agrees that it shall
         not institute against, or join any other Person in instituting against,
         any  Designated  Lender any  bankruptcy,  reorganization,  arrangement,
         insolvency or  liquidation  proceeding or other  proceedings  under any
         federal or state bankruptcy or similar law for one year and a day after
         payment  in  full  of  all  outstanding  senior   indebtedness  of  any
         Designated  Lender;  provided  that  the  Designating  Lender  for each
         Designated  Lender hereby  agrees to indemnify,  save and hold harmless
         each other party hereto for any loss, cost,  damage and expense arising
         out of its  inability to  institute  any such  proceeding  against such
         Designated  Lender.  This Section 6 of the Designation  Agreement shall
         survive the termination of this  Designation  Agreement and termination
         of the Credit Agreement.

7.       This  Designation  Agreement  shall be governed  by, and  construed  in
         accordance  with, the internal laws  (including  ss.735 ILCS 105/5-1 et
         seq. but otherwise  without regard to the conflicts of laws provisions)
         of the State of Illinois.

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

Effective Date2:

                                       [NAME OF DESIGNATING LENDER]

                                       By:  ____________________________________
                                       Name:  __________________________________
                                       Title:  _________________________________

                                       [NAME OF DESIGNATED LENDER]

                                       By:  ____________________________________
                                       Name:  __________________________________
                                       Title:  _________________________________

-------------------------------
2        This  date  should be no  earlier  than the date of  acceptance  by the
         Administrative Agent.


                                       6
<PAGE>


                                       APPLEBEE'S  INTERNATIONAL, INC.

                                       By:  ____________________________________
                                       Name:  __________________________________
                                       Title:  _________________________________

Accepted and Approved this
____ day of ________, ____

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent


By:  _______________________________
Title:  ____________________________



                                       7
<PAGE>



                                    EXHIBIT H

                                    GUARANTY

              THIS  GUARANTY  (this  "Guaranty")  is  made  as of the 3rd day of
December,  2004, by and among each of the undersigned (the "Initial  Guarantors"
and along with any additional  Subsidiaries of the Borrower which become parties
to this Guaranty by executing a supplement  hereto in the form attached as Annex
I, the  "Guarantors")  in favor of the  Administrative  Agent,  for the  ratable
benefit of the  Holders of  Obligations  (as  defined  below),  under the Credit
Agreement referred to below.


                                   WITNESSETH:

              WHEREAS,  APPLEBEE'S  INTERNATIONAL,  INC., a Delaware corporation
(the "Borrower"),  the institutions from time to time parties hereto as Lenders,
and JPMorgan Chase Bank, N.A., a national banking  association,  in its capacity
as contractual  representative (the  "Administrative  Agent") for itself and the
other Lenders,  have entered into a certain 5-Year  Revolving  Credit  Agreement
dated as of December 3, 2004 (as the same may be amended, modified, supplemented
and/or  restated,  and as in effect from time to time, the "Credit  Agreement"),
providing, subject to the terms and conditions thereof, for extensions of credit
and other financial accommodations to be made by the Lenders to the Borrower;

              WHEREAS,  it is a condition precedent to the initial extensions of
credit by the Lenders  under the Credit  Agreement  that each of the  Guarantors
(constituting  all of the Subsidiaries of the Borrower  required to execute this
Guaranty pursuant to Section 6.10 of the Credit  Agreement)  execute and deliver
this Guaranty,  whereby each of the Guarantors  shall guarantee the payment when
due of all  "Obligations"  (as  defined  in the  Credit  Agreement),  including,
without  limitation,  all principal,  interest,  letter of credit  reimbursement
obligations  and other amounts that shall be at any time payable by the Borrower
under the Credit Agreement, the other Loan Documents, and any Financial Contract
to which  any  Lender  or  affiliate  of any  Lender  shall  be a party  (each a
"Designated Financial Contract"); and

              WHEREAS, in consideration of the direct and indirect financial and
other  support  that the  Borrower  has  provided,  and such direct and indirect
financial  and other support as the Borrower may in the future  provide,  to the
Guarantors,  and in order to induce the Lenders and the Administrative  Agent to
enter into the Credit Agreement,  each of the Guarantors is willing to guarantee
the  obligations  of the Borrower  under the Credit  Agreement,  any  Designated
Financial Contract and the other Loan Documents;

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

    SECTION  1.    Definitions. Terms defined in the  Credit  Agreement  and not
otherwise defined herein have, as used herein, the respective  meanings provided
for therein.  For purposes of this Guaranty,  "Holders of Obligations" means the
holders of the Obligations from time to time and shall include (i) each Lender



<PAGE>


and LC Issuer in respect of its Credit Extensions, (ii) the Administrative Agent
and the  Lenders in  respect of all other  present  and future  obligations  and
liabilities  of the Borrower of every type and  description  arising under or in
connection  with the Credit  Agreement  or any other Loan  Document,  (iii) each
indemnified  party under  Section 9.6 of the Credit  Agreement in respect of the
obligations and  liabilities of the Borrower to such Person  hereunder and under
the other Loan Documents, and (iv) their respective successors,  transferees and
assigns.

    SECTION 2.     Representations,  Warranties  and  Covenants.   Each  of  the
Guarantors  represents and  warrants (which representations and warranties shall
be  deemed to have  been  renewed at the  time  of  the  making,  conversion  or
continuation of any Loan or issuance of any Facility LC) that:

                   (A) It is a  corporation,  partnership  or limited  liability
    company duly and properly  incorporated  or  organized,  as the case may be,
    validly  existing and (to the extent such concept applies to such entity) in
    good  standing  under  the  laws of its  jurisdiction  of  incorporation  or
    organization and has all requisite authority to conduct its business in each
    jurisdiction  in which its business is conducted,  except to the extent that
    the failure to have such authority  could not reasonably be expected to have
    a Material Adverse Effect.

                   (B) It (to the extent applicable) has the power and authority
    and legal  right to execute  and deliver  this  Guaranty  and to perform its
    obligations hereunder.  The execution and delivery by each Guarantor of this
    Guaranty and the performance by each of its obligations  hereunder have been
    duly  authorized  by proper  proceedings,  and this  Guaranty  constitutes a
    legal,  valid  and  binding  obligation  of  each  Guarantor,  respectively,
    enforceable  against such  Guarantor,  respectively,  in accordance with its
    terms, except as enforceability may be limited by bankruptcy,  insolvency or
    similar laws affecting the enforcement of creditors' rights generally.

                   (C)  Neither  the  execution  and  delivery  by  it  of  this
    Guaranty, nor the consummation of the transactions herein contemplated,  nor
    compliance  with the  provisions  hereof  will (i)  violate  any law,  rule,
    regulation, order, writ, judgment, injunction, decree or award binding on it
    or its articles or certificate of  incorporation,  limited liability company
    or  partnership   agreement,   certificate  of   partnership,   articles  or
    certificate  of  organization,  by-laws,  or  operating  agreement  or other
    management  agreement,  as  the  case  may  be,  or  the  provisions  of any
    indenture,  instrument  or  agreement  to which the  Borrower  or any of its
    Subsidiaries is a party or is subject,  or by which it, or its Property,  is
    bound,  or (ii) conflict with, or constitute a default under,  or result in,
    or require, the creation or imposition of any Lien in, of or on its Property
    pursuant to the terms of, any such  indenture,  instrument or agreement.  No
    order,  consent,   adjudication,   approval,  license,   authorization,   or
    validation of, or filing,  recording or registration  with, or exemption by,
    or other action in respect of any  governmental or public body or authority,
    or any subdivision  thereof,  which has not been obtained by it, is required
    to  be  obtained  by it in  connection  with  the  execution,  delivery  and
    performance  by  it  of,  or  the  legality,  validity,  binding  effect  or
    enforceability against it of, this Guaranty.


                                       2
<PAGE>


                   In  addition  to  the  foregoing,   each  of  the  Guarantors
    covenants that, so long as any Lender has any Commitment  outstanding  under
    the Credit Agreement or any amount payable under the Credit Agreement or any
    other  Guaranteed   Obligations  shall  remain  unpaid,  it  will,  and,  if
    necessary,  will enable the Borrower  to, fully comply with those  covenants
    and agreements of the Borrower applicable to such Guarantor set forth in the
    Credit Agreement.

    SECTION  3.    The Guaranty. Each of the Guarantors  hereby  unconditionally
guarantees,  jointly  with the  other  Guarantors  and  severally,  the full and
punctual  payment when due (whether at stated  maturity,  upon  acceleration  or
otherwise) of the Obligations,  including, without limitation, (i) the principal
of and  interest on each  Advance  made to the  Borrower  pursuant to the Credit
Agreement,  (ii)  any  Reimbursement  Obligations  of the  Borrower,  (iii)  all
obligations  of the Borrower  owing to any Lender or any affiliate of any Lender
under any Designated  Financial Contract,  and (iv) all other amounts payable by
the  Borrower  or  any of its  Subsidiaries  under  the  Credit  Agreement,  any
Designated Financial Contract and the other Loan Documents (all of the foregoing
being referred to collectively as the "Guaranteed Obligations"). Upon failure by
the Borrower or any of its Affiliates, as applicable, to pay punctually any such
amount, each of the Guarantors agrees that it shall forthwith on demand pay such
amount at the place and in the manner  specified  in the Credit  Agreement,  any
Designated Financial Contract or the relevant Loan Document, as the case may be.
Each  of the  Guarantors  hereby  agrees  that  this  Guaranty  is an  absolute,
irrevocable  and  unconditional  guaranty  of payment  and is not a guaranty  of
collection.

    SECTION 4.     Guaranty  Unconditional.  The  obligations  of  each  of  the
Guarantors hereunder shall be  unconditional and  absolute and, without limiting
the generality of the foregoing, shall not be released, discharged  or otherwise
affected by:

                   (A)   any   extension,   renewal,   settlement,   indulgence,
    compromise,  waiver  or  release  of  or  with  respect  to  the  Guaranteed
    Obligations or any part thereof or any agreement  relating thereto,  or with
    respect to any  obligation of any other  guarantor of any of the  Guaranteed
    Obligations, whether (in any such case) by operation of law or otherwise, or
    any failure or omission to enforce any right,  power or remedy with  respect
    to the Guaranteed  Obligations or any part thereof or any agreement relating
    thereto,  or with respect to any obligation of any other guarantor of any of
    the Guaranteed Obligations;

                   (B) any  modification  or amendment of or  supplement  to the
    Credit  Agreement,  any  Designated  Financial  Contract  or any other  Loan
    Document,  including,  without  limitation,  any such  amendment  which  may
    increase  the amount of, or the  interest  rates  applicable  to, any of the
    Obligations guaranteed hereby;

                   (C) any release, surrender,  compromise,  settlement, waiver,
    subordination or modification,  with or without consideration,  of any other
    guaranties  with respect to the Guaranteed  Obligations or any part thereof,
    or any  other  obligation  of any  person  or  entity  with  respect  to the
    Guaranteed  Obligations  or  any  part  thereof,  or  any  nonperfection  or
    invalidity   of  any  direct  or  indirect   security  for  the   Guaranteed
    Obligations;


                                       3
<PAGE>


                   (D)  any  change  in  the  corporate,  partnership  or  other
    existence,  structure or ownership of the Borrower or any other guarantor of
    any  of  the  Guaranteed   Obligations,   or  any  insolvency,   bankruptcy,
    reorganization  or other  similar  proceeding  affecting the Borrower or any
    other guarantor of the Guaranteed  Obligations,  or any of their  respective
    assets or any  resulting  release  or  discharge  of any  obligation  of the
    Borrower or any other guarantor of any of the Guaranteed Obligations;

                   (E) the existence of any claim,  setoff or other rights which
    the  Guarantors  may  have at any  time  against  the  Borrower,  any  other
    guarantor of any of the Guaranteed  Obligations,  the Administrative  Agent,
    any  Holder  of  Obligations  or any other  Person,  whether  in  connection
    herewith or in  connection  with any unrelated  transactions,  provided that
    nothing  herein  shall  prevent the  assertion of any such claim by separate
    suit or compulsory counterclaim;

                   (F)  the   enforceability   or  validity  of  the  Guaranteed
    Obligations  or any  part  thereof  or the  genuineness,  enforceability  or
    validity of any agreement relating thereto or with respect to any collateral
    securing  the  Guaranteed  Obligations  or any part  thereof,  or any  other
    invalidity  or  unenforceability  relating to or against the Borrower or any
    other guarantor of any of the Guaranteed Obligations, for any reason related
    to the Credit Agreement,  any Designated Financial Contract,  any other Loan
    Document,  or any  provision of applicable  law or regulation  purporting to
    prohibit  the  payment  by  the  Borrower  or  any  other  guarantor  of the
    Guaranteed Obligations, of any of the Guaranteed Obligations;

                   (G) the failure of the Administrative Agent to take any steps
    to perfect and maintain any security  interest in, or to preserve any rights
    to, any security or collateral for the Guaranteed Obligations, if any;

                   (H) the  election by, or on behalf of, any one or more of the
    Holders of  Obligations,  in any proceeding  instituted  under Chapter 11 of
    Title 11 of the United States Code (11 U.S.C.  101 et seq.) (the "Bankruptcy
    Code"), of the application of Section 1111(b)(2) of the Bankruptcy Code;

                   (I) any  borrowing  or grant of a  security  interest  by the
    Borrower, as debtor-in-possession, under Section 364 of the Bankruptcy Code;

                   (J) the  disallowance,  under  Section 502 of the  Bankruptcy
    Code,  of  all or  any  portion  of the  claims  of  any of the  Holders  of
    Obligations or the Administrative  Agent for repayment of all or any part of
    the Guaranteed Obligations;

                   (K) the  failure  of any  other  Guarantor  to sign or become
    party to this Guaranty or any amendment, change, or reaffirmation hereof; or

                   (L) any other act or  omission to act or delay of any kind by
    the  Borrower,  any  other  guarantor  of the  Guaranteed  Obligations,  the
    Administrative  Agent,  any Holder of Obligations or any other Person or any
    other  circumstance  whatsoever  which might, but for the provisions of this
    Section 4,  constitute  a legal or equitable  discharge  of any  Guarantor's
    obligations hereunder.


                                       4
<PAGE>


    SECTION 5.     Discharge Only Upon Payment In Full: Reinstatement In Certain
Circumstances.  Each of the  Guarantors'  obligations  hereunder shall remain in
full force and effect until all Guaranteed  Obligations  shall have been paid in
full in cash and the  Commitments  and all  Facility LCs issued under the Credit
Agreement  shall have  terminated or expired.  If at any time any payment of the
principal of or interest on any Advance,  any  Reimbursement  Obligation  or any
other  amount  payable  by the  Borrower  or any other  party  under the  Credit
Agreement,  any  Designated  Financial  Contract  or any other Loan  Document is
rescinded  or must be  otherwise  restored  or  returned  upon  the  insolvency,
bankruptcy  or  reorganization  of  the  Borrower  or  otherwise,  each  of  the
Guarantors'  obligations  hereunder  with  respect  to  such  payment  shall  be
reinstated as though such payment had been due but not made at such time.

    SECTION  6.    General  Waivers. Each of the Guarantors  irrevocably  waives
acceptance hereof,  presentment,  demand or action on delinquency,  protest, the
benefit of any statutes of limitations  and, to the fullest extent  permitted by
law, any notice not provided for herein,  as well as any requirement that at any
time any action be taken by any Person against the Borrower, any other guarantor
of the Guaranteed Obligations, or any other Person.

    SECTION 7.     Subordination of Subrogation; Subordination  of  Intercompany
Indebtedness.

                   (A)  Subordination  of  Subrogation.   Until  the  Guaranteed
    Obligations have been  indefeasibly paid in full in cash, the Guarantors (i)
    shall  have  no  right  of  subrogation  with  respect  to  such  Guaranteed
    Obligations and (ii) waive any right to enforce any remedy which the Holders
    of  Obligations,  LC  Issuers  or the  Administrative  Agent now have or may
    hereafter have against the Borrower, any endorser or any guarantor of all or
    any  part  of the  Guaranteed  Obligations  or any  other  Person,  and  the
    Guarantors  waive any  benefit  of,  and any right to  participate  in,  any
    security or collateral  given to the Holders of Obligations,  the LC Issuers
    and the Administrative  Agent to secure the payment or performance of all or
    any  part  of the  Guaranteed  Obligations  or any  other  liability  of the
    Borrower to the Holders of Obligations  or LC Issuers.  Should any Guarantor
    have the right,  notwithstanding the foregoing,  to exercise its subrogation
    rights, each Guarantor hereby expressly and irrevocably (A) subordinates any
    and  all  rights  at  law  or  in  equity  to  subrogation,   reimbursement,
    exoneration,  contribution,  indemnification  or set off that such Guarantor
    may  have to the  indefeasible  payment  in  full in cash of the  Guaranteed
    Obligations  and (B)  waives  any and all  defenses  available  to a surety,
    guarantor or accommodation  co-obligor until the Guaranteed  Obligations are
    indefeasibly  paid in full in cash. Each Guarantor  acknowledges  and agrees
    that this subordination is intended to benefit the Administrative  Agent and
    the  Holders of  Obligations  and shall not limit or  otherwise  affect such
    Guarantor's liability hereunder or the enforceability of this Guaranty,  and
    that  the  Administrative  Agent,  the  Holders  of  Obligations  and  their
    respective  successors and assigns are intended third party beneficiaries of
    the waivers and agreements set forth in this Section 7(a).

                   (B)   Subordination   of  Intercompany   Indebtedness.   Each
    Guarantor  agrees  that any and all  claims of such  Guarantor  against  the
    Borrower or any other  Guarantor  hereunder (each an "Obligor") with respect
    to any "Intercompany  Indebtedness" (as hereinafter defined),  any endorser,


                                       5
<PAGE>


    obligor  or  any  other  guarantor  of all or  any  part  of the  Guaranteed
    Obligations,  or against  any of its  properties  shall be  subordinate  and
    subject in right of payment to the prior  payment,  in full and in cash,  of
    all Guaranteed  Obligations.  Notwithstanding  any right of any Guarantor to
    ask,  demand,  sue for,  take or receive any payment from any  Obligor,  all
    rights,  liens and  security  interests  of such  Guarantor,  whether now or
    hereafter arising and howsoever existing, in any assets of any other Obligor
    shall be and are  subordinated  to the rights of the Holders of  Obligations
    and the  Administrative  Agent in those assets.  No Guarantor shall have any
    right to possession  of any such asset or to foreclose  upon any such asset,
    whether  by  judicial  action  or  otherwise,  unless  and  until all of the
    Guaranteed  Obligations (other than contingent indemnity  obligations) shall
    have been fully paid and satisfied (in cash) and all financing  arrangements
    pursuant to any Loan Document or any Designated Financial Contract have been
    terminated. If all or any part of the assets of any Obligor, or the proceeds
    thereof,  are subject to any  distribution,  division or  application to the
    creditors  of such  Obligor,  whether  partial  or  complete,  voluntary  or
    involuntary, and whether by reason of liquidation,  bankruptcy, arrangement,
    receivership, assignment for the benefit of creditors or any other action or
    proceeding,  or if the  business  of any such  Obligor  is  dissolved  or if
    substantially  all of the assets of any such Obligor are sold,  then, and in
    any such event (such  events  being  herein  referred  to as an  "Insolvency
    Event"),  any payment or  distribution  of any kind or character,  either in
    cash,  securities or other  property,  which shall be payable or deliverable
    upon or with  respect to any  indebtedness  of any Obligor to any  Guarantor
    ("Intercompany  Indebtedness")  shall be paid or  delivered  directly to the
    Administrative  Agent for application on any of the Guaranteed  Obligations,
    due  or to  become  due,  until  such  Guaranteed  Obligations  (other  than
    contingent  indemnity  obligations)  shall  have  first  been fully paid and
    satisfied  (in  cash).  Should  any  payment,   distribution,   security  or
    instrument or proceeds thereof be received by the applicable  Guarantor upon
    or with respect to the Intercompany  Indebtedness after any Insolvency Event
    and prior to the  satisfaction of all of the Guaranteed  Obligations  (other
    than contingent indemnity  obligations) and the termination of all financing
    arrangements  pursuant  to any Loan  Document  among  the  Borrower  and the
    Holders of  Obligations,  such Guarantor  shall receive and hold the same in
    trust,  as trustee,  for the benefit of the Holders of Obligations and shall
    forthwith deliver the same to the  Administrative  Agent, for the benefit of
    the Holders of Obligations,  in precisely the form received  (except for the
    endorsement or assignment of the Guarantor where necessary), for application
    to  any of the  Guaranteed  Obligations,  due or  not  due,  and,  until  so
    delivered,  the same shall be held in trust by the Guarantor as the property
    of the Holders of Obligations.  If any such Guarantor fails to make any such
    endorsement or assignment to the  Administrative  Agent, the  Administrative
    Agent or any of its officers or employees is irrevocably  authorized to make
    the same. Each Guarantor agrees that until the Guaranteed Obligations (other
    than the contingent indemnity  obligations) have been paid in full (in cash)
    and satisfied and all financing  arrangements  pursuant to any Loan Document
    among the Borrower and the Holders of Obligations have been  terminated,  no
    Guarantor   will  assign  or   transfer  to  any  Person   (other  than  the
    Administrative  Agent) any claim any such  Guarantor has or may have against
    any Obligor.


                                       6
<PAGE>


    SECTION 8.     Contribution with Respect to Guaranteed Obligations.

                   (A) To the  extent  that any  Guarantor  shall make a payment
    under this Guaranty (a "Guarantor  Payment") which,  taking into account all
    other Guarantor  Payments then previously or concurrently  made by any other
    Guarantor,  exceeds the amount  which  otherwise  would have been paid by or
    attributable  to such  Guarantor if each  Guarantor  had paid the  aggregate
    Guaranteed  Obligations  satisfied  by such  Guarantor  Payment  in the same
    proportion as such  Guarantor's  "Allocable  Amount" (as defined  below) (as
    determined  immediately  prior  to  such  Guarantor  Payment)  bore  to  the
    aggregate  Allocable  Amounts  of  each  of  the  Guarantors  as  determined
    immediately prior to the making of such Guarantor Payment,  then,  following
    indefeasible  payment  in full in cash  of the  Guaranteed  Obligations  and
    termination of the Credit Agreement and the Designated  Financial Contracts,
    such Guarantor shall be entitled to receive contribution and indemnification
    payments from, and be reimbursed by, each other  Guarantor for the amount of
    such  excess,  pro rata  based upon their  respective  Allocable  Amounts in
    effect immediately prior to such Guarantor Payment.

                   (B) As of any date of determination,  the "Allocable  Amount"
    of any  Guarantor  shall be equal to the  maximum  amount of the claim which
    could then be recovered  from such  Guarantor  under this  Guaranty  without
    rendering such claim  voidable or avoidable  under Section 548 of Chapter 11
    of the  Bankruptcy  Code or under any  applicable  state Uniform  Fraudulent
    Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common
    law.

                   (C) This  Section 8 is intended  only to define the  relative
    rights  of the  Guarantors,  and  nothing  set  forth in this  Section  8 is
    intended to or shall impair the obligations of the  Guarantors,  jointly and
    severally,  to pay any  amounts  as and when the same  shall  become due and
    payable in accordance with the terms of this Guaranty.

                   (D)  The  parties  hereto  acknowledge  that  the  rights  of
    contribution and  indemnification  hereunder shall constitute  assets of the
    Guarantor to which such contribution and indemnification is owing.

                   (E) The rights of the indemnifying  Guarantors  against other
    Guarantors  under  this  Section  8 shall be  exercisable  upon the full and
    indefeasible  payment  of  the  Guaranteed   Obligations  in  cash  and  the
    termination of the Credit Agreement and the Designated Financial Contracts.

    SECTION 9.     Stay of Acceleration. If acceleration of the time for payment
of any amount payable by the Borrower under the Credit Agreement, any Designated
Financial  Contract or any other Loan  Document  is stayed upon the  insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to  acceleration  under  the  terms  of the  Credit  Agreement,  any  Designated
Financial  Contract or any other Loan Document  shall  nonetheless be payable by
each of the  Guarantors  hereunder  forthwith  on demand  by the  Administrative
Agent.

    SECTION 10.    Notices.  All notices,  requests and  other communications to
any party  hereunder shall be  given in the manner prescribed in Article XIII of


                                       7
<PAGE>


the Credit  Agreement  with respect to the  Administrative  Agent at its  notice
address therein and with respect to any Guarantor at the address set forth below
or such other address or telecopy number as such party may hereafter specify for
such  purpose by  notice to the  Administrative  Agent in  accordance  with  the
provisions of such Article XIV.

              Notice Address for Guarantors:
              c/o Applebee's International, Inc.
              4551 W. 107th Street
              Overland Park, KS 66207
              Attention:  Chief Financial Officer
              Phone:    (913) 967-4197
              Fax:      (913) 967-2334

    SECTION 11.    No Waivers.  No failure or delay by the Administrative  Agent
or any  Holder of  Obligations in  exercising  any  right,  power  or  privilege
hereunder  shall operate as a  waiver thereof nor  shall any  single or  partial
exercise thereof preclude any other or  further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies provided in this
Guaranty, the Credit Agreement,  any Designated Financial Contract and the other
Loan  Documents  shall be cumulative and not exclusive of any rights or remedies
provided by law.

    SECTION 12.    Successors  and  Assigns. This Guaranty is for the benefit of
the Administrative Agent and the Holders of  Obligations  and  their  respective
successors and permitted  assigns,  provided,  that no Guarantor  shall have any
right to assign its rights or obligations  hereunder  without the consent of all
of the Lenders, and any such assignment in violation of this Section 12 shall be
null and void;  and in the event of an assignment  of any amounts  payable under
the  Credit  Agreement,  any  Designated  Financial  Contract  or the other Loan
Documents in accordance with the respective terms thereof, the rights hereunder,
to the extent  applicable to the  indebtedness  so assigned,  may be transferred
with  such  indebtedness.  This  Guaranty  shall  be  binding  upon  each of the
Guarantors and their respective successors and assigns.

    SECTION 13.    Changes  in  Writing.  Other  than  in  connection  with  the
addition of additional Subsidiaries, which become parties hereto by executing  a
supplement hereto in the form attached as Annex I, neither this Guaranty nor any
provision hereof may be changed,  waived,  discharged or terminated  orally, but
only in writing signed by each of the Guarantors  and the  Administrative  Agent
with the consent of the Required Lenders under the Credit Agreement.

    SECTION 14.    GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS 105/5-1 ET SEQ.,
BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

    SECTION  15.  CONSENT TO  JURISDICTION;  SERVICE  OF  PROCESS;  JURY  TRIAL.


                                       8
<PAGE>


                   (A)   CONSENT  TO   JURISDICTION.   EACH   GUARANTOR   HEREBY
    IRREVOCABLY  SUBMITS TO THE NON-EXCLUSIVE  JURISDICTION OF ANY UNITED STATES
    FEDERAL OR ILLINOIS  STATE COURT SITTING IN CHICAGO,  ILLINOIS IN ANY ACTION
    OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AND EACH GUARANTOR
    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
    ADMINISTRATIVE  AGENT,  ANY LC  ISSUER OR ANY  LENDER  TO BRING  PROCEEDINGS
    AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL
    PROCEEDING BY ANY GUARANTOR AGAINST THE ADMINISTRATIVE  AGENT, ANY LC ISSUER
    OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, ANY LC ISSUER OR
    ANY LENDER INVOLVING,  DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
    OUT OF,  RELATED  TO, OR  CONNECTED  WITH THIS  GUARANTY  OR ANY OTHER  LOAN
    DOCUMENT  SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,  ILLINOIS OR THE CITY
    IN WHICH  THE  PRINCIPAL  OFFICE  OF THE  ADMINISTRATIVE  AGENT,  LENDER  OR
    AFFILIATE, AS THE CASE MAY BE, IS LOCATED.

                   (B) WAIVER OF JURY TRIAL.  EACH GUARANTOR HEREBY WAIVES 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 THIS  GUARANTY  OR ANY OTHER  LOAN
    DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

    SECTION 16.    No Strict Construction. The parties hereto have  participated
jointly  in the  negotiation  and  drafting  of this  Guaranty.  In the event an
ambiguity or question of intent or interpretation arises, this Guaranty shall be
construed  as if drafted  jointly by the parties  hereto and no  presumption  or
burden of proof shall arise favoring or  disfavoring  any party by virtue of the
authorship of any provisions of this Guaranty.

    SECTION 17.    Taxes, Expenses of Enforcement, etc.

                   (A) Taxes.

                   (i)    All payments by any Guarantor to or for the account of
         any Lender,  any LC Issuer or the  Administrative  Agent  hereunder  or
         under any Note or Facility LC Application  shall be made free and clear
         of and without  deduction for any and all Taxes. If any Guarantor shall
         be  required  by law to deduct  any Taxes from or in respect of any sum
         payable  hereunder to any Lender,  any LC Issuer or the  Administrative
         Agent,  (a) the sum payable  shall be  increased  as  necessary so that
         after making all required deductions  (including  deductions applicable
         to additional sums payable under this Section 17(A)) such Lender,  such
         LC Issuer or the Administrative  Agent (as the case may be) receives an


                                       9
<PAGE>


         amount equal to the sum it would have  received had no such  deductions
         been made,  (b) such  Guarantor  shall make such  deductions,  (c) such
         Guarantor shall pay the full amount deducted to the relevant  authority
         in accordance  with applicable law and (d) such Guarantor shall furnish
         to the  Administrative  Agent the original copy of a receipt evidencing
         payment thereof within thirty (30) days after such payment is made.

                   (ii)   In addition, the  Guarantors  hereby  agree to pay any
         present or future  stamp or  documentary  taxes and any other excise or
         property taxes,  charges or similar levies which arise from any payment
         made hereunder or under any Note or Facility LC Application or from the
         execution or delivery of, or otherwise  with respect to, this  Guaranty
         or any Note or Facility LC Application ("Other Taxes").

                   (iii)  The   Guarantors   hereby  agree  to   indemnify   the
         Administrative  Agent,  the LC  Issuers  and each  Lender  for the full
         amount of Taxes or Other  Taxes  (including,  without  limitation,  any
         Taxes or Other  Taxes  imposed on amounts  payable  under this  Section
         17(A)) paid by the Administrative  Agent, the LC Issuers or such Lender
         and any liability (including penalties,  interest and expenses) arising
         therefrom   or  with   respect   thereto.   Payments   due  under  this
         indemnification  shall be made within  thirty (30) days of the date the
         Administrative  Agent,  the LC  Issuers  or such  Lender  makes  demand
         therefor.

                   (iv)   Each Lender that is not incorporated under the laws of
         the  United  States of  America or a state  thereof  (each a  "Non-U.S.
         Lender")  agrees  that it will,  not more than ten (10)  Business  Days
         after the date on which it becomes a party to the Credit Agreement, (i)
         deliver to each of the  Borrower and the  Administrative  Agent two (2)
         duly completed  copies of United States  Internal  Revenue Service Form
         W-8BEN  or  W-8ECI,  certifying  in either  case  that  such  Lender is
         entitled to receive payments under this Guaranty  without  deduction or
         withholding of any United States federal income taxes, and (ii) deliver
         to each of the Borrower and the  Administrative  Agent a United  States
         Internal  Revenue Form W-8 or W-9, as the case may be, and certify that
         it is entitled to an exemption  from United States  backup  withholding
         tax. Each Non-U.S.  Lender further undertakes to deliver to each of the
         Borrower and the Administrative Agent (x) renewals or additional copies
         of such form (or any  successor  form) on or before  the date that such
         form expires or becomes  obsolete,  and (y) after the occurrence of any
         event  requiring a change in the most recent  forms so delivered by it,
         such  additional  forms  or  amendments  thereto  as may be  reasonably
         requested by the  Borrower or the  Administrative  Agent.  All forms or
         amendments  described in the preceding sentence shall certify that such
         Lender is  entitled to receive  payments  under this  Guaranty  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 or amendment with respect to it and such
         Lender advises the Borrower and the Administrative Agent that it is not
         capable of receiving  payments  without any deduction or withholding of
         United States federal income tax.

                   (v)    For  any  period  during  which a Non-U.S.  Lender has
         failed to provide the Borrower  with an  appropriate  form  pursuant to
         clause  (iv) above (unless  such  failure is due to a change in treaty,


                                       10
<PAGE>


         law   or   regulation,   or   any   change  in  the  interpretation  or
         administration   thereof  by  any   governmental  authority,  occurring
         subsequent to the date on which a form originally was required to be
         provided), such Non-U.S. Lender shall not be entitled to
         indemnification under this Section 17(A) with respect to Taxes  imposed
         by the United States; provided that, should a Non-U.S. Lender  which is
         otherwise exempt from or subject to a reduced rate of  withholding  tax
         become subject to Taxes because of its failure to deliver a form
         required under clause (iv), above, the Guarantors shall take such steps
         as such Non-U.S. Lender shall reasonably request to assist such
         Non-U.S. Lender to recover such Taxes.

                   (vi)   Any Lender that is entitled  to an  exemption  from or
         reduction  of  withholding  tax with  respect  to  payments  under this
         Guaranty or any Note  pursuant to the law of any relevant  jurisdiction
         or any  treaty  shall  deliver  to the  Borrower  (with  a copy  to the
         Administrative  Agent),  at the time or times  prescribed by applicable
         law, such properly completed and executed  documentation  prescribed by
         applicable  law  as  will  permit  such  payments  to be  made  without
         withholding or at a reduced rate.

                   (vii)  If the IRS or any other governmental  authority of the
         United States or any other country or any political subdivision thereof
         asserts a claim that the Administrative Agent did not properly withhold
         tax from amounts paid to or for the account of any Lender  (because the
         appropriate form was not delivered or properly completed,  because such
         Lender  failed  to  notify  the  Administrative  Agent of a  change  in
         circumstances   which   rendered   its   exemption   from   withholding
         ineffective,  or for any other reason), such Lender shall indemnify the
         Administrative   Agent  fully  for  all  amounts   paid,   directly  or
         indirectly,  by the Administrative Agent as tax, withholding  therefor,
         or otherwise,  including  penalties and interest,  and including  taxes
         imposed by any  jurisdiction on amounts  payable to the  Administrative
         Agent  under  this  subsection,  together  with all costs and  expenses
         related  thereto  (including   attorneys'  fees  and  time  charges  of
         attorneys  for  the  Administrative   Agent,  which  attorneys  may  be
         employees of the Administrative  Agent). The obligations of the Lenders
         under  this  Section  17(A)(vii)  shall  survive  the  payment  of  the
         Obligations and termination of this Guaranty.

                   (B) Expenses of Enforcement, Etc. Subject to the terms of the
    Credit  Agreement,  after  the  occurrence  of a Default  under  the  Credit
    Agreement,  the  Lenders  shall  have the  right at any time to  direct  the
    Administrative Agent to commence enforcement proceedings with respect to the
    Guaranteed Obligations. The Guarantors agree to reimburse the Administrative
    Agent  and  the  Holders  of  Obligations  for  any  reasonable   costs  and
    out-of-pocket  expenses  (including  reasonable  attorneys'  fees  and  time
    charges  of  attorneys  for the  Administrative  Agent  and the  Holders  of
    Obligations, which attorneys may be employees of the Administrative Agent or
    the Holders of Obligations) paid or incurred by the Administrative  Agent or
    any Holders of Obligation in connection  with the collection and enforcement
    of amounts due under the Loan Documents,  including without  limitation this
    Guaranty.  The Administrative  Agent agrees to distribute  payments received
    from any of the Guarantors  hereunder to the Holders of Obligations on a pro
    rata  basis for  application  in  accordance  with the  terms of the  Credit
    Agreement.


                                       11
<PAGE>


    SECTION  18.   Setoff. At any time  after all or any part of the  Guaranteed
Obligations  have become due and payable (by  acceleration  or otherwise),  each
Holder of Obligations and the  Administrative  Agent may,  without notice to any
Guarantor and regardless of the acceptance of any security or collateral for the
payment  hereof,  appropriate and apply toward the payment of all or any part of
the Guaranteed  Obligations (i) any  indebtedness due or to become due from such
Holder of Obligations or the Administrative Agent to any Guarantor, and (ii) any
moneys,  credits or other property belonging to any Guarantor,  at any time held
by or  coming  into  the  possession  of  such  Holder  of  Obligations  or  the
Administrative Agent or any of their respective affiliates.

    SECTION  19.   Financial   Information.   Each   Guarantor   hereby  assumes
responsibility  for keeping  itself  informed of the financial  condition of the
Borrower and any and all endorsers and/or other Guarantors of all or any part of
the Guaranteed Obligations, and of all other circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations,  or any part thereof, that diligent
inquiry would reveal,  and each Guarantor hereby agrees that none of the Holders
of  Obligations or the  Administrative  Agent shall have any duty to advise such
Guarantor of  information  known to any of them  regarding such condition or any
such circumstances. In the event any Holder of Obligations or the Administrative
Agent,  in its sole  discretion,  undertakes at any time or from time to time to
provide any such  information to a Guarantor,  such Holder of Obligations or the
Administrative  Agent  shall  be  under  no  obligation  (i)  to  undertake  any
investigation not a part of its regular business  routine,  (ii) to disclose any
information  which  such  Holder of  Obligations  or the  Administrative  Agent,
pursuant to  accepted or  reasonable  commercial  finance or banking  practices,
wishes to maintain confidential or (iii) to make any other or future disclosures
of such information or any other information to such Guarantor.

    SECTION 20.    Severability.  Wherever  possible,  each  provision  of  this
Guaranty shall be interpreted in such manner as to be effective and valid  under
applicable  law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such  provision  shall be  ineffective  to the extent of
such  prohibition  or  invalidity  without  invalidating  the  remainder of such
provision or the remaining provisions of this Guaranty.

    SECTION 21.    Merger.  This Guaranty represents the final agreement of each
of the Guarantors with respect to the  matters  contained  herein and may not be
contradicted by evidence of prior or contemporaneous  agreements,  or subsequent
oral  agreements,  between the  Guarantor and any Holder of  Obligations  or the
Administrative Agent.

    SECTION 22.    Headings.   Section   headings  in  this   Guaranty  are  for
convenience of  reference only and  shall not govern  the interpretation  of any
provision of this Guaranty.


                      REMAINDER OF PAGE INTENTIONALLY BLANK


                                       12
<PAGE>




                           SIGNATURE PAGE TO GUARANTY

         IN WITNESS WHEREOF, the Initial Guarantors have caused this Guaranty to
be duly  executed by its  authorized  officer as of the day and year first above
written.

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



                                       By:      ________________________________
                                       Its:     ________________________________

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



                                       By:      ________________________________
                                       Its:     ________________________________

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



                                       By:      ________________________________
                                       Its:     ________________________________

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



                                       By:      ________________________________
                                       Its:     ________________________________




                                       13
<PAGE>


                               ANNEX I TO GUARANTY

              Reference is hereby made to the Guaranty (the  "Guaranty") made as
of  the  3rd  day  of  December  2004,  by  and  among  ____________________,  a
____________________,       ________________,       a       ___________________,
______________________, a ____________________ and __________________________, a
____________________  (the "Initial  Guarantors"  and along with any  additional
Subsidiaries of the Borrower, which become parties thereto and together with the
undersigned,  the  "Guarantors") in favor of the  Administrative  Agent, for the
ratable  benefit of the  Holders  of  Obligations,  under the Credit  Agreement.
Capitalized  terms used herein and not defined  herein  shall have the  meanings
given to them in the Guaranty.  By its execution below, the undersigned [NAME OF
NEW  GUARANTOR],  a [corporation]  [partnership]  [limited  liability  company],
agrees to become,  and does hereby  become,  a Guarantor  under the Guaranty and
agrees to be bound by such  Guaranty as if  originally a party  thereto.  By its
execution below,  the undersigned  represents and warrants as to itself that all
of the representations and warranties contained in Section 2 of the Guaranty are
true and correct in all respects as of the date hereof.

IN WITNESS  WHEREOF,  [NAME OF NEW  GUARANTOR],  a  [corporation]  [partnership]
[limited  liability company] has executed and delivered this Annex I counterpart
to the Guaranty as of this __________ day of _________, ____.



                                       [NAME OF NEW GUARANTOR]


                                       By: _____________________________________
                                       Its:_____________________________________


                                       14
<PAGE>



                                    EXHIBIT I

                        FORM OF COMMITMENT AND ACCEPTANCE



                            COMMITMENT AND ACCEPTANCE



                             Dated [_______________]

    Reference  is made to the  5-Year  Revolving  Credit  Agreement  dated as of
December 3, 2004 (the "Credit Agreement") among Applebee's  International,  Inc.
(the "Borrower"),  the financial institutions party thereto (the "Lenders"), and
JPMorgan Chase Bank,  N.A., as contractual  representative  for the Lenders (the
"Administrative  Agent").  Terms defined in the Credit Agreement are used herein
with the same meaning.

    Pursuant  to  Section  2.6.3  of the  Credit  Agreement,  the  Borrower  has
requested  an increase  in the  Aggregate  Commitment  from  $______________  to
$_____________. Such increase in the Aggregate Commitment is to become effective
on the date (the "Effective Date") which is the later of (i) _________, ____ and
(ii) the date on which the  conditions  precedent  set forth in Section 2.6.3 in
respect of such increase have been satisfied.  In connection with such requested
increase in the Aggregate Commitment, the Borrower, the Administrative Agent and
_________________ (the "Accepting Bank") hereby agree as follows:

    1.   Effective as of the Effective  Date, [the Accepting Bank shall become a
party to the Credit  Agreement  as a Lender and shall have all of the rights and
obligations of a Lender  thereunder and shall thereupon have a Commitment  under
and for  purposes  of the  Credit  Agreement  in an  amount  equal to the]  [the
Commitment of the Accepting Bank under the Credit  Agreement  shall be increased
from  $_________ to the] amount set forth opposite the Accepting  Bank's name on
the signature page hereof.

    2.   The  Accepting  Bank hereby (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements  and such
other  documents and  information  as it has deemed  appropriate to make its own
credit  analysis  and  decision  to enter into this  Commitment  and  Acceptance
Agreement; (ii) agrees that it will, independently and without reliance upon the
Administrative  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 the Credit  Agreement;
(iii) appoints and authorizes  the  Administrative  Agent to take such action as
contractual  representative  on its behalf and to exercise such powers under the
Credit  Agreement  and  the  other  Loan  Documents  as  are  delegated  to  the
Administrative  Agent by the terms  thereof,  together  with such  powers as are
reasonably  incidental  thereto;  and  (iv)  agrees  that  it  will  perform  in
accordance  with their  terms all of the  obligations  which by the terms of the
Credit Agreement are required to be performed by it as a Lender]



<PAGE>


    3.   The Borrower hereby represents  and warrants that as of the date hereof
and as of the Effective Date, (a) all  representations  and warranties  shall be
true and correct in all material respects as though made on such date and (b) no
event shall have occurred and then be continuing which  constitutes a Default or
an Unmatured Default.

    4.   THIS COMMITMENT AND  ACCEPTANCE  AGREEMENT  SHALL BE  GOVERNED  BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS INCLUDING ss.735 ILCS 105/5-1 ET
SEQ. BUT OTHERWISE  WITHOUT  REGARD TO THE CONFLICTS OF LAWS  PROVISIONS) OF THE
STATE OF ILLINOIS.

    5.   This Commitment and Acceptance Agreement may be executed in one or more
counterparts,  each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.


                                       2
<PAGE>



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

                                       APPLEBEE'S INTERNATIONAL, INC.


                                       By:______________________________________
                                       Title:___________________________________


                                       JPMORGAN CHASE BANK, N.A.,
                                       as Administrative Agent


                                       By:______________________________________
                                       Title:___________________________________


COMMITMENT                                  ACCEPTING BANK


$                                      [BANK]


                                       By:______________________________________
                                       Title:___________________________________


                                       3
<PAGE>



                          Reaffirmations of Guarantors

    Each  of the  undersigned  hereby  acknowledges  receipt  of  the  foregoing
Commitment and Acceptance.  Capitalized terms used in this Reaffirmation and not
defined  herein  shall have the meanings  given to them in the Credit  Agreement
referred  to in the  foregoing  Commitment  and  Acceptance.  Without in any way
establishing a course of dealing by the Administrative  Agent or any Lender, the
undersigned  reaffirms  the terms and  conditions  of the  Guaranty  dated as of
December 3, 2004 executed by it and  acknowledges  and agrees that such Guaranty
and each and every other Loan Document executed by the undersigned in connection
with the  Credit  Agreement  remain in full  force  and  effect  and are  hereby
ratified,  reaffirmed  and  confirmed.  All  references to the Credit  Agreement
contained in the  above-referenced  documents shall be a reference to the Credit
Agreement as so amended by the  Commitment  and  Acceptance  and as the same may
from time to time hereafter be amended, modified or restated. The failure of any
Guarantor to sign this Reaffirmation  shall not release,  discharge or otherwise
affect the obligations of any of the Guarantors hereunder or under the Guaranty.

                                       [GUARANTORS]

                                       By: _____________________________________

                                       Its: ____________________________________



                                       4