Exhibit 10.31


                               RECOTON CORPORATION

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

                             NOTE PURCHASE AGREEMENT

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


                           DATED AS OF JANUARY 6, 1997



                ADJUSTABLE RATE SENIOR NOTES DUE JANUARY 6, 2007

<PAGE>


                                TABLE OF CONTENTS
                             (NOT PART OF AGREEMENT)
                                                                     PAGE

1.  AUTHORIZATION OF ISSUE OF NOTES..................................  1

2.  PURCHASE AND SALE OF NOTES.......................................  1

3.  CONDITIONS OF CLOSING............................................  1
         3A.      Opinion of Purchasers' Special Counsel.............  2
         3B.      Opinions of Company's Counsel and Subsidiaries'
                  Counsel............................................  2
         3C.      Subsidiary Guaranty and Sharing Agreement..........  2
         3D.      Representations and Warranties; No Default.........  2
         3E.      Purchase Permitted By Applicable Laws..............  2
         3F.      Sale of Notes to Other Purchasers..................  3
         3G.      Placement Number...................................  3
         3H.      Closing Expenses...................................  3
         3I.      Indebtedness of Recoton Audio Corporation..........  3
         3J.      Proceedings........................................  3
         3K.      Amendment to Bank Credit Agreement; Bank Consent...  3

4.       PREPAYMENTS AND INTEREST....................................  3
         4A.      Required Prepayments...............................  3
         4B.      Optional Prepayment With Yield-Maintenance Amount..  4
         4C.      Notice of Optional Prepayment......................  4
         4D.      Partial Payments Pro Rata..........................  4
         4E.      Obligation to Purchase during Existence of Put
                  Condition..........................................  4
         4F.      Retirement of Notes................................  5
         4G.      Interest Payments..................................  6

5.       AFFIRMATIVE COVENANTS.......................................  7
         5A.      Financial Statements...............................  7
         5B.      Information Required by Rule 144A..................  8
         5C.      Inspection of Property.............................  9
         5D.      Other Information..................................  9
         5E.      Payment of Taxes and Claims........................ 10
         5F.      Maintenance of Properties; Corporate Existence;
                  etc................................................ 10
         5G.      Covenant to Secure Notes Equally................... 11

6.       NEGATIVE COVENANTS.......................................... 11
         6A.      Line of Business................................... 11
         6B.      Current Debt....................................... 11
         6C.      Funded Debt........................................ 11
         6D.      Interest Expense Coverage.......................... 13
         6E.      Net Worth.......................................... 13
         6F.      Restricted Investments and Restricted Payments..... 14
         6G.      Mergers and Consolidations......................... 14
         6H.      Transfers of Property; Subsidiary Stock............ 15
         6I.      Liens.............................................. 18
         6J.      Permitted Investments.............................. 20
         6K.      Transactions with Affiliates....................... 20
         6L.      Designation of Subsidiaries........................ 20
         6M.      Subsidiary Guaranty................................ 20
         6N.      PRC Subsidiaries................................... 20

7.       EVENTS OF DEFAULT........................................... 20
         7A.      Acceleration....................................... 20
         7B.      Rescission of Acceleration......................... 24
         7C.      Notice of Acceleration or Rescission............... 24
         7D.      Other Remedies..................................... 24

8.       REPRESENTATIONS, COVENANTS AND WARRANTIES................... 24
         8A.      Organization; Subsidiaries and Affiliates.......... 24
         8B.      Financial Statements............................... 25
         8C.      Actions Pending.................................... 25
         8D.      Outstanding Debt................................... 25
         8E.      Title to Properties................................ 26
         8F.      Taxes.............................................. 26
         8G.      Conflicting Agreements and Other Matters........... 26
         8H.      Offering of Notes.................................. 26
         8I.      Use of Proceeds.................................... 26
         8J.      ERISA.............................................. 27
         8K.      Governmental Consent............................... 27
         8L.      Environmental Compliance........................... 27
         8M.      Disclosure......................................... 27

9.       REPRESENTATIONS OF EACH PURCHASER........................... 28
         9A.      Nature of Purchase................................. 28
         9B.      Source of Funds.................................... 28

10.      DEFINITIONS................................................. 29
         10A.     Yield-Maintenance Terms............................ 29
         10B.     Other Terms........................................ 30
         10C.     Generally Accepted Accounting Principles........... 42

11.      MISCELLANEOUS............................................... 43
         11A.     Note Payments...................................... 43
         11B.     Expenses........................................... 43
         11C.     Consent to Amendments.............................. 43
         11D.     Form, Registration, Transfer and Exchange of
                  Notes; Lost Notes.................................. 44
         11E.     Persons Deemed Owners; Participations.............. 44
         11F.     Survival of Representations and Warranties;
                  Entire Agreement................................... 44
         11G.     Successors and Assigns............................. 45
         11H.     Notices............................................ 45
         11I.     Payments Due on Non-Business Days.................. 45
         11J.     Disclosure to Other Persons........................ 45
         11K.     Satisfaction Requirement........................... 46
         11L.     Governing Law...................................... 46
         11M.     Severability....................................... 47
         11N.     Descriptive Headings............................... 47
         11O.     Counterparts....................................... 47
         11P.     Severalty of Obligations........................... 47

Annex 1           --       Purchaser Schedule
Annex 2           --       Wire Information
Annex 3           --       Information as to Company

Exhibit A         --       Form of Note
Exhibit B1        --       Form of Opinion of Stroock & Stroock & Lavan
Exhibit B2        --       Form of Opinion of McCarthy TJtrault
Exhibit B3        --       Form of Opinion of Siao, Wen and Leung
Exhibit B4        --       Form of Opinion of Lang & Rahmann
Exhibit B5        --       Form of Opinion of de Libero Camilli Boniello
                           Bartoli Di Garbo
Exhibit C         --       Form of Subsidiary Guaranty
Exhibit D         --       Form of Sharing Agreement


<PAGE>

                               RECOTON CORPORATION
                               2950 LAKE EMMA ROAD
                            LAKE MARY, FLORIDA 32746
                ADJUSTABLE RATE SENIOR NOTES DUE JANUARY 6, 2007


                                                      As of January 6, 1997

To Each of the Purchasers Named in the
Purchaser Schedule Attached Hereto

Ladies and Gentlemen:

          The undersigned, Recoton Corporation (herein called the "COMPANY"),
hereby agrees with the purchasers named in the Purchaser Schedule attached as
Annex 1 hereto (herein called the "PURCHASERS") as follows:

          1. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize the
issue of its senior promissory notes in the aggregate principal amount of
$75,000,000, to be dated the date of issue thereof, to mature January 6, 2007,
to bear interest on the unpaid balance thereof as set forth in paragraph 4G
hereof, and to be substantially in the form of Exhibit A attached hereto. The
term "NOTES" as used herein shall include each such senior promissory note
delivered pursuant to any provision of this Agreement and each such senior
promissory note delivered in substitution or exchange for any other Note
pursuant to any such provision.

          2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to
each Purchaser and, subject to the terms and conditions herein set forth, each
Purchaser agrees to purchase from the Company, the aggregate principal amount of
Notes set forth opposite such Purchaser's name in the Purchaser Schedule
attached as Annex 1 hereto at 100% of such aggregate principal amount. The
Company will deliver to each Purchaser, at the offices of Hebb & Gitlin, a
Professional Corporation, One State Street, Hartford, Connecticut 06103, one or
more Notes registered in such Purchaser's name, evidencing the aggregate
principal amount of Notes to be purchased by such Purchaser and in the
denomination or denominations specified with respect to such Purchaser in the
Purchaser Schedule against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's account, as directed by
the Company on Annex 2 hereto, on the date of closing, which shall be January 6,
1997 or any other date on or before January 31, 1997 upon which the Company and
the Purchasers may mutually agree (the "CLOSING DATE").

          3. CONDITIONS OF CLOSING. Each Purchaser's obligation to purchase and
pay for the Notes to be purchased by such Purchaser hereunder is subject to the
satisfaction, on or before the Closing Date, of the following conditions:

          3A. OPINION OF PURCHASERS' SPECIAL COUNSEL. Such Purchaser shall have
received from Hebb & Gitlin, a Professional Corporation, which is acting as
special counsel for the Purchasers in connection with this transaction, a
favorable opinion satisfactory to such Purchaser as to such matters incident to
the matters herein contemplated as it may reasonably request.

          3B. OPINIONS OF COMPANY'S COUNSEL AND SUBSIDIARIES' COUNSEL. Such
Purchaser shall have received from

                  (i) Stroock & Stroock & Lavan, regular counsel for the
         Company, a favorable opinion satisfactory to such Purchaser and
         substantially in the form of Exhibit B1 attached hereto;

                  (ii) McCarthy TJtrault, special counsel for Subsidiaries
         organized in Canada, a favorable opinion satisfactory to such Purchaser
         and substantially in the form of Exhibit B2 attached hereto;

                  (iii) Siao, Wen and Leung, special counsel for Subsidiaries
         (other than Avelco Trading Limited) organized in Hong Kong, a favorable
         opinion satisfactory to such Purchaser and substantially in the form of
         Exhibit B3 attached hereto;

                  (iv) Lang & Rahmann, special counsel for Subsidiaries
         organized in Germany, a favorable opinion satisfactory to such
         Purchaser and substantially in the form of Exhibit B4 attached hereto;
         and

                  (v) de Libero Camilli Boniello Bartoli Di Garbo, special
         counsel for Subsidiaries organized in Italy, a favorable opinion
         satisfactory to such Purchaser and substantially in the form of Exhibit
         B5 attached hereto.

          3C. SUBSIDIARY GUARANTY AND SHARING AGREEMENT. Each Restricted
Subsidiary, other than the Excluded Subsidiaries, shall have executed and
delivered the Subsidiary Guaranty and the Banks shall have executed and
delivered the Sharing Agreement.

          3D. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations
and warranties contained in paragraph 8 shall be true on and as of the Closing
Date, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on the Closing Date no Event of Default or
Default; and the Company shall have delivered to such Purchaser an Officer's
Certificate, dated the Closing Date, to both such effects. In addition, the
Company shall have delivered to such Purchaser a certificate from the Secretary
or an Assistant Secretary of the Company certifying the incumbency of officers
of the Company executing this Agreement, the Notes and other documents,
attaching copies of the Company's by-laws and resolutions authorizing its
execution of this Agreement and its issuance of the Notes, and certifying as to
such other matters as the Purchasers shall reasonably request.

          3E. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment
for the Notes to be purchased by such Purchaser on the Closing Date on the terms
and conditions herein provided (including the use of the proceeds of such Notes
by the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, section 5 of the Securities Act or Regulation G,
T or X of the Board of Governors of the Federal Reserve System) and shall not
subject such Purchaser to any tax, penalty, liability or other onerous condition
under or pursuant to any applicable law or governmental regulation, and such
Purchaser shall have received such certificates or other evidence as it may
request to establish compliance with this condition.

          3F. SALE OF NOTES TO OTHER PURCHASERS. The Company shall have sold to
the other Purchasers the Notes to be purchased by them on the Closing Date and
shall have received payment in full therefor.

          3G. PLACEMENT NUMBER. The Company shall have obtained or caused to be
obtained a placement number for the Notes from the CUSIP Service Bureau of
Standard & Poor's.

          3H. CLOSING EXPENSES. The Company shall have paid at the closing the
statement for fees and disbursements of the special counsel to the Purchasers
presented on the Closing Date.

          3I. INDEBTEDNESS OF RECOTON AUDIO CORPORATION. The indebtedness of
Recoton Audio Corporation (formerly known as International Jensen Incorporated)
evidenced by its 8.02% Senior Notes due May 30, 2004 in the aggregate principal
amount of $15,000,000 shall have been paid in full and the Purchasers shall have
received copies of such documents confirming compliance with the foregoing as
they may reasonably request.

          3J. PROCEEDINGS. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all documents
incident thereto shall be satisfactory in substance and form to such Purchaser,
and such Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.

          3K. AMENDMENT TO BANK CREDIT AGREEMENT; BANK CONSENT. The Company and
the Banks shall have entered into an amendment to the Bank Credit Agreement, in
form and substance satisfactory to such Purchaser, and the Banks shall have
delivered to such Purchaser a written consent in respect of the transactions
contemplated by this Agreement and the Subsidiary Guaranty.

          4. PREPAYMENTS AND INTEREST. The Notes shall be subject to required
prepayment as set forth in paragraph 4A hereof, optional prepayment at the
option of the Company as set forth in paragraph 4B hereof and prepayment at the
option of the Purchasers as provided in paragraph 4E hereof. Interest shall
accrue and be payable as set forth in paragraph 4G hereof.

          4A. REQUIRED PREPAYMENTS. Until the Notes shall be paid in full, the
Company shall apply to the prepayment of the Notes, without premium, the sum of
$10,714,286 on January 6 in each of the years 2001 to 2006, inclusive, and such
principal amounts of the Notes, together with interest thereon to the prepayment
dates, shall become due on such prepayment dates. The remaining unpaid principal
amount of the Notes, if any, together with interest accrued thereon, shall
become due on the maturity date of the Notes.

          4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes shall
be subject to prepayment, in whole at any time or from time to time in part (in
multiples of $5,000,000), at the option of the Company, at 100% of the principal
amount so prepaid plus interest thereon to the prepayment date and the
Yield-Maintenance Amount, if any, with respect to each Note being prepaid. Any
partial prepayment of Notes pursuant to this paragraph 4B shall be applied,
first, to the principal amount due on the maturity date of the Notes and,
second, to the required prepayments applicable to the Notes, as set forth in
paragraph 4A hereof, in the inverse order of the maturity thereof.

          4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder
of each Note irrevocable written notice of any prepayment pursuant to paragraph
4B hereof not less than ten Business Days prior to the prepayment date,
specifying such prepayment date and the principal amount of the Notes, and of
the Notes held by such holder, to be prepaid on such date and stating that such
prepayment is to be made pursuant to paragraph 4B of this Agreement. Notice of
prepayment having been given as aforesaid, the principal amount of the Notes
specified in such notice, together with interest thereon to the prepayment date
and together with the Yield- Maintenance Amount, if any, with respect thereto,
shall become due and payable on such prepayment date. The Company shall, on or
before the day on which it gives written notice of any prepayment pursuant to
paragraph 4B hereof, also call to give telephonic notice of the principal amount
of the Notes to be prepaid and the prepayment date to each Significant Holder
which shall have designated a recipient of (and provided a current telephone
number for) such notices in the Purchaser Schedule attached hereto or by notice
in writing to the Company.

          4D. PARTIAL PAYMENTS PRO RATA. Upon any partial prepayment of the
Notes pursuant to paragraph 4A hereof or paragraph 4B hereof, the principal
amount so prepaid shall be allocated to all Notes at the time outstanding
(including, for the purpose of this paragraph 4D only, all Notes prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any of
its Subsidiaries or Affiliates other than by prepayment pursuant to paragraph 4A
hereof or paragraph 4B hereof) in proportion to the respective outstanding
principal amounts thereof.

          4E. OBLIGATION TO PURCHASE DURING EXISTENCE OF PUT CONDITION. In the
event that

                  (i) the Company delivers a written notice (a "WAIVER NOTICE")
         to the holders of the Notes requesting a waiver (which notice shall set
         forth detailed information concerning the transaction for which the
         waiver is requested) of paragraph 6G hereof (a "MERGER PUT Condition"),
         or

                  (ii) the Company or any Restricted Subsidiary shall have
         Transferred Property pursuant to paragraph 6H(i)(d) (without giving
         effect to the first proviso to paragraph 6H(i)) in any period of 12
         consecutive calendar months with an aggregate book value equal to or
         greater than 15% of Consolidated Total Assets or that has contributed
         15% or more to Consolidated Operating Income (such book value or such
         contribution, whichever exceeds the percentage limitation more, herein
         called the "EXCESS AMOUNT") during such period (an "ASSET TRANSFER PUT
         CONDITION"),

each holder of Notes shall have the right, by delivery of a written notice (a
"PUT NOTICE") within 60 days (the "SECOND PUT CUT-OFF DATE") after (a) receipt
of such request in respect of a Merger Put Condition or (b) the later of (1) the
expiration of such 12 month period or (2) its receipt of a notice pursuant to
paragraph 6H(iii) hereof in respect of an Asset Transfer Put Condition, to
require the Company to purchase, and the Company will purchase, the Put Amount
(determined as set forth in clause (A) or clause (B) below, as applicable).
Promptly, but in any event within two Business Days after its receipt of any Put
Notice, the Company shall give written notice thereof to all other holders of
Notes, such notice to include the First Put Date and the Second Put Date (as
such terms are defined below).

          On the date (the "FIRST PUT DATE") which is 30 days after the date of
the first Put Notice delivered to the Company by a holder of Notes (or the first
Business Day thereafter if such 30th day shall not be a Business Day), but only
if the First Put Date would occur prior to the Second Put Date, the Company
shall prepay a principal amount of the Notes equal to the Put Amount to each
holder of Notes that has delivered a Put Notice not later than 25 days after
such first Put Notice (the "FIRST PUT CUT-OFF DATE"), at 100% of the principal
amount thereof, together with interest thereon to such Put Date and the
Yield-Maintenance Amount, if any, in respect thereof.

          On the date (the "SECOND PUT DATE") which is 5 days after the Second
Put Cut-Off Date, the Company shall prepay a principal amount of the Notes equal
to the Put Amount to each holder of Notes that has delivered a Put Notice
subsequent to the First Put Cut-Off Date and not later than the Second Put
Cut-Off Date at 100% of the principal amount thereof, together with interest
thereon to such Put Date and the Yield-Maintenance Amount, if any, in respect
thereof. In addition, on the Second Put Date, the Company shall make a payment
to each holder of Notes that delivered a Put Notice on or prior to the First Put
Cut-Off Date in an amount equal to (1) the additional principal amount of Notes,
plus (2) interest thereon accrued to the Second Put Date and Yield-Maintenance
Amount in respect thereof determined as of the Second Put Date, that such holder
would have received had the Put Amount for the First Put Date been determined by
reference to the aggregate principal amount of Notes as to which Put Notices
have been delivered as of the Second Put Date, rather than the outstanding
principal amount of all Notes.

         As used in this paragraph 4E, "PUT AMOUNT" shall mean,

                  (A) in the case of a Merger Put Condition, all or a part of
         the Notes of the holder delivering the related Put Notice, as specified
         in such Put Notice, or

                  (B) in the case of an Asset Transfer Put Condition, an amount
         equal to the net proceeds received by the Company which are ratably
         attributable to the Excess Amount multiplied by a fraction, the
         numerator of which, in the case of the First Put Date, is the
         outstanding principal amount of all Notes and, in the case of the
         Second Put Date, is the outstanding principal amount of such holder's
         Notes and the denominator of which is the aggregate principal amount of
         all Notes as to which Put Notices have been delivered in connection
         with such Asset Transfer Put Condition (or such lesser amount of Notes
         as such holder shall have specified in its Put Notice).

Any partial prepayment of Notes pursuant to this paragraph 4E shall be applied
ratably to the principal amount due on the maturity date of the Notes and to the
required prepayments applicable to the Notes as set forth in paragraph 4A
hereof.

          4F. RETIREMENT OF NOTES. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or
in part prior to their stated final maturity (other than by prepayment pursuant
to paragraph 4A hereof, paragraph 4B hereof or paragraph 4E hereof or upon
acceleration of such final maturity pursuant to paragraph 7A hereof), or
purchase or otherwise acquire, directly or indirectly, Notes held by any holder
unless the Company or such Subsidiary or Affiliate shall have offered to prepay
or otherwise retire or purchase or otherwise acquire, as the case may be, the
same proportion of the aggregate principal amount of Notes held by each other
holder of Notes at the time outstanding upon the same terms and conditions. Any
Notes so prepaid or otherwise retired or purchased or otherwise acquired by the
Company or any of its Subsidiaries or Affiliates shall not be deemed to be
outstanding for any purpose under this Agreement, except as provided in
paragraph 4D hereof.

         4G.      INTEREST PAYMENTS.

          Interest (computed on the basis of a 360-day year of twelve 30-day
months) shall accrue on the unpaid principal balance of the Notes, from the date
of each Note, and shall be payable to the holders thereof quarterly on the sixth
day of January, April, July and October in each year (each an "INTEREST PAYMENT
DATE"), commencing with the Interest Payment Date next succeeding the date of
such Note, until the principal thereof shall have become due and payable, at the
rate of

                 (i)   8.12% per annum, provided that a Rate Increase
         Event shall not have  occurred, and

                 (ii)  8.75% per annum, if a Rate Increase Event shall
         have occurred,

and on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Yield-Maintenance
Amount at the Applicable Default Interest Rate. If a Rate Increase Event shall
have occurred, the rate of 8.75% per annum shall be deemed to be the interest
rate applicable to each Note, retroactive to the Closing Date, and the Company
shall pay to each holder of Notes, on the Interest Payment Date immediately
succeeding the date of the Rate Increase Event, an amount equal to

                  (a) the amount of interest which would have accrued on the
         outstanding principal balance of such Notes (including, without
         limitation, any interest which may have accrued at the Applicable
         Default Interest Rate), for the period beginning on the Closing Date
         through and including the day preceding such Interest Payment Date, if
         the interest rate applicable to such Notes had been 8.75% during such
         period, minus

                 (b) the amount of interest that accrued on the outstanding
         principal balance of such Notes (including, without limitation, any
         interest which may have accrued at the Applicable Default Interest
         Rate), for the period beginning on the Closing Date through and
         including the day preceding such Interest Payment Date.

The term "RATE INCREASE EVENT" as used herein shall mean the occurrence of any
one or more of the following conditions:

                  (i) Funded Debt Percentage of Consolidated Tangible Gross
         Worth -- Consolidated Funded Debt shall have exceeded 52.5% of
         Consolidated Tangible Gross Worth as of September 30, 1997 or as of
         December 31, 1997, in each case determined as of such dates; or

                  (ii) Ratio of Funded Debt to Consolidated Adjusted Cash Flow
         -- the ratio of (a) Consolidated Funded Debt, determined as of
         September 30, 1997, to Consolidated Adjusted Cash Flow for the period
         of four consecutive complete fiscal quarters of the Company ending on
         such date shall have been greater than 4.00 to 1.00 or (b) Consolidated
         Funded Debt, determined as of December 31, 1997, to Consolidated
         Adjusted Cash Flow for the period of four consecutive complete fiscal
         quarters of the Company ending on such date, shall have been greater
         than 3.50 to 1.00; or

                 (iii) Ratio of Consolidated Adjusted Cash Flow to Interest
         Expense -- the ratio of (a) Consolidated Adjusted Cash Flow for the
         period of four consecutive complete fiscal quarters of the Company
         ending on September 30, 1997 to Consolidated Interest Expense for such
         period shall have been less than 3.75 to 1.00 or (b) Consolidated
         Adjusted Cash Flow for the period of four consecutive complete fiscal
         quarters of the Company ending on December 31, 1997 to Consolidated
         Interest Expense for such period shall have been less than 4.25 to
         1.00.

          5. AFFIRMATIVE COVENANTS.

          5A. FINANCIAL STATEMENTS. The Company covenants that it will deliver
to each Significant Holder in duplicate:

                  (i) as soon as practicable and in any event within 50 days,
         with respect to consolidated statements, or 65 days, with respect to
         consolidating statements, after the end of each quarterly period (other
         than the last quarterly period) in each fiscal year, consolidating and
         consolidated statements of operations and cash flows of the Company and
         the Restricted Subsidiaries for the period from the beginning of the
         current fiscal year to the end of such quarterly period, and a
         consolidating and consolidated balance sheet of the Company and the
         Restricted Subsidiaries as at the end of such quarterly period, setting
         forth in each case in comparative form figures for the corresponding
         period in the preceding fiscal year, all in reasonable detail and
         satisfactory in form to the Required Holders and certified by an
         authorized financial officer of the Company, subject to changes
         resulting from year-end adjustments;

                 (ii) as soon as practicable and in any event within 95 days,
         with respect to consolidated statements, or 105 days, with respect to
         consolidating statements, after the end of each fiscal year,
         consolidating and consolidated statements of operations and cash flows
         and a consolidated statement of stockholders' equity of the Company and
         the Restricted Subsidiaries for such year, and a consolidating and
         consolidated balance sheet of the Company and the Restricted
         Subsidiaries as at the end of such year, setting forth in each case in
         comparative form corresponding consolidated figures from the preceding
         annual audit, all in reasonable detail and satisfactory in form to the
         Required Holders and, as to the consolidated statements, reported on by
         Cornick, Garber & Sandler, LLP or independent public accountants of
         recognized national standing selected by the Company whose report shall
         be without limitation as to the scope of the audit and satisfactory in
         substance to the Required Holders and, as to the consolidating
         statements, certified by an authorized financial officer of the
         Company;

                  (iii) promptly upon transmission thereof, copies of all such
         financial statements, proxy statements, notices and reports as it shall
         send to its public stockholders and copies of all registration
         statements (without exhibits) and all financial statements and reports
          which it files with or makes to the Securities and Exchange Commission
         (or any governmental body or agency succeeding to the functions of the
         Securities and Exchange Commission);

                  (iv) promptly upon receipt thereof, a copy of each other
         report submitted to the Company or any Subsidiary by independent
         accountants in connection with any annual, interim or special audit
         made by them of the books of the Company or any Subsidiary, provided
         that audits conducted with respect to foreign Subsidiaries to satisfy
         statutory requirements need not be delivered unless requested by any
         Significant Holder; and

                  (v)  with reasonable promptness, such other financial
         data as such Significant  Holder may reasonably request.

The consolidating financial statements required by clause (i) and clause (ii)
above shall include the separate financial position of each direct Subsidiary of
the Company (each, a "FIRST TIER SUBSIDIARY"). The financial statements of each
First Tier Subsidiary, however, may reflect the consolidated position of such
First Tier Subsidiary and its direct and indirect Subsidiaries.

          Together with each delivery of consolidating financial statements
required by clause (i) and clause (ii) above, the Company will deliver to each
Significant Holder an Officer's Certificate demonstrating (with computations in
reasonable detail) compliance by the Company and the Restricted Subsidiaries
with the provisions of paragraph 6A through paragraph 6J, inclusive, and
paragraph 6N, and stating that there exists no Event of Default or Default, or,
if any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Company proposes to take with respect
thereto. Together with each delivery of consolidated financial statements
required by clause (ii) above, the Company will deliver to each Significant
Holder a certificate of such accountants stating that, in making the audit
necessary for their report on such financial statements, they have obtained no
knowledge of any Event of Default or Default, or, if they have obtained
knowledge of any Event of Default or Default, specifying the nature and period
of existence thereof. The Company also covenants that immediately after any
Responsible Officer obtains knowledge of an Event of Default or Default, it will
deliver to each Significant Holder an Officer's Certificate specifying the
nature and period of existence thereof and what action the Company proposes to
take with respect thereto.

          5B. INFORMATION REQUIRED BY RULE 144A. The Company covenants that it
will, upon the request of the holder of any Note, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to the reporting requirements of section 13 or 15(d)
of the Exchange Act. For the purpose of this paragraph 5B, the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under the
Securities Act.

          5C. INSPECTION OF PROPERTY. The Company covenants that it will permit
any Person designated by any Significant Holder in writing, at such Significant
Holder's expense, to visit and inspect any of the properties of the Company and
the Subsidiaries, to inspect the corporate books and financial records of the
Company and the Subsidiaries and make copies thereof or extracts therefrom and
to discuss the affairs, finances and accounts of any of such corporations with
the principal officers of the Company and its independent public accountants,
all at such reasonable times and as often as such Significant Holder may
reasonably request.

          5D. OTHER INFORMATION. The Company covenants that it will deliver to
each Significant Holder:

                  (I)      ERISA --

                           (a) within 30 days of becoming aware of the
                  occurrence of any "reportable event" (as such term is defined
                  in section 4043 of ERISA) for which notice thereof has not
                  been waived pursuant to regulations of the Department of
                  Labor, or "prohibited transaction" (as such term is defined in
                  section 406 of ERISA or section 4975 of the Code) in
                  connection with any Pension Plan or any trust created
                  thereunder, a written notice specifying the nature thereof,
                  what action the Company is taking or proposes to take with
                  respect thereto, and, when known, any action taken by the
                  Internal Revenue Service, the Department of Labor or the PBGC
                  with respect thereto, and

                           (b) prompt written notice of and, where applicable,
                  a description of

                                    (1) any notice from the PBGC in respect of
                           the commencement of any proceedings pursuant to
                           section 4042 of ERISA to terminate any Pension Plan
                           or for the appointment of a trustee to administer any
                           Pension Plan, and any distress termination notice
                           delivered to the PBGC under section 4041 of ERISA in
                           respect of any Pension Plan, and any determination of
                           the PBGC in respect thereof,

                                    (2) the placement of any Multiemployer Plan
                           in reorganization status under Title IV of ERISA, any
                           Multiemployer Plan becoming "insolvent" (as such term
                           is defined in section 4245 of ERISA) under Title IV
                           of ERISA, or the whole or partial withdrawal of the
                           Company or any ERISA Affiliate from any Multiemployer
                           Plan and the withdrawal liability  incurred in
                           connection therewith, or

                                    (3) the occurrence of any event, transaction
                           or condition that could result in the incurrence of
                           any liability of the Company or any ERISA Affiliate
                           or the imposition of a Lien on the Property of the
                           Company or any ERISA Affiliate, in either case
                           pursuant to Title I or Title IV of ERISA or pursuant
                           to the penalty or excise tax or security provisions
                           of the Code;

                  (II)     ACTIONS, PROCEEDINGS -- promptly after the
         commencement of any action  or proceeding, of which the
         Company is aware, relating to the Company or any Restricted
         Subsidiary in any court or before any governmental authority or
         arbitration board or tribunal as to which there is a reasonable
         possibility of an adverse determination and that, if adversely
         determined, is reasonably likely to have a material adverse effect on
         the business, condition (financial or otherwise) or operations of the
         Company and the Restricted Subsidiaries taken as a whole, a written
         notice specifying the nature and period of existence thereof and what
         action the Company is taking or proposes to take with respect thereto;
         and

                  (III) CERTAIN ENVIRONMENTAL MATTERS -- prompt written notice
         of and a description of any event or circumstance that, had such event
         or circumstance occurred or existed prior to the Closing Date, would
         have been required to be disclosed as an exception to any statement set
         forth in paragraph 8L hereof and a description of the action that the
         Company is taking or proposes to take with respect thereto.

          5E. PAYMENT OF TAXES AND CLAIMS. The Company covenants that it will,
and will cause each Restricted Subsidiary to, pay before they become delinquent

                  (i)  all taxes, assessments and governmental charges or
         levies imposed upon  it or its Property, and

                  (ii) all claims or demands of materialmen, mechanics,
         carriers, warehousemen, vendors, landlords and other like Persons that,
         if unpaid, might result in the creation of a Lien upon its Property,

provided, that items of the foregoing description need not be paid so long as
such items are being actively contested in good faith and by appropriate
proceedings and reasonable book reserves have been established and maintained
with respect thereto.

          5F. MAINTENANCE OF PROPERTIES; CORPORATE EXISTENCE; ETC. The Company
covenants that it will, and will cause each Restricted Subsidiary to:

                  (I) PROPERTY -- maintain its Property in good condition,
         ordinary wear and tear and obsolescence excepted, and make all
         necessary renewals, replacements, additions, betterments and
         improvements thereto;

                  (II) INSURANCE -- maintain, with financially sound and
         reputable insurers, insurance with respect to its Property and
         business, against such casualties and contingencies, of such types and
         in such amounts as is customary in the case of Persons of established
         reputations engaged in the same or a similar business and similarly
         situated;

                  (III) FINANCIAL RECORDS -- keep proper books of record and
         account, in which full and correct entries shall be made of all
         dealings and transactions of or in relation to the Properties and
         business thereof, and that will permit the production of financial
         statements in accordance with GAAP;

                  (IV) EXISTENCE AND RIGHTS -- do or cause to be done all things
         necessary to preserve and keep in full force and effect its partnership
         or corporate existence, rights and franchises, except as permitted by
         paragraph 6G hereof; and

                  (V) COMPLIANCE WITH LAW -- comply with all laws, ordinances
         and governmental rules and regulations to which it is subject
         (including, without limitation, any environmental protection law) and
         obtain all licenses, certificates, permits, franchises and other
         governmental authorizations necessary to the ownership of its
         Properties and the conduct of its business except for such violations
         and failures to obtain that, in the aggregate, could not reasonably be
         expected to have a material adverse effect on the business, condition
         (financial or otherwise) or operations of the Company and the
         Restricted Subsidiaries taken as a whole.

          5G. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that, if
it or any Subsidiary shall create or assume any Lien upon any of its Property,
whether now owned or hereafter acquired, other than Liens permitted by the
provisions of paragraph 6I hereof (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to paragraph 11C
hereof), it will make or cause to be made effective provision whereby the Notes
will be secured by such Lien equally and ratably with any and all other Debt
thereby secured so long as any such other Debt shall be so secured (provided
that, notwithstanding the foregoing, each holder of Notes shall have the right
to elect, at any time, by delivery of written notice of such election to the
Company, to cause the Notes held by such holder not to be secured by such Lien,
provided, further that the creation or assumption of any such Lien shall
constitute an Event of Default regardless of whether the Notes shall be so
equally and ratably secured).

          6. NEGATIVE COVENANTS.

          6A. LINE OF BUSINESS. The Company will not, and will not permit any
Restricted Subsidiary to, engage in any material business if, as a result
thereof, the business and operations of the Company and its Restricted
Subsidiaries would not be in or directly related to the consumer electronics
industry or activities that are ancillary, incidental or necessary to such
business, provided that the Company and the Restricted Subsidiaries may acquire
businesses that have operations unrelated to the consumer electronics industry
if, with respect to each such acquisition, (i) the assets in respect of such
unrelated operations (the "UNRELATED ASSETS") constitute less than 50% of
consolidated total assets of any such business and contribute less than 50% to
consolidated operating income of any such business and (ii) the Investment in
such Unrelated Assets shall be permitted by the provisions of paragraph 6F
hereof.

          6B. CURRENT DEBT. The Company will not, and will not permit any
Restricted Subsidiary to, have any Current Debt outstanding on any day unless,
within the 12 consecutive complete calendar months immediately preceding such
day, there shall have been at least one period of not less than 30 consecutive
days on each of which Consolidated Current Debt did not exceed

                  (i)      $5,000,000, plus

                  (ii) an amount equal to the amount of additional Funded Debt
         that the Company would have been permitted to incur (but did not incur)
         under paragraph 6C(iii) on such day.

          6C. FUNDED DEBT. The Company will not, and will not permit any
Restricted Subsidiary to, at any time directly or indirectly create, incur,
issue, assume, guarantee or otherwise become liable with respect to any Funded
Debt except:

                  (I)      EXISTING FUNDED DEBT --

                           (a)    Funded Debt evidenced by the Notes and the
                  Subsidiary Guaranty,

                           (b)    other Funded Debt existing on the Closing
                  Date and described in  Part 6C of Annex 3 hereto and

                           (c)    Guarantees existing on the Closing Date by
                  Restricted Subsidiaries in respect of the obligations of the
                  Company under the Bank Credit Agreement and described in Part
                  6C of Annex 3 hereto;

                  (II)     RESTRICTED SUBSIDIARY FUNDED DEBT --

                           (a)    Funded Debt of Restricted Subsidiaries owing
                  to the Company or to  another Restricted Subsidiary and

                           (b)    other Funded Debt of Restricted Subsidiaries,
                  provided that, immediately after, and after giving effect to,
                  the incurrence of any such Funded Debt, the sum, without
                  duplication, of

                                    (1) the aggregate amount of outstanding
                           Funded Debt of Restricted Subsidiaries which was not
                           outstanding on the Closing Date and which is held by
                           Persons other than the Company or a Restricted
                           Subsidiary and outstanding at such time, plus

                                    (2) the aggregate amount of outstanding
                           Debt secured by Liens  permitted by clause (vi)
                           and clause (vii) of paragraph 6I hereof,

                does not exceed 15% of Consolidated Tangible Net Worth; and

                  (III) ADDITIONAL FUNDED DEBT -- additional Funded Debt of the
         Company not otherwise permitted pursuant to this paragraph 6C, provided
         that immediately after the incurrence of such Funded Debt and after
         giving effect thereto and to any concurrent transactions,

                           (a)     the sum of (x) Consolidated Funded Debt plus
                  (y) Excess Current  Debt shall be less than or equal to

                                    (1) 55% of Consolidated Tangible Gross
                           Worth, determined as at the end of the then most
                           recently ended fiscal quarter of the Company, if the
                           incurrence of such Funded Debt occurs on or prior to
                           December 31, 1997, and

                                    (2) 50% of Consolidated Tangible Gross
                           Worth, determined as at the end of the then most
                           recently ended fiscal quarter of the Company, if the
                           incurrence of such Funded Debt occurs after December
                           31, 1997, and

                           (b) the ratio of (x) the sum of (I) Consolidated
                  Funded Debt plus (II) Excess Current Debt to (y) Consolidated
                  Adjusted Cash Flow for the period of four consecutive complete
                  fiscal quarters of the Company most recently ended at such
                  time shall be less than or equal to

                                    (1) 4.50 to 1.00, if the incurrence of such
                           Funded Debt occurs  on or prior to December 31,
                           1997,

                                    (2) 4.00 to 1.00, if the incurrence of such
                           Funded Debt occurs  at any time from and
                           including January 1, 1998 through and including
                           December 31, 1998, and

                                    (3) 3.50 to 1.00, if the incurrence of such
                           Funded Debt occurs  at any time on or after
                           January 1, 1999.

         For purposes of this clause (iii), the following terms shall have the
         following meanings:

                  "ADJUSTED CONSOLIDATED CURRENT DEBT" -- shall mean, as of any
         date, the amount, if any, by which Consolidated Current Debt exceeds
         $5,000,000.

                  "EXCESS CURRENT DEBT" shall mean, as of any date, the greatest
         amount of Adjusted Consolidated Current Debt outstanding on any one day
         during the then applicable Excess Current Debt Measuring Period.

                  "EXCESS CURRENT DEBT MEASURING PERIOD" shall mean, at any
         time, the period of 30 consecutive days occurring during the period of
         12 consecutive complete calendar months then most recently ended during
         which the greatest amount of Adjusted Consolidated Current Debt
         outstanding on any one day of such period was lower than the greatest
         amount of Adjusted Consolidated Current Debt outstanding on any one day
         of any other period of 30 consecutive days occurring during such period
         of 12 consecutive complete calendar months.

Any extension or renewal of Funded Debt in existence at any time shall be deemed
to be a new incurrence of such Funded Debt.

          6D. INTEREST EXPENSE COVERAGE. The Company will not at any time permit
the ratio of

                  (i)      Consolidated Adjusted Cash Flow for the period of
         four consecutive complete fiscal quarters of the Company most recently
         ended at such time to

                  (ii)     Consolidated Interest Expense for such period

to be less than 3.50 to 1.00.

          6E. NET WORTH. The Company will not at any time permit Consolidated
Tangible Net Worth to be less than the sum of

                  (i)      $90,000,000, plus

                  (ii)     the sum of the Annual Net Worth Increase Amounts
         for all fiscal years  ended after the Closing Date.

"Annual Net Worth Increase Amount" means, for any fiscal year of the Company
ended after December 31, 1996, the greater of (a) 50% of Consolidated Net Income
for such fiscal year and (b) $0.

          6F. RESTRICTED INVESTMENTS AND RESTRICTED PAYMENTS. The Company will
not, and will not permit any Restricted Subsidiary to, make any Basket
Investment, or declare, make, set apart any funds or other Property for, or
incur any liability to make, any Restricted Payment unless:

                  (i) immediately after, and after giving effect to such Basket
         Investment or such Restricted Payment, the aggregate amount of all
         Basket Investments outstanding at such time plus all Restricted
         Payments declared or made on or after the Closing Date would not exceed
         the sum of

                           (a)      $5,000,000, plus

                           (b) 50% (or minus 100% in the case of a loss) of
                  Consolidated Net Income for the period commencing on January
                  1, 1997 and ending on and including the last day of the fiscal
                  quarter of the Company most recently ended as of the date such
                  Basket Investment is made or such Restricted Payment is
                  declared or made; and

                  (ii) immediately before, and after giving effect to, such
         Basket Investment or  such Restricted Payment and any concurrent
         transactions,

                           (a)    no Default or Event of Default exists or
                  would exist, and

                           (b)    the Company would be permitted by the
                  provisions of paragraph 6C  hereof to incur at least
                  $1.00 of additional Funded Debt.

          6G. MERGERS AND CONSOLIDATIONS. The Company will not, and will not
permit any Restricted Subsidiary to, merge or consolidate with or into any other
Person, or convey, transfer, spin-off or lease all or substantially all of its
assets in a single transaction or series of transactions to any Person, except
that:

                  (i)   any such Restricted Subsidiary may merge or consolidate
         with or into, or convey, transfer or spin-off all or substantially all
         of its assets to, the Company (provided that the Company is the
         continuing or surviving corporation), another Restricted Subsidiary or
         any Person that concurrently with such merger, consolidation,
         conveyance, transfer or spin-off becomes a Restricted Subsidiary, and

                  (ii)     the Company may merge or consolidate with or
         into, or convey, transfer or  spin-off all or substantially
         all of its assets to, another corporation, provided that

                           (a) the successor formed by such consolidation or the
                  survivor of such merger or the Person that acquires by
                  conveyance, transfer or spin-off all or substantially all of
                  the assets of the Company as an entirety, as the case may be
                  (the "SUCCESSOR CORPORATION"), shall be a solvent corporation
                  organized and existing under the laws of the United States of
                  America, any state thereof or the District of Columbia,

                           (b) if the Company is not the Successor Corporation,
                  the Successor Corporation shall have executed and delivered to
                  each holder of Notes its assumption of the due and punctual
                  performance and observance of each covenant and condition of
                  this Agreement and the Notes pursuant to such agreements and
                  instruments as shall be reasonably satisfactory to the
                  Required Holders, and the Company shall have caused to be
                  delivered to each holder an opinion, in form and substance
                  satisfactory to the Required Holders, of independent counsel
                  reasonably satisfactory to the Required Holders, to the effect
                  that all agreements or instruments effecting such assumption
                  are enforceable in accordance with their terms and comply with
                  the terms hereof, and

                           (c) immediately after, and immediately after giving
                  effect to, such transaction, no Default or Event of Default
                  would exist and the Successor Corporation would be permitted
                  by the provisions of paragraph 6C hereof to incur at least
                  $1.00 of additional Funded Debt.

          6H. TRANSFERS OF PROPERTY; SUBSIDIARY STOCK.

                  (I) TRANSFERS OF PROPERTY. The Company will not, and will not
         permit any Restricted Subsidiary to, sell, lease as lessor, transfer or
         otherwise dispose of any Restricted Subsidiary Stock, except pursuant
         to clause (ii) of this paragraph 6H, or any other Property
         (collectively, "TRANSFERS") except for:

                           (a) any Transfer made in compliance with
                  paragraph 6G hereof or any  Transfer of Unrelated
                  Assets;

                           (b) Transfers of inventory, payments to vendors and
                  suppliers, payments of compensation (including, without
                  limitation, salaries, bonuses, options, insurance, benefits,
                  payments pursuant to employment agreements and other
                  perquisites), and other similar payments, in each case in the
                  ordinary course of business of the Company or such Restricted
                  Subsidiary;

                           (c) any Transfer of Property by a Restricted
                  Subsidiary to the Company  or any other Restricted
                  Subsidiary;

                           (d) any other Transfer at any time of any Property to
                  a Person, other than an Affiliate (whether effected in a
                  single transaction or in a series of related transactions) not
                  otherwise permitted under clauses (a) through (c), inclusive,
                  of this paragraph 6H(i) (for purposes of this clause (d), a
                  "CURRENT TRANSFER"), if each of the following conditions would
                  be satisfied with respect to such Transfer:

                                    (1) the consideration received in respect of
                           such current Transfer is an amount not less than that
                           reasonably obtainable in a comparable arm's-length
                           transaction or series of transactions with a Person
                           that is not an Affiliate of the Company or any
                           Subsidiary, with neither the seller nor the buyer
                           being under any compulsion to sell or buy,
                           respectively,

                                    (2) immediately after giving effect to such
                           current Transfer, no  Default or Event of Default
                           would exist,

                                    (3) the sum of

                                            (A) the net book value of the
                                   Property that is the subject  of such current
                                   Transfer, plus

                                            (B) the aggregate net book value of
                                    all other items of Property of the Company
                                    and the Restricted Subsidiaries that were
                                    the subject of prior Transfers under this
                                    clause (d) consummated during the period
                                    beginning on the first day of the four
                                    consecutive complete fiscal quarters of the
                                    Company then most recently ended and ending
                                    immediately prior to the time of such
                                    current Transfer,

                           would not exceed 20% of Consolidated Total
                           Assets, determined as at the  beginning of such
                           period, and

                                    (4) the sum of

                                            (A) the contribution (expressed as
                                    a percentage and  exclusive of losses) to
                                    Consolidated Operating Income of such
                                    Property, plus

                                            (B) the contribution (expressed as a
                                    percentage and exclusive of losses) to
                                    Consolidated Operating Income of all other
                                    items of Property of the Company and the
                                    Restricted Subsidiaries that were the
                                    subject of prior Transfers under this clause
                                    (d) consummated during the period beginning
                                    on the first day of the four consecutive
                                    complete fiscal quarters of the Company then
                                     most recently ended and ending immediately
                                    prior to the time of  such current Transfer,

                           would not exceed 20%;

                  provided that the net book value or the contribution to
                  Consolidated Operating Income of any item of Property shall be
                  excluded for purposes of clause (3) and clause (4) of this
                  paragraph 6H(i)(d) if, prior to consummation of any Transfer,
                  the Company gives written notice (a "REINVESTMENT NOTICE") to
                  all holders of Notes that, within 12 months after such
                  Transfer, the entire proceeds of such Transfer, net of
                  ordinary and reasonable transaction costs and expenses
                  incurred in connection with such Transfer, will be applied by
                  the Company or such Restricted Subsidiary to the purchase of
                  Capital Assets of the Company or any Restricted Subsidiary to
                  be used in the business of the Company, as described in
                  paragraph 6A hereof; provided further that such exclusions
                  only apply to the extent that the aggregate net book value of
                  all Property so excluded at any one time shall not exceed 25%
                  of Consolidated Tangible Net Worth and the sum of the
                  contributions to Consolidated Operating Income (expressed as a
                  percentage, with each such contribution being determined as of
                  the date of Transfer of the Property generating such
                  contribution) of all Property so excluded at any one time
                  shall not exceed 25%.

         If the Company shall fail to apply the proceeds of any Transfer in
         accordance with a Reinvestment Notice given in respect thereof, such
         failure shall constitute an Event of Default.

                  (II) TRANSFERS OF SUBSIDIARY STOCK. The Company will not, and
         will not permit any Restricted Subsidiary to, Transfer any shares of
         the stock (or any warrants, rights or options to purchase stock or
         other Securities exchangeable for or convertible into stock) of a
         Restricted Subsidiary (such stock, warrants, rights, options and other
         Securities herein called "RESTRICTED SUBSIDIARY STOCK"), nor will any
         Restricted Subsidiary issue, sell or otherwise dispose of any shares of
         its own Restricted Subsidiary Stock, provided that the foregoing
         restrictions do not apply to:

                           (a)      the issuance by a Restricted Subsidiary of
                  shares of its own  Restricted Subsidiary Stock to the
                  Company or another Restricted Subsidiary;

                           (b)      Transfers by the Company or a Restricted
                  Subsidiary of shares of  Restricted Subsidiary Stock
                  to the Company or another Restricted Subsidiary;

                           (c)      the issuance by a Restricted Subsidiary of
                  directors' qualifying shares or shares to holders (who hold
                  for the benefit of the Company or a Restricted Subsidiary) to
                  meet statutory requirements for domestic holdings or minimum
                  numbers of stockholders;

                           (d)      the Transfer of all of the Restricted
                  Subsidiary Stock of a Restricted  Subsidiary owned by
                  the Company and the other Restricted Subsidiaries if:

                                    (1) such Transfer satisfies the requirement
                           of paragraph 6H(i)(d) hereof (for purposes of such
                           paragraph, the net book value of such Restricted
                           Subsidiary Stock being deemed to be the aggregate net
                           book value of all assets of such Restricted
                           Subsidiary);

                                    (2) in connection with such Transfer, the
                           entire investment (whether represented by stock,
                           Debt, claims or otherwise) of the Company and the
                           other Restricted Subsidiaries in such Restricted
                           Subsidiary is Transferred to a Person other than the
                           Company or a Restricted Subsidiary not
                           simultaneously being disposed of;

                                    (3) the Restricted Subsidiary being
                           disposed of has no  continuing investment in any
                           other Restricted Subsidiary not  simultaneously
                           being disposed of or in the Company; and

                                    (4) immediately before and after the
                           consummation of such  Transfer, and after giving
                           effect thereto, no Default or Event of Default
                           would exist; and

                           (e) Transfers of Unrelated Assets consisting of
                  Restricted Subsidiary Stock if the requirements set forth in
                  subclauses (2), (3) and (4) of the foregoing clause (d) have
                  been satisfied.

                  (III)   NOTICES WITH RESPECT TO TRANSFERS.  The Company
         shall give written  notice to each holder of Notes at least ten days
         prior to the consummation of any Transfer that would give rise to a
         potential prepayment obligation under paragraph 4E hereof specifying:

                           (a)      the anticipated consummation date of the
                  related Transfer; and

                           (b)      an estimate of the net proceeds to be
                  received for the Property  subject to such Transfer.

          6I. LIENS. The Company will not, and it will not permit any Restricted
Subsidiary to, create, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, except:

                  (i)      Liens outstanding on the Closing Date and listed
         in Part 6I(i) of Annex 3  hereto;

                  (ii)     Liens incurred or deposits made in the ordinary
                  course of business,

                           (a) in connection with workers' compensation,
                  unemployment  insurance, social security and other
                  like laws,

                           (b) to secure the performance of letters of credit,
                  bids, tenders, sales contracts, surety and performance bonds
                  (of a type other than set forth in clause (iv) of this
                  paragraph 6I) and other ordinary course obligations not
                  incurred in connection with the borrowing of money, the
                  obtaining of advances or the payment of the deferred purchase
                  price of Property, and

                           (c) in respect of statutory obligations or claims or
                  demands of materialmen, mechanics, carriers, warehousemen,
                  landlords and other like Persons, provided that the
                  obligations secured by such Liens shall not be in default and
                  the title of the Company or the Restricted Subsidiary, as the
                  case may be, to, and its right to use, the Property subject to
                  such Lien, is not materially adversely affected thereby;

                  (iii)  Liens for taxes not yet due or that are being actively
                  contested in good faith  by appropriate proceedings;

                  (iv)   Liens, arising in connection with court proceedings,

                           (a) in the nature of attachments, remedies and
                  judgments, provided that the execution or other enforcement of
                  such Liens is effectively stayed and the claims secured
                  thereby are being actively contested in good faith and by
                  appropriate proceedings, and

                           (b) securing appeal bonds, supersedeas bonds and
                  other similar Liens arising in connection with court
                  proceedings (including, without limitation, surety bonds and
                  letters of credit) or any other instrument serving a similar
                  purpose,

         provided that the aggregate amount so secured pursuant to
         this clause (iv) shall not at any  time exceed $2,500,000;

                  (v) reservations, exceptions, encroachments, easements,
         rights-of-way, covenants, conditions, restrictions and other similar
         title exceptions or encumbrances affecting real property, provided they
         do not in the aggregate materially detract from the value of such real
         property or materially interfere with their use in the ordinary conduct
         of the owning Person's business;

                  (vi) any Lien on Property that is acquired or constructed by
         the Company or any Restricted Subsidiary that secures Debt incurred by
         the owner of such Property to pay for all or a portion of the related
         purchase price or construction costs of such Property, provided that

                           (a) such Lien shall not extend to or cover any
                  Property other than Property acquired or constructed after the
                  Closing Date with the proceeds of the Debt secured thereby and
                  shall not secure Debt other than such Debt,

                           (b) such Lien shall be created within 12 months
                  after the acquisition or  substantial completion of
                  such Property, and

                           (c) such Lien shall secure Debt in an amount not
                  exceeding 100% of the lesser of (1) the cost of acquisition or
                  construction of the Property to which such Debt relates and
                  (2) the Fair Market Value of the Property to which such Debt
                  relates, determined as the time of the incurrence of such
                  Debt; and

                  (vii) Liens securing Debt other than those Liens permitted by
         clause (i) through clause (vi) of this paragraph 6I, provided that,
         immediately after, and immediately after giving effect to, the
         incurrence of any Debt secured by any such Lien,

                           (a)      the sum of

                                    (1)     the aggregate amount of all Debt
                           secured by such Liens,  plus

                                    (2)     the aggregate amount of all Debt
                           secured by Liens  permitted by clause (vi) of
                           this paragraph 6I, plus

                                    (3)     the aggregate amount of all Debt of
                           Restricted Subsidiaries  then outstanding which
                           was incurred pursuant to paragraph 6C(ii)(b)
                           hereof,

                  would not exceed 15% of Consolidated Tangible Net
                  Worth, and

                           (b)      the Company would be permitted by the
                  provisions of paragraph 6C  hereof to incur at least
                  $1.00 of additional Funded Debt.

A violation of this paragraph 6I will constitute an Event of Default, whether or
not any provision is made for an equal and ratable Lien pursuant to paragraph
5G.

          6J. PERMITTED INVESTMENTS. The Company will not, nor will it permit
any of its Restricted Subsidiaries to, make any Investment other than a
Permitted Investment or a Basket Investment.

          6K. TRANSACTIONS WITH AFFILIATES. The Company will not, and will not
permit any Restricted Subsidiary to, enter into any transaction, including,
without limitation, the purchase, sale or exchange of Property or the rendering
of any service, with any Affiliate, except in the ordinary course of and
pursuant to the reasonable requirements of the business of the Company or such
Restricted Subsidiary and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.

          6L. DESIGNATION OF SUBSIDIARIES. Each Person which shall become a
Subsidiary for the first time after the Closing Date shall be a Restricted
Subsidiary unless, within 30 days after such Person shall first have become a
Subsidiary, the Company shall give written notice to all holders of the Notes
stating that such Person shall be an Unrestricted Subsidiary. Any Person so
designated as an Unrestricted Subsidiary may not thereafter be redesignated as a
Restricted Subsidiary without the approval of the Required Holders.

          6M. SUBSIDIARY GUARANTY. The Company will cause each corporation which
becomes a Subsidiary after the Closing Date, and which executes a guaranty of
obligations outstanding under the Bank Credit Agreement, as amended or restated
from time to time, to execute and deliver to each holder of Notes,
simultaneously with its execution and delivery of any such guaranty of Bank
Credit Agreement obligations, a copy of the Joinder Agreement in the form
attached to the Subsidiary Guaranty as Annex 2, duly executed by such
corporation.

          6N. PRC SUBSIDIARIES. The Company will not permit, on the last day of
any fiscal quarter or any fiscal year of the Company, the aggregate net book
value of the assets (as reported in the consolidating financial statements
referred to in clause (i) and clause (ii) of paragraph 5A hereof, respectively)
of the PRC Subsidiaries to be greater than an amount equal to 20% of
Consolidated Tangible Net Worth.

          7. EVENTS OF DEFAULT.

          7A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):

                 (i) the Company defaults in the payment of any principal of or
         Yield-Maintenance Amount payable with respect to any Note when the
         same shall become due, either by the terms thereof or otherwise as
         herein provided; or

                  (ii) the Company defaults in the payment of any interest on
         any Note for more  than five days after the date due; or

                  (iii) the Company fails to perform or observe any agreement
         contained in paragraph 6 hereof (other than any default caused by the
         incurrence of Debt by a Subsidiary in an amount less than $1,000,000,
         provided that such default is remedied within 15 days after such
         incurrence); or

                  (iv) the Company fails to perform or observe any other
         agreement, term or condition contained herein and such failure shall
         not be remedied within 30 days after any Responsible Officer obtains
         actual knowledge thereof; or

                  (v) any representation or warranty made by the Company herein
         or by the Company or any of its officers in any writing furnished in
         connection with or pursuant to this Agreement shall be false in any
         material respect on the date as of which made; or

                  (vi) the Company or any Restricted Subsidiary defaults
         (whether as primary obligor or as guarantor or other surety) in any
         payment of principal of or interest on any other obligation for money
         borrowed (or any Capitalized Lease Obligation, any obligation under a
         conditional sale or other title retention agreement, any obligation
         issued or assumed as full or partial payment for Property whether or
         not secured by a purchase money mortgage or any obligation under notes
         payable or drafts accepted representing extensions of credit) beyond
         any period of grace (not to exceed 30 days) provided with respect
         thereto, or the Company or any Restricted Subsidiary fails to perform
         or observe any other agreement, term or condition contained in any
         agreement under which any such obligation is created (or if any other
         event thereunder or under any such agreement shall occur and be
         continuing) and the effect of such failure or other event is to cause,
         or to permit the holder or holders of such obligation (or a trustee on
         behalf of such holder or holders) to cause, such obligation to become
         due (or to be repurchased by the Company or any Restricted Subsidiary)
         prior to any stated maturity, provided that the aggregate amount of all
         obligations as to which such a payment default shall occur and be
         continuing or such a failure or other event causing or permitting
         acceleration (or resale to the Company or any Restricted Subsidiary)
         shall occur and be continuing exceeds $5,000,000 (it being understood
         that a failure to make a prepayment of a portion of any obligations
         shall be deemed to be a payment default in respect of the entire amount
         of such obligations); or

                  (vii) the Company or any Restricted Subsidiary (other than a
         Minor Subsidiary) makes an assignment for the benefit of creditors or
         is generally not paying its debts as such debts become due; or

                  (viii) any decree or order for relief in respect of the
         Company or any Restricted Subsidiary (other than a Minor Subsidiary) is
         entered under any bankruptcy, reorganization, compromise, arrangement,
         insolvency, readjustment of debt, dissolution or liquidation or similar
         law, whether now or hereafter in effect (the "BANKRUPTCY LAW"), of any
         jurisdiction; or

                  (ix)  the Company or any Restricted Subsidiary (other
         than a Minor Subsidiary)  petitions or applies to any
         tribunal for, or consents to, the appointment of, or taking
          possession by, a trustee, receiver, custodian, liquidator or similar
         official of the Company or any Restricted Subsidiary (other than a
         Minor Subsidiary), or of the majority of the assets of the Company or
         any Restricted Subsidiary (other than a Minor Subsidiary), or commences
         a voluntary case under the Bankruptcy Law of the United States or any
         proceedings (other than proceedings for the voluntary liquidation and
         dissolution of a Restricted Subsidiary) relating to the Company or any
         Restricted Subsidiary (other than a Minor Subsidiary) under the
         Bankruptcy Law of any other jurisdiction; or

                  (x) any such petition or application is filed, or any such
         proceedings are commenced, against the Company or any Restricted
         Subsidiary (other than a Minor Subsidiary) and the Company or such
         Restricted Subsidiary by any act indicates its approval thereof,
         consent thereto or acquiescence therein, or an order, judgment or
         decree is entered appointing any such trustee, receiver, custodian,
         liquidator or similar official, or approving the petition in any such
         proceedings, and such order, judgment or decree remains unstayed and in
         effect for more than 60 days; or

                  (xi) any order, judgment or decree is entered in any
         proceedings against the Company decreeing the dissolution of the
         Company or any Restricted Subsidiary (other than a Minor Subsidiary)
         and such order, judgment or decree remains unstayed and in effect for
         more than 60 days; or

                  (xii) any order, judgment or decree is entered in any
         proceedings against the Company or any Restricted Subsidiary (other
         than a Minor Subsidiary) decreeing a split-up of the Company or such
         Restricted Subsidiary which requires the divestiture of assets
         representing a material part, or the divestiture of the stock of a
         Restricted Subsidiary whose assets represent a material part, of the
         consolidated assets of the Company and the Restricted Subsidiaries
         (determined in accordance with GAAP) or which requires the divestiture
         of assets, or stock of a Restricted Subsidiary, which shall have
         contributed a material part of the consolidated net income of the
         Company and the Restricted Subsidiaries (determined in accordance with
         GAAP) for any of the three fiscal years then most recently ended, and
         such order, judgment or decree remains unstayed and in effect for more
         than 60 days; or

                  (xiii) (a) the Subsidiary Guaranty shall cease to be in full
                  force and effect or shall be declared by a court or
                  governmental authority of competent jurisdiction to be void,
                  voidable or unenforceable against any Subsidiary (other than a
                  Minor Subsidiary),

                           (b) the validity or enforceability of the
                  Subsidiary Guaranty against any  Subsidiary shall be
                  contested by such Subsidiary, the Company or any
                  Affiliate, or

                           (c) any Subsidiary, the Company or any Affiliate
                  shall deny that such  Subsidiary has any further
                  liability or obligation under the Subsidiary Guaranty;
                  or

                  (xiv) a final judgment in an amount in excess of $1,000,000 is
         rendered against the Company or any Restricted Subsidiary and, within
         60 days after entry thereof, such judgment is not discharged or
         execution thereof stayed pending appeal, or within 60 days after the
         expiration of any such stay, such judgment is not discharged;

                  (xv) the Company or any ERISA Affiliate, in its capacity as an
         employer under a Multiemployer Plan, makes a complete or partial
         withdrawal from such Multiemployer Plan resulting in the incurrence by
         such withdrawing employer of a withdrawal liability in an amount
         exceeding $1,000,000; or

                  (xvi) (a) any natural person other than Robert L. Borchardt,
                  his estate, any trust established by him or his heirs, or any
                  Person or "group" (within the meaning of section 13(d) or
                  section 14(d) of the Exchange Act) not controlled by Robert L.
                  Borchardt, his estate, any trust established by him or his
                  heirs (other than any holder of shares of any outstanding
                  class of the capital stock of the Company that shall have been
                  designated as a "permitted holder" in a resolution duly
                  adopted by the board of directors of the Company and that
                  shall have been approved in writing by the Required Holders)

                                    (1)  shall have acquired beneficial
                           ownership of 20% or more of  any outstanding
                           class of Voting Stock of the Company or

                                    (2)  shall obtain the power (whether or not
                           exercised) to elect a  majority of the Company's
                           directors or

                           (b) the board of directors of the Company shall not
                  consist of a majority of continuing directors (for purposes of
                  this clause (b), "CONTINUING directors" shall mean the members
                  of the board of directors of the Company on the Closing Date
                  and each other director nominated for election to the board of
                  directors of the Company by a majority of the then continuing
                  directors);

then

                  (a) if such event is an Event of Default specified in clause
         (viii), clause (ix) or clause (x) of this paragraph 7A with respect to
         the Company, all of the Notes at the time outstanding shall
         automatically become immediately due and payable, together with
         interest accrued thereon, and together with the Yield-Maintenance
         Amount, if any, with respect to each Note, without presentment, demand,
         protest or notice of any kind, all of which are hereby waived by the
         Company;

                  (b) if such Event of Default is any other Event of Default,
         the Required Holders may at their option, by notice in writing to the
         Company, declare all of the Notes to be, and all of the Notes shall
         thereupon be and become, immediately due and payable together with
         interest accrued thereon and together with the Yield-Maintenance
         Amount, if any, with respect to each Note, without presentment, demand,
         protest or other notice of any kind, all of which are hereby waived by
         the Company, and

                  (c) if such event is an Event of Default specified in clause
         (i) or clause (ii) of this paragraph 7A, the holder of any Note (other
         than the Company or any of its Subsidiaries or Affiliates) may at its
         option, by notice in writing to the Company, declare such Note to be,
         and such Note shall thereupon be and become, immediately due and
         payable at par together with interest accrued thereon, without
         presentment, demand, protest or other notice of any kind, all of which
         are hereby waived by the Company.

          7B. RESCISSION OF ACCELERATION. At any time after any or all of the
Notes shall have been declared immediately due and payable pursuant to paragraph
7A(b), the Required Holders may, by notice in writing to the Company, rescind
and annul such declaration and its consequences if (i) the Company shall have
paid all overdue interest on the Notes, the principal of and Yield-Maintenance
Amount, if any, payable with respect to any Notes which have become due
otherwise than by reason of such declaration, and interest on such overdue
interest and overdue principal and Yield-Maintenance Amount at the rate
specified in the Notes, (ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 11C hereof, and (iv) no judgment or decree shall have been entered
for the payment of any amounts due pursuant to the Notes or this Agreement. No
such rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.

          7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A hereof or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B hereof, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.

          7D. OTHER REMEDIES. If any Event of Default or Default shall occur and
be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.

          8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants as of the date hereof as follows:

          8A. ORGANIZATION; SUBSIDIARIES AND AFFILIATES.

                  (I) ORGANIZATION. The Company is a corporation duly organized
         and existing in good standing under the laws of the State of New York
         and each Subsidiary is duly organized and existing in good standing
         under the laws of the jurisdiction in which it is incorporated.

                  (II) OWNERSHIP OF SUBSIDIARIES. Part 8A(ii) of Annex 3 hereto
         states the name of each of the Subsidiaries, its jurisdiction of
         organization and the percentage of its Voting Stock beneficially owned
         by the Company and each other Subsidiary.

                  (III) AFFILIATES.  Part 8A(iii) of Annex 3 hereto sets
         forth the name of each  Affiliate and the nature of the affiliation of
         such Affiliate.

                  (IV) TITLE TO SHARES. Each of the Company and the Subsidiaries
         has good title to all of the shares it purports to own of the stock of
         each Subsidiary, free and clear in each case of any Lien. All such
         shares have been duly issued and are fully paid and nonassessable.

                  (V)  SUBSIDIARY GUARANTORS.  All Subsidiaries that
         have guaranteed the  Company's obligations under the Bank
         Credit Agreement are parties to the Subsidiary  Guaranty.

          8B. FINANCIAL STATEMENTS. The Company has furnished each Purchaser
with the following financial statements, identified by a principal financial
officer of the Company: (i) a consolidated balance sheet of the Company and the
Subsidiaries as at December 31 in each of the years 1993, 1994 and 1995, and
consolidated statements of operations, stockholders' equity and cash flows of
the Company and the Subsidiaries for each such year, all reported on by Cornick,
Garber & Sandler, LLP; and (ii) a consolidated balance sheet of the Company and
the Subsidiaries as at September 30, 1996 and September 30, 1995 and
consolidated statements of operations and cash flows for the nine-month period
ended on each such date, prepared by the Company. Such financial statements
(including any related schedules and/or notes) are true and correct in all
material respects (subject, as to interim statements, to changes resulting from
audits and year-end adjustments), have been prepared in accordance with GAAP
consistently followed throughout the periods involved and show all liabilities,
direct and contingent, of the Company and the Subsidiaries required to be shown
in accordance with GAAP. The balance sheets fairly present the financial
condition of the Company and the Subsidiaries as at the dates thereof, and the
statements of income, stockholders' equity and cash flows fairly present the
results of the operations of the Company and the Subsidiaries and their cash
flows for the periods indicated. There has been no material adverse change in
the business, condition (financial or otherwise) or operations of the Company
and the Subsidiaries taken as a whole since December 31, 1995.

          8C. ACTIONS PENDING. Except as set forth in Part 8C of Annex 3 hereto,
there is no action, suit, investigation or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries, or any Properties of the Company or any of the Subsidiaries, by or
before any court, arbitrator or administrative or governmental body which might
result in any material adverse change in the business, condition (financial or
otherwise) or operations of the Company and the Subsidiaries taken as a whole.

          8D. OUTSTANDING DEBT. Consolidated Funded Debt outstanding on the
Closing Date is set forth in Part 6C of Annex 3 hereto. Consolidated Current
Debt outstanding on the Closing Date, immediately after giving effect to the
application of the proceeds of the sale of the Notes, is in an amount not in
excess of $50,000,000. There exists no default under the provisions of any
instrument evidencing such Debt or of any agreement relating thereto.

          8E. TITLE TO PROPERTIES. Each of the Company and the Subsidiaries has
good and indefeasible title to its respective real Property (other than Property
which it leases) and good title to all of its other respective Property (other
than Property which it leases), including the Property reflected in the balance
sheet as at December 31, 1995 referred to in paragraph 8B hereof (other than
Property disposed of in the ordinary course of business), subject to no Lien of
any kind except Liens permitted by paragraph 6I hereof. All leases necessary in
any material respect for the conduct of the respective businesses of the Company
and the Subsidiaries are valid and subsisting and are in full force and effect.

          8F. TAXES. Each of the Company and the Subsidiaries has filed all
federal, state and other income tax returns which, to the knowledge of the
officers of the Company, are required to be filed, and each has paid all taxes
as shown on such returns and on all assessments received by it to the extent
that such taxes have become due, except such taxes as are being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP.

          8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company nor
any of the Subsidiaries is a party to any contract or agreement or subject to
any charter or other corporate restriction which materially and adversely
affects its business, Property or financial condition. Neither the execution nor
delivery of this Agreement or the Notes, nor the offering, issuance and sale of
the Notes, nor fulfillment of nor compliance with the terms and provisions
hereof and of the Notes will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien upon any of the Property of
the Company or any of the Subsidiaries pursuant to, the charter or by-laws of
the Company or any of the Subsidiaries, any award of any arbitrator or any
agreement (including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the Company or any
of the Subsidiaries is subject. Neither the Company nor any of the Subsidiaries
is a party to, or otherwise subject to any provision contained in, any
instrument evidencing Debt of the Company or such Subsidiary, any agreement
relating thereto or any other contract or agreement (including its charter)
which limits the amount of, or otherwise imposes restrictions on the incurring
of, Debt of the Company of the type to be evidenced by the Notes except as set
forth in the agreements listed in Part 8G of Annex 3 hereto.

          8H. OFFERING OF NOTES. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar Security of
the Company for sale to, or solicited any offers to buy the Notes or any similar
Security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than the Purchasers and no more than 61 other
institutional investors, and neither the Company nor any agent acting on its
behalf has taken or will take any action which would subject the issuance or
sale of the Notes to the provisions of section 5 of the Securities Act or to the
provisions of any securities or Blue Sky law of any applicable jurisdiction.

          8I. USE OF PROCEEDS. Neither the Company nor any Subsidiary owns or
has any present intention of acquiring any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal Reserve
System ("MARGIN STOCK"). The proceeds of sale of the Notes will be used to repay
the Debt set forth in Part 8I of Annex 3 hereto and for general corporate
purposes. None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or carrying
any margin stock or for the purpose of maintaining, reducing or retiring any
Debt which was originally incurred to purchase or carry any stock that is
currently a margin stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of such Regulation G. Neither
the Company nor any agent acting on its behalf has taken or will take any action
which might cause this Agreement or the Notes to violate Regulation G,
Regulation T or any other regulation of the Board of Governors of the Federal
Reserve System or to violate the Exchange Act, in each case as in effect now or
as the same may hereafter be in effect.

          8J. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the PBGC
has been or is expected by the Company or any ERISA Affiliate to be incurred
with respect to any Plan (other than a Multiemployer Plan) by the Company, any
Subsidiary or any ERISA Affiliate which is or would be materially adverse to the
business, condition (financial or otherwise) or operations of the Company and
the Subsidiaries taken as a whole. Neither the Company, any Subsidiary nor any
ERISA Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
is or would be materially adverse to the business, condition (financial or
otherwise) or operations of the Company and the Subsidiaries taken as a whole.
The execution and delivery of this Agreement and the issuance and sale of the
Notes will be exempt from, or will not involve any transaction which is subject
to, the prohibitions of section 406 of ERISA and will not involve any
transaction in connection with which a penalty could be imposed under section
502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the Code.
The representation by the Company in the next preceding sentence is made in
reliance upon and subject to the accuracy of each Purchaser's representation in
paragraph 9B hereof.

          8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Closing Date with the
Securities and Exchange Commission and/or state Blue Sky authorities) in
connection with the execution and delivery of this Agreement, the offering,
issuance, sale or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof or of the Notes.

          8L. ENVIRONMENTAL COMPLIANCE. The Company and the Subsidiaries and all
of their respective Properties and facilities have complied at all times and in
all respects with all federal, state, local and regional statutes, laws,
ordinances and judicial or administrative orders, judgments, rulings and
regulations relating to protection of the environment except, in any such case,
where failure to comply would not result in a material adverse effect on the
business, condition (financial or otherwise) or operations of the Company and
the Subsidiaries taken as a whole.

          8M. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company in connection herewith contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to the
Company or any of the Subsidiaries which materially adversely affects or in the
future may (so far as the Company can now foresee) materially adversely affect
the business, Property or financial condition of the Company or any of the
Subsidiaries and which has not been set forth in this Agreement or in the other
documents, certificates and statements furnished to each Purchaser by or on
behalf of the Company prior to the date hereof in connection with the
transactions contemplated hereby.

          9. REPRESENTATIONS OF EACH PURCHASER.

          9A. NATURE OF PURCHASE. Each Purchaser represents as of the Closing
Date that such Purchaser is an accredited investor (as defined in the Securities
Act) and is not acquiring the Notes to be purchased by it hereunder with a view
to or for sale in connection with any distribution thereof within the meaning of
the Securities Act, provided that the disposition of such Purchaser's Property
shall at all times be and remain within its control.

          9B. SOURCE OF FUNDS. Each Purchaser represents as of the Closing Date:

                  (i) if it is acquiring the Notes for its own account with
         funds from or attributable to its general account, and in reliance upon
         the Company's representations set forth in paragraph 8J, that the
         amount of the reserves and liabilities for the general account
         contracts (as defined by the annual statement for life insurance
         companies as in effect on the date hereof and approved by the National
         Association of Insurance Commissioners (the "NAIC Annual Statement"))
         held by or on behalf of any Pension Plan together with the amount of
         the reserves and liabilities for the general account contracts held by
         or on behalf of any other Pension Plans maintained by the same employer
         (or affiliate thereof, as such term is defined in section V of DOL
         Prohibited Transaction Exemption 95-60 (60 FR 35925, July 12, 1995)) or
         by the same employee organization (as defined in ERISA) in the general
         account do not exceed 10% of the total reserves and liabilities of the
         general account (exclusive of separate account liabilities) plus
         surplus as set forth in the NAIC Annual Statement filed with the state
         of domicile of the insurance company; for purposes of the percentage
         limitation in this clause (i), the amount of reserves and liabilities
         for the general account contracts held by or on behalf of a Pension
         Plan shall be determined before reduction for credits on account of any
         reinsurance ceded on a coinsurance basis; or

                  (ii) if any part of the funds being used by it to purchase the
         Notes shall come from assets of an employee benefit plan (as defined in
         section 3(3) of ERISA) or a plan (as defined in section 4975(e)(1) of
         the Code):

                           (a) if such funds are attributable to a separate
                  account (as defined in  section 3(17) of ERISA), then

                                    (I) all requirements for an exemption under
                           DOL Prohibited Transaction Exemption 90-1 (issued
                           January 29, 1990) are met with respect to the use of
                           such funds to purchase the Notes, or

                                    (II) the employee benefit plans with an
                           interest in such separate account have been
                           identified in a writing delivered by such Purchaser
                           to the Company;

                           (b) if such funds are attributable to a separate
                  account (as defined in section 3(17) of ERISA) that is
                  maintained solely in connection with fixed contracted
                  obligations of an insurance company, any amounts payable, or
                  credited, to any employee benefit plan having an interest in
                  such account and to any participant or beneficiary of such
                  plan (including an annuitant) are not affected in any manner
                  by the investment performance of the separate account;

                           (c) if such funds are attributable to an investment
                  fund managed by a qualified plan asset manager (as such terms
                  are defined in Part V of DOL Prohibited Transaction Exemption
                  84-14, issued March 13, 1984), all requirements for an
                  exemption under such Exemption are met with respect to the use
                  of such funds to purchase the Notes; or

                           (d) such employee benefit plan is excluded from
                  the provisions of  section 406 of ERISA by virtue of
                  section 4(b) of ERISA; or

                  (iii) the source of funds being used by it to purchase the
                  Notes is:

                           (a) a governmental plan (as defined in section
                  3(32) of ERISA);

                           (b) a bank collective investment fund (within the
                  meaning of DOL Prohibited Transaction Exemption 91-38, issued
                  July 12, 1991), and it has identified in writing to the
                  Company each plan (as defined in section 3(3) of ERISA) or
                  group of related plans that comprises ten percent of the
                  assets of such fund; or

                           (c) one or more plans (as defined in section 3(3) of
                  ERISA), or a separate account (as defined in section 3(17) of
                  ERISA) or a trust fund comprised of one or more plans, each of
                  which has been identified in writing to the Company.

          10. DEFINITIONS. For the purpose of this Agreement, the terms defined
in the introductory sentence and in paragraphs 1 and 2 shall have the respective
meanings specified therein, and the following terms shall have the meanings
specified with respect thereto below:

          10A. YIELD-MAINTENANCE TERMS.

          "CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4B or paragraph 4E or
is declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.

          "DISCOUNTED VALUE" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.

          "REINVESTMENT YIELD" shall mean, with respect to the Called Principal
of any Note, 0.50% over the yield to maturity implied by (i) the yields
reported, as of 10:00 a.m. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Service (or such other display
as may replace Page 678 on the Telerate Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or if such yields shall not be
reported as of such time or the yields reported as of such time shall not be
ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for
the latest day for which such yields shall have been so reported as of the
Business Day next preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date. Such implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent
yields in accordance with accepted financial practice and (b) interpolating
linearly between yields reported for various maturities.

          "REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.

          "REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.

          "SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4B or paragraph 4E or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.

          "YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.

          10B. OTHER TERMS.

          "ADJUSTED CONSOLIDATED CURRENT DEBT" shall have the meaning assigned
to it in paragraph 6C of this Agreement.

          "AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Restricted Subsidiary. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by contract or
otherwise.

          "AGREEMENT, THIS" shall mean this Agreement as it may from time to
time be amended, supplemented, modified or restated.

          "APPLICABLE DEFAULT INTEREST RATE" shall mean, at any time, the
greater of

                  (i)      the rate of interest which is 2.0% in excess of
                  the interest rate then  applicable to the Notes or

                  (ii) 2.0% over the rate of interest publicly announced by
         Morgan Guaranty Trust Company of New York from time to time in New York
         City as its prime rate.

          "ASSET TRANSFER PUT CONDITION" shall have the meaning assigned to it
in paragraph 4E(ii) of this Agreement.

          "BANK" shall mean the banks that are parties to the Bank Credit
Agreement, as amended or restated from time to time.

          "BANK CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of
August 27, 1996, among the Company, The Chase Manhattan Bank, SunTrust Bank,
Central Florida, National Association, Marine Midland Bank and Harris Trust and
Savings Bank.

          "BANKRUPTCY LAW" shall have the meaning assigned to it in clause
(viii) of paragraph 7A of this Agreement.

          "BASKET INVESTMENT" shall mean any Investment (including, without
limitation, any Investment in Unrelated Assets) other than a Permitted
Investment.

          "BUSINESS DAY" shall mean a day other than a Saturday, a Sunday or a
day on which the national banks located in New York City, New York, are required
by law (other than a general banking moratorium or holiday for a period
exceeding four consecutive days) to be closed.

          "CAPITAL ASSETS" shall mean all tangible assets of a Person that at
the time of acquisition or construction have an expected economic useful life of
more that one year, and would be shown on a balance sheet of the acquiring or
constructing Person as an asset.

          "CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under GAAP, is or will be required to be capitalized on the books of the Company
or any of its Subsidiaries, taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with GAAP.

         "CLOSING DATE" shall have the meaning assigned to it in paragraph 2 of
this Agreement.

          "CODE" shall mean the Internal Revenue Code of 1986, as amended.

          "COMPANY" shall have the meaning assigned to it in the introductory
sentence of this Agreement.

          "CONFIDENTIAL INFORMATION" shall have the meaning assigned to it in
paragraph 11J of this Agreement.

          "CONSOLIDATED ADJUSTED CASH FLOW" shall mean, for any period, the sum
of

                  (i)  Consolidated Operating Income, plus

                  (ii) to the extent, and only to the extent, that such amount
         was deducted in the computation of such Consolidated Net Income, the
         aggregate amount of depreciation and amortization of the Company and
         the Restricted Subsidiaries, determined on a consolidated basis for
         such Persons.

          "CONSOLIDATED CURRENT DEBT" shall mean, at any time, all Current Debt
of the Company and the Restricted Subsidiaries, determined at such time on a
consolidated basis for such Persons.

          "CONSOLIDATED FUNDED DEBT" shall mean, at any time, the aggregate
amount of Funded Debt of the Company and the Restricted Subsidiaries, determined
at such time on a consolidated basis for such Persons.

          "CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the
consolidated interest expense of the Company and the Restricted Subsidiaries for
such period (including the interest component of Capitalized Lease Obligations)
payable in cash.

          "CONSOLIDATED NET INCOME" shall mean, for any period, net earnings (or
loss), after income taxes, of the Company and the Restricted Subsidiaries for
such period, determined on a consolidated basis for such Persons in accordance
with GAAP, but excluding on an after-tax basis:

                  (i) any gain or loss during such period resulting
         from the receipt of any  proceeds of any insurance policy,
         except business interruption insurance;

                  (ii) any gains or Permitted Losses arising from any sale,
         abandonment or other disposition of Capital Assets other than in the
         ordinary course of business;

                  (iii) any gain arising from any re-evaluation or
         write-up of assets;

                  (iv) any gain resulting from the redemption of Debt at
         a price below the outstanding principal amount of, and accrued
         interest on, such Debt;

                  (v) extraordinary gains or Permitted Losses, gains or
         Permitted Losses resulting from transactions of a non-recurring, or
         non-operating, and material nature, and gains or Permitted Losses
         arising from the discontinuance of operations;

                  (vi) net earnings or losses of any Restricted Subsidiary
         accrued prior to the  date it became a Restricted Subsidiary;

                  (vii) net earnings of any Person (other than a Restricted
         Subsidiary) in which the Company or any of the Restricted Subsidiaries
         shall have an ownership interest unless such net earnings shall have
         actually been received by the Company or such Restricted Subsidiary in
         the form of a cash distribution;

                  (viii) any portion of the net earnings of any
         Restricted Subsidiary that by reason  of contract, charter
         restriction or applicable law is unavailable for payment to
         the  Company;

                  (ix)  any earnings or losses of any successor to the
         Company, whether through  purchase, merger, consolidation,
         acquisition of assets or otherwise, for any period prior to
          the date of acquisition;

                  (x) any deferred credit (or the amortization of any deferred
         credit) arising in connection with the acquisition of any Person
         acquired by the Company or a Restricted Subsidiary through purchase,
         merger, consolidation, acquisition of assets or otherwise; and

                  (xi) any restoration during such period to income of any
         contingency reserve, except to the extent that provision for such
         reserve was made during such period out of income accrued during such
         period.

         As used in this definition,

          "Permitted Losses" means, for any period for which Consolidated Net
Income is being measured, (a) if aggregate gains for either item (ii) or item
(v) exceed aggregate losses for such item during such period, actual aggregate
losses for such period or (b) if aggregate losses for either item (ii) or item
(v) exceed aggregate gains for such item during such period, the lesser of (1)
that amount by which such aggregate losses exceed such aggregate gains during
such period and (2) $2,500,000.

          "CONSOLIDATED OPERATING INCOME" shall mean, for any period, the sum of

                  (i)  Consolidated Net Income for such period, plus

                  (ii) to the extent, and only to the extent, that such amount
         was deducted in the computation of Consolidated Net Income for such
         period, the aggregate amount of income tax expense and interest expense
         of the Company and the Restricted Subsidiaries during such period,
         determined on a consolidated basis for such Persons.

          "CONSOLIDATED TANGIBLE GROSS WORTH" shall mean, at any time, the sum
of

                  (i)      Consolidated Tangible Net Worth at such time plus

                  (ii)     Consolidated Funded Debt at such time.

          "CONSOLIDATED TANGIBLE NET WORTH" shall mean, at any time, the result
of

                  (i)      the shareholders' equity of the Company and the
         Restricted Subsidiaries,  minus

                  (ii)     all Intangible Assets of the Company and the
         Restricted Subsidiaries,  minus

                  (iii)   (a) all Basket Investments, (b) Investments by the
         Company or any Restricted Subsidiary set forth in clause (vii) of the
         definition of Permitted Investments, and (c) Insider Loans in excess of
         the sum of (1) $2,500,000 plus (2) up to an additional $2,500,000 so
         long as such additional amount consists of Insider Loans referred to in
         subclause (A) of clause (viii) of the definition of "Permitted
         Investments", and then only to the extent that such Insider Loans are
         each in an original principal amount of $500,000 or less and are used
         solely for relocation costs of officers, directors and employees of the
         Company or any Restricted Subsidiary (including, without limitation,
         financing the purchase of homes),

in each case as would be reflected on a consolidated balance sheet of such
Persons at such time.

          "CONSOLIDATED TOTAL ASSETS" means, at any time, the net book value of
all of the assets of the Company and its Restricted Subsidiaries, as such net
book value would be reflected on the Company's balance sheet as of its most
recent fiscal year end prepared at such time on a consolidated basis in
accordance with GAAP.

          "CURRENT DEBT" shall mean, with respect to any Person, all Debt of
such Person for borrowed money which by its terms or by the terms of any
instrument or agreement relating thereto matures on demand or within one year
from the date of the creation thereof and is not directly or indirectly
renewable or extendible at the option of the debtor to a date more than one year
from the date of the creation thereof, provided that

                  (i) Debt for borrowed money outstanding under a revolving
         credit or similar agreement, notwithstanding that it obligates the
         lender or lenders to extend credit over a period of more than one year,
         shall constitute Current Debt and

                  (ii) Debt for borrowed money which constitutes the current
         maturities of Debt with a stated maturity of more than one year from
         the date of creation thereof shall constitute Funded Debt and not
         Current Debt, even though such current maturities of Debt by their
         terms mature within one year.

          "DEBT" shall mean, with respect to any Person, without duplication,

                  (i) all obligations of such Person for borrowed money
         (including, without limitation, all obligations of such Person
         evidenced by any debenture, bond, note, commercial paper or Security,
         but also including all such obligations for borrowed money not so
         evidenced);

                  (ii) all obligations for borrowed money secured by any Lien
         existing on Property owned by such Person (whether or not such
         obligations have been assumed by such Person or recourse in respect
         thereof is available against such Person);

                  (iii) all Capitalized Lease Obligations of such Person;

                  (iv) all obligations of such Person to pay the deferred
         purchase price of Property or services, all conditional sale
         obligations of such Person and all obligations of such Person under any
         title retention agreements, provided that trade account payables
         incurred in the ordinary course of business of such Person shall be
         excluded from this clause (iv);

                  (v) all obligations of such Person in respect of banker's
         acceptances, other acceptances, stand-by letters of credit and other
         instruments serving a similar function issued or accepted by banks and
         other financial institutions for the account of such Person (whether or
         not incurred in connection with the borrowing of money); and

                  (vi) any Guarantee of such Person of any obligation or
         liability of another Person of a type described in any of clause (i)
         through clause (v), inclusive, of this definition.

          "DOL" shall mean the Department of Labor of the government of the
United States of America or any other department or agency of such government
that shall succeed to the functions of the Department of Labor.

          "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

          "ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.

          "EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A of this Agreement, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "DEFAULT" shall mean
any of such events, whether or not any such requirement has been satisfied.

          "EXCESS AMOUNT" shall have the meaning assigned to it in paragraph
4E(ii) of this Agreement.

          "EXCESS CURRENT DEBT" shall have the meaning assigned to it in
paragraph 6C of this Agreement.

          "EXCESS CURRENT DEBT MEASURING PERIOD" shall have the meaning assigned
to it in paragraph 6C of this Agreement.

          "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

          "EXCLUDED SUBSIDIARIES" shall mean the PRC Subsidiaries, RAC-FSC, a
U.S. Virgin Islands corporation, Entel Limited, an English corporation, and
Avelco Trading Limited, a Hong Kong corporation.

          "FAIR MARKET VALUE" shall mean, with respect to any Property, the sale
value of such Property that would be realized in an arm's-length sale at such
time between an informed and willing buyer and an informed and willing seller
under no compulsion to buy or sell, respectively.

          "FIRST PUT DATE" shall have the meaning assigned to it in paragraph 4E
of this Agreement.

          "FIRST PUT CUT-OFF DATE" shall have the meaning assigned to it in
paragraph 4E of this Agreement.

          "FIRST TIER SUBSIDIARY" shall have the meaning assigned to it in
paragraph 5A of this Agreement.

          "FUNDED DEBT" shall mean, with respect to any Person, at any time, all
Debt of such Person other than Current Debt.

          "GAAP" means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.

          "GUARANTEE" shall mean, with respect to any Person (for the purposes
of this definition, the "guarantor"), any obligation (except the endorsement in
the ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person (the "Primary
Obligor") in any manner, whether directly or indirectly, including, without
limitation, obligations incurred through an agreement, contingent or otherwise,
by the guarantor:

                  (i)      to purchase such indebtedness or obligation or
         any Property constituting  security therefor;

                  (ii)     to advance or supply funds

                           (a)    for the purchase or payment of such
                  indebtedness, dividend or  obligation, or

                           (b)    to maintain working capital or other balance
                  sheet condition or any income statement condition of the
                  Primary Obligor or otherwise to advance or make available
                  funds for the purchase or payment of such indebtedness,
                  dividend or obligation;

                  (iii) to lease Property or to purchase securities or other
         Property or services primarily for the purpose of assuring the owner of
         such indebtedness or obligation of the ability of the Primary Obligor
         to make payment of the indebtedness or obligation; or

                  (iv)  otherwise to assure the owner of the indebtedness
         or obligation of the  Primary Obligor against loss in
         respect thereof.

For purposes of computing the amount of any Guarantee, in connection with any\
computation of indebtedness or other liability,

                  (i) in each case where the obligation that is the subject of
         such Guarantee is in the nature of indebtedness for money borrowed it
         shall be assumed that the amount of the Guarantee is the amount of the
         direct obligation then outstanding, and

                  (ii) in each case where the obligation that is the subject of
         such Guarantee is not in the nature of indebtedness for money borrowed
         it shall be assumed that the amount of the Guarantee is the maximum
         aggregate amount (if any) of such obligation.

          "INSIDER LOANS" shall mean the Investments described in clause (viii)
of the definition of "Permitted Investments."

          "INTANGIBLE ASSETS" shall mean any assets of a Person that would be
classified as "intangible assets" under GAAP, including, without limitation,
goodwill, trademarks, trade names, patents, copyrights, franchises and other
intangible assets of such Person.

          "INTEREST PAYMENT DATE" shall have the meaning assigned to it in
paragraph 4G of this Agreement.

          "INVESTMENT" shall mean any investment made in cash or by delivery of
Property by the Company or a Restricted Subsidiary (i) in any Person, whether by
acquisition of stock, indebtedness or other obligation or Security, or by loan,
Guarantee, advance, capital contribution or otherwise, or (ii) in any Property.
Investments shall be valued at the greater of:

                  (x) the amount at which such Investment is shown on
         the books of the Company or  any Restricted Subsidiary; and

                  (y) either

                         (1) in the case of any Guarantee of the obligation of
                  any Person, the amount which the Company or any Restricted
                  Subsidiary has paid on account of such obligation less any
                  recoupment by the Company or such Restricted Subsidiary of any
                  such payments, or

                           (2) in the case of any other Restricted Investment,
                  the excess of (A) the greater of (I) the amount originally
                  entered on the books of the Company or any Restricted
                  Subsidiary with respect thereto and (II) the cost thereof to
                  the Company or such Restricted Subsidiary over (B) any return
                  of capital (after income taxes applicable thereto) upon such
                  Restricted Investment through the sale or other liquidation
                  thereof or any part thereof or otherwise.

          "LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction) or any other type of preferential arrangement for the purpose,
or having the effect, of protecting a creditor against loss or securing the
payment or performance of an obligation.

          "MARGIN STOCK" shall have the meaning assigned to it in paragraph 8I
of this Agreement.

          "MERGER PUT CONDITION" shall have the meaning assigned to it in
paragraph 4E(i) of this Agreement.

          "MINOR SUBSIDIARY" shall mean, at any time, any Subsidiary that is
organized under a jurisdiction other than the United States of America or any
State thereof and that satisfies the following conditions:

                  (i) the portion of Consolidated Total Assets, determined as of
         the end of the then most recently ended fiscal quarter of the Company,
         attributable to such Subsidiary in accordance with GAAP is less than
         five percent, determined at such time, of Consolidated Total Assets;
         and

                  (ii) the portion of Consolidated Operating Income, determined
         for the then most recently ended period of four consecutive fiscal
         quarters of the Company, attributable to such Subsidiary in accordance
         with GAAP is less than five percent, determined for such period, of
         Consolidated Operating Income.

          "MOODY'S" shall mean Moody's Investor Services, Inc.

          "MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).

          "NOTES" shall have the meaning assigned to it in paragraph 1 of this
Agreement.

          "OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by its President, one of its Vice Presidents or its Treasurer.

          "PBGC" means the Pension Benefit Guaranty Corporation and any
successor corporation or governmental agency.

          "PENSION PLAN" means any "employee pension benefit plan" (as such term
is defined in ERISA) maintained by the Company or any ERISA Affiliate for
employees of the Company or such ERISA Affiliate, excluding any Multiemployer
Plan, but including, without limitation, any Multiple Employer Pension Plan.

         As used in this definition,

                  "Multiple Employer Pension Plan" means any employee benefit
         plan within the meaning of Section 3(3) of ERISA (other than a
         Multiemployer Plan), subject to Title IV of ERISA, to which the Company
         or any ERISA Affiliate and an employer (as such term is defined in
         Section 3 of ERISA), other than an ERISA Affiliate or the Company,
         contribute.

          "PERMITTED INVESTMENTS" means and includes the following:

                  (i) Investments existing on the Closing Date (other than
         Insider Loans) and described in Part 10B-1 of Annex 3 hereto, and
         Investments in Property used by the Company or any Restricted
         Subsidiary in its operations in the ordinary course of its business;

                  (ii) Investments in the ordinary course of business of the
         Company in one or more Restricted Subsidiaries or any corporation that
         concurrently with such Investment becomes a Restricted Subsidiary
         (except to the extent that any such Investment is in Unrelated Assets);

                  (iii) Investments in direct obligations of the
         United States of America or any  agency thereof, maturing
         within one year of the date of acquisition thereof;

                  (iv) Investments in commercial paper maturing within 270 days
         from the date of acquisition and rated A-1 or P-1 (or the equivalent)
         or better at the date of acquisition by Standard & Poor's or Moody's;

                  (v) Investments in debt obligations of corporations organized
         under the laws of the United States of America or any state thereof or
         obligations of any state of the United States of America or any
         municipality thereof, in each case maturing within one year from the
         date of acquisition and rated AA or Aa (or the equivalent) or better at
         the date of acquisition by Standard & Poor's or Moody's;

                  (vi) Investments in certificates of deposit issued by an
         Acceptable Bank and, in each case, maturing within one year of the date
         of acquisition thereof, provided that such Investments issued by
         banks deemed to be "Acceptable Banks" pursuant to the proviso of the
         definition of "Acceptable Bank" shall not exceed $2,500,000 in any one
         such deemed Acceptable Bank, or $5,000,000 in the aggregate for all
         such deemed Acceptable Banks, at any one time;

                  (vii) Investments in any other Person in an amount not
         exceeding the net proceeds of a concurrent sale of capital stock of the
         Company (other than an Investment of the type referred to in clause
         (ii) of this definition); and

                  (viii) Investments (A) in loans and advances in the ordinary
         course of business, and necessary to carrying on the business of the
         Company or any Restricted Subsidiary, to officers, directors and
         employees of the Company or any Restricted Subsidiary, (B) in loans and
         advances to corporations that are acquisition targets of the Company or
         any Restricted Subsidiary, and (C) consisting of short term advances or
         prepayments to suppliers, provided that the aggregate amount of all
         Investments referred to in subclauses (A), (B) and (C) of this clause
         (viii) does not at any time exceed $7,000,000.

As used in this definition,

                  "Acceptable Bank" means (i)(a) a commercial bank or trust
         company organized in the United States of America and having combined
         capital, surplus and undivided profits aggregating at least
         $500,000,000 or (b) any other commercial bank having capital, surplus
         and undivided profits of at least $1,000,000,000 and (ii) the long-term
         unsecured debt obligations of which (or the long-term unsecured debt
         obligations of the bank holding company owning all of the capital stock
         of such bank) are rated "A" or higher by Standard & Poor's or "A2" or
         higher by Moody's, provided that a commercial bank not organized in the
         United States of America that satisfies the requirement set forth in
         the foregoing clause (i)(b) but whose long-term unsecured debt
         obligations (or the long-term unsecured debt obligations of the bank
         holding company owning all of the capital stock of such bank) are not
         rated by Standard & Poor's or Moody's shall be deemed to be an
         "Acceptable Bank" if the Required Holders shall have consented in
         writing to Investments in certificates of deposit issued by such bank.

          "PERSON" shall mean and include an individual, a partnership, a
limited liability company, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

          "PLAN" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.

          "PRC SUBSIDIARIES" shall mean Subsidiaries organized under the laws of
the People's Republic of China, other than Subsidiaries organized under the laws
of Hong Kong.

          "PREFERRED STOCK" shall mean any class of capital stock of a Person
that is preferred over any other class of capital stock of such Person as to the
payment of dividends or the payment of any amount upon liquidation of such
Person.

          "PROPERTY" shall mean any interest in any kind of property or assets,
whether real, personal or mixed, and whether tangible or intangible.

          "PURCHASERS" shall have the meaning assigned to it in the introductory
sentence of this Agreement.

          "PUT AMOUNT" shall have the meaning assigned to it in paragraph 4E of
this Agreement.

          "PUT NOTICE" shall have the meaning assigned to it in paragraph 4E of
this Agreement.

          "RATE INCREASE EVENT" shall have the meaning assigned to it in
paragraph 4G of this Agreement.

          "REINVESTMENT NOTICE" shall have the meaning assigned to it in
paragraph 6H of this Agreement.

          "REQUIRED HOLDERS" shall mean the holder or holders of at least 66b%
of the aggregate principal amount of the Notes from time to time outstanding
(exclusive of Notes then owned by any one or more of the Company, any Subsidiary
or any Affiliate).

          "RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company or any other officer of the Company involved principally in its
financial administration or its controllership function.

          "RESTRICTED PAYMENT" means and includes

                  (i) any dividend or other distribution, direct or indirect and
         whether payable in cash or Property, on account of any capital stock or
         other equity interests of the Company or any of the Restricted
         Subsidiaries, except to the extent such dividend or distribution

                           (a)  is payable solely to the Company or any
                  Restricted Subsidiary;

                           (b)  is payable solely in capital stock or other
                  equity interests of the  Company or such Restricted
                  Subsidiary; or

                           (c) is payable in respect of Preferred Stock issued
                  by the Company after the Closing Date, provided that the full
                  purchase price of such Preferred Stock was paid in cash to the
                  Company prior to the payment of such dividend or distribution;

                  (ii) any redemption, retirement, purchase or other
         acquisition, direct or indirect, of any capital stock or other equity
         interests of the Company or any of the Restricted Subsidiaries now or
         hereafter outstanding, or of any warrants, rights or options to acquire
         any such capital stock or other equity interests or any Securities
         convertible into such capital stock or other equity interests, except
         to the extent that any amount due in respect of such redemption,
         retirement, purchase or other acquisition

                           (a)  is payable to the Company or any of its
                  Restricted Subsidiaries; or

                           (b)  is payable solely in capital stock or other
                  equity interests of the  Company or such Restricted
                  Subsidiary; or

                           (c)  is payable with the proceeds of the sale of
                  capital stock of the  Company consummated after the
                  Closing Date.

          "RESTRICTED SUBSIDIARY" shall mean each Wholly-Owned Subsidiary of the
Company which is a Wholly-Owned Subsidiary on the Closing Date and each
Wholly-Owned Subsidiary that becomes a Wholly-Owned Subsidiary after the Closing
Date and that has not been designated as an Unrestricted Subsidiary by the
Company pursuant to paragraph 6L of this Agreement.

          "RESTRICTED SUBSIDIARY STOCK" shall have the meaning assigned to it in
paragraph 6H(ii) of this Agreement.

          "SECOND PUT CUT-OFF DATE" shall have the meaning assigned to it in
paragraph 4E of this Agreement.

          "SECOND PUT DATE" shall have the meaning assigned to it in paragraph
4E of this Agreement.

          "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

          "SECURITY" shall mean "security" as defined in section 2(1) of the
Securities Act.

          "SHARING AGREEMENT" shall mean the Sharing Agreement in the form of
Exhibit D hereto.

          "SIGNIFICANT HOLDER" shall mean (i) each Purchaser, so long as such
Purchaser shall hold (or be committed under this Agreement to purchase) any
Note, or (ii) any other holder of at least five percent of the aggregate
principal amount of the Notes from time to time outstanding.

          "STANDARD & POOR'S" shall mean Standard & Poor's Rating Group, a
division of McGraw- Hill, Inc.

          "SUBSIDIARY" shall mean any corporation more than 50% of the total
combined voting power of all classes of Voting Stock of which shall, at the time
as of which any determination is being made, be owned by the Company either
directly or through Subsidiaries.

          "SUBSIDIARY GUARANTY" shall mean the Subsidiary Guaranty in the form
of Exhibit C hereto.

          "SUCCESSOR CORPORATION" shall have the meaning assigned to it in
paragraph 6G(ii)(a) of this Agreement.

          "TRANSFEREE" shall mean any direct or indirect transferee of all or
any part of any Note purchased by any Purchaser under this Agreement.

          "TRANSFERS" shall have the meaning assigned to it in paragraph 6H(i)
of this Agreement.

          "UNRELATED ASSETS" shall have the meaning assigned to it in paragraph
6A of this Agreement.

          "UNRESTRICTED SUBSIDIARY" shall mean, at any time, any Subsidiary
other than a Restricted Subsidiary.

          "VOTING STOCK" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).

          "WAIVER NOTICE" shall have the meaning assigned to it in paragraph
4E(i) of this Agreement.

          "WHOLLY-OWNED SUBSIDIARY" shall mean any corporation 100% of the total
combined voting power of all classes of Voting Stock of which shall, at the time
as of which any determination is being made, be beneficially owned by the
Company either directly or through Wholly-Owned Subsidiaries.

          10C. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Where the character or
amount of any asset or liability or item of income or expense, or any
consolidation or other accounting computation is required to be made for any
purpose hereunder, it shall be done in accordance with GAAP as in effect on the
date of, or at the end of the period covered by, the financial statements from
which such asset, liability, item of income, or item of expense, is derived, or,
in the case of any such computation, as in effect on the date as of which such
computation is required to be determined; provided, however, that if any term
defined herein includes or excludes amounts, items, or concepts that would not
be included in or excluded from such term if such term were defined with
reference solely to GAAP, such term will be deemed to include or exclude such
amounts, items or concepts as set forth herein.

          11. MISCELLANEOUS.

          11A. NOTE PAYMENTS. The Company agrees that, so long as any Purchaser
shall hold any Note, it will make payments of principal of, interest on and any
Yield-Maintenance Amount payable with respect to such Note by wire transfer of
immediately available funds for credit (not later than 12:00 noon, New York City
time, on the date due) to such Purchaser's account or accounts as specified in
the Purchaser Schedule attached hereto, or such other account or accounts in the
United States as such Purchaser may designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, such Purchaser will
make a notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which interest thereon has
been paid. The Company agrees to afford the benefits of this paragraph 11A to
any Transferee which shall have made the same agreement as each Purchaser has
made in this paragraph 11A.

          11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save each Purchaser and
any Transferee harmless against liability for the payment of, all out-of-pocket
expenses arising in connection with such transactions, including (i) all
document production and duplication charges and the reasonable fees and expenses
of any special counsel engaged by such Purchaser or such Transferee in
connection with this Agreement, the transactions contemplated hereby and any
subsequent proposed modification, amendment or waiver of, or proposed consent
under, this Agreement or the Notes, whether or not such proposed modification,
amendment or waiver shall be effected or proposed consent granted, and (ii) the
costs and expenses, including reasonable attorneys' fees, incurred by such
Purchaser or such Transferee in enforcing or defending (or determining whether
or how to enforce or defend) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the transactions contemplated
hereby or by reason of such Purchaser's or such Transferee's having acquired any
Note, including without limitation costs and expenses (including the costs and
expenses of financial advisors) incurred in any bankruptcy case or in connection
with any work-out or restructuring of the transactions contemplated by this
Agreement and the Notes. The Company will pay, and will save each holder of a
Note harmless from all claims in respect of any fees, costs or expenses, if any,
of brokers and finders (other than those retained by any such holder). The
obligations of the Company under this paragraph 11B shall survive the transfer
of any Note or portion thereof or interest therein by any Purchaser or any
Transferee and the payment of any Note.

          11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holders except
that, without the written consent of the holder or holders of all Notes at the
time outstanding, no amendment to this Agreement shall change the maturity of
any Note, or change the principal of, or the rate or time of payment of interest
on or any Yield- Maintenance Amount payable with respect to any Note, or affect
the time, amount or allocation of any prepayments, or change the proportion of
the principal amount of the Notes required with respect to any consent,
amendment, waiver or declaration. Each holder of any Note at the time or
thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation referring to any
such consent. No course of dealing between the Company and the holder of any
Note nor any delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note.

          11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES.
The Notes are issuable as registered notes without coupons in denominations of
at least $100,000, except as may be necessary to reflect any principal amount
not evenly divisible by $100,000. The Company shall keep at its principal office
a register in which the Company shall provide for the registration of Notes and
of transfers of Notes. Upon surrender for registration of transfer of any Note
at the principal office of the Company, the Company shall, at its expense,
execute and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such Transferee or Transferees. At
the option of the holder of any Note, such Note may be exchanged for other Notes
of like tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office of
the Company. Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes which the holder making the
exchange is entitled to receive. Every Note surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to unpaid
interest and interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and, in the case
of any such loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Note.

          11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of, interest on and any Yield-Maintenance Amount
payable with respect to such Note and for all other purposes whatsoever, whether
or not such Note shall be overdue, and the Company shall not be affected by
notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in such Note to any Person on
such terms and conditions as may be determined by such holder in its sole and
absolute discretion, provided that any such participation shall be in a
principal amount of at least $100,000.

          11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the Purchasers and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.

          11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.

          11H. NOTICES. All written communications provided for hereunder shall
be sent by first class mail, by nationwide overnight delivery service (with
charges prepaid) or by facsimile transmission (confirmed by delivery by
nationwide overnight delivery service sent on the day of the sending of such
facsimile transmission) and (i) if to any Purchaser, addressed to such Purchaser
at the address specified for such communications in the Purchaser Schedule
attached as Annex 1 hereto, or at such other address as such Purchaser shall
have specified to the Company in writing, (ii) if to any other holder of any
Note, addressed to such other holder at such address as such other holder shall
have specified to the Company in writing or, if any such other holder shall not
have so specified an address to the Company, then addressed to such other holder
in care of the last holder of such Note which shall have so specified an address
to the Company, and (iii) if to the Company, addressed to it at 2950 Lake Emma
Road, Lake Mary, Florida 32746, Attention: Stuart Mont (facsimile no.
407-444-0559), with a copy (which shall not constitute notice) to Stroock &
Stroock & Lavan, 180 Maiden Lane, New York, New York 10038, Attention: Theodore
S. Lynn, Esq. (facsimile no. 212-806-6006), or at such other address as the
Company shall have specified to the holder of each Note in writing; provided,
however, that any such communication to the Company may also, at the option of
the holder of any Note, be delivered by any other means either to the Company at
its address specified above or to any officer of the Company.

          11I. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
interest on any Note that is due on a date other than a Business Day shall be
made on the next succeeding Business Day. If the date for any payment is
extended to the next succeeding Business Day by reason of the preceding
sentence, the period of such extension shall be excluded in the computation of
the interest payable on such Business Day.

          11J. DISCLOSURE TO OTHER PERSONS. For purposes of this paragraph 11J,
"CONFIDENTIAL INFORMATION" means information delivered to the Purchasers or
their representatives by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement or the Subsidiary Guaranty that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by
the Purchasers as being confidential information of the Company or such
Subsidiary, provided that such term does not include information that (i) was
publicly known or otherwise known to a Purchaser prior to the time of such
disclosure, (ii) subsequently becomes publicly known through no act or omission
by a Purchaser or any Person acting on a Purchaser's behalf, (iii) otherwise
becomes known to a Purchaser other than through disclosure by the Company or any
Subsidiary or (iv) constitutes financial statements delivered to the holders of
the Notes pursuant to this Agreement that are otherwise publicly available. Each
Purchaser will use its best efforts to maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by it in good
faith to protect confidential information of third parties delivered to it. The
Company acknowledges that each Purchaser may deliver copies of any such
Confidential Information delivered to it, and disclose any other information
disclosed to it, in connection herewith or the Subsidiary Guaranty to

                  (i)   its directors, officers, employees, agents and
         professional consultants who  have been informed of the
         confidential nature of the information provided,

                  (ii)  any other Noteholder,

                  (iii) any Person to which it offers to sell any Note held by
         it or any part thereof if such Person has agreed to be bound by the
         provisions of this paragraph 11J,

                  (iv) any Person to which it sells or offers to sell a
         participation in all or any part of any Note held by it if such Person
         has agreed to be bound by the provisions of this paragraph 11J,

                   (v)  any federal or state regulatory authority having
         jurisdiction over it,

                  (vi)  the National Association of Insurance
         Commissioners or any similar  organization, or any nationally
         recognized rating agency that requires access to information about its
         investment portfolio, or

                  (vii) any other Person to which such delivery or
         disclosure may be necessary or appropriate

                           (a) in compliance with any law, rule, regulation
                  or order applicable to it,

                           (b) in response to any subpoena or other legal
                  process,

                           (c) in connection with any litigation to which
                  it is a party, or

                           (d) in connection with the enforcement or
                  protection of its rights and  remedies under the
                  Notes, this Agreement or the Subsidiary Guaranty.

Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this paragraph 11J
as though it were a party to this Agreement.

          11K. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser or to the Required Holders, the
determination of such satisfaction shall be made by such Purchaser or the
Required Holders, as the case may be, in the sole and exclusive judgment
(exercised in good faith) of the Person or Persons making such determination.

          11L. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK.

          11M. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

          11N. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

          11O. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.

          11P. SEVERALTY OF OBLIGATIONS. The sales of Notes to the Purchasers
are to be several sales, and the obligations of the Purchasers under this
Agreement are several obligations. Except as provided in paragraph 3F hereof, no
failure by any Purchaser to perform its obligations under this Agreement shall
relieve any other Purchaser or the Company of any of its obligations hereunder,
and no Purchaser shall be responsible for the obligations of, or any action
taken or omitted by, any other Purchaser hereunder.

          [Remainder of page intentionally blank. Next page is signature page.]
<PAGE>

          If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement among the
Company and the Purchasers.

                                        Very truly yours,


                                        RECOTON CORPORATION


                                        By /S/ STUART MONT
                                        Name:  Stuart Mont
                                        Title: COO, CFO, Executive V.P. -
Operations,                                    Secretary

The foregoing Agreement is
hereby accepted as of the
date first above written.

[EXECUTED BY EACH OF
THE FOLLOWING PURCHASERS]

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

By /S/ KEVIN J. KRASKA
Name:  Kevin J. Kraska
Title:  Vice President

JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

By /S/ DANIEL C. BUDDE
Name:  Daniel C. Budde
Title:  Investment Officer

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY


By /S/ M. M. STAPLETON
Name:  M. M. Stapleton
Title:  Vice President


MELLON BANK, N.A., SOLELY IN ITS CAPACITY AS       The decision to participate
TRUSTEE FOR THE LONG TERM INVESTMENT TRUST,        in this investment, any
(AS DIRECTED BY JOHN HANCOCK MUTUAL LIFE INSURANCE representations made herein
COMPANY), AND NOT IN ITS INDIVIDUAL CAPACITY       by the participant, and any
                                                   actions taken hereunder by
                                                   the participant has/have
                                                   been made solely at the
                                                   discretion of the
                                                   investment fiduciary who
                                                   has sole investment
                                                   discretion with respect to
                                                   this investment.
                                                   [SEAL]
By /S/ ALLAN M. SEAMAN
Name:  Allan M. Seaman
Title:  Associate Counsel


JOHN HANCOCK LIFE INSURANCE COMPANY OF AMERICA

By /S/ M. M. STAPLETON
Name:  M. M. Stapleton
Title:  Vice President


MELLON BANK, N.A., SOLELY IN ITS CAPACITY AS       The decision to participate
TRUSTEE FOR THE NYNEX MASTER PENSION TRUST,        in this investment, any
(AS DIRECTED BY JOHN HANCOCK MUTUAL LIFE INSURANCE representations made herein
COMPANY), AND NOT IN ITS INDIVIDUAL CAPACITY       by the participant, and any
                                                   actions taken hereunder by
                                                   the participant has/have
                                                   been made solely at the
                                                   direction of the
                                                   investment fiduciary
 who                                               has sole investment
                                                   discretion with respect to
                                                   this investment
                                                   [SEAL]
By /S/ ALLAN M. SEAMAN
Name:  Allan M. Seaman
Title:  Associate Counsel