SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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


                                    FORM 10-Q


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                         Commission file number 1-10994

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


                  For the quarterly period ended March 31, 1999



                        PHOENIX INVESTMENT PARTNERS, LTD.



              DELAWARE                                 95-4191764
      (State of Incorporation)            (I.R.S. Employer Identification No.)


56 Prospect St., Hartford, Connecticut  06115-0480   (860) 403-7667
(Address of principal executive offices)     (Registrant's telephone number)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No ___


On April 30, 1999, the registrant had 43,871,022 shares of $.01 par value common
stock outstanding.


<PAGE>



               PHOENIX INVESTMENT PARTNERS, LTD. AND SUBSIDIARIES

                          Quarter Ended March 31, 1999

                                      Index


PART I -   FINANCIAL INFORMATION:

                                                                         Page   
  Item 1.  Consolidated Financial Statements:

           Consolidated Condensed Statements of Financial Condition.    3
              March 31, 1999 and December 31, 1998

           Consolidated Statements of Income .......................    4
              Three Months Ended March 31, 1999 and
              Three Months Ended March 31, 1998

           Consolidated Condensed Statements of Cash Flows .........    5
              Three Months Ended March 31, 1999 and
              Three Months Ended March 31, 1998

           Notes to the Consolidated Financial Statements...........    6


  Item 2.  Management's Discussion and Analysis of:

           Results of Operations and Financial Condition............   12

           Liquidity and Capital Resources..........................   16

           Market Risk..............................................   16

           Impact of the Year 2000 Issue............................   17

           Cautionary Statement under Section 21E of the Securities
              Exchange Act of 1934..................................   18


PART II -  OTHER INFORMATION:


  Item 1.  Legal Proceedings........................................   19

  Item 4.  Submission of Matters to a Vote of Security Holders......   19

  Item 6.  Exhibits and Reports on Form 8-K.........................   19

  Signatures........................................................   20







                                       2
<PAGE>



                                      
PART  I. Financial Information
 Item 1. Consolidated Financial Statements


               Phoenix Investment Partners, Ltd. and Subsidiaries
            Consolidated Condensed Statements of Financial Condition
                                 (in thousands)
                                                         (Unaudited)
                                                          March 31,  December31,
                                                             1999        1998
Assets
Current Assets
 Cash and cash equivalents                               $  22,582    $ 29,298
 Marketable securities, at market                           21,341      16,275
 Accounts receivable                                        40,403      35,015
 Prepaid expenses and other current assets                   3,711       2,951
                                                         ---------    --------
   Total current assets                                     88,037      83,539

 Deferred commissions                                        2,267       2,798
 Furniture, equipment and leasehold improvements, net       10,606       8,589
 Goodwill and intangible assets, net                       579,349     446,657
 Long-term investments and other assets                     19,776      22,135
                                                         ---------    --------
   Total assets                                          $ 700,035    $563,718
                                                         =========    ========

Liabilities and Stockholders' Equity
Current Liabilities
 Accounts payable and other accrued liabilities          $  35,948    $ 39,659
 Payables to related parties                                 4,609       3,032
 Broker-dealer payable                                      11,320       9,568
 Current portion of long-term debt                             889         964
                                                         ---------    --------
   Total current liabilities                                52,766      53,223

Deferred taxes, net                                         53,003      53,446
Long-term debt, net of current portion                       3,270       1,718
Convertible subordinated debentures                         76,364      76,364
Credit facilities                                          275,000     140,000
Lease obligations and other long-term liabilities            4,379       4,843
                                                         ---------    --------
   Total liabilities                                       464,782     329,594
                                                         ---------    --------

Minority Interest                                            1,290       2,531
                                                         ---------    --------

Stockholders' Equity
Common stock, $.01 par value, 100,000,000 shares
 authorized, 45,401,175 and 45,172,258 shares issued,
 and 43,669,075 and 43,710,458 shares outstanding              454         451
Additional paid-in capital                                 196,844     195,224
Retained earnings                                           47,895      44,482
Accumulated other comprehensive income                       3,695       3,571
Unearned compensation on restricted stock                   (2,427)     (1,529)
Treasury stock, at cost, 1,732,100 and 1,461,800 shares    (12,498)    (10,606)
                                                         ---------    --------
   Total stockholders' equity                              233,963     231,593
                                                         ---------    --------
   Total liabilities and stockholders' equity            $ 700,035    $563,718
                                                         =========    ========




        The accompanying notes are an integral part of these statements.


                                       3
<PAGE>


               Phoenix Investment Partners, Ltd. and Subsidiaries
           Consolidated Statements of Income and Comprehensive Income
                      (in thousands, except per share data)

                                                               (Unaudited)
                                                    Three months ended March 31,
                                                             1999        1998
Revenues
Investment management fees                               $  55,025    $ 45,654
Mutual funds - ancillary fees                                7,328       6,154
Other income and fees                                          966         649
                                                         ---------    --------
   Total revenues                                           63,319      52,457
                                                         ---------    --------

Operating Expenses
Employment expenses                                         26,654      22,731
Other operating expenses                                    14,513      11,692
Depreciation and amortization of
  leasehold improvements                                       904         913
Amortization of goodwill and intangible assets               6,314       5,504
Amortization of deferred commissions                           565         340
                                                         ---------    --------
   Total operating expenses                                 48,950      41,180
                                                         ---------    --------

Operating Income                                            14,369      11,277
                                                         ---------    --------

Equity in Earnings of Unconsolidated Affiliates                165         929
                                                         ---------    --------

Other Income - Net                                              45         515
                                                         ---------    --------

Interest (Expense) Income - Net
Interest expense                                            (3,786)     (2,952)
Interest income                                                727         395
                                                         ---------    --------
   Total interest expense - net                             (3,059)     (2,557)
                                                         ---------    --------

Income to Minority Interest                                   (737)       (488)
                                                         ---------    --------

Income Before Income Taxes                                  10,783       9,676
Provision for income taxes                                   4,745       4,251
                                                         ---------    --------
Net Income                                                   6,038       5,425

Other Comprehensive Income, Net of Tax
Unrealized gains(losses)on securities available-for-sale       124        (435)
Foreign currency translation adjustment                                    192
                                                         ---------    --------
   Total other comprehensive income (loss)                     124        (243)
                                                         ---------    --------
Comprehensive Income                                     $   6,162    $  5,182
                                                         =========    ========

Net Income                                               $   6,038    $  5,425
Series A preferred stock dividends                                       1,190
                                                         ---------    --------
Income available to common stockholders                  $   6,038    $  4,235
                                                         =========    ========

Weighted average shares outstanding
   Basic                                                    43,661      43,936
   Diluted                                                  53,446      44,530

Earnings per share
   Basic                                                 $     .14    $    .10
   Diluted                                               $     .13    $    .10

        The accompanying notes are an integral part of these statements.


                                       4
<PAGE>



               Phoenix Investment Partners, Ltd. and Subsidiaries
                 Consolidated Condensed Statements of Cash Flows
                                 (in thousands)

                                                               (Unaudited)
                                                    Three months ended March 31,
                                                             1999        1998
Cash Flows from Operating Activities:
  Net income                                             $  6,038      $ 5,425
   Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization of
      leasehold improvements                                  904          913
    Amortization of goodwill and intangible assets          6,314        5,504
    Amortization of deferred commissions                      565          340
    Income to minority interest                               737          488
    Compensation recognized under employee
      benefit plans                                           308
    Equity in earnings of unconsolidated
      affiliates, net of dividends                             27          397
    Changes in other operating assets                      (2,403)      (4,035)
    Changes in other operating liabilities                 (6,514)      (2,960)
                                                         --------      -------
   Net cash provided by operating activities                5,976        6,072
                                                         --------      -------

Cash Flows from Investing Activities:
  Purchase of subsidiaries, net of cash acquired         (137,714)      (5,853)
 (Purchase) sale of marketable securities, net             (2,932)         847
  Capital expenditures                                       (572)        (758)
  Distributions to minority interest                       (1,978)        (643)
  Purchase of long-term investments                          (360)        (408)
  Proceeds from long-term investments                         490             
                                                         --------      -------
   Net cash used in investing activities                 (143,066)      (6,815)
                                                         --------      -------

Cash Flows from Financing Activities:
  Proceeds from (repayment of) borrowings, net            134,744         (146)
  Dividends paid                                           (2,626)      (3,834)
  Stock repurchases                                        (1,892)        (721)
  Proceeds from issuance of stock                             323          577
  Other financing activities                                 (175)             
                                                         --------      --------
   Net cash provided by (used in) financing activities    130,374       (4,124)
                                                         --------      -------

Net decrease in cash and cash equivalents                  (6,716)      (4,867)
Cash and cash equivalents, beginning of period             29,298       21,872
                                                         --------      -------

   Cash and Cash Equivalents, End of Period              $ 22,582      $17,005
                                                         ========      =======


Supplemental Cash Flow Information:
   Interest paid                                         $  3,387      $ 3,140
   Income taxes paid                                     $  9,996      $ 8,944



          The accompanying notes are an integral part of these statements.


                                       5
<PAGE>



Phoenix Investment Partners, Ltd. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------

1. Basis of Presentation

   The  unaudited   consolidated  financial  statements  of  Phoenix  Investment
   Partners,  Ltd. and  Subsidiaries  (PXP or the Company)  included herein have
   been prepared in accordance with the  instructions to the Quarterly Report on
   Form 10-Q  pursuant  to the  rules  and  regulations  of the  Securities  and
   Exchange  Commission.  Certain information and footnote  disclosures normally
   included in  financial  statements  prepared  in  accordance  with  generally
   accepted  accounting  principles  have  been  condensed  or  omitted.  It  is
   suggested that these consolidated financial statements be read in conjunction
   with the financial  statements  and notes  included in the  Company's  Annual
   Report on Form 10-K for the year ended  December 31, 1998.  Reclassifications
   have been made, when necessary,  to conform the prior period  presentation to
   the current period presentation.

2. Recent Accounting Pronouncements

   PXP  adopted  Statement  of  Financial  Accounting  Standard  (SFAS) No. 131,
   "Disclosures about Segments of an Enterprise and Related  Information," as of
   December  31,  1998.  This  statement  supercedes  SFAS  No.  14,  "Financial
   Reporting for Segments of a Business  Enterprise," by replacing the "industry
   segment"  approach with the "management"  approach.  The management  approach
   designates  the internal  organization  that is used by management for making
   operating  decisions and assessing  performance  as the source for reportable
   segments. SFAS No. 131 also requires disclosures about products and services,
   geographic areas, and major customers.  As this  pronouncement only addresses
   financial statement disclosure,  it has no impact on PXP's financial results.
   (See Note 6)

3. Acquisition Related Activity

   On March 1, 1999,  PXP acquired the retail  mutual fund and  closed-end  fund
   businesses  of  the  New  York  City-based   Zweig  Fund  Group  (Zweig)  for
   consideration of approximately  $135 million.  The agreement  provides for an
   additional  payout of up to $29 million over the next three years,  dependent
   upon revenue growth of the purchased business.

   The purchase price for Zweig represents the consideration paid and the direct
   costs incurred by PXP related to the purchase. Preliminary analyses have been
   performed  in order to identify  intangible  assets and to allocate  purchase
   price to such  assets.  Additional  information  is necessary to complete the
   purchase price  allocation.  The excess of purchase price over the fair value
   of acquired net tangible  assets of Zweig  totaled  $135.0  million.  Of this
   excess  purchase  price,  $78.1 million has been  preliminarily  allocated to
   intangible assets, primarily associated with investment management contracts,
   which are  being  amortized  over  their  estimated  useful  lives  using the
   straight-line  method.  The average  estimated  useful life of the intangible
   assets is  approximately  12 years.  The remaining  excess  purchase price of
   $56.9 million has been  classified as goodwill and is being amortized over 40
   years using the straight-line method. Related amortization of $.8 million has
   been expensed for the period ended March 31, 1999.




                                       6
<PAGE>



   The following table summarizes the preliminary calculation and allocation of
   Zweig's purchase price
   (in thousands):

    Purchase Price:
    Consideration paid or payable                    $  135,000
    Transaction costs                                     2,325
                                                     ----------  
       Total Purchase Price                          $  137,325
                                                     ==========       

    Purchase Price Allocation:
    Fair value of acquired net assets                $    2,359
    Identified intangibles                               78,063
    Goodwill                                             56,903
                                                     ----------
       Total Allocation of Purchase Price            $  137,325
                                                     ==========

4. Pro Forma Results

   PXP's financial  results for the first quarter of 1999 include the operations
   of Zweig from March 1, 1999,  while the first  quarter of 1998  excludes  the
   operations of Zweig.  Management believes that, for comparative purposes, the
   most meaningful  financial  presentation  for these periods is on a pro forma
   basis.

   The  following  pro forma  financial  information  for the three months ended
   March 31, 1999 and 1998 is derived from the historical  financial  statements
   of PXP and  Zweig,  and  gives  effect  to the  acquisition  of  Zweig by PXP
   assuming  the  acquisition  was  effected  on January 1, 1998.  The pro forma
   financial  information  does not necessarily  reflect the actual results that
   would  have  been   obtained  had  the   acquisition   taken  effect  on  the
   aforementioned assumed date.

                                                            Pro Forma
                                                  Three months ended March 31,
                                                      1999           1998  
                                                   ---------      ---------
                                                  (in thousands, except per
                                                        share amounts)

    Revenues                                       $  70,002      $  63,024
                                                   ---------      ---------
    Employment expenses                               29,118         25,362
    Other operating expenses                          17,241         15,924
    Amortization of goodwill and
     intangible assets                                 7,969          7,969
                                                   ---------      ---------
    Operating income                                  15,674         13,769
    Other income - net                                   210          1,444
    Interest expense - net                            (4,343)        (4,490)
    Income to minority interest                         (737)          (488)
                                                   ---------      ---------
    Income before income taxes                        10,804         10,235
    Provision for income taxes                         4,786          4,579
                                                   ---------      ---------
    Net income                                     $   6,018      $   5,656
                                                   =========      =========

    Earnings per share
      Basic                                        $     .14      $     .10
      Diluted                                      $     .13      $     .10




                                       7
<PAGE>



5. Dividends and Other Capital Transactions

   On May 6, 1999,  PXP's Board of  Directors  declared a quarterly  dividend of
   $.06 per common share payable June 10, 1999, to stockholders of record on May
   28, 1999. PXP intends to continue to pay quarterly cash  dividends,  however,
   future  payment  of cash  dividends  by PXP will  depend  upon the  financial
   condition, capital requirements and earnings of PXP.

   On April 3, 1998,  PXP exchanged  3.2 million  shares of Series A Convertible
   Exchangeable   Preferred   Stock   (Preferred   Stock)  for  6%   Convertible
   Subordinated  Debentures  (Debentures)  due 2015.  Each share of  outstanding
   Preferred Stock, including unpaid and accrued dividends,  was exchanged for a
   Debenture with a $25.00 face value. Interest on the Debentures for the period
   from March 10, 1999  through June 9, 1999 will be payable on June 10, 1999 to
   registered holders as of May 20, 1999.

   As of March  31,  1999,  the  Company,  in  accordance  with  the  previously
   announced stock repurchase program, had purchased a total of 1,732,100 shares
   of PXP common stock at a cost of $12.5 million.

6. Segment Information

   PXP has determined that its reportable segments are those based on the method
   used for internal  reporting,  which  disaggregates  the business by customer
   category. PXP's reportable segments are its retail and institutional lines of
   business.  The retail line primarily serves the individual investor by acting
   as advisor to and, in certain  instances,  distributor  for  open-end  mutual
   funds and  managed  accounts.  The  institutional  line  provides  management
   services primarily to corporate entities and multi-employer retirement funds,
   as well as endowment,  insurance and other special  purpose funds,  including
   closed-end funds.

   The following tables summarize  pertinent financial  information  relative to
   PXP's operations:

     Three Months Ended March 31, 1999                        All
                                        Retail Institutional Other     Total 
                                                   (in thousands)

     Revenues                           $ 40,268  $22,526   $   525   $ 63,319
                                        --------  -------   -------   --------
     Employment and
      other operating expenses            26,383   16,127       126     42,636
     Amortization of goodwill
      and intangible assets                3,531    2,783                6,314
                                        --------  -------   -------   --------
     Operating income                     10,354    3,616       399     14,369
     Other (expense) income - net           (93)      142       161        210
     Interest expense                    (1,823)     (779)   (1,184)   (3,786)
     Interest income                         153       45       529        727
     Minority interest                               (737)               (737)
                                        --------  -------   -------   -------
     Income (loss) before income taxes  $  8,591  $ 2,287   $   (95)  $ 10,783
                                        ========  =======   =======   ========

                                                     (in millions)
     Assets under management            $ 24,778  $33,739   $  --     $ 58,517
                                        ========  =======   =======   ========





                                       8
<PAGE>



     Three Months Ended March 31, 1998                         All 
                                        Retail Institutional  Other    Total
                                                 (in thousands)

     Revenues                           $ 33,721  $18,211   $   525   $ 52,457
                                        --------  -------   -------   --------
     Employment and
      other operating expenses            23,642   12,034               35,676
     Amortization of goodwill
      and intangible assets                3,146    2,358                5,504
                                        --------  -------   -------   --------
     Operating income                      6,933    3,819       525     11,277
     Other income - net                       31      367     1,046      1,444
     Interest expense                    (2,460)     (442)      (50)   (2,952)
     Interest income                         116       14       265        395
     Minority interest                               (488)               (488)
                                        --------  -------   -------   -------
     Income before income taxes         $  4,620  $ 3,270   $ 1,786   $  9,676
                                        ========  =======   =======   ========

                                                     (in millions)
     Assets under management            $ 20,400  $28,904   $  --     $ 49,304
                                        ========  =======   =======   ========

   The "All Other" column represents corporate office revenue and expenses which
   are not directly attributable to either line of business.

   There are no intersegment  revenues.  Balance sheet asset information by line
   of business is not reported as the information is not produced internally and
   is not utilized in managing the business.

7. Comprehensive Income

   The components of other comprehensive income, and related tax effects, are as
   follows for the periods ended March 31, (in thousands):

    1999                                                       Tax
                                               Before-Tax   (Expense) Net-of-Tax
                                                Amount       Benefit     Amount
    Unrealized gains on securities
      available-for-sale:
      Unrealized holding gains arising
        during period                           $  210      $    (86)   $   124
                                                ------      --------    -------
    Other comprehensive income                  $  210      $    (86)   $   124
                                                ======      ========    =======

    1998                                                       Tax
                                               Before-Tax   (Expense) Net-of-Tax
                                                Amount       Benefit     Amount

    Foreign currency translation adjustment     $  325      $   (133)   $   192
    Unrealized losses on securities
      available-for-sale:
      Unrealized holding losses arising
        during period                             (737)          302       (435)
                                                ------      --------    -------
    Other comprehensive loss                    $ (412)     $    169    $  (243)
                                                ======      ========    =======





                                       9
<PAGE>



   The  following  tables  summarize   accumulated  other  comprehensive  income
   balances (in thousands):

    As of March 31, 1999:                                            Accumulated
                                                        Unrealized      Other
                                                     Gains(Losses) Comprehensive
                                                      on Securities    Income

    Balance as of December 31, 1998                      $  3,571    $   3,571
    Current period change                                     124          124
                                                         --------    ---------
    Balance as of March 31, 1999                         $  3,695    $   3,695
                                                         ========    =========


    As of December 31, 1998:                                         Accumulated
                                             Foreign   Unrealized      Other
                                            Currency Gains(Losses) Comprehensive
                                              Items   on Securities    Income

    Balance as of December 31, 1997          $ (1,171)   $ 11,845    $  10,674
    Current period change                       1,171      (8,274)      (7,103)
                                             --------    --------    ---------
    Balance as of December 31, 1998          $    --     $  3,571    $   3,571
                                             ========    ========    =========

8. Earnings Per Share

   Earnings  per share  (EPS) is  calculated  in  accordance  with SFAS No. 128,
   "Earnings per Share." Basic EPS is computed by dividing  income  available to
   common   stockholders  by  the  weighted  average  number  of  common  shares
   outstanding  for the  period.  The  computation  of diluted EPS is similar to
   basic EPS,  except that the denominator is increased to include the number of
   additional  common  shares that would have been  outstanding  if  potentially
   dilutive  common  shares had been issued,  and the numerator is increased for
   any  related  net income  effect.  Potentially  dilutive  shares are based on
   outstanding stock options and convertible securities.

   The  following  tables  reconcile  PXP's basic  earnings per share to diluted
   earnings per share:

                                       For the Three Months Ended March 31, 1999
                                                                Per-Share
                                         Income       Shares      Amount
                                           (in thousands)

    Basic EPS
    Income available to common
      stockholders                      $ 6,038       43,661      $  .14
                                                                  ======

    Effect of Dilutive Securities
    Stock options                                        285
    6% convertible debentures               667        9,500
                                        -------       ------

    Diluted EPS
    Income available to common
      stockholders and assumed
      conversions                       $ 6,705       53,446      $  .13
                                        =======       ======      ======





                                       10
<PAGE>



                                       For the Three Months Ended March 31, 1998
                                                                Per-Share
                                         Income       Shares      Amount
                                           (in thousands)

    Net income                          $ 5,425
    Less: preferred stock dividends       1,190
                                        -------               
    Basic EPS
    Income available to common
      stockholders                        4,235       43,936      $  .10
                                                                  ======

    Effect of Dilutive Securities
    Stock options                                        594
                                        -------       ------
    Diluted EPS
    Income available to common
      stockholders and assumed
      conversions                       $ 4,235       44,530      $  .10
                                        =======       ======      ======

   In accordance  with SFAS No. 128, the March 31, 1998  computation  of diluted
   earnings per share,  and the  respective  weighted  average  diluted  shares,
   excludes  the effect of the  Preferred  Stock  since  these  securities  were
   anti-dilutive.  Had the Preferred Stock not been anti-dilutive,  the weighted
   average  diluted  shares for the three months ended March 31, 1998 would have
   been 54.7 million.

9. Long-term Debt

   On March  17,  1999,  PXP  entered  into a five  year,  $175  million  Credit
   Agreement with a consortium of banks.  At March 31, 1999, PXP had outstanding
   borrowings  of  $75  million  under  this  facility.  In  addition,  PXP  had
   outstanding borrowings under an existing $200 million credit facility of $200
   million  and  $140   million  at  March  31,  1999  and  December  31,  1998,
   respectively.  The Zweig  acquisition  was financed  through  borrowings from
   these  credit  facilities.  Interest  rates  on both  credit  facilities  are
   variable.

   On March 17, 1999, PXP and the banks amended the financial  covenant  section
   of its existing $200 million Credit Agreement to be consistent with the terms
   of the new $175 million Credit Agreement.






                                       11
<PAGE>


               Phoenix Investment Partners, Ltd. and Subsidiaries


Item 2.  Management's Discussion and Analysis of Results of Operations and
Financial Condition

Business Description

Phoenix Investment Partners, Ltd. and subsidiaries (PXP or the Company) provide
a variety of financial services to a broad base of institutional, corporate and
individual clients.

PXP  currently  operates  two  lines  of  business:   retail  and  institutional
investment  management.  The  retail  investment  management  line  of  business
provides  investment  management  services on a discretionary  basis  (including
administrative  services) with products  consisting of open-end mutual funds and
individually  managed  accounts.  Individually  managed  accounts are  primarily
administered  through  broker-dealer  sponsored  and  distributed  wrap programs
offered to high net-worth individuals.  The institutional  investment management
line  of  business  provides  discretionary  and  non-discretionary   investment
management   services   primarily  to  corporate   entities  and  multi-employer
retirement  funds,  as well as endowment,  insurance  and other special  purpose
funds, including closed-end funds.

The following table  summarizes  operating  revenues,  pre-tax income and assets
under  management  by line of  business as of, and for the three  months  ended,
March 31, 1999 and 1998:

                                                          Assets Under
                       Revenues        Pre-Tax Income      Management   
                    1999      1998     1999      1998     1999     1998
                    ----      ----     ----      ----     ----     ----
                    (in thousands)     (in thousands)      (in millions)
Retail            $40,268   $33,721  $ 8,591   $ 4,620  $24,778   $20,400
Institutional      22,526    18,211    2,287     3,270   33,739    28,904
All other  *          525       525      (95)    1,786                  
                  -------   -------  -------   -------  -------   -------
Total             $63,319   $52,457  $10,783   $ 9,676  $58,517   $49,304
                  =======   =======  =======   =======  =======   =======  

*  - All other represents  corporate office revenue and expenses,  which are not
     attributed directly to either line of business.




                                       12
<PAGE>



Results of Operations

Assets Under Management

At March 31, 1999, PXP had $58.5 billion of assets under management, an increase
of $5.0  billion from  December 31, 1998,  and $9.2 billion from March 31, 1998.
The increase from  December 31, 1998 is primarily the result of the  acquisition
of the New York  City-based  Zweig Fund Group (Zweig),  on March 1, 1999,  which
increased  assets under  management  by $3.7  billion as of March 31, 1999.  The
increase from March 31, 1998 is primarily due to positive market performance, as
well as the acquisition of Zweig. The pro forma assets under management at March
31, 1998  assumes  the Zweig assets had been acquired as of that date. Since the
revenues  of the  Company  are  substantially  earned  based upon  assets  under
management, this information is important to an understanding of the business.

                                                    Historical    Pro Forma
                          March 31,   December 31,   March 31,    March 31,
                            1999          1998         1998         1998   
                                            (in millions)
Retail:
  Open-end Mutual Funds $    16,658   $   14,407    $   14,085    $  16,787
  Managed Accounts  *         8,120        7,322         6,315        6,315
                        -----------   ----------    ----------    ---------
                             24,778       21,729        20,400       23,102

Institutional:
  Closed-end Funds            4,726        3,505         3,373        4,782
  Institutional Accounts**   20,196       19,468        17,207       17,477
  PHL General Account         8,817        8,785         8,324        8,324
                        -----------   ----------    ----------    ---------
                             33,739       31,758        28,904       30,583
                        -----------   ----------    ----------    ---------

                        $    58,517   $   53,487    $   49,304    $  53,685
                        ===========   ==========    ==========    =========

*  Managed Accounts  represent assets which are individually  managed for retail
   clients.
** Institutional  Accounts  include 100% of the assets managed by Seneca Capital
   Management.


Three Months Ended March 31, 1999 Compared with Three Months Ended March 31, 
1998 - Historical

Revenues  for the three  months  ended  March 31, 1999 of $63.3  million,  which
includes  $3.2  million  for Zweig,  increased  $10.9  million  (21%) from $52.5
million  for the same  period in 1998.  Excluding  the  effects  of  Zweig,  the
Company's  revenues  for the three months  ended March 31, 1999  increased  $7.7
million (15%)  compared to the same period in 1998.  Revenues for the retail and
institutional  lines of  business  increased  $6.5  million  and  $4.3  million,
respectively.

Investment management fees of $55.0 million for the three months ended March 31,
1999,  which  includes $2.7 million for Zweig,  increased  $9.4 million (21%) as
compared  to  $45.7  million  for the same  period  in  1998.  Excluding  Zweig,
management  fees  earned  from the retail line of  business,  including  managed
accounts and open-end mutual funds, increased $3.6 million due to a $3.4 billion
increase in average assets under  management  offset,  in part, by a decrease in
the fee schedule for certain wrap programs.  Excluding  Zweig,  management  fees
earned from the institutional  line of business increased $3.1 million primarily
as a result of a $3.6 billion increase in average assets under  management.  The
institutional  accounts  contributed  $2.3 million to the increase in management
fees as a result of a $3.1  billion  increase  in average  assets  managed.  The
overall increase in average assets managed in both the retail and  institutional
lines of business is due to strong investment performance by investment managers
both in absolute  terms and relative to the strong  performance of the market in
general.




                                       13
<PAGE>


Mutual funds - ancillary  fees,  a component of the retail line of business,  of
$7.3  million for the three  months  ended March 31,  1999,  which  includes $.3
million for Zweig,  increased $1.2 million (19%) as compared to $6.2 million for
the same  period in 1998.  Administrative  fees  earned on the  Phoenix-Engemann
Funds  increased  $.3  million  as a result of an  increase  in  average  assets
managed.  Fund  accounting fees earned on open-end mutual funds and Phoenix Home
Life Mutual Insurance Company (PHL) sponsored  variable  products  increased $.4
million  primarily as a result of an increase in average assets under management
and an approved  change in the fee  structure.  This change was  implemented  in
order to reimburse Phoenix Equity Planning  Corporation  (PEPCO), a wholly-owned
subsidiary  of  PXP,  for  additional   administrative   costs  related  to  the
out-sourcing of  substantially  all of PXP's fund  accounting  operations in the
first quarter of 1998.

Other  income and fees of $1.0 million for the three months ended March 31, 1999
increased  $.3  million  (49%) as compared to $.6 million for the same period in
1998, due to fees earned administering the Zweig closed-end funds.

Operating  expenses for the three months ended March 31, 1999 of $48.9  million,
which  includes $2.6 million for Zweig,  increased $7.8 million (19%) from $41.2
million for the same  period in 1998,  of which $3.1  million  and $4.5  million
related to the retail and institutional lines of business, respectively.

Employment  expenses of $26.7 million for the three months ended March 31, 1999,
which  includes $.8 million for Zweig,  increased $3.9 million (17%) as compared
to $22.7  million  for the  same  period  in  1998.  An  increase  in  incentive
compensation of $2.8 million resulted from improved sales in both the retail and
institutional lines of business,  and improved  performance by several portfolio
managers and research  analysts.  Compensation  expense increased $.3 million in
the first quarter of 1999 due to the severance costs related to  the elimination
of certain sales positions as a result of  the  Zweig  acquisition.  A  decrease
of  $.3  million  resulted  from  the out-sourcing of substantially all of PXP's
fund  accounting   operations  in  the  first  quarter  of 1998.  Annual  salary
adjustments  increased  compensation  by $.5  million,  partially  offset  by  a
reduction in staff levels in 1998 particularly in  the  investment portfolio and
sales areas.

Other  operating  expenses of $14.5 million for the three months ended March 31,
1999,  which  includes $1.0 million for Zweig,  increased  $2.8 million (24%) as
compared to $11.7 million for the same period in 1998. Payments to a third party
administrator,  relating to the out-sourcing of substantially  all of PXP's fund
accounting  operations in the first quarter of 1998,  increased  other operating
expenses  in  the  retail  line  of   business  by  $1.6   million.   Additional
administrative   costs   incurred   on  behalf  of  the   Phoenix-Engemann   and
Phoenix-Seneca Funds (Funds), which were recovered by administrative fees earned
on the Funds,  increased other operating expenses by $.3 million.  Restructuring
charges  of $.2  million in 1998 were the result of the  Company's  decision  to
out-source  substantially all of its fund accounting operations effective in the
first  quarter of 1998. No such charges were incurred for the three months ended
March 31, 1999.

Depreciation and  amortization of leasehold  improvements of $.9 million for the
three  months  ended  March 31,  1999,  which  includes  $.1  million for Zweig,
remained relatively constant from $.9 million for the same period in 1998.

Amortization  of goodwill  and  intangible  assets of $6.3 million for the three
months  ended March 31,  1999  increased  $.8 million  (15%) as compared to $5.5
million  for the same  period  in 1998 as a result  of the  amortization  of the
intangible  assets and goodwill  identified in the  preliminary  purchase  price
allocation of Zweig.

Amortization  of  deferred  commissions,  a  component  of the  retail  line  of
business, of $.6 million for the three months ended March 31, 1999 increased $.2
million  (66%) as  compared  to $.3  million  for the same period in 1998 due to
increased  redemptions of B share mutual funds.  Pasadena Capital  Corporation's
deferred commissions asset established prior to February 1, 1998 continues to be
amortized.

Operating  income of $14.4  million  for the three  months  ended March 31, 1999
increased $3.1 million (27%) as compared to $11.3 million for the same period in
1998 as a result of the changes discussed above.




                                       14
<PAGE>


Equity in earnings  of  unconsolidated  affiliates  of $.2 million for the three
months  ended March 31,  1999  decreased  $.8  million  (82%) as compared to $.9
million for the same period in 1998.  PXP sold its investment in Beutel, Goodman
& Company,  Ltd. (BG) in the fourth quarter of 1998. PXP's share of BG's  income
in the first quarter of 1998 was $.9 million.

Other  income - net of $45  thousand  for the three  months ended March 31, 1999
decreased  $.5  million  (91%) as compared to $.5 million for the same period in
1998. An increase in losses on marketable  securities  decreased other income by
$.2  million,  with the  remaining  decrease  being  the  result  of other  less
significant changes.

Interest expense - net of $3.1 million for the three months ended March 31, 1999
increased  $.5 million  (20%) as compared to $2.6 million for the same period in
1998.  The  exchange  of PXP's  preferred  stock  for  convertible  subordinated
debentures in April 1998 resulted in additional interest expense of $1.1 million
in the first quarter of 1999, while  eliminating PXP's preferred stock dividend.
An increase of $.7 million is due to additional  interest charges resulting from
the  financing of the Zweig  acquisition.  A decrease of $.9 million is due to a
lower  average  outstanding  principal  balance on its credit  facilities  and a
decrease in the average  interest  rate in the first quarter of 1999 compared to
the same period in 1998.  Other  interest  and  dividend  income  decreased  $.3
million.

Income to minority  interest of $.7 million and $.5 million for the three months
ended  March  31,  1999  and  1998,   respectively,   represents   the  minority
shareholders'  interest  in the  equity  earnings  of  Seneca,  which  is  fully
consolidated in the Company's financial statements.

Net income for the three months ended March 31, 1999 of $6.0 million reflects an
increase of $.6  million  (11%) from the $5.4  million for the first  quarter of
1998,  resulting from the increased  income and expenses  discussed  above.  The
effective  tax rate of 44% for the three  months  ended March 31, 1999  remained
unchanged relative to the same period in 1998.


Three Months Ended March 31, 1999 Compared with Three Months Ended March 31, 
1998 - Pro Forma
(see Note 4)

Except for the items noted  below,  the pro forma  variances  for March 31, 1999
compared to March 31, 1998 are substantially the same as historical.

Investment management fees - pro forma of $60.5 million  for  the  three  months
ended March 31, 1999 increased $6.1  million  (10%) from $54.5 million  for  the
same period in 1998.  In addition to the historical variances noted above, Zweig
investment management fees decreased $.6 million due  to a $.6 billion  decrease
in assets under management representing the net impact of  performance  and  net
asset outflows. 

Net income - pro forma of $6.0 million for the three months ended March 31, 1999
reflects an increase of $.4 million (6%)as compared to $5.7 million for the same
period in 1998,  resulting from the effects of the increased income and expenses
discussed  above.  The effective tax rate  decreased to 44% for the three months
ended March 31, 1999 from 45% for the same period in 1998.




                                       15
<PAGE>


Liquidity and Capital Resources

The  Company's  business  is not  considered  to be capital  intensive.  Working
capital  requirements  for  the  Company  have  historically  been  provided  by
operating  cash flow. It is expected that such cash flows will continue to serve
as the principal source of working capital for the Company for the near future.

The Company's  current capital  structure,  as of April 30, 1999,  includes 43.9
million shares of common stock and $76.4 million of 6% Convertible  Subordinated
Debentures with a principal value of $25.00 per debenture.  The current dividend
rate on common stock is $.06 per share per quarter. If the dividend rate remains
constant  for  1999,  the  total  annual  dividend  on  common  stock  would  be
approximately $10.5 million based upon shares outstanding at April 30, 1999. The
total  annual  interest   expense  on  the  debentures   based  upon  debentures
outstanding at April 30, 1999, at an interest rate of 6%, would be $4.6 million.

The Company has two five-year credit facilities,  totaling $375 million, with no
required principal  repayments prior to maturity ($200 million matures in August
2002 and $175 million matures in March 2004). The outstanding  obligations under
the credit  facilities at March 31, 1999 were $275 million with an interest rate
of approximately  5.4%. The credit  agreements  contain  financial and operating
covenants  including,  among  other  provisions,  requirements  that the Company
maintain  certain   financial  ratios  and  satisfy  certain   financial  tests,
restrictions on the ability to incur indebtedness, and limitations on the amount
of the Company's  capital  expenditures.  At March 31, 1999,  the Company was in
compliance with all covenants  contained in the credit  agreements.  The Company
believes  that funds from  operations  and  amounts  available  under the credit
facility will provide adequate liquidity for the foreseeable future.

Management considers the liquidity of the Company to be adequate to meet present
and anticipated needs.

Market Risk

The Company is exposed to the impact of interest rate changes and changes in the
market value of its investments  and assets  managed.  The Company does not have
any derivative  investments  and, as of the fourth quarter of 1998, is no longer
exposed to foreign currency fluctuations.

The  Company's  exposure to changes in interest  rates is limited to  borrowings
under two five-year credit  agreements,  which have variable interest rates. The
average interest rate on the credit  agreements in the first quarter of 1999 and
for all of 1998 was approximately 5.4% and 6.0%, respectively.  In addition, the
Company has subordinated  debentures  bearing interest at 6%. At March 31, 1999,
the  Company  estimated  that the  fair  value  of the  subordinated  debentures
approximated market value.

The Company  invests  excess cash in  marketable  securities,  which  consist of
mutual  fund  investments,  of  which  the  Company  is the  advisor,  and  U.S.
Government obligations.  The fair value of these investments approximated market
value at March 31, 1999.

The  Company's  revenues  are largely  driven by the market  value of its assets
under  management  and is therefore  exposed to  fluctuations  in market prices.
Management fees earned on managed  accounts and certain  institutional  accounts
(approximately 43% of total assets under management), for any given quarter, are
based on the  market  value of the  portfolio  on the last day of the  preceding
quarter.  Any  significant  increase  or decline  in the market  value of assets
managed on the last day of a quarter would result in a corresponding increase or
decline in revenues for the following three months.




                                       16
<PAGE>


Impact of the Year 2000 Issue

The Year 2000 Issue is the result of computer  programs  being written using two
digits  rather  than four to define  the  applicable  year.  Any of a  company's
computer programs that have  date-sensitive  software may recognize a date using
"00" as the year 1900 rather than the year 2000.  This could  result in a system
failure or miscalculation  causing disruptions of operations,  including,  among
other things, a temporary inability to process  transactions,  send invoices, or
engage in similar normal business  activities.  In addition,  other non-business
specific  systems  such as security  alarms,  elevators,  telephones,  etc.  are
subject to malfunction due to their  dependence upon computers or computer chips
for proper operation.

Based upon Company assessments,  it has been determined that the Company will be
required  to modify or replace  portions of its  software  so that its  computer
systems  will  properly  utilize  dates beyond  December  31, 1999.  The Company
believes that with  modifications  to existing  software and  conversions to new
software,  the Year 2000 Issue will be mitigated.  It is  anticipated  that such
modifications  and conversions  will be completed on a timely basis. The failure
of computer programs to recognize the year 2000 could have a negative impact on,
but is not  limited  to, the  handling  of  securities  trades,  the  pricing of
securities  and the  servicing of client  accounts.  If such  modifications  and
conversions are not made, or are not completed timely, the Year 2000 Issue would
have a material  impact on the  operations of the Company.  As such, the Company
has  created a Year 2000  Project  Office to address  the Year 2000  Issue.  The
assessment  and  inventory  phases  of the  project  have  been  completed.  The
remediation phase is virtually complete and the testing and contingency planning
phases are in process.

The  Company  has  initiated  formal  communications  with  all of its  software
vendors,  service providers and information providers to determine the extent to
which the Company is  vulnerable  to those third  parties'  failure to remediate
their own Year 2000  Issue.  The  Company's  total  Year 2000  project  cost and
estimate to complete  include the estimated  costs and time  associated with the
impact of a third party's Year 2000 Issue, and are based on presently  available
information.  However,  if the systems of other companies on which the Company's
systems rely are not converted in a timely fashion, or are not converted at all,
or are converted in a manner that is  incompatible  with the Company's  systems,
the Company's operations and financial results could be adversely affected.

The Company is utilizing internal resources to reprogram,  or replace,  and test
the software  for Year 2000  modifications.  Certain  systems are already in the
process of being converted due to previous Company initiatives.  The Company has
substantially  completed  the  remediation  phase of the Year 2000  project  and
expects  to  complete  this work by June 30,  1999.  The  Company  expects to be
substantially  complete  with the testing phase of the Year 2000 project by June
30, 1999 with the  remainder  scheduled to be done in the third quarter of 1999.
The  testing of the  contingency  plans will occur in the third  quarter of 1999
where appropriate.  The total cost of the Year 2000 project is estimated at $5.3
million  and is being  funded  through  operating  cash  flows,  which are being
expensed as  incurred.  To date,  the Company has  incurred  approximately  $3.3
million related to the assessment of its Year 2000 project, the development of a
Year 2000 plan,  remediation,  testing, and contingency planning. The total cost
to the Company to become Year 2000  compliant is not expected to have a material
impact on the Company's results of operations.

The costs of the project and the date on which the Company plans to complete the
Year  2000  modifications  are based on  management's  best  estimates  and were
derived utilizing numerous  assumptions of future events including the continued
availability  of certain  resources,  third party  modification  plans and other
factors.  However,  there can be no guarantee that these estimates will prove to
be  accurate  and actual  results  could  differ  materially  from those  plans.
Specific factors that might cause such material differences include, but are not
limited to, the  availability  and cost of personnel  trained in this area,  the
ability  to  locate  and  correct  all  relevant  computer  codes,  and  similar
uncertainties.




                                       17
<PAGE>



Cautionary Statement under Section 21E of the Securities Exchange Act of 1934

This quarterly report contains forward-looking statements that involve risks and
uncertainties,  including,  but not limited  to, the  following:  The  Company's
performance is highly dependent on the amount of assets under management,  which
may decrease for a variety of reasons  including  changes in interest  rates and
adverse  economic  conditions;  the Company's  performance  is very sensitive to
changes in interest rates, which may increase from current levels; the Company's
performance  is  affected  by the demand for and the  market  acceptance  of the
Company's products and services; the Company's business is extremely competitive
with several  competitors being substantially  larger than the Company;  and the
Company's performance may be impacted by changes in the performance of financial
markets and general economic conditions. The costs involved to complete the Year
2000 modifications are based on management's best estimates,  which were derived
based  upon  assumptions  relative  to future  events  including  the  continued
availability  of certain  resources,  third party  modification  plans and other
factors.  There can be no guarantee  that these  estimates  will be achieved and
actual results could differ  materially from those plans.  Specific factors that
might  cause such  material  differences  include,  but are not  limited to, the
availability  and cost of personnel  trained in this area, the ability to locate
and  correct  all  relevant  computer  codes,  and  similar  uncertainties.  The
potential  problems  related to the Year 2000 Issue could  affect the ability to
provide  advisory  services  for the  Company's  products.  Accordingly,  actual
results  may  differ  materially  from  those set  forth in the  forward-looking
statements.  Attention  is also  directed  to other  risk  factors  set forth in
documents filed by the Company with the Securities and Exchange Commission.





                                       18
<PAGE>



PART II. Other Information

 Item 1. Legal Proceedings

         With regard to the litigation  between PXP and Gigatek Memory  Systems,
         Inc.,  as outlined in PXP's 1998 Annual  Report on Form 10-K,  in April
         1999 the court transferred the case to its docket for complex cases.
         No new trial date has been set.


 Item 4. Submission of Matters to a Vote of Security Holders

         No items submitted.

 Item 6. Exhibits and Reports on Form 8-K

     (a) The following documents are filed as part of these reports:

     4(v)First  Amendment  dated as of March  17,  1999,   amending  the  Credit
         Agreement  dated as of August 14,  1997 among the  Registrant,  various
         financial  institutions,  Bank of America  National  Trust and  Savings
         Association as Syndication Agent and Documentation  Agent, and The Bank
         of New York as Administrative Agent.

     4(w)Credit  Agreement  dated as of March 17,  1999  among  the  Registrant,
         various  financial  institutions,  Bank of America  National  Trust and
         Savings Association as Administrative Agent, Deutsche Bank AG, New York
         Branch as Syndication  Agent, and The Bank of New York as Documentation
         Agent.

     (b) Exhibits and Reports on Form 8-K.

         A Current  Report on Form 8-K,  with  Exhibits,  was filed on March 15,
         1999  describing the  acquisitions  of  Zweig/Glaser  Advisers,  Euclid
         Advisors LLC, Zweig Advisors Inc., Zweig Total Return  Advisors,  Inc.,
         and Zweig Securities Corp. (collectively, the Zweig Fund Group).

         A  Current  Report  on Form  8-K/A  was  filed on May 14,  1999,  which
         incorporated  combined  historical  financial  statements for the Zweig
         Fund Group and pro forma financial  statements for the Zweig Fund Group
         acquisition.




                                       19
<PAGE>



                                   Signatures

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                    Phoenix Investment Partners, Ltd.




May 14, 1999                        /s/ Philip R. McLoughlin      
                                    ------------------------------
                                    Philip R. McLoughlin, Chairman and
                                    Chief Executive Officer


May 14, 1999                        /s/ William R. Moyer          
                                    ------------------------------
                                    William R. Moyer, Chief Financial Officer






                                       20
<PAGE>





51135317     99512352

                                                                            4(v)

                                 FIRST AMENDMENT


      THIS FIRST AMENDMENT  dated as of March 17, 1999 (this "First  Amendment")
amends the Credit Agreement dated as of August 14, 1997 (the "Credit Agreement")
among PHOENIX INVESTMENT PARTNERS, LTD. (formerly known as Phoenix Duff & Phelps
Corporation,  the "Company"),  PHOENIX HOME LIFE MUTUAL  INSURANCE  COMPANY (the
"Guarantor"), various financial institutions, Bank of America National Trust and
Savings Association,  as Syndication Agent and Documentation Agent, and The Bank
of New York, as Administrative Agent. Terms defined in the Credit Agreement are,
unless otherwise defined herein or the context otherwise  requires,  used herein
as defined therein.

      WHEREAS,  the Company,  the  Guarantor,  the Banks and the  Administrative
Agent desire to amend the Credit Agreement as hereinafter set forth;

      NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1 Amendments.  Effective on (and subject to the occurrence of) the First
Amendment  Effective  Date (as defined  below),  the Credit  Agreement  shall be
amended in accordance with Sections 1.1 through 1.13 below:

SECTION 1.1  Amendment to  Definition of Eligible  Assignee.  The  definition of
"Eligible  Assignee"  in Section 1.1 is amended by adding the  following  clause
(iv) immediately before the period at the end thereof:

      "; and (iv) any other Person agreed to by the Company and the
Administrative Agent".

SECTION 1.2  Amendment  to  Definition  of S&P Rating.  The  definition  of "S&P
Rating" in Section 1.1 is amended by deleting the words  "Insurer  Claims Paying
Ability" therein and substituting the words "Insurer  Financial Strength Rating"
therefor.

SECTION 1.3  Amendment to Section 5.5.  Section 5.5 is amended by (a) adding the
words "Company or the"  immediately  prior to the first reference to "Guarantor"
therein,  (b)  deleting  the word "or" at the end of  clause  (a)  therein,  (c)
deleting the period at the end of clause (b) and  substituting  "; or" therefore
and (d) adding the following new subsection (c):

            "(c)  seeks damages in an amount reasonably expected to have a
            Material Adverse Effect."

SECTION 1.4 Addition of Representations  and Warranties.  The following Sections
5.21 and Section 5.22 are added to the end of Article 5:



<PAGE>



51135317     99512352
                                       

            "5.21  Compliance.  The Guarantor and each of its Subsidiaries is in
      compliance  with all  applicable  laws  and  regulations,  all  applicable
      ordinances, decrees, requirements, orders and judgments of, and all of the
      terms of any applicable  licenses and permits issued by, any  governmental
      body,  agency or official,  and all agreements and instruments to which it
      may be subject or any of its properties  may be bound,  in each case where
      the violation thereof may have a Material Adverse Effect.

            5.22 Year 2000  Problem.  The  Guarantor and the Company and each of
      their  respective  Subsidiaries  have  reviewed  the  areas  within  their
      business and  operations  which could be  adversely  affected by, and have
      developed or are  developing a program to address on a timely  basis,  the
      "Year 2000 Problem" (that is, the risk that computer  applications used by
      the  Guarantor and the Company and each of their  respective  Subsidiaries
      may be unable to recognize and perform properly  date-sensitive  functions
      involving  certain  dates prior to and any date after  December 31, 1999).
      Based on such review and program, the Guarantor and the Company reasonably
      believe  that the "Year 2000  Problem"  will not have a  Material  Adverse
      Effect."

SECTION 1.5 Amendment to Section  6.2(c).  Section 6.2(c) is amended by deleting
the words "Guarantor's  Claims Paying Rating" therein and substituting the words
"Guarantor's Financial Strength Rating" therefor.

SECTION 1.6 Amendment to Section 7.4. Section 7.4 is amended by (a) deleting the
word "and" at the end of subsection (c) thereof,  (b) changing  subsection "(d)"
therein to subsection "(e)", and (c) adding the following new subsection (d):

            "(d)  Indebtedness  of the  Company  in  connection  with the Credit
      Agreement  dated as of March 17, 1999 among the  Company,  the  Guarantor,
      various financial  institutions,  BofA, as Administrative  Agent, Deutsche
      Bank AG, New York Branch, as Syndication  Agent, and BNY, as Documentation
      Agent; and".

SECTION 1.7 Amendment to Section  7.7(c).  Section 7.7(c) is amended by deleting
the reference to "Section  7.4(d)"  therein and  substituting  "Section  7.4(e)"
therefor.

SECTION 1.8  Amendment  to Section  7.8.  Section 7.8 is amended by deleting the
amount  "$10,000,000"  therein and  substituting the words "10% of the Company's
net worth (at the time of the proposed Joint Venture)" therefor.

SECTION 1.9 Amendment to Section 8.1. Section 8.1 is amended by (a) deleting the
amount  "$825,000,000"   therein  and  substituting  the  amount  "$900,000,000"
therefor and (b) deleting the date "September 30, 1997" therein and substituting
the date "March 31, 1999" therefor.

SECTION 1.10  Amendment  to Section 8.2.  Section 8.2 is amended by deleting the
amount "5.5%" therein and substituting the amount "7.0%" therefor.



<PAGE>


SECTION 1.11  Amendment  to Section 9.1.  Section 9.1 is amended by (a) deleting
the amount  "$165,000,000"  therein and substituting  the amount  "$185,000,000"
therefor and (b) deleting the date "September 30, 1997" therein and substituting
the date "March 31, 1999" therefor.

SECTION 1.12  Amendment  to Section 9.3.  Section 9.3 is amended and restated in
its entirety to read as follows:

            "9.3  Total Debt to Capital Ratio.  The Company shall maintain a
      Total Debt to Capital Ratio of not in excess of the following percentages
      at any time during the following periods:

                  Percentage        Periods

                  60.0%             March 17, 1999 through March 31, 2000

                  57.5%             April 1, 2000 through March 31, 2001

                  52.5%             April 1, 2001 and thereafter"

SECTION 1.13  Amendment  to Section 9.4.  Section 9.4 is amended and restated in
its entirety to read as follows:

            "9.4  Senior Debt to EBITDA  Ratio.  The  Company  shall  maintain a
      Senior  Debt to EBITDA  Ratio of not in excess  of the  following  amounts
      during the following periods:

                  Amount            Period 

                  3.0 to 1          March 17, 1999 through March 31, 2000

                  2.5 to 1          April 1, 2000 through March 31, 2001

                  2.0 to 1          April 1, 2001 and thereafter"



<PAGE>


SECTION 2 Representations and Warranties.  Each of the Company and the Guarantor
represents and warrants to the Administrative  Agent and the Banks that (a) each
representation  and warranty  set forth in Section 5 of the Credit  Agreement is
true and  correct as of the date of the  execution  and  delivery  of this First
Amendment  by the Company and the  Guarantor  (and  assuming  the  effectiveness
hereof), with the same effect as if made on such date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier  date);  (b) the execution and
delivery by the  Company  and the  Guarantor  of this First  Amendment,  and the
performance  by each of the Company and the Guarantor of its  obligations  under
the Credit  Agreement  as amended  hereby (as so amended,  the  "Amended  Credit
Agreement"),  (i)  are  within  the  corporate  powers  of the  Company  and the
Guarantor,  (ii) have been duly authorized by all necessary  corporate action on
the part of the Company and the  Guarantor,  (iii) have  received all  necessary
governmental and regulatory  approval and (iv) do not and will not contravene or
conflict  with,  or result in or require the creation or  imposition of any lien
under, any provision of law or of the charter or by-laws of the Guarantor or any
of its  Subsidiaries or of any agreement,  instrument,  order or decree which is
binding  upon the  Guarantor  or any of its  Subsidiaries;  and (c) the  Amended
Credit  Agreement is, and when executed and delivered will be, the legal,  valid
and binding  obligation  of each of the Company and the  Guarantor,  enforceable
against the Company and the  Guarantor in accordance  with its terms,  except as
enforceability may be limited by bankruptcy, insolvency or other similar laws of
general application affecting the enforcement of creditors' rights or by general
principles of equity limiting the availability of equitable remedies.

SECTION 3  Effectiveness.  The  amendments  set forth in  Section 1 above  shall
become  effective on the date (the "First  Amendment  Effective  Date") when the
Administrative Agent shall have received each of the following  documents,  each
in form and substance satisfactory to the Administrative Agent:

(a)   counterparts  of  this  First  Amendment  executed  by  the  Company,  the
      Guarantor,  the  Majority  Banks  and the  Administrative  Agent (it being
      understood  that the  Administrative  Agent may  conclusively  rely on any
      counterpart signature hereof received by facsimile); and

(b) such other documents as the Administrative Agent may reasonably request.

SECTION 4   Miscellaneous.

SECTION  4.1  Continuing  Effectiveness,  etc.  As herein  amended,  the  Credit
Agreement  shall  remain in full  force and effect  and is hereby  ratified  and
confirmed  in all  respects.  After  the First  Amendment  Effective  Date,  all
references  in the  Credit  Agreement  and the other Loan  Documents  to "Credit
Agreement" or similar terms shall refer to the Amended Credit Agreement.

SECTION 4.2 Counterparts.  This First Amendment may be executed in any number of
counterparts  and by the different  parties on separate  counterparts,  and each
such  counterpart  shall be deemed to be an original  but all such  counterparts
shall together constitute one and the same First Amendment.

SECTION 4.3 Governing Law. This First  Amendment  shall be a contract made under
and governed by the laws of the State of New York  applicable to contracts  made
and to be performed entirely within such State.

SECTION 4.4 Successors and Assigns.  This First  Amendment shall be binding upon
the  Company,  the  Guarantor,  the Banks and the  Agents  and their  respective
successors  and  assigns,  and shall  inure to the benefit of the  Company,  the
Guarantor, the Banks and the Agents and the respective successors and assigns of
the Company, the Guarantor, the Banks and the Agents.




<PAGE>




Delivered at Chicago, Illinois, as of the day and year first above written.


                                    PHOENIX INVESTMENT PARTNERS, LTD.


                                    By:                /s/ William R. Moyer   
                                    Title:              Senior V.P. and CFO   



<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                                    PHOENIX HOME LIFE MUTUAL INSURANCE
                                     COMPANY

                                    By:             /s/ Raymond E. Cummings   
                                    Title:                        Treasurer   



<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                                    BANK OF AMERICA NATIONAL TRUST
                                    AND SAVINGS ASSOCIATION, as
                                    Syndication Agent and Documentation Agent

                                    By:           /s/ Elizabeth W.F. Bishop   
                                    Title:                   Vice President   



<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                                    BANK OF AMERICA NATIONAL TRUST
                                    AND SAVINGS ASSOCIATION, as a Bank

                                    By:           /s/ Elizabeth W.F. Bishop   
                                    Title:                   Vice President   



<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                                    THE BANK OF NEW YORK, as
                                    Administrative Agent

                                    By:              /s/ Scott H. Buitekant   
                                    Title:                   Vice President   



<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                                    THE BANK OF NEW YORK, as a Bank


                                    By:              /s/ Scott H. Buitekant   
                                    Title:                   Vice President   



<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                                    FLEET NATIONAL BANK, as a Bank


                                    By:            /s/ Elizabeth B. Shelley   
                                    Title:                   Vice President   



<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                                    BANK OF MONTREAL, as a Bank


                                    By:                 /s/ Bruce A. Pietka   
                                    Title:                         Director   



<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                                    SUNTRUST BANK, ATLANTA as a Bank


                                    By:              /s/ Jennifer Harrelson   
                                    Title:                   Vice President   

                                    By:             /s/ John O. Fields, Jr.   
                                    Title:                   Vice President   




<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                                    STATE STREET BANK AND TRUST
                                    COMPANY, as a Bank


                                    By:              /s/ Edward M. Anderson   
                                    Title:                   Vice President   





<PAGE>


Delivered at Chicago, Illinois, as of the day and year first above written.


                             DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR
                         CAYMAN ISLAND BRANCH, as a Bank


                             By:                     /s/ George Korchowsky    
                             Title:                         Vice President    

                             By:                            /s/ Ruth Leung    
                             Title:                               Director    





<PAGE>



51135219      99512352

                                                                            4(w)



                               CREDIT AGREEMENT

                          Dated as of March 17, 1999

                                      among

                      PHOENIX INVESTMENT PARTNERS, LTD.,
                  PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY,



                        BANK OF AMERICA NATIONAL TRUST
                           AND SAVINGS ASSOCIATION,
                           as Administrative Agent,


                               DEUTSCHE BANK AG
                              as Syndication Agent,

                              THE BANK OF NEW YORK,
                             as Documentation Agent,


                 THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO


                                       and


                    NATIONSBANC MONTGOMERY SECURITIES LLC,
                   as Sole Lead Arranger and Sole Book Manager





<PAGE>



51135219      99512352

                                TABLE OF CONTENTS
Section                                                                   Page
||
ARTICLE I  DEFINITIONS.......................................................1
         1.1     Certain Defined Terms.......................................1
         1.2     Other Interpretive Provisions..............................18
         1.3     Accounting Principles......................................19

ARTICLE II  THE CREDITS.....................................................20
         2.1     Amounts and Terms of Commitments...........................20
         2.2     Loan Accounts..............................................20
         2.3     Procedure for Borrowing....................................20
         2.4     Conversion and Continuation Elections......................21
         2.5     Voluntary Termination or Reduction of
                 Commitments................................................22
         2.6     Optional Prepayments.......................................23
         2.7     Mandatory Prepayments of Loans; Mandatory
                 Commitment Reductions......................................23
         2.8     Repayment..................................................23
         2.9     Interest...................................................23
         2.10    Fees.......................................................24
                 (a)    Arrangement, Agency Fees............................24
                 (b)    Facility Fee........................................24
                 (c)    Closing Fee.........................................25
         2.11    Computation of Fees and Interest...........................25
         2.12    Payments by the Company....................................25
         2.13    Payments by the Banks to the Administrative
                 Agent......................................................26
         2.14    Sharing of Payments, Etc...................................26

ARTICLE III  TAXES, YIELD PROTECTION AND ILLEGALITY.........................27
         3.1     Taxes......................................................27
         3.2     Illegality.................................................29
         3.3     Increased Costs and Reduction of Return....................29
         3.4     Funding Losses.............................................30
         3.5     Inability to Determine Rates...............................31
         3.6     Certificates of Banks......................................31
         3.7     Survival...................................................31

ARTICLE IV  CONDITIONS PRECEDENT............................................31
         4.1     Conditions of Initial Loans................................32
                 (i)    Credit Agreement....................................32
                 (ii)   Notes...............................................32
                 (iii)  Resolutions; Incumbency.............................32
                 (iv)   Organization Documents; Good Standing...............32
                 (v)    Legal Opinions......................................32
                 (vi)   Payment of Fees.....................................33
                 (vii)  Certificate.........................................33
                 (viii)Other Documents......................................33
         4.2     Conditions to All Borrowings...............................33
                 (a)    Notice of Borrowing.................................34
                 (b)    Continuation of Representations and Warranties......34
                 (c)    No Existing Default.................................34

ARTICLE V  REPRESENTATIONS AND WARRANTIES...................................34
         5.1     Corporate Existence and Power..............................34
         5.2     Corporate Authorization; No Contravention..................34
         5.3     Governmental Authorization.................................35
         5.4     Binding Effect.............................................35
         5.5     Litigation.................................................35
         5.6     Contractual Obligation.....................................36
         5.7     ERISA Compliance...........................................36
         5.8     Use of Proceeds; Margin Regulations........................36
         5.9     Title to Properties........................................36
         5.10    Taxes......................................................37
         5.11    Financial Condition........................................37
         5.12    Environmental Matters......................................38
         5.13    Regulated Entities.........................................38
         5.14    No Burdensome Restrictions.................................38
         5.15    Copyrights, Patents, Trademarks and
                 Licenses, etc..............................................38
         5.16    Subsidiaries...............................................39
         5.17    Insurance..................................................39
         5.18    Full Disclosure............................................39
         5.19    Zweig Acquisition Agreement................................39
         5.20    Compliance.................................................40
         5.21    Year 2000 Problem..........................................40

ARTICLE VI  AFFIRMATIVE COVENANTS...........................................40
         6.1     Financial Statements.......................................40
         6.2     Certificates; Other Information............................41
         6.3     Notices....................................................42
         6.4     Preservation of Corporate Existence, Etc...................43
         6.5     Maintenance of Property....................................43
         6.6     Insurance..................................................43
         6.7     Payment of Obligations.....................................44
         6.8     Compliance with Laws.......................................44
         6.9     Compliance with ERISA......................................44
         6.10    Inspection of Property and Books and Records...............44
         6.11    Environmental Laws.........................................45
         6.12    Use of Proceeds............................................45

ARTICLE VII  NEGATIVE COVENANTS.............................................45
         7.1     Limitation on Liens........................................45
         7.2     Mergers, Consolidations and Sales of Assets................46
         7.3     Loans and Investments......................................47
         7.4     Limitation on Indebtedness.................................47
         7.5     Transactions with Affiliates...............................48
         7.6     Use of Proceeds............................................48
         7.7     Contingent Obligations.....................................48
         7.8     Joint Ventures.............................................48
         7.9     Lease Obligations..........................................48
         7.10    Restricted Payments........................................49
         7.11    ERISA......................................................49
         7.12    Change in Business.........................................49
         7.13    Accounting Changes.........................................49
         7.14    Pari Passu.................................................49
         7.15    Phoenix....................................................50
         7.16    Subordinated Debt and Preferred Stock......................50
         7.17    Capital Expenditures.......................................50

ARTICLE VIII  GUARANTOR'S FINANCIAL COVENANTS...............................50
         8.1     Guarantor's Minimum Total SAP Adjusted
                 Capital....................................................50
         8.2     Invested Assets............................................50
         8.3     NAIC Ratings...............................................50
         8.4     Real Estate................................................50
         8.5     Risk Based Capital.........................................50
         8.6     NonPerforming Real Estate..................................50
         8.7     Indebtedness to Capital....................................51

ARTICLE IX  COMPANY'S FINANCIAL COVENANTS...................................51
         9.1     Shareholders' Equity.......................................51
         9.2     EBITDA to Interest Ratio...................................51
         9.3     Total Debt to Capital Ratio................................51
         9.4     Senior Debt to EBITDA Ratio................................51

ARTICLE X GUARANTY..........................................................52
         10.1    Guaranty...................................................52
         10.2    Guaranty Unconditional.....................................52
         10.3    Discharge only upon Payment in Full;
                 Reinstatement in Certain Circumstances.....................53
         10.4    Waiver by the Guarantor....................................53
         10.5    Subrogation................................................53
         10.6    Stay of Acceleration.......................................53

ARTICLE XI  EVENTS OF DEFAULT...............................................53
         11.1    Event of Default...........................................53
                 (a)    NonPayment..........................................53
                 (b)    Representation or Warranty..........................53
                 (c)    Specific Defaults...................................54
                 (d)    Other Defaults......................................54
                 (e)    CrossDefault........................................54
                 (f)    Insolvency; Voluntary Proceedings...................54
                 (g)    Involuntary Proceedings.............................54
                 (h)    ERISA...............................................55
                 (i)    Monetary Judgments..................................55
                 (j)    NonMonetary Judgments...............................55
                 (k)    Change of Control...................................55
                 (l)    Loss of Licenses....................................55
         11.2    Remedies...................................................56
         11.3    Rights Not Exclusive.......................................56

ARTICLE XII  THE ADMINISTRATIVE AGENT.......................................56
         12.1    Appointment................................................56
         12.2    Delegation of Duties.......................................57
         12.3    Exculpatory Provisions.....................................57
         12.4    Reliance by Administrative Agent...........................57
         12.5    Notice of Default..........................................58
         12.6    NonReliance on Administrative Agent and Other Banks........58
         12.7    Indemnification............................................59
         12.8    Administrative Agent in Its Individual Capacity............60
         12.9    Successor Administrative Agent.............................60
         12.10   Syndication Agent and Documentation Agent..................61

ARTICLE XIII  MISCELLANEOUS.................................................61
         13.1    Amendments and Waivers.....................................61
         13.2    Notices....................................................62
         13.3    No Waiver; Cumulative Remedies.............................63
         13.4    Costs and Expenses.........................................63
         13.5    Indemnity..................................................63
         13.6    Payments Set Aside.........................................64
         13.7    Successors and Assigns.....................................64
         13.8    Assignments, Participations, etc...........................64
         13.9    Confidentiality............................................66
         13.10   Setoff.....................................................67
         13.11   Automatic Debits of Fees...................................67
         13.12   Notification of Addresses, Lending
                 Offices, Etc...............................................68
         13.13   Counterparts...............................................68
         13.14   Severability...............................................68
         13.15   No Third Parties Benefited.................................68
         13.16   Governing Law and Jurisdiction.............................68
         13.17   Waiver of Jury Trial.......................................68
         13.18   Entire Agreement...........................................69


<PAGE>



schedules

Schedule 1.1         Pricing Schedule
Schedule 2.1         Commitments
Schedule 5.5         Litigation
Schedule 5.7         ERISA
Schedule 5.11        Permitted Liabilities
Schedule 5.12        Environmental Matters
Schedule 5.16        Subsidiaries and Minority Interests
Schedule 5.17        Insurance Matters
Schedule 7.1         Permitted Liens
Schedule 7.4         Permitted Indebtedness
Schedule 7.7         Contingent Obligations
Schedule 13.2        Lending Offices; Addresses for Notices

EXHIBITS

Exhibit A            Form of Notice of Borrowing
Exhibit B            Form of Notice of Conversion/Continuation
Exhibit C            Form of Compliance Certificate
Exhibit D-1          Form of Legal Opinion of Company's Counsel
Exhibit D-2          Form of Legal Opinion of Guarantor's Counsel
Exhibit E            Form of Assignment and Acceptance
Exhibit F            Form of Promissory Note


<PAGE>




51135219      99512352

                               CREDIT AGREEMENT


      This CREDIT  AGREEMENT is entered into as of March 17,1999,  among Phoenix
Investment Partners, Ltd., a Delaware corporation (the "Company"),  Phoenix Home
Life Mutual Insurance  Company,  a New York domiciled  mutual insurance  company
(the "Guarantor"), the several financial institutions from time to time party to
this Agreement (collectively,  the "Banks";  individually, a "Bank") and Bank of
America National Trust and Savings Association,  as Administrative Agent for the
Banks,  Deutsche Bank AG, as Syndication Agent for the Banks and The Bank of New
York, as Documentation Agent for the Banks.

      WHEREAS,  the  Banks  have  agreed  to make  available  to the  Company  a
revolving  credit  facility  guaranteed  by the  Guarantor  upon the  terms  and
conditions set forth in this Agreement;

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


                                    ARTICLE I

                                   DEFINITIONS

      1.1  Certain Defined.  The following terms have the following meanings:

            "Acquisition"   means  any   transaction   or   series  of   related
      transactions for the purpose of or resulting,  directly or indirectly,  in
      (a) the acquisition of all or substantially all of the assets of a Person,
      or of any  business  or division of a Person,  (b) the  acquisition  of in
      excess of 50% of the capital stock, partnership interests or equity of any
      Person, or otherwise  causing any Person to become a Subsidiary,  or (c) a
      merger or  consolidation  or any other  combination  with  another  Person
      (other than a Person that is a  Subsidiary)  provided  that the Company or
      the Subsidiary is the surviving entity.

            "Administrative Agent" means BofA, in its capacity as administrative
      agent for the Banks  hereunder,  and any  successor  administrative  agent
      arising under Section 12.9.

            "Administrative  Agent's  Payment  Office"  means  the  address  for
      payments  set  forth on the  signature  page  hereto  in  relation  to the
      Administrative  Agent, or such other address as the  Administrative  Agent
      may from time to time specify.



<PAGE>




51135219      99512352
                                       -5-

            "Affiliate"  means,  as to  any  Person,  any  other  Person  which,
      directly or  indirectly,  is in control of, is controlled  by, or is under
      common  control  with,  such  Person.  A Person shall be deemed to control
      another  Person  if  the  controlling   Person   possesses,   directly  or
      indirectly,  the power to direct or cause the direction of the  management
      and policies of the other Person,  whether through the ownership of voting
      securities, by contract, or otherwise.

            "Agent-Related  Persons" means BofA, BNY, Deutsche and any successor
      Administrative  Agent  arising  under  Section  12.9,  together with their
      respective Affiliates (including,  in the case of BofA, the Arranger), and
      the officers,  directors,  employees, agents and attorneys-in-fact of such
      Persons and Affiliates.

            "Agents" mean the  Administrative  Agent,  Deutsche, as  Syndication
      Agent, and BNY, as Documentation Agent.

            "Agreement" means this Credit Agreement.

            "Annual  Statement"  means the  annual  financial  statement  of any
      insurance  company as required to be filed with the  Department,  together
      with all exhibits or schedules  filed  therewith,  prepared in  conformity
      with SAP. References to amounts on particular exhibits,  schedules, lines,
      pages and  columns  on such  Annual  Statements  are based on the  formats
      promulgated by the NAIC for 1997 Annual Statements for the applicable type
      of  insurance  company.  If such format is changed in future years so that
      different  information is contained in such items or they no longer exist,
      it is understood that the reference is to information consistent with that
      recorded  in the  referenced  item in the  1997  Annual  Statement  of the
      insurance company.

            "Applicable  Fee  Rate"  means,  at any  time,  the rate  per  annum
      determined in accordance with Schedule 1.1.

            "Applicable  Margin" means,  at any time, with respect to Eurodollar
      Rate Loans, the rate per annum determined in accordance with Schedule 1.1.

            "Assignee" has the meaning specified in subsection 13.8(a).

            "Attorney  Costs" means and includes all fees and  disbursements  of
      any law firm or other external counsel, the non-duplicative allocated cost
      of internal legal services and all disbursements of internal counsel.

            "Bank" has the meaning specified in the introductory clause hereto.

            "Bankruptcy  Code" means the Federal  Bankruptcy  Reform Act of 1978
      (11 U.S.C. ss.101, et seq.).



<PAGE>


            "Base Rate" means, for any day, a rate per annum equal to the higher
      of:  (a) 0.50% per annum  above the  Federal  Funds Rate in effect on such
      date; and (b) the BofA Rate in effect on such day.

            Any  change in the BofA Rate  shall  take  effect at the  opening of
      business on the day specified in the public announcement of such change.

            "Base Rate Loan" means a Loan that bears  interest based on the Base
      Rate.

            "BNY" means The Bank of New York, a New York banking corporation.

            "BofA" means Bank of America National Trust and Savings Association,
      a national banking association.

            "BofA Rate" means a rate of interest  per annum equal to the rate of
      interest publicly announced in San Francisco, California by BofA from time
      to time as its "reference  rate".  (The "reference  rate" is a rate set by
      BofA based upon various factors including BofA's costs and desired return,
      general economic conditions and other factors,  and is used as a reference
      point for pricing some loans, which may be priced at, above, or below such
      announced rate.)

            "Borrowing" means a borrowing  hereunder  consisting of Loans of the
      same Type made to the Company on the same day by the Banks  under  Article
      II,  and,  other  than in the case of Base  Rate  Loans,  having  the same
      Interest Period.

            "Borrowing  Date" means any date on which a Borrowing  occurs  under
      Section 2.3.

            "Business Day" means any day other than a Saturday,  Sunday or other
      day on which  commercial  banks in New York City or Chicago are authorized
      or required by law to close and, if the applicable Business Day relates to
      any Eurodollar  Rate Loan,  means such a day on which dealings are carried
      on in the applicable Eurodollar dollar interbank market.

            "Capital  Adequacy  Regulation"  means  any  guideline,  request  or
      directive  of any central  bank or other  Governmental  Authority,  or any
      other law, rule or regulation,  whether or not having the force of law, in
      each case,  regarding  capital  adequacy of any bank or of any corporation
      controlling a bank.

            "Change of Control" means



<PAGE>


            (a) 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) of 20% or more of the voting power of the Guarantor; or

            (b)  the  failure  of  the  Guarantor  to  own  either  directly  or
      indirectly,  free and clear of all Liens or other  encumbrances,  at least
      51% of the outstanding shares of the voting stock and of the capital stock
      of the Company on a fully diluted basis.

            "Closing Date" means the date on which all conditions  precedent set
      forth in Section 4.1 are satisfied or waived by all Banks (or, in the case
      of subsection  4.1(a)(vi),  waived by the Person  entitled to receive such
      payment).

            "Code" means the  Internal  Revenue  Code of 1986,  and  regulations
      promulgated thereunder.

            "Commitment",  as to each Bank, has the meaning specified in Section
      2.1.  As of the  date  of  this  Agreement,  the  amount  of the  combined
      Commitments of all Banks is $175,000,000.

            "Company  Action Level" means 200% of the  Authorized  Control Level
      Risk-Based  Capital  of  the  Guarantor.   The  Authorized  Control  Level
      Risk-Based  Capital of the Guarantor  shall be computed in the manner from
      time to time  prescribed by the  Insurance  Department of the State of New
      York for  inclusion  in the  Annual  Statement  of the  Guarantor  of such
      Department.  Such Authorized  Control Level Risk-Based  Capital  currently
      appears on page 23 of such statement in column 1, line 28.

            "Compliance  Certificate" means a certificate  substantially  in the
      form of Exhibit C.



<PAGE>


            "Contingent  Obligation"  means,  as to any  Person,  any  direct or
      indirect  liability of that  Person,  whether or not  contingent,  with or
      without recourse,  (a) with respect to any Indebtedness,  lease, dividend,
      letter  of credit  or other  obligation  (the  "primary  obligations")  of
      another Person (the "primary  obligor"),  including any obligation of that
      Person (i) to  purchase,  repurchase  or  otherwise  acquire  such primary
      obligations or any security therefor, (ii) to advance or provide funds for
      the payment or discharge of any such  primary  obligation,  or to maintain
      working  capital or equity capital of the primary  obligor or otherwise to
      maintain  the net worth or solvency or any  balance  sheet item,  level of
      income or financial  condition of the primary  obligor,  (iii) to purchase
      property, securities or services primarily for the purpose of assuring the
      owner of any such primary obligation of the ability of the primary obligor
      to make payment of such primary obligation, or (iv) otherwise to assure or
      hold  harmless the holder of any such primary  obligation  against loss in
      respect thereof (each, a "Guaranty  Obligation");  (b) with respect to any
      Surety  Instrument  issued for the  account of that  Person or as to which
      that Person is otherwise liable for reimbursement of drawings or payments;
      (c) to purchase any  materials,  supplies or other  property  from,  or to
      obtain the services of, another  Person if the relevant  contract or other
      related  document or obligation  requires that payment for such materials,
      supplies or other property, or for such services, shall be made regardless
      of whether delivery of such materials,  supplies or other property is ever
      made or tendered,  or such services are ever performed or tendered, or (d)
      in respect of any Swap Contract.  The amount of any Contingent  Obligation
      shall, in the case of Guaranty Obligations,  be deemed equal to the stated
      or determinable  amount of the primary obligation in respect of which such
      Guaranty  Obligation is made or, if not stated or if  indeterminable,  the
      maximum reasonably  anticipated  liability in respect thereof,  and in the
      case of other  Contingent  Obligations,  shall  be  equal  to the  maximum
      reasonably anticipated liability in respect thereof.

            "Contractual  Obligation"  means, as to any Person, any provision of
      any  security  issued  by such  Person or of any  agreement,  undertaking,
      contract, indenture, mortgage, deed of trust or other instrument, document
      or  agreement to which such Person is a party or by which it or any of its
      property is bound.

            "Conversion/Continuation  Date"  means  any  date  on  which,  under
      Section 2.4, the Company (a) converts  Loans of one Type to another  Type,
      or (b) continues as Eurodollar Rate Loans, but with a new Interest Period,
      Eurodollar Rate Loans having Interest Periods expiring on such date.

            "Default" means any event or circumstance  which, with the giving of
      notice,  the lapse of time,  or both,  would  (if not  cured or  otherwise
      remedied during such time) constitute an Event of Default.

            "Department"  means the  applicable  Governmental  Authority  of the
      state of domicile of an insurance  company  responsible for the regulation
      of said insurance company.

            "Deutsche" means Deutsche Bank Securities, Inc.

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

            "EBITDA" means, with respect to the Company and its Subsidiaries, as
      the end of any fiscal  quarter  for the four fiscal  quarters  then ending
      earnings before interest, taxes, depreciation and amortization, calculated
      in  accordance  with GAAP;  provided,  that,  for any four fiscal  quarter
      period in which the Zweig Acquisition shall have occurred, EBITDA shall be
      calculated on a pro forma basis as if such acquisition had occurred on the
      first day of such period.


<PAGE>



            "Eligible  Assignee" means (i) a commercial bank organized under the
      laws of the United  States,  or any state  thereof,  and having a combined
      capital and surplus of at least $100,000,000 (or its equivalent in foreign
      currency);  (ii) a commercial  bank organized  under the laws of any other
      country which is a member of the Organization for Economic Cooperation and
      Development,  or a political subdivision of any such country, and having a
      combined  capital and surplus of at least  $100,000,000 (or its equivalent
      in foreign  currency),  provided that such bank is acting through a branch
      or  agency  located  in the  United  States;  and  (iii) a Person  that is
      primarily engaged in the business of commercial  banking and that is (A) a
      Subsidiary  of a Bank,  (B) a Subsidiary  of a Person of which a Bank is a
      Subsidiary, or (C) a Person of which a Bank is a Subsidiary;  and (iv) any
      other Person agreed to by the Company and the Administrative Agent.

            "Environmental  Claims" means all claims,  however asserted,  by any
      Governmental  Authority or other Person  alleging  potential  liability or
      responsibility  for violation of any Environmental  Law, or for release or
      injury to the environment.

            "Environmental  Laws"  means  all  federal,  state  or  local  laws,
      statutes,  common law duties,  rules,  regulations,  ordinances and codes,
      together  with  all  administrative  orders,  directed  duties,  requests,
      licenses,   authorizations  and  permits  of,  and  agreements  with,  any
      Governmental Authorities, in each case relating to environmental,  health,
      safety and land use matters.

            "ERISA" means the Employee  Retirement  Income Security Act of 1974,
      and regulations promulgated thereunder.

            "ERISA  Affiliate"  means  any  trade or  business  (whether  or not
      incorporated)  under common control with the Company within the meaning of
      Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
      for purposes of provisions relating to Section 412 of the Code).



<PAGE>


            "ERISA Event" means (a) a Reportable Event with respect to a Pension
      Plan;  (b) a  withdrawal  by the  Company  or any ERISA  Affiliate  from a
      Pension  Plan subject to Section 4063 of ERISA during a plan year in which
      it was a substantial  employer (as defined in Section 4001(a)(2) of ERISA)
      or a cessation of operations  which is treated as such a withdrawal  under
      Section  4062(e) of ERISA;  (c) a complete  or partial  withdrawal  by the
      Company or any ERISA Affiliate from a  Multiemployer  Plan or notification
      that a Multiemployer Plan is in reorganization; (d) the filing of a notice
      of intent to terminate, the treatment of a Plan amendment as a termination
      under Section 4041 or 4041A of ERISA,  or the  commencement of proceedings
      by the PBGC to  terminate a Pension  Plan or  Multiemployer  Plan;  (e) an
      event or  condition  which might  reasonably  be  expected  to  constitute
      grounds  under  Section  4042 of  ERISA  for the  termination  of,  or the
      appointment of a trustee to administer,  any Pension Plan or Multiemployer
      Plan;  or (f) the  imposition  of any  liability  under Title IV of ERISA,
      other than PBGC  premiums  due but not  delinquent  under  Section 4007 of
      ERISA, upon the Company or any ERISA Affiliate.

            "Eurodollar  Rate"  means,  with  respect  to  the  Interest  Period
      applicable  to any  Eurodollar  Loan,  a rate of  interest  per annum,  as
      determined  by the  Administrative  Agent,  obtained by dividing (and then
      rounding to the nearest  1/16 of 1% or, if there is no nearest 1/16 of 1%,
      then to the next higher 1/16 of 1%):

            (a) the  rate,  as  reported  by BofA to the  Administrative  Agent,
      quoted by BofA to leading banks in the interbank  eurodollar market as the
      rate  at  which  BofA is  offering  Dollar  deposits  in an  amount  equal
      approximately to the Eurodollar Loan of BofA to which such Interest Period
      shall  apply  for a period  equal to such  Interest  Period,  as quoted at
      approximately  11:00 a.m. two Business Days prior to the first day of such
      Interest Period, by

            (b) a number  equal to 1.00 minus the  aggregate  of the then stated
      maximum  rates  during such  Interest  Period of all reserve  requirements
      (including,  without  limitation,  marginal,  emergency,  supplemental and
      special  reserves),  expressed as a decimal,  established  by the Board of
      Governors of the Federal Reserve System and any other banking authority to
      which BofA and other major  United  States money center banks are subject,
      in respect of eurocurrency funding (currently referred to as "Eurocurrency
      liabilities"  in  Regulation  D of the Board of  Governors  of the Federal
      Reserve  System)  or in  respect  of any  other  category  of  liabilities
      including  deposits by reference to which the interest  rate on Eurodollar
      Loans is  determined  or any  category  of  extensions  of credit or other
      assets which includes loans by non-domestic  offices of any Bank to United
      States  residents.   Such  reserve  requirements  shall  include,  without
      limitation,  those imposed under such Regulation D. Eurodollar Loans shall
      be deemed to  constitute  Eurocurrency  liabilities  and as such  shall be
      deemed to be  subject  to such  reserve  requirements  without  benefit of
      credits for  proration,  exceptions or offsets which may be available from
      time to time to any Bank  under such  Regulation  D. The  Eurodollar  Rate
      shall be adjusted  automatically  on and as of the  effective  date of any
      change in any such reserve requirement.

            "Eurodollar Rate Loan" means a Loan that bears interest based on the
      Eurodollar Rate.

            "Event  of  Default"  means  any  of  the  events  or  circumstances
      specified in Section 11.1.



<PAGE>


            "Exchange  Act" means the  Securities  and Exchange Act of 1934, and
      regulations promulgated thereunder.

            "FDIC"  means the Federal  Deposit  Insurance  Corporation,  and any
      Governmental Authority succeeding to any of its principal functions.

            "Federal Funds Rate" means, for any day, a rate per annum (expressed
      as a decimal,  rounded upwards, if necessary,  to the next higher 1/100 of
      1%) equal to the weighted average of the rates on overnight  federal funds
      transactions  with  members of the  Federal  Reserve  System  arranged  by
      federal  funds  brokers on such day, as published  by the Federal  Reserve
      Bank of New York on the Business Day next  succeeding  such day,  provided
      that  (i) if the day for  which  such  rate is to be  determined  is not a
      Business  Day,  the Federal  Funds Rate for such day shall be such rate on
      such  transactions  on the next preceding  Business Day as so published on
      the  next  succeeding  Business  Day,  and  (ii)  if  such  rate is not so
      published  for any day,  the Federal  Funds Rate for such day shall be the
      average of the  quotations for such day on such  transactions  received by
      BofA as determined by BofA and reported to the Administrative Agent.

            "FRB" means the Board of  Governors of the Federal  Reserve  System,
      and  any  Governmental  Authority  succeeding  to  any  of  its  principal
      functions.

            "GAAP" means generally accepted accounting principles set forth from
      time  to  time  in the  opinions  and  pronouncements  of  the  Accounting
      Principles   Board  and  the  American   Institute  of  Certified   Public
      Accountants and statements and pronouncements of the Financial  Accounting
      Standards Board (or agencies with similar functions of comparable  stature
      and authority within the U.S. accounting profession), which are applicable
      to the circumstances as of the date hereof.

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

            "Guaranty  Obligation"  has the meaning  specified in the definition
      of "Contingent Obligation."

            "Highest  Lawful  Rate" means as to any Bank,  the  maximum  rate of
      interest,  if any, that at any time or from time to time may be contracted
      for, taken, charged or received by such Bank on the obligations owed to it
      under the laws applicable to such Bank and this transaction.


<PAGE>



            "Indebtedness"  of any Person means,  without  duplication,  (a) all
      indebtedness for borrowed money; (b) all obligations issued, undertaken or
      assumed as the deferred purchase price of property or services (other than
      trade payables entered into in the ordinary course of business on ordinary
      terms); (c) all non-contingent  reimbursement or payment  obligations with
      respect to Surety  Instruments;  (d) all  obligations  evidenced by notes,
      bonds,  debentures  or  similar  instruments,   including  obligations  so
      evidenced incurred in connection with the acquisition of property,  assets
      or  businesses  (but not including in the case of the  Guarantor,  Surplus
      Notes); (e) all indebtedness created or arising under any conditional sale
      or other title retention  agreement,  or incurred as financing,  in either
      case with  respect to  property  acquired by the Person  (even  though the
      rights and  remedies  of the seller or bank  under such  agreement  in the
      event of default are limited to  repossession  or sale of such  property);
      (f) all  obligations  with  respect  to  capital  leases  (other  than the
      $2,600,000  capital lease related to the National  Securities and Research
      Corporation  transaction);  (g) all net  obligations  with respect to Swap
      Contracts;  (h) all  indebtedness  referred  to in clauses (a) through (g)
      above  secured  by (or for which the  holder of such  Indebtedness  has an
      existing right,  contingent or otherwise,  to be secured by) any Lien upon
      or in property  (including  accounts and  contracts  rights) owned by such
      Person,  even though such Person has not assumed or become  liable for the
      payment of such Indebtedness;  and (i) all Guaranty Obligations in respect
      of  indebtedness  or  obligations  of others of the kinds  referred  to in
      clauses (a) through (g) above.

            "Indemnified Liabilities" has the meaning specified in Section 13.5.

            "Indemnified Person" has the meaning specified in Section 13.5.

            "Independent  Auditor"  has the  meaning  specified  in  subsection
      6.1(a).

            "Insolvency  Proceeding"  means (a) any case,  action or  proceeding
      before any court or other  Governmental  Authority relating to bankruptcy,
      reorganization,   insolvency,  liquidation,   receivership,   dissolution,
      winding-up or relief of debtors,  or (b) any assignment for the benefit of
      creditors,  composition,  marshaling  of assets for  creditors,  or other,
      similar   arrangement  in  respect  of  its  creditors  generally  or  any
      substantial portion of its creditors; undertaken under U.S. Federal, state
      or foreign law, including the Bankruptcy Code.



<PAGE>


            "Insurance  Code" means with respect to any insurance  company,  the
      insurance  code at the state of  domicile  and any  successor  statute  of
      similar  import  together  with the  regulations  thereunder as amended or
      otherwise modified and in effect from time to time. References to sections
      of the  Insurance  Code  shall be  construed  to also  refer to  successor
      sections.

            "Interest Expense" means consolidated  interest expense,  calculated
      in accordance with GAAP including,  without  limitation,  interest expense
      with respect to Subordinated Debt.

            "Interest  Payment Date" means,  as to any Eurodollar Rate Loan, the
      last day of each  Interest  Period  applicable to such Loan and, as to any
      Base Rate Loan,  the last Business Day of each  calendar  quarter and each
      date such Loan is converted into another Type of Loan, provided,  however,
      that if any  Interest  Period for a  Eurodollar  Rate Loan  exceeds  three
      months,  the date that falls  three  months  after the  beginning  of such
      Interest Period and after each Interest Payment Date thereafter is also an
      Interest Payment Date.

            "Interest  Period" means, as to any Eurodollar Rate Loan, the period
      commencing   on   the   Borrowing   Date   of   such   Loan   or  on   the
      Conversion/Continuation  Date  on  which  the  Loan is  converted  into or
      continued as an  Eurodollar  Rate Loan,  and ending on the date one,  two,
      three or six months thereafter as selected by the Company in its Notice of
      Borrowing or Notice of Conversion/Continuation;

      provided that:

            (i) if any Interest  Period would otherwise end on a day that is not
      a Business Day,  that  Interest  Period shall be extended to the following
      Business  Day unless the result of such  extension  would be to carry such
      Interest Period into another  calendar month, in which event such Interest
      Period shall end on the preceding Business Day;

            (ii) any Interest  Period that begins on the last  Business Day of a
      calendar   month  (or  on  a  day  for  which  there  is  no   numerically
      corresponding  day in the  calendar  month  at the  end of  such  Interest
      Period)  shall end on the last  Business Day of the calendar  month at the
      end of such Interest Period; and

            (iii) no Interest Period shall extend beyond the Termination Date.

            "Invested   Assets"  means  cash,  cash   equivalents,   short  term
      investments,  investments  held for sale and any  other  assets  which are
      treated as investments under SAP.

            "IRS"  means the  Internal  Revenue  Service,  and any  Governmental
      Authority succeeding to any of its principal functions under the Code.


<PAGE>



            "Joint  Venture" means a  single-purpose  corporation,  partnership,
      joint  venture or other  similar  legal  arrangement  (whether  created by
      contract or conducted  through a separate  legal  entity) now or hereafter
      formed by the Company or any of its  Subsidiaries  with another  Person in
      order to conduct a common venture or enterprise with such Person.

            "Lending  Office"  means,  as to any Bank,  the office or offices of
      such Bank specified as its "Lending  Office" or "Domestic  Lending Office"
      or "Eurodollar  Lending Office",  as the case may be, on Schedule 13.2, or
      such other office or offices as such Bank may from time to time notify the
      Company and the Administrative Agent.

            "Lien" means any security interest, mortgage, deed of trust, pledge,
      hypothecation,  assignment,  charge or deposit  arrangement,  encumbrance,
      lien  (statutory  or other)  or  preferential  arrangement  of any kind or
      nature whatsoever in respect of any property  (including those created by,
      arising  under  or  evidenced  by any  conditional  sale  or  other  title
      retention  agreement,  the interest of a lessor under a capital lease, any
      financing  lease having  substantially  the same economic effect as any of
      the foregoing,  or the filing of any financing  statement naming the owner
      of the asset to which  such lien  relates  as  debtor,  under the  Uniform
      Commercial  Code or any  comparable  law)  and  any  contingent  or  other
      agreement to provide any of the foregoing,  but not including the interest
      of a lessor under an operating lease.

            "Loan" means an  extension of credit by a Bank to the Company  under
      Article II, and may be a Base Rate Loan or an Eurodollar  Rate Loan (each,
      a "Type" of Loan).

            "Loan  Documents"  means  this  Agreement,  any  Notes and all other
      documents delivered to the Administrative  Agent or any Bank in connection
      herewith.

            "Majority  Banks"  means at any time  Banks  then  holding  at least
      66-2/3% of the then aggregate unpaid principal amount of the Loans, or, if
      no such principal amount is then  outstanding,  Banks then having at least
      66-2/3% of the aggregate Commitments.

            "Margin  Stock"  means  "margin  stock" as such term is  defined  in
      Regulation T, U or X of the FRB.



<PAGE>


            "Material Adverse Effect" means (a) a material adverse change in, or
      a material  adverse effect upon,  the  operations,  management,  business,
      properties,  condition  (financial  or  otherwise)  or  prospects  of  the
      Guarantor,  the  Company or the Company  and its  Subsidiaries  taken as a
      whole or the  Guarantor  and its  Subsidiaries  taken  as a  whole;  (b) a
      material  impairment  of the  ability of the Company or the  Guarantor  to
      perform under any Loan Document and to avoid any Event of Default;  or (c)
      an  adverse  effect  upon  the  legality,   validity,  binding  effect  or
      enforceability against the Company or the Guarantor of any Loan Document.

            "Moody's" means Moody's Investors Services, Inc.

            "Moody's  Rating"  shall  mean at any time the  Insurance  Financial
      Strength Rating of the Guarantor assigned by Moody's.

            "Multiemployer  Plan"  means a "Multi  employer  plan",  within  the
      meaning of Section  4001(a)(3) of ERISA, to which the Company or any ERISA
      Affiliate  makes,  is making,  or is obligated to make  contributions  or,
      during the preceding three calendar years,  has made, or been obligated to
      make, contributions.

            "NAIC" means the National  Association of Insurance Commissioners or
      any successor thereto.

            "NAIC  Ratings"  shall  mean the  quality  ratings  assigned  by the
      Securities  Valuation  Office of the NAIC to  investments of the Guarantor
      and the Primary  Insurance  Subsidiaries.  References in this Agreement to
      particular  NAIC  ratings  are  references  to such  ratings as  currently
      defined and classified by the Securities  Valuation Office of the National
      Association  of  Insurance  Commissioners  and if such  rating  system  is
      changed then each reference to a particular rating in this Agreement shall
      be deemed to be a reference to the rating under such changed rating system
      which  most  closely  approximates  the credit  quality of the  particular
      rating as currently defined. The Guarantor will use its best efforts to at
      all  times  have not less than 90% of its bond  portfolio  and that of the
      Primary Insurance  Subsidiaries covered by NAIC Ratings. If for any reason
      beyond the control of the Guarantor NAIC Ratings are  unavailable for such
      percentage  of the  bond  portfolios  of the  Guarantor  and  the  Primary
      Insurance  Subsidiaries or the NAIC rating system is discontinued  then in
      that event the  Guarantor  and the Banks agree to  negotiate in good faith
      for an amendment to this Agreement  replacing  Sections 8.2 and 8.3 hereof
      with new covenants  measuring the credit  quality of the bond portfolio of
      the Guarantor  and the Primary  Insurance  Subsidiaries  and which are not
      materially more liberal nor  restrictive  than Sections 8.2 and 8.3 hereof
      as  presently  in  effect,  but in the event  that the  Guarantor  and the
      Majority Banks are unable to agree to such an amendment  within 60 days of
      the date the NAIC rating system is discontinued or the Guarantor is unable
      to comply with the preceding  sentence  then in that event this  Agreement
      may,  at the  option of the  Majority  Banks or the  Guarantor,  terminate
      whereupon  the  Commitments  shall  terminate and all  outstanding  Loans,
      together  with  interest  thereon and any amounts due the Banks under this
      Agreement, including under Section 3.4 hereof, shall be repaid.


<PAGE>



            "Net Cash  Proceeds"  means with respect to the sale,  transfer,  or
      other  disposition  by the  Guarantor  or  any  Subsidiary  of  any  asset
      (including  any stock of any  Subsidiary),  the  aggregate  cash  proceeds
      (including cash proceeds  received by way of deferred payment of principal
      pursuant to a note, installment  receivable or otherwise,  but only as and
      when  received)  received by the Guarantor or any  Subsidiary  pursuant to
      such sale,  transfer  or other  disposition,  net of (i) the direct  costs
      relating to such sale, transfer or other disposition  (including,  without
      limitation, sales commissions and legal, accounting and investment banking
      fees),  (ii) taxes paid or payable as a result  thereof (after taking into
      account  any  available  tax  credits or  deductions  and any tax  sharing
      arrangements),  (iii)  amounts  required to be applied to the repayment of
      any  Indebtedness  secured  by a Lien on the asset  subject  to such sale,
      transfer or other disposition  (other than the Loans) and (iv) any reserve
      for  adjustment  in respect of the sale  price of such asset  (until  such
      amount is available to the Guarantor or the applicable Subsidiary).

            "Net  Invested  Assets" shall mean the  Guarantor's  and the Primary
      Insurance Subsidiaries'  portfolios of stocks, bonds, mortgage loans, real
      estate,  policy loans and other assets classified as invested assets under
      SAP less Separate Account assets.

            "Non-Performing Real Estate" shall mean the book value of the sum of
      (i) real  estate  acquired  by the  Guarantor  and the  Primary  Insurance
      Subsidiaries in satisfaction of indebtedness, whether by foreclosure, deed
      in lieu of foreclosure  or otherwise,  which during the period of 180 days
      prior to the  date of  determination  had a net  operating  income  (gross
      income less taxes,  maintenance and other operating expenses and also less
      principal and interest on  indebtedness  not owing to the Guarantor or the
      applicable  Primary  Insurance  Subsidiary) of less than 6% of book value,
      (ii) mortgage  loans the terms of which have been modified  because of the
      borrower's  inability  to comply  with the terms as  originally  agreed or
      which  are in the  process  of  foreclosure  and under  which  the  amount
      received by the Guarantor or the applicable  Primary Insurance  Subsidiary
      (exclusive  of amounts  received  for taxes or  insurance or in payment of
      expenses)  during the 90 days  preceding the date of  determination  is an
      amount  which on an annual  basis  would  return to the  Guarantor  or the
      applicable Primary Insurance  Subsidiary less than 6% of the book value of
      the  mortgage  loan in  question  and  (iii)  mortgage  loans on which any
      payment of principal or interest is more than 90 days past due.

            "Note" means a promissory note executed by the Company in favor of a
      Bank pursuant to subsection  2.2(b),  in substantially the form of Exhibit
      F.



<PAGE>


            "Notice of  Borrowing"  means a notice in substantially  the form of
      Exhibit A.

            "Notice of  Conversion/Continuation" means a notice in substantially
      the form of Exhibit B.

            "Obligations" means all advances, debts,  liabilities,  obligations,
      covenants and duties  arising under any Loan Document owing by the Company
      or the Guarantor to any Bank, any Agent, or any other Indemnified  Person,
      whether  direct or indirect  (including  those  acquired  by  assignment),
      absolute or  contingent,  due or to become due,  now existing or hereafter
      arising.

            "Organization Documents" means, for any corporation, the certificate
      or articles of incorporation, the bylaws, any certificate of determination
      or  instrument  relating to the rights of preferred  shareholders  of such
      corporation,   any  shareholder  rights  agreement,   and  all  applicable
      resolutions  of the board of directors (or any committee  thereof) of such
      corporation.

            "Participant" has the meaning specified in subsection 13.8(d).

            "PBGC"  means  the  Pension  Benefit  Guaranty  Corporation,  or any
      Governmental  Authority succeeding to any of its principal functions under
      ERISA.

            "Pension  Plan" means a pension  plan (as defined in Section 3(2) of
      ERISA) subject to Title IV of ERISA which the Company sponsors, maintains,
      or to which it makes, is making, or is obligated to make contributions, or
      in the case of a multiple  employer plan (as described in Section  4064(a)
      of  ERISA)  has made  contributions  at any time  during  the  immediately
      preceding five (5) plan years.

            "Permitted Liens" has the meaning specified in Section 7.1.

            "Person"  means  an  individual,   partnership,   limited  liability
      company,   corporation,   business  trust,  joint  stock  company,  trust,
      unincorporated association, joint venture or Governmental Authority.

            "Plan" means an employee benefit plan (as defined in Section 3(3) of
      ERISA)  which the Company  sponsors or  maintains  or to which the Company
      makes, is making,  or is obligated to make  contributions and includes any
      Pension Plan.

            "Primary   Insurance   Subsidiaries"   shall  mean   those   Primary
      Subsidiaries principally engaged in the business of insurance.



<PAGE>


            "Primary  Subsidiaries"  shall mean Phoenix  American Life Insurance
      Co., the Company,  and any other  Subsidiary of the Guarantor which at the
      time of determination has capital or a net worth in excess of $25,000,000.

            "Pro Rata Share" means,  as to any Bank at any time,  the percentage
      equivalent (expressed as a decimal, rounded to the ninth decimal place) at
      such time of such Bank's Commitment divided by the combined Commitments of
      all Banks.

            "Rating" means the Moody's Rating or the S&P Rating.  All references
      in this  Agreement  to  particular  Moody's  Ratings  and S&P  Ratings are
      references to such ratings as currently defined by Moody's and S&P, and in
      the event  either of such  corporations  changes its rating  system,  each
      reference  to a  particular  rating set forth in this  Agreement  shall be
      deemed to be a reference to the rating under such  changed  rating  system
      which,  in the  reasonable  judgment of the  Administrative  Agent,  after
      consultation with the rating service involved,  most closely  approximates
      the level of claims paying ability  associated with the particular  rating
      as currently defined.
       Whenever  a  determination  of  compliance  with  any  provision  of this
      Agreement or any interest rate or fee is dependent  upon the  availability
      of both a Moody's  Rating  and an S&P Rating and one or the other (but not
      both) of such rating  services ceases to rate the claims paying ability of
      the Guarantor, compliance with the applicable provisions of this Agreement
      and  determinations  of interest rates and fees shall be made on the basis
      of the rating  which is  available.  If for any  reason  neither a Moody's
      Rating nor an S&P Rating is available for the Guarantor then in that event
      compliance with the provisions of this Agreement where a determination  of
      such a rating is  necessary,  determinations  of  interest  rates and fees
      shall  be  made  by  the  Majority  Banks,  after  consultation  with  the
      Guarantor,  based on the Majority Banks' good faith estimates of what such
      ratings would have been had they been available,  the determination of the
      Majority  Banks in such regards to be final and  conclusive  provided that
      they have been made in good faith.

            "Reportable  Event"  means,  any of the  events set forth in Section
      4043(b) of ERISA or the regulations thereunder,  other than any such event
      for which the 30-day  notice  requirement  under  ERISA has been waived in
      regulations issued by the PBGC.

            "Requirement of Law" means, as to any Person,  any law (statutory or
      common),  treaty,  rule or regulation or determination of an arbitrator or
      of a Governmental  Authority,  in each case  applicable to or binding upon
      the  Person or any of its  property  or to which the  Person or any of its
      property is subject.



<PAGE>


            "Responsible  Officer" means, with respect to any Person,  the chief
      executive  officer,  or the president of such Person, or any other officer
      having  substantially  the same  authority  and  responsibility;  or, with
      respect  to  compliance  with  financial  covenants,  the chief  financial
      officer or the  treasurer  of such  Person,  or any other  officer  having
      substantially the same authority and responsibility.

            "Risk Based Capital Ratio" shall mean, as of any time the same is to
      be  determined,  the ratio of  adjusted  capital of the  Guarantor  to the
      Company Action Level of the Guarantor.  Adjusted capital,  for the purpose
      of this  definition,  shall be  computed  in the manner  from time to time
      prescribed by the  Insurance  Department of the State of New York as total
      adjusted capital for inclusion in the Annual Statement of the Guarantor to
      such department  (currently  appearing on page 23 of such annual statement
      in column 1, line 27 and currently  consisting of capital and surplus, the
      asset  valuation  reserve  of the  Guarantor  and  50% of the  Guarantor's
      dividend liability).

            "S&P" means Standard & Poor's Ratings Group.

            "S&P Rating" shall mean at any time the Insurer  Financial  Strength
      Rating of the Guarantor assigned by Standard & Poor's Ratings Services,  a
      Division of the McGraw Hill Companies, Inc.

            "SAP"  means,  as  to  the  Guarantor,   the  statutory   accounting
      principles prescribed or permitted by the Department, or in the event that
      the  Department  fails to prescribe or address  such  practices,  the NAIC
      guidelines.

            "SAP  Capital"  means  unrestricted   surplus  accounts  plus  asset
      valuation  reserve plus surplus notes,  all calculated in accordance  with
      SAP.

            "SEC"  means  the  Securities  and  Exchange   Commission,   or  any
      Governmental Authority succeeding to any of its principal functions.

            "Senior Debt" means Indebtedness less Subordinated Debt.

            "Senior Debt to EBITDA Ratio" means the ratio for the Company,  on a
      consolidated  basis in  accordance  with GAAP, as at the end of any fiscal
      quarter of Senior Debt as of such quarter end to EBITDA as of such quarter
      end for the four fiscal quarters then ending.

            "Separate  Accounts" shall mean accounts maintained by the Guarantor
      and the Primary Insurance  Subsidiaries pursuant to the New York Insurance
      Law of a character such that the assets  allocated  thereto are to provide
      for annuities or life insurance  benefits  under  specific  annuity and/or
      insurance  contracts and are not chargeable with other  liabilities of the
      Guarantor or the Primary Insurance Subsidiaries.


<PAGE>



            "Shareholders'  Equity"  means  shareholders'  equity determined  in
      accordance with GAAP.

            "Sole Book Manager" means NationsBanc Montgomery Securities LLC.

            "Sole Lead Arranger" means NationsBank Montgomery Securities LLC.

            "Subordinated   Debt"  means   Indebtedness   subordinated   to  the
      Obligations in form and substance satisfactory to the Majority Banks.

            "Subsidiary" of a Person means any  corporation,  limited  liability
      company, association,  partnership, joint venture or other business entity
      of which more than 50% of the voting stock or other equity  interests  (in
      the case of  Persons  other  than  corporations),  is owned or  controlled
      directly or indirectly by the Person,  or one or more of the  Subsidiaries
      of the Person,  or a  combination  thereof.  Unless the context  otherwise
      clearly  requires,   references  herein  to  a  "Subsidiary"  refer  to  a
      Subsidiary of the Guarantor.

            "Surety  Instruments" means all letters of credit (including standby
      and commercial),  banker's acceptances,  bank guaranties,  shipside bonds,
      surety bonds and similar instruments.

            "Surplus  Notes"  means  surplus  notes  issued in  accordance  with
      Section 1307 of the New York  Insurance Law and which are payable only out
      of free and divisible surplus with the prior approval of the Department.

            "Swap Contract" means any agreement  (including any master agreement
      and any  agreement,  whether  or not in  writing,  relating  to any single
      transaction) that is an interest rate swap agreement,  basis swap, forward
      rate agreement,  commodity swap, commodity option,  equity or equity index
      swap or  option,  bond  option,  interest  rate  option,  forward  foreign
      exchange  agreement,  rate cap, collar or floor  agreement,  currency swap
      agreement,  cross-currency rate swap agreement,  swaption, currency option
      or any other, similar agreement (including any option to enter into any of
      the foregoing).

            "Termination Date" means the earlier to occur of:

            (a)   March 16, 2004; and

            (b) the date on which the  Commitments  terminate in accordance with
      the provisions of this Agreement.



<PAGE>


            "Total Debt to Capital Ratio" means the ratio for the Company,  on a
      consolidated basis in accordance with GAAP, of its Indebtedness to the sum
      of its Indebtedness plus its Shareholders'  Equity. For the purpose of the
      calculations of Indebtedness for this ratio, Indebtedness shall be reduced
      by  an  amount  equal  to  the  lesser  of  (i)  50%  of  any  outstanding
      Subordinated  Debt which has been  exchanged  for  Subordinated  Debt from
      preferred stock outstanding on the Closing Date and (ii) $40,000,000.

            "Total SAP Adjusted  Capital"  means SAP Capital  plus  reserves for
      losses on real estate.

            "12b-1 Asset" means, with respect to any Person, such Person's right
      to receive  payments  arising in  connection  with the sale of shares in a
      registered open-end management investment company,  which payment shall be
      permitted  pursuant to Rule 12b-1(b)  (such  payment,  a so-called  "12b-1
      fee") or Rule 6c-10 (such payment, a so-called  "contingent deferred sales
      load") of the Investment Company Act of 1940.

            "Type" has the meaning specified in the definition of "Loan."

            "Unfunded  Pension  Liability"  means the excess of a Plan's benefit
      liabilities under Section  4001(a)(16) of ERISA, over the current value of
      that Plan's assets, determined in accordance with the assumptions used for
      funding  the  Pension  Plan  pursuant  to Section  412 of the Code for the
      applicable plan year.

            "United States" and "U.S." each means the United States of America.

            "Wholly-Owned Subsidiary" means any corporation in which (other than
      directors' qualifying shares required by law) 100% of the capital stock of
      each class having ordinary voting power,  and 100% of the capital stock of
      every other class, in each case, at the time as of which any determination
      is being made, is owned,  beneficially and of record,  by the Guarantor or
      by one or more of the other Wholly-Owned Subsidiaries, or both.

            "Zweig  Group"  means  Zweig  Glaser  Advisers,  a New York  general
      partnership,  Zweig  Securities  Corp.,  a  New  York  corporation,  Zweig
      Advisors Inc., a Delaware corporation, Zweig Total Return Advisors Inc., a
      Delaware  corporation,  and  Euclid  Advisors  LLC,  a  New  York  limited
      liability company.

            "Zweig  Acquisition"  means the  acquisition  by the  Company of the
      Zweig Group pursuant to the Zweig Acquisition Agreement.



<PAGE>


            "Zweig Acquisition  Agreement" means the Acquisition Agreement dated
      as of  December  15,  1998 among the  Company, each of the  members of the
      Zweig Group,  Glaser Corp.,  Zweig  Management Corp.  and Martin E. Zweig,
      individually  and  as  attorney-in-fact  for  the  shareholders  of  Zweig
      Securities Corp., Zweig Advisors Inc. and Zweig Total Return Advisors Inc.

      1.2 Other  Interpretive  Provisions.  (a) The meanings  of  defined  terms
are equally applicable to the singular and plural forms of the defined terms.

            (b) The words  "hereof",  "herein",  "hereunder"  and similar  words
refer to this Agreement as a whole and not to any  particular  provision of this
Agreement; and subsection,  Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.

            (c) (i)  The  term  "documents"  includes  any and all  instruments,
      documents,  agreements,   certificates,   indentures,  notices  and  other
      writings, however evidenced.

                  (ii)  The  term   "including"   is  not  limiting   and  means
      "including without limitation."

                  (iii) In the  computation  of periods of time from a specified
      date  to  a  later  specified  date,  the  word  "from"  means  "from  and
      including";  the words "to" and "until" each mean "to but excluding",  and
      the word "through" means "to and including."

            (d)  Except  as  otherwise   stated,   the  terms   "determine"   or
"determination"  mean  to  reasonably  determine  or  reasonable  determination,
respectively.

            (e) Unless otherwise  expressly  provided herein,  (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be  construed  as  including  all  statutory  and  regulatory  provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.

            (f) The captions and headings of this Agreement are for  convenience
of reference only and shall not affect the interpretation of this Agreement.

            (g)  This  Agreement  and  other  Loan  Documents  may  use  several
different  limitations,  tests or  measurements  to regulate the same or similar
matters.  All such limitations,  tests and measurements are cumulative and shall
each be performed in accordance with their terms.



<PAGE>


            (h) This  Agreement  and the other Loan  Documents are the result of
negotiations  among and have been reviewed by counsel to the Agents, the Company
and the other parties,  and are the products of all parties.  Accordingly,  they
shall not be  construed  against the Banks or the Agents  merely  because of the
Agents' or Banks' involvement in their preparation.

      1.3  Accounting  Principles.  (a) Unless  the  context  otherwise  clearly
requires,  all accounting terms not expressly defined herein shall be construed,
and all financial  computations  required under this Agreement shall be made, in
accordance with GAAP, consistently applied.

            (b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.


                                  ARTICLE II

                                   THE CREDITS

      2.1 Amounts and Terms of Commitments.  Each Bank severally  agrees, on the
terms and conditions  set forth herein,  to make loans to the Company (each such
loan, a "Loan") from time to time on any Business Day during the period from the
Closing Date to the  Termination  Date, in an aggregate  amount not to exceed at
any time outstanding, together with the principal amount of Loans outstanding in
favor of such Bank at such time,  the amount set forth next to such  Bank's name
on Schedule 2.1 (such amount as the same may be reduced  under Section 2.5 or as
a  result  of  one  or  more   assignments   under  Section  13.8,   the  Bank's
"Commitment");  provided,  however,  that, after giving effect to any Borrowing,
the aggregate  principal  amount of all outstanding  Loans shall not at any time
exceed the combined  Commitments.  Within the limits of each Bank's  Commitment,
and subject to the other  terms and  conditions  hereof,  the Company may borrow
under this Section 2.1, prepay under Section 2.6 and reborrow under this Section
2.1.

      2.2 Loan  Accounts.  (a) The Loans made by each Bank shall be evidenced by
one or more loan  accounts or records  maintained  by such Bank in the  ordinary
course  of  business.   The  loan   accounts  or  records   maintained   by  the
Administrative  Agent shall be conclusive absent manifest error of the amount of
the  Loans  made by the  Banks to the  Company  and the  interest  and  payments
thereon.  Any failure so to record or any error in doing so shall not,  however,
limit or otherwise  affect the  obligation  of the Company  hereunder to pay any
amount owing with respect to the Loans.



<PAGE>


            (b) Upon the  request of any Bank made  through  the  Administrative
Agent,  the  Loans  made by such  Bank may be  evidenced  by one or more  Notes,
instead of loan accounts.  Each such Bank shall endorse on the schedules annexed
to its  Note(s)  the date,  amount and  maturity of each Loan made by it and the
amount of each  payment of principal  made by the Company with respect  thereto.
Each such Bank is irrevocably  authorized by the Company to endorse its Note(s);
provided,  however, that the failure of a Bank to make, or an error in making, a
notation  thereon with  respect to any Loan shall not limit or otherwise  affect
the obligations of the Company hereunder or under any such Note to such Bank.

      2.3 Procedure for  Borrowing.  (a) Each  Borrowing  shall be made upon the
Company's  irrevocable  written notice delivered to the Administrative  Agent in
the  form of a  Notice  of  Borrowing  (which  notice  must be  received  by the
Administrative Agent prior to 11:00 a.m. (New York City time) (i) three Business
Days prior to the  requested  Borrowing  Date,  in the case of  Eurodollar  Rate
Loans;  and (ii) one Business Day prior to the requested  Borrowing Date, in the
case of Base Rate Loans, specifying:

                  (A)  the  amount  of  the  Borrowing,  which  shall  be  in an
            aggregate minimum amount of $5,000,000 or any multiple of $1,000,000
            in excess thereof;

                  (B) the requested  Borrowing  Date,  which shall be a Business
            Day;

                  (C)   the Type of Loans comprising the Borrowing; and

                  (D) in the case of Eurodollar Rate Loans,  the duration of the
            Interest Period applicable to such Loans included in such notice. If
            the  Notice  of  Borrowing  fails to  specify  the  duration  of the
            Interest  Period for any  Borrowing  comprised  of  Eurodollar  Rate
            Loans, such Interest Period shall be three months.

      (b) After  giving  effect to any  Borrowing,  there may be no more than 10
different Interest Periods in effect.

      2.4  Conversion  and  Continuation  Elections. (a) The Company  may,  upon
irrevocable  written  notice  to the  Administrative Agent  in  accordance  with
subsection 2.4(b):

                  (i) elect,  as of any  Business  Day, in the case of Base Rate
      Loans,  or as of the last day of the applicable  Interest  Period,  in the
      case of  Eurodollar  Rate  Loans,  to convert  any such Loans (or any part
      thereof in an amount not less than  $5,000,000,  or that is in an integral
      multiple of $1,000,000 in excess thereof) into Loans of any other Type; or

                  (ii)  elect,  as of the  last day of the  applicable  Interest
      Period, to continue any Loans having Interest Periods expiring on such day
      (or any part thereof in an amount not less than $5,000,000,  or that is in
      an integral multiple of $1,000,000 in excess thereof);

provided,  that if at any time the aggregate  amount of Eurodollar Rate Loans in
respect of any Borrowing is reduced,  by payment,  prepayment,  or conversion of
part  thereof to be less than  $5,000,000,  such  Eurodollar  Rate  Loans  shall
automatically convert into Base Rate Loans.



<PAGE>


            (b) The Company shall deliver a Notice of  Conversion/  Continuation
to be received by the  Administrative  Agent not later than 11:00 a.m. (New York
City   time)   at  least   (i)   three   Business   Days  in   advance   of  the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as  Eurodollar  Rate  Loans;  and  (ii)  one  Business  Day  in  advance  of the
Conversion/Continuation  Date,  if the Loans are to be converted  into Base Rate
Loans, specifying:

                  (A)  the proposed Conversion/Continuation Date;

                  (B)  the   aggregate   amount of  Loans  to  be  converted  or
      continued;

                  (C) the Type of Loans  resulting from the proposed  conversion
      or continuation; and

                  (D)  in the  case  of  continuations  of or  conversions  into
      Eurodollar Rate Loans, the duration of the requested Interest Period.

            (c) If upon the  expiration  of any Interest  Period  applicable  to
Eurodollar  Rate Loans,  the Company has failed to select  timely a new Interest
Period to be  applicable  to such  Eurodollar  Rate Loans,  or if any Default or
Event of Default  then  exists,  the Company  shall be deemed to have elected to
convert  such  Eurodollar  Rate Loans into Base Rate Loans  effective  as of the
expiration date of such Interest Period.

            (d) The  Administrative  Agent will promptly notify each Bank of its
receipt  of a Notice of  Conversion/Continuation,  or,  if no  timely  notice is
provided by the Company, the Administrative Agent will promptly notify each Bank
of the details of any automatic  conversion.  All conversions and  continuations
shall be made ratably according to the respective  outstanding principal amounts
of the Loans with respect to which the notice was given held by each Bank.

            (e) Unless the Majority Banks otherwise  agree,  with respect to all
Loans during the existence of a Default or Event of Default, the Company may not
elect to have a Loan converted into or continued as an Eurodollar Rate Loan.

            (f) After giving effect to any conversion or  continuation of Loans,
there may not be more than 10 different Interest Periods in effect.



<PAGE>


     2.5 Voluntary  Termination  or Reduction of  Commitments.  The Company may,
upon not less than  three  Business  Days'  prior  notice to the  Administrative
Agent,  terminate the Commitments,  or permanently  reduce the Commitments by an
aggregate  minimum  amount of $5,000,000 or any multiple of $1,000,000 in excess
thereof;  provided,  however,  that  after  giving  effect  thereto  and  to any
prepayments  of Loans made on the effective date thereof,  the  then-outstanding
principal  amount  of the  Loans  may not  exceed  the  amount  of the  combined
Commitments  then in effect.  Once reduced in accordance with this Section,  the
Commitments  may not be  increased.  Any reduction of the  Commitments  shall be
applied to each Bank according to its Pro Rata Share.  All accrued facility fees
to, but not  including the effective  date of any  reduction or  termination  of
Commitments,  shall  be  paid  on  the  effective  date  of  such  reduction  or
termination.

     2.6 Optional  Prepayments.  Subject to Section 3.4, the Company may, at any
time or from time to time,  upon not less than three Business Days'  irrevocable
notice to the Administrative Agent, ratably prepay Loans in whole or in part, in
minimum  amounts of $5,000,000 or any multiple of $1,000,000 in excess  thereof.
Such notice of prepayment  shall specify the date and amount of such  prepayment
and the Type(s) of Loans to be prepaid.  The Administrative  Agent will promptly
notify each Bank of its receipt of any such notice,  and of such Bank's Pro Rata
Share of such  prepayment.  If such notice is given by the Company,  the Company
shall make such prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein, together with accrued interest
to each such date on the amount  prepaid  and any amounts  required  pursuant to
Section 3.4.

     2.7 Mandatory Prepayments of Loans;  Mandatory Commitment  Reductions.  The
Company  shall make a prepayment  of the Loans  within 30 days after  receipt of
proceeds  from any sale,  transfer  or other  disposition  by the Company or any
Subsidiary  of the  Company  of any asset  outside  the  ordinary  course of its
business  (other than any sale of 12b-1 Assets pursuant to the Purchase and Sale
Agreement among Phoenix Equity Planning Corporation, the Company and FEP Capital
L.P. dated as of June 1, 1997, and additional sales of 12b-1 Assets for up to an
aggregate  amount of $4,000,000,  so long as in either case the proceeds of such
sale shall be reinvested  within 365 days in businesses or assets  substantially
similar to the  business or assets of the Company) in an amount equal to 100% of
the Net Cash Proceeds of such sale, to the extent the aggregate proceeds thereof
shall  exceed  $5,000,000  in any  fiscal  year.  On the date of any  prepayment
pursuant to this Section 2.7, accrued interest on the amount of such prepayment,
together with any amounts owing under Section 3.4, shall be due and payable. The
Commitments shall be reduced by the amount of such prepayments.

     2.8 Repayment. The Company shall repay to the Banks on the Termination Date
the aggregate principal amount of Loans outstanding on such date.

     2.9  Interest.  (a)  Each  Loan  shall  bear  interest  on the  outstanding
principal amount thereof from the applicable  Borrowing Date at a rate per annum
equal to the  Eurodollar  Rate or the Base Rate, as the case may be (and subject
to the  Company's  right to convert to other Types of Loans under  Section 2.4),
plus the Applicable Margin, in the case of Eurodollar Rate Loans.



<PAGE>


           (b)  Interest on each Loan shall be paid in arrears on each  Interest
Payment Date. Interest shall also be paid on the date of any prepayment of Loans
under  Section  2.6 or 2.7 for the  portion  of the  Loans so  prepaid  and upon
payment  (including  prepayment)  in full thereof and,  with respect to any Loan
during the existence of any Event of Default,  interest  shall be paid on demand
of the  Administrative  Agent at the request or with the consent of the Majority
Banks.

           (c)  Notwithstanding  subsection  (a) of this Section with respect to
any Loan, while any Event of Default exists or after  acceleration,  the Company
shall pay  interest  (after as well as before  entry of judgment  thereon to the
extent permitted by law) on the principal amount of all outstanding  Loans, at a
rate per annum  which is  determined  by  adding 2% per annum to the  Applicable
Margin then in effect for such Loans and,  in the case of Base Rate Loans,  at a
rate per annum equal to the Base Rate plus 2%; provided,  however,  that, on and
after the expiration of any Interest  Period  applicable to any Eurodollar  Rate
Loan  outstanding  on the  date  of  occurrence  of such  Event  of  Default  or
acceleration,  the principal amount of such Loan shall,  during the continuation
of such Event of  Default or after  acceleration,  bear  interest  at a rate per
annum equal to the Base Rate plus 2%.

           (d) Highest  Lawful Rate.  At no time shall the interest rate payable
on the Loans of any Bank,  together with the fees and all other amounts  payable
under the Loan  Documents to such Bank,  to the extent the same are construed to
constitute interest,  exceed the Highest Lawful Rate applicable to such Bank. If
with respect to any Bank for any period during the term of this  Agreement,  any
amount paid to such Bank under the Loan Documents,  to the extent the same shall
(but for the  provisions of this Section)  constitute or be deemed to constitute
interest,  would exceed the maximum amount of interest  permitted by the Highest
Lawful  Rate  applicable  to such Bank during such  period  (such  amount  being
hereinafter referred to as an "Unqualified  Amount"),  then (i) such Unqualified
Amount  shall be applied or shall be deemed to have been applied as a prepayment
of the Loans of such Bank, and (ii) if in any subsequent  period during the term
of this Agreement,  all amounts payable under the Loan Documents to such Bank in
respect  of such  period  which  constitute  or shall be  deemed  to  constitute
interest  shall be less than the  maximum  amount of interest  permitted  by the
Highest Lawful Rate applicable to such Bank during such period, then the Company
shall pay to such Bank in respect of such period an amount (each a "Compensatory
Interest  Payment")  equal to the lesser of (x) a sum  which,  when added to all
such  amounts,  would equal the  maximum  amount of  interest  permitted  by the
Highest  Lawful Rate  applicable  to such Bank during  such  period,  and (y) an
amount  equal to the  Unqualified  Amount less all other  Compensatory  Interest
Payments made in respect thereof.



<PAGE>


     2.10 Fees. (a) Arrangement, Agency Fees. The Company shall pay such fees to
the  Arranger  and the Agents for their own accounts as may be agreed to between
the Company and the Arranger and the Agents from time to time.

           (b) Facility Fee. The Company shall pay to the  Administrative  Agent
for the account of each Bank a facility fee on the Bank's  Commitment,  computed
on a  quarterly  basis in  arrears  on the last  Business  Day of each  calendar
quarter as calculated by the  Administrative  Agent, equal to the Applicable Fee
Rate per annum.  Such  facility  fee shall  accrue  from the date  hereof to the
Termination  Date and shall be due and payable  quarterly in arrears on the last
Business Day of each calendar  quarter  commencing on March 31, 1999 through the
Termination  Date,  with the final payment to be made on the  Termination  Date;
provided  that, in connection  with any reduction or  termination of Commitments
under Section 2.5 or Section 2.7, the accrued  facility fee  calculated  for the
period  ending on such date shall also be paid on the date of such  reduction or
termination,  with the following quarterly payment being calculated on the basis
of the period from such reduction or termination date to such quarterly  payment
date.  The facility fees provided in this  subsection  shall accrue at all times
after the above-mentioned  commencement date, including at any time during which
one or more conditions in Article IV are not met.

           (c) Closing Fee. On the Closing  Date,  the Company  shall pay to the
Administrative  Agent for the  account  of each Bank a closing  fee in an amount
equal to 0.03% of such Bank's  Commitment (the amount of which is set forth next
to such Bank's name on Schedule 2.1).

     2.11 Computation of Fees and Interest. (a) All computations of interest for
Base  Rate  Loans  when the Base  Rate is  determined  by the BofA  Rate and all
computations of facility fees shall be made on the basis of a year of 365 or 366
days, as the case may be, and actual days  elapsed.  All other  computations  of
interest  shall be made on the basis of a 360-day  year and actual days  elapsed
(which  results in more  interest  being paid than if computed on the basis of a
365-day  year).  Interest and fees shall accrue during each  Interest  Period or
other period during which  interest or such fees are computed from the first day
thereof to but excluding the last day thereof.

           (b) Each  determination  of an  interest  rate by the  Administrative
Agent  shall be  conclusive  and  binding  on the  Company  and the Banks in the
absence of manifest error.



<PAGE>


     2.12  Payments by the  Company.  (a) All payments to be made by the Company
shall be made without set-off,  recoupment or counterclaim.  Except as otherwise
expressly  provided  herein,  all  payments by the Company  shall be made to the
Administrative Agent for the account of the Banks at the Administrative  Agent's
Payment Office, and shall be made in dollars and in immediately available funds,
no later than 12:00 p.m. (New York City time) on the date specified herein.  The
Administrative  Agent will  promptly  distribute to each Bank its Pro Rata Share
(or other applicable share as expressly provided herein) of such payment in like
funds as received.  Any payment received by the Administrative  Agent later than
12:00 p.m.  (New York City time)  shall be deemed to have been  received  on the
following  Business  Day and any  applicable  interest or fee shall  continue to
accrue.

           (b)  Subject  to  the  provisions  set  forth  in the  definition  of
"Interest  Period"  herein,  whenever  any  payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the  computation of interest
or fees, as the case may be.

           (c) Unless the Administrative  Agent receives notice from the Company
prior to the date on which any payment is due to the Banks that the Company will
not make such payment in full as and when required, the Administrative Agent may
assume  that the  Company  has made such  payment in full to the  Administrative
Agent on such date in immediately  available funds and the Administrative  Agent
may (but shall not be so required), in reliance upon such assumption, distribute
to each Bank on such due date an amount  equal to the amount then due such Bank.
If and to the  extent  the  Company  has not made  such  payment  in full to the
Administrative  Agent,  each Bank  shall  repay to the  Administrative  Agent on
demand such amount  distributed to such Bank,  together with interest thereon at
the Federal Funds Rate for each day from the date such amount is  distributed to
such Bank until the date repaid.



<PAGE>


     2.13  Payments  by the Banks to the  Administrative  Agent.  (a) Unless the
Administrative Agent receives notice from a Bank on or prior to the Closing Date
or, with respect to any Borrowing  after the Closing Date, at least one Business
Day prior to the date of such Borrowing,  that such Bank will not make available
as and when required  hereunder to the  Administrative  Agent for the account of
the  Company  the amount of that  Bank's Pro Rata  Share of the  Borrowing,  the
Administrative Agent may assume that each Bank has made such amount available to
the  Administrative  Agent in immediately  available funds on the Borrowing Date
and the  Administrative  Agent may (but shall not be so  required),  in reliance
upon such assumption, make available to the Company on such date a corresponding
amount.  If and to the  extent  any Bank  shall  not have  made its full  amount
available to the  Administrative  Agent in immediately  available  funds and the
Administrative  Agent in such  circumstances  has made  available to the Company
such amount,  that Bank shall on the Business Day following  such Borrowing Date
make such amount available to the Administrative  Agent,  together with interest
at the  Federal  Funds Rate for each day  during  such  period.  A notice of the
Administrative  Agent  submitted to any Bank with respect to amounts owing under
this  subsection (a) shall be conclusive,  absent manifest error. If such amount
is so made available,  such payment to the Administrative Agent shall constitute
such Bank's Loan on the date of Borrowing for all purposes of this Agreement. If
such amount is not made  available to the  Administrative  Agent on the Business
Day following  the  Borrowing  Date,  the  Administrative  Agent will notify the
Company of such failure to fund and,  upon demand by the  Administrative  Agent,
the  Company  shall  pay  such  amount  to  the  Administrative  Agent  for  the
Administrative  Agent's  account,  together with  interest  thereon for each day
elapsed  since  the date of such  Borrowing,  at a rate per  annum  equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.

           (b) The  failure of any Bank to make any Loan on any  Borrowing  Date
shall not relieve any other Bank of any  obligation  hereunder to make a Loan on
such Borrowing  Date,  but no Bank shall be  responsible  for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.

     2.14  Sharing  of  Payments,  Etc.  If,  other than as  expressly  provided
elsewhere  herein,  any Bank shall obtain on account of the Loans made by it any
payment (whether  voluntary,  involuntary,  through the exercise of any right of
set-off,  or  otherwise)  in  excess  of its Pro Rata  Share,  such  Bank  shall
immediately (a) notify the  Administrative  Agent of such fact, and (b) purchase
from the other Banks such  participations  in the Loans made by them as shall be
necessary  to cause such  purchasing  Bank to share the excess  payment pro rata
with each of them; provided,  however, that if all or any portion of such excess
payment is thereafter recovered from the purchasing Bank, such purchase shall to
that extent be rescinded and each other Bank shall repay to the purchasing  Bank
the purchase price paid  therefor,  together with an amount equal to such paying
Bank's  ratable  share  (according  to the  proportion of (i) the amount of such
paying Bank's required  repayment to (ii) the total amount so recovered from the
purchasing  Bank)  of any  interest  or  other  amount  paid or  payable  by the
purchasing Bank in respect of the total amount so recovered.  The Company agrees
that any Bank so  purchasing  a  participation  from  another  Bank may,  to the
fullest extent permitted by law,  exercise all its rights of payment  (including
the right of  set-off,  but  subject  to  Section  13.10)  with  respect to such
participation  as fully as if such Bank were the direct  creditor of the Company
in the amount of such participation.  The Administrative Agent will keep records
(which  shall be  conclusive  and binding in the  absence of manifest  error) of
participations  purchased  under this  Section  and will in each case notify the
Banks following any such purchases or repayments.


                                   ARTICLE III

                    TAXES, YIELD PROTECTION AND ILLEGALITY



<PAGE>


     3.1 Taxes.  (a) Payments to be Free and Clear.  All payments by the Company
or the  Guarantor  under  the  Loan  Documents  to or  for  the  account  of the
Administrative  Agent, or any Bank (each, an "Indemnified  Tax Person") shall be
made free and clear of, and  without  any  deduction  or  withholding  for or on
account of, any and all current or future taxes,  levies,  imposts,  deductions,
charges or  withholdings,  and all liabilities  with respect thereto  (including
interest,  additions to tax, and penalties thereon) imposed, levied,  collected,
withheld or assessed by the United States or any political subdivision or taxing
authority thereof (collectively,  "Taxes"),  excluding as to any Indemnified Tax
Person,  (i) a Tax on the Income imposed on such Indemnified Tax Person and (ii)
any interest, fees, additions to tax or penalties for late payment thereof (each
such  nonexcluded Tax, an "Indemnified  Tax"). For purposes hereof,  "Tax on the
Income"  shall  mean,  as to any Person,  a Tax imposed by one of the  following
jurisdictions or by any political  subdivision or taxing authority thereof:  (i)
the United  States,  (ii) the  jurisdiction  in which such Person is  organized,
(iii) the jurisdiction in which such Person's  principal  office is located,  or
(iv) in the case of each Bank, any jurisdiction in which such Bank's  applicable
Lending  Office is located;  which Tax is an income tax or franchise tax imposed
on all or part of the net  income  or net  profits  of such  Person or which Tax
represents  interest,  fees, or penalties for late payment of such an income tax
or franchise tax.

           (b) Grossing Up of Payments.  If the  Company,  the  Guarantor or any
other Person is required by law, rule, regulation,  order, directive,  treaty or
guideline to make any deduction or withholding  (which  deduction or withholding
would  constitute an Indemnified Tax) from any amount required to be paid by the
Company or the Guarantor to or on behalf of an Indemnified  Tax Person under any
Loan Document (i) the Company or the Guarantor  shall pay such  Indemnified  Tax
before the date on which penalties  attach thereto,  such payment to be made for
its own  account  (if the  liability  to pay is  imposed  on the  Company or the
Guarantor)  or on behalf of and in the name of such  Indemnified  Tax Person (if
the  liability  is imposed on such  Indemnified  Tax  Person),  and (ii) the sum
payable to such Indemnified Tax Person shall be increased as may be necessary so
that after making all required deductions and withholdings (including deductions
and withholdings  applicable to additional sums payable under this Section) such
Indemnified  Tax  Person  receives  an  amount  equal to the sum it  would  have
received had no such deductions or withholdings been made.

           (c) Other  Taxes.  The  Company  and the  Guarantor  agree to pay any
current or future  stamp or  documentary  taxes or any other  excise or property
taxes,  charges or similar  levies that rise from any payment made  hereunder or
from the execution, delivery or registration of, or any amendment, supplement or
modification  of, or any  waiver or  consent  under or in  respect  of, the Loan
Documents or otherwise  with respect to, the Loan Documents  (collectively,  the
"Other Taxes").



<PAGE>


           (c) Evidence of Payment.  Within 30 days after the reasonable request
therefor  by  the  Administrative  Agent  in  connection  with  any  payment  of
Indemnified  Taxes or Other Taxes, the Company or the Guarantor,  as applicable,
will furnish to the Administrative  Agent the original or a certified copy of an
official  receipt  from the  jurisdiction  to which  payment is made  evidencing
payment thereof or, if  unavailable,  a certificate  from a Responsible  Officer
that  states  that such  payment  has been made and that sets forth the date and
amount of such payment.

           (d) U.S.  Tax  Certificates.  Each  Indemnified  Tax  Person  that is
organized under the laws of any jurisdiction other than the United States or any
political  subdivision  thereof  that  is  exempt  from  United  States  federal
withholding  tax,  or that is  subject  to such tax at a reduced  rate  under an
applicable  treaty,  with  respect to payments  under the Loan  Documents  shall
deliver to the Administrative Agent for transmission to the Company, on or prior
to the Closing Date (in the case of each  Indemnified  Tax Person  listed on the
signature  pages  hereof)  or on  the  effective  date  of  the  Assignment  and
Acceptance  Agreement  or  other  document  pursuant  to  which  it  becomes  an
Indemnified Tax Person (in the case of each other  Indemnified Tax Person),  and
at such other times as the Company or the  Administrative  Agent may  reasonably
request,  Internal  Revenue  Form  4224 or Form  1001 or  other  certificate  or
document  required  under  United  States law to establish  entitlement  to such
exemption  or reduced  rate.  Neither  the Company  nor the  Guarantor  shall be
required to pay any additional  amount to any such  Indemnified Tax Person under
subsection (b) above if such Indemnified Tax Person shall have failed to satisfy
the requirements of the immediately  preceding  sentence;  provided that if such
Indemnified  Tax Person shall have  satisfied such  requirements  on the Closing
Date (in the case of each  Indemnified  Tax Person listed on the signature pages
hereof) or on the effective date of the  Assignment and Acceptance  Agreement or
other  document  pursuant to which it became an  Indemnified  Tax Person (in the
case of each other  Indemnified Tax Person),  nothing in this  subsection  shall
relieve the Company or the  Guarantor of its  obligation  to pay any  additional
amounts  pursuant to subsection (b) in the event that, as a result of any change
in applicable law or treaty,  such  Indemnified Tax Person is no longer properly
entitled to deliver  certificates,  documents or other  evidence at a subsequent
date  establishing  the fact  that  such  Indemnified  Tax  Person  is no longer
entitled to such exemption or reduced rate.

     3.2 Illegality.  (a) If any Bank  determines  that the  introduction of any
Requirement  of  Law,  or  any  change  in any  Requirement  of  Law,  or in the
interpretation  or  administration  of any  Requirement  of  Law,  has  made  it
unlawful, or that any central bank or other Governmental  Authority has asserted
that it is  unlawful,  for any Bank or its  applicable  Lending  Office  to make
Eurodollar  Rate  Loans,  then,  on notice  thereof  by the Bank to the  Company
through the Administrative Agent, any obligation of that Bank to make Eurodollar
Rate Loans shall be suspended until the Bank notifies the  Administrative  Agent
and the Company  that the  circumstances  giving rise to such  determination  no
longer exist.



<PAGE>


           (b)  If a  Bank  determines  that  it is  unlawful  to  maintain  any
Eurodollar Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Bank (with a copy to the Administrative  Agent),  prepay in
full such  Eurodollar  Rate Loans of that Bank then  outstanding,  together with
interest  accrued thereon and amounts  required under Section 3.4, either on the
last day of the Interest  Period thereof,  if the Bank may lawfully  continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if the Bank may
not lawfully  continue to maintain such  Eurodollar Rate Loan. If the Company is
required to so prepay any  Eurodollar  Rate Loan,  then  concurrently  with such
prepayment,  the Company  shall borrow from the affected  Bank, in the amount of
such repayment, a Base Rate Loan.

     3.3  Increased  Costs and Reduction of Return.  (a) If any Bank  determines
that, due to either (i) the introduction of or any change (other than any change
by way of  imposition  of or  increase in reserve  requirements  included in the
calculation of the Eurodollar  Rate or in respect of the assessment rate payable
by any Bank to the FDIC for insuring U.S.  deposits) in or in the interpretation
of any law or regulation or (ii) the  compliance by that Bank with any guideline
or request from any central bank or other Governmental Authority (whether or not
having the force of law),  there shall be any  increase in the cost to such Bank
of agreeing to make or making, funding or maintaining any Eurodollar Rate Loans,
then the Company  shall be liable for, and shall from time to time,  upon demand
(with a copy of such demand to be sent to the Administrative  Agent), pay to the
Administrative  Agent for the  account of such Bank,  additional  amounts as are
sufficient to compensate such Bank for such increased costs.

           (b) If any Bank shall have  determined  that (i) the  introduction of
any  Capital  Adequacy  Regulation,  (ii) any  change  in any  Capital  Adequacy
Regulation,  (iii) any change in the  interpretation  or  administration  of any
Capital Adequacy Regulation by any central bank or other Governmental  Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Bank (or its Lending  Office) or any  corporation  controlling the Bank with
any Capital Adequacy  Regulation,  affects or would affect the amount of capital
required or expected to be maintained by the Bank or any corporation controlling
the Bank and  (taking  into  consideration  such  Bank's  or such  corporation's
policies  with  respect to capital  adequacy and such Bank's  desired  return on
capital)  determines  that  the  amount  of  such  capital  is  increased  as  a
consequence  of  its  Commitment,  loans,  credits  or  obligations  under  this
Agreement,   then,  upon  demand  of  such  Bank  to  the  Company  through  the
Administrative  Agent,  the Company shall pay to the Bank,  from time to time as
specified by the Bank,  additional amounts sufficient to compensate the Bank for
such increase.

     3.4 Funding  Losses.  The Company shall  reimburse  each Bank and hold each
Bank  harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:

           (a    the  failure  of the  Company  to make on a  timely  basis  any
payment of principal of any Eurodollar Rate Loan;


<PAGE>


           (b the failure of the  Company to borrow,  continue or convert a Loan
after the Company  has given (or is deemed to have given) a Notice of  Borrowing
or a Notice of Conversion/ Continuation;

           (c    the   failure  of  the  Company  to  make  any  prepayment   in
accordance with any notice delivered under Section 2.6;

           (d the  prepayment  (including  pursuant  to  Section  2.7) or  other
payment (including after  acceleration  thereof) of an Eurodollar Rate Loan on a
day that is not the last day of the relevant Interest Period; or

           (e the automatic  conversion under Section 2.4 of any Eurodollar Rate
Loan to a Base  Rate  Loan on a day  that is not the  last  day of the  relevant
Interest Period;

including any such loss or expense  arising from the liquidation or reemployment
of funds  obtained  by it to  maintain  its  Eurodollar  Rate Loans or from fees
payable to  terminate  the  deposits  from which such funds were  obtained.  For
purposes of calculating  amounts  payable by the Company to the Banks under this
Section and under  subsection  3.3(a),  each Eurodollar Rate Loan made by a Bank
(and each related  reserve,  special  deposit or similar  requirement)  shall be
conclusively  deemed  to  have  been  funded  at the  Dollar  deposits  used  in
determining  the  Eurodollar  Rate for such  Eurodollar  Rate Loan by a matching
deposit or other borrowing in the interbank  eurodollar  market for a comparable
amount and for a comparable period,  whether or not such Eurodollar Rate Loan is
in fact so funded.

     3.5 Inability to Determine  Rates. If the Majority Banks determine that for
any  reason  adequate  and  reasonable  means do not exist for  determining  the
Eurodollar  Rate for any  requested  Interest  Period with respect to a proposed
Eurodollar  Rate  Loan,  or that the  Eurodollar  Rate  applicable  pursuant  to
subsection  2.9(a) for any requested  Interest Period with respect to a proposed
Eurodollar  Rate Loan does not  adequately  and fairly  reflect  the cost to the
Banks of funding such Loan, the Administrative Agent will promptly so notify the
Company  and each  Bank.  Thereafter,  the  obligation  of the  Banks to make or
maintain Eurodollar Rate Loans, as the case may be, hereunder shall be suspended
until the  Administrative  Agent  upon the  instruction  of the  Majority  Banks
revokes such notice in writing.  Upon  receipt of such  notice,  the Company may
revoke  any  Notice  of  Borrowing  or Notice  of  Conversion/Continuation  then
submitted  by it. If the Company  does not revoke such  Notice,  the Banks shall
make,  convert or continue the Loans, as proposed by the Company,  in the amount
specified in the  applicable  notice  submitted  by the Company,  but such Loans
shall be made,  converted or continued as Base Rate Loans  instead of Eurodollar
Rate Loans.



<PAGE>


     3.6  Certificates  of Banks.  Any Bank or Agent claiming  reimbursement  or
compensation under this Article III shall deliver to the Company (with a copy to
the Administrative  Agent) a certificate  setting forth in reasonable detail the
amount  payable to the Bank or Agent  hereunder  and such  certificate  shall be
conclusive and binding on the Company in the absence of manifest error.

     3.7 Survival. The agreements and obligations of the Company in this Article
III shall survive the payment of all other Obligations.


                                  ARTICLE IV

                             CONDITIONS PRECEDENT

     4.1  Conditions of Initial  Loans.  The obligation of each Bank to make its
initial Loan hereunder is subject to the following conditions:

           (a) The  Administrative  Agent  shall have  received on or before the
initial borrowing date all of the following,  in form and substance satisfactory
to the  Administrative  Agent and each Bank,  and in sufficient  copies for each
Bank (except for the Notes, of which only the originals shall be signed):

           (i) Credit Agreement.  This Agreement executed by each party hereto;

           (ii) Notes.  The Notes (if any);

           (iii) Resolutions; Incumbency.

                 (A) Copies of the  resolutions of the board of directors of the
     Company and the Guarantor authorizing the transactions contemplated hereby,
     certified as of the Closing Date by the Secretary or an Assistant Secretary
     of such Person; and

                 (B) A certificate  of the  Secretary or Assistant  Secretary of
     the Company and the Guarantor  certifying the names and true  signatures of
     the officers of the Company or the Guarantor authorized to execute, deliver
     and perform, as applicable, this Agreement, and all other Loan Documents to
     be delivered by it hereunder;

           (iv   Organization  Documents;  Good  Standing. Each of the following
documents:

                 (A) the articles or certificate of incorporation and the bylaws
     of the  Company  and  the  Guarantor  as in  effect  on the  Closing  Date,
     certified by the  Secretary  or  Assistant  Secretary of the Company or the
     Guarantor as of the Closing Date; and



<PAGE>


                 (B) a  good  standing  certificate  for  the  Company  and  the
     Guarantor from the Secretary of State (or similar,  applicable Governmental
     Authority) of its state of incorporation;

           (v)   Legal Opinions.

                 (A) An opinion of Thomas Steenburg,  counsel to the Company and
     addressed to the Agents and the Banks, substantially in the form of Exhibit
     D-1; and

                 (B) An opinion of John T. Mulrain, counsel to the Guarantor and
     addressed to the Agents and the Banks, substantially in the form of Exhibit
     D-2;

           (vi)Payment  of Fees.  Evidence  of  payment  by the  Company  of all
accrued and unpaid  fees,  costs and expenses to the extent then due and payable
on the Closing Date, together with Attorney Costs of BofA to the extent invoiced
prior to or on the Closing Date, plus such additional  amounts of Attorney Costs
as shall constitute BofA's reasonable  estimate of Attorney Costs incurred or to
be incurred by it through the closing  proceedings  (provided that such estimate
shall not thereafter preclude final settling of accounts between the Company and
BofA);  including any such costs,  fees and expenses arising under or referenced
in Sections 2.10 and 13.4;

           (vii) Certificate.  A certificate signed by a Responsible  Officer of
each of the Company and the  Guarantor,  dated as of the Closing  Date,  stating
that:

                 (A) the representations  and warranties  contained in Article V
     are true and  correct on and as of such date,  as though  made on and as of
     such date;

                 (B) no Default or Event of Default  exists or would result from
     the initial Borrowing; and

                 (C) there has occurred  since  December  31, 1997,  no event or
     circumstance that has resulted or could reasonably be expected to result in
     a Material Adverse Effect; and

           (viii)      Other   Documents.   Such   other  approvals,   opinions,
documents or materials as the Administrative Agent or any Bank may request.



<PAGE>


           (b The Administrative  Agent shall have received a certificate signed
by a Responsible Officer of the Company stating that all material  governmental,
creditor,  shareholder and other third party approvals and consents necessary in
connection  with the  execution  and  delivery  by each of the  Company  and the
Guarantor of the Loan Documents to which it is a party,  and the  performance by
each  of the  Company  and the  Guarantor  of its  obligations  under  the  Loan
Documents,  shall have been  obtained  and  remain in effect and any  applicable
waiting periods shall have expired.

           (c)  The   Administrative   Agent   shall  have   received   evidence
(satisfactory to the  Administrative  Agent) that the Zweig Acquisition has been
completed  on  substantially  similar  terms to  those  described  in the  Zweig
Acquisition Agreement.

     4.2 Conditions to All  Borrowings.  The obligation of each Bank to make any
Loan  to  be  made  by it  (including  its  initial  Loan)  is  subject  to  the
satisfaction  of the following  conditions  precedent on the relevant  Borrowing
Date:

           (a) Notice of Borrowing. The Administrative Agent shall have received
(with,  in the case of the initial  Loan only, a copy for each Bank) a Notice of
Borrowing;

           (b)   Continuation   of   Representations    and   Warranties.    The
representations  and warranties in Article V shall be true and correct on and as
of  such  Borrowing  Date  with  the  same  effect  as if made on and as of such
Borrowing  Date  (except  to the  extent  such  representations  and  warranties
expressly refer to an earlier date, in which case they shall be true and correct
as of such earlier date and in the case of Section 5.16, as otherwise  permitted
hereunder); and

           (c) No Existing  Default.  No Event of Default or Default shall exist
or shall result from such Borrowing.

Each Notice of Borrowing  submitted by the Company  hereunder shall constitute a
representation  and  warranty by the Company  hereunder,  as of the date of each
such notice and as of each  Borrowing  Date,  that the conditions in Section 4.2
are satisfied.


                                    ARTICLE V

                        REPRESENTATIONS AND WARRANTIES

     The Guarantor and the Company  represent and warrant to each Agent and each
Bank that:

     5.1  Corporate   Existence  and  Power.  The  Guarantor  and  each  of  its
Subsidiaries:

           (a    is a corporation  duly organized,  alidly  existing and in good
standing under the laws of the jurisdiction of its incorporation;

           (b has  the  power  and  authority  and  all  governmental  licenses,
authorizations,  consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;



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           (c is duly qualified as a foreign  corporation and is licensed and in
good standing under the laws of each jurisdiction where its ownership,  lease or
operation of property or the conduct of its business requires such qualification
or license; and

           (d is in compliance  with all  Requirements of Law;  except,  in each
case  referred to in clause (c) or clause (d), to the extent that the failure to
do so could not reasonably be expected to have a Material Adverse Effect.

     5.2 Corporate Authorization; No Contravention.  The execution, delivery and
performance  by the Guarantor and its  Subsidiaries  of this  Agreement and each
other Loan Document to which such Person is party,  have been duly authorized by
all necessary corporate action, and do not and will not:

           (a    contravene  the  terms  of any  of  that Person's  Organization
Documents;

           (b conflict with or result in any breach or contravention  of, or the
creation of any Lien under, any document  evidencing any Contractual  Obligation
to which such Person is a party or any order, injunction,  writ or decree of any
Governmental Authority to which such Person or its property is subject; or

           (c    violate any Requirement of Law.

     5.3   Governmental   Authorization.   No  approval,   consent,   exemption,
authorization,   or  other  action  by,  or  notice  to,  or  filing  with,  any
Governmental   Authority  is  necessary  or  required  in  connection  with  the
execution,  delivery or performance by, or enforcement against, the Guarantor or
any of its  Subsidiaries  of the  Agreement or any other Loan  Document,  except
filings  made prior to the date hereof and other  filings  which will be made as
required by law.

     5.4 Binding  Effect.  This  Agreement and each other Loan Document to which
the Guarantor or the Company is a party constitute the legal,  valid and binding
obligations of the Guarantor and the Company, enforceable against such Person in
accordance with their respective terms,  except as enforceability may be limited
by applicable bankruptcy,  insolvency, or similar laws affecting the enforcement
of  creditors'  rights  generally  or  by  equitable   principles   relating  to
enforceability.

     5.5 Litigation. Except as specifically disclosed in Schedule 5.5, there are
no  actions,  suits,  proceedings,  claims or disputes  pending,  or to the best
knowledge of the Company or the Guarantor,  threatened or contemplated,  at law,
in equity,  in arbitration  or before any  Governmental  Authority,  against the
Guarantor  or the  Company  or its  Subsidiaries  or  any  of  their  respective
properties which:




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           (a    purport  to affect or  pertain  to this Agreement  or any other
Loan Document, or any of the transactions contemplated hereby or thereby;

           (b as to which there exists a  substantial  likelihood  of an adverse
determination,  which  determination  would  reasonably  be  expected  to have a
Material Adverse Effect. No injunction, writ, temporary restraining order or any
order of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution,  delivery or performance of this
Agreement  or any  other  Loan  Document,  or  directing  that the  transactions
provided for herein or therein not be consummated as herein or therein provided;
or

           (c    seeks  damages  in an  amount reasonably  expected  to  have  a
Material Adverse Effect.

     5.6 Contractual  Obligation.  As of the Closing Date, neither the Guarantor
nor any  Subsidiary  is in  default  under or with  respect  to any  Contractual
Obligation  in any  respect  which,  individually  or  together  with  all  such
defaults, could reasonably be expected to have a Material Adverse Effect.

     5.7 ERISA Compliance. Except as specifically disclosed in Schedule 5.7:

           (a Each  Plan is in  compliance  in all  material  respects  with the
applicable  provisions  of ERISA,  the Code and other  federal or state law. The
Guarantor and each ERISA  Affiliate has made all required  contributions  to any
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any  amortization  period pursuant to Section 412 of the Code
has been made with respect to any Plan.

           (b There are no  pending  or,  to the best  knowledge  of  Guarantor,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could  reasonably  be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary  responsibility  rules with respect to any Plan which
has  resulted or could  reasonably  be expected to result in a Material  Adverse
Effect.



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           (c (i) No ERISA  Event has  occurred  or is  reasonably  expected  to
occur;  (ii) no Pension Plan has any Unfunded Pension  Liability;  (iii) neither
the Guarantor nor any ERISA  Affiliate  has incurred,  or reasonably  expects to
incur,  any  liability  under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent  under Section 4007 of ERISA);  (iv)
neither the  Guarantor  nor any ERISA  Affiliate  has  incurred,  or  reasonably
expects to incur,  any  liability  (and no event has  occurred  which,  with the
giving of notice under  Section 4219 of ERISA,  would result in such  liability)
under Section 4201 or 4243 of ERISA with respect to a  Multiemployer  Plan;  and
(v) neither the Guarantor  nor any ERISA  Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.

     5.8 Use of Proceeds;  Margin Regulations.  The proceeds of the Loans are to
be used solely for the purposes  set forth in and  permitted by Section 6.12 and
Section 7.6.  Neither the Guarantor nor any  Subsidiary is generally  engaged in
the business of purchasing or selling  Margin Stock or extending  credit for the
purpose of purchasing or carrying Margin Stock.

     5.9 Title to  Properties.  The  Guarantor  and its  Subsidiaries  have good
record and marketable  title in fee simple to, or valid leasehold  interests in,
all real property  necessary or used in the ordinary conduct of their respective
businesses,  except for such defects in title as could not,  individually  or in
the  aggregate,  have a Material  Adverse  Effect.  As of the Closing Date,  the
property of the Guarantor  and its  Subsidiaries  is subject to no Liens,  other
than Permitted Liens.

     5.10 Taxes. The Guarantor and its  Subsidiaries  have filed all Federal and
other material tax returns and reports  required to be filed,  and have paid all
Federal  and other  material  taxes,  assessments,  fees and other  governmental
charges  levied  or  imposed  upon  them or their  properties,  income or assets
otherwise due and payable,  except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment  against the Guarantor
or any Subsidiary that would, if made, have a Material Adverse Effect.

     5.11 Financial  Condition.  (a) The statutory  financial  statements of the
Guarantor and its Primary Insurance Subsidiaries dated December 31, 1997 and the
statutory  statements of the Guarantor  and its Primary  Insurance  Subsidiaries
dated  September 30, 1998,  and the related  statements of income or operations,
surplus or capital and surplus  and cash flows for the fiscal  periods  ended on
those dates:

                 (i were prepared in accordance  with SAP  consistently  applied
     throughout the period covered thereby,  except as otherwise expressly noted
     therein,  subject  in the case of the  September  30,  1998  statements  to
     ordinary, good faith year end audit adjustments;

                 (ii fairly present the financial condition of the Guarantor and
     its Primary  Insurance  Subsidiaries  as of the date thereof and results of
     operations for the period covered thereby; and



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                 (iii except as  specifically  disclosed in Schedule 5.11,  show
     all material indebtedness and other liabilities,  direct or contingent,  of
     the  Guarantor  and  its  Primary  Insurance  Subsidiaries  as of the  date
     thereof,   including   liabilities  for  taxes,  material  commitments  and
     Contingent Obligations.

           (b The audited  consolidated  financial statements of the Company and
its  Subsidiaries  dated  December  31,  1997,  and the  unaudited  consolidated
statements of the Company and its Subsidiaries dated September 30, 1998, and the
related  consolidated  statements of income or operations,  shareholders' equity
and cash flows for the fiscal periods ended on those dates:

                 (i were prepared in accordance with GAAP  consistently  applied
     throughout the period covered thereby,  except as otherwise expressly noted
     therein,  subject in the case of the  September  30,  1998,  statements  to
     ordinary, good faith year end audit adjustments;

                 (ii fairly  present the  financial condition of the Company and
     its  Subsidiaries  as of the date thereof and results of operations for the
     period covered thereby; and

                 (iii except as  specifically  disclosed in Schedule 5.11,  show
     all material indebtedness and other liabilities,  direct or contingent,  of
     the  Company  and its  consolidated  Subsidiaries  as of the date  thereof,
     including  liabilities  for  taxes,  material  commitments  and  Contingent
     Obligations.

           (c Since December 31,1997, there has been no Material Adverse Effect.

     5.12 Environmental  Matters.  The Guarantor conducts in the ordinary course
of business a review of the effect of existing  Environmental  Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the  Guarantor  has  reasonably  concluded to the best of its  knowledge
that, except as specifically disclosed in Schedule 5.12, such Environmental Laws
and Environmental Claims could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

     5.13 Regulated Entities. The Company is not subject to regulation under the
Public  Utility  Holding  Company  Act of  1935,  the  Federal  Power  Act,  the
Interstate  Commerce Act, any state public  utilities code, or any other Federal
or state statute or regulation  limiting its ability to incur  Indebtedness.  No
filings,  approvals or consents are required under the Investment Company Act of
1940 for the enforceability of this Agreement or any other Loan Document.

     5.14 No Burdensome  Restrictions.  Neither the Guarantor nor any Subsidiary
is a  party  to or  bound  by any  Contractual  Obligation,  or  subject  to any
restriction in any Organization Document, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.



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     5.15 Copyrights,  Patents,  Trademarks and Licenses,  etc. The Guarantor or
its  Subsidiaries  own or are licensed or otherwise have the right to use all of
the patents,  trademarks,  service marks, trade names,  copyrights,  contractual
franchises,  authorizations  and other rights that are reasonably  necessary for
the operation of their respective  businesses,  without conflict with the rights
of any other Person. To the best knowledge of the Guarantor,  no slogan or other
advertising device, product,  process, method, substance, part or other material
now  employed,  or now  contemplated  to be  employed,  by the  Guarantor or any
Subsidiary  infringes  upon any  rights  held by any  other  Person.  Except  as
specifically  disclosed in Schedule 5.5, no claim or litigation regarding any of
the  foregoing  is pending or  threatened,  and no  patent,  invention,  device,
application,  principle or any statute, law, rule, regulation,  standard or code
is pending or, to the knowledge of the  Guarantor,  proposed,  which,  in either
case, could reasonably be expected to have a Material Adverse Effect.

     5.16   Subsidiaries.   As  of  the  Closing  Date,  the  Guarantor  has  no
Subsidiaries  other than those  specifically  disclosed  in part (a) of Schedule
5.16 hereto and the Company has no equity  investments in any other  corporation
or entity other than those specifically disclosed in part (b) of Schedule 5.16.

     5.17  Insurance.  Except as  specifically  disclosed in Schedule  5.17, the
properties of the Guarantor and its  Subsidiaries  are insured with  financially
sound and reputable insurance companies not Affiliates of the Guarantor, in such
amounts,  with such  deductibles  and  covering  such  risks as are  customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Guarantor or such Subsidiary operates.

     5.18 Full Disclosure. None of the representations or warranties made by the
Guarantor  or  any  Subsidiary  in  the  Loan  Documents  as of  the  date  such
representations  and  warranties  are  made  or  deemed  made,  and  none of the
statements contained in any exhibit,  report, statement or certificate furnished
by or on behalf of the Guarantor or any  Subsidiary in connection  with the Loan
Documents  (including the offering and disclosure  materials  delivered by or on
behalf of the  Guarantor to the Banks prior to the Closing  Date),  contains any
untrue  statement of a material  fact or omits any material  fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered;  provided,  that, to the extent the representations and warranties
set forth in this Section 5.18 relate to the Zweig Group,  they shall be made to
the best of the knowledge of the Guarantor and the Company after due inquiry.



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     5.19 Zweig Acquisition Agreement. The representations and warranties of the
Company and, to the best of the knowledge of the Company after due inquiry,  the
sellers contained in the Zweig Acquisition Agreement (a true and correct copy of
which Zweig  Acquisition  Agreement,  together  with all  schedules and exhibits
thereto,  has been delivered to the Banks), are true and correct in all respects
which, upon consummation of the Zweig Acquisition, could have a Material Adverse
Effect.  As of the date of the Zweig  Acquisition,  (i) the  Company  shall have
taken all necessary  corporate actions to authorize the Zweig  Acquisition;  and
(ii) no  representation  made by the Company or, to the best of the knowledge of
the  Company  after due  inquiry,  the  sellers,  under such  Zweig  Acquisition
Agreement,  in any notices or filings  with the  shareholders  of the Company or
such sellers,  with the SEC or any applicable  state  securities  commissions or
with   any   governmental   authority   including,   without   limitation,   any
representations  concerning  any agreement  with, or financing  provided by, the
Banks,  contain  any untrue  statement  of a material  fact or omit to state any
material  fact  required to be stated  therein or necessary in order to make the
statements  made  therein,  in light of the  circumstances  under which they are
made, not misleading as of the time when made or delivered.

     5.20  Compliance.  The  Guarantor  and  each  of  its  Subsidiaries  is  in
compliance with all applicable laws and regulations,  all applicable ordinances,
decrees,  requirements,  orders  and  judgments  of, and all of the terms of any
applicable  licenses and permits  issued by, any  governmental  body,  agency or
official,  and all agreements and  instruments to which it may be subject or any
of its  properties  may be bound,  in each case where the violation  thereof may
have a Material Adverse Effect.

     5.21 Year 2000  Problem.  The  Guarantor  and the Company and each of their
respective  Subsidiaries  have  reviewed  the areas  within  their  business and
operations  which could be  adversely  affected  by, and have  developed  or are
developing a program to address on a timely basis, the "Year 2000 Problem" (that
is, the risk that  computer  applications  used by the Guarantor and the Company
and each of their respective Subsidiaries may be unable to recognize and perform
properly date-sensitive  functions involving certain dates prior to and any date
after  December 31, 1999).  Based on such review and program,  the Guarantor and
the Company  reasonably  believe  that the "Year 2000  Problem"  will not have a
Material Adverse Effect.

                                  ARTICLE VI

                              AFFIRMATIVE COVENANTS

     So long as any Bank shall  have any  Commitment  hereunder,  or any Loan or
other Obligation  shall remain unpaid or unsatisfied,  unless the Majority Banks
waive compliance in writing:

     6VI.1 Financial Statements.  The Guarantor and/or the Company shall deliver
to  the   Administrative   Agent,  in  form  and  detail   satisfactory  to  the
Administrative  Agent and the Majority Banks,  with  sufficient  copies for each
Bank:



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           (a as soon as available, but not later than 120 days after the end of
each  fiscal  year,  a copy of the  audited  consolidated  balance  sheet of the
Company  and  its  Subsidiaries  as at the  end of such  year  and  the  related
consolidated  statements of income or operations,  shareholders' equity and cash
flows for such year,  setting forth in each case in comparative form the figures
for  the   previous   fiscal   year,   and   accompanied   by  the   opinion  of
PricewaterhouseCoopers  or  another  nationally-recognized   independent  public
accounting  firm  ("Independent  Auditor")  which  report  shall state that such
consolidated  financial statements present fairly the financial position for the
periods  indicated in conformity  with GAAP applied on a basis  consistent  with
prior  years.  Such  opinion  shall not be  qualified  or  limited  because of a
restricted or limited  examination  by the  Independent  Auditor of any material
portion of the Company's or any Subsidiary's records;

           (b as soon as available,  but not later than 60 days after the end of
each of the first  three  fiscal  quarters of each  fiscal  year,  a copy of the
unaudited  consolidated  balance sheet of the Company and its Subsidiaries as of
the end of such  quarter  and the  related  consolidated  statements  of income,
shareholders'  equity and cash flows for the period  commencing on the first day
and  ending on the last day of such  quarter,  and  certified  by a  Responsible
Officer of the Company as fairly presenting, in accordance with GAAP (subject to
ordinary, good faith year-end audit adjustments), the financial position and the
results of operations of the Company and the Subsidiaries;

           (c as soon as available, but not later than 120 days after the end of
each fiscal  year,  a copy of the Annual  Statement  of the  Guarantor  for such
fiscal year prepared in accordance with SAP and accompanied by the certification
of a Responsible  Officer of the Guarantor that such Annual  Statement  presents
fairly in accordance  with SAP the  financial  position of the Guarantor for the
period then ended;

           (d as soon as  possible,  but no later  than 60 days after the end of
each of the first  three  fiscal  quarters of each  fiscal  year,  a copy of the
quarterly  consolidated statement of the Guarantor for each such fiscal quarter,
all prepared in accordance with GAAP and accompanied by the  certification  of a
Responsible  Officer  of the  Guarantor  that  all such  quarterly  consolidated
statements  present fairly in accordance with GAAP the financial position of the
Guarantor for the period then ended;

           (e as soon as  available,  a copy of the  Guarantor's  "Statement  of
Actuarial   Opinion"   which  is  provided  to  the  Department  (or  equivalent
information  should the Department no longer require such a statement) as to the
adequacy of loss reserves of the Guarantor, which opinion shall be in the format
prescribed by the Insurance Code;



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           (f as soon as  available,  a copy of the  Management  Discussion  and
Analysis  filed  with  the  Department  with  respect  to any  of the  foregoing
financial statements and such other information; and

           (g  within  90  days  after  each  fiscal  year,  projections  of the
Company's  financial  performance  on an annual  basis for the next fiscal year,
prepared by the Company's management.

     6VI.2  Certificates;  Other  Information.  The Company shall furnish to the
Administrative Agent, with sufficient copies for each Bank:

           (a  concurrently  with  the  delivery  of  the  financial  statements
referred to in subsections 6.1(a) and (b), a Compliance  Certificate executed by
a Responsible Officer of the Company;

           (b promptly,  copies of all financial statements and reports that the
Guarantor or the Company sends to its policyholders or shareholders,  and copies
of all financial statements and regular,  periodical or special reports that the
Guarantor or any Subsidiary may make to, or file with, the SEC;

           (c    promptly,  upon a change in the Guarantor's Financial  Strength
Rating, written notice of such change by a Responsible Officer; and

           (d promptly,  such  additional  information  regarding  the business,
financial  or  corporate  affairs  of the  Guarantor  or any  Subsidiary  as the
Administrative  Agent,  at the  request  of any  Bank,  may  from  time  to time
reasonably request.

     6.3  Notices.  The  Company and the  Guarantor  shall  promptly  notify the
Administrative Agent and each Bank:

           (a    of any change in a Rating;

           (b of the  occurrence  of any  Default or Event of Default and of the
occurrence  or  existence of any event or  circumstance  that  foreseeably  will
become a Default or Event of Default;

           (c of any  matter  that has  resulted  or may  result  in a  Material
Adverse  Effect,  including  (i) breach or  non-performance  of, or any  default
under,  a Contractual  Obligation of the Guarantor or any  Subsidiary;  (ii) any
dispute,  litigation,  investigation,   proceeding  or  suspension  between  the
Guarantor  or any  Subsidiary  and any  Governmental  Authority;  or  (iii)  the
commencement  of, or any material  development  in, any litigation or proceeding
affecting the Guarantor or any Subsidiary;  including pursuant to any applicable
Environmental Laws;



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           (d of the  occurrence  of any of the following  events  affecting the
Guarantor or any ERISA  Affiliate  (but in no event more than 10 days after such
event),  and  deliver  to the  Administrative  Agent and each Bank a copy of any
notice with  respect to such event that is filed with a  Governmental  Authority
and any notice  delivered by a  Governmental  Authority to the  Guarantor or any
ERISA Affiliate with respect to such event:

                 (i)   an ERISA Event;

                 (ii) a material  increase in the Unfunded Pension  Liability of
     any Pension Plan;

                 (iii) the adoption of, or the commencement of contributions to,
     any Plan  subject  to Section  412 of the Code by the  Company or any ERISA
     Affiliate; or

                 (iv) the adoption of any amendment to a Plan subject to Section
     412 of the Code,  if such  amendment  results;  in a material  increase  in
     contributions or Unfunded Pension Liability;

           (e) of any  material  change  in  accounting  policies  or  financial
reporting practices by the Guarantor or any of its Primary Subsidiaries; and

           (f)  of  any  proposed  Acquisition  by  the  Company  or  any of its
Subsidiaries,  the total  consideration  for  which  shall  exceed  $10,000,000,
together with pro forma financial  statements  giving effect to such Acquisition
but subject to the requirements of any applicable confidentiality agreement.

           Each notice  under this  Section  shall be  accompanied  by a written
statement by a Responsible Officer of the Company or the Guarantor setting forth
details of the  occurrence  referred  to therein,  and  stating  what action the
Company,  the Guarantor or any affected Subsidiary proposes to take with respect
thereto and at what time.  Each notice under  subsection  6.3(b) shall  describe
with  particularity any and all clauses or provisions of this Agreement or other
Loan Document that have been (or foreseeably will be) breached or violated.

     6.4 Preservation of Corporate Existence, Etc. The Guarantor and the Company
shall, and shall cause each of their respective Subsidiaries to:

           (a)  preserve  and  maintain  in full force and effect its  corporate
existence  and good  standing  under  the laws of its state or  jurisdiction  of
incorporation;

           (b) preserve  and maintain in full force and effect all  governmental
rights, privileges,  qualifications,  permits, licenses and franchises necessary
or desirable in the normal conduct of its business;

           (c)   use reasonable efforts,  in the ordinary course of business, to
preserve its business organization and goodwill; and



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           (d)  preserve  or renew all of its  registered  patents,  trademarks,
trade names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

     6.5 Maintenance of Property.  The Guarantor and the Company shall maintain,
and shall cause each of their respective  Subsidiaries to maintain, and preserve
all its property  which is used or useful in its business in good working  order
and condition, ordinary wear and tear excepted.

     6.6  Insurance.  The Guarantor and the Company  shall  maintain,  and shall
cause each of their respective  Subsidiaries to maintain, with financially sound
and reputable independent insurers, insurance with respect to its properties and
business  against  loss or damage of the kinds  customarily  insured  against by
Persons  engaged  in the same or  similar  business,  of such  types and in such
amounts as are  customarily  carried under similar  circumstances  by such other
Persons.

     6.7 Payment of Obligations.  The Guarantor and the Company shall, and shall
cause each of their  respective  Subsidiaries  to, pay and discharge as the same
shall become due and payable, all their respective  obligations and liabilities,
including:

           (a) all tax  liabilities,  assessments  and  governmental  charges or
levies upon it or its properties or assets,  unless the same are being contested
in good faith by  appropriate  proceedings  and adequate  reserves in accordance
with GAAP are being maintained by the Guarantor, the Company or such Subsidiary;

           (b)   all lawful claims which,  if unpaid, would by law become a Lien
upon its property; and

           (c) all indebtedness, as and when due and payable, but subject to any
subordination  provisions  contained in any  instrument or agreement  evidencing
such Indebtedness.

     6.8 Compliance  with Laws. The Guarantor and the Company shall comply,  and
shall cause each of their  respective  Subsidiaries  to comply,  in all material
respects  with all  Requirements  of Law of any  Governmental  Authority  having
jurisdiction over it or its business (including the Federal Fair Labor Standards
Act),  except such as may be  contested in good faith or as to which a bona fide
dispute may exist.

     6.9 Compliance with ERISA.  The Company shall,  and shall cause each of its
ERISA  Affiliates  to: (a)  maintain  each Plan in  compliance  in all  material
respects with the applicable  provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified  under  Section  401(a) of the
Code to maintain such qualification;  and (c) make all required contributions to
any Plan subject to Section 412 of the Code.



<PAGE>


     6.10  Inspection  of Property and Books and Records.  The Guarantor and the
Company shall maintain, and shall cause each of their respective Subsidiaries to
maintain,  proper books of record and account,  in which full,  true and correct
entries in  conformity  with GAAP or SAP, as  applicable,  consistently  applied
shall be made of all financial transactions and matters involving the assets and
business of the Guarantor,  the Company and such  Subsidiary.  The Guarantor and
the Company shall permit, and shall cause each of their respective  Subsidiaries
to permit,  representatives  and independent  contractors of the  Administrative
Agent or any Bank to visit and inspect any of their  respective  properties,  to
examine their respective  corporate,  financial and operating records,  and make
copies thereof or abstracts therefrom,  and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and independent
public  accountants,  all at the expense of the Guarantor and the Company and at
such  reasonable  times  during  normal  business  hours  and as often as may be
reasonably  desired,  upon reasonable  advance notice to the Company;  provided,
however,  when an Event of Default or Default exists the Administrative Agent or
any Bank may do any of the foregoing  during normal  business  hours and without
advance notice.

     6.11  Environmental  Laws. The Guarantor and the Company  shall,  and shall
cause each of their respective  Subsidiaries to, conduct its operations and keep
and maintain its property in compliance with all Environmental Laws.

     6.12 Use of Proceeds.  The Company  shall use the proceeds of the Loans for
working  capital  purposes  including  the  acquisition  of the Zweig  Group and
Acquisitions  not in  contravention  of any  Requirement  of Law or of any  Loan
Document;  provided,  however,  that  such  proceeds  shall  not be used for any
Acquisition,  if the board of directors  of the entity to be acquired  shall not
have approved such Acquisition.



                                   ARTICLE VII

                              NEGATIVE COVENANTS

     So long as any Bank shall  have any  Commitment  hereunder,  or any Loan or
other Obligation  shall remain unpaid or unsatisfied,  unless the Majority Banks
waive compliance in writing:

     7.1 Limitation on Liens.  The Guarantor  shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer  to exist  any Lien  upon or with  respect  to any part of its  property,
whether now owned or hereafter  acquired,  other than the following  ("Permitted
Liens"):

           (a) any Lien existing on property of the Guarantor or any  Subsidiary
on the  Closing  Date  and set  forth  in  Schedule  7.1  securing  Indebtedness
outstanding on such date;


<PAGE>


           (b)   any Lien created under any Loan Document;

           (c) Liens for taxes, fees,  assessments or other governmental charges
which are not delinquent or remain  payable  without  penalty,  or to the extent
that non-payment thereof is permitted by Section 6.7, provided that no notice of
lien has been filed or recorded under the Code;

           (d)   Liens on 12b-1 Assets which have been sold;

           (e) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's  or other similar  Liens arising in the ordinary  course of business
which are not delinquent or remain payable without penalty;

           (f)  Liens  (other  than any Lien  imposed  by ERISA)  consisting  of
pledges or deposits  required in the ordinary  course of business in  connection
with workers'  compensation,  unemployment  insurance and other social  security
legislation;

           (g) Liens  consisting  of  judgment  or  judicial  attachment  liens,
provided that the  enforcement of such Liens is effectively  stayed and all such
liens  in the  aggregate  at any  time  outstanding  for the  Guarantor  and its
Subsidiaries do not exceed $10,000,000;

           (h)  easements,   rights-of-way,   restrictions   and  other  similar
encumbrances  incurred  in  the  ordinary  course  of  business  which,  in  the
aggregate,  are  not  substantial  in  amount,  and  which  do not  in any  case
materially  detract from the value of the property  subject thereto or interfere
with  the  ordinary   conduct  of  the  businesses  of  the  Guarantor  and  its
Subsidiaries;

           (i) Liens  arising  solely by virtue of any  statutory  or common law
provision relating to banker's liens, securities intermediary's liens, rights of
set-off  or similar  rights and  remedies  as to  deposit  accounts,  securities
accounts  or other  funds  maintained  with a creditor  depository  institution;
provided  that (i) such  deposit  account  is not a  dedicated  cash  collateral
account and is not subject to  restrictions  against  access by the Guarantor in
excess of those set forth by  regulations  promulgated by the FRB, and (ii) such
deposit  account or  securities  account is not intended by the Guarantor or any
Subsidiary to provide  collateral to the depository  institution  providing such
account;

           (j)  Liens on real  property  and  related  assets  of the  Guarantor
granted  to  any  home  loan  bank,   provided  that  the  aggregate  amount  of
Indebtedness  secured by all such Liens,  when taken together with the aggregate
amount of Indebtedness  secured by Liens permitted by clause (k) of this Section
7.1 shall not exceed $100,000,000 at any one time outstanding; and

           (k)  additional   Liens  securing   Indebtedness  not  in  excess  of
$10,000,000 at any time outstanding.



<PAGE>


     7.2 Mergers,  Consolidations  and Sales of Assets. The Guarantor  will not,
and will not permit any Primary Subsidiary to

           (a)  consolidate with or be a party to a merger with any other Person
     or

           (b) sell,  lease or otherwise  dispose of any substantial part of its
     Properties,  provided that the  foregoing  shall not apply to or operate to
     prevent (i) reinsurance and similar risk sharing  arrangements entered into
     in the ordinary  course of business,  (ii) sales or other  dispositions  of
     assets  acquired in  satisfaction  of obligations  owing the Guarantor or a
     Primary Subsidiary, (iii) mergers of a Primary Subsidiary with and into the
     Guarantor and other mergers not involving the  Guarantor,  or (iv) the sale
     of all or any substantial part of the assets of, or of the equity interests
     held by the Guarantor in, any Primary  Subsidiary so long as in the case of
     each of the matters described in clauses (i) through (iv) above, no Default
     or Event of Default shall have occurred and be continuing or would occur as
     a result  thereof.  The  foregoing  to the  contrary  notwithstanding,  the
     Guarantor  will not in any event  sell,  transfer or  otherwise  dispose of
     capital  stock of the Company or permit the merger of the Company  into any
     other Person other than the  Guarantor if after giving  effect  thereto the
     Company  would no longer be a Subsidiary  of the  Guarantor or would not be
     the survivor of the merger in question.

     7.3 Loans and Investments.  The Guarantor shall not purchase or acquire, or
suffer or permit any  Subsidiary to purchase or acquire,  or make any commitment
therefor,  any capital  stock,  equity  interest,  or any  obligations  or other
securities  of, or any  interest  in, any Person,  or make or commit to make any
Acquisitions,  or make or commit to make any advance,  loan, extension of credit
or capital  contribution to or any other investment in, any Person including any
Affiliate of the Company, except for:

           (a)   investments in cash equivalents;

           (b)   investments by the Guarantor in compliance  with all applicable
regulatory requirements;

           (c)  investments by the  Company in the  ordinary  course of business
consistent with past practices; and



<PAGE>


           (d)  Acquisitions,  so  long  as (i) the  acquired  entity  is in the
similar or related business as the Guarantor and its Subsidiaries and (ii) after
giving effect to the Acquisition,  (A) no Default or Event of Default shall have
occurred and be  continuing  and (B) the  Guarantor  and the Company would be in
compliance with all financial covenants hereof,  calculated on a pro forma basis
at the time of the  Acquisition and as if the Acquisition had taken place at the
beginning of the four fiscal quarter period ending as of the last fiscal quarter
end, with the Guarantor providing a certificate with respect thereto.

     7.4 Limitation on Indebtedness. The Company shall not, and shall not suffer
or permit  any  Subsidiary  to,  create,  incur,  assume,  suffer  to exist,  or
otherwise  become or remain  directly or indirectly  liable with respect to, any
Indebtedness, except:

           (a)   Indebtedness available pursuant to this Agreement;

           (b)   Indebtedness consisting  of  Contingent  Obligations  permitted
pursuant to Section 7.7;

           (c)   Indebtedness existing  on the  Closing  Date  and set  forth in
Schedule 7.4;

           (d)  Indebtedness  of the  Company  in  connection  with  the  Credit
Agreement dated as of August 14, 1997 among the Company, the Guarantor,  various
financial  institutions,  BofA, as Syndication and Documentation  Agent, and The
Bank of New York, as Administrative Agent; and

           (e) other  Indebtedness  of the  Company and its  Subsidiaries  in an
amount  at any  time  outstanding  not in  excess  of (i)  $20,000,000  or  (ii)
$30,000,000  when added to the  Contingent  Obligations  permitted  pursuant  to
Section 7.7(c).

     7.5 Transactions  with  Affiliates.  The Guarantor shall not, and shall not
suffer  or  permit  any  Subsidiary  to,  enter  into any  transaction  with any
Affiliate  of the  Guarantor,  except  upon  fair and  reasonable  terms no less
favorable to the Guarantor or such  Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Guarantor or such
Subsidiary.

     7.6 Use of Proceeds.  The Company shall not, and shall not suffer or permit
any Subsidiary to, use any portion of the Loan proceeds, directly or indirectly,
(i) to purchase or carry  Margin  Stock,  (ii) to repay or  otherwise  refinance
indebtedness  of the Company or others  incurred  to  purchase  or carry  Margin
Stock,  (iii) to extend  credit for the purpose of  purchasing  or carrying  any
Margin Stock, or (iv) to acquire any security in any transaction that is subject
to Section 13 or 14 of the Exchange Act.

     7.7 Contingent Obligations.  The Company shall not, and shall not suffer or
permit  any  Subsidiary  to,  create,  incur,  assume  or  suffer  to exist  any
Contingent Obligations except:

           (a)   endorsements  for collection or deposit in the ordinary  course
of business;

           (b)  Contingent  Obligations  of the  Company  and  its  Subsidiaries
existing as of the Closing Date and listed in Schedule 7.7;


<PAGE>


           (c) other Contingent  Obligations in aggregate  amounts not to exceed
(i) $15,000,000 or (ii)  $30,000,000  when added to the  Indebtedness  permitted
pursuant to Section 7.4(e), at any time outstanding; and

           (d)  Guarantees of Indebtedness of Subsidiaries.

     7.8  Joint  Ventures.  The  Company  shall not  enter  into or  permit  any
Subsidiary  to enter into,  any Joint  Venture  involving an investment by it in
excess of 10% of the  Company's  net worth  (at the time of the  proposed  Joint
Venture) for all Joint Ventures after the date hereof except Joint Ventures with
its Affiliates.

     7.9 Lease  Obligations.  The  Guarantor  shall not, and shall not suffer or
permit any  Subsidiary  to,  create or suffer to exist any  obligations  for the
payment of rent for any property under lease or agreement to lease, except for:

           (a)   operating   leases   entered  into  by  the   Guarantor or  any
Subsidiary in the ordinary course of business; and

           (b)   capital leases  entered into by the Guarantor or any Subsidiary
to finance the acquisition of equipment;

     7.10 Restricted Payments.  The Guarantor shall not, and shall not suffer or
permit  any  Subsidiary  to,  declare  or make  any  dividend  payment  or other
distribution of assets,  properties,  cash, rights, obligations or securities to
its policy holders or shareholders, except that:

           (a)   the  Guarantor and its  Insurance  Subsidiaries  may pay policy
holder dividends;

           (b)   the  Company  may  make  dividends  and  distributions, payable
solely in common stock;

           (c) the Company  may in any fiscal  quarter  pay cash  dividends  and
repurchase stock not in excess of its income in such fiscal quarter,  so long as
after giving effect thereto,  no Default or Event of Default shall have occurred
and be continuing; and

           (d) Any Subsidiary of the Guarantor  (other than the Company) may pay
in any fiscal quarter cash dividends, so long as after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing.

     7.11 ERISA.  The Guarantor shall not, and shall not suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited  transaction or violation of
the fiduciary  responsibility  rules with respect to any Plan which has resulted
or could  reasonably  be  expected to result in  liability  of the Company in an
aggregate  amount in excess of $5,000,000  or (b) engage in a  transaction  that
could be subject to Section 4069 or 4212(c) of ERISA.



<PAGE>


     7.12 Change in Business.  The Guarantor  shall not, and shall not suffer or
permit any Subsidiary to, engage in any material line of business  substantially
different  from those  lines of  business  carried on by the  Guarantor  and its
Subsidiaries on the date hereof.

     7.13 Accounting  Changes.  The Guarantor shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting  practices,  except as  required  by GAAP or SAP, or change the fiscal
year of the Guarantor or of any Subsidiary.

     7.14 Pari Passu. The Guarantor shall cause the Obligations to rank at least
pari passu with all other senior  unsecured  Indebtedness of the Guarantor.  The
Company shall cause the  Obligations  to rank at least pari passu with all other
senior unsecured Indebtedness of the Company.

     7.15 Phoenix. The Company shall retain the word "Phoenix" in its name.

     7.16  Subordinated Debt and Preferred Stock. The Company shall not make any
payments,  or set  aside  funds  to make  payments,  on  preferred  stock or any
Subordinated  Debt into which  preferred  stock is  converted;  except  that the
Company may make regularly  scheduled  interest and dividend payments thereon so
long as after giving effect  thereto,  no Default or Event of Default shall have
occurred and be continuing.

     7.17 Capital Expenditures.  The Company and its Subsidiaries shall not make
any capital expenditures in excess of $15,000,000 in any fiscal year.


                                 ARTICLE VIII

                         GUARANTOR'S FINANCIAL COVENANTS

     So long as any Bank shall have any  Commitments  hereunder,  or any Loan or
other Obligations shall remain unpaid or unsatisfied,  unless the Majority Banks
waive compliance in writing:

     8.1  Guarantor's  Minimum Total SAP Adjusted  Capital.  The Guarantor shall
maintain a Total SAP Adjusted Capital of not less than  $900,000,000 plus 50% of
net income (if  greater  than zero) for each fiscal  quarter  ending on or after
March 31, 1999.

     8.2 Invested Assets.  The Guarantor shall not permit Invested Assets of the
Guarantor and its Primary Insurance Subsidiaries  consisting of notes, bonds and
other obligations classified as bonds which bear NAIC Ratings from three to six,
both inclusive, to exceed 7.0% of Net Invested Assets.



<PAGE>


     8.3 NAIC  Ratings.  The  Guarantor  shall not  permit  the  portion  of the
Invested  Assets  of  the  Guarantor  and  its  Primary  Insurance  Subsidiaries
consisting of notes, bonds and other obligations  classified as bonds which bear
NAIC Ratings from five to six to exceed 13% of Total SAP Adjusted Capital.

     8.4 Real Estate. The Guarantor shall not permit the portion of the Invested
Assets of the Guarantor and its Primary  Insurance  Subsidiaries in real estate,
real  estate  acquired  in  satisfaction  of  indebtedness  (exclusive  of  such
investments  of  either  category  occupied  by the  Guarantor  or  its  Primary
Insurance  Subsidiaries  for use in their  business) plus mortgage loans on real
estate to exceed 32% of Net Invested Assets.

     8.5 Risk Based Capital.  The Guarantor shall maintain a minimum  Risk-Based
Capital Ratio of not less than 1.75 to 1.0.

     8.6  Non-Performing  Real Estate.  The Guarantor  shall not permit the book
value of the investment of the Guarantor and its Primary Insurance  Subsidiaries
in  non-performing  real estate under SAP,  prior to any reserves or  write-offs
with respect thereto, to exceed 30% of Total SAP Adjusted Capital.

     8.7   Indebtedness   to  Capital.   The  Guarantor  shall  not  permit  the
consolidated Indebtedness of the Guarantor and its Subsidiaries to exceed 75% of
Total SAP Adjusted Capital.


                                  ARTICLE IX

                          COMPANY'S FINANCIAL COVENANTS

     So long as any Bank shall have any  Commitments  hereunder,  or any Loan or
other Obligation  shall remain unpaid or unsatisfied,  unless the Majority Banks
waive compliance in writing:

     9.1   Shareholders'   Equity.   The  Company   shall   maintain  a  minimum
Shareholders'  Equity  (excluding any preferred shares) of $185,000,000 plus 50%
of net income (if greater than zero) for each  quarter  ending on or after March
31, 1999.

     9.2 EBITDA to Interest Ratio.  The Company shall maintain a ratio of EBITDA
to  Interest  Expense as at the end of any fiscal  quarter  for the four  fiscal
quarters then ending of not less than 4.0 to 1.0.

     9.3 Total Debt to Capital Ratio. The Company shall maintain a Total Debt to
Capital Ratio of not in excess of the following  percentages  at any time during
the following periods:



<PAGE>


     Percentage        Periods

     60.0%             Date hereof through March 31, 2000

     57.5%             April 1, 2000 through March 31, 2001

     52.5%             April 1, 2001 and thereafter


     9.4 Senior Debt to EBITDA Ratio.  The Company shall  maintain a Senior Debt
to EBITDA Ratio of not in excess of the following  amounts  during the following
periods:

     Amount                  Period

     3.0 to 1                Date hereof through March 31, 2000

     2.5 to 1                April 1, 2000 through March 31, 2001

     2.0 to 1                April 1, 2001 and thereafter


                                    ARTICLE X

                                   GUARANTY

     10.1  Guaranty.   The  Guarantor  hereby  unconditionally  and  irrevocably
guarantees  the full and  punctual  payment  (whether at stated  maturity,  upon
acceleration  or otherwise) of the principal of and interest on each Note issued
by the Company pursuant to this Agreement,  and the full and punctual payment of
all other  Obligations of the Company under this Agreement.  Upon failure by the
Company to pay  punctually  any such amount,  the Guarantor  shall  forthwith on
demand pay the amount  not so paid at the place and in the manner  specified  in
this Agreement.

     10.2 Guaranty  Unconditional.  The  obligations of the Guarantor under this
Article  X 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, compromise, waiver or release
     in respect of any  obligation  of the Company  under this  Agreement or any
     Note, by operation of law or otherwise;

           (b)   any   modification   or  amendment of  or  supplement  to  this
     Agreement or any Note;

           (c) any release,  impairment,  non-perfection  or  invalidity  of any
     direct or indirect  security for any  obligation  of the Company under this
     Agreement or any Note;



<PAGE>


           (d) any change in the corporate existence,  structure or ownership of
     the Company or any insolvency, bankruptcy,  reorganization or other similar
     proceeding  affecting the Company or its assets or any resulting release or
     discharge of any  obligation of the Company  contained in this Agreement or
     any Note;

           (e) the  existence  of any claim,  set-off or other  right  which the
     Guarantor  may have at any time  against the  Company,  the  Administrative
     Agent, any Bank or any other Person,  whether in connection herewith or any
     unrelated  transaction,  provided  that nothing  herein  shall  prevent the
     assertion of any such claim by separate suit or compulsory counterclaim;

           (f) any  invalidity  or  unenforceability  relating to or against the
     Company for any reason of this  Agreement or any Note,  or any provision of
     applicable  law or  regulation  purporting  to prohibit  the payment by the
     Company of the  principal  of or interest  on any Note or any other  amount
     payable by the Company under this Agreement; or

           (g) any  other  act or  omission  to act or  delay of any kind by the
     Company,  the  Administrative  Agent,  any Bank or any other  Person or any
     other  circumstance  whatsoever which might, but for the provisions of this
     paragraph,  constitute a legal or equitable discharge of the Company or the
     Guarantor obligations as guarantor hereunder.

     10.3  Discharge  only  upon  Payment  in  Full;  Reinstatement  in  Certain
Circumstances.  The Guarantor's  obligations as guarantor hereunder shall remain
in full force and effect until the  Commitments  shall have  terminated  and all
Obligations shall have been paid in full in money. If at any time any payment of
principal,  interest  or any other  amount  payable  by the  Company  under this
Agreement or any Note is  rescinded  or must be  otherwise  restored or returned
upon the insolvency,  bankruptcy or  reorganization of the Company or otherwise,
the  Guarantor's  obligations  hereunder  with respect to such payment  shall be
reinstated as though such payment had been due but not made at such time.

     10.4 Waiver by the Guarantor.  The Guarantor  irrevocably waives acceptance
hereof, presentment,  demand, protest and any notice not provided for herein, as
well as any  requirement  that at any time  any  action  be taken by any  Person
against the Company or any other Person.

     10.5 Subrogation. Notwithstanding any payment made by or for the account of
the Guarantor  pursuant to this Article X, the Guarantor shall not be subrogated
to any  right of the  Administrative  Agent or any Bank  until  such time as the
Administrative  Agent and the Banks shall have received final payment in cash of
the full amount of all Obligations.



<PAGE>


     10.6 Stay of  Acceleration.  If acceleration of the time for payment of any
amount  payable by the Company  under this  Agreement or any Note is stayed upon
the insolvency,  bankruptcy or reorganization  of the Company,  all such amounts
otherwise  subject  to  acceleration  under  the terms of this  Agreement  shall
nonetheless  be payable by the  Guarantor  hereunder  forthwith on demand by the
Administrative Agent made at the request of the Majority Banks.


                                  ARTICLE XI

                                EVENTS OF DEFAULT

     11.1 Event of Default.  Any of the following shall  constitute an "Event of
Default":

           (a)  Non-Payment.  The Company fails to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan, or (ii) within five days
after the same  becomes  due,  any  interest,  fee or any other  amount  payable
hereunder or under any other Loan Document; or

           (b) Representation or Warranty. Any representation or warranty by the
Guarantor  or any  Subsidiary  made or deemed  made  herein,  in any other  Loan
Document,  or which is  contained in any  certificate,  document or financial or
other statement by the Guarantor, any Subsidiary,  or any Responsible Officer of
the Guarantor or any Subsidiary,  furnished at any time under this Agreement, or
in or under any other Loan Document,  is incorrect in any material respect on or
as of the date made or deemed made; or

           (c) Specific Defaults.  The Guarantor or the Company,  as applicable,
fails to perform or observe any term,  covenant or agreement contained in any of
Section 6.1, 6.2, 6.3 or 6.9 or in Article VII, VIII or IX hereof; or

           (d) Other Defaults.  The Guarantor or the Company fails to perform or
observe any other term or covenant contained in this Agreement or any other Loan
Document,  and such default shall  continue  unremedied  for a period of 20 days
after the date upon which  written  notice  thereof is given to the Guarantor by
the Administrative Agent or any Bank; or



<PAGE>


           (e) Cross-Default.  The Guarantor or any Subsidiary (i) fails to make
any payment in respect of any  Indebtedness or Contingent  Obligation  having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement)  of  more  than  $10,000,000  with  respect  to the  Guarantor,  or
$5,000,000 with respect to the Company or any other Subsidiary of the Guarantor,
when due  (whether by scheduled  maturity,  required  prepayment,  acceleration,
demand,  or otherwise);  or (ii) fails to perform or observe any other condition
or  covenant,  or any other  event  shall occur or  condition  exist,  under any
agreement  or  instrument  relating  to  any  such  Indebtedness  or  Contingent
Obligation, if the effect of such failure, event or condition is to cause, or to
permit  the  holder  or  holders  of  such   Indebtedness   or   beneficiary  or
beneficiaries  of such  Indebtedness  (or a  trustee  or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be  declared  to be due  and  payable  prior  to its  stated  maturity,  or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or

           (f)  Insolvency;   Voluntary   Proceedings.   The  Guarantor  or  any
Subsidiary  (i) ceases or fails to be  solvent,  or  generally  fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise;  (ii)
voluntarily  ceases to  conduct  its  business  in the  ordinary  course;  (iii)
commences any Insolvency  Proceeding with respect to itself or its property;  or
(iv) takes any action to effectuate or authorize any of the foregoing; or

           (g)  Involuntary   Proceedings.   (i)  Any   involuntary   Insolvency
Proceeding is commenced or filed against the Guarantor or any  Subsidiary or its
property,  or any writ,  judgment,  warrant of attachment,  execution or similar
process,  is issued or levied against a substantial  part of the  Guarantor's or
any  Subsidiary's  properties,  and any such proceeding or petition shall not be
dismissed, or such writ, judgment,  warrant of attachment,  execution or similar
process  shall not be  released,  vacated or fully  bonded  within 60 days after
commencement,  filing or levy;  (ii) the Guarantor or any Subsidiary  admits the
material allegations of a petition against it in any Insolvency  Proceeding,  or
an order for relief (or  similar  order  under  non-U.S.  law) is ordered in any
Insolvency  Proceeding;  or (iii) the Guarantor or any Subsidiary  acquiesces in
the  appointment of a receiver,  trustee,  custodian,  conservator,  liquidator,
mortgagee in possession (or agent therefor),  or other similar Person for itself
or a substantial portion of its property or business; or

           (h) ERISA.  (i) An ERISA Event shall occur with  respect to a Pension
Plan or Multi  employer Plan which has resulted or could  reasonably be expected
to result in liability of the  Guarantor  under Title IV of ERISA to the Pension
Plan,  Multi  employer Plan or the PBGC;  (ii) there exists an Unfunded  Pension
Liability;  or (iii) the Company or any ERISA  Affiliate  shall fail to pay when
due,  after the  expiration  of any  applicable  grace period,  any  installment
payment with respect to its  withdrawal  liability  under  Section 4201 of ERISA
under a Multi employer Plan; or



<PAGE>


           (i)  Monetary  Judgments.  One or more  non-interlocutory  judgments,
non-interlocutory  orders,  decrees or arbitration awards is entered against the
Guarantor  or any  Subsidiary  involving  in the  aggregate a liability  (to the
extent not covered by independent  third-party insurance as to which the insurer
does not dispute  coverage) as to any single or related series of  transactions,
incidents  or  conditions,  of  $10,000,000  or more,  and the same shall remain
unsatisfied, unvacated and unstayed pending appeal for a period of 10 days after
the entry thereof; or

           (j)  Non-Monetary  Judgments.  Any  non-monetary  judgment,  order or
decree is entered  against the Guarantor or any  Subsidiary  which does or would
reasonably be expected to have a Material Adverse Effect, and there shall be any
period  of 10  consecutive  days  during  which  a stay of  enforcement  of such
judgment or order,  by reason of a pending appeal or otherwise,  shall not be in
effect; or

           (k)   Change of Control.  There occurs any Change of Control; or

           (l) Loss of Licenses.  Any Governmental Authority revokes or fails to
renew  any  material  license,  permit  or  franchise  of the  Guarantor  or any
Subsidiary, or the Guarantor or any Subsidiary for any reason loses any material
license,  permit or franchise,  or the Guarantor or any  Subsidiary  suffers the
imposition of any restraining order,  escrow,  suspension or impound of funds in
connection with any proceeding  (judicial or administrative) with respect to any
material license, permit or franchise.

     11.2 Remedies.  If any Event of Default occurs,  the  Administrative  Agent
shall, at the request of, or may, with the consent of, the Majority Banks,

           (a)  declare  the  commitment  of  each  Bank  to  make  Loans  to be
terminated, whereupon such commitments shall be terminated;

           (b) declare the unpaid principal amount of all outstanding Loans, all
interest  accrued and unpaid  thereon,  and all other  amounts  owing or payable
hereunder or under any other Loan  Document to be  immediately  due and payable,
without presentment,  demand,  protest or other notice of any kind, all of which
are hereby expressly waived by the Company; and

           (c)  exercise  on  behalf of itself  and the  Banks  all  rights  and
remedies  available to it and the Banks under the Loan  Documents or  applicable
law;

provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 11.1 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein),  the obligation of each Bank
to make Loans shall  automatically  terminate and the unpaid principal amount of
all  outstanding  Loans and all  interest and other  amounts as aforesaid  shall
automatically  become due and payable without further act of the  Administrative
Agent or any Bank.



<PAGE>


     11.3 Rights Not  Exclusive.  The rights  provided for in this Agreement and
the other Loan  Documents  are  cumulative  and are not  exclusive  of any other
rights,  powers,  privileges or remedies  provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.


                                   ARTICLE XII

                           THE ADMINISTRATIVE AGENT

     12.1 Appointment. Each Bank hereby irrevocably designates and appoints BofA
as the Administrative  Agent of such Bank under the Loan Documents and each Bank
hereby irrevocably  authorizes the  Administrative  Agent to take such action on
its behalf  under the  provisions  of the Loan  Documents  and to exercise  such
powers and perform such duties as are expressly  delegated to the Administrative
Agent by the  terms of the Loan  Documents,  together  with  such  powers as are
reasonably  incidental thereto.  The duties of the Administrative Agent shall be
mechanical and administrative in nature,  and,  notwithstanding any provision to
the contrary elsewhere in any Loan Document,  the Administrative Agent shall not
have any  duties  or  responsibilities  other  than  those  expressly  set forth
therein, or any fiduciary relationship with, or fiduciary duty to, any Bank, and
no  implied  covenants,  functions,  responsibilities,  duties,  obligations  or
liabilities shall be read into the Loan Documents or otherwise exist against the
Administrative Agent.

     12.2 Delegation of Duties. The Administrative  Agent may execute any of its
duties under the Loan  Documents by or through agents or  attorneys-in-fact  and
shall be entitled to rely upon,  and shall be fully  protected in, and shall not
be under any liability for,  relying upon, the advice of counsel  concerning all
matters pertaining to such duties.



<PAGE>


     12.3 Exculpatory  Provisions.  Neither the Administrative  Agent nor any of
its officers,  directors,  employees,  agents,  attorneys-in-fact  or affiliates
shall be (i) liable for any action  lawfully  taken or omitted to be taken by it
or such  Person  under or in  connection  with the Loan  Documents  (except  the
Administrative  Agent for its own gross  negligence or willful  misconduct),  or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations  or  warranties  made by the  Company  or the  Guarantor  or any
officer thereof  contained in the Loan Documents or in any certificate,  report,
statement or other  document  referred to or provided for in, or received by the
Administrative  Agent under or in connection with, the Loan Documents or for the
value,  validity,  effectiveness,  genuineness,  perfection,  enforceability  or
sufficiency  of any of the Loan  Documents  or for any failure of the Company or
the  Guarantor or any other Person to perform its  obligations  thereunder.  The
Administrative  Agent shall not be under any obligation to any Bank to ascertain
or to inquire  as to the  observance  or  performance  of any of the  agreements
contained in, or conditions of, the Loan Documents,  or to inspect the property,
books or records of the Company or the Guarantor. The Banks acknowledge that the
Administrative  Agent  shall  not be under  any  duty to take any  discretionary
action permitted under the Loan Documents unless the Administrative  Agent shall
be  instructed in writing to do so by the Majority  Banks and such  instructions
shall be binding on the Banks and all holders of the Notes;  provided,  however,
that the  Administrative  Agent shall not be  required to take any action  which
exposes the Administrative Agent to personal liability or its contrary to law or
any provision of the Loan Documents. The Administrative Agent shall not be under
any liability or  responsibility  whatsoever,  as  Administrative  Agent, to the
Company or the Guarantor or any other Person as a consequence  of any failure or
delay in performance, or any breach, by any Bank of any of its obligations under
any of the Loan Documents.

     12.4 Reliance by Administrative  Agent. The  Administrative  Agent shall be
entitled to rely,  and shall be fully  protected  in relying,  upon any writing,
resolution, notice, consent, certificate, affidavit, opinion, letter, cablegram,
telegram,  telecopy,  telex  or  teletype  message,  statement,  order  or other
document  or  conversation  believed by it to be genuine and correct and to have
been  signed,  sent or made by a proper  Person or Persons  and upon  advice and
statements  of legal  counsel  (including,  without  limitation,  counsel to the
Company or the Guarantor), independent accountants and other experts selected by
the Administrative  Agent. The Administrative  Agent may treat each Bank, or the
Person  designated in the last notice filed with it under this  Section,  as the
holder of all of the  interests  of such  Bank,  in its Loans and  Notes,  until
written notice of transfer, signed by such Bank (or the Person designated in the
last notice filed with the Administrative Agent) and by the Person designated in
such  written  notice of transfer,  in form and  substance  satisfactory  to the
Administrative  Agent, shall have been filed with the Administrative  Agent. The
Administrative  Agent  shall not be under any duty to  examine  or pass upon the
validity, effectiveness,  enforceability or genuineness of the Loan Documents or
any  instrument,  document or  communication  furnished  pursuant  thereto or in
connection  therewith,  and the Administrative Agent shall be entitled to assume
that the same are valid,  effective and genuine, have been signed or sent by the
proper parties and are what they purport to be. The  Administrative  Agent shall
be fully  justified  in failing or  refusing  to take any action  under the Loan
Documents  unless it shall  first  receive  such  advice or  concurrence  of the
Majority Banks as it deems appropriate.  The  Administrative  Agent shall in all
cases be fully protected in acting, or in refraining from acting, under the Loan
Documents in accordance with a request or direction of the Majority  Banks,  and
such  request  or  direction  and any action  taken or  failure to act  pursuant
thereto shall be binding upon all the Banks and all future holders of the Notes.



<PAGE>


     12.5 Notice of  Default.  The  Administrative  Agent shall not be deemed to
have  knowledge or notice of the  occurrence  of any Default or Event of Default
unless the Administrative Agent has received written notice thereof from a Bank,
the  Company  or the  Guarantor.  In the  event  that the  Administrative  Agent
receives  such a notice,  the  Administrative  Agent shall  promptly give notice
thereof to the Banks,  the Company or the Guarantor.  The  Administrative  Agent
shall take such action with respect to such Default or Event of Default as shall
be directed by the Majority Banks, provided,  however, that unless and until the
Administrative  Agent shall have received such  directions,  the  Administrative
Agent may (but shall not be  obligated  to) take such  action,  or refrain  from
taking such action, with respect to such Default or Event of Default as it shall
deem to be in the best interests of the Banks.

     12.6  Non-Reliance  on  Administrative  Agent  and Other  Banks.  Each Bank
expressly  acknowledges  that  neither the  Administrative  Agent nor any of its
respective  officers,   directors,   employees,  agents,   attorneys-in-fact  or
affiliates has made any  representations  or warranties to it and that no act by
the Administrative Agent hereinafter, including any review of the affairs of the
Company or the Guarantor,  shall be deemed to constitute any  representation  or
warranty by the  Administrative  Agent to any Bank.  Each Bank represents to the
Administrative  Agent that it has,  independently  and without reliance upon the
Administrative Agent or any Bank, and based on such documents and information as
it has deemed  appropriate made its own evaluation of and investigation into the
business,   operations,    property,   financial   and   other   condition   and
creditworthiness  of the Company and the  Guarantor and made its own decision to
enter into this Agreement. Each Bank also represents that it will, independently
and without  reliance upon the  Administrative  Agent or any Bank,  and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit analysis, evaluations and decisions in taking or
not taking action under any Loan Document,  and to make such investigation as it
deems  necessary  to inform  itself as to the  business,  operations,  property,
financial  and  other  condition  and  creditworthiness  of the  Company  or the
Guarantor. Except for notices, reports and other documents expressly required to
be  furnished  to  the  Banks  by  the  Administrative   Agent  hereunder,   the
Administrative  Agent shall not have any duty or  responsibility  to provide the
Bank with any credit or other information  concerning the business,  operations,
property,  financial and other condition or  creditworthiness  of the Company or
the  Guarantor   which  at  any  time  may  come  into  the  possession  of  the
Administrative  Agent  or any of its  officers,  directors,  employees,  agents,
attorneys-in-fact or affiliates.



<PAGE>


     12.7  Indemnification.  Each Bank agrees to indemnify and hold harmless the
Administrative  Agent  in its  capacity  as such  (to the  extent  not  promptly
reimbursed by the Company or the Guarantor and without  limiting the  obligation
of the Company or the  Guarantor to do so), pro rata  according to the aggregate
of the outstanding  principal balance of the Loans (or at any time when no Loans
are outstanding,  according to its Pro Rata Share), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or  disbursements  of any kind  whatsoever  including,  without
limitation,  any amounts paid to the Banks (through the Administrative Agent) by
the Company or the Guarantor  pursuant to the terms of the Loan Documents,  that
are  subsequently  rescinded  or  avoided,  or must  otherwise  be  restored  or
returned)  which may at any time  (including,  without  limitation,  at any time
following  the payment of the Loans or the Notes) be imposed on,  incurred by or
asserted against the Administrative  Agent in any way relating to or arising out
of the Loan  Documents  or any other  documents  contemplated  by or referred to
therein or the transactions  contemplated thereby or any action taken or omitted
to be taken by the  Administrative  Agent under or in connection with any of the
foregoing;  provided,  however,  that no Bank shall be liable for the payment of
any  portion  of such  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits,  costs,  expenses  or  disbursements  to the extent
resulting  solely  from the  finally  adjudicated  gross  negligence  or willful
misconduct of the  Administrative  Agent.  Without  limitation of the foregoing,
each Bank agrees to reimburse the Administrative  Agent promptly upon demand for
its pro rata share of any unpaid fees owing to the Administrative Agent, and any
costs and expenses (including, without limitation,  reasonable fees and expenses
of counsel)  payable by the Company or the Guarantor  under Section 13.4, to the
extent that the Administrative Agent has not been paid such fees or has not been
reimbursed  for such costs and expenses,  by the Company or the  Guarantor.  The
failure of any Bank to reimburse the  Administrative  Agent promptly upon demand
for its pro rata  share of any  amount  required  to be paid by the Banks to the
Administrative  Agent as  provided in this  Section  shall not relieve any other
Bank of its obligation  hereunder to reimburse the Administrative  Agent for its
pro rata share of such amount,  but no Bank shall be responsible for the failure
of any other Bank to reimburse  the  Administrative  Agent for such other Bank's
pro rata share of such amount. If after having been indemnified or reimbursed by
the Banks as  provided  by this  Section,  the  Administrative  Agent shall have
received  payment from the obligor in respect of the obligation or liability for
which it received such  indemnification  or  reimbursement  from the Banks,  the
Administrative  Agent shall  disburse to the Banks an amount equal to the amount
of the payment so received on a pro rata basis.  The  agreements in this Section
shall survive the  termination of the  Commitments of all of the Banks,  and the
payment of all amounts payable under the Loan Documents.

     12.8  Administrative  Agent  in  Its  Individual  Capacity.  BofA  and  its
affiliates may make secured or unsecured loans to, accept  deposits from,  issue
letters of credit for the account of, act as trustee  under  indentures  of, and
generally  engage in any kind of business  with, the Company or the Guarantor as
though BofA were not an Agent  hereunder and NationsBanc  Montgomery  Securities
LLC did not arrange the transactions  contemplated  hereby.  With respect to the
Commitment  made or renewed by BofA and the Note issued to BofA, BofA shall have
the same rights and powers under the Loan Documents as any Bank and may exercise
the same as though it were not the  Administrative  Agent,  and the terms "Bank"
and "Banks" shall in each case include BofA.


<PAGE>



     12.9  Successor  Administrative  Agent.  If at any time the  Administrative
Agent deems it advisable,  in its sole discretion,  it may submit to the Banks a
written  notice  of its  resignation  as  Administrative  Agent  under  the Loan
Documents,  such resignation to be effective upon the earlier of (i) the written
acceptance of the duties of the Administrative Agent under the Loan Documents by
a successor Administrative Agent and (ii) on the 30th day after the date of such
notice.  Upon any such  resignation,  the Majority Banks shall have the right to
appoint from among the Banks a successor  Administrative  Agent. If no successor
Administrative  Agent shall have been so  appointed  by the  Majority  Banks and
accepted  such  appointment  in  writing  within  30  days  after  the  retiring
Administrative  Agent's  giving  of  notice of  resignation,  then the  retiring
Administrative   Agent  may,  on  behalf  of  the  Bank,   appoint  a  successor
Administrative Agent, which successor Administrative Agent shall be a commercial
bank  organized  under the laws of the United  States or any State  thereof  and
having  a  combined  capital,   surplus,  and  undivided  profits  of  at  least
$100,000,000.  Upon the acceptance of any  appointment as  Administrative  Agent
hereunder by a successor  Administrative  Agent,  such successor  Administrative
Agent shall thereupon succeed to and become vested with all the rights,  powers,
privileges  and duties of the retiring  Administrative  Agent,  and the retiring
Administrative Agent's rights,  powers,  privileges and duties as Administrative
Agent under the Loan Documents shall be terminated.  The Company,  the Guarantor
and the Banks shall execute such  documents as shall be necessary to effect such
appointment.   After  any  retiring   Administrative   Agent's   resignation  as
Administrative  Agent,  the provisions of the Loan Documents  shall inure to its
benefit as to any  actions  taken or omitted to be taken by it, and any  amounts
owing to it, while it was Administrative  Agent under the Loan Documents.  If at
any time there shall not be a duly  appointed and acting  Administrative  Agent,
the  Company  and the  Guarantor  agree to make each  payment due under the Loan
Documents directly to the Banks entitled thereto during such time.

     12.10  Syndication  Agent  and  Documentation  Agent.  None  of  the  Banks
identified  on the  facing  page  or  signature  pages  of this  Agreement  as a
"syndication  agent" or  "documentation  agent"  shall  have any  right,  power,
obligation,  liability,  responsibility  or duty under this Agreement other than
those applicable to all Banks as such.  Without limiting the foregoing,  none of
the Banks so  identified  as a  "co-agent"  or "lead  manager"  shall have or be
deemed to have any fiduciary  relationship with any Bank. Each Bank acknowledges
that it has not relied,  and will not rely, on any of the Banks so identified in
deciding  to enter  into  this  Agreement  or in  taking  or not  taking  action
hereunder.




<PAGE>


                                 ARTICLE XIII

                                  MISCELLANEOUS

     13.1  Amendments  and Waivers.  No amendment or waiver of any  provision of
this  Agreement or any other Loan  Document,  and no consent with respect to any
departure by the  Guarantor or any  applicable  Subsidiary  therefrom,  shall be
effective  unless the same shall be in writing and signed by the Majority  Banks
(or by the  Administrative  Agent at the written  request of the Majority Banks)
and the Company and acknowledged by the Administrative  Agent, and then any such
waiver or consent shall be effective  only in the specific  instance and for the
specific  purpose  for which  given;  provided,  however,  that no such  waiver,
amendment,  or consent shall, unless in writing and signed by all the Banks, the
Company and the Guarantor and acknowledged by the  Administrative  Agent, do any
of the following:

           (a) increase or extend the  Commitment  of any Bank (or reinstate any
Commitment terminated pursuant to Section 11.2);

           (b)  postpone or delay any date fixed by this  Agreement or any other
Loan Document for any payment of principal,  interest, fees or other amounts due
to the Banks (or any of them) hereunder or under any other Loan Document;

           (c) reduce the principal of, or the rate of interest specified herein
on any Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;

           (d) change the  percentage  of the  Commitments  or of the  aggregate
unpaid  principal  amount of the Loans which is required for the Banks or any of
them to take any action hereunder; or

           (e) amend this Section,  or Section  2.14,  or any  provision  herein
providing for consent or other action by all Banks;

           (f) amend or terminate any guaranty including  the guaranty  pursuant
to Article X;

and, provided  further,  that no amendment,  waiver or consent shall,  unless in
writing and signed by the Administrative Agent in addition to the Majority Banks
or all the  Banks,  as the case may be,  affect  the  rights  or  duties  of the
Administrative Agent under this Agreement or any other Loan Document.



<PAGE>


     13.2 Notices.  (a) All notices,  requests and other communications shall be
in writing  (including,  unless the context  expressly  otherwise  provides,  by
facsimile  transmission,  provided that any matter transmitted by the Company or
the  Guarantor by facsimile  (i) shall be  immediately  confirmed by a telephone
call to the recipient at the number  specified on Schedule  13.2, and (ii) shall
be followed  promptly by delivery of a hard copy  original  thereof) and mailed,
faxed or delivered,  to the address or facsimile number specified for notices on
Schedule  13.2;   or,  as  directed  to  the  Guarantor,   the  Company  or  the
Administrative Agent, to such other address as shall be designated by such party
in a written notice to the other parties, and as directed to any other party, at
such other address as shall be  designated by such party in a written  notice to
the Guarantor, the Company and the Administrative Agent.

           (b)  All  such  notices,  requests  and  communications  shall,  when
transmitted  by overnight  delivery,  or faxed,  be effective when delivered for
overnight  (next-day)  delivery,  or  transmitted  in legible  form by facsimile
machine,  respectively, or if mailed, upon the third Business Day after the date
deposited  into the U.S.  mail,  or if  delivered,  upon  delivery;  except that
notices  pursuant  to Article II or XII shall not be  effective  until  actually
received by the Administrative Agent.

           (c) Any agreement of the Administrative Agent and the Banks herein to
receive  certain notices by telephone or facsimile is solely for the convenience
and at the request of the Company.  The Administrative Agent and the Banks shall
be entitled to rely on the  authority  of any Person  purporting  to be a Person
authorized by the Company to give such notice and the  Administrative  Agent and
the Banks shall not have any liability to the Company or other Person on account
of any  action  taken or not taken by the  Administrative  Agent or the Banks in
reliance upon such telephonic or facsimile notice. The obligation of the Company
to repay the  Loans  shall not be  affected  in any way or to any  extent by any
failure  by  the   Administrative   Agent  and  the  Banks  to  receive  written
confirmation  of any  telephonic  or  facsimile  notice  or the  receipt  by the
Administrative  Agent and the Banks of a confirmation  which is at variance with
the terms understood by the  Administrative  Agent and the Banks to be contained
in the telephonic or facsimile notice.

     13.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising,  on the part of the  Administrative  Agent or any Bank,  any  right,
remedy,  power or privilege  hereunder,  shall operate as a waiver thereof;  nor
shall any single or partial  exercise of any right,  remedy,  power or privilege
hereunder  preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.

     13.4  Costs and  Expenses.  The  Guarantor  and the  Company,  jointly  and
severally shall:



<PAGE>


           (a)  whether  or  not  the  transactions   contemplated   hereby  are
consummated,  pay or  reimburse  BofA within  five  Business  Days after  demand
(subject to subsection 4.1(a)(v)) for all costs and expenses incurred by BofA in
connection  with the  development,  preparation,  delivery,  administration  and
execution of, and any amendment,  supplement, waiver or modification to (in each
case,  whether or not  consummated),  this Agreement,  any Loan Document and any
other  documents  prepared  in  connection   herewith  or  therewith,   and  the
consummation  of the  transactions  contemplated  hereby and thereby,  including
reasonable Attorney Costs incurred by BofA with respect thereto; and

           (b) pay or  reimburse  each Agent,  the Arranger and each Bank within
five Business Days after demand (subject to subsection  4.1(a)(v)) for all costs
and  expenses  (including   reasonable  Attorney  Costs)  incurred  by  them  in
connection with the enforcement,  attempted enforcement,  or preservation of any
rights or remedies  under this  Agreement or any other Loan Document  during the
existence of an Event of Default or after  acceleration of the Loans  (including
in connection  with any  "workout" or  restructuring  regarding  the Loans,  and
including in any Insolvency Proceeding or appellate proceeding).

     13.5 Indemnity.  Whether or not the  transactions  contemplated  hereby are
consummated,  the  Guarantor  and the  Company,  jointly  and  severally,  shall
indemnify  and hold the  Agent-Related  Persons,  and each  Bank and each of its
respective officers, directors, employees, counsel, agents and attorneys-in-fact
(each,  an  "Indemnified   Person")  harmless  from  and  against  any  and  all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  charges,  expenses and disbursements  (including  Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the  termination,  resignation  or replacement of the
Administrative  Agent or replacement of any Bank) be imposed on,  incurred by or
asserted  against any such Person in any way  relating to or arising out of this
Agreement  or  any  document  contemplated  by or  referred  to  herein,  or the
transactions  contemplated  hereby,  or any action  taken or omitted by any such
Person under or in connection with any of the foregoing,  including with respect
to  any  investigation,  litigation  or  proceeding  (including  any  Insolvency
Proceeding or appellate  proceeding) related to or arising out of this Agreement
or the Loans or the use of the proceeds thereof,  whether or not any Indemnified
Person is a party thereto (all the  foregoing,  collectively,  the  "Indemnified
Liabilities");  provided,  that the  Guarantor  and the  Company  shall  have no
obligation  hereunder  to any  Indemnified  Person with  respect to  Indemnified
Liabilities  resulting solely from the gross negligence or willful misconduct of
such Indemnified  Person; and provided,  further,  that the Indemnified  Persons
shall, at the Company's request, only use one counsel among them unless any such
Indemnified  Person  determines  in its sole  discretion  that its interests may
differ from any other Indemnified  Person.  The agreements in this Section shall
survive payment of all other Obligations.



<PAGE>


     13.6  Payments Set Aside.  To the extent that the Company or the  Guarantor
makes a payment to the Administrative  Agent or the Banks, or the Administrative
Agent or the Banks  exercise  their  right of set-off,  and such  payment or the
proceeds  of such  set-off or any part  thereof  are  subsequently  invalidated,
declared to be  fraudulent  or  preferential,  set aside or required  (including
pursuant to any settlement entered into by the Administrative Agent or such Bank
in its  discretion) to be repaid to a trustee,  receiver or any other party,  in
connection with any Insolvency  Proceeding or otherwise,  then (a) to the extent
of such  recovery  the  obligation  or part  thereof  originally  intended to be
satisfied  shall be revived  and  continued  in full force and effect as if such
payment had not been made or such  set-off had not  occurred,  and (b) each Bank
severally  agrees to pay to the  Administrative  Agent upon  demand its pro rata
share of any amount so recovered from or repaid by the Administrative Agent.

     13.7  Successors and Assigns.  The  provisions of this  Agreement  shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Guarantor and the Company may not assign
or transfer any of its rights or obligations  under this  Agreement  without the
prior written consent of the Administrative Agent and each Bank.

     13.8 Assignments,  Participations,  etc. (a) Any Bank may, with the written
consent of the Company at all times other than during the  existence of an Event
of  Default,  and  the  Administrative   Agent,  which  consents  shall  not  be
unreasonably  withheld,  at any time assign and delegate to one or more Eligible
Assignees (provided that no written consent of the Company or the Administrative
Agent shall be required in connection  with any  assignment  and delegation by a
Bank to an  Eligible  Assignee  that is an  Affiliate  of such  Bank)  (each  an
"Assignee")  all, or any ratable part of all, of the Loans,  the Commitments and
the other rights and  obligations  of such Bank  hereunder,  in a minimum amount
such that the Assignee  after  giving  effect to such  assignment  shall hold at
least  $10,000,000 of the  Commitments  (or if less the aggregate  amount of the
Commitments of the Bank so assigning);  provided,  however, that the Company and
the Administrative Agent may continue to deal solely and directly with such Bank
in  connection  with the  interest so assigned to an Assignee  until (i) written
notice of such  assignment,  together with payment  instructions,  addresses and
related  information with respect to the Assignee,  shall have been given to the
Company and the  Administrative  Agent by such Bank and the Assignee;  (ii) such
Bank and its Assignee shall have delivered to the Company and the Administrative
Agent an Assignment  and  Acceptance in the form of Exhibit E  ("Assignment  and
Acceptance")  together  with any Note or Notes  subject to such  assignment  and
(iii) the  assignor  Bank or  Assignee  has paid to the  Administrative  Agent a
processing  fee in the  amount of $3,500  (such  processing  fee to be  payable,
without limitation, in connection with assignments from a Bank to another Bank).



<PAGE>


           (b) From and after the date that the  Administrative  Agent  notifies
the assignor  Bank that it has received  (and  provided its consent with respect
to) an executed  Assignment and  Acceptance and payment of the  above-referenced
processing fee, (i) the Assignee  thereunder shall be a party hereto and, to the
extent that rights and  obligations  hereunder have been assigned to it pursuant
to such  Assignment and  Acceptance,  shall have the rights and obligations of a
Bank under the Loan  Documents,  and (ii) the assignor Bank shall, to the extent
that rights and  obligations  hereunder and under the other Loan  Documents have
been assigned by it pursuant to such Assignment and  Acceptance,  relinquish its
rights and be released from its obligations under the Loan Documents.

           (c) Within  five  Business  Days  after its  receipt of notice by the
Administrative  Agent that it has received an executed Assignment and Acceptance
and  payment of the  processing  fee,  (and  provided  that it  consents to such
assignment in accordance with subsection 13.8(a)), the Company shall execute and
deliver to the  Administrative  Agent,  a new Note  evidencing  such  Assignee's
assigned Loans and  Commitment  and, if the assignor Bank has retained a portion
of its Loans and its Commitment,  a replacement  Note in the principal amount of
the Loans  retained by the assignor  Bank (such Note to be in exchange  for, but
not in payment of, the Note held by such Bank). Immediately upon each Assignee's
making its  processing fee payment under the  Assignment  and  Acceptance,  this
Agreement  shall be deemed to be amended to the extent,  but only to the extent,
necessary to reflect the addition of the Assignee and the  resulting  adjustment
of the Commitments arising therefrom.  The Commitment allocated to each Assignee
shall reduce such Commitment of the assigning Bank pro tanto.



<PAGE>


           (d) Any Bank may at any time sell to one or more commercial  banks or
other  Persons not  Affiliates  of the Company (a  "Participant")  participating
interests in any Loans,  the Commitment of that Bank and the other  interests of
that Bank (the "originating Bank") hereunder and under the other Loan Documents;
provided,  however,  that (i) the  originating  Bank's  obligations  under  this
Agreement shall remain unchanged,  (ii) the originating Bank shall remain solely
responsible for the performance of such  obligations,  (iii) the Company and the
Administrative  Agent  shall  continue  to deal  solely  and  directly  with the
originating   Bank  in  connection  with  the  originating   Bank's  rights  and
obligations under this Agreement and the other Loan Documents,  and (iv) no Bank
shall transfer or grant any  participating  interest under which the Participant
has rights to approve any  amendment  to, or any consent or waiver with  respect
to,  this  Agreement  or any other  Loan  Document,  except to the  extent  such
amendment,  consent or waiver would  require  unanimous  consent of the Banks as
described  in the  first  proviso  to  Section  13.1.  In the  case of any  such
participation, the Participant shall be entitled to the benefit of Sections 3.1,
3.3 and 13.5 as though it were also a Bank  hereunder,  and not have any  rights
under  this  Agreement,  or any of the other  Loan  Documents,  and all  amounts
payable by the Company  hereunder  shall be  determined  as if such Bank had not
sold  such  participation;  except  that,  if  amounts  outstanding  under  this
Agreement  are due and unpaid,  or shall have been declared or shall have become
due and payable upon the  occurrence  of an Event of Default,  each  Participant
shall be deemed to have the right of set-off  in  respect  of its  participating
interest  in amounts  owing  under this  Agreement  to the same extent as if the
amount of its  participating  interest were owing directly to it as a Bank under
this Agreement.

           (e) Notwithstanding  any other provision in this Agreement,  any Bank
may at any time create a security interest in, or pledge,  all or any portion of
its rights under and interest in this Agreement and the Note held by it in favor
of any Federal  Reserve Bank in accordance  with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss.203.14,  and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.

     13.9 Confidentiality.  Each Bank agrees to take and to cause its Affiliates
to take normal and reasonable  precautions and exercise due care to maintain the
confidentiality  of all information  identified as "confidential" or "secret" by
the Company and  provided to it by the  Guarantor or any  Subsidiary,  or by any
Agent or the Arranger on such  Guarantor's or  Subsidiary's  behalf,  under this
Agreement or any other Loan  Document,  and neither it nor any of its Affiliates
shall use any such  information  other than in connection with or in enforcement
of this  Agreement  and the other Loan  Documents  or in  connection  with other
business now or hereafter  existing or  contemplated  with the  Guarantor or any
Subsidiary;  except to the extent such information (i) was or becomes  generally
available to the public  other than as a result of  disclosure  by the Bank,  or
(ii) was or becomes  available on a  non-confidential  basis from a source other
than the  Guarantor or the Company,  provided that such source is not bound by a
confidentiality  agreement  with the Guarantor or the Company known to the Bank;
provided,  however,  that any  Bank may  disclose  such  information  (A) at the
request or pursuant to any  requirement of any  Governmental  Authority to which
the Bank is subject or in  connection  with an  examination  of such Bank by any
such  authority;  (B)  pursuant to subpoena  or other  court  process;  (C) when
required  to  do  so  in  accordance  with  the  provisions  of  any  applicable
Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the  Administrative  Agent,  any Bank or their
respective  Affiliates may be party;  (E) to the extent  reasonably  required in
connection  with the  exercise of any remedy  hereunder  or under any other Loan
Document;  (F) to  such  Bank's  independent  auditors  and  other  professional
advisors; (G) to any Participant or Assignee, actual or potential, provided that
such Person agrees in writing to keep such information  confidential to the same
extent required of the Banks hereunder;  (H) as to any Bank or its Affiliate, as
expressly permitted under the terms of any other document or agreement regarding
confidentiality  to which the Guarantor or any  Subsidiary is party or is deemed
party with such Bank or such Affiliate; and (I) to its Affiliates.



<PAGE>


     13.10 Set-off. In addition to any rights and remedies of the Banks provided
by law, if an Event of Default exists or the Loans have been  accelerated,  each
Bank is  authorized  at any time and from time to time,  without prior notice to
the Company or the  Guarantor,  any such notice  being waived by the Company and
the Guarantor to the fullest  extent  permitted by law, to set off and apply any
and all deposits (general or special,  time or demand,  provisional or final) at
any time held by, and other  indebtedness  at any time owing by, such Bank to or
for the credit or the  account of the Company or the  Guarantor  against any and
all  Obligations  owing  to  such  Bank  by the  Company  or the  Guarantor,  as
applicable,  now or  hereafter  existing,  irrespective  of  whether  or not the
Administrative Agent or such Bank shall have made demand under this Agreement or
any Loan Document and although such  Obligations may be contingent or unmatured.
Each Bank agrees  promptly to notify the  Company and the  Administrative  Agent
after any such set-off and  application  made by such Bank;  provided,  however,
that the  failure to give such  notice  shall not affect  the  validity  of such
set-off and application.

     13.11 Automatic  Debits of Fees. With respect to any fee, or any other cost
or expense (including  Attorney Costs) due and payable to the Agents,  BofA, BNY
or  Deutsche  or the  Arranger  under the Loan  Documents,  the  Company  hereby
irrevocably  authorizes  BNY,  Deutsche and BofA to debit any deposit account of
the Company  with BNY,  Deutsche  or BofA in an amount  such that the  aggregate
amount debited from all such deposit  accounts does not exceed such fee or other
cost or expense.  If there are  insufficient  funds in such deposit  accounts to
cover the amount of the fee or other cost or expense then due,  such debits will
be  reversed  (in  whole  or in  part,  in  BofA's,  BNY's  or  Deutsche's  sole
discretion)  and such amount not debited  shall be deemed to be unpaid.  No such
debit under this Section shall be deemed a set-off.

     13.12  Notification  of Addresses,  Lending  Offices,  Etc. Each Bank shall
notify the  Administrative  Agent in writing  of any  changes in the  address to
which  notices to the Bank  should be  directed,  of  addresses  of any  Lending
Office,  of payment  instructions  in respect of all  payments  to be made to it
hereunder and of such other  administrative  information  as the  Administrative
Agent shall reasonably request.

     13.13  Counterparts.  This  Agreement  may be  executed  in any  number  of
separate  counterparts,  each of  which,  when so  executed,  shall be deemed an
original,  and all of said  counterparts  taken  together  shall  be  deemed  to
constitute but one and the same instrument.

     13.14 Severability.  The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement  required  hereunder  shall not in
any way  affect  or impair  the  legality  or  enforceability  of the  remaining
provisions of this Agreement or any instrument or agreement required hereunder.



<PAGE>


     13.15 No Third Parties  Benefited.  This Agreement is made and entered into
for the sole  protection  and legal benefit of the Guarantor,  the Company,  the
Banks, the Agents and the Agent-Related  Persons, and their permitted successors
and assigns, and no other Person shall be a direct or indirect legal beneficiary
of, or have any direct or indirect cause of action or claim in connection  with,
this Agreement or any of the other Loan Documents.

     13.16  Governing  Law and  Jurisdiction.  (a) This  Agreement and the Notes
Shall be Governed By, and Construed in Accordance  With, the Law of the State of
New York; Provided That the Agents and the Banks Shall Retain All Rights Arising
Under Federal Law.

           (b) Any Legal Action or Proceeding  With Respect to This Agreement or
Any Other Loan Document May be Brought in the Courts of the State of New York or
of the United States for the Southern District of New York, and by Execution and
Delivery of This Agreement,  Each of the Guarantor,  the Company, the Agents and
the  Banks  Consents,  for  Itself  and  in  Respect  of  Its  Property,  to the
Non-exclusive  Jurisdiction of Those Courts. Each of the Guarantor, the Company,
the  Agents  and the Banks  Irrevocably  Waives  Any  Objection,  Including  Any
Objection  to the  Laying  of  Venue  or  Based  On the  Grounds  of  Forum  Non
Conveniens,  Which It May Now or Hereafter Have to the Bringing of Any Action or
Proceeding  in Such  Jurisdiction  in Respect of This  Agreement or Any Document
Related Hereto. the Guarantor,  the Company, the Agents and the Banks Each Waive
Personal Service of Any Summons,  Complaint or Other Process,  Which May be Made
by Any Other Means Permitted by New York Law.

     13.17 Waiver of Jury Trial. the Guarantor,  the Company,  the Banks and the
Agents  Each Waive  Their  Respective  Rights to a Trial by Jury of Any Claim or
Cause of Action Based Upon or Arising Out of or Related to This  Agreement,  the
Other Loan Documents, or the Transactions Contemplated Hereby or Thereby, in Any
Action, Proceeding or Other Litigation of Any Type Brought by Any of the Parties
Against Any Other Party or Any  Agent-related  Person,  Participant or Assignee,
Whether  With  Respect to  Contract  Claims,  Tort  Claims,  or  Otherwise.  the
Guarantor,  the Company, the Banks and the Agents Each Agree That Any Such Claim
or Cause of  Action  Shall be Tried by a Court  Trial  Without  a Jury.  Without
Limiting the Foregoing, the Parties Further Agree That Their Respective Right to
a Trial  by Jury is  Waived  by  Operation  of This  Section  as to Any  Action,
Counterclaim or Other  Proceeding Which Seeks, in Whole or in Part, to Challenge
the Validity or  Enforceability of This Agreement or the Other Loan Documents or
Any  Provision  Hereof or  Thereof.  This Waiver  Shall Apply to Any  Subsequent
Amendments,  Renewals,  Supplements or  Modifications  to This Agreement and the
Other Loan Documents.

     13.8  Entire  Agreement.  This  Agreement,  together  with the  other  Loan
Documents,  embodies the entire agreement and understanding among the Guarantor,
the  Company,   the  Banks  and  the  Agents,   and   supersedes  all  prior  or
contemporaneous  agreements  and  understandings  of  such  Persons,  verbal  or
written, relating to the subject matter hereof and thereof.


<PAGE>




51135219      99512352
                                      S-13

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed and delivered by their proper and duly  authorized  officers as of
the day and year first above written.

                                   PHOENIX INVESTMENT PARTNERS, LTD


                                   By: /s/ William R. Moyer            

                                   Title:  Senior V.P. and CFO         



<PAGE>


   IN WITNESS WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.


                                   PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY


                                   By:  /s/ Raymond E. Cummings        

                                   Title:  Treasurer                   




<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.


                                   BANK OF AMERICA NATIONAL TRUST
                                   AND SAVINGS ASSOCIATION, as
                                   Administrative Agent


                                   By:  /s/ Elizabeth W.F. Bishop

                                   Title:  Vice President              



<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.


                                   BANK OF AMERICA NATIONAL TRUST
                                   AND SAVINGS ASSOCIATION, as a
                                   Bank


                                   By:  /s/ Elizabeth W.F. Bishop

                                   Title:  Vice President              


<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.



                                   DEUTSCHE BANK AG, New York branch,
                                   as Syndication Agent


                                   By:  /s/ George Kudnosky            

                                   Title:  Vice President              


                                   By:  /s/ Ruth Leung                 

                                   Title:  Director                    





<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.


                                   DEUTSCHE BANK AG, New York branch
                                   and/or Cayman Islands branch,
                                   as a Bank


                                   By:  /s/ George Korchowsky          

                                   Title:  Vice President              


                                   By:  /s/ Ruth Leung                 

                                   Title:  Director                    





<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.



                                   THE BANK OF NEW YORK,
                                   as Documentation Agent


                                   By:  /s/ Scott H. Buitekant         

                                   Title:  Vice President              



<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.


                                   THE BANK OF NEW YORK,
                                    as a Bank


                                   By:  /s/ Scott H. Buitekant         

                                   Title:  Vice President              



<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.

                                   FLEET NATIONAL BANK,
                                    as a Bank


                                   By:  /s/ Elizabeth B. Shelley       

                                   Title:  Vice President              


<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.

                                BANK OF MONTREAL,
                                    as a Bank


                                   By:  /s/ Bruce A. Pietka            

                                   Title:  Vice President              




<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.


                                   SUNTRUST BANK, ATLANTA,
                                    as a Bank


                                   By:  /s/ Jennifer Harrelson         

                                   Title:  Vice President              


                                   By:  /s/ John O. Fields, Jr.        

                                   Title:  Vice President              




<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.


                                   STATE STREET BANK AND TRUST COMPANY,
                                    as a Bank


                                   By:  /s/ Edward M. Anderson         

                                   Title:  Vice President              





<PAGE>


  IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.


                                BANKBOSTON, N.A.,
                                    as a Bank


                                   By:  /s/ Charles A. Garrity         

                                   Title:  Vice President              



<PAGE>




51135219      99512352


                                 SCHEDULE 1.1

                               PRICING SCHEDULE



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

                                   Applicable
                                   Margin for
 S&P Rating/Moody's Rating of      Eurodollar Rate
           Guarantor                    Loans            Applicable Fee Rate
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

            AA/Aa2                      0.22%                   0.08%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

            AA-/Aa3                     0.26%                   0.09%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

             A+/A1                      0.30%                   0.10%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

             A/A2                       0.34%                   0.11%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

        A-/A3 or lower                  0.375%                 0.125%
-------------------------------------------------------------------------------


      Initially,  the  Applicable  Margin  for  Eurodollar  Rate  Loans  and the
Applicable  Fee Rate  shall be 0.26% and  0.09%,  respectively.  The  Applicable
Margin and the  Applicable  Fee Rate  shall be  adjusted  concurrently  with any
change in the  Rating of the  Guarantor.  In the  event of a split  between  the
Moody's Rating and the S&P Rating,  the higher  Applicable Margin and Applicable
Fee Rate shall be applicable.



<PAGE>




                                 SCHEDULE 2.1




                                   COMMITMENTS
                               AND PRO RATA SHARES


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

        Bank                           Commitments
                                                           Pro Rata Share

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

Bank of America National Trust         $30,000,000            17.14286%
and Savings Association
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Deutsche Bank Securities, Inc.         $27,500,000            15.71429%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

The Bank of New York                   $27,500,000            15.71429%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Fleet National Bank                    $22,500,000            12.85714%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Bank of Montreal                       $22,500,000            12.85714%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

Bank Boston, N.A.                      $15,000,000            8.57143%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

State Street Bank and Trust            $15,000,000            8.57143%
Company
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

SunTrust Bank, Atlanta                 $15,000,000            8.57143%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

              TOTAL                   $175,000,000             100.0%
-------------------------------------------------------------------------------