REVOLVING CREDIT AGREEMENT
                            Dated as of November 2, 1998

                                   BY AND AMONG
                             HMT TECHNOLOGY CORPORATION,

                              the BANKS named therein,

                                        and

                             CREDIT SUISSE FIRST BOSTON,

                                        and

                                 FLEET NATIONAL BANK

                                     as Agents
                           _____________________________


                       REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT (this "Credit Agreement") is made 
as of November 2, 1998, by and among (a) HMT TECHNOLOGY CORPORATION (the 
"Borrower"), a Delaware corporation having its principal place of 
business at 1055 Page Avenue, Fremont, California 94538, (b) the 
financial institutions from time to time parties hereto (the "Banks"), 
and (c) CREDIT SUISSE FIRST BOSTON and  FLEET NATIONAL BANK, as Agents 
for the Banks.
RECITALS
WHEREAS, The Banks have agreed to make and maintain the credit 
described in this Credit Agreement only on the terms, subject to the 
conditions and in reliance on the representations and warranties set 
forth below.
NOW, THEREFORE, in consideration of the mutual agreements, 
provisions and covenants contained herein, the parties agree as follows:
1.      DEFINITIONS AND RULES OF INTERPRETATION.
1.1.    Definitions.  The following terms shall have the meanings 
set forth in this   1 or elsewhere in the provisions of this Credit 
Agreement referred to below:
Affiliate.  Any Person that would be considered to be an affiliate 
of the Borrower under Rule 144(a) of the Rules and Regulations of the 
Securities and Exchange Commission, as in effect on the date hereof, if 
the Borrower were issuing securities.
Agents.  CSFB and Fleet, individually and collectively, in their 
respective capacities as Agents for the Banks.
Agents' Head Office.  In the case of Fleet, its head office 
located at Mail Stop MA OF D07A, One Federal Street, Boston, 
Massachusetts, 02110; in the case of CSFB, its head office located at 11 
Madison Avenue, New York, New York 10010.
Assignment and Acceptance.  See   18.1.
Attributable Debt.  In respect of a Sale/Leaseback Transaction, 
"Attributable Debt" means, as at the date of determination, the present 
value (discounted at the highest applicable interest rate per annum 
borne by the Loans on the date of determination) of the total 
obligations of the lessee for rental payments during the remaining term 
of the lease included in such Sale/Leaseback transaction (including any 
period for which such lease has been extended).
Balance Sheet Date.  March 31, 1998.
Banks.  The lending institutions listed on Schedule 1.1 hereto and 
any other Person who becomes an assignee of any rights and obligations 
of a Bank pursuant to   18.  References to the Banks shall include the 
Issuing Bank in its capacity as such unless the context otherwise 
clearly requires.  For purposes of clarification only, to the extent 
that the Issuing Bank may have any rights or obligations in addition to 
those of the Banks due to its status as Issuing Bank, its status as such 
will be specifically referenced.
Base Rate.  The higher of (i) the arithmetic mean of (A) the 
annual rate of interest announced from time to time by Fleet, as its 
"base rate, and (B) the annual rate of interest announced from time to 
time by CSFB, as its "base rate" and (ii) one-half of one percent (1/2%) 
above the Federal Funds Effective Rate. For the purposes of this 
definition, "Federal Funds Effective Rate" shall mean, for any day, the 
rate per annum equal to the weighted average of the rates on overnight 
federal funds transactions with members of the Federal Reserve System 
arranged by federal funds brokers, as published for such day (or, if 
such day is not a Business Day, for the next preceding Business Day) by 
the Federal Reserve Bank of New York, or, if such rate is not so 
published for any day that is a Business Day, the average of the 
quotations for such day on such transactions received by each of Fleet 
and CSFB from three funds brokers of recognized standing selected by 
Fleet and CSFB, as the case may be.
Base Rate Loans.  All or any portion of the Revolving Credit Loans 
bearing interest calculated by reference to the Base Rate.
Borrower.  As defined in the preamble hereto.
Business Day.  Any day on which (a) banking institutions in 
Boston, Massachusetts, New York, New York and San Francisco, California, 
are open for the transaction of banking business and (b) in the case of 
LIBOR Rate Loans, a day which is also a LIBOR Business Day.
Capital Assets.  Fixed assets, both tangible (such as land, 
buildings, fixtures, machinery and equipment) and intangible (such as 
patents, copyrights, trademarks, franchises and good will); provided 
that Capital Assets shall not include any item customarily charged 
directly to expense or depreciated over a useful life of twelve (12) 
months or less in accordance with GAAP.
Capital Expenditures.  Amounts paid or indebtedness incurred by 
the Borrower or any of its Subsidiaries in connection with the purchase 
or lease by the Borrower or any of its Subsidiaries of Capital Assets 
that would be required to be capitalized and shown on the balance sheet 
of such Person in accordance with GAAP.
Capitalized Leases.  Leases under which the Borrower or any of its 
Subsidiaries is the lessee or obliger, the discounted future rental 
payment obligations under which are required to be capitalized on the 
balance sheet of the lessee or obliger in accordance with GAAP.
Closing Date.  The first date on which all of the conditions set 
forth in   10 have been satisfied.
Code.  The Internal Revenue Code of 1986.
Collateral.  The property described in the Collateral Documents, 
and all other property now existing or hereafter acquired which may at 
any time be or become subject to a Lien in favor of the Agents or the 
Banks pursuant to the Collateral Documents or otherwise, securing the 
payment and performance of the Obligations.
Collateral Documents.  The Security Agreement and any other 
agreement pursuant to which the Borrower or any other Person provides a 
Lien on its assets in favor of the Banks or the Agents for the benefit 
of the Banks and all financing statements, fixture filings, assignments, 
acknowledgments and other filings, documents and agreements made or 
delivered pursuant thereto.
Commitment.  With respect to each Bank, the amount set forth on 
Schedule 1.1 hereto as the amount of such Bank's commitment to make 
Revolving Credit Loans and to participate in the issuance, extension and 
renewal of Letters of Credit for the account of the Borrower, as the 
same may be reduced from time to time; or, if such commitment is 
terminated pursuant to the provisions hereof, zero.
Commitment Fee.  See   2.2.
Commitment Percentage.  With respect to each Bank, such Bank's 
percentage of the aggregate Commitments of all of the Banks.
Compliance Certificate.  See   7.4(c).
Consolidated or consolidated.  With reference to any term defined 
herein, such term as applied to the accounts of the Borrower and its 
Subsidiaries, consolidated in accordance with GAAP.
Consolidated Net Income (or Deficit).  The consolidated net income 
(or deficit) of the Borrower and its Subsidiaries, after deduction of 
all expenses, taxes, and other proper charges, determined in accordance 
with GAAP, after eliminating therefrom all extraordinary nonrecurring 
items of income or expense.
Consolidated Net Worth.  On a consolidated basis, the common 
stockholders' equity capital plus surplus plus retained earnings, as 
determined and computed according to GAAP.
Consolidated Total Interest Expense.  For any period, the 
aggregate amount of interest required to be paid or accrued by the 
Borrower and its Subsidiaries during such period on all Indebtedness of 
the Borrower and its Subsidiaries outstanding during all or any part of 
such period, whether such interest was or is required to be reflected as 
an item of expense or capitalized, including payments consisting of 
interest in respect of Capitalized Leases.
Conversion Request.  A notice given by the Borrower to the Agents 
of the Borrower's election to convert or continue a Loan in accordance 
with   2.7.
Credit Agreement.  This Revolving Credit Agreement, including the 
Schedules and Exhibits hereto, which by this reference are incorporated 
into and made a part hereof
CSFB.  Credit Suisse First Boston.
Default.  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.
Delinquent Bank.  See   14.5.3.
Designated Officer.  The chief executive officer, the chief 
operating officer and the chief financial officer of the Borrower.
Distribution.  The declaration or payment of any dividend on or in 
respect of any shares of any class of capital stock of the Borrower, 
other than dividends payable solely in shares of common stock of the 
Borrower; the purchase, redemption, or other retirement of any shares of 
any class of capital stock of the Borrower, directly or indirectly 
through a Subsidiary of the Borrower or otherwise; the return of capital 
by the Borrower to its shareholders as such; or any other distribution 
on or in respect of any shares of any class of capital stock of the 
Borrower or any of its Subsidiaries (other than to the Borrower or a 
direct or indirect wholly-owned Subsidiary of the Borrower).
Dollars or $.  Dollars in lawful currency of the United States of 
America.
Domestic Lending Office.  Initially, the office of each Bank 
designated as such in Schedule 1.1 hereto; thereafter, such other office 
of such Bank, if any, located within the United States that will be 
making or maintaining Base Rate Loans.
Dow Jones Page 3750.  The display designated as page "3750" on the 
Dow Jones Market Service (formerly known as the Telerate Service) or 
such other page as may replace the "3750" page on that service or such 
other service or services as may be nominated by the British Bankers 
Association for the purpose of displaying London interbank offered rates 
for Dollar deposits.
Drawdown Date.  The date on which any Revolving Credit Loan is 
made or is to be made,  and the date on which any Revolving Credit Loan 
is converted or continued in accordance with   2.7, each of which shall 
be a Business Day (and, in accordance with Section 2.7, may also be 
required to be a LIBOR Business Day).
EBITDAR.  For any period, an amount equal to the sum of (i) EBITR 
plus (ii) depreciation and amortization for such period, in each case, 
determined in accordance with GAAP.
EBITR.  For any period, an amount equal to the consolidated 
earnings (or loss) from the operations of the Borrower and its 
Subsidiaries for any period, after all expenses and other proper charges 
but before provision for any income taxes, interest expense, rent or 
operating lease expense for such period, in each case, determined in 
accordance with GAAP.
Eligible Assignee.  Any of (i) a commercial bank or finance 
company organized under the laws of the United States, or any State 
thereof or the District of Columbia, and having total assets in excess 
of $1,000,000,000, calculated in accordance with GAAP; (ii) a savings 
and loan association or savings bank organized under the laws of the 
United States, or any State thereof or the District of Columbia, and 
having a net worth of at least $100,000,000, calculated in accordance 
with GAAP; (iii) a commercial bank organized under the laws of any other 
country which is a member of the Organization for Economic Cooperation 
and Development (the "OECD"), or a political subdivision of any such 
country, and having total assets in excess of $1,000,000,000, provided 
that such bank is acting through a branch or agency located in the 
United States; (iv) the central bank of any country which is a member of 
the OECD; (v) funds and investment companies that invest in loans 
expected to earn interest based on the Base Rate or LIBOR Rate; and (vi) 
if, but only if an Event of Default has occurred and is continuing, any 
other bank insurance company, commercial finance company or other 
financial institution or other Person approved by the Agents, such 
approval not to be unreasonably withheld.
Employee Benefit Plan.  Any employee benefit plan within the 
meaning of   3(3) of ERISA maintained or contributed to by the Borrower 
or any ERISA Affiliate, other than a Multiemployer Plan.
Environmental Laws.  Any judgment, decree, order, law, license, 
rule or regulation pertaining to environmental matters, including 
without limitation those arising under the Resource Conservation and 
Recovery Act ("RCRA"), the Comprehensive Environmental Response, 
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund 
Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean 
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, 
each as subsequently amended, or any State or local statute, regulation, 
ordinance, order or decree relating to health, safety or the 
environment.
ERISA.  The Employee Retirement Income Security Act of 1974.
ERISA Affiliate.  Any Person which is treated as a single employer 
with the Borrower under   414 of the Code.
ERISA Reportable Event.  A "reportable event" with respect to a 
Guaranteed Pension Plan within the meaning of   4043 of ERISA and the 
regulations promulgated thereunder as to which the requirement of notice 
has not been waived.
Eurocurrency Reserve Rate.  For any day with respect to a LIBOR 
Rate Loan, the maximum rate (expressed as a decimal) at which any lender 
subject thereto would be required to maintain reserves under Regulation 
D of the Board of Governors of the Federal Reserve System (or any 
successor or similar regulations relating to such reserve requirements) 
against "Eurocurrency Liabilities" (as that term is used in Regulation 
D), if such liabilities were outstanding. The Eurocurrency Reserve Rate 
shall be adjusted automatically on and as of the effective date of any 
change in the Eurocurrency Reserve Rate.
Event of Default.  See   12.1.
Event of Loss.  With respect to any asset of the Borrower or its 
Subsidiaries any of the following:  (i) any loss, destruction or damage 
of such asset; (ii) any pending or threatened institution of any 
proceedings for the condemnation or seizure of such asset or of any 
right of eminent domain; or (iii) any actual condemnation, seizure or 
taking, by exercise of the power of eminent domain or otherwise, of such 
asset, or confiscation of such asset or requisition of the use of such 
asset.
Existing Credit Agreement.  The Second Amended and Restated 
Revolving Credit Agreement dated as of November 17, 1997, by and among 
the Borrower, the lenders parties thereto and BankBoston, N.A., as 
Agent.
Fleet.  Fleet National Bank, a national banking association.
GAAP.  Generally accepted accounting principles as in effect from 
time to time in the United States. In the event that GAAP changes during 
the term of this Credit Agreement such that the covenants contained in 
Section 9 would be calculated in a different manner or with different 
components, (a) at the request of the Borrower or the Majority Banks, 
the parties hereto agree to amend this Credit Agreement in such respects 
as are necessary to conform those covenants as criteria for evaluating 
Borrower's financial condition to substantially the same criteria as 
were effective prior to such change, and (b) Borrower shall be deemed to 
be in compliance with the covenants contained in Section 9 during the 
ninety (90) day period following any such change in GAAP if and to the 
extent that Borrower would have been in compliance therewith under GAAP 
as in effect immediately prior to such change.
Guaranteed Pension Plan.  Any employee pension benefit plan within 
the meaning of   3(2) of ERISA maintained or contributed to by the 
Borrower or any ERISA Affiliate the benefits of which are guaranteed on 
termination in full or in part by the PBGC pursuant to Title IV of 
ERISA, other than a Multiemployer Plan.
Hazardous Substances.  Any hazardous waste, as defined by 42 
U.S.C.   6903(5), any hazardous substances as defined by 42 U.S.C.   
9601(14), any pollutant or contaminant as defined by 42 U.S.C.   
9601(33) and any toxic substances, oil or hazardous materials or other 
chemicals or substances regulated by any Environmental Laws.
Indebtedness.  All obligations, contingent and otherwise, that in 
accordance with GAAP should be classified upon the obligor's balance 
sheet as liabilities, or to which reference should be made by footnotes 
thereto (other than contingent liabilities which have not been 
quantified in such footnotes), including in any event and whether or not 
so classified: (i) all debt and similar monetary obligations, whether 
direct or indirect; (ii) all liabilities secured by any mortgage, 
pledge, security interest, lien, charge or other encumbrance existing on 
property owned or acquired subject thereto, whether or not the liability 
secured thereby shall have been assumed; (iii) all Attributable Debt; 
and (iv) all guaranties, endorsements and other contingent obligations 
whether direct or indirect in respect of indebtedness of others, 
including any obligation to supply funds to or in any manner to invest 
in, directly or indirectly, the debtor, to purchase indebtedness, or to 
assure the owner of indebtedness against loss, through an agreement to 
purchase goods, supplies, or services for the purpose of enabling the 
debtor to make payment of the indebtedness held by such owner or 
otherwise, and the obligations to reimburse the issuer in respect of any 
letters of credit.
Indenture.  The Indenture dated as of January 15, 1997 between the 
Borrower and State Street Bank and Trust Company of California, N.A., as 
trustee.
Intangible Assets.  The value, as stated on the consolidated 
balance sheet of the Borrower, of all intangible assets of the Borrower 
as determined and computed in accordance with GAAP.
Interest Payment Date.  (i) As to any Base Rate Loan, the last day 
of each calendar quarter including the calendar quarter in which the 
Drawdown Date of such Base Rate Loan occurs; and (ii) as to any LIBOR 
Rate Loan, the earlier to occur of (A) three months after the making of 
such LIBOR Rate Loan and (B) the last day of the Interest Period in 
respect of such LIBOR Rate Loan.
Interest Period.  With respect to each Revolving Credit Loan, (i) 
initially, the period commencing on the Drawdown Date of such Loan and 
ending on the last day of one of the periods set forth below, as 
selected by the Borrower in a Loan Request: (A) for any Base Rate Loan, 
the calendar quarter in which the Drawdown Date for such Base Rate Loan 
occurs; or (B) for any LIBOR Rate Loan, 1, 2, 3 or 6 months; and (ii) 
thereafter, each period commencing on the first day immediately 
succeeding the last day of the immediately preceding Interest Period 
applicable to such Revolving Credit Loan and ending on the last day of 
one of the periods set forth above, as selected by the Borrower in a 
Conversion Request; provided that all of the foregoing provisions 
relating to Interest Periods are subject to the following:
(a)     if any Interest Period with respect to a LIBOR 
Rate Loan would otherwise end on a day that is not a LIBOR 
Business Day, that Interest Period shall be extended to the 
next succeeding LIBOR 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 immediately preceding LIBOR Business Day;
(b)     if any Interest Period with respect to a Base 
Rate Loan would end on a day that is not a Business Day, 
that Interest Period shall end on the next succeeding 
Business Day;
(c)     if the Borrower shall fail to give notice as 
provided in   2.7, the Borrower shall be deemed to have 
requested a conversion of the affected LIBOR Rate Loan to a 
Base Rate Loan and the continuance of all Base Rate Loans as 
Base Rate Loans on the last day of the then current Interest 
Period with respect thereto;
(d)     any Interest Period relating to any LIBOR Rate 
Loan that begins on the last LIBOR 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 LIBOR 
Business Day of a calendar month; and
(e)     any Interest Period that would otherwise extend 
beyond the Maturity Date shall end on the Maturity Date.
Investments.  All expenditures made and all liabilities incurred 
(contingently or otherwise) for the acquisition of stock or Indebtedness 
of, or for loans, advances, capital contributions or transfers of 
property to, or in respect of any guaranties (or other commitments as 
described under Indebtedness), or obligations of, any Person. In 
determining the aggregate amount of Investments of a Person outstanding 
at any particular time: (i) the amount of any Investment represented by 
a guaranty shall be taken at not less than the principal amount of the 
obligations guaranteed and still outstanding; (ii) there shall be 
included as an Investment all interest accrued with to Indebtedness 
constituting an Investment unless and until such interest is paid; (iii) 
there shall be deducted in respect of each such Investment any amount 
received as a return of capital (but only by repurchase, redemption, 
retirement, repayment, liquidating dividend or liquidating 
distribution); (iv) there shall not be deducted in respect of any 
Investment any amounts received as earnings on such Investment, whether 
as dividends, interest or otherwise, except that accrued interest 
included as provided in the foregoing clause (ii) may be deducted when 
paid; and (v) there shall not be deducted from the aggregate amount of 
Investments any decrease in the fair market value thereof.
Issuing Bank.  Fleet, acting as letter of credit issuer for the 
Banks.
Issuing Bank Head Office.  The Issuing Bank's head office located 
at One Federal Street, Boston, Massachusetts, 02110.
Knowledge.  "Knowledge" of Borrower shall mean information which 
is known to, or should in the ordinary course of such Designated 
Officer's duties have become known to, a Designated Officer of the 
Borrower.
Letter of Credit.  See   4.1.1.
Letter of Credit Application.  See   4.1.1.
Letter of Credit Participation.  See   4.1.4.
Leverage Ratio.  The ratio of Total Funded Debt of the Borrower to 
the Borrower's total EBITDA for the immediately preceding four 
consecutive quarters, treated as a single accounting period.
LIBOR Business Day.  Any day on which commercial banks are open 
for international business (including dealings in Dollar deposits) in 
London.
LIBOR Lending Office.  Initially, the office of each Bank 
designated as such in Schedule 1.1 hereto; thereafter, such other office 
of such Bank, if any, that shall be making or maintaining LIBOR Rate 
Loans.
LIBOR Rate.  For any Interest Period with respect to a LIBOR Rate 
Loan, the rate of interest equal to (i) the rate at which Dollar 
deposits for such Interest Period in an amount approximately equal to 
the principal amount of such LIBOR Rate Loan are offered based on 
information presented on Dow Jones Page 3750 as of 11:00 a.m. (London 
time) on the second LIBOR Business Day prior to the first day of such 
Interest Period, divided by (B) a number equal to 1.00 minus the 
Eurocurrency Reserve Rate, if applicable, or (ii) if for any reason Dow 
Jones Page 3750 is unavailable, the higher of a rate of interest per 
annum selected by Fleet acting in good faith and a rate of interest per 
annum selected by CSFB acting in good faith, in each case, at which 
deposits in Dollars are offered to Fleet or CSFB, as the case may be, in 
the London interbank market at approximately 11:00 A.M. (London time) 
two LIBOR Business Days before the first day of such Interest Period in 
an amount approximately equal to the principal amount of the LIBOR Rate 
Loan to which such Interest Period is to apply and for a period of time 
comparable to such Interest Period.
LIBOR Rate Loans.  Revolving Credit Loans bearing interest 
calculated by reference to the LIBOR Rate.
LIBOR Spread.  In each case, effective from the date on which the 
Agents receive the applicable Compliance Certificate, (i) at any time 
when the Leverage Ratio calculated as of the end of the previous quarter 
was less than 1.50, one and one-half percent (1.50%); (ii) at any time 
when the Leverage Ratio calculated as of the end of the previous quarter 
was greater than or equal to 1.50 but less than 2.00, one and five-
eighths percent (1.625%), (iii) at any time when the Leverage Ratio 
calculated as of the end of the previous quarter was greater than  or 
equal to 2.00 but less than 2.50, one and three-quarters percent 
(1.75%), and (iv) at any time when the Leverage Ratio calculated as of 
the end of the previous quarter was greater than or equal to 2.50, two 
percent (2.00%).  Notwithstanding the foregoing, the LIBOR Spread for 
the period from the Closing Date until the date on which the Agents 
receive a Compliance Certificate for the fiscal quarter ending March 31, 
1999, shall be fixed at one and five-eighths percent (1.625%).
Lien.  Any mortgage, deed of trust, pledge, security interest, 
assignment, deposit arrangement, charge or encumbrance, lien (statutory 
or other), or other preferential arrangement (including any conditional 
sale or other title retention agreement, any financing lease having 
substantially the same economic effect as any of the foregoing or any 
agreement to give any security interest).
Loan Documents.  This Credit Agreement, the Letter of Credit 
Applications, the Letters of Credit, the Collateral Documents and the 
Notes. 
Loan Request.  See   2.6.
Loans.  The Revolving Credit Loans.
Majority Banks.  As of any date, the Banks (excluding any 
Delinquent Banks, provided that if the Commitments have been terminated 
as of such date, any Delinquent Bank shall not be excluded) having Total 
Percentages aggregating to at least sixty-six and two-thirds percent 
(66-2/3%) on such date.
Maturity Date.  The second anniversary of the Closing Date, 
subject to extension pursuant to Section 3.1.
Maximum Drawing Amount.  The maximum aggregate amount that the 
beneficiaries may at any time draw under outstanding Letters of Credit, 
as such aggregate amount may be reduced from time to time pursuant to 
the terms of the Letters of Credit.
Multiemployer Plan.  Any multiemployer plan within the meaning of 
  3(37) of ERISA maintained or contributed to by the Borrower or any 
ERISA Affiliate.
Net Fixed Assets.  The value of property, plant and equipment 
required to be reflected on the consolidated balance sheet of the 
Borrower in accordance with GAAP, minus accumulated depreciation as of 
any date of determination of Net Fixed Assets.
"Net Issuance Proceeds" means, when used in respect of any 
issuance of any debt or equity securities of the Borrower or any 
Subsidiary, the gross proceeds received by the Borrower or such 
Subsidiary from such issuance less all direct costs and expenses 
incurred or to be incurred, and all federal, state, local and foreign 
taxes assessed or to be assessed, in connection therewith.
Notes.  The Revolving Credit Notes.
Obligations.  All indebtedness, obligations and liabilities of any 
of the Borrower and its Subsidiaries to any of the Banks and the Agents, 
individually or collectively, existing on the date of this Credit 
Agreement or arising thereafter, direct or indirect, joint or several, 
absolute or contingent, matured or unmatured, liquidated or 
unliquidated, secured or unsecured, arising by contract, operation of 
law or otherwise, arising or incurred under this Credit Agreement or any 
of the other Loan Documents or in respect of any of the Loans made or 
Reimbursement Obligations incurred or any of the Notes, Letter of Credit 
Applications, Letters of Credit, or other instruments at any time 
evidencing any thereof.
Outstanding.  With respect to the Loans, the aggregate unpaid 
principal thereof as of any date of determination.
PBGC.  The Pension Benefit Guaranty Corporation created by   4002 
of ERISA and any successor entity or entities having similar 
responsibilities.
Permitted Acquisition.  The acquisition by the Borrower of a 
majority of the voting ownership interests in an entity (provided, that 
if Borrower is acquiring less than all such interests in an entity, the 
acquisition will not be a Permitted Acquisition unless the Agents shall 
have approved the transaction), in connection with which all of the 
following conditions are met: (i) the total cash portion of the purchase 
price for such acquisition, regardless of when paid, when aggregated 
with the cash portions of the purchase prices for any other acquisitions 
consummated by the Borrower during the period beginning on the Closing 
Date and ending on the Maturity Date, does not exceed $50,000,000; (ii) 
the aggregate total fair market value of the consideration paid in 
connection with all such acquisitions, regardless of how paid and when 
due and determined as of the date of consummation of the acquisition, 
does not exceed $100,000,000 for all acquisitions to be consummated in 
any given twelve-month period; (iii) in the event any such acquisition 
involves a merger to which the Borrower is a party, the Borrower is the 
surviving entity; (iv) the entity acquired is primarily engaged in the 
same, a related, or a similar, line of business as the Borrower; (v) 
after giving effect to such acquisition on a pro forma basis, the 
Borrower is in compliance with the covenants set forth in Section 9 
hereof, as demonstrated by submission of a pro forma Compliance 
Certificate; (vi) at the time of such acquisition, no Default or Event 
of Default has occurred and is continuing; (vii) the Borrower's 
acquisition of such entity is being accomplished with the cooperation 
and consent of the management of, the board of directors (if any) of, 
the managing member (if any) of, and the requisite majority, if 
required, of holders of ownership interests in, the acquired entity, and 
(viii) such acquisition has been approved by Borrower's board of 
directors.
Permitted Liens.  Liens, security interests and other encumbrances 
permitted by   8.2.
Permitted New Subordinated Debt.  Unsecured subordinated 
Indebtedness of the Borrower as to which the following conditions are 
satisfied: (i) the terms and conditions governing the subordination of 
such Indebtedness are no less favorable to the Banks (as determined by 
the Agents) than those governing the Borrower's Subordinated Debt; (ii) 
the coupon applicable to such subordinated Indebtedness does not exceed 
twelve percent (12%) per annum; (iii) no principal payments in respect 
of such subordinated Indebtedness are required until after the Maturity 
Date; (iv) the terms of such subordinated Indebtedness specify that 
under no circumstances may such subordinated Indebtedness become due and 
payable prior to the Maturity Date, provided that this clause (iv) shall 
not prohibit the acceleration of the maturity of such Subordinated 
Indebtedness in accordance with the terms thereof if any and all 
payments in respect of such subordinated Indebtedness made as a result 
of such acceleration are made directly to the Agents for the benefit of 
the Banks, to the extent required pursuant to the subordination 
provisions of the Indenture and the Subordinated Notes and (v) the terms 
of such subordinated Indebtedness are otherwise satisfactory to the 
Agents (in their reasonable discretion), including with respect to 
payment blockage periods in favor of the Agents and the Banks.
Person.  Any individual, corporation, partnership, trust, 
unincorporated association, business, or other legal entity, and any 
government or any governmental agency or political subdivision thereof.
Preferred Stock.  As applied to the capital stock of any Person, 
the capital stock of any class or classes (however designated) that is 
preferred as to the payment of dividends, or as to the distribution of 
assets upon any voluntary or involuntary liquidation or dissolution of 
such corporation, over shares of capital stock of any other class of 
such Person.
Real Estate.  All real property at any time owned or leased (as 
lessee or sublessee) by the Borrower or any of its Subsidiaries.
Recapitalization Agreement.  The Recapitalization Agreement, dated 
as of October 31, 1995, among the Borrower and each of the investors 
listed on Exhibit A thereto.
Record.  The grid attached to a Note, or the continuation of such 
grid, or any other similar record, including computer records, 
maintained by any Bank with respect to any Loan referred to in such 
Note.
Reimbursement Obligation.  The Borrower's obligation to reimburse 
the Issuing Bank and the Banks on account of any drawing under any 
Letter of Credit as provided in   4.2.
Restricted Payments.  In relation to the Borrower and its 
Subsidiaries, any (a) Distribution or (b) payment or prepayment by the 
Borrower or any of its Subsidiaries to any Affiliate of the Borrower 
other than payments to Affiliates for goods and services in the ordinary 
course of business on terms equivalent to those obtainable in arms'-
length transactions.
Revolving Credit Loans.  Revolving credit loans made or to be made 
by the Banks to the Borrower pursuant to   2.
Revolving Credit Note Record.  A Record with respect to a 
Revolving Credit Note.
Revolving Credit Notes.  See   2.4.
Sale/Leaseback Transaction.  An arrangement relating to property 
now owned or hereafter acquired whereby the Borrower or a direct or 
indirect Subsidiary of the Borrower transfers such property to a Person 
and the Borrower or a direct or indirect Subsidiary of the Borrower 
leases it from such Person, including without limitation contingent 
obligations with respect to "off balance sheet" or "synthetic" leases 
(i.e. leases where for tax purposes the lessee is treated as the owner 
of the leased property but for GAAP purposes the lease is treated as an 
operating lease and the lessor is treated as the owner of the leased 
property), other than (a) leases between the Borrower and a direct or 
indirect Subsidiary of the Borrower or between any direct or indirect 
Subsidiaries of the Borrower and (b) such arrangements if the property 
so transferred is personal property and is transferred to such Person 
within ninety (90) days of the original acquisition thereof and is 
leased from such Person pursuant to an operating lease.
Security Agreement.  The Security Agreement between the Borrower, 
on the one hand, and the Agents, on the other, in substantially the form 
of Exhibit E.
Solvent.  See   6.4.2.
Subordinated Debt.  Indebtedness of the Borrower in respect of the 
Subordinated Notes that is expressly subordinated and made junior to the 
payment and performance in full of the Obligations, and evidenced as 
such by the terms of the Indenture and the Subordinated Notes.
Subordinated Debt Documents.  The Subordinated Notes and the 
Indenture.
Subordinated Notes.  The convertible Subordinated Notes due 2004 
issued by the Borrower pursuant to the Indenture.
Subsidiary.  Any corporation, association, trust, or other 
business entity of which the designated parent shall at any time own 
directly or indirectly through a Subsidiary or Subsidiaries at least a 
majority (by number of votes) of the outstanding Voting Stock.
Tangible Net Worth.  At any date of determination thereof, on a 
consolidated basis, Borrower's Consolidated Net Worth, less all 
Intangible Assets.
Total Commitment.  The sum of the Commitments of the Banks, as in 
effect from time to time, provided that the initial Total Commitment 
shall be Fifty Million Dollars ($50,000,000).
Total Funded Debt.  All Indebtedness of the Borrower and its 
Subsidiaries for borrowed money, purchase money Indebtedness and with 
respect to Capitalized Leases (excluding, in each case, Indebtedness in 
respect of Letters of Credit which have been issued by the Issuing Bank 
to credit enhance funded Indebtedness), determined on a consolidated 
basis in accordance with GAAP.
Total Liabilities.  The total liabilities of a Person that would 
be required to be reflected on such Person's balance sheet in accordance 
with GAAP.
Total Percentage.  With respect to each Bank, the portion of the 
Commitment (or, if the Commitments are terminated, Revolving Credit 
Loans, Letter of Credit Participations in Unpaid Reimbursement 
Obligations and participating interests in the risk relating to 
outstanding Letters of Credit) held by such Bank as a percentage of the 
greater of (i) the Total Commitment and (ii) the outstanding principal 
amount of the Revolving Credit Loans, Unpaid Reimbursement Obligations 
and the Maximum Drawing Amount. 
Type.  As to any Revolving Credit Loan, its nature as a Base Rate 
Loan or a LIBOR Rate Loan.
UCC.  The Uniform Commercial Code of the jurisdiction the law of 
which governs the Loan Document in which such term is used or the 
attachment, perfection or priority of the Lien on any Collateral.
Uniform Customs.  With respect to any Letter of Credit, the 
Uniform Customs and Practice for Documentary Credits (1993 Revision), 
International Chamber of Commerce Publication No. 500 or any successor 
version thereto adopted by the Issuing Bank in the ordinary course of 
its business as a letter of credit issuer and in effect at the time of 
issuance of such Letter of Credit.
Unpaid Reimbursement Obligation.  Any Reimbursement Obligation for 
which the Borrower does not reimburse the Issuing Bank and the Banks on 
the date specified in, and in accordance with,   4.2.
Voting Stock.  Stock or similar interests, of any class or classes 
(however designated), the holders of which are at the time entitled, as 
such holders, to vote for the election of a majority of the directors 
(or persons performing similar functions) of the corporation, 
association, trust or other business entity involved, whether or not the 
right so to vote exists by reason of the happening of a contingency.
1.2.    Rules of Interpretation.
(a)     A reference to any document or agreement shall 
include such document or agreement as amended, modified or 
supplemented from time to time in accordance with its terms 
and the terms of this Credit Agreement.
(b)     The singular includes the plural and the plural 
includes the singular.
(c)     A reference to any law includes any amendment or 
modification to such law.
(d)     A reference to any Person includes its permitted 
successors and permitted assigns.
(e)     Accounting terms not otherwise defined herein 
have the meanings assigned to them by GAAP, applied on a 
consistent basis, by the accounting entity to which they 
refer.
(f)     The words "include", "includes" and "including" 
are not limiting.
(g)     All terms not specifically defined herein or by 
GAAP, which terms are defined in the Uniform Commercial Code 
as in effect in the State of California, have the meanings 
assigned to them therein, with the term "instrument" being 
that defined under Article 9 of the Uniform Commercial Code.
(h)     Reference to a particular " " refers to that 
section of this Credit Agreement unless otherwise indicated.
(i)     The words "herein", "hereof", "hereunder" and 
words of like import shall refer to this Credit Agreement as 
a whole and not to any particular section or subdivision of 
this Credit Agreement.
2.      THE REVOLVING CREDIT FACILITY.
2.1.    Commitment to Lend.  Subject to the terms and conditions set 
forth in this Credit Agreement, each of the Banks severally agrees to 
lend to the Borrower and the Borrower may borrow, repay, and reborrow 
from time to time between the Closing Date and the Maturity Date upon 
notice by the Borrower to the Agents given in accordance with   2.6, 
such sums as are requested by the Borrower up to a maximum aggregate 
amount outstanding (after giving effect to all amounts requested) at any 
one time equal to such Bank's Commitment minus such Bank's Commitment 
Percentage of the sum of the Maximum Drawing Amount and all Unpaid 
Reimbursement Obligations, provided that the sum of the outstanding 
amount of the Revolving Credit Loans (after giving effect to all amounts 
requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement 
Obligations shall not at any time exceed the Total Commitment. The 
Revolving Credit Loans shall be made pro rata in accordance with each 
Bank's Commitment Percentage. Each request for a Revolving Credit Loan 
hereunder shall constitute a representation and warranty by the Borrower 
that the conditions set forth in   11 have been satisfied on the date of 
such request.
2.2.    Commitment Fee.  The Borrower agrees to pay to the Agents 
for the respective accounts of the Banks in accordance with their 
respective Commitment Percentages a Commitment Fee (each a "Commitment 
Fee" and, in the aggregate, the "Commitment Fee") calculated as follows: 
(a) for the period from the Closing Date until the date on which the 
Agents receive a Compliance Certificate for the fiscal quarter ending 
March 31, 1999, thirty-seven and one-half basis points (0.375%), and (b) 
in each case effective from the date on which the Agents receive the 
applicable Compliance Certificate: (i) at any time when the Leverage 
Ratio calculated as of the end of the previous quarter was less than 
1.50, thirty-two and one-half basis points (0.325%); (ii) at any time 
when the Leverage Ratio calculated as of the end of the previous quarter 
was greater than or equal to 1.50 but less than 2.00, thirty-seven and 
one-half basis points (0.375%); (iii) at any time when the Leverage 
Ratio calculated as of the end of the previous quarter was greater than 
or equal to 2.00 but less than 2.50, forty-two and one-half basis points 
(0.425%); and (iv) at any time when the Leverage Ratio calculated as of 
the end of the previous quarter was greater than or equal to 2.50, 
fifty-five basis points (0.55%); in each case calculated on the average 
daily amount during each calendar quarter, or such shorter period as may 
exist from the Closing Date to the first immediately succeeding end of a 
calendar quarter or from the end of the final calendar quarter occurring 
prior to the Maturity Date until the Maturity Date, by which the Total 
Commitment minus the sum of the Maximum Drawing Amount and all Unpaid 
Reimbursement Obligations exceeds the outstanding amount of Revolving 
Credit Loans during such calendar quarter. The Commitment Fee shall be 
payable quarterly in arrears on the first day of each calendar quarter 
for the immediately preceding calendar quarter commencing on the first 
such date following the date hereof, with a final payment on the earlier 
to occur of (i) the Maturity Date and (ii) any earlier date on which the 
Commitments shall terminate pursuant hereto.
2.3.    Reduction of Total Commitment.  The Borrower shall have the 
right, at any time and from time to time, upon three (3) Business Days' 
prior written notice to the Agents, to reduce by $5,000,000 or an 
integral multiple thereof, or terminate entirely, the Total Commitment, 
whereupon the Commitments of the Banks shall be reduced pro rata in 
accordance with their respective Commitment Percentages of the amount 
specified in such notice or, as the case may be, terminated.  Promptly 
after receiving any notice of the Borrower delivered pursuant to this 
  2.3, the Agents will notify the Banks of the substance thereof.  Upon 
the effective date of any such reduction or termination, the Borrower 
shall pay to the Agents for the respective accounts of the Banks the 
full amount of any Commitment Fee then accrued on the amount of the 
reduction, plus any amounts due under Section 3.2 and 3.3.2 hereof. No 
reduction or termination of the Commitments may be reinstated.
2.4.    The Revolving Credit Notes.  The Revolving Credit Loans 
shall be evidenced by separate promissory notes of the Borrower, each in 
substantially the form of Exhibit A hereto (each a "Revolving Credit 
Note"), dated the Closing Date (or such other date on which a Bank may 
become a party hereto pursuant to   18 hereof) and completed with 
appropriate insertions. One Revolving Credit Note shall be payable to 
the order of each Bank in a principal amount equal to such Bank's 
Commitment or, if less, the outstanding amount of all Revolving Credit 
Loans made by such Bank plus interest accrued thereon, as set forth 
below. The Borrower irrevocably authorizes each Bank to make or cause to 
be made, at or about the time of the Drawdown Date of any Revolving 
Credit Loan or at the time of receipt of any payment of principal on 
such Bank's Revolving Credit Note, an appropriate notation on such 
Bank's Revolving Credit Note Record reflecting the making of such 
Revolving Credit Loan or (as the case may be) the receipt of such 
payment. The outstanding amount of the Revolving Credit Loans set forth 
on such Bank's Revolving Credit Note Record shall be prima facie 
evidence of the principal amount thereof owing and unpaid to such Bank, 
but the failure to record, or any error in so recording, any such amount 
on such Bank's Revolving Credit Note Record shall not limit or otherwise 
affect the obligations of the Borrower hereunder or under any Revolving 
Credit Note to make payments of principal of or interest on any 
Revolving Credit Note when due.
2.5.    Interest on Revolving Credit Loans.  Except as otherwise 
provided in   5.10,
(a)     Each Base Rate Loan shall bear interest for the 
period commencing with the Drawdown Date thereof and ending 
on the last day of the Interest Period with respect thereto 
at a rate per annum equal to the Base Rate plus twenty-five 
basis points (0.25%);
(b)     Each LIBOR Rate Loan shall bear interest for the 
period commencing with the Drawdown Date thereof and ending 
on the last day of the Interest Period with respect thereto 
at the rate per annum equal to the LIBOR Rate determined for 
such Interest Period plus the applicable LIBOR Spread;
(c)     The Borrower promises to pay interest on each 
Revolving Credit Loan, in arrears, on each Interest Payment 
Date with respect thereto.
2.6.    Requests for Revolving Credit Loans.  The Borrower shall 
give to the Agents written notice in the form of Exhibit B hereto (or 
telephonic notice confirmed in a writing in the form of Exhibit B 
hereto) of each Revolving Credit Loan requested hereunder (a "Loan 
Request") no later than 2:00 p.m. (New York City time) (i) on the 
proposed Drawdown Date of any Base Rate Loan and (ii) three (3) LIBOR 
Business Days prior to the proposed Drawdown Date of any LIBOR Rate 
Loan. Each such notice shall specify (A) the aggregate principal amount 
of the Revolving Credit Loans requested, (B) the proposed Drawdown Date 
of such Revolving Credit Loans, (C) in the case of LIBOR Rate Loans, the 
Interest Period for such Revolving Credit Loans, and (D) the Type of 
such Revolving Credit Loans. Promptly upon receipt of any such notice, 
the Agents shall notify each of the Banks thereof. Each Loan Request 
shall be irrevocable and binding on the Borrower and shall obligate the 
Borrower to accept the Revolving Credit Loans requested from the Banks 
on the proposed Drawdown Date. Each Loan Request shall be in a minimum 
aggregate amount of $1,000,000 or an integral multiple thereof.
2.7.    Conversion Options.
2.7.1.  Conversion to Different Type of Revolving Credit 
Loan.  The Borrower may elect from time to time to convert any 
outstanding Revolving Credit Loan to a Revolving Credit Loan of another 
Type, provided that (i) with respect to any such conversion of a LIBOR 
Rate Loan to a Base Rate Loan, the Borrower shall give the Agents at 
least one (1) Business Day's prior written notice of such election; (ii) 
with respect to any such conversion of a Base Rate Loan to a LIBOR Rate 
Loan, the Borrower shall give the Agents at least three (3) LIBOR 
Business Days' prior written notice of such election; (iii) with respect 
to any such conversion of a LIBOR Rate Loan into a Base Rate Loan, such 
conversion shall only be made at the end of business on the last day of 
the Interest Period with respect thereto; (iv) no more than six (6) 
different Interest Rate Periods in respect of LIBOR Rate Loans may be in 
effect at any time; and (v) no Loan may be converted into a LIBOR Rate 
Loan when any Default or Event of Default has occurred and is 
continuing. On the date on which such conversion is being made each Bank 
shall take such action as is necessary to transfer its Commitment 
Percentage of such Revolving Credit Loans to its Domestic Lending Office 
or its LIBOR Lending Office, as the case may be. All or any part of 
outstanding Revolving Credit Loans of any Type may be converted into a 
Revolving Credit Loan of another Type as provided herein, provided that 
any partial conversion shall be in an aggregate principal amount of 
$1,000,000 or a whole multiple thereof.  Each Conversion Request 
relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan 
shall be irrevocable by the Borrower.
2.7.2.  Continuation of Revolving Credit Loan.  Any 
Revolving Credit Loan of any Type may be continued as a Revolving Credit 
Loan of the same Type upon the expiration of an Interest Period with 
respect thereto by compliance by the Borrower with the notice provisions 
contained in   2.7.1; provided that no LIBOR Rate Loan may be continued 
as such when any Default or Event of Default has occurred and is 
continuing, but shall be automatically converted to a Base Rate Loan at 
the end of business on the last day of the Interest Period relating 
thereto ending during the continuance of any Default or Event of Default 
of which officers of the Agents active in respect of the Borrower's 
account have actual knowledge. In the event that the Borrower fails to 
provide any such notice with respect to the continuation of any LIBOR 
Rate Loan as such, then such LIBOR Rate Loan shall be automatically 
converted to a Base Rate Loan at the end of business on the last day of 
the first Interest Period relating thereto. The Agents shall notify the 
Banks promptly when any such automatic conversion contemplated by this 
  2.7.2 is scheduled to occur.
2.8.    Funds for Revolving Credit Loan.
2.8.1.  Funding Procedures.  Not later than 3:00 p.m. 
(New York City time) on the proposed Drawdown Date of any Revolving 
Credit Loans, each of the Banks will make available to the CSFB or 
Fleet, as the case may be, in its capacity as Agent, at its Head Office, 
in immediately available funds, the amount of such Bank's Commitment 
Percentage of the aggregate amount of the requested Revolving Credit 
Loans. Upon receipt from each Bank of such amount, and upon receipt of 
the documents required by    10 and 11 and the satisfaction of the other 
conditions set forth therein, to the extent then applicable, the Agents 
will make available to the Borrower the aggregate amount of such 
Revolving Credit Loans made available to the Agents by the Banks. The 
failure or refusal of any Bank to make available to the Agents at the 
aforesaid time and place on any Drawdown Date the amount equal to its 
Commitment Percentage of the aggregate amount of the requested Revolving 
Credit Loans shall not relieve any other Bank from its several 
obligation hereunder to make available to the Agents the amount equal to 
such other Bank's Commitment Percentage of the aggregate amount of any 
requested Revolving Credit Loans.
2.8.2.  Advances by Agents.  The Agents may, unless 
notified to the contrary by any Bank prior to a Drawdown Date, assume 
that such Bank has made available to either CSFB or Fleet, in its 
capacity as Agent, on such Drawdown Date the amount equal to such Bank's 
Commitment Percentage of the aggregate Revolving Credit Loans to be made 
on such Drawdown Date, and the Agents may (but shall not be required 
to), in reliance upon such assumption, make available to the Borrower a 
corresponding amount. If any Bank makes available to either CSFB or 
Fleet, in its capacity as Agent, such amount on a date after such 
Drawdown Date, such Bank shall pay to CSFB or Fleet, as the case may be, 
in its capacity as Agent, on demand, an amount equal to the product of 
(i) the average computed for the period referred to in clause (iii) of 
this sentence, of the weighted average interest rate paid by CSFB or 
Fleet, as the case may be, in its capacity as Agent, for federal funds 
acquired by such Agent during each day included in such period, times 
(ii) the amount equal to such Bank's Commitment Percentage of such 
Revolving Credit Loans, times (iii) a fraction, the numerator of which 
is the number of days that elapse from and including such Drawdown Date 
to the date on which the amount equal to such Bank's Commitment 
Percentage of such Revolving Credit Loans shall become immediately 
available to CSFB or Fleet, as the case may be, in its capacity as 
Agent, and the denominator of which is 365. A statement of either Agent 
submitted to such Bank with respect to any amounts owing under this 
  2.8.2 shall be prima facie evidence of the amount due and owing to 
such Agent by such Bank. If the amount equal to such Bank's Commitment 
Percentage of such Revolving Credit Loans is not made available to 
either CSFB or Fleet, in its capacity as Agent, by such Bank within 
three (3) Business Days following such Drawdown Date, the Agents shall 
be entitled to recover (a) such amount from the Banks (excluding the 
Delinquent Bank) on a pro rata basis up to each Bank's Commitment 
Percentage of such amount); provided that in no event shall any Bank be 
required to advance more than the difference between such Bank's 
Commitment in effect at such time minus the sum equal to its Commitment 
Percentage of (i) all Revolving Credit Loans then outstanding, plus 
(ii) the Maximum Drawing Amount plus (iii) all Unpaid Reimbursement 
Obligations and (b) from the Borrower on demand any amount not recovered 
pursuant to the foregoing clause (a), with interest thereon at the rate 
per annum applicable to the Revolving Credit Loans made on such Drawdown 
Date.
3.      REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1.    Maturity
(a)     The Borrower promises to pay on the Maturity 
Date, and there shall become absolutely due and payable on 
the Maturity Date, all of the Revolving Credit Loans 
outstanding on such date, together with any and all accrued 
and unpaid interest thereon.
(b)     The Borrower may give written notice to the 
Banks (through the Agents) at least 60 days prior to the 
Maturity Date then in effect that it requests the Agents and 
the Banks to extend the Maturity Date for an additional one 
year period.  The Banks and the Agents may grant or reject 
such request in their sole discretion, and the Borrower 
acknowledges that there is no commitment or understanding 
that the Maturity Date will be extended.  If such request is 
granted by the Agents and all of the Banks, the Maturity 
Date then in effect shall be so extended, subject to such 
changed terms and payment of such fee (if any) as shall have 
been agreed upon by the Borrower, the Banks and the Agents.
3.2.    Mandatory Repayments of Revolving Credit Loans.  If at any 
time the sum of the outstanding amount of the Revolving Credit Loans, 
the Maximum Drawing Amount, and all Unpaid Reimbursement Obligations 
exceeds the amount of the Total Commitment, then the Borrower shall 
immediately and without demand therefor pay the amount of such excess to 
the Agents for the respective accounts of the Banks for application: 
first, to any Unpaid Reimbursement Obligations; second to the Revolving 
Credit Loans; and third to provide to the Agents cash collateral for 
Reimbursement Obligations as contemplated by    4.2(b) and (c). Each 
payment of any Unpaid Reimbursement Obligations or prepayment of 
Revolving Credit Loans shall be allocated among the Banks, in 
proportion, as nearly as practicable, to each Unpaid Reimbursement 
Obligation or (as the case may be) the respective unpaid principal 
amount of each Bank's Revolving Credit Note, with adjustments to the 
extent practicable to equalize any prior payments or repayments not 
exactly in proportion.
3.3.    Optional Repayments of Revolving Credit Loans.
3.3.1.  Repayments of Base Rate Loans.  The Borrower 
shall have the right, at its election, to repay the outstanding amount 
of the Base Rate Loans, as a whole or in part, at any time without 
penalty or premium. The Borrower shall give the Agents, no later than 
2:00 p.m. (New York City time) on the proposed prepayment date, prior 
written notice of any proposed repayment pursuant to this   3.3.1 of 
such Base Rate Loans, specifying the proposed date of repayment of Base 
Rate Loans and the principal amount to be repaid. Accrued but unpaid 
interest on amounts repaid pursuant to this   3.3.1 shall be payable on 
the next-occurring Interest Payment Date in accordance with   2.5(c). 
Each such repayment of Base Rate Loans shall be in an integral multiple 
of $1,000,000 and shall be allocated among the Banks, in proportion, as 
nearly as practicable, to the respective unpaid principal amount of each 
Bank's Revolving Credit Note, with adjustments to the extent practicable 
to equalize any prior repayments not exactly in proportion.
3.3.2.  Prepayment of LIBOR Loans.  The Borrower shall 
have the right, at its election, to prepay the outstanding amount of any 
LIBOR Rate Loans, as a whole or in part, at any time, provided that any 
full or partial prepayment of the outstanding amount of any LIBOR Rate 
Loans pursuant to this   3.3.2 made on any day other than the last day 
of the Interest Period relating thereto shall be accompanied by tender 
of all costs incurred by the Agents and the Banks as a result thereof, 
including reasonable costs of redeployment of funds. The Borrower shall 
give the Agents, no later than 2:00 p.m. (New York City time), at least 
three (3) LIBOR Business Days' notice of any proposed prepayment 
pursuant to this   3.3.2 of LIBOR Rate Loans, specifying the proposed 
date of prepayment and the principal amount to be prepaid. Each such 
prepayment of the LIBOR Rate Loans shall be in an integral multiple of 
$1,000,000, shall be accompanied by the payment of costs, as described 
in this   3.3.2, and of accrued but unpaid interest on the principal 
prepaid to the date of prepayment. Each partial prepayment shall be 
allocated among the Banks, in proportion, as nearly as practicable, to 
the respective unpaid principal amount of each Bank's Revolving Credit 
Note, with adjustments to the extent practicable to equalize any prior 
repayments not exactly in proportion.
4.      LETTERS OF CREDIT
4.1.    Letter of Credit Commitments.
4.1.1.  Commitment to Issue Letters of Credit.  Subject 
to the terms and conditions hereof and the execution and delivery by the 
Borrower of a fully-completed and executed letter of credit application 
on the Issuing Bank's customary form (a "Letter of Credit Application"), 
the Issuing Bank on behalf of the Banks and in reliance upon the 
agreement of the Banks set forth in   4.1.4 and upon the representations 
and warranties of the Borrower contained herein, agrees, in its 
individual capacity, to issue, extend and renew for the account of the 
Borrower one or more standby or documentary letters of credit 
(individually, a "Letter of Credit"), in such form as may be requested 
from time to time by the Borrower and agreed to by the Issuing Bank; 
provided, however, that, after giving effect to such request, (a) the 
sum of the aggregate Maximum Drawing Amount and all Unpaid Reimbursement 
Obligations shall not exceed $10,000,000 at any one time and (b) the sum 
of (i) the Maximum Drawing Amount, (ii) all Unpaid Reimbursement 
Obligations, and (iii) the amount of all Revolving Credit Loans 
outstanding shall not exceed the Total Commitment. Upon receipt of a 
Letter of Credit Application, the Issuing Bank shall notify the Agents 
of such request for the issuance, extension or renewal of a Letter of 
Credit, and the Agents shall confirm to the Issuing Bank that after 
giving effect to such request, the sum of the Maximum Drawing Amount of 
all Unpaid Reimbursement Obligations plus all outstanding Revolving 
Credit Loans does not exceed the Total Commitment. Notwithstanding the 
foregoing, the Issuing Bank shall have no obligation to issue any Letter 
of Credit to support or secure any Indebtedness of the Borrower or any 
of its Subsidiaries to the extent that such Indebtedness was incurred 
prior to the proposed issuance date of such Letter of Credit, unless in 
any such case the Borrower demonstrates to the satisfaction of the 
Issuing Bank that (x) such prior incurred Indebtedness was then fully-
secured by a perfected and unavoidable security interest in collateral 
provided by the Borrower or such Subsidiary to the proposed beneficiary 
of such Letter of Credit or (y) such prior incurred Indebtedness was 
then secured or supported by a letter of credit issued for the account 
of the Borrower or such Subsidiary and the reimbursement obligation with 
respect to such letter of credit was fully-secured by a perfected and 
unavoidable security interest in collateral provided to the issuer of 
such letter of credit by the Borrower or such Subsidiary. The Issuing 
Bank shall not issue any Letter of Credit if it is aware that one or 
more of the applicable conditions precedent set forth in Section 11 are 
not then satisfied, or if it has received written notice from the 
Majority Lenders that one or more of the applicable conditions precedent 
set forth in Section 11 are not then satisfied (provided that the 
delivery and receipt of such written notice shall not limit, affect or 
modify the Banks' obligations in respect of unpaid reimbursement 
obligations under Letters of Credit issued prior to the receipt of such 
notice, as specified in   4.1.4).
4.1.2.  Letter of Credit Applications.  Each Letter of 
Credit Application shall be completed to the satisfaction of the Issuing 
Bank. In the event that any provision of a Letter of Credit Application 
shall be inconsistent with any provision of this Credit Agreement, then 
the provision of this Credit Agreement shall, to the extent of any such 
inconsistency, govern.
4.1.3.  Terms of Letters of Credit.  Each Letter of 
Credit issued, extended or renewed hereunder shall, among other things, 
(i) provide for the payment of sight drafts for honor thereunder when 
presented in accordance with the terms thereof and when accompanied by 
the documents described therein, and (ii) have an expiry date no later 
than the date which is fourteen (14) days (or, if the Letter of Credit 
is confirmed by a confirmer or otherwise provides for one or more 
nominated persons, forty-five (45) days) prior to the Maturity Date. 
Without limiting the generality of clause (ii) of the immediately 
preceding sentence, each documentary Letter of Credit issued, extended 
or renewed hereunder shall have an expiry date not later than three 
hundred sixty (360) days after the date of its issuance, extension or 
renewal. Each Letter of Credit so issued, extended or renewed shall be 
subject to the Uniform Customs.
4.1.4.  Reimbursement Obligations of Banks.  Each Bank 
severally agrees that it shall be absolutely liable, without regard to 
the occurrence of any Default or Event of Default or any other condition 
precedent whatsoever, to the extent of such Bank's Commitment 
Percentage, to reimburse the Issuing Bank on demand for the amount of 
each draft paid by the Issuing Bank under each Letter of Credit to the 
extent that such amount is not reimbursed by the Borrower pursuant to   
4.2 (such agreement for a Bank being called herein the "Letter of Credit 
Participation" of such Bank).
4.1.5.  Participations of Banks.  Each such payment made 
by a Bank shall be treated as the purchase by such Bank of a 
participating interest in the Borrower's Reimbursement Obligation under 
  4.2 in an amount equal to such payment. Each Bank shall share in 
accordance with its participating interest in any interest which accrues 
pursuant to   4.2.
4.2.    Reimbursement Obligation of the Borrower.  In order to 
induce the Issuing Bank to issue, extend and renew each Letter of Credit 
and the Banks to participate therein, the Borrower hereby agrees to 
reimburse or pay to the Issuing Bank, for the account of the Issuing 
Bank or (as the case may be) the Banks, with respect to each Letter of 
Credit issued, extended or renewed by the Issuing Bank hereunder,
(a)     except as otherwise expressly provided in    
4.2(b) and (c), on each date that any draft presented under 
such Letter of Credit is honored by the Issuing Bank, or the 
Issuing Bank otherwise makes a payment with respect thereto, 
(i) the amount paid by the Issuing Bank under or with 
respect to such Letter of Credit, and (ii) the amount of any 
taxes, fees, charges or other costs and expenses whatsoever 
incurred by the Issuing Bank or any Bank in connection with 
any payment made by the Issuing Bank or any Bank under, or 
with respect to, such Letter of Credit,
(b)     upon the reduction (but not termination) of the 
Total Commitment to an amount less than the Maximum Drawing 
Amount, an amount equal to such difference, which amount 
shall be held by the Issuing Bank for the benefit of the 
Banks and the Issuing Bank as cash collateral for all 
Reimbursement Obligations (provided that notwithstanding the 
availability of such cash collateral, the Maximum Drawing 
Amount of all outstanding letters of credit shall constitute 
a use of the Total Commitment, regardless of any reduction 
thereof), and
(c)     upon the termination of the Total Commitment, or 
the acceleration of the Reimbursement Obligations with 
respect to all Letters of Credit in accordance with   12, an 
amount equal to the then Maximum Drawing Amount, which 
amount shall be held by the Issuing Bank for the benefit of 
the Banks and the Issuing Bank as cash collateral for all 
Reimbursement Obligations.
Each such payment shall be made to the Issuing Bank at the Issuing 
Bank's Head Office in immediately available funds. Interest on any and 
all amounts remaining unpaid by the Borrower under this   4.2 at any 
time from the date such amounts become due and payable (whether as 
stated in this   4.2, by acceleration or otherwise) until payment in 
full (whether before or after judgment) shall be payable to the Issuing 
Bank on demand at the rate specified in   5.10 for overdue principal on 
the Revolving Credit Loans.
4.3.    Letter of Credit Payments.  If any draft shall be presented 
or other demand for payment shall be made under any Letter of Credit, 
the Issuing Bank shall notify the Borrower of the date and amount of the 
draft presented or demand for payment and of the date and time when it 
expects to pay such draft or honor such demand for payment. If the 
Borrower fails to reimburse the Issuing Bank as provided in   4.2 on or 
before the date that such draft is paid or other payment is made by the 
Issuing Bank the Issuing Bank may at any time thereafter notify the 
Banks of the amount of any such Unpaid Reimbursement Obligation. No 
later than 11:00 a.m. (California time) on the Business Day next 
following the receipt of such notice, each Bank shall make available to 
the Issuing Bank, at the Issuing Bank's Head Office, in immediately 
available funds, such Bank's Commitment Percentage of such Unpaid 
Reimbursement Obligation, together with an amount equal to the product 
of (i) the average, computed for the period referred to in clause (iii) 
of this sentence, of the weighted average interest rate paid by the 
Issuing Bank for federal funds acquired by the Issuing Bank during each 
day included in such period, times (ii) the amount equal to such Bank's 
Commitment Percentage of such Unpaid Reimbursement Obligation, times 
(iii) a fraction, the numerator of which is the number of days that 
elapse from and including the date the Issuing Bank paid the draft 
presented for honor or otherwise payment to the date on which such 
Bank's Commitment Percentage of such Unpaid Reimbursement obligation 
shall become immediately available to the Issuing Bank, and the 
denominator of which is 365. The responsibility of the Issuing Bank to 
the Borrower and the Banks shall be only to determine that the documents 
(including each draft) delivered under each Letter of Credit in 
connection with such presentment shall be in conformity in all material 
respects with such Letter of Credit.
4.4.    Obligations Absolute.  The Borrower's obligations under this 
  4 shall be absolute and unconditional under any and all circumstances 
and irrespective of the occurrence of any Default or Event of Default or 
any condition precedent whatsoever or any setoff, counterclaim or 
defense to payment which the Borrower may have or have had against the 
Issuing Bank, any Bank or any beneficiary of a Letter of Credit. The 
Borrower further agrees with the Agents, the Issuing Bank and the Banks 
that the Issuing Bank and the Banks shall not be responsible for, and 
the Borrower's Reimbursement Obligations under   4.2 shall not be 
affected by, among other things, the validity or genuineness of 
documents or of any endorsements thereon, even if such documents should 
in fact prove to be in any or all respects invalid, fraudulent or 
forged, or any dispute between or among the Borrower, the beneficiary of 
any Letter of Credit or any financing institution or other party to 
which any Letter of Credit may be transferred or any claims or defenses 
whatsoever of the Borrower against the beneficiary of any Letter of 
Credit or any such transferee. The Issuing Bank and the Banks shall not 
be liable for any error, omission, interruption or delay in 
transmission, dispatch or delivery of any message or advice, however 
transmitted, in connection with any Letter of Credit. The Borrower 
agrees that any action taken or omitted by the Issuing Bank or any Bank 
under or in connection with each Letter of Credit and the related drafts 
and documents, if done in good faith, shall be binding upon the Borrower 
and shall not result in any liability on the part of the Issuing Bank or 
any Bank to the Borrower.
4.5.    Reliance by Issuer.  To the extent not inconsistent with   
4.4, the Issuing Bank shall be entitled to rely, and shall be fully 
protected in relying upon, any Letter of Credit, draft, writing, 
resolution, notice, consent, certificate, affidavit, letter, cablegram, 
telegram, telecopy, telex or teletype message, statement, order or other 
document believed by it to be genuine and correct and to have been 
signed, sent or made by the proper Person or Persons and upon advice and 
statements of legal counsel, independent accountants and other experts 
selected by the Issuing Bank. The Issuing Bank shall be fully justified 
in failing or refusing to take any action under this Credit Agreement 
unless it shall first have received such advice or concurrence of the 
Majority Banks as it reasonably deems appropriate or it shall first be 
indemnified to its reasonable satisfaction by the Banks against any and 
all liability and expense which may be incurred by it by reason of 
taking or continuing to take any such action. The Issuing Bank shall in 
all cases be fully protected in acting, or in refraining from acting, 
under this Agreement in accordance with a request of the Majority Banks, 
and such request and any action taken or failure to act pursuant thereto 
shall be binding upon the Banks and all future holders of the Revolving 
Credit Notes or of a Letter of Credit Participation.
4.6.    Letter of Credit Fee.  The Borrower shall pay a fee (in each 
case, a "Letter of Credit Fee") to the Issuing Bank (i) in respect of 
each standby Letter of Credit, equal to the LIBOR Spread in effect on 
the date of such issuance, of the face amount of such standby Letter of 
Credit plus the Issuing Bank's issuance fee equal to one-eighth of one 
percent (1/8%) per annum of the face amount of such standby Letter of 
Credit; and (ii) in respect of each documentary Letter of Credit, equal 
to the Issuing Bank's customary fees for such Letter of Credit at such 
time plus, in each case, the Issuing Bank's customary amendment and 
other administrative processing fees, such Letter of Credit Fee (but not 
such issuance, amendment or administrative fees) to be for the accounts 
of the Banks in accordance with their respective Commitment Percentages. 
Such Letter of Credit Fees shall be due and payable quarterly in arrears 
on the last Business Day of each calendar quarter during which Letters 
of Credit are outstanding, commencing on the first such quarterly date 
to occur after the Closing Date, through the Maturity Date (or such 
later date upon which the outstanding Letters of Credit shall expire), 
with the final payment to be made on the Maturity Date (or such later 
expiration date), and, during the existence of any Event of Default, 
such letter of credit fees shall be paid on demand of the Agents at the 
request or with the consent of the Majority Banks. Nothing herein shall 
(A) effect any change in the Letter of Credit Fee paid in connection 
with any Letters of Credit issued pursuant to the Original Credit 
Agreement that are outstanding on the Closing Date or (B) require any 
adjustment to any Letter of Credit Fee as a result of any subsequent 
change in the LIBOR Spread. If any existing Letters of Credit of the 
type described in clause (A) above are extended or renewed, the Letter 
of Credit Fee for such extension or renewal shall be calculated pursuant 
to this   4.6.
5.      CERTAIN GENERAL PROVISIONS.
5.1.    Fees.  The Borrower shall pay to the Agents certain fees in 
accordance with that certain letter agreement between the Borrower, on 
the one hand, and the Agents, on the other, dated as of the date hereof.
5.2.    Funds for Payments.
5.2.1.  Payments to Agents.  All payments of principal, 
interest, Reimbursement Obligations, Commitment Fees, Letter of Credit 
Fees and any other amounts due hereunder or under any of the other Loan 
Documents shall be made to the Agents, for the respective accounts of 
the Banks and the Agents, at the Agents' Head Office or at such other 
location that the Agents may from time to time designate, in each case 
in immediately available funds.  Without limiting the generality of the 
preceding sentence, whenever payment of any amount is to be made 
hereunder or under any other Loan Document to the Agents by the Borrower 
for the respective accounts of the Banks, the Borrower shall pay one-
half of such amount to Fleet, in its capacity as Agent, and one-half of 
such amount to CSFB, in its capacity as Agent.
5.2.2.  No Offset. etc.  All payments by the Borrower 
hereunder or under any of the other Loan Documents shall be made without 
setoff or counterclaim and free and clear of, and without deduction for, 
any taxes, levies, imposts, duties, charges, fees, deductions, 
withholdings, compulsory loans, restrictions or conditions of any nature 
now or hereafter imposed or levied by any jurisdiction or any political 
subdivision thereof or taxing or other authority therein unless the 
Borrower is compelled by law to make such deduction or withholding. If 
any such obligation is imposed upon the Borrower with respect to any 
amount payable by it hereunder or under any of the other Loan Documents, 
the Borrower will pay to the Agents, for the respective accounts of the 
Banks or (as the case may be) the Agents, on the date on which such 
amount is due and payable hereunder or under such other Loan Document, 
such additional amount in Dollars as shall be necessary to enable the 
Banks or the Agents to receive the same net amount which the Banks or 
the Agents would have received on such due date had no such obligation 
been imposed upon the Borrower. The Borrower will deliver promptly to 
the Agents certificates or other valid vouchers for all taxes or other 
charges deducted from or paid with respect to payments made by the 
Borrower hereunder or under such other Loan Document.
5.2.3.  Withholding Forms.
(a)     Each Bank that is organized under the laws of a 
jurisdiction outside the United States hereby agrees that, 
if and to the extent it is legally able to do so and has not 
already done so, it shall, prior to the date of the first 
payment by the Borrower hereunder to be made to such Bank or 
for such Bank's account, deliver to the Borrower and the 
Agents, as applicable, such certificates, documents or other 
evidence, as and when required by the Code or Treasury 
Regulations issued pursuant thereto, including two (2) duly 
completed originals of Internal Revenue Service Form 1001 or 
Form 4224 and any other certificate or statement of 
exemption required by Treasury Regulations, or any 
subsequent versions thereof or successors thereto, properly 
completed and duly executed by such Bank establishing that 
with respect to payments of principal, interest or fees 
hereunder it is (i) not subject to United States federal 
withholding tax under the Code because such payment is 
effectively connected with the conduct by such Bank of a 
trade or business in the United States or (ii) totally 
exempt from United States federal withholding taxes under a 
provision of an applicable tax treaty or, in the case of a 
Bank that is not a "bank" under Section 881(c) of the Code, 
a Form W-8 and a certificate stating that such Bank is not a 
"bank" within the meaning of the aforementioned Code 
section.
(b)     The Borrower shall not be required to pay any 
additional amounts to any Bank pursuant to this   5.2, if 
(i) the obligation to pay such additional amounts would not 
have arisen but for a failure by such Bank to deliver the 
forms contemplated by this   5.2.3; or (ii) the Bank is not 
eligible for complete exemption from United States federal 
withholding tax with respect to payments of interest, 
principal or fees under this Credit Agreement or under any 
of the other Loan Documents, other than by reason of any 
change, after the Initial Date, of any applicable law, 
treaty or regulations by any governmental authority or other 
agency charged with the interpretation or administration 
thereof.  For purposes of this   5.2.3, the term "Initial 
Date" shall mean, with respect to any Bank which is a party 
hereto on the date hereof, the date hereof, and with respect 
to each assignee or transferee of any Bank, the date of the 
grant of the participation in, or transfer or assignment of 
an interest hereunder to, such assignee or transferee.
(c)     If at any time any Bank makes any changes 
necessitating a new Form 4224 or Form 1001 or Form W-8, if 
applicable, it shall:
(i)     with reasonable promptness deliver to the 
Borrower in replacement for, or in addition to, the forms 
previously delivered by it hereunder, two completed 
originals of Form 1001 or Form 4224 or Form W-8, as 
appropriate, in each case properly completed and duly 
executed by such Bank establishing that such Bank is on the 
date of delivery thereof entitled to receive payments of 
principal, interest and fees under this Credit Agreement 
free from withholding of United States Federal income tax;
(ii)    before or promptly after the occurrence of 
any event (including the passing of time but excluding any 
event mentioned in (i) above) requiring a change in the most 
recent Form 4224, Form 1001, or, as the case may be, Form W-
8 previously delivered by such Bank and if the delivery of 
the same be lawful, deliver to the Borrower two completed 
originals of Form 4224, Form 1001, or, as the case may be, 
Form W-8 in replacement for the forms previously delivered 
by the relevant Bank in each case properly completed and 
duly executed; and
(iii)   promptly upon the Borrower's reasonable 
request, deliver to the Borrower such other forms or similar 
documentation as may be required from time to time by any 
applicable law, treaty, rule or regulation in order to 
establish such Banks tax status for withholding purposes.
(d)     If the Borrower is required to pay any 
additional amounts to any Bank on account of required 
withholdings pursuant to this   5.2.3, then such Bank shall 
use its reasonable best efforts (consistent with legal and 
regulatory restrictions) to change the jurisdiction of its 
lending office so as to minimize any additional payments 
which may thereafter accrue; provided, that no Bank shall be 
required to change its lending office if such change would 
be, in the sole judgment of such Bank, otherwise 
disadvantageous to such Bank.
5.3.    Computations.  All computations of interest on the Loans and 
of Commitment Fees, Letter of Credit Fees or other fees shall, unless 
otherwise expressly provided herein, be based on a 360-day year and paid 
for the actual number of days elapsed. Except as otherwise provided in 
the definition of the term "Interest Period" with respect to LIBOR Rate 
Loans, whenever a payment hereunder or under any of the other Loan 
Documents becomes due on a day that is not a Business Day, the due date 
for such payment shall be extended to the next succeeding Business Day, 
and interest shall accrue during such extension. The outstanding amount 
of the Loans as reflected on the Revolving Credit Note Records from time 
to time shall be considered correct and binding on the Borrower absent 
manifest error.
5.4.    Inability to Determine LIBOR Rate.  In the event, prior to 
the commencement of any Interest Period relating to any LIBOR Rate Loan, 
the Agents shall determine or be notified by the Majority Banks that 
adequate and reasonable methods do not exist for ascertaining the LIBOR 
Rate that would otherwise determine the rate of interest to be 
applicable to any LIBOR Rate Loan during any Interest Period, the Agents 
shall forthwith give notice of such determination (which shall be 
conclusive and binding on the Borrower and the Banks) to the Borrower 
and the Banks. In such event (i) any Loan Request or Conversion Request 
with respect to LIBOR Rate Loans shall be automatically withdrawn and 
shall be deemed a request for Base Rate Loans, (ii) each LIBOR Rate Loan 
will automatically, on the last day of the then current Interest Period 
relating thereto, become a Base Rate Loan, and (iii) the obligations of 
the Banks to make LIBOR Rate Loans shall be suspended until the Agents 
or the Majority Banks determine that the circumstances giving rise to 
such suspension no longer exist, whereupon the Agents or, as the case 
may be, the Agents upon the instruction of the Majority Banks, shall so 
notify the Borrower and the Banks.
5.5.    Illegality.  Notwithstanding any other provisions herein, if 
any present or future law, regulation, treaty or directive or in the 
interpretation or application thereof shall make it unlawful for any 
Bank to make or maintain LIBOR Rate Loans, such Bank shall forthwith 
give notice of such circumstances to the Borrower and the other Banks 
and thereupon (i) the commitment of such Bank to make LIBOR Rate Loans 
or convert Loans of another Type to LIBOR Rate Loans shall forthwith be 
suspended and (ii) such Bank's Revolving Credit Loans then outstanding 
as LIBOR Rate Loans, if any, shall be converted automatically to Base 
Rate Loans on the last day of each Interest Period applicable to such 
LIBOR Rate Loans or within such earlier period as may be required by 
law. The Borrower hereby agrees promptly to pay the Agents for the 
account of such Bank upon demand by such Bank any additional amounts 
necessary to compensate such Bank for any costs incurred by such Bank in 
making any conversion in accordance with this   5.5, including any 
interest or fees payable by such Bank to lenders of funds obtained by it 
in order to make or maintain its LIBOR Rate Loans hereunder.
5.6.    Additional Costs, etc.  If after the date hereof any present 
or future applicable law, which term, as used herein, includes statutes, 
rules and regulations thereunder and interpretations thereof by any 
competent court or by any governmental or other regulatory body or 
official charged with the administration or the interpretation thereof 
and requests, directives, instructions and notices at any time or from 
time to time hereafter made upon or otherwise issued to any Bank or 
either Agent by any central bank or other fiscal, monetary or other 
authority (whether or not having the force of law), shall:
(a)     subject any Bank or either Agent to any tax, 
levy, impost, duty, charge, fee, deduction or withholding of 
any nature with respect to this Credit Agreement, the other 
Loan Documents, any Letters of Credit, such Bank's 
Commitment or the Loans (other than taxes based upon or 
measured by the income or profits of such Bank or such 
Agent), or
(b)     materially change the basis of taxation (except 
for changes in taxes on income or profits) of payments to 
any Bank of the principal of or the interest on any Loans or 
any other amounts payable to any Bank or either Agent under 
this Credit Agreement or any of the other Loan Documents, or
(c)     impose or increase or render applicable (other 
than to the extent specifically provided for elsewhere in 
this Credit Agreement) any special deposit, reserve, 
assessment, liquidity, capital adequacy or other similar 
requirements (whether or not having the force of law) 
against assets held by, or deposits in or for the account 
of, or loans by, or letters of credit issued by, or 
commitments of an office of any Bank, or
(d)     impose on any Bank or either Agent any other 
conditions or requirements with respect to this Credit 
Agreement, the other Loan Documents, any Letters of Credit, 
the Loans, such Bank's Commitment, or any class of loans, 
letters of credit or commitments of which any of the Loans, 
the Letters of Credit or such Bank's Commitment forms a 
part, and the result of any of the foregoing is
(i)     to increase the cost to any Bank of 
making, funding, issuing, renewing, extending or maintaining 
any of the Loans or such Bank's Commitment or any Letter of 
Credit, or
(ii)    to reduce the amount of principal, 
interest, Reimbursement Obligation or other amount payable 
to such Bank or either Agent hereunder on account of such 
Bank's Commitment, any Letter of Credit or any of the Loans, 
or
(iii)   to require such Bank or either Agent to 
make any payment or to forgo any interest or Reimbursement 
Obligation or other sum payable hereunder, the amount of 
which payment or forgone interest or Reimbursement 
Obligation or other sum is calculated by reference to the 
gross amount of any sum receivable or deemed received by 
such Bank or such Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such 
Bank or (as the case may be) such Agent at any time and from time to 
time and as often as the occasion therefor may arise, pay to such Bank 
or such Agent such additional amounts as would be sufficient to 
compensate such Bank or such Agent for such additional cost, reduction, 
payment or forgone interest or Reimbursement Obligation or other sum.
5.7.    Capital Adequacy.  If after the date hereof any Bank or 
either Agent determines that (i) the adoption of or change in any law, 
governmental rule, regulation, policy, guideline or directive (whether 
or not having the force of law) regarding capital requirements for banks 
or bank holding companies or any change in the interpretation or 
application thereof by a court or governmental authority with 
appropriate jurisdiction, or (ii) compliance by such Bank or such Agent 
or any corporation controlling such Bank or such Agent with any law, 
governmental rule, regulation, policy, guideline or directive (whether 
or not having the force of law) of any such entity regarding capital 
adequacy, has the effect of reducing the return on such Bank's or such 
Agent's commitment with respect to any Loans to a level below that which 
such Bank or such Agent could have achieved but for such adoption, 
change or compliance (taking into consideration such Bank's or such 
Agent's then existing policies with respect to capital adequacy and 
assuming full utilization of such entity's capital) by any amount deemed 
by such Bank or (as the case may be) such Agent to be material, then 
such Bank or such Agent may notify the Borrower of such fact. To the 
extent that the amount of such reduction in the return on capital is not 
reflected in the Base Rate, the Borrower and such Bank shall thereafter 
attempt to negotiate in good faith, within thirty (30) days after the 
day on which the Borrower receives such notice, an adjustment payable 
hereunder that will adequately compensate such Bank in light of these 
circumstances. If the Borrower and such Bank are unable to agree to such 
adjustment within thirty (30) days after the date on which the Borrower 
receives such notice, then commencing on the date of such notice (but 
not earlier than the effective date of any such increased capital 
requirement), the fees payable to such Bank hereunder shall increase by 
an amount that will, in such Bank's reasonable determination, provide 
adequate compensation. Each Bank shall allocate such cost increases 
among its customers in good faith and on an equitable basis.
5.8.    Certificate.  A certificate setting forth any additional 
amounts payable pursuant to   5.6 or   5.7 and a brief explanation of 
such amounts which are due, submitted by any Bank or the Agents to the 
Borrower, shall constitute prima facie evidence that such amounts are 
due and owing.
5.9.    Indemnity.  The Borrower agrees to indemnify each Bank and 
to hold each Bank harmless from and against any loss, cost or expense 
(including loss of anticipated profits) that such Bank may sustain or 
incur as a consequence of (i) default by the Borrower in payment of the 
principal amount of or any interest on any LIBOR Rate Loans as and when 
due and payable, including any such loss or expense arising from 
interest or fees payable by such Bank to lenders of funds obtained by it 
in order to maintain its LIBOR Rate Loans, (ii) default by the Borrower 
in making a borrowing or conversion after the Borrower has given (or is 
deemed to have given) a Loan Request or a Conversion Request relating 
thereto in accordance with   2.6 or   2.7 or (iii)  the making of any 
payment of a LIBOR Rate Loan or the making of any conversion of any such 
LIBOR Rate Loan to a Base Rate Loan on a day that is not the last day of 
the applicable Interest Period with respect thereto, including interest 
or fees payable by such Bank to lenders of funds obtained by it in order 
to maintain any such Loans.
5.10.   Interest After Default.  Overdue principal and (to the 
extent permitted by applicable law) interest on the Loans and all other 
overdue amounts payable hereunder or under any of the other Loan 
Documents shall bear interest compounded monthly and payable on demand 
at a rate per annum equal to two percent (2%) above the interest rate 
then otherwise applicable to such Loans hereunder until such amount 
shall be paid in full (after as well as before judgment).
6.      REPRESENTATIONS AND WARRANTIES
As of the date of this Agreement, the Closing Date, each Drawdown 
Date, and the date of the issuance, extension, or renewal of any Letter 
of Credit, the Borrower represents and warrants to each of the Banks and 
the Agents as follows:
6.1.    Corporate Authority.
6.1.1.  Incorporation: Good Standing.  Each of the 
Borrower and its Subsidiaries (i) is a corporation duly organized, 
validly existing and in good standing under the laws of its state of 
incorporation, (ii) has all requisite corporate power to own its 
property and conduct its business as now conducted and as presently 
contemplated, and (iii) is in good standing as a foreign corporation and 
is duly authorized to do business in each jurisdiction where such 
qualification is necessary except where a failure to be so qualified 
would not have a materially adverse effect on the business, assets or 
financial condition of the Borrower or such Subsidiary.
6.1.2.  Authorization.  The execution, delivery and 
performance of this Credit Agreement and the other Loan Documents to 
which the Borrower or any of its Subsidiaries is or is to become a party 
and the transactions contemplated hereby and thereby (i) are within the 
corporate authority of such Person, (ii) have been duly authorized by 
all necessary corporate proceedings, (iii) do not conflict with or 
result in any breach or contravention of any provision of law, statute, 
rule or regulation to which such Person is subject or any judgment, 
order, writ, injunction, license or permit applicable to such Person and 
(iv) do not conflict with any provision of the corporate charter or 
bylaws of, or any agreement or other instrument binding upon, the 
Borrower or any of its Subsidiaries.
6.1.3.  Enforceability.  The execution and delivery of 
this Credit Agreement and the other Loan Documents to which the Borrower 
or any of its Subsidiaries is or is to become a party will result in 
valid and legally binding obligations of such Person enforceable against 
it in accordance with the respective terms and provisions hereof and 
thereof, except as enforceability is limited by bankruptcy, insolvency, 
reorganization, moratorium or other laws relating to or affecting 
generally the enforcement of creditors' rights and except to the extent 
that availability of the remedy of specific performance or injunctive 
relief or other equitable remedy is subject to the discretion of the 
court before which any proceeding therefor may be brought.
6.2.    Governmental Approvals.  The execution, delivery and 
performance by the Borrower and any of its Subsidiaries of this Credit 
Agreement and the other Loan Documents to which the Borrower or any of 
its Subsidiaries is or is to become a party and the transactions 
contemplated hereby and thereby do not require the approval or consent 
of or filing with, any governmental agency or authority other than those 
already obtained.
6.3.    Financial Statements.  There has been furnished to each of 
the Banks a consolidated balance sheet of the Borrower and its 
Subsidiaries as at the Balance Sheet Date, and a consolidated statement 
of income of the Borrower and its Subsidiaries for the fiscal year then 
ended, certified by Coopers & Lybrand LLP as fairly presenting the 
consolidated financial position of the Borrower as at such date and for 
such period in all material respects in accordance with GAAP. Such 
balance sheet and statement of income have been prepared in accordance 
with GAAP and fairly present the financial condition of the Borrower as 
at the close of business on the date thereof and the results of 
operations for the fiscal year then ended. There are no contingent 
liabilities of the Borrower or any of its Subsidiaries as of such date 
involving material amounts, known to the officers of the Borrower, which 
were not disclosed in such balance sheet and the notes related thereto.
6.4.    No Material Changes; etc.; Solvency.
6.4.1.  Changes.  Except for matters disclosed in the 
Borrower's report on form 10Q dated June 30, 1998, and as disclosed in 
the Borrower's press release dated October 20, 1998, since the Balance 
Sheet Date, there has occurred no materially adverse change in the 
financial condition or business of the Borrower and its Subsidiaries as 
shown on or reflected in the consolidated balance sheet of the Borrower 
and its Subsidiaries as at the Balance Sheet Date, or the consolidated 
statement of income for the fiscal year then ended, other than changes 
in the ordinary course of business that have not had any materially 
adverse effect, either individually or in the aggregate, on the business 
or financial condition of the Borrower or any of its Subsidiaries. Since 
the Balance Sheet Date, the Borrower has not made any Distribution.
6.4.2.  Solvency.  The Borrower and its Subsidiaries, 
taken as a whole, are, and will be after giving effect to the 
transactions contemplated by the Loan Documents, Solvent. As used 
herein, "Solvent" shall mean that the Borrower and its Subsidiaries, 
taken as a whole, (i) shall have a fair value and present fair salable 
value of their assets that would exceed their stated liabilities and 
identified contingent liabilities, (ii) should be able to pay their 
debts as such debts become absolute and mature, and (iii) have and 
expect to continue to have, access to capital that would not be 
unreasonably small for the conduct of their business as now conducted 
and as proposed to be conducted following the Closing Date.
6.5.    Franchises; Patents; Copyrights; etc.  Except for matters 
disclosed in the Borrower's report on form 10K dated March 31, 1998, 
each of the Borrower and its Subsidiaries possesses all franchises, 
patents, copyrights, trademarks, trade names, licenses and permits, and 
rights in respect of the foregoing, adequate for the conduct of its 
business substantially as now conducted without known conflict with any 
rights of others.
6.6.    Litigation.  Except as set forth in Schedule 6.6 hereto, 
there are no actions, suits, proceedings or investigations of any kind 
pending or threatened against the Borrower or any of its Subsidiaries 
before any court, tribunal or administrative agency or board that, if 
adversely determined, either in any case or in the aggregate, could 
reasonably be expected to materially adversely affect the properties, 
assets, financial condition or business of the Borrower and its 
Subsidiaries or materially impair the right of the Borrower and its 
Subsidiaries, considered as a whole, to carry on business substantially 
as now conducted by them, or result in any substantial liability not 
adequately covered by insurance, or for which adequate reserves are not 
maintained on the consolidated balance sheet of the Borrower and its 
Subsidiaries, or which question the validity of this Credit Agreement or 
any of the other Loan Documents, or any action taken or to be taken 
pursuant hereto or thereto.
6.7.    No Materially Adverse Contracts; etc.  Neither the Borrower 
nor any of its Subsidiaries is subject to any charter, corporate or 
other legal restriction, or any judgment, decree, order, rule or 
regulation that has or is expected in the future to have a materially 
adverse effect on the business, assets or financial condition of the 
Borrower or any of its Subsidiaries. Neither the Borrower nor any of its 
Subsidiaries is a party to any contract or agreement that has or is 
expected, in the reasonable judgment of the Borrower's officers, to have 
a materially adverse effect on the business, assets or financial 
condition of the Borrower or any of its Subsidiaries.
6.8.    Compliance with Other Instruments, Laws; etc.  Neither the 
Borrower nor any of its Subsidiaries is in violation of any provision of 
its charter documents, bylaws, or any agreement or instrument to which 
it may be subject or by which it or any of its properties may be bound 
or any decree, order, judgment, statute, license, rule or regulation, in 
any of the foregoing cases in a manner that could result in the 
imposition of substantial penalties or materially and adversely affect 
the financial condition, properties or business of the Borrower or any 
of its Subsidiaries.
6.9.    Tax Status.  The Borrower and its Subsidiaries (i) have made 
or filed all federal and state income and all other tax returns, reports 
and declarations required by any jurisdiction to which any of them is 
subject, (ii) have paid all taxes and other governmental assessments and 
charges shown or determined to be due on such returns, reports and 
declarations, except those being contested in good faith and by 
appropriate proceedings and (iii) have set aside on their books 
provisions reasonably adequate for the payment of all taxes for periods 
subsequent to the periods to which such returns, reports or declarations 
apply. There are no unpaid taxes in any material amount claimed to be 
due by the taxing authority of any jurisdiction, and the officers of the 
Borrower know of no basis for any such claim.
6.10.   No Event of Default.  No Default or Event of Default has 
occurred and is continuing.
6.11.   Holding Company and Investment Company Acts.  Neither the 
Borrower nor any of its Subsidiaries is a "holding company", or a 
"subsidiary company" of a "holding company", or an "affiliate" of a 
"holding company", as such terms are defined in the Public Utility 
Holding Company Act of 1935; nor is it an "investment company", or an 
"affiliated company" or a "principal underwriter" of an "investment 
company", as such terms are defined in the Investment Company Act of 
1940.
6.12.   Absence of Financing Statements. etc.  Except with respect 
to Permitted Liens, there is no financing statement, security agreement, 
chattel mortgage, real estate mortgage or other document filed or 
recorded with any filing records, registry or other public office, that 
purports to cover, affect or give notice of any present or possible 
future lien on, or security interest in, any assets or property of the 
Borrower or any of its Subsidiaries or any rights relating thereto.
6.13.   Certain Transactions.  Except for arm's length transactions 
pursuant to which the Borrower or any of its Subsidiaries makes payments 
in the ordinary course of business upon terms no less favorable than the 
Borrower or such Subsidiary could obtain from third parties, none of the 
officers, directors, or employees of the Borrower or any of its 
Subsidiaries is presently a party to any transaction with the Borrower 
or any of its Subsidiaries (other than for services as employees, 
officers and directors), including any contract, agreement or other 
arrangement providing for the furnishing of services to or by, providing 
for rental of real or personal property to or from, or otherwise 
requiring payments to or from any officer, director or such employee or, 
to the knowledge of the Borrower, any corporation, partnership, trust or 
other entity in which any officer, director, or any such employee has a 
substantial interest or is an officer, director, trustee or partner.
6.14.   Employee Benefit Plans.
6.14.1. In General.  Each Employee Benefit Plan has been 
maintained and operated in compliance in all material respects with the 
provisions of ERISA and, to the extent applicable, the Code including, 
but not limited to, the provisions thereunder respecting prohibited 
transactions. The Borrower has heretofore delivered to the Agents the 
most recently completed annual report, Form 5500, with all required 
attachments, and actuarial statement required to be submitted under   
103(d) of ERISA, with respect to each Guaranteed Pension Plan.
6.14.2. Terminability of Welfare Plans.  Under each 
Employee Benefit Plan which is an employee welfare benefit plan within 
the meaning of   3(1) or   3(2)(B) of ERISA, no benefits are due unless 
the event giving rise to the benefit entitlement occurs prior to plan 
termination (except as required by Title I, Part 6 of ERISA). The 
Borrower or an ERISA Affiliate, as appropriate, may terminate each such 
Plan at any time (or at any time subsequent to the expiration of any 
applicable bargaining agreement) in the discretion of the Borrower or 
such ERISA Affiliate without liability to any Person.
6.14.3. Guaranteed Pension Plans.  Each contribution 
required to be made to a Guaranteed Pension Plan, whether required to be 
made to avoid the incurrence of an accumulated funding deficiency, the 
notice or lien provisions of   302(f) of ERISA, or otherwise, has been 
timely made. No waiver of an accumulated funding deficiency or extension 
of amortization periods has been received with respect to any Guaranteed 
Pension Plan. No liability to the PBGC (other than required insurance 
premiums, all of which have been paid) has been incurred by the Borrower 
or any ERISA Affiliate with respect to any Guaranteed Pension Plan and 
there has not been any ERISA Reportable Event, or any other event or 
condition which presents a material risk of termination of any 
Guaranteed Pension Plan by the PBGC. Based on the latest valuation of 
each Guaranteed Pension Plan (which in each case occurred within twelve 
months prior to the date of this representation), and on the actuarial 
methods and assumptions employed for that valuation, the aggregate 
benefit liabilities of all such Guaranteed Pension Plans within the 
meaning of   4001 of ERISA did not exceed the aggregate value of the 
assets of all such Guaranteed Pension Plans, disregarding for this 
purpose the benefit liabilities and assets of any Guaranteed Pension 
Plan with assets in excess of benefit liabilities.
6.14.4. Multiemployer Plans.  Neither the Borrower nor 
any ERISA Affiliate has incurred any material liability (including 
secondary liability) to any Multiemployer Plan as a result of a complete 
or partial withdrawal from such Multiemployer Plan under   4201 of ERISA 
or as a result of a sale of assets described in   4204 of ERISA. Neither 
the Borrower nor any ERISA Affiliate has been notified that any 
Multiemployer Plan is in reorganization or insolvent under and within 
the meaning of   4241 or   4245 of ERISA or that any Multiemployer Plan 
intends to terminate or has been terminated under   4041A of ERISA.
6.15.   Regulations U and X.  The proceeds of the Loans shall be 
used solely for general corporate purposes including working capital and 
Capital Expenditures of the Borrower, and funding Permitted 
Acquisitions.  The Borrower will obtain Letters of Credit solely for 
working capital and general corporate purposes.  No portion of any Loan 
is to be used, and no portion of any Letter of Credit is to be obtained, 
for the purpose of purchasing or carrying any "margin security" or 
"margin stock" as such terms are used in Regulations U and X of the 
Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 
and 224.
6.16.   Environmental Compliance.  The Borrower, and each of its 
Subsidiaries, have obtained all permits, licenses and other 
authorizations which are required under all Environmental Laws, except 
to the extent failure to have any such permit, license or authorization 
would not have a material adverse effect on the business, assets or 
financial condition of the Borrower and its Subsidiaries, taken as a 
whole. The Borrower, and each of its Subsidiaries, is in compliance in 
all material respects with the terms and conditions of all such permits, 
licenses and authorizations, and is also in compliance with all other 
limitations, restrictions, conditions, standards, prohibitions, 
requirements, obligations, schedules, and timetables contained in any 
applicable Environmental Law, except to the extent failure to comply 
would not have a material adverse effect on the business, assets or 
financial condition of the Borrower and its Subsidiaries, taken as a 
whole.
6.17.   Subsidiaries; etc.The Borrower currently has no Subsidiaries 
except HMT FSC Ltd., a Barbados West Indies Company.  The Borrower is 
not engaged in any joint venture or partnership with any other Person.
6.18.   Fiscal Year.  The Borrower and each of its Subsidiaries has 
a fiscal year which is twelve (12) calendar months ending on March 31 of 
each year.
6.19.   No Amendments to Certain Documents.  The Borrower has not 
amended any of the Recapitalization Documents insofar as they relate to 
the character of the Preferred Stock of the Borrower, has not amended 
any of the Subordinated Debt Documents, and has not otherwise amended 
any of the Recapitalization Documents in any way that could materially 
adversely affect the interest of the Banks.
6.20.   Title to Properties; Liens.  The Borrower and its 
Subsidiaries have good and marketable title to, or valid and subsisting 
leasehold interests in, their properties and assets, including all 
property forming a part of the Collateral, and there is no Lien upon or 
with respect to any of such properties or assets, including any of the 
Collateral, except for Permitted Liens.
6.21.   Insurance.  The Borrower and its Subsidiaries carry and 
maintain in full force and effect with financially sound and reputable 
insurers policies of insurance with respect to their respective 
properties and businesses against such casualties and contingencies as 
shall be in accordance with the general practices of similar size 
businesses engaged in similar activities in similar geographic areas and 
in amounts, containing such terms, in such forms and for such periods as 
may be reasonable and prudent.  A true and correct summary of all such 
insurance policies which are in full force and effect on the Closing 
Date is attached as Schedule 6.21.
6.22.   Year 2000.  The Borrower [[[.
6.23.   Disclosure.  No representation or warranty made by the 
Borrower in this Credit Agreement or in any of the other Loan Documents 
or in any agreement, instrument, document, certificate, statement or 
letter furnished to any of the Agents or any Bank by or on behalf of the 
Borrower as requested by the Borrower in connection with any of the 
transactions contemplated by any of the Loan Documents contains any 
untrue statement of a material fact or omits to state a material fact 
necessary in order to make the statements contained therein not 
misleading in light of the circumstances in which they are made.
7.      AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, 
Unpaid Reimbursement Obligation, Letter of Credit or  Note, or other 
amount in respect of any of the foregoing, is outstanding or any Bank 
has any obligation to make any Loans or the Issuing Bank has any 
obligation to issue, extend or renew any Letters of Credit:
7.1.    Punctual Payment.  The Borrower will duly and punctually pay 
or cause to be paid the principal and interest on the Loans, all 
Reimbursement Obligations, the Letter of Credit Fees, the Commitment 
Fees, the Agents' fee and all other amounts provided for in this Credit 
Agreement and the other Loan Documents to which the Borrower or any of 
its Subsidiaries is a party, all in accordance with the terms of this 
Credit Agreement and such other Loan Documents.
7.2.    Maintenance of Office.  The Borrower will maintain its chief 
executive office at 1055 Page Avenue, Fremont, California 94538, or at 
such other place in the United States of America as the Borrower shall 
designate upon written notice to the Agents, where notices, 
presentations and demands to or upon the Borrower in respect of the Loan 
Documents to which the Borrower is a party may be given or made.
7.3.    Records and Accounts.  The Borrower will (i) keep, and cause 
each of its Subsidiaries to keep, true and accurate records and books of 
account in which full, true and correct entries will be made in 
accordance with GAAP and (ii) maintain adequate accounts and reserves 
for all taxes (including income taxes), depreciation, depletion, 
obsolescence and amortization of its properties and the properties of 
its Subsidiaries, contingencies, and other reserves.
7.4.    Financial Statements. Certificates and Information.  The 
Borrower will deliver to each of the Banks:
(a)     Promptly upon filing with the Securities and 
Exchange Commission, and in no event later than ninety (90) 
days after the Borrower's fiscal year end, annual financial 
statements for such fiscal year, which may include a copy of 
the Borrower's Annual Report as filed with Form 10-K, but 
shall include in any event (i) the consolidated balance 
sheets of the Borrower and its Subsidiaries, and (ii) the 
related consolidated statements of income and statements of 
cash flow, each setting forth in comparative form the 
figures for the previous fiscal year and in reasonable 
detail and prepared in accordance with GAAP. All such 
statements shall be certified without qualification by 
Coopers & Lybrand LLP or by other independent certified 
public accountants satisfactory to the Agents, and shall be 
accompanied by copies of any "management letter" provided by 
such accountants and by a written statement from such 
accountants to the effect that, in making the examination 
necessary to said certification, they have obtained no 
knowledge of any Default or Event of Default, or, if such 
accountants shall have obtained knowledge of any then 
existing Default or Event of Default they shall disclose in 
such statement the nature of any such Default or Event of 
Default; provided that such accountants shall not be liable 
to the Banks for failure to obtain knowledge of any Default 
or Event of Default;
(b)     Promptly upon filing with the Securities and 
Exchange Commission and in no event later than forty-five 
(45) days after the end of each fiscal quarter of the 
Borrower, quarterly financial statements for such quarter, 
which may include a copy of the financial reports as filed 
with Form 10-Q for such fiscal quarter, but shall include in 
any event (i) the consolidated balance sheets of the 
Borrower and its Subsidiaries as at the end of such quarter, 
and (ii) the related consolidated statements of income and 
statements of cash flow for the portion of the Borrower's 
fiscal year then elapsed, all in reasonable detail and 
prepared in accordance with GAAP, together with a 
certification by the principal financial or accounting 
officer of the Borrower that the information contained in 
such financial statements fairly presents the financial 
position of the Borrower and its Subsidiaries on the date 
thereof (subject to customary year-end adjustments).
(c)     simultaneously with the delivery of the 
financial statements referred to in subsections (a) and (b) 
above, (i) a statement certified by the principal financial 
or accounting officer of the Borrower in substantially the 
form of Exhibit C hereto (a "Compliance Certificate") and 
setting forth in reasonable detail computations evidencing 
compliance with the covenants contained in   9 and (if 
applicable) reconciliations to reflect changes in GAAP since 
the Balance Sheet Date, and (ii) if an Event of Default has 
occurred and is continuing, and if Borrower has received a 
request from the Agents therefor, the consolidating 
financial statements relating to the statements delivered 
pursuant to subsections (a) and (b) above;
(d)     contemporaneously with the filing or mailing 
thereof, copies of all material of a financial nature filed 
with the Securities and Exchange Commission or sent 
generally to the stockholders of the Borrower;
(e)     No later than ninety (90) days after the end of 
each fiscal year of the Borrower, financial projections of 
the Borrower and its Subsidiaries on a consolidated basis 
for the immediately upcoming fiscal year of the Borrower;
(f)     from time to time such other financial data and 
information (including accountants' management letters) as 
the Agents or any Bank may reasonably request.
7.5.    Notices.
7.5.1.  Defaults.  The Borrower will promptly notify the 
Agents and each of the Banks in writing of the occurrence of any Default 
or Event of Default. If any Person shall give any notice or take any 
other action in respect of a claimed default (whether or not 
constituting an Event of Default) under this Credit Agreement or any 
other note, evidence of indebtedness, indenture or other obligation to 
which or with respect to which the Borrower or any of its Subsidiaries 
is a party or obliger, whether as principal, guarantor, surety or 
otherwise, the Borrower shall forthwith give written notice thereof to 
the Agents and each of the Banks, describing the notice or action and 
the nature of the claimed default.
7.5.2.  Environmental Events.  The Borrower will 
promptly give notice to the Agents and each of the Banks (i) of any 
violation of any Environmental Law that the Borrower or any of its 
Subsidiaries reports in writing or is reportable by such Person in 
writing (or for which any written report supplemental to any oral report 
is made) to any federal, state or local environmental agency and (ii) 
upon becoming aware thereof of any inquiry, proceeding, investigation, 
or other action, including a notice from any agency of potential 
environmental liability, of any federal, state or local environmental 
agency or board, that has the potential to materially affect the assets, 
liabilities, financial conditions or operations of the Borrower and its 
Subsidiaries, taken as a whole.
7.5.3.  Notice of Litigation and Judgments.  The 
Borrower will, and will cause each of its Subsidiaries to, give notice 
to the Agents and each of the Banks in writing within fifteen (15) days 
after becoming aware of any litigation or proceedings threatened in 
writing or any pending litigation and proceedings affecting the Borrower 
or any of its Subsidiaries or to which the Borrower or any of its 
Subsidiaries is or becomes a party involving a claim against the 
Borrower or any of its Subsidiaries that could reasonably be expected to 
have a materially adverse effect on the Borrower and its Subsidiaries 
(on a consolidated basis) and stating the nature and status of such 
litigation or proceedings. The Borrower will, and will cause each of its 
Subsidiaries to, give notice to the Agents and each of the Banks, in 
writing, in form and detail satisfactory to the Agents, within ten (10) 
days of any final judgment against the Borrower or any of its 
Subsidiaries in an amount in excess of $2,000,000.
7.6.    Corporate Existence; Maintenance of Properties.  The 
Borrower will do or cause to be done all things necessary to preserve 
and keep in full force and effect its corporate existence, rights and 
franchises and those of its Subsidiaries and will not, and will not 
cause or permit any of its Subsidiaries to, convert to a limited 
liability company or a limited liability partnership. It (i) will cause 
all of its properties and those of its Subsidiaries used or useful in 
the conduct of its business or the business of its Subsidiaries to be 
maintained and kept in good condition, repair and working order and 
supplied with all necessary equipment; (ii) will cause to be made all 
necessary repairs, renewals, replacements, betterments and improvements 
thereof, all as in the judgment of the Borrower may be necessary so that 
the business carried on in connection therewith may be properly and 
advantageously conducted at all times; and (iii) will, and will cause 
each of its Subsidiaries to, continue to engage primarily in the 
businesses now conducted by them and in related businesses; provided 
that nothing in this   7.6 shall prevent the Borrower from discontinuing 
the operation and maintenance of any of its properties or any of those 
of its Subsidiaries if such discontinuance is, in the reasonable 
judgment of the Borrower, desirable in the conduct of its or their 
business and does not in the aggregate materially adversely affect the 
business of the Borrower and its Subsidiaries on a consolidated basis.
7.7.    Insurance.  The Borrower will, and will cause each of its 
Subsidiaries to, carry and maintain in full force and effect, at its own 
expense, with financially sound and reputable insurers insurance with 
respect to its properties and business against such casualties and 
contingencies as shall be in accordance with the general practices of 
similar size businesses engaged in similar activities in similar 
geographic areas and in amounts, containing such terms, in such forms 
and for such periods as may be reasonable and prudent.  No Person other 
than the Borrower or the Agents shall be named as loss payee in respect 
of such policies of insurance covering the Collateral or any portion 
thereof.  Upon the reasonable request of any Agent or any Bank, the 
Borrower shall furnish the Agents from time to time with full 
information as to the insurance carried by it and, if so reasonably 
requested, copies of all such insurance policies.  The Borrower shall 
also furnish to the Agents from time to time upon the reasonable request 
of any Agent or any Bank a certificate of the Borrower's insurance 
broker or other insurance specialist stating that all premiums then due 
on the policies relating to insurance on the Collateral have been paid, 
that such policies are in full force and effect and that such insurance 
coverage and such policies comply with all the requirements of this 
Section.  Until such time as the Liens on the Collateral arising under 
the Collateral Documents are released pursuant to Section 28, the 
Borrower shall not, and shall not suffer or permit, any insurance policy 
required under this Section to be terminated or cancelled without at 
least 30 days' prior written notice to the Agents.  Receipt of notice of 
termination or cancellation of any such insurance policies or reduction 
of coverages or amounts thereunder shall entitle the Agents to renew any 
such policies, cause the coverages and amounts thereof to be maintained 
at levels required pursuant to the first sentence of this Section or 
otherwise to obtain similar insurance in place of such policies, in each 
case at the expense of the Borrower.  If any Event of Loss shall occur 
in respect of any of the Collateral, the Borrower shall cause, 
immediately upon receipt thereof, all insurance proceeds paid in respect 
of such Event of Loss to be deposited into an account maintained at 
either of the Agents, and the Borrower shall take whatever action may be 
reasonably requested by either Agent to perfect and/or maintain 
perfected the Agents' security interest in such proceeds.
7.8.    Taxes.  The Borrower will, and will cause each of its 
Subsidiaries to, duly pay and discharge, or cause to be paid and 
discharged, before the same shall become overdue, all taxes, assessments 
and other governmental charges imposed upon it and its real properties, 
sales and activities, or any part thereof, or upon the income or profits 
therefrom, as well as all claims for labor, materials, or supplies that 
if unpaid might by law become a lien or charge upon any of its property; 
provided that any such tax, assessment, charge, levy or claim need not 
be paid if the validity or amount thereof shall currently be contested 
in good faith by appropriate proceedings and if the Borrower or such 
Subsidiary shall have set aside on its books adequate reserves with 
respect thereto; and provided further that the Borrower and each 
Subsidiary of the Borrower will pay all such taxes, assessments, 
charges, levies or claims forthwith upon the commencement of proceedings 
to foreclose any lien that may have attached as security therefor.
7.9.    Inspection of Properties and Books; etc.
7.9.1.  General.  The Borrower shall permit the Banks, 
through the Agents (or either of them) or any of the Banks' other 
designated representatives, to visit and inspect any of the properties 
of the Borrower or any of its Subsidiaries, to examine the books of 
account of the Borrower and its Subsidiaries (and to make copies thereof 
and extracts therefrom), to conduct periodic audits of the Collateral 
and to discuss the affairs, finances and accounts of the Borrower and 
its Subsidiaries with, and to be advised as to the same by, its and 
their officers, all at such reasonable times and intervals as the Agents 
or any Bank may reasonably request.
7.9.2.  Communications with Accountants.  The Borrower 
will, at the reasonable request of the Agents, authorize the Agents and, 
if accompanied by the Agents, the Banks to communicate directly with the 
Borrower's independent certified public accountants and hereby 
authorizes such accountants to disclose to the Agents and the Banks any 
and all financial statements and other supporting financial documents 
and schedules with respect to the business, financial condition, assets 
and other affairs of the Borrower or any of its Subsidiaries. At the 
reasonable request of the Agents, the Borrower shall deliver a letter 
addressed to such accountants instructing them to comply with the 
provisions of this   7.9.3.
7.10.   Compliance with Laws, Contracts, Licenses and Permits.  The 
Borrower will, and will cause each of its Subsidiaries to, comply with 
(i) the applicable laws and regulations wherever its business is 
conducted, including all Environmental Laws, (ii) the provisions of its 
charter documents and by-laws, (iii) all agreements and instruments by 
which it or any of its properties is or may be bound, except such 
agreements or instruments the noncompliance with which could not, with 
reasonable likelihood as determined by the Agents, result in a material 
adverse effect on the business or financial condition of the Borrower 
and its Subsidiaries taken as a whole, and (iv) all applicable decrees, 
orders, and judgments. If any authorization, consent, approval, permit 
or license from any officer, agency or instrumentality of any government 
shall become necessary or required in order that the Borrower or any of 
its Subsidiaries may fulfill any of its obligations hereunder or any of 
the other Loan Documents to which the Borrower or such Subsidiary is a 
party, the Borrower will, or (as the case may be) will cause such 
Subsidiary to, immediately take or cause to be taken all reasonable 
steps within the power of the Borrower or such Subsidiary to obtain such 
authorization, consent, approval, permit or license and furnish the 
Agents and the Banks with evidence thereof.
7.11.   Employee Benefit Plans.  The Borrower will (i) promptly upon 
filing the same with the Department of Labor or Internal Revenue 
Service, upon request of the Agents, furnish to the Agents a copy of the 
most recent actuarial statement required to be submitted under   103(d) 
of ERISA and Annual Report, Form 5500, with all required attachments, in 
respect of each Guaranteed Pension Plan and (ii) promptly upon receipt 
or dispatch, furnish to the Agents any notice, report or demand sent or 
received in respect of a Guaranteed Pension Plan under    302, 4041, 
4042, 4043, 4063, 4065, 4066, and 4068 of ERISA, or in respect of a 
Multiemployer Plan, under    4041A, 4202, 4219, 4242, or 4245 of ERISA.
7.12.   Use of Proceeds.  The Borrower will use the proceeds of the 
Loans solely for the purposes set forth in   6.15 hereof.
7.13.   Additional Subsidiaries.  (i) Promptly after the date the 
Borrower incorporates, creates or acquires any additional Subsidiary 
and, in any event, within five Business Days following receipt by the 
Borrower from the Agents of a security agreement substantially in the 
form of the Security Agreement and a guaranty of the Obligations in 
substantially the form of the Guaranty, the Borrower shall cause such 
Subsidiary to execute and deliver such guaranty and security agreement 
to the Agents.  (ii) Within five Business Days after the date such 
Subsidiary becomes a Subsidiary, the Borrower shall cause such 
Subsidiary to have executed and filed any UCC-1 financing statements 
furnished by the Agents in each jurisdiction in which such filing is 
necessary to perfect the security interest of the Agents in the 
Collateral of such Subsidiary and in which the Agents request that such 
filing be made. (iii) Additionally, the Borrower and such Subsidiary 
shall have executed and delivered to the Agents such other items as 
reasonably requested by the Agent in connection with the foregoing, 
including resolutions, incumbency and officers' certificates, opinions 
of counsel, search reports and other certificates and documents.
7.14.   Further Assurances.  The Borrower will, and will cause each 
of its Subsidiaries to, cooperate with the Banks and the Agents and 
execute such further instruments and documents as each of the Banks or 
the Agents shall reasonably request to carry out to their satisfaction 
the transactions contemplated by this Credit Agreement and the other 
Loan Documents.
8.      CERTAIN NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan, 
Unpaid Reimbursement Obligation, Letter of Credit or Note, or other 
amount in respect of any of the foregoing, is outstanding or any Bank 
has any obligation to make any Loans or the Issuing Bank has any 
obligations to issue, extend or renew any Letters of Credit:
8.1.    Restrictions on Indebtedness.  The Borrower will not, and 
will not permit any of its Subsidiaries to, create, incur, assume, 
guarantee or be or remain liable, contingently or otherwise, with 
respect to any Indebtedness other than:
(a)     Indebtedness to the Banks and the Agents arising 
under any of the Loan Documents;
(b)     Indebtedness existing on the Closing Date and 
listed and described on Schedule 8.1(b) hereto;
(c)     current liabilities of the Borrower or such 
Subsidiary incurred in the ordinary course of business not 
incurred through (i) the borrowing of money, or (ii) the 
obtaining of credit except for credit on an open account 
basis customarily extended and in fact extended in 
connection with normal purchases of goods and services;
(d)     Indebtedness in respect of taxes, assessments, 
governmental charges or levies and claims for labor, 
materials and supplies to the extent that payment therefor 
shall not at the time be required to be made in accordance 
with the provisions of   7.8;
(e)     Indebtedness in respect of judgments or awards 
(a) that (i) have been in force for less than the applicable 
period for taking an appeal so long as execution is not 
levied thereunder, or (ii) in respect of which the Borrower 
or such Subsidiary shall at the time in good faith be 
prosecuting an appeal or proceedings for review and in 
respect of which a stay of execution shall have been 
obtained pending such appeal or review, and (b) the 
existence of which does not constitute an Event of Default 
under   12.1;
(f)     endorsements for collection, deposit or 
negotiation and warranties of products or services, in each 
case incurred in the ordinary course of business;
(g)     Subordinated Debt;
(h)     Permitted New Subordinated Debt;
(i)     Indebtedness which is secured by "purchase money 
security interests," as such term is defined in the Uniform 
Commercial Code as adopted in the State of California;
(j)     Attributable Debt;
(k)     unsecured Indebtedness of a direct or indirect 
Subsidiary of the Borrower incurred and outstanding on or 
prior to the date on which such Subsidiary was acquired by 
the Borrower or a Subsidiary of the Borrower;
(l)     unsecured Indebtedness not otherwise permitted 
hereunder;
(m)     Indebtedness incurred to refinance existing 
Indebtedness permitted hereunder, provided, that the 
principal amount thereof does not exceed the principal 
amount of the Indebtedness to be refinanced outstanding 
immediately prior to such refinancing and the terms and 
provisions of the new Indebtedness (including subordination 
provisions) are not otherwise more favorable to the holder 
thereof (including without limitation by stating an earlier 
maturity) than those of the Indebtedness to be refinanced; 
and
(n)     Indebtedness owing by Subsidiaries of the 
Borrower to the Borrower. 
provided, however, that the aggregate principal amount of 
all Indebtedness permitted by clauses (h), (j), (k) and (l), 
(and any refinancing of such Indebtedness permitted by 
Clause (m)) shall not exceed $25,000,000 at any time 
outstanding.
8.2.    Restrictions on Liens.  The Borrower will not, and will not 
permit any of its Subsidiaries to, (i) create or incur or suffer to be 
created or incurred or to exist any lien, encumbrance, mortgage, pledge, 
charge, restriction or other security interest of any kind upon any of 
its property or assets of any character whether now owned or hereafter 
acquired, or upon the income or profits therefrom; (ii) transfer any of 
such property or assets or the income or profits therefrom for the 
purpose of subjecting the same to the payment of Indebtedness or 
performance of any other obligation in priority to payment of its 
general creditors; (iii) acquire, or agree or have an option to acquire, 
any property or assets pursuant to a purchase money security agreement, 
device or arrangement; (iv) suffer to exist for a period of more than 
thirty (30) days after the same shall have been incurred any 
Indebtedness or claim or demand against it that if unpaid might by law 
or upon its bankruptcy or insolvency, or otherwise, be given any 
priority whatsoever over its general creditors; or (v) sell, assign, 
pledge or otherwise transfer any accounts, contract rights, general 
intangibles, chattel paper or instruments, with or without recourse; 
provided that the Borrower and any Subsidiary of the Borrower may create 
or incur or suffer to be created or incurred or to exist:
(a)     liens in favor of the Borrower on all or part of 
the assets of Subsidiaries of the Borrower securing 
Indebtedness owing by Subsidiaries of the Borrower to the 
Borrower;
(b)     liens to secure taxes, assessments and other 
government charges in respect of obligations not overdue or 
liens to secure claims for labor, material or supplies in 
respect of obligations not overdue;
(c)     deposits or pledges made in connection with, or 
to secure payment of workmen's compensation, unemployment 
insurance, old age pensions or other social security 
obligations;
(d)     liens in respect of judgments or awards, the 
indebtedness with respect to which is permitted by   8. 
l(e);
(e)     liens of carriers, warehousemen, mechanics and 
materialmen, and other like liens on properties in existence 
less than 120 days from the date of creation thereof in 
respect of obligations not overdue;
(f)     encumbrances on Real Estate consisting of 
easements, rights of way, zoning restrictions, restrictions 
on the use thereof and defects and irregularities in the 
title thereto, landlord's or lessor's liens under leases to 
which the Borrower or a Subsidiary of the Borrower is a 
party, and other minor liens or encumbrances, none of which 
in the reasonable opinion of the Borrower interferes 
materially with the use of the property affected in the 
ordinary conduct of the business of the Borrower and its 
Subsidiaries, which defects do not individually or in the 
aggregate have a materially adverse effect on the business 
of the Borrower individually or of the Borrower and its 
Subsidiaries on a consolidated basis;
(g)     liens existing on the date hereof and listed on 
Schedule 8.2(g) hereto;
(h)     purchase money security interests in or purchase 
money mortgages on real or personal property acquired after 
the date hereof to secure purchase money Indebtedness of the 
type and amount permitted by   8.1(i), incurred in 
connection with the acquisition of such property, which 
security interests or mortgages cover only the real or 
personal property so acquired;
(i)     the interest of lessors under leases of real or 
personal property made by the Borrower or any of its 
Subsidiaries in the ordinary course of business and listed 
on Schedule 8.2(i) hereto;
(j)     leases, subleases, licenses, and sublicenses 
granted to third parties, the granting of which does not 
result in a material adverse effect on the business or 
financial condition of the Borrower;
(k)     liens in favor of customs and revenue 
authorities which secure payment of customs in connection 
with the importation of goods;
(l)     liens which constitute rights of set-off of a 
customary nature or bankers' liens on amounts on deposit, 
whether arising by contract or by operation of law, in 
connection with arrangements entered into with depository 
institutions in the ordinary course of business not to 
exceed at any time $25,000 in the aggregate;
(m)     liens on the Collateral in favor of the Banks or 
the Agents for the benefit of the Banks arising under the 
Collateral Documents; and
(n)     replacement liens for any lien referred to above 
securing Indebtedness refinanced pursuant to   8.1(m).
8.3.    Restrictions on Investments.  The Borrower will not, and 
will not permit any of its Subsidiaries to, make or permit to exist or 
to remain outstanding any Investment except Investments in:
(a)     marketable direct or guaranteed obligations of 
the United States of America or any agency or state thereof 
that mature within one (l) year from the date of purchase by 
the Borrower;
(b)     demand deposits, certificates of deposit, 
bankers acceptances and time deposits of United States banks 
having total assets in excess of $5,000,000,000;
(c)     securities commonly known as "commercial paper" 
issued by a corporation organized and existing under the 
laws of the United States of America or any State thereof 
that at the time of purchase have been rated and the ratings 
for which are not less than "P 1" if rated by Moody's 
Investors Services, Inc., and not less than "A l" if rated 
by Standard and Poor's Ratings Group, a division of McGraw 
Hill, Inc.;
(d)     Investments not otherwise permitted by this   
8.3 existing on the date hereof and listed on Schedule 8.3 
hereto;
(e)     Investments by the Borrower or its Subsidiaries 
constituting Permitted Acquisitions, provided, however, that 
(i) such Investments with respect to U.S. Subsidiaries shall 
not at any time exceed, in the aggregate, an amount equal to 
ten percent (10%) of Borrower's total assets, determined in 
accordance with GAAP, as at such time, (ii) such Investments 
with respect to non-U.S. Subsidiaries shall not exceed five 
percent (5%) of Borrower's total assets, determined in 
accordance with GAAP, as at such time, and (iii) at any time 
when Borrower's aggregate Investments in Subsidiaries equal 
or exceed Ten Million Dollars ($10,000,000), the Agents may 
request that some or all of Borrower's Subsidiaries provide 
guaranties of the Obligations, and neither Borrower nor any 
of its Subsidiaries will unreasonably deny any such request, 
provided that no guaranty will be required if Borrower's 
board of directors in good faith determines, on advice of 
tax advisors, that giving such a guaranty would create 
material tax liability for the Borrower that would not be 
incurred if the guaranty were not given;
(f)     Investments consisting of promissory notes 
received as proceeds of asset dispositions permitted by   
8.5.2;
(g)     Investments consisting of loans and advances to 
employees for moving, entertainment, travel and other 
similar expenses in the ordinary course of business; and
(h)     other Investments not otherwise permitted by 
this   8.3 but made in accordance with an investment policy 
approved by Borrower's board of directors and determined by 
the Agents to be reasonably satisfactory prior to any 
Investment hereunder being made.
8.4.    Restricted Payments.  The Borrower will not make any 
Restricted Payments, other than:
(a)     payments in respect of the Subordinated Debt or 
Permitted New Subordinated Debt to the extent permitted by   
8.7 hereof;
(b)     if no Default or Event of Default has occurred 
and is continuing or would result therefrom, repurchase by 
the Borrower of its common stock from employees of the 
Borrower, provided the aggregate amount of all such 
repurchases from the Closing Date to the Maturity Date does 
not exceed $500,000;
(c)     non-cash payments to the holders of Preferred 
Stock of the Borrower; and
(d)     Investments permitted under   8.3(g).
8.5.    Merger: Consolidation and Disposition of Assets.
8.5.1.  Mergers and Acquisitions.  Other than Permitted 
Acquisitions, the Borrower will not, and will not permit any of its 
Subsidiaries to, become a party to any merger or consolidation, or agree 
to or effect any asset acquisition or stock acquisition (other than the 
acquisition of assets in the ordinary course of business consistent with 
past practices) except the merger or consolidation of one or more of the 
Subsidiaries of the Borrower with and into the Borrower, or the merger 
or consolidation of two or more Subsidiaries of the Borrower.
8.5.2.  Disposition of Assets.  Other than the 
disposition of assets in the ordinary course of business, the Borrower 
will not, and will not permit any of its Subsidiaries to, become a party 
to or agree to or effect any disposition of assets or properties 
exceeding ten percent (10%) of its total assets, such ten percent (10%) 
being calculated on a cumulative basis beginning on the Closing Date.
8.6.    No Subsidiaries. Etc.  The Borrower will not create or 
acquire any Subsidiaries nor acquire any interest in any joint venture 
or partnership, other than Subsidiaries which engage in substantially 
the same business as the Borrower.
8.7.    Subordinated Debt.  Except in connection with the issuance 
of Permitted New Subordinated Debt, the Borrower will not, and will not 
permit any of its Subsidiaries to, amend, supplement or otherwise modify 
the terms of any of the Subordinated Debt or, after issued, the 
Permitted New Subordinated Debt. The Borrower will not, and will not 
permit any of its Subsidiaries to, prepay, redeem or repurchase any of 
the Subordinated Debt (except in connection with the issuance of 
Permitted New Subordinated Debt) or the Permitted New Subordinated Debt. 
The Borrower will not make any principal payments on any Subordinated 
Debt or Permitted New Subordinated Debt and will not make any interest 
payments on any Subordinated Debt or Permitted New Subordinated Debt 
other than regularly scheduled interest payments permitted to be paid 
under the Subordinated Debt Documents or the documents executed in 
connection with any Permitted New Subordinated Debt, as the case may be.
8.8.    Employee Benefit Plans.  Neither the Borrower nor any ERISA 
Affiliate will
(a)     engage in any "prohibited transaction" within 
the meaning of   406 of ERISA or   4975 of the Code which 
could result in a material liability for the Borrower or any 
of its Subsidiaries; or
(b)     permit any Guaranteed Pension Plan to incur an 
"accumulated funding deficiency", as such term is defined in 
  302 of ERISA, whether or not such deficiency is or may be 
waived; or
(c)     fail to contribute to any Guaranteed Pension 
Plan to an extent which, or terminate any Guaranteed Pension 
Plan in a manner which, could result in the imposition of a 
lien or encumbrance on the assets of the Borrower or any of 
its Subsidiaries pursuant to   302(f) or   4068 of ERISA; or
(d)     permit or take any action which would result in 
the aggregate benefit liabilities (within the meaning of   
4001 of ERISA) of all Guaranteed Pension Plans exceeding the 
value of the aggregate assets of such Plans, disregarding 
for this purpose the benefit liabilities and assets of any 
such Plan with assets in excess of benefit liabilities, by 
more than the amount set forth in   6.14.3.
8.9.    Change of Fiscal Year.  The Borrower will not, and will not 
permit its Subsidiaries to, change the date of the end of their 
respective fiscal years from that set forth in   6.18 hereof.
8.10.   Capitalization.  The Borrower will not issue any capital 
stock having mandatory redemption rights or redemption at the option of 
the holder, sinking fund payments, guaranteed return or exchange ability 
or conversion into debt instruments of the Borrower or any other "debt-
like" features.
8.11.   No Material Changes; etc.  The Borrower shall not permit, at 
any time after the Closing Date, except as disclosed in the Borrower's 
press release dated October 20, 1998, any materially adverse change in 
the financial condition or business of the Borrower and its 
Subsidiaries, taken as a whole, as of the Closing Date (after giving 
effect to the transactions contemplated in this Credit Agreement), other 
than changes in the ordinary course of business that have not had any 
materially adverse effect either individually or in the aggregate on the 
business or financial condition of the Borrower and its Subsidiaries, 
taken as a whole.
8.12.   Negative Pledge.  Except as otherwise permitted hereunder, 
including, without limitation, in connection with Capitalized Leases and 
purchase money indebtedness permitted hereunder, the Borrower shall not, 
and shall not permit any of its Subsidiaries to, enter into or suffer to 
exist any agreement (other than this Agreement or any other Loan 
Document) prohibiting or conditioning the creation or assumption of any 
lien, security interest or other encumbrance upon any of its properties, 
revenues or assets, whether now owned or hereafter acquired, or which 
otherwise grants a negative pledge in favor of any Person other than the 
Agents and the Banks.
8.13.   Designated Senior Debt Under The Indenture.  Borrower shall 
not create any Designated Senior Debt, as such term is defined in the 
Indenture, unless (a) the aggregate original committed amount of such 
new Designated Senior Debt equals or exceeds Ten Million Dollars 
($10,000,000) and (b) the holder of such Designated Senior Debt is a 
financial institution that would qualify as an Eligible Assignee 
hereunder. The documents governing any such new Designated Senior Debt 
shall include an intercreditor agreement with the Agents, which shall be 
in form and substance satisfactory to Agents and Agent's counsel, and 
shall provide that (i) the holders of any such new Designated Senior 
Debt shall vote as a class with the holders of Indebtedness arising 
under this Credit Agreement on whether the holders of Designated Senior 
Debt should exercise their right to block payment to the holders of the 
Subordinated Debt, (2) a vote of the holders of not less than 66 2/3% of 
the aggregate amount of the commitments of holders of Designated Senior 
Debt shall be required, and (iii) the Agents shall be the only 
representative of Designated Senior Debt that shall be entitled to give 
notice of the exercise of blockage rights.
9.      FINANCIAL COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan, 
Unpaid Reimbursement Obligation, Letter of Credit or Note, or other 
amount in respect of any of the foregoing, is outstanding or any Bank 
has any obligation to make any Loans or the Issuing Bank has any 
obligation to issue, extend or renew any Letters of Credit:
9.1.    Leverage Ratio.  The Borrower will not permit its Leverage 
Ratio to exceed (i) 3.25:1.00 through the last day of the Borrower's 
fiscal quarter ending June 30, 1999 and (ii) 2.75:1.00 thereafter.  For 
purposes of measuring the Borrower's compliance with this Section 9.1, 
non-recurring restructuring charges of up to $50,000,000 recorded by the 
Borrower (in accordance with GAAP) in its fiscal quarter ending December 
31, 1998 shall be added to EBITDAR (to the extent deducted in 
determining EBITDAR) in calculating the Leverage Ratio hereunder; 
provided, however, that to the extent any of such restructuring charges 
are cash charges, no more than $5,000,000 of such cash restructuring 
charges shall be added to EBITDAR in calculating the Leverage Ratio 
hereunder.
9.2.    Interest Coverage.  The Borrower will not permit the ratio 
of (i) EBITDAR on a rolling 4-quarter basis to (ii) Consolidated Total 
Interest Expense plus rent and operating lease expense, in each case for 
such rolling 4-quarter period, to be less than 2.50:1.00.
9.3.    Quick Ratio.  The Borrower shall not suffer of permit its 
ratio (determined on a consolidated basis) of (i) cash plus the value 
(valued in accordance with GAAP) of all cash equivalents, other than 
cash and cash equivalents subject to a lien securing Indebtedness, plus 
net current accounts receivable (valued in accordance with GAAP) to (ii) 
consolidated current liabilities (other than liabilities secured by a 
lien on cash or cash equivalents), to be less than 1.00 to 1.00.
9.4.    Profitable Operations.  The Borrower will not permit EBITR 
or Consolidated Net Income, for any fiscal quarter, to be less than 
$1.00.  For purposes of measuring the Borrower's compliance with this 
Section 9.4, non-recurring restructuring charges of up to $50,000,000 
recorded by the Borrower (in accordance with GAAP) in its fiscal quarter 
ending December 31, 1998 shall be added to EBITR and Consolidated Net 
Income (to the extent deducted in determining EBITR or Consolidated Net 
Income, as the case may be); provided, however, that to the extent any 
of such restructuring charges are cash charges, no more than $10,000,000 
of such cash restructuring charges shall be added to EBITR and 
Consolidated Net Income .
9.5.    Tangible Net Worth.  The Borrower shall not permit Tangible 
Net Worth to be less than (i) 85% of Tangible Net Worth measured as of 
September 30, 1998, plus (ii) 75% of Consolidated Net Income earned in 
each quarterly accounting period ending after September 30, 1998 (not to 
be reduced by any Consolidated Net Deficit), plus (iii) 100% of the Net 
Issuance Proceeds of any new equity the Borrower  issues after 
September 30, 1998, plus (iv) 100% of the  amount of any Subordinated 
Debt or Permitted New Subordinated Debt that is converted to equity of 
the Borrower after September 30, 1998.
10.     CLOSING CONDITIONS.
The obligations of the Banks to extend credit hereunder shall be 
subject to the satisfaction of the following conditions precedent:
10.1.   Loan Documents, etc.  Each of the Loan Documents shall have 
been duly executed and delivered by the respective parties thereto, 
shall be in full force and effect and shall be in form and substance 
satisfactory to each of the Banks and the Agents.
10.2.   Certified Copies of Charter Documents.  Each of the Banks 
shall have received from the Borrower a copy, certified by a duly 
authorized officer of the Borrower to be true and complete on the 
Closing Date, of each of (i) its charter or other incorporation 
documents as in effect on the Closing Date, and (ii) its by-laws as in 
effect on the Closing Date.
10.3.   Corporate Action.  All corporate action necessary for the 
valid execution, delivery and performance by the Borrower and any of its 
Subsidiaries of this Credit Agreement and the other Loan Documents to 
which it is or is to become a party shall have been duly and effectively 
taken, and evidence thereof satisfactory to the Banks shall have been 
provided to each of the Banks.
10.4.   Incumbency Certificate.  Each of the Banks shall have 
received from the Borrower an incumbency certificate, dated as of the 
Closing Date, signed by a duly authorized officer of the Borrower and 
giving the name and bearing a specimen signature of each individual who 
shall be authorized: (i) to sign, in the name and on behalf of the 
Borrower each of the Loan Documents to which the Borrower is or is to 
become a party; (ii) to make Loan Requests and Conversion Requests and 
to apply for Letters of Credit; and (iii) to give notices and to take 
other action on its behalf under this Credit Agreement and the other 
Loan Documents.
10.5.   Opinion of Counsel.  Each of the Banks and the Agents shall 
have received a favorable legal opinion addressed to the Banks and the 
Agents, dated as of the Closing Date, in form and substance satisfactory 
to the Banks and the Agents.
10.6.    Existing Credit Agreement.  The Agents shall have received 
evidence, in form and substance satisfactory to the Agents, that all 
sums owing under the Existing Credit Agreement have been paid in full 
(or concurrently with the initial borrowings hereunder will be paid in 
full) and that all commitments to lend thereunder have been terminated 
(or concurrently with the initial borrowings hereunder will be 
terminated).
10.7.   Documents and Actions Relating to Collateral.  The Agents 
shall have received the following, in form and substance satisfactory to 
each of them:
(a)     evidence that all filings, registrations and 
recordings have been made in the appropriate governmental 
offices, and all other action has been taken, which shall be 
necessary to create, in favor of the Agents on behalf of the 
Banks, a perfected first priority Lien (subject to Permitted 
Encumbrances) on the Collateral, including the filing of 
completed UCC-1 financing statements in the appropriate 
governmental offices; and
(b)     the results, dated as of a recent date prior to 
the Closing Date, of searches conducted in the UCC filing 
records in each of the governmental offices in each 
jurisdiction in which personal property and fixture 
Collateral is located, which shall have revealed no Liens 
with respect to any of the Collateral except Permitted 
Liens.
10.8.   Insurance.  Evidence satisfactory to the Agents that all 
insurance required under this Agreement and the Collateral Documents is 
in full force and effect.
11.     CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan on any Drawdown Date 
and of the Issuing Bank to issue, extend or renew any Letter of Credit, 
in each case whether on or after the Closing Date, shall also be subject 
to the satisfaction of the following conditions precedent:
11.1.   Representations True; No Event of Default.  Each of the 
representations and warranties of any of the Borrower and its 
Subsidiaries contained in this Credit Agreement, the other Loan 
Documents or in any document or instrument delivered pursuant to or in 
connection with this Credit Agreement shall be true as of the date as of 
which they were made and shall also be true at and as of the time of the 
making of such Loan on any Drawdown Date or the issuance, extension or 
renewal of such Letter of Credit, with the same effect as if made at and 
as of that time (except to the extent of changes resulting from 
transactions contemplated or permitted by this Credit Agreement and the 
other Loan Documents and changes occurring in the ordinary course of 
business that singly or in the aggregate are not materially adverse, and 
to the extent that such representations and warranties solely relate 
expressly to an earlier date) and no Default or Event of Default shall 
have occurred and be continuing. The Agents shall have received a 
certificate of the Borrower signed by an authorized officer of the 
Borrower to such effect.
11.2.   No Legal Impediment.  No change shall have occurred in any 
law or regulations thereunder or interpretations thereof that in the 
reasonable opinion of any Bank would make it illegal for such Bank to 
make such Loan or to participate in the issuance, extension or renewal 
of such Letter of Credit or in the reasonable opinion of the Issuing 
Bank would make it illegal for the Issuing Bank to issue, extend or 
renew such Letter of Credit.
11.3.   Governmental Regulation.  Each Bank shall have received such 
statements, in substance and form reasonably satisfactory to such Bank 
as such Bank shall require for the purpose of compliance with any 
applicable regulations of the Comptroller of the Currency or the Board 
of Governors of the Federal Reserve System.
11.4.   Proceedings and Documents.  All proceedings in connection 
with the transactions contemplated by this Credit Agreement, the other 
Loan Documents and all other documents incident thereto shall be 
satisfactory in substance and in form to the Banks and to the Agents, 
and the Banks and the Agents shall have received all information and 
such counterpart originals or certified or other copies of such 
documents as the Agents may reasonably request.
12.     EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1.   Events of Default and Acceleration.  If any of the following 
events ("Events of Default") shall occur:
(a)     the Borrower shall fail to pay any principal of 
the Loans or any Reimbursement Obligation when the same 
shall become due and payable, whether at the stated date of 
maturity or any accelerated date of maturity or at any other 
date fixed for payment thereof;
(b)     the Borrower shall fail to pay any interest on 
the Loans, the Commitment Fee, any Letter of Credit Fee, the 
Agents' fee, or other sums due hereunder or under any of the 
other Loan Documents, when the same shall become due and 
payable, whether at the stated date of maturity or any 
accelerated date of maturity or at any other date fixed for 
payment thereof, and such failure shall not have been cured 
within five (5) calendar days after such payment date;
(c)     the Borrower shall fail to comply with any of 
its covenants contained in    7.4, 7.5, the first sentence 
of 7.6, 7.8, 7.10, 7.12, 8 or 9;
(d)     the Borrower or any of its Subsidiaries shall 
fail to perform any term, covenant or agreement contained 
herein or in any of the other Loan Documents (other than 
those specified elsewhere in this   12.1) for thirty (30) 
days after any Designated Officer has knowledge of such 
failure;
(e)     any representation or warranty of the Borrower 
or any of its Subsidiaries in this Credit Agreement or any 
of the other Loan Documents or in any other document or 
instrument delivered pursuant to or in connection with this 
Credit Agreement shall prove to have been false in any 
material respect upon the date when made or deemed to have 
been made or repeated;
(f)     the Borrower or any of its Subsidiaries shall 
fail to pay at maturity, or within any applicable period of 
grace, any obligation for borrowed money or credit received 
or in respect of any Capitalized Leases in excess of 
$5,000,000 in aggregate principal amount, or fail to observe 
or perform any material term, covenant or agreement 
contained in any agreement by which it is bound, evidencing 
or securing borrowed money or credit received or in respect 
of any Capitalized Leases in excess of $5,000,000 in 
aggregate principal amount for such period of time as would 
permit (assuming the giving of appropriate notice if 
required) the holder or holders thereof or of any 
obligations issued thereunder to accelerate the maturity 
thereof;
(g)     the Borrower or any of its Subsidiaries shall 
make an assignment for the benefit of creditors, or admit in 
writing its inability to pay or generally fail to pay its 
debts as they mature or become due, or shall petition or 
apply for the appointment of a trustee or other custodian, 
liquidator or receiver of the Borrower or any of its 
Subsidiaries or of any substantial part of the assets of the 
Borrower or any of its Subsidiaries or shall commence any 
case or other proceeding relating to the Borrower or any of 
its Subsidiaries under any bankruptcy, reorganization, 
arrangement, insolvency, readjustment of debt, dissolution 
or liquidation or similar law of any jurisdiction, now or 
hereafter in effect, or shall take any action to authorize 
or in furtherance of any of the foregoing, or if any such 
petition or application shall be filed or any such case or 
other proceeding shall be commenced against the Borrower or 
any of its Subsidiaries and the Borrower or any of its 
Subsidiaries shall indicate its approval thereof, consent 
thereto or acquiescence therein or such petition or 
application shall not have been dismissed within forty-five 
(45) days following the filing thereof;
(h)     a decree or order is entered appointing any such 
trustee, custodian, liquidator or receiver or adjudicating 
the Borrower or any of its Subsidiaries bankrupt or 
insolvent, or approving a petition in any such case or other 
proceeding, or a decree or order for relief is entered in 
respect of the Borrower or any Subsidiary of the Borrower in 
an involuntary case under federal bankruptcy laws as now or 
hereafter constituted;
(i)     there shall remain in force, undischarged, 
unsatisfied and unstayed, for more than forty-five (45) 
days, whether or not consecutive, any final judgment against 
the Borrower or any of its Subsidiaries that, with other 
outstanding final judgments, undischarged, against the 
Borrower or any of its Subsidiaries exceeds in the aggregate 
$5,000,000 and the Borrower shall have failed to provide 
evidence satisfactory to the Agents and the Banks that such 
judgment or award is fully covered by independent third-
party insurance;
(j)     the holders of all or any part of the 
Subordinated Debt or Permitted New Subordinated Debt shall 
accelerate the maturity of all or any part of such 
Indebtedness or the Subordinated Debt shall be redeemed or 
repurchased in whole or in part (other than with proceeds 
from Permitted New Subordinated Debt) or the Permitted New 
Subordinated Debt shall be redeemed or repurchased in whole 
or in part;
(k)     if any of the Loan Documents or any material 
provision thereof shall be canceled, terminated, revoked or 
rescinded, otherwise than in accordance with the terms 
thereof or with the express prior written agreement, consent 
or approval of the Banks, or any action at law, suit or in 
equity or other legal proceeding to cancel, revoke or 
rescind any of the Loan Documents or any material provision 
thereof shall be commenced by or on behalf of the Borrower 
(or any of its Subsidiaries party thereto) or any of their 
respective stockholders, or any court or any other 
governmental or regulatory authority or agency of competent 
jurisdiction shall make a determination that, or issue a 
judgment, order, decree or ruling to the effect that, any 
one or more of the Loan Documents or any material provision 
thereof is illegal, invalid or unenforceable in accordance 
with the terms thereof;
(l)     with respect to any Guaranteed Pension Plan, an 
ERISA Reportable Event shall have occurred and the Majority 
Banks shall have reasonably determined that such event 
reasonably could be expected to result in liability of the 
Borrower or any of its Subsidiaries to the PBGC or such 
Guaranteed Pension Plan in an aggregate amount exceeding 
$5,000,000 and such event in the circumstances occurring 
reasonably could constitute grounds for the termination of 
such Guaranteed Pension Plan by the PBGC or for the 
appointment by the appropriate United States District Court 
of a trustee to administer such Guaranteed Pension Plan; or 
a trustee shall have been appointed by the United States 
District Court to administer such Plan; or the PBGC shall 
have instituted proceedings to terminate such Guaranteed 
Pension Plan;
(m)     with the Borrower or any of its Subsidiaries 
shall be enjoined, restrained or in any way prevented by the 
order of any court or any administrative or regulatory 
agency from conducting any material part of its business and 
such order shall continue in effect for more than thirty 
(30) days;
(n)     there shall occur any strike, lockout, labor 
dispute, embargo, condemnation, act of God or public enemy, 
or other casualty, which in any such case causes, for more 
than fifteen (15) consecutive days, the cessation or 
substantial curtailment of revenue producing activities of 
the Borrower and its Subsidiaries on a consolidated basis if 
such event or circumstance is not covered by business 
interruption insurance and would have a material adverse 
effect on the business or financial condition of the 
Borrower and its Subsidiaries, taken as a whole;
(o)     there shall occur the loss, suspension or 
revocation of, or failure to renew, any license, permit or 
consent issued by any government or government agency or 
authority now held or hereafter acquired by the Borrower or 
any of its Subsidiaries if such loss, suspension, revocation 
or failure to renew would have a material adverse effect on 
the business or financial condition of the Borrower and its 
Subsidiaries, taken as a whole; or
(p)     any Person or group of affiliated Persons, other 
than a group comprised of some or all of (i) Summit Ventures 
II, L.P., Summit Ventures IV, L.P., and Summit Subordinated 
Debt Fund, L.P., including for this purpose their affiliates 
and partners, (ii) current management of the Borrower and 
(iii) employee stockholders of the Borrower shall acquire in 
excess of fifty percent (50%) of the outstanding shares of 
Voting Stock of the Borrower; or
(q)     the Borrower or any other Person shall fail to 
perform or observe any term, covenant or agreement contained 
in the Collateral Documents on its part to be performed or 
observed and any such failure shall remain unremedied for a 
period of 30 days from the occurrence thereof, or any "Event 
of Default" as defined in any Collateral Document shall have 
occurred or any of the Collateral Documents after delivery 
thereof shall for any reason be revoked or invalidated, or 
otherwise cease to be in full force and effect (other than 
pursuant to the operation of Section 28), or the Borrower or 
any other Person shall contest in any manner the validity or 
enforceability thereof, or the Borrower or any other Person 
shall deny that it has any further liability or obligation 
thereunder; or any of the Collateral Documents for any 
reason, except to the extent permitted by the terms thereof, 
shall cease to create a valid and perfected first priority 
Lien subject only to Permitted Liens in any of the 
Collateral purported to be covered thereby;
then, and in any such event, so long as the same may be continuing, the 
Agents may, and upon the request of the Majority Banks shall, by notice 
in writing to the Borrower declare all Obligations to be, and they shall 
thereupon forthwith become, immediately due and payable without 
presentment, demand, protest or other notice of any kind, all of which 
are hereby expressly  waived by the Borrower; provided that in the event 
of any Event of Default specified in   12.1(g), 12.1(h) or 12.1(j), all 
such amounts shall become immediately due and payable automatically and 
without any requirement of notice from the Agents or any Bank.
12.2.   Termination of Commitments.  If any one or more of the 
Events of Default specified in   12.1(g), 12.1(h) or 12.1(j) shall 
occur, any unused portion of the Commitments shall forthwith 
automatically terminate and each of the Banks shall be relieved of all 
further obligations to make Loans to the Borrower and the Issuing Bank 
shall be relieved of all further obligations to issue, extend or renew 
Letters of Credit. If any other Event of Default shall have occurred and 
be continuing, or if on any Drawdown Date or other date for issuing, 
extending or renewing any Letter of Credit the conditions precedent to 
the making of the Loans to be made on such Drawdown Date or (as the case 
may be) to issuing, extending or renewing such Letter of Credit on such 
other date are not satisfied, the Agents may and, upon the request of 
the Majority Banks, shall, by notice to the Borrower, terminate the 
unused portion of the Total Commitment hereunder, and upon such notice 
being given such unused portion of the Total Commitment hereunder shall 
terminate immediately and each of the Banks shall be relieved of all 
further obligations to make Loans and the Issuing Bank shall be relieved 
of all further obligations to issue, extend or renew Letters of Credit. 
No termination of the Total Commitment hereunder shall relieve the 
Borrower or any of its Subsidiaries of any of the Obligations.
12.3.   Remedies.  If an Event of Default occurs under Section 
12.1(g), (h) or (j) then the unpaid principal amount of the Loans and 
all other Obligations shall automatically become immediately due and 
payable, without presentment, demand, protest, notice or other 
requirements of any kind, all of which are hereby expressly waived by 
the Borrower. If an Event of Default occurs, other than under Section 
12.1(g), (h) or (j), the Agents may, or upon written request of the 
Majority Banks shall, by written notice to the Borrower, declare the 
unpaid principal amount of the Loans and all other Obligations to be, 
and the same shall thereupon become, due and payable, without 
presentment, demand, protest, any additional notice or other 
requirements of any kind, all of which are hereby expressly waived by 
the Borrower.  Upon the occurrence of any Event of Default, the Agents 
may (A) exercise any or all of the Agents' rights and remedies under the 
Collateral Documents, and (B) proceed to enforce all other rights and 
remedies available to the Agents and the Banks under the Loan Documents 
and applicable law.
13.     SETOFF.
During the continuance of any Event of Default, any deposits or 
other sums credited by or due from any of the Banks to the Borrower and 
any securities or other property of the Borrower in the possession of 
such Bank may be applied to or set off by such Bank against the payment 
of Obligations and any and all other liabilities, direct or indirect, of 
the Borrower to such Bank which are then due and payable. Each of the 
Banks agrees with each other Bank that (i) if an amount to be set off is 
applied to Indebtedness of the Borrower to such Bank other than 
Indebtedness evidenced by the Notes held by such Bank or constituting 
Reimbursement Obligations owed to such Bank, such amount shall be 
applied ratably to such other Indebtedness and to the Indebtedness 
evidenced by all such Notes held by such Bank or constituting 
Reimbursement Obligations owed to such Bank and (ii) if such Bank shall 
receive from the Borrower, whether by voluntary payment, exercise of the 
right of setoff, counterclaim, cross action, enforcement of the claim 
evidenced by the Notes held by, or constituting Reimbursement 
Obligations owed to, such Bank by proceedings against the Borrower at 
law or in equity or by proof thereof in bankruptcy, reorganization, 
liquidation, receivership or similar proceedings, or otherwise, and 
shall retain and apply to the payment of the Note or Notes held by, or 
Reimbursement Obligations owed to, such Bank any amount in excess of its 
ratable portion of the payments received by all of the Banks with 
respect to the Notes held by, or Reimbursement Obligations owed to, all 
of the Banks, such Bank will make such disposition and arrangements with 
the other Banks with respect to such excess, either by way of 
distribution, pro tanto assignment of claims, subrogation or otherwise 
as shall result in each Bank receiving in respect of the Notes held by 
it, or Reimbursement Obligations owed it, its proportionate payment as 
contemplated by this Credit Agreement; provided that if all or any part 
of such excess payment is thereafter recovered from such Bank, such 
disposition and arrangements shall be rescinded and the amount restored 
to the extent of such recovery, but without interest.
14.     THE AGENTS.
14.1.   Authorization.
(a)     Each Agent is authorized to take such action on 
behalf of each of the Banks and to exercise all such powers 
as are hereunder and under any of the other Loan Documents 
and any related documents delegated to the Agents, together 
with such powers as are reasonably incident thereto, 
provided that no duties or responsibilities not expressly 
assumed herein or therein shall be implied to have been 
assumed by either Agent. Whenever the Agents are authorized 
hereunder or under any other Loan Document to act on behalf 
of the Banks (or the Majority Banks, as the case may be), 
such action may be taken by one or both of the Agents, in 
each case, in consultation with the other.
(b)     The relationship between each Agent and each of 
the Banks is that of an independent contractor. The use of 
the term "Agents" is for convenience only and is used to 
describe, as a form of convention, the independent 
contractual relationship between each Agent and each of the 
Banks. Nothing contained in this Credit Agreement nor the 
other Loan Documents shall be construed to create an agency, 
trust or other fiduciary relationship between each Agent and 
any of the Banks nor between each Agent.
(c)     All notices and payments to be given or made 
hereunder or under any other Loan Document by the Agent to 
any one or more of the Banks shall (i) be given or made by 
Fleet, in its capacity as Agent, in the case of any Bank 
that is an assignee (or successive assignee) of any portion 
of the Commitment or Loans of Fleet, and (ii) be given or 
made by CSFB, in its capacity as Agent, in the case of any 
Bank that is an assignee (or successive assignee) of any 
portion of the Commitment or Loans of CSFB.
14.2.   Employees and Agents.  The Agents may exercise its powers 
and execute its duties by or through employees or agents and shall be 
entitled to take, and to rely on, advice of counsel concerning all 
matters pertaining to its rights and duties under this Credit Agreement 
and the other Loan Documents. The Agents may utilize the services of 
such Persons as the Agents in their sole discretion may reasonably 
determine, and all reasonable fees and expenses of any such Persons 
shall be paid by the Borrower.
14.3.   No Liability.  Neither Agent nor any of its shareholders, 
directors, officers or employees nor any other Person assisting it in 
its duties nor any Agent or employee thereof shall be liable for any 
waiver, consent or approval given or any action taken, or omitted to be 
taken, in good faith by it or them hereunder or under any of the other 
Loan Documents, or in connection herewith or therewith, or be 
responsible for the consequences of any oversight or error of judgment 
whatsoever, except that each Agent or such other Person, as the case may 
be, may be liable for losses exclusively due to its willful misconduct 
or gross negligence.
14.4.   No Representations.  Neither Agent shall be responsible for 
the execution or validity or enforceability of this Credit Agreement, 
the Notes, the Letters of Credit, any of the other Loan Documents or for 
the validity, enforceability, sufficiency, value or collectibility of 
any amounts owing with respect to the Loan Documents or any of the 
Collateral, or for any recitals or statements, warranties or 
representations made herein or in any of the other Loan Documents or in 
any certificate or instrument hereafter furnished to it by or on behalf 
of the Borrower or any of its Subsidiaries, or be bound to ascertain or 
inquire as to the performance or observance of any of the terms, 
conditions, covenants or agreements herein or to inspect any of the 
properties, books or records of the Borrower or any of its Subsidiaries. 
Neither Agent shall be bound to ascertain whether any notice, consent, 
waiver or request delivered to it by the Borrower or any holder of any 
of the Notes shall have been duly authorized or is true, accurate and 
complete. Neither Agent has made nor does any of them now make any 
representations or warranties, express or implied, nor does any of them 
assume any liability to the Banks, with respect to the creditworthiness 
or financial conditions of the Borrower or any of its Subsidiaries. Each 
Bank acknowledges that it has, independently and without reliance upon 
either Agent or any other Bank and based upon such information and 
documents as it has deemed appropriate, made its own credit analysis and 
decision (i) to enter into this Credit Agreement and to accept 
Borrower's Note, (ii) in the case of the Issuing Bank, to issue, renew 
and extend Letters of Credit, and (iii) with respect to the nature and 
value of the Collateral, and that it will continue to do so in 
connection with making each Loan and issuance, renewal and extension of 
each Letter of Credit, as applicable.
14.5.   Payments.
14.5.1. Payments to Agents.  A payment by the Borrower 
to the Agents hereunder or any of the other Loan Documents for the 
account of any Bank shall constitute a payment to such Bank. The Agents 
agree promptly to distribute to each Bank such Bank's pro rata share of 
payments received by the Agents for the account of the Banks except as 
otherwise expressly provided herein or in any of the other Loan 
Documents.
14.5.2. Distribution by Agents.  If in the opinion of 
the Agents the distribution of any amount received by it in such 
capacity hereunder, under the Notes or under any of the other Loan 
Documents, might result in the incurrence by it of any liability, it may 
refrain from making such distribution until its right to make such 
distribution shall have been adjudicated by a court of competent 
jurisdiction. If a court of competent jurisdiction shall adjudge that 
any amount received from the Borrower and distributed by the Agents is 
to be repaid, each Person to whom any such distribution shall have been 
made shall either repay to the Agents its proportionate share of the 
amount so adjudged to be repaid or shall pay over the same in such 
manner and to such Persons as shall be determined by such court.
14.5.3. Delinquent Banks.  Notwithstanding anything to 
the contrary contained in this Credit Agreement or any of the other Loan 
Documents, any Bank that fails (i) to make available to the Agents its 
pro rata share of any Loan or to purchase any Letter of Credit 
Participation or (ii) to comply with the provisions of   13 with respect 
to making dispositions and arrangements with the other Banks, where such 
Bank's share of any payment received, whether by setoff or otherwise, is 
in excess of its pro rata share of such payments due and payable to all 
of the Banks, in each case as, when and to the full extent required by 
the provisions of this Credit Agreement, shall be deemed delinquent (a 
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time 
as such delinquency is remedied. A Delinquent Bank shall be deemed to 
have assigned any and all payments due to it from the Borrower, whether 
on account of outstanding Loans, Unpaid Reimbursement Obligations, 
interest, fees or otherwise, to the remaining nondelinquent Banks for 
application to, and reduction of, their respective pro rata shares of 
all outstanding Loans and Unpaid Reimbursement Obligations. The 
Delinquent Bank hereby authorizes the Agents to distribute such payments 
to the nondelinquent Banks in proportion to their respective pro rata 
shares of all outstanding Loans and Unpaid Reimbursement Obligations. A 
Delinquent Bank shall be deemed to have remedied in full a delinquency 
when and if, as a result of application of the assigned payments to all 
outstanding Loans and Unpaid Reimbursement Obligations of the 
nondelinquent Banks, the Banks' respective pro rata shares of all 
outstanding Loans and Unpaid Reimbursement Obligations have returned to 
those in effect immediately prior to such delinquency and without giving 
effect to the nonpayment causing such delinquency. Until such time as 
its delinquency is remedied, a Delinquent Bank shall have no right to 
vote with respect to any matters under or in respect of this Credit 
Agreement (other than matters that require the vote of all Banks, as 
described in Article 25 hereof) and shall not be entitled to receive its 
portion of any Commitment Fee paid in accordance with   2.2 of this 
Credit Agreement.
14.6.   Holders of Notes.  The Agents may deem and treat the holder 
of any Note or the purchaser of any Letter of Credit Participation as 
the absolute owner or purchaser thereof for all purposes until it shall 
have been furnished in writing with a different name by such payee or by 
a subsequent holder, assignee or transferee.
14.7.   Indemnity.  The Banks ratably (computed by reference to each 
Bank's Total Percentage) agree hereby to indemnify and hold harmless 
each Agent from and against any and all claims, actions and suits 
(whether groundless or otherwise), losses, damages, costs, expenses 
(including any expenses for which the Agents have not been reimbursed by 
the Borrower as required by   15), and liabilities of every nature and 
character arising out of or related to this Credit Agreement, the Notes, 
or any of the other Loan Documents or the transactions contemplated or 
evidenced hereby or thereby, or the actions of any Agent taken hereunder 
or thereunder, except to the extent that any of the same shall be 
directly and exclusively caused by such Agent's willful misconduct or 
gross negligence.
14.8.   Agents as Bank.  In its individual capacity, each of Fleet 
and CSFB shall have the same obligations and the same rights, powers and 
privileges with respect to its Commitment and the Loans made by it, and 
as the holder of any of the Notes and as the purchaser of any Letter of 
Credit Participations, as it would have were it not also an Agent.
14.9.   Resignation.  Each Agent may resign at any time by giving 
sixty (60) days' prior written notice thereof to the Banks and the 
Borrower. Upon the resignation of such Agent, the Majority Banks shall 
have the right to appoint a successor Agent in such capacity.  Unless a 
Default or Event of Default shall have occurred and be continuing, such 
successor Agent shall be reasonably acceptable to the Borrower; if a 
Default or Event of Default shall have occurred and be continuing, the 
Borrower shall not be entitled to review the identity of any proposed 
successor Agent.  If no successor Agent shall have been so appointed by 
the Majority Banks and shall have accepted such appointment within 
thirty (30) days after the retiring Agent's giving of notice of 
resignation, then the retiring Agent may, on behalf of the Banks, 
appoint a successor Agent in such capacity, which shall be a financial 
institution having a rating of not less than A or its equivalent by 
Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc. Upon 
the acceptance of any appointment as Agent hereunder by a successor 
Agent, such successor Agent shall thereupon succeed to and become vested 
with all the rights, powers, privileges and duties of the retiring 
Agent, and the retiring Agent shall be discharged from its duties and 
obligations hereunder. After any retiring Agent's resignation, the 
provisions of this Credit Agreement and the other Loan Documents shall 
continue in effect for its benefit in respect of any actions taken or 
omitted to be taken by it while it was acting as Agent.
14.10.  Notification of Defaults and Events of Default.  Each 
Bank hereby agrees that, upon an officer of such Bank active in respect 
of the Borrower's account learning of the existence of a Default or an 
Event of Default, it shall promptly notify the Agents thereof (provided 
that failure to promptly so notify shall not, in itself, create any 
liability). The Agents hereby agree that upon receipt of any notice 
under this   14.10 they shall promptly notify the other Banks of the 
existence of such Default or Event of Default.
14.11.  Duties in the Case of Enforcement.  In case one or 
more Events of Default have occurred and shall be continuing, and 
whether or not acceleration of the Obligations shall have occurred, the 
Agents shall, if (i) so requested by the Majority Banks and (ii) the 
Banks have provided to the Agents such additional indemnities and 
assurances against expenses and liabilities as the Agents may reasonably 
request, proceed to exercise all or any such other legal and equitable 
and other rights or remedies as the Bank may have in respect of such 
Event of Default. The Majority Banks may direct the Agents in writing as 
to the method and the extent of any such enforcement, the Banks hereby 
ratably (computed by reference to each Bank's Total Percentage) agreeing 
to indemnify and hold the Agents harmless from all liabilities incurred 
in respect of all actions taken or omitted in accordance with such 
directions, provided that the Agents need not comply with any such 
direction to the extent that the Agents reasonably believe the Agents' 
compliance with such direction to be unlawful or inadvisable.
14.12.  Collateral Matters.
14.12.1.        Authorization.  The Agents are each authorized 
on behalf of all the Banks, without the necessity of any notice to or 
further consent from the Banks, from time to time to take any action 
with respect to any Collateral or the Collateral Documents which may be 
necessary to perfect and maintain perfected the Liens on the Collateral 
granted pursuant to the Collateral Documents or protect and preserve the 
Agents' ability to enforce the Liens or realize upon the Collateral.
14.12.2.        Collateral Releases.  The Banks irrevocably 
authorize the Agents, at their option and in their discretion, to 
release any Lien granted to or held by the Agents upon any Collateral 
(i) upon termination of the Commitments and payment in full of all Loans 
and all other Obligations known to the Agents and payable under this 
Agreement or any other Loan Document; (ii) constituting property sold or 
to be sold or disposed of as part of or in connection with any 
disposition permitted hereunder or under any Collateral Document; 
(iii) constituting property in which the Borrower owned no interest at 
the time the Lien was granted or at any time thereafter; 
(iv) constituting property leased to the Borrower under a lease which 
has expired or been terminated in a transaction permitted under this 
Agreement or is about to expire and which has not been, and is not 
intended by the Borrower or such Subsidiary to be, renewed or extended; 
(v) consisting of an instrument evidencing Indebtedness or other debt 
instrument, if the indebtedness evidenced thereby has been paid in full; 
or (vi) if approved, authorized or ratified in writing by the Majority 
Banks or all the Banks, as the case may be, as provided in Section 25.  
Upon request by the Agents at any time, the Banks shall confirm in 
writing the Agents' authority to release particular types or items of 
Collateral pursuant to this Section 14.12, provided that the absence of 
any such confirmation for whatever reason shall not affect the Agents' 
rights under this Section 14.12.
15.     EXPENSES.
The Borrower agrees to pay (i) the reasonable costs of producing 
and reproducing this Credit Agreement, the other Loan Documents and the 
other agreements and instruments mentioned herein, (ii) any taxes 
(including any interest and penalties in respect thereto) payable by the 
Agents or any of the Banks (other than taxes based upon any Agent's or 
any Bank's net income, subject to the limitations set forth in   5.2.3) 
on or with respect to the transactions contemplated by this Credit 
Agreement (the Borrower hereby agreeing to indemnify the Agents and each 
Bank with respect thereto), (iii) the reasonable fees, expenses and 
disbursements of the Agents' legal counsel incurred in connection with 
the preparation, administration or interpretation of the Loan Documents 
and other instruments mentioned herein, each closing hereunder, 
amendments, modifications, approvals, consents or waivers hereto or 
hereunder (iv) the reasonable fees, expenses and disbursements of the 
Agents incurred by the Agents in connection with the preparation, 
administration or interpretation of the Loan Documents and other 
instruments mentioned herein, (v) all search, recording, filing and 
similar costs, fees and expenses incurred or sustained by the Agents in 
connection with the Loan Documents or the Collateral, and (vi) all 
reasonable out-of-pocket expenses (including, without limitation, 
reasonable attorneys' fees and costs, which attorneys may be employees 
of any Bank or the Agents, and reasonable consulting, accounting, 
appraisal, investment banking and similar professional fees and charges) 
incurred by any Bank or the Agents in connection with (A) the 
enforcement of or preservation of rights under any of the Loan Documents 
against the Borrower or any of its Subsidiaries or the administration 
thereof after the occurrence of a Default or Event of Default, (B) the 
preservation of and realization upon any of the Collateral, and (C) any 
litigation, proceeding or dispute, whether arising hereunder or 
otherwise, in any way related to any Bank's or the Agents' relationship 
with the Borrower or any of its Subsidiaries. The covenants of this   15 
shall survive payment or satisfaction of all other Obligations.
16.     INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agents and 
the Banks from and against any and all claims, actions and suits, 
whether groundless or otherwise, and from and against any and all 
liabilities, losses, damages and expenses of every nature and character 
arising out of this Credit Agreement or any of the other Loan Documents 
or the transactions contemplated hereby including, without limitation, 
(i) any actual or proposed use by the Borrower or any of its 
Subsidiaries of the proceeds of any of the Loans or Letters of Credit, 
(ii) the Borrower or any of its Subsidiaries entering into or performing 
this Credit Agreement or any of the other Loan Documents or (iii) with 
respect to the Borrower and its Subsidiaries and their respective 
properties and assets, the violation of any Environmental Law, the 
presence, disposal, escape, seepage, leakage, spillage, discharge, 
emission, release or threatened release of any Hazardous Substances or 
any action, suit, proceeding or investigation brought or threatened with 
respect to any Hazardous Substances (including, but not limited to, 
claims with respect to wrongful death, personal injury or damage to 
property), in each case including, without limitation, the reasonable 
fees and disbursements of counsel and allocated costs of internal 
counsel incurred in connection with any such investigation, litigation 
or other proceeding. In litigation, or the preparation therefor, the 
Banks and the Agents shall be entitled to select their own counsel and, 
in addition to the foregoing indemnity, the Borrower agrees to pay 
promptly the reasonable fees and expenses of such counsel. If and to the 
extent that the obligations of the Borrower under this   16 are 
unenforceable for any reason, the Borrower hereby agrees to make the 
maximum contribution to the payment in satisfaction of such obligations 
which is permissible under applicable law. The covenants contained in 
this   16 shall survive payment or satisfaction in full of all other 
Obligations. The foregoing notwithstanding, the Borrower shall not be 
required to indemnify the Agents or any Bank for any liabilities, 
losses, damages or expenses to the extent that the foregoing arise 
directly and exclusively from either Agent's or such Bank's gross 
negligence or willful misconduct.
17.     SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made 
herein, in the Notes, in any of the other Loan Documents or in any 
documents or other papers delivered by or on behalf of the Borrower or 
any of its Subsidiaries pursuant hereto shall be deemed to have been 
relied upon by the Banks and the Agents, notwithstanding any 
investigation heretofore or hereafter made by any of them, and shall 
survive the making by the Banks of any of the Loans and the issuance, 
extension or renewal of any Letters of Credit, as herein contemplated, 
and shall continue in full force and effect so long as any Letter of 
Credit or any Obligation remains outstanding or any Bank has any 
obligation to make any Loans or the Issuing Bank has any obligation to 
issue, extend or renew any Letter of Credit, and for such further time 
as may be otherwise expressly specified in this Credit Agreement. All 
statements contained in any certificate or other paper delivered to any 
Bank or either Agent at any time by or on behalf of the Borrower or any 
of its Subsidiaries pursuant hereto or in connection with the 
transactions contemplated hereby shall constitute representations and 
warranties by the Borrower or such Subsidiary hereunder.
18.     ASSIGNMENT AND PARTICIPATION.
18.1.   Conditions to Assignment by Banks.  Except as provided 
herein, each Bank may, beginning on the 90th day following the Closing 
Date (but not prior to such time), assign to one or more Eligible 
Assignees all or a portion of its interests, rights and obligations 
under this Credit Agreement (including all or a portion of its 
Commitment Percentage and Commitment and the same portion of the Loans 
at the time owing to it, the Notes held by it and its participating 
interest in the risk relating to any Letters of Credit) and the other 
Loan Documents; provided that (i) unless the transfer is to an Eligible 
Assignee that is an affiliate of the assigning Bank, in which case 
consent shall not be required, the Agents and, unless a Default or Event 
of Default shall have occurred and be continuing, the Borrower shall 
have given its prior written consent to such assignment, which consent, 
in the case of the Borrower and the Agents, will not be unreasonably 
withheld, (ii) each such assignment shall be of a constant, and not a 
varying, percentage of all the assigning Bank's rights and obligations 
in respect of the Revolving Credit Loans and the Letters of Credit under 
this Credit Agreement, (iii) each assignment shall be in a minimum 
amount of $ 5,000,000 (or, if less, the entire Commitment and Loans of 
the assignor) and (iv) the parties to such assignment shall execute and 
deliver to the Agents, for recording in the Register (as hereinafter 
defined), an Assignment and Acceptance, substantially in the form of 
Exhibit D hereto (an "Assignment and Acceptance"), together with any 
Notes subject to such assignment. In the event that either Agent holds a 
Total Percentage under this Credit Agreement in an amount less than ten 
percent (10%), such Agent agrees that, at the request of the Borrower 
and the Banks, and provided no Default or Event of Default shall have 
occurred and be continuing, such Agent shall resign as such Agent agrees 
in accordance with   14.9 hereof.  Upon such execution, delivery, 
acceptance and recording, from and after the effective date specified in 
each Assignment and Acceptance, which effective date shall be at least 
five (5) Business Days after the execution thereof, (i) the assignee 
thereunder shall be a party hereto and, to the extent provided in such 
Assignment and Acceptance, have the rights and obligations of a Bank 
hereunder (including, without limitation, those under   5.2.3), and (ii) 
the assigning Bank shall, to the extent provided in such assignment and 
upon payment to the Agents of the registration fee referred to in 
  18.3, be released from its obligations under this Credit Agreement.
18.2.   Certain Representations and Warranties: Limitations; 
Covenants.  By executing and delivering an Assignment and Acceptance, 
the parties to the assignment thereunder confirm to and agree with each 
other and the other parties hereto as follows:
(a)     other than the representation and warranty that 
it is the legal and beneficial owner of the interest being 
assigned thereby free and clear of any adverse claim, the 
assigning Bank makes no representation or warranty, express 
or implied, and assumes no responsibility with respect to 
any statements, warranties or representations made in or in 
connection with this Credit Agreement or the execution, 
legality, validity, enforceability, genuineness, sufficiency 
or value of this Credit Agreement, the other Loan Documents 
or any other instrument or document furnished pursuant 
hereto or the attachment, perfection or priority of any 
security interest or mortgage;
(b)     the assigning Bank makes no representation or 
warranty and assumes no responsibility with respect to the 
financial condition of the Borrower and its Subsidiaries or 
any other Person primarily or secondarily liable in respect 
of any of the Obligations, or the performance or observance 
by the Borrower and its Subsidiaries or any other Person 
primarily or secondarily liable in respect of any of the 
Obligations of any of their obligations under this Credit 
Agreement or any of the other Loan Documents or any other 
instrument or document furnished pursuant hereto or thereto;
(c)     such assignee confirms that it has received a 
copy of this Credit Agreement and each of the other Loan 
Documents, together with copies of the most recent financial 
statements referred to in   6.3 and   7.4 and such other 
documents and information as it has deemed appropriate to 
make its own credit analysis and decision to enter into such 
Assignment and Acceptance;
(d)     such assignee will, independently and without 
reliance upon the assigning Bank, the Agents or any other 
Bank and based on such documents and information as it shall 
deem appropriate at the time, continue to make its own 
credit decisions in taking or not taking action under this 
Credit Agreement;
(e)     such assignee represents and warrants that it is 
an Eligible Assignee;
(f)      such assignee appoints and authorizes each 
Agent to take such action as Agent on its behalf and to 
exercise such powers under this Credit Agreement and the 
other Loan Documents as are delegated to the Agents by the 
terms hereof or thereof, together with such powers as are 
reasonably incidental thereto;
(g)     such assignee agrees that it will perform in 
accordance with their terms all of the obligations that by 
the terms of this Credit Agreement are required to be 
performed by it as a Bank; and
(h)     such assignee represents and warrants that it is 
legally authorized to enter into such Assignment and 
Acceptance.
(i)     such assignee acknowledges that it has made 
arrangements with the assigning Bank satisfactory to such 
assignee with respect to its pro rata share of Letter of 
Credit Fees in respect of outstanding Letters of Credit.
18.3.   Register.  The Agents shall maintain a copy of each 
Assignment and Acceptance delivered to it and a register or similar list 
(the "Register") for the recordation of the names and addresses of the 
Banks and the Commitment Percentage of and principal amount of the 
Revolving Credit Loans owing to, and Letter of Credit Participations 
purchased by, the Banks from time to time. The entries in the Register 
shall be conclusive, in the absence of manifest error, and the Borrower, 
the Agents and the Banks may treat each Person whose name is recorded in 
the Register as a Bank hereunder for all purposes of this Credit 
Agreement. The Register shall be available for inspection by the 
Borrower and the Banks at any reasonable time and from time to time upon 
reasonable prior notice. Upon each such recordation, the assigning Bank 
agrees to pay or cause the assignee Bank to pay to the Agents a 
registration fee in the sum of $3,500.
18.4.   New Notes.  Upon its receipt of an Assignment and Acceptance 
executed by the parties to such assignment, together with each Note 
subject to such assignment, the Agents shall (i) record the information 
contained therein in the Register, and (ii) give prompt notice thereof 
to the Borrower and the Banks (other than the assigning Bank). Within 
five (5) Business Days after receipt of such notice, the Borrower, at 
its own expense, shall execute and deliver to the Agents, in exchange 
for each surrendered Note, a new Note to the order of such Eligible 
Assignee in an amount equal to the amount assumed by such Eligible 
Assignee pursuant to such Assignment and Acceptance and, if the 
assigning Bank has retained some portion of its obligations hereunder, a 
new Note to the order of the assigning Bank in an amount equal to the 
amount retained by it hereunder. Such new Notes shall provide that they 
are replacements for the surrendered Notes, shall be in an aggregate 
principal amount equal to the aggregate principal amount of the 
surrendered Notes, shall be dated the effective date of such Assignment 
and Acceptance and shall otherwise be in substantially the form of the 
assigned Notes. Within five (5) days of issuance of any new Notes 
pursuant to this   18.4, the Borrower shall deliver an opinion of 
counsel, addressed to the Banks and the Agents, relating to the due 
authorization, execution and delivery of such new Notes and the 
legality, validity and binding effect thereof, in form and substance 
satisfactory to the Banks, provided that the Borrower shall be required 
to deliver such an opinion only at the request and the expense of the 
Eligible Assignee. The surrendered Notes shall be marked "canceled" and 
returned to, the Borrower.
18.5.   Participations.  Each Bank may, beginning on the 90th day 
following the Closing Date (but not prior to such time), sell 
participations to one or more banks or other Persons in all or a portion 
of such Bank's rights and obligations under this Credit Agreement and 
the other Loan Documents; provided that (i) any such sale or 
participation shall not affect the rights and duties of the selling Bank 
hereunder to the Borrower and (ii) the only rights granted to the 
participant pursuant to such participation arrangements with respect to 
waivers, amendments or modifications of the Loan Documents shall be the 
rights to approve waivers, amendments or modifications that would reduce 
the principal of or the interest rate on any Loans, extend the term or 
increase the amount of the Commitment of such Bank as it relates to such 
participant, reduce the amount of any Commitment Fees or Letter of 
Credit Fees to which such participant is entitled or extend any 
regularly scheduled payment date for principal or interest or fees.
18.6.   Disclosure.  The Borrower agrees that in addition to 
disclosures made in accordance with standard and customary banking 
practices, any Bank may disclose information obtained by such Bank 
pursuant to this Credit Agreement to assignees or participants and 
potential assignees or participants hereunder; provided that such 
assignees or participants or potential assignees or participants shall 
agree (i) to treat in confidence such information unless such 
information otherwise becomes public knowledge, (ii) not to disclose 
such information to a third party, except to their legal counsel or as 
required by law or legal process, and (iii) not to make use of such 
information for purposes of transactions unrelated to such contemplated 
assignment or participation.
18.7.   Assignee or Participant Affiliated with the Borrower.  If 
any assignee Bank is an Affiliate of the Borrower, then any such 
assignee Bank shall have no right to vote as a Bank hereunder or under 
any of the other Loan Documents for purposes of granting consents or 
waivers or for purposes of agreeing to amendments or other modifications 
to any of the Loan Documents or for purposes of making requests to the 
Agents pursuant to   12.1 or   12.2, and the determination of the 
Majority Banks shall for all purposes of this Agreement and the other 
Loan Documents be made without regard to such assignee Bank's interest 
in any of the Loans. If any Bank sells a participating interest in any 
of the Loans or Reimbursement Obligations to a participant, and such 
participant is the Borrower or an Affiliate of the Borrower, then such 
transferor Bank shall promptly notify the Agents of the sale of such 
participation. A transferor Bank shall have no right to vote as a Bank 
hereunder or under any of the other Loan Documents for purposes of 
granting consents or waivers or for purposes of agreeing to amendments 
or modifications to any of the Loan Documents or for purposes of making 
requests to the Agents pursuant to   12.1 or   12.2 to the extent that 
such participation is beneficially owned by the Borrower or any 
Affiliate of the Borrower, and the determination of the Majority Banks 
shall for all purposes of this Agreement and the other Loan Documents be 
made without regard to the interest of such transferor Bank in the Loans 
to the extent of such participation.
18.8.   Miscellaneous Assignment Provisions.  Any assigning Bank 
shall retain its rights to be indemnified pursuant to   15 or   16 with 
respect to any claims or actions arising prior to the date of such 
assignment. If any assignee Bank is not incorporated under the laws of 
the United States of America or any state thereof, it shall, prior to 
the date on which any interest or fees are payable hereunder or under 
any of the other Loan Documents for its account, deliver to the Borrower 
and the Agents certification as to its exemption from deduction or 
withholding of any United States federal income taxes. Anything 
contained in this   18 to the contrary notwithstanding, any Bank may at 
any time pledge all or any portion of its interest and rights under this 
Credit Agreement (including all or any portion of its Notes) to any of 
the twelve Federal Reserve Banks organized under   4 of the Federal 
Reserve Act, 12 U.S.C.   341. No such pledge or the enforcement thereof 
shall release the pledgor Bank from its obligations hereunder or under 
any of the other Loan Documents.
18.9.   Assignment by Borrower.  The Borrower shall not assign or 
transfer any of its rights or obligations under any of the Loan 
Documents without the prior written consent of each of the Banks, which 
consent may be withheld in such Bank's sole and absolute discretion, and 
any attempted assignment in violation of this   18 shall be void ab 
initio.
19.     NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, 
all notices and other communications made or required to be given 
pursuant to this Credit Agreement or the Notes or any Letter of Credit 
Applications or any other Loan Document shall be in writing and shall be 
delivered by hand, mailed by United States registered or certified first 
class mail, postage prepaid, sent by overnight courier, or sent by 
telegraph, telecopy, facsimile or telex and confirmed by delivery via 
courier or postal service, addressed as follows:
(a)     if to the Borrower, at 1055 Page Avenue, 
Fremont, California 94538, Attention: Chief Financial 
Officer, or at such other address for notice as the Borrower 
shall last have furnished in writing to the Person giving 
the notice;
(b)     if to the Agents, at the Agents' Head office or 
such other address for notice as the Agents shall last have 
furnished in writing to the Person giving the notice; and
(c)     if to any of the Banks, at such Bank's address 
set forth on Schedule 1.1 hereto, or such other address for 
notice as such Bank shall have last furnished in writing to 
the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given 
or made and to have become effective (i) if delivered by hand, overnight 
courier or facsimile to a responsible officer of the party to which it 
is directed, at the time of the receipt thereof by such officer or the 
sending of such facsimile and (ii) if sent by registered or certified 
first-class mail, postage prepaid, on the third Business Day following 
the mailing thereof.
20.     GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY 
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER 
THE LAWS OF THE STATE OF CALIFORNIA AND SHALL FOR ALL PURPOSES BE 
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE OF 
CALIFORNIA (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF 
LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS 
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN 
THE COURTS OF THE STATE OF CALIFORNIA OR ANY FEDERAL COURT SITTING 
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND 
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON TEE BORROWER BY MAIL 
AT THE ADDRESS SPECIFIED IN   19. THE BORROWER HEREBY WAIVES ANY 
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH 
SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT 
COURT.
21.     HEADINGS.
The captions in this Credit Agreement are for convenience of 
reference only and shall not define or limit the provisions hereof.
22.     COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in 
several counterparts and by each party on a separate counterpart, each 
of which when executed and delivered shall be an original, and all of 
which together shall constitute one instrument. In proving any matter 
with respect to this Credit Agreement it shall not be necessary to 
produce or account for more than one such counterpart signed by the 
party against whom enforcement is sought.
23.     ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection 
herewith or therewith express the entire understanding of the parties 
hereto and thereto with respect to the transactions contemplated hereby 
and thereby. Neither this Credit Agreement nor any term hereof may be 
changed, waived, discharged or terminated, except as provided in   25.
24.     WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect 
to any action or claim arising out of any dispute in connection with 
this Credit Agreement, the Notes or any of the other Loan Documents, any 
rights or obligations hereunder or thereunder or the performance of such 
rights and obligations. Except as prohibited by applicable law, the 
Borrower hereby waives any right it may have to claim or recover in any 
litigation referred to in the preceding sentence any special, exemplary, 
punitive or consequential damages or any damages other than, or in 
addition to, actual damages. The Borrower (i) certifies that no 
representative, agent or attorney of any Bank or any agent has 
represented, expressly or otherwise, that such Bank or such agent would 
not, in the event of litigation, seek to enforce the foregoing waivers 
and (ii) acknowledges that the Agents and the Banks have been induced to 
enter into this Credit Agreement, the other Loan Documents to which it 
is a party and the Subordinated Debt Documents to which it is a party 
by, among other things, the waivers and certifications contained herein.
25.     CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit 
Agreement to be given by all of the Banks may be given, and any term of 
this Credit Agreement, the other Loan Documents or any other instrument 
related hereto or mentioned herein may be amended, and the performance 
or observance by the Borrower or any of its Subsidiaries of any terms of 
this Credit Agreement, the other Loan Documents or such other instrument 
or the continuance of any Default or Event of Default may be waived 
(either generally or in a particular instance and either retroactively 
or prospectively) with, but only with, the written consent of the 
Borrower and the written consent of the Majority Banks. Notwithstanding 
the foregoing, the rate of interest on the Notes, the timing of any 
regularly scheduled payment date for principal, interest or fees, the 
term of the Notes, the amount of the Commitments of the Banks and the 
amount of Commitment Fee or Letter of Credit Fees hereunder may not be 
changed without the written consent of the Borrower and the written 
consent of each Bank affected thereby (except that the Commitments may 
be changed pursuant to and in connection with assignments made in 
accordance with   18 hereof); the definition of Majority Banks may not 
be amended without the written consent of all of the Banks; the amount 
of any Letter of Credit Fees payable for the Issuing Bank's account may 
not be amended without the written consent of the Issuing Bank; the 
amount of the Agent's Fee and   14 may not be amended without the 
written consent of the Agents; no release of any guaranty of the 
Obligations or release of the Liens (except pursuant to Section 28) in 
favor of the Banks or the Agents for the benefit of the Banks on any 
material portion of the Collateral shall occur without the consent of 
all of the Banks; and this sentence may not be waived or modified except 
with the written consent of all of the Banks. No waiver shall extend to 
or affect any obligation not expressly waived or impair any right 
consequent thereon. No course of dealing or delay or omission on the 
part of the Agents or any Bank in exercising any right shall operate as 
a waiver thereof or otherwise be prejudicial thereto. No notice to or 
demand upon the Borrower shall entitle the Borrower to other or further 
notice or demand in similar or other circumstances.
26.     SEVERABILITY.
The provisions of this Credit Agreement and each of the other Loan 
Documents are severable and if any one clause or provision hereof or 
thereof shall be held invalid or unenforceable in whole or in part in 
any jurisdiction, then such invalidity or unenforceability shall affect 
only such clause or provision, or part hereof or thereof, in such 
jurisdiction, and shall not in any manner affect such clause or 
provision in any other jurisdiction, or any other clause or provision of 
this Credit Agreement or any of the other Loan Documents in any 
jurisdiction.
27.     CONFIDENTIALITY.
Each Agent and each Bank agrees to take, and to cause its 
respective affiliates to take, reasonable precautions in accordance with 
safe and sound banking practice and its customary procedures, to 
maintain the confidentiality of all non-public information relating to 
the Borrower or any Subsidiary provided to such Agent or Bank in 
connection with this Credit Agreement or any other Loan Document, and 
none of the Agents, the Banks, nor any of their respective affiliates 
shall use any such information other than in connection with or in 
enforcement of this Credit Agreement and the other Loan Documents or in 
connection with other business now or hereafter existing or contemplated 
with the Borrower 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 Agents or the Banks, or (ii) was 
or becomes available on a non-confidential basis from a source other 
than the Borrower, so long as such source is not bound by a 
confidentiality agreement with the Borrower known to such Bank; 
provided, however, that the provisions of this   27 shall not restrain 
the Agents or the Banks from divulging such information (A) at the 
request or pursuant to any requirement of any governmental authority to 
which either Agent or such Bank is subject or in connection with an 
examination of such Agent or 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 legal requirement; (D) 
to the extent reasonably required in connection with any litigation or 
proceeding to which any Agent or Bank or any of their respective 
affiliates may be party; (E) to the extent reasonably required in 
connection with the exercise by the Agents of any right or remedy 
hereunder or under any other Loan Documents; (F) to any Agent's or a 
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 assigning Agent or Bank hereunder; (H) as 
expressly permitted under the terms of any other document or agreement 
regarding confidentiality to which the Borrower or any Subsidiary is 
party or is deemed party with either Agent or any Bank, or any affiliate 
of such Agent or Bank; and (I) to its affiliates, which shall be deemed 
to be bound by the provisions of this   27.
28.     RELEASE OF LIENS.
Upon the later of (a) March 31, 1999, and (b) the date of the 
Agents' receipt of a completed Compliance Certificate for any fiscal 
quarter ending after the Closing Date for which Consolidated Net Income 
is greater than $5,000,000, and provided that no Event of Default then 
exists under the Loan Documents, the Agents' and the Banks' Liens on the 
Collateral shall terminate automatically without any further act of the 
parties.  The Agents and the Banks agree to execute and deliver to the 
Borrower such documents and instruments reasonably requested by the 
Borrower as shall be necessary to evidence the termination of all such 
Liens on the Collateral granted by the Borrower in favor of the Banks or 
the Agents for the benefit of the Banks.
[Signatures follow.]

IN WITNESS WHEREOF, the undersigned have duly executed this Credit 
Agreement as of the date first set forth above.
HMT TECHNOLOGY CORPORATION
By:             
        Title:

CREDIT SUISSE FIRST BOSTON, as 
Agent and a Bank
By:             
        Title:
By:             
        Title:

FLEET NATIONAL BANK, as Agent and 
a Bank
By:             
        Title:  Vice President





                           EXHIBITS AND SCHEDULES

Exhibit A              Form of Revolving Credit Note

Exhibit B              Form of Revolving Loan Request

Exhibit C              Form of Compliance Certificate

Exhibit D              Form of Assignment and Acceptance

Exhibit E              Form of Security Agreement

Schedule 1.1           Other Lending Institutions; Amount of such Bank's 
                       Commitment; Such Bank's Percentage of the 
                       Aggregate Commitment; Domestic Lending Office; 
                       LIBOR Lending Office

Schedule 6.6           Litigation

Schedule 6.21          Insurance

Schedule 8.1           Existing Indebtedness

Schedule 8.2           Existing Liens; Leases of Real or Personal 
                       Property

Schedule 8.3           Investments





                                                             EXHIBIT A
                           FORM OF REVOLVING CREDIT NOTE
$_____________                                    Fremont,  California

                                                  November 2, 1998

FOR VALUE RECEIVED, the undersigned, HMT Technology Corporation, a 
Delaware corporation (the "Borrower"), hereby promises to pay to the 
order of [name of bank], (the "Lender"), for the account of its Lending 
Office, the lesser of (i) the principal sum of $_________________, and 
(ii) the aggregate unpaid principal amount of the Revolving Credit Loans 
(the "Loans") made by the Lender to the Borrower under the Credit 
Agreement referred to below, on the dates and in the amounts set forth 
in the Credit Agreement. The Borrower further promises to pay interest 
on the unpaid principal amount of each such Loan from time to time 
outstanding on the dates and at the rates specified in the Credit 
Agreement.
This Revolving Credit Note (the "Note") is one of the Revolving 
Credit Notes referred to in, and is entitled to the benefits of, the 
Credit Agreement, dated as of November 2, 1998, as the same may be 
amended, supplemented, replaced, renewed or otherwise modified from time 
to time (as so modified, the "Credit Agreement"), by and among (a) the 
Borrower, (b) the financial institutions from time to time party 
thereto, and (c) Credit Suisse First Boston and Fleet National Bank, as 
Agents.  The Credit Agreement provides for, among other things, the 
acceleration of the maturity hereof upon the occurrence of certain 
events and for voluntary and mandatory prepayments under certain 
circumstances and upon certain terms and conditions. This Note is 
entitled to the benefits of the other Loan Documents described in the 
Credit Agreement.
Terms with initial capital letters used but not defined herein 
have the meanings assigned to them in the Credit Agreement. All payments 
due hereunder shall be made to the Agents at the time and place, in the 
type of funds, and in the manner set forth in the Credit Agreement, 
without any deduction whatsoever, including, without limitation, any 
deduction for any set-off, recoupment, counterclaim or Taxes. The 
Borrower hereby waives diligence, presentment, demand, protest, notice 
of dishonor and all other demands and notices in connection with the 
execution, delivery, performance or enforcement of this Note, except as 
otherwise set forth in the Credit Agreement.
The Lender is authorized (but not obligated) to endorse on the 
Schedule hereto, or on a continuation thereof, each Loan made by the 
Lender and each payment or prepayment with respect thereto. The Borrower 
promises to pay all costs and expenses, including attorneys' fees and 
disbursements, incurred in the collection or enforcement hereof.
Except as permitted by Article l8 of the Credit Agreement, this 
Note may not be assigned to any Person.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, 
THE LAWS OF CALIFORNIA. THE BORROWER AND, BY ACCEPTANCE IIEREOF, THE 
LENDER WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION UNDER THIS NOTE 
OR ANY ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY, 
REGARDLESS OF WIIICH PARTY INITIATES SUCH ACTION OR ACTIONS.

                                      HMT Technology Corporation
                                      By:             
                                      Name:   
                                      Title:  




                                SCHEDULE
                            REVOLVING LOAN NOTE


 Funding   Type and   Interest   Interest   Amount of   Unpaid    Notation
  Date     Amount of   Period      Rate     Principal  Principal   Made By
             Loan                            Paid or   Amount of
                                             Prepaid     Note














                                                                 EXHIBIT B
FORM OF LOAN REQUEST
TO:     CREDIT SUISSE FIRST BOSTON, as Agent
11 Madison Avenue
New York, NY 10010
FLEET NATIONAL BANK, as Agent
Mail Stop:  MA OF D07A
One Federal Street
Boston, MA  02110
Reference is hereby made to the Credit Agreement, dated as of 
November 2, 1998, as the same may be amended, supplemented, replaced, 
renewed or otherwise modified from time to time (as so modified, the 
"Credit Agreement"), by and among (a) HMT Technology Corporation (the 
"Borrower"), (b) the financial institutions from time to time party 
thereto, and (c) Credit Suisse First Boston, and Fleet National Bank, as 
Agents.  Terms with initial capital letters used but not defined herein 
have the meanings assigned to them in the Credit Agreement.
Pursuant to Article 2 of the Credit Agreement:
1. The Borrower hereby requests to borrow Revolving Credit 
Loans in the aggregate amount of $ ____________ on 
________________________  in the form of __________  Loans [for an 
Interest Period, in the case of LIBOR Rate Loans, of ____________ 
months]; and
2. The Borrower hereby represents and warrants as follows:
(a) All of the representations and warranties 
contained in Article 6 of the Credit Agreement and in the other Loan 
Documents are true and correct in all material respects on and as of the 
date hereof as though made on and as of this date (except to the extent 
that such representations and warranties expressly were made only as of 
a specific date);
(b) No Default or Event of Default exists or 
would result from the making of the Loans; and
(c) All other conditions to borrowing set forth 
in Article 11 of the Credit Agreement are satisfied.
Date:____________________.
HMT Technology Corporation, a
Delaware corporation
By:             
Name:   
Title:  

                                                                   EXHIBIT C
                       FORM OF COMPLIANCE CERTIFICATE
To:  Credit Suisse First Boston, as Agent
11 Madison Avenue
New York, NY 10010

To:  Fleet National Bank, as Agent
Mail Stop:  MA OF D07A
One Federal Street
Boston, MA  02110

Re: Compliance Certificate

Ladies and Gentlemen:

Reference is made to the Credit Agreement, dated as of November 2, 
1998 as the same may be amended, supplemented, replaced, renewed or 
otherwise modified from time to time (as so modified, the "Credit 
Agreement"), by and among (a) HMT Technology Corporation (the 
"Borrower"), (b) the financial institutions from time to time party 
thereto, and (c) Credit Suisse First Boston and Fleet National Bank, as 
Agents.  Capitalized terms which are used but not defined herein and 
which are defined in the Credit Agreement shall have the respective 
meanings assigned to such terms in the Credit Agreement.

This is a Compliance Certificate delivered pursuant to   7.4(c) of 
the Credit Agreement with respect to the financial covenants set forth 
in Article 9 of the Credit Agreement. This Compliance Certificate has 
been duly executed by the principal financial or accounting officer of 
the Borrower.

1. No Default. To the best knowledge and belief of the 
undersigned, (a) each of the representations and warranties of the 
Borrower contained in the Credit Agreement, the other Loan Documents, or 
in any document or instrument delivered pursuant to or in connection 
with any of the Loan Documents is true as of the date hereof, with the 
same effect as if made at and as of the date hereof (except to the 
extent of changes resulting from transactions contemplated or permitted 
by the Credit Agreement and the other Loan Documents and changes 
occurring in the ordinary course of business that singly or in the 
aggregate are not materially adverse to the business or financial 
condition of the Borrower and its Subsidiaries, taken as a whole, or to 
the extent that such representations and warranties relate expressly to 
an earlier date) and (b) no Default or Event of Default has occurred and 
is continuing under the Credit Agreement. Attached hereto as Appendix I 
are all relevant calculations setting forth the Borrower's compliance 
with Article 9 of the Credit Agreement measured as of the last day of 
the fiscal [quarter] [year] ended on _______ or, if required, during the 
period covered by the financial statements delivered herewith, together 
with the reconciliations to reflect changes, if any, in GAAP since the 
Balance Sheet Date.

2. Financial Statements. Together with this Compliance 
Certificate, the Borrower is delivering to each Bank the financial 
statements required pursuant to   7.4 of the Credit Agreement.

 IN WITNESS WHEREOF, the undersigned has signed this Compliance 
Certificate on ______________________.
 By:            

        Title:  


                                APPENDIX I
                          9.1. Leverage Ratio

 Compliance period: four-quarter period immediately preceding 
compliance determination date

 A.     Total Funded Debt:                                        $____________

 B.     EBITDA:

     l.     Measured for the four-quarter period immediately 
     preceding the compliance determination date (treated as 
     a single accounting period)

       (a)    Consolidated earnings (or loss) from 
              operations of Borrower and its Subsidiaries for 
              such four quarter period (after all expenses and 
              other proper charges but before provision for any 
              income taxes, interest expense rent or operating 
              lease expense for such period)                      $____________

       (b)    Depreciation and amortization for such  period      $____________


       (c)    Rent and operating lease expense for such  period   $____________


       (d)    Non-recurring restructuring charges of up to  $50,000,000
              recorded in the fiscal quarter ending  December 31, 1998 (but no
              more than $5,000,000 of such restructuring charges may be cash
              charges)                                            $____________

       (e)    Sum of Items 1(a) through 1(d)                      $____________

 C.     Ratio (Total Funded Debt to EBITDA) (Item A  divided by Item B1(e)) 
                                                                   ____:1.00

 Maximum Permitted Ratio of Total Funded Debt to EBITDA:  (i) 3:25 to  1:00
through  June 30, 1999  and (ii)  2.75/1:00  thereafter

        Compliance                                      _____yes/no


                       9.2 Interest Coverage

 Compliance period:  four quarter period immediately preceding 
compliance determination date

 A.     EBITR:                                                    $____________

Consolidated earnings (or loss) from operations of 
Borrower and its Subsidiaries for 4-quarter period 
immediately preceding the compliance determination date 
but before provision for any income taxes, interest 
expense, rent or operating lease expense for such period

 B.     Consolidated Total Interest Expense:                      $____________

Aggregate amount of interest required to be paid or 
accrued by Borrower and its Subsidiaries during the 4-
quarter period immediately preceding the compliance 
determination date on all Indebtedness of Borrower and 
its Subsidiaries outstanding during all or part of such 
period (whether or not such interest was or is required 
to be reflected as an item of expense or capitalized), 
including payments of interest in respect of Capitalized 
Leases

 C.     Consolidated rent and operating lease expense of 
the Borrower and its Subsidiaries for the 4-quarter 
period immediately preceding the compliance 
determination date

 D.     Ratio of EBITR to Consolidated Total Interest                  ___:1.00
Expense plus rent and operating lease expense (Item A 
divided by (Item B plus Item C))

 Minimum Ratio of EBITR to Consolidated Total Interest Expense:      2.50:1.00

        Compliance                                      _____yes/no


                              9.3. Quick Ratio

 Compliance period: each fiscal quarter

      A. AA.         1.      Cash plus cash equivalents of           $_________
      the Borrower and its Subsidiaries on the 
      compliance determination date

      2.     Net current accounts receivable of the                  $_________
      Borrower and its Subsidiaries on the compliance 
      determination date

      3.     Cash and cash equivalents of the Borrower               $_________
      and its Subsidiaries subject to a lien securing 
      Indebtedness

      4.     Sum of Item 1 plus Item 2 minus Item 3                  $_________

      B.     1.      Consolidated current liabilities                $_________

             2.      Consolidated current liabilities                $_________
             secured by a lien on cash or cash equivalents

             3.      Item 1 minus Item 2                             $_________

      C.     Ratio of A.4. divided by B.3.                            ____:1.00

      Minimum Quick Ratio:
        Compliance                                      ____  yes/no



                        9.4. Profitable Operations

      I.     Compliance period: each fiscal quarter 

     A.      EBITR:                                                 I.

         1.     Consolidated earnings (or loss) from              $____________

         operations of Borrower and its Subsidiaries 
         for fiscal quarter most recently ended but 
         before provision for any income taxes, 
         interest expense, rent or operating lease 
         expense for such period, plus non-recurring 
         restructuring charges recorded in the fiscal 
         quarter ending December 31, 1998 (but no 
         more than $10,000,000 of such restructuring 
         charges may be cash charges)

   No fiscal quarter shall be less than $1.00

        Compliance                                      _____yes/no

        B.      Consolidated Net Income (or Deficit):

            ' 1.     Consolidated net income (or deficit)          $____________
              of Borrower and its Subsidiaries for fiscal 
              quarter most recently ended after deduction 
              of all expenses, taxes and other proper 
              charges, and after eliminating all 
              extraordinary nonrecurring items of income 
              and expense for such period, plus non-
              recurring restructuring charges recorded in 
              the fiscal quarter ending December 31, 1998 
             (but no more than $10,000,000 of such 
              restructuring charges may be cash charges)

   No fiscal quarter shall be less than $1.00

        Compliance                                      _____yes/no


                           9.5. Tangible Net Worth

   Compliance period: each fiscal quarter

        A. AA.         Tangible Net Worth                            $_________

        1.     Common Stockholders' equity capital plus              $_________
        surplus plus retained earnings of the Borrower and 
        its Subsidiaries

        2.  Intangible Assets of the Borrower and its  Subsidiaries  $_________

        3.     Item 1 minus Item 2                                   $_________

        Minimum Permitted Tangible Net Worth

        B.     Minimum Tangible Net Worth Calculation

            1.      85% of Tangible Net Worth measured as            $_________
            of September 30, 1998

            2.      75% of Consolidated Net Income earned            $_________
            in each quarterly accounting period ending after 
            September 30, 1998

            3.      100% of the Net Issuance Proceeds of             $_________
            any new equity the Borrower issues after 
            September 30, 1998

            4.      100% of any Subordinated Debt or                 $_________
            Permitted New Subordinated Debt that is converted 
            to equity of the Borrower after September 30, 1998

           5.      Sum of Items 1 through4                           $_________

        Compliance                                      ____  yes/no





 EXHIBIT D
 FORM OF ASSIGNMENT AND ACCEPTANCE
 Dated __________________________, 199_
 Reference is hereby made to the Revolving Credit Agreement, dated 
as of November 2, 1998 (as the same may be amended, supplemented, 
replaced, renewed or otherwise modified from time to time, the "Credit 
Agreement"), by and among (a) HMT Technology Corporation (the 
"Borrower"), (b) the financial institutions from time to time party 
thereto, and (c) Credit Suisse First Boston and Fleet National Bank, as 
Agents.  Terms with initial capital letters used but not defined herein 
have the meanings assigned to them in the Credit Agreement.
 _________________________________________ (the "Assignor") and 
_________________________________ (the "Assignee") agree as follows:
1. Subject to Section 3 below, the Assignor hereby sells and 
assigns to the Assignee, and the Assignee hereby purchases and assumes 
from the Assignor, WITHOUT RECOURSE, a _____________% interest in and to 
all of the Assignor's rights and obligations under the Credit Agreement 
and the other Loan Documents as of the Effective Date (as defined 
below), including, without limitation, such percentage interest in the 
Assignor's Commitment as is in effect on the Effective Date, the 
Revolving Loans owing to the Assignor on the Effective Date, the 
Revolving Credit Notes held by the Assignor and the Assignor's 
participation in Letter of Credit liability on the Effective Date.
2. The Assignor (a) represents and warrants that, as of the 
date hereof, its Commitment (without giving effect to assignments 
thereof which have not yet become effective) is $________________; (b) 
represents and warrants that it is the legal and beneficial owner of the 
interest being assigned by it hereunder and that such interest is free 
and clear of any adverse claim; (c) makes no representation or warranty 
and assumes no responsibility with respect to any statements, warranties 
or representations made in or in connection with the Credit Agreement or 
any of the other Loan Documents or the execution, legality, validity, 
enforceability, genuineness, sufficiency or value of the Credit 
Agreement or any of the other Loan Documents or any other instrument or 
document furnished pursuant thereto; (c) makes no representation or 
warranty and assumes no responsibility with respect to the financial 
condition of the Borrower or any of its obligations under the Loan 
Documents or any other instrument or document furnished pursuant thereto 
and (d) attaches the Revolving Credit Notes referred to in paragraph 1 
above and requests that the Agents exchange such notes for a new 
Revolving Credit Note as follows: a Revolving Credit Note, dated 
_____________, in the principal amounts of $________________, payable to 
the Assignor or its registered assigns.
3. The Assignee (a) confirms that it has received a copy of 
the Credit Agreement and the other Loan Documents, together with copies 
of the financial statements delivered pursuant to Article 7 thereof 
prior to the date hereof and such other documents and information as it 
has deemed appropriate to make its own credit analysis and decision to 
enter into this Assignment and Acceptance; (b) agrees that it will, 
independently and without reliance upon the Agents or any other Bank, 
and based on such documents and information as it shall deem appropriate 
at the time, continue to make its own credit decisions in taking or not 
taking action under the Credit Agreement or the other Loan Documents; 
(c) appoints and authorizes the Agents to take such actions on its 
behalf and to exercise such powers under the Loan Documents as are 
delegated to the Agents by the terms thereof, together with such powers 
as are reasonably incidental thereto;(d) agrees that it will perform in 
accordance with their terms all of the obligations which by the terms of 
the Credit Agreement or the other Loan Documents are required to be 
performed by it as a Bank; (e) specifies as its address for notices the 
office set forth beneath its name on the signature pages hereof.
4. The effective date of this Assignment and Acceptance 
shall be the date hereof; provided that the Agents (and the Borrower to 
the extent required under   18.1) shall have consented to the assignment 
(such date, the "Effective Date").
5. Upon acceptance and recording by the Agents, if any, as 
of the Effective Date, (a) the Assignee shall be a party to the Credit 
Agreement and, to the extent provided in this Assignment and Acceptance, 
have the rights and obligations of a Bank thereunder and under the other 
Loan Documents and (b) the Assignor shall, to the extent provided in 
this Assignment and Acceptance, relinquish its rights and be released 
from its obligations under the Credit Agreement and the other Loan 
Documents.
6. Upon such acceptance and recording, from and after the 
Effective Date, the Agents shall make all payments under the Credit 
Agreement and the other Loan Documents in respect of the interest 
assigned hereby (including all payments of principal, interest and fees) 
to the Assignee. The Assignor and Assignee shall make all appropriate 
adjustments in payments under the Credit Agreement and the other Loan 
Documents for periods prior to the Effective Date directly between 
themselves.

7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND 
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF CALIFORNIA.
                                     [NAME OF ASSIGNOR]
                                     By:             
                                     Name:   
                                     Title:  
                                     After the Effective Date:
                                     Commitment: $

                                     [NAME OF ASSIGNEE]
                                     By:             
                                     Name:   
                                     Title:  
                                     Notice Address:
                                     After the Effective Date:
                                     Commitment: $
Accepted this   day of ________________

CREDIT SUISSE FIRST 
BOSTON, as Agent
By:                                     
Name:                                   
Title:                                  

By:                                     
Name:                                   
Title:                                  

FLEET NATIONAL BANK,
as Agent

By:                                     
Name:                                   
Title: