AMENDED AND RESTATED CREDIT AGREEMENT


                  This Amended and Restated  Credit  Agreement dated as of March
14,  1996  (as  amended,  supplemented  or  modified  from  time  to  time,  the
"Agreement")  is  entered  into  among  DynCorp,  a  Delaware  corporation  (the
"Borrower"),  the  institutions  from time to time a party  hereto  as  Lenders,
whether by execution of this  Agreement or an  Assignment  and  Acceptance,  and
Citicorp  North  America,  Inc.,  a Delaware  corporation  ("Citicorp"),  in its
capacity as agent for the Lenders hereunder (in such capacity, the "Agent").

                              W I T N E S S E T H:

                  WHEREAS, Borrower entered into the "1995 Credit Agreement" (as
hereinafter  defined) pursuant to which Citicorp made certain revolving loans to
Borrower;

                  WHEREAS,  Borrower has  requested an increase in the revolving
credit commitments under the 1995 Credit Agreement,  an extension of the term of
the 1995  Credit  Agreement,  provision  of letters  of credit  under its credit
facilities evidenced by the 1995 Credit Agreement,  and certain other amendments
and modifications of the 1995 Credit Agreement;

                  WHEREAS,  the parties  hereto have agreed to amend and restate
the 1995 Credit  Agreement to  facilitate  the aforesaid and set forth the terms
and  conditions  under  which  loans,  letters  of credit  and  other  financial
accommodations  will hereafter be made available to the Borrower for the benefit
of the Borrower and its subsidiaries;

                  NOW,  THEREFORE,  for good  and  valuable  consideration,  the
receipt and sufficiency of which are hereby  acknowledged by the parties hereto,
the parties  hereto  hereby agree that the 1995 Credit  Agreement is amended and
restated in its entirety by this Agreement.
         ARTICLE I                                    ARTICLE I
                                   DEFINITIONS

                  1.01.   Certain  Defined   TermsCertain   Defined  Terms.  The
following  terms  used in this  Agreement  shall  have the  following  meanings,
applicable both to the singular and the plural forms of the terms defined:

                  "Accommodation  Obligation" means any Contractual  Obligation,
contingent  or  otherwise,  of one Person  with  respect to the  guaranty of the
payment,  performance,  collection,  or discharge of any Indebtedness of another
Person (i) for borrowed  money,  (ii) evidenced by bonds,  debentures,  notes or
other similar instruments,  (iii) to pay the deferred purchase price of property
or  services,  except  accounts  payable,  accrued  expenses  and other  current
liabilities  arising in the ordinary  course of  business,  (iv) as lessee under
leases which shall have been or should be, in accordance with GAAP,  recorded as
Capital Leases, (v) contingent, or otherwise, under acceptance, letter of credit
or similar facilities, (vi) in respect of the purchase, redemption,  retirement,
defeasance or other acquisition for value of any Capital Stock of such Person or
any  warrants,  rights or options to acquire  such  Capital  Stock,  or (vii) in
respect of Hedge  Agreements,  if the primary  purpose or intent  thereof by the
Person  incurring the  Accommodation  Obligation is to provide  assurance to the
obligee of such  Indebtedness  that such  Indebtedness,  obligation or liability
will be paid or  discharged,  or that any  agreements  relating  thereto will be
complied  with,  or that the holders  thereof will be protected  (in whole or in
part)  against  loss  in  respect  thereof.  The  amount  of  any  Accommodation
Obligation  shall be equal to the  amount  of the  Indebtedness,  obligation  or
liability  so  guaranteed  or  otherwise  supported;  provided,  that (a) if the
liability  of the Person  extending  such  guaranty  or support is limited  with
respect thereto to an amount less than the Indebtedness, obligation or liability
guaranteed or supported, or is limited to recourse against a particular asset or
assets of such Person, the amount of the corresponding  Accommodation Obligation
shall be limited (in the case of a guaranty or other support  limited by amount)
to such lesser amount or (in the case of a guaranty or other support  limited by
recourse  to a  particular  asset or assets) to the value at which such asset or
assets  would,  in  conformity  with  GAAP,  be  reflected  on or valued for the
purposes of  preparing a  consolidated  balance  sheet of such Person as at such
determination  date;  and (b) if any  obligation  or liability is  guaranteed or
otherwise  supported  jointly and  severally  by a Person and  others,  then the
amount of the  obligation  or  liability  of such  Person  with  respect to such
guaranty  or  other  support  to be  included  in the  amount  of such  Person's
Accommodation  Obligation  shall be the whole principal  amount so guaranteed or
otherwise supported.

                  "Acquisition  Loan"  means a Loan,  the  proceeds of which are
used in connection with the making of a Permitted Acquisition.

                  "Affiliate",  as applied to any Person, means any other Person
that  directly or  indirectly  controls,  is  controlled  by, or is under common
control  with,  that  Person.   For  purposes  of  this  definition,   "control"
(including, with correlative meanings, the terms "controlling",  "controlled by"
and  "under  common  control  with"),  as  applied  to  any  Person,  means  the
possession,  directly or indirectly, of the power to vote five percent (5.0%) or
more of the Securities having voting power for the election of directors of such
Person or  otherwise  to direct or cause the  direction  of the  management  and
policies of that Person,  whether through the ownership of voting  Securities or
by contract or otherwise.

                  "Agent"  means  Citicorp and each  successor  agent  appointed
pursuant to the terms of Article XII of this Agreement.

                  "Agreement" is defined in the preamble hereto.

                  "Applicable   Lending   Office"  means,   with  respect  to  a
particular  Lender,  its  Eurodollar  Lending  Office in respect  of  provisions
relating to Eurodollar Rate Loans and its Domestic  Lending Office in respect of
provisions relating to Base Rate Loans.

                  "Assignment and Acceptance" means an Assignment and Acceptance
in  substantially  the form of Exhibit A attached  hereto and made a part hereof
(with blanks appropriately  completed) delivered to the Agent in connection with
an assignment of a Lender's interest under this Agreement in accordance with the
provisions of Section 14.01.

                  "Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C. ss.ss. 101 et seq.), as amended from time to time, and any successor
statute.

                  "Base Eurodollar  Rate" means,  with respect to any Eurodollar
Interest Period  applicable to a Borrowing of Eurodollar Rate Loans, an interest
rate per annum  determined by the Agent to be the average (rounded upward to the
nearest whole multiple of  one-sixteenth  of one percent  (0.0625%) per annum if
such average is not such a multiple) of the rates per annum  specified by notice
to the Agent by Citibank as the rate per annum at which  deposits in Dollars are
offered by the principal office of Citibank in London, England to major banks in
the London  interbank  market at  approximately  11:00 a.m. (London time) on the
Eurodollar  Interest Rate Determination Date for such Eurodollar Interest Period
for a  period  equal  to  such  Eurodollar  Interest  Period  and  in an  amount
substantially  equal to the amount of the Eurodollar Rate Loan to be outstanding
to Citicorp for such Eurodollar Interest Period.

                  "Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the higher of:

                  (a) the rate of interest announced publicly by Citibank in New
         York, New York, from time to time, as Citibank's base rate; and

                  (b) the sum (adjusted to the nearest 1/4 of one percent or, if
         there is no nearest 1/4 of one  percent,  to the next higher 1/4 of one
         percent) of (i) 1/2 of one  percent  per annum,  plus (ii) the rate per
         annum obtained by dividing (A) the latest  three-week moving average of
         secondary  market  morning  offering  rates in the  United  States  for
         three-month certificates of deposit of major United States money market
         banks,  such three-week  moving average being determined weekly on each
         Monday  (or,  if any  such  date is not a  Business  Day,  on the  next
         succeeding  Business  Day)  for the  three-week  period  ending  on the
         previous  Friday by  Citibank  on the basis of such rates  reported  by
         certificate of deposit  dealers to and published by the Federal Reserve
         Bank of New  York  or,  if  such  publication  shall  be  suspended  or
         terminated,  on the basis of  quotations  for such  rates  received  by
         Citibank  from  three  New  York  certificate  of  deposit  dealers  of
         recognized standing selected by Citibank,  by (B) a percentage equal to
         100% minus the average of the daily  percentages  specified during such
         three-week  period by the Federal  Reserve  Board for  determining  the
         maximum  reserve  requirement  (including,  but  not  limited  to,  any
         emergency,  supplemental  or other marginal  reserve  requirement)  for
         Citibank in respect of  liabilities  consisting of or including  (among
         other liabilities) three-month U.S. dollar nonpersonal time deposits in
         the United States, plus (iii) the average during such three-week period
         of the annual  assessment  rates  estimated by Citibank for determining
         the then current annual  assessment  payable by Citibank to the Federal
         Deposit  Insurance  Corporation  (or any  successor)  for insuring U.S.
         dollar deposits of Citibank in the United States.

                  "Base Rate  Loans"  means all Loans  which bear  interest at a
rate determined by reference to the Base Rate as provided in Section 4.01(a).

                  "Base  Rate  Margin"  means  a  rate  equal  to  (i)  one  and
one-quarter  percent  (1.25%)  per annum  during  the period  commencing  on the
Closing  Date and ending on December  31, 1996 and (ii) from and after  December
31,  1996,  (a) one  percent  (1.00%) per annum  provided  that the ratio of the
average of Borrower's Funded Debt as of the last day of each Fiscal Month in the
Fiscal Quarter then ended to Consolidated EBITDA for the four consecutive Fiscal
Quarters  then  ended is less than or equal to 3.5 : 1; (b) one and  one-quarter
percent  (1.25%) per annum  provided that the ratio of the average of Borrower's
Funded Debt as of the last day of each Fiscal  Month in the Fiscal  Quarter then
ended to Consolidated EBITDA for the four consecutive Fiscal Quarters then ended
is  greater  than  3.5 : 1 and  less  than or  equal to 4.0 : 1; and (c) one and
one-half  percent  (1.50%) per annum  provided  that the ratio of the average of
Borrower's  Funded  Debt as of the last day of each  Fiscal  Month in the Fiscal
Quarter  then  ended to  Consolidated  EBITDA  for the four  consecutive  Fiscal
Quarters  then  ended  is  greater  than  4.0 : 1 and  less  than  4.5 : 1.  The
applicable  Base  Rate  Margin  shall be  determined  on the date the  Financial
Statements for the last month of each Fiscal Quarter are due pursuant to Section
7.01(a) as of the end of such Fiscal Quarter and be effective  during the period
commencing on such due date and ending on the day immediately  preceding the due
date for Financial  Statements for the last month of the Fiscal Quarter in which
such determination is made.

                  "Benefit  Plan"  means a defined  benefit  plan as  defined in
Section  3(35) of ERISA  (other than a  Multiemployer  Plan or Foreign  Employee
Benefit  Plan) in respect of which the  Borrower or any ERISA  Affiliate  is, or
within the immediately  preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.

                  "Borrower" is defined in the preamble of this Agreement.

                  "Borrower   Pledge   Agreement"   means  that  certain  Pledge
Agreement  dated as of July 25, 1995  executed  by the  Borrower in favor of the
Agent  for  the  benefit  of the  Holders  pursuant  to  which  the  issued  and
outstanding  Capital Stock of certain of Borrower's  Subsidiaries  is pledged as
part of the Collateral securing the payment and performance of the Obligations.

                  "Borrower  Security  Agreement"  means that  certain  Security
Agreement  dated as of July 25, 1995  executed  by the  Borrower in favor of the
Agent for the benefit of the Holders pursuant to which the personal Property and
interests in Property of the Borrower more  specifically  described  therein are
pledged as part of the  Collateral  securing the payment and  performance of the
Obligations.

                  "Borrowing" means a borrowing  consisting of Loans of the same
type made, continued or converted on the same day.

                  "Business  Activity  Report"  means (A) a Notice  of  Business
Activities  Report  from the State of New Jersey  Division  of Taxation or (B) a
Minnesota Business Activity Report from the Minnesota Department of Revenue.

                  "Business  Day" means a day,  in the  applicable  local  time,
which is not a Saturday or Sunday or a legal  holiday and on which banks are not
required or  permitted by law or other  governmental  action to close (i) in New
York,  New York  and  (ii) in the case of  Eurodollar  Rate  Loans,  in  London,
England.

                  "Capital Expenditures" means, for any period, the aggregate of
all  expenditures  (whether  payable in cash or other  Property  or accrued as a
liability (but without duplication)) during such period that, in conformity with
GAAP,  are required to be included in or reflected by the  Borrower's  or any of
its  Subsidiaries'  fixed asset accounts as reflected in any of their respective
balance  sheets;  provided,  however,  Capital  Expenditures  shall include that
portion of Capital Leases which is capitalized on the consolidated balance sheet
of the Borrower and its Subsidiaries.

                  "Capital Lease" means any lease of any property (whether real,
personal or mixed) by a Person as lessee  which,  in  conformity  with GAAP,  is
accounted for as a capital lease on the balance sheet of that Person.

                  "Capital Stock" means, with respect to any Person, any capital
stock of such Person,  regardless  of class or  designation,  and all  warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls or
claims of any character with respect thereto.

                  "Cash  Collateral"  means cash or Cash Equivalents held by the
Agent or any of the Lenders as security for the Obligations.

                  "Cash Collateral Account" means an interest bearing account at
Citibank's  office in New York, New York designated by the Agent into which Cash
Collateral  shall be  deposited,  which account shall be under the sole dominion
and control of the Agent.

                  "Cash  Equivalents"  means (i) marketable  direct  obligations
issued or unconditionally  guaranteed by the United States government and backed
by the full faith and credit of the United States government;  and (ii) domestic
and Eurodollar  certificates of deposit and time deposits,  bankers' acceptances
and  floating  rate  certificates  of  deposit  issued  by any  commercial  bank
organized under the laws of the United States,  any state thereof,  the District
of Columbia,  any foreign  bank,  or its branches or agencies  (fully  protected
against currency fluctuations), which, at the time of acquisition, are rated A-1
(or better) by Standard & Poor's Ratings Group, a division of McGraw-Hill,  Inc.
or P-1 (or better) by Moody's Investors Services,  Inc.; provided,  that (x) the
maturities of such Cash Equivalents  shall not exceed one year and (y) such Cash
Equivalents shall be maintained in investment and other accounts of the Agent at
Citibank.

                  "Cash  Management  Account" means the Crestar  Account and any
account opened or maintained by the Borrower at any financial institution in the
United States in  substitution  for the Crestar Account as permitted or required
by the terms of this Agreement.

                  "CERCLA"  means  the  Comprehensive   Environmental  Response,
Compensation  and  Liability  Act of 1980, 42 U.S.C.  ss.ss.  9601 et seq.,  any
amendments  thereto,  any successor  statutes,  and any regulations  promulgated
thereunder.

                  "Change of Control"  means  either of (i) any  transaction  or
series of transactions (including, without limitation, a tender offer, merger or
consolidation)  the result of which is that any "person" or "group"  (within the
meaning of Sections  13(d) and 14(d)(2) of the  Securities  Exchange  Act) other
than an Affiliate of the Borrower, becomes the "beneficial owner" (as defined in
Rule  13(d)(3)  under the  Securities  Exchange  Act) of more than forty percent
(40%) of the total  aggregate  voting power of all classes of the Capital  Stock
which is voting stock of the Borrower and/or warrants or options to acquire such
Capital Stock, calculated on a fully diluted basis or (ii) individuals who as of
the Closing Date  constituted the Borrower's  Board of Directors  (together with
any new directors  whose election by the Borrower's  Board of Directors or whose
nomination for election by the Borrower's stockholders was approved by a vote of
at least  two-thirds  of the  directors  then still in office  who  either  were
directors at the beginning of such period or whose  election or  nomination  for
election  was  previously  so  approved)  cease for any reason to  constitute  a
majority of the directors then in office.

                "Citibank" means Citibank, N.A., a national banking association.

                "Citibank Collection Account" is defined in Section 3.04.

                "Citicorp" is defined in the preamble of this Agreement.

                "Claim"  means  any  claim  or  demand,   by  any  Person,  of
whatsoever kind or nature for any alleged  Liabilities and Costs,  whether based
in contract,  tort, implied or express warranty,  strict liability,  criminal or
civil statute, Permit, ordinance or regulation, common law or otherwise.

                "Closing Date" means March 14, 1996.

                "Collateral"  means all Property and interests in Property now
owned or hereafter acquired by the Borrower and the Guarantors upon which a Lien
is granted under the Borrower Pledge Agreement, the Borrower Security Agreement,
the Guarantor Pledge Agreements and the Guarantor Security Agreements.

                  "Commercial  Letter of Credit" means any documentary letter of
credit for the  account of the  Borrower or any of the  Borrower's  Subsidiaries
which is drawable upon presentation of documents evidencing the sale or shipment
of goods  purchased by the Borrower or such Subsidiary in the ordinary course of
its business.

                  "Commission" means the Securities and Exchange Commission and
any Person succeeding to the functions thereof.

                  "Commitment"  means, with respect to any Lender at the time of
determination  thereof,  the aggregate amount of such Lender's  Revolving Credit
Commitment and "Commitments"  means the aggregate amount of all Revolving Credit
Commitments.

                  "Commitment Letter" means that certain letter addressed to the
Borrower from Citicorp  Securities,  Inc. dated February 8, 1996 and accepted by
the Borrower on February 9, 1996.

                  "Compliance Certificate" is defined in Section 7.01(c).

                  "Computran Indebtedness" means the obligations of the Borrower
arising from the  operations and indemnity  obligations  relating to the sale of
the Borrower's  former  Subsidiary,  Dynalectric  Company,  and litigation among
Computran Systems Corporation, Dynalectric Company, and the Borrower.

                  "Consolidated  EBITDA"  means,  without  duplication,  for any
period,  (i) the sum of the  amounts  for such  period of (a)  Consolidated  Net
Income,  plus (b)  provision  for taxes based on income,  plus (c)  Consolidated
Interest Expense,  plus (d) depreciation expense, plus (e) amortization expense,
plus (f) Restricted Stock Plan expense,  plus (g) Net ESOP  Contributions,  plus
(h)  non-cash  401(k)  matching  contributions  and other  compensation  expense
payable in Capital Stock of the Borrower  which is common stock,  minus (ii) the
amount for such period of interest  income,  all as determined on a consolidated
basis in accordance with GAAP.

                  "Consolidated  Interest  Expense" means,  for any period,  the
total interest  expense of the Borrower and its  Subsidiaries  on a consolidated
basis for such period as determined in accordance with GAAP.

                  "Consolidated  Net  Cash  Interest  Expense"  means,  for  any
period,  (i)  Consolidated  Interest  Expense  for such  period,  but  excluding
interest  expense  not payable in cash and  amortization  of debt  discount  and
deferred  financing costs, minus (ii) consolidated cash interest income for such
period.

                  "Consolidated  Net  Income"  means,  for any  period,  the net
income (or loss) of the Borrower and its  Subsidiaries  on a consolidated  basis
for such period,  excluding the sum of (i) extraordinary  items for such period,
net of taxes  based on income,  plus (ii)  dividends  for such period on Capital
Stock which is preferred stock, all as determined in accordance with GAAP.

                  "Contaminant" means any waste, pollutant, hazardous substance,
toxic substance,  hazardous waste, special waste, petroleum or petroleum-derived
substance  or  waste,  radioactive  materials,   asbestos-containing   material,
polychlorinated  biphenyls  (PCBs),  or any constituent of any such substance or
waste,  and includes,  but is not limited to, these terms as defined in federal,
state or local laws or regulations.

                  "Contractual Obligation",  as applied to any Person, means any
provision of any Securities  issued by that Person or any  indenture,  mortgage,
deed  of  trust,  security  agreement,  pledge  agreement,  guaranty,  contract,
undertaking, agreement or instrument to which that Person is a party or by which
it or any of its properties is bound, or to which it or any of its properties is
subject.

                  "Crestar Account" means Borrower's depository account no.
01521489 at Crestar Bank in Alexandria, Virginia.

                  "Cure Loans" is defined in Section 3.02(b)(v)(C).

                  "Customary Permitted Liens" means

                  (i) Liens (other than  Environmental  Liens and Liens in favor
         of the PBGC) with  respect  to the  payment  of taxes,  assessments  or
         governmental  charges  in all cases  which are not yet due or which are
         being  contested  in good  faith by  appropriate  proceedings  and with
         respect to which adequate reserves or other appropriate  provisions are
         being maintained in accordance with GAAP;

                  (ii) Liens of  landlords  and Liens of  suppliers,  mechanics,
         carriers, materialmen,  warehousemen or workmen and other Liens imposed
         by law created in the  ordinary  course of business for amounts not yet
         due  or  which  are  being  contested  in  good  faith  by  appropriate
         proceedings  and with  respect  to  which  adequate  reserves  or other
         appropriate provisions are being maintained in accordance with GAAP;

                  (iii)  Liens  (other  than  any  Lien in  favor  of the  PBGC)
         incurred  or  deposits  made in the  ordinary  course  of  business  in
         connection with worker's compensation,  unemployment insurance or other
         types of social security benefits or to secure the performance of bids,
         tenders,  sales,  contracts  (other than for the  repayment of borrowed
         money),  surety,  appeal and performance  bonds;  provided that (A) all
         such Liens do not in the aggregate materially detract from the value of
         the  Borrower's  or any of its  Subsidiaries'  assets  or  Property  or
         materially  impair the use thereof in the operation of their respective
         businesses,  and (B) all  Liens of  attachment  or  judgment  and Liens
         securing bonds to stay  judgments or in connection  with appeals do not
         secure at any time an aggregate amount exceeding $2,000,000; and

                  (iv)  Liens  arising  with  respect  to  zoning  restrictions,
         easements, licenses, reservations,  covenants,  rights-of-way,  utility
         easements,   building   restrictions   and  other  similar  charges  or
         encumbrances  on the use of Real Property  which do not interfere  with
         the  ordinary  conduct of the  business  of the  Borrower or any of its
         Subsidiaries.

                  "Designated Prepayment" means each mandatory prepayment
         required by Section 3.01(b)(i) through (iv).


                  "DOL" means the United States Department of Labor and any
         Person succeeding to the functions thereof.

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

                  "Domestic  Lending Office" means,  with respect to any Lender,
such Lender's office,  located in the United States,  specified as the "Domestic
Lending  Office"  under  its  name  on  the  signature  pages  hereof  or on the
Assignment  and  Acceptance  by which it  became a Lender or such  other  United
States  office of such  Lender as it may from time to time  specify  by  written
notice to the Borrower and the Agent.

                  "Dyn Funding" means Dyn Funding Corporation, a Delaware
corporation and Wholly-Owned Subsidiary of the Borrower.

                  "Eligible  Assignee"  means  (i) a  Lender  or  any  Affiliate
thereof; (ii) a commercial bank having total assets in excess of $2,500,000,000;
(iii) the central bank of any country which is a member of the  Organization for
Economic  Cooperation  and  Development;  or (iv) a finance  company,  insurance
company,  other financial institution or fund, acceptable to the Agent, which is
regularly  engaged in making,  purchasing or investing in loans and having total
assets in excess of $300,000,000.

                  "Environmental,  Health or Safety  Requirements  of Law" means
all Requirements of Law derived from or relating to any federal,  state or local
law, ordinance, rule, regulation, Permit, license or other binding determination
of any  Governmental  Authority  relating  to,  imposing  liability or standards
concerning,  or otherwise  addressing,  the  environment,  health and/or safety,
including,  but not limited to the Clean Air Act,  the Clean Water Act,  CERCLA,
RCRA, any so-called "Superfund" or "Superlien" law, the Toxic Substances Control
Act, OSHA, and public health codes, each as from time to time in effect.

                  "Environmental Lien" means a Lien in favor of any Governmental
Authority  for any (i)  liabilities  under any  Environmental,  Health or Safety
Requirement  of Law, or (ii) damages  arising  from,  or costs  incurred by such
Governmental  Authority  in response  to, a Release or  threatened  Release of a
Contaminant into the environment.

                  "Environmental  Property  Transfer  Acts" means any applicable
Requirement  of Law  that  conditions,  restricts,  prohibits  or  requires  any
notification or disclosure triggered by the transfer,  sale, lease or closure of
any  Property  or deed or title  for any  Property  for  environmental  reasons,
including,  but not limited to, any so-called "Industrial Site Recovery Acts" or
"Responsible Property Transfer Acts".

                  "Equipment"  means,  with  respect to any Person,  all of such
Person's  present  and  future (i)  equipment,  including,  without  limitation,
machinery,  manufacturing,  distribution,  selling,  data  processing and office
equipment,   assembly  systems,   tools,  molds,  dies,  fixtures,   appliances,
furniture, furnishings, vehicles, vessels, aircraft, aircraft engines, and trade
fixtures,  (ii) other  tangible  personal  property  (other  than such  Person's
Inventory),  and (iii) any and all accessions,  parts and appurtenances attached
to any of the foregoing or used in connection  therewith,  and any substitutions
therefor and replacements, products and proceeds thereof.

                  "ERISA" means the Employee  Retirement  Income Security Act of
1974, 29 U.S.C.  ss.ss.  1000 et seq.,  any  amendments  thereto,  any successor
statutes, and any regulations or guidance promulgated thereunder.

                  "ERISA  Affiliate" means (i) any corporation which is a member
of the same  controlled  group of  corporations  (within  the meaning of Section
414(b) of the Internal  Revenue  Code) as the Borrower;  (ii) a  partnership  or
other trade or  business  (whether or not  incorporated)  which is under  common
control (within the meaning of Section 414(c) of the Internal Revenue Code) with
the Borrower;  and (iii) a member of the same  affiliated  service group (within
the meaning of Section 414(m) of the Internal Revenue Code) as the Borrower, any
corporation  described  in  clause  (i)  above  or any  partnership  or trade or
business described in clause (ii) above.

                  "ESOP" means the DynCorp  Employee Stock  Ownership Plan dated
as of January 1, 1988.

                  "ESOP   Documents"   means,    collectively,    that   certain
Subscription  Agreement  dated as of  September  9, 1988  between  Borrower  and
Manufacturers  Hanover Trust Company,  as trustee of the DynCorp  Employee Stock
Ownership  Trust  established  pursuant to the DynCorp  Employee Stock Ownership
Trust  Agreement  ("Trust  Agreement")  adopted  as part of the ESOP,  the Trust
Agreement,  the Plan, and that certain 1995 Stock Issuance Agreement dated March
30, 1995 between  Borrower and the DynCorp  Employee Stock  Ownership  Trust, in
each instance, as amended,  supplemented or otherwise modified from time to time
as permitted under the terms of this Agreement.

                  "ESOP Fixed Charge Coverage Ratio" means, for any period,  the
ratio of (i) the amount  calculated  as  Consolidated  EBITDA  minus all federal
income  taxes paid in cash  during  such  period  attributable  to the income of
continuing  operations  for that period  minus the  aggregate  amount of Capital
Expenditures made in cash during such period to (ii) Fixed Charges.

                  "Eurodollar Affiliate" means, with respect to each Lender, the
Affiliate of such Lender (if any) set forth below such  Lender's  name under the
heading  "Eurodollar  Affiliate"  on  the  signature  pages  hereof  or  on  the
Assignment  and  Acceptance  by which it became a Lender or such  Affiliate of a
Lender as it may from time to time specify by written notice to the Borrower and
the Agent.

                  "Eurodollar  Interest  Payment Date" means (i) with respect to
any  Eurodollar  Rate  Loan,  the last day of each  Eurodollar  Interest  Period
applicable to such Loan and (ii) with respect to any Eurodollar Rate Loan having
a Eurodollar  Interest Period in excess of three (3) calendar  months,  the last
day of each three (3) calendar month interval  during such  Eurodollar  Interest
Period.

                  "Eurodollar Interest Period" is defined in Section 4.02(b).

                  "Eurodollar Interest Rate Determination Date" is defined in
Section 4.02(c).

                  "Eurodollar Lending Office" means, with respect to any Lender,
the office or offices of such Lender (if any) set forth below such Lender's name
under the heading  "Eurodollar  Lending Office" on the signature pages hereof or
on the  Assignment  and Acceptance by which it became a Lender or such office or
offices of such Lender as it may from time to time specify by written  notice to
the Borrower and the Agent.

                  "Eurodollar  Rate"  means,  with  respect  to  any  Eurodollar
Interest Period applicable to a Eurodollar Rate Loan, an interest rate per annum
obtained by dividing (i) the Base  Eurodollar Rate applicable to that Eurodollar
Interest Period by (ii) a percentage equal to 100% minus the Eurodollar  Reserve
Percentage  in effect on the relevant  Eurodollar  Interest  Rate  Determination
Date.

                  "Eurodollar  Rate Loans" means those Loans  outstanding  which
bear interest at a rate  determined by reference to the Eurodollar  Rate and the
Eurodollar Rate Margin as provided in Section 4.01(a).

                  "Eurodollar  Rate  Margin"  means a rate  equal to (i) two and
one-half  percent (2.50%) per annum during the period  commencing on the Closing
Date and ending on December 31, 1996 and (ii) from and after  December 31, 1996,
(a) two and one-quarter percent (2.25%) per annum provided that the ratio of the
average of Borrower's Funded Debt as of the last day of each Fiscal Month in the
Fiscal Quarter then ended to Consolidated EBITDA for the four consecutive Fiscal
Quarters  then  ended is less  than or  equal  to 3.5 : 1; (b) two and  one-half
percent  (2.50%) per annum  provided that the ratio of the average of Borrower's
Funded Debt as of the last day of each Fiscal  Month in the Fiscal  Quarter then
ended to Consolidated EBITDA for the four consecutive Fiscal Quarters then ended
is  greater  than  3.5 : 1 and  less  than or  equal to 4.0 : 1; and (c) two and
three-quarters  percent (2.75%) per annum provided that the ratio of the average
of Borrower's  Funded Debt as of the last day of each Fiscal Month in the Fiscal
Quarter  then  ended to  Consolidated  EBITDA  for the four  consecutive  Fiscal
Quarters  then  ended  is  greater  than  4.0 : 1 and  less  than  4.5 : 1.  The
applicable  Eurodollar Rate Margin shall be determined on the date the Financial
Statements for the last month of each Fiscal Quarter are due pursuant to Section
7.01(a) as of the end of the such  Fiscal  Quarter and be  effective  during the
period  commencing on such due date and ending on the day immediately  preceding
the due date for Financial  Statements  for the last month of the Fiscal Quarter
in which such determination is made.

                  "Eurodollar  Reserve  Percentage"  means,  for any  day,  that
percentage  which is in effect on such day, as prescribed by the Federal Reserve
Board for  determining  the  maximum  reserve  requirement  (including,  without
limitation,  any emergency,  supplemental or other marginal reserve requirement)
for a member  bank of the  Federal  Reserve  System in New  York,  New York with
deposits  exceeding  Five  Billion  Dollars   ($5,000,000,000)   in  respect  of
"Eurocurrency  Liabilities"  (or in respect of any other category of liabilities
which  includes  deposits by reference to which the interest  rate on Eurodollar
Rate Loans is determined or any category of extensions of credit or other assets
which includes loans by a non-United  States office of any bank to United States
residents).

                  "Event of Default" means any of the  occurrences  set forth in
Section 11.01 after the expiration of any applicable grace period,  as expressly
provided in Section 11.01.

                  "Existing  Letters of Credit"  means  those  letters of credit
identified on Schedule 1.01.1 attached hereto and made a part hereof.

                  "Existing    Receivables   Purchase   Documents"   means   the
Receivables Purchase Agreement,  the Servicing Agreement,  the Indenture and the
instruments and documents executed and delivered in connection therewith.

                  "Existing   Securitization   Program"   means  the   financing
transactions set forth in the Existing Receivables Purchase Documents.

                  "Fair Market  Value"  means,  with  respect to any asset,  the
value  of the  consideration  obtainable  in a sale of such  asset  in the  open
market,  assuming a sale by a willing seller to a willing  purchaser  dealing at
arm's length and arranged in an orderly manner over a reasonable period of time,
each  having  reasonable  knowledge  of the nature and  characteristics  of such
asset,  neither  being  under  any  compulsion  to act,  and,  if in  excess  of
$5,000,000,  as  determined  in good  faith  by the  Board of  Directors  of the
Borrower.

                  "Federal  Funds Rate"  means,  for any period,  a  fluctuating
interest  rate per annum equal for each day during  such period to the  weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers,  as published for such
day (or, if such day is not a Business Day in New York,  New York,  for the next
preceding Business Day) in New York, New York by the Federal Reserve Bank of New
York, or if such rate is not so published for any day which is a Business Day in
New  York,  New  York,  the  average  of the  quotations  for  such  day on such
transactions  received  by  the  Agent  from  three  federal  funds  brokers  of
recognized standing selected by the Agent.

                  "Federal  Reserve  Board"  means the Board of Governors of the
Federal  Reserve  System  or  any  Governmental   Authority  succeeding  to  its
functions.

                  "Fee Letter" means that certain letter agreement dated
February 9, 1996 between the Borrower and Citicorp.

                  "Financial  Officer" means any of the  Borrower's  senior vice
president and chief financial officer; vice president and controller; treasurer;
assistant treasurer; and vice president, contract administration and operational
reporting.

                  "Financial Statements" means statements of income and retained
earnings, statements of cash flow, and balance sheets.

                  "Fiscal  Month"  means  each  period  commencing  on the  date
immediately succeeding the "Effective Close Date" for the prior fiscal month and
ending on the  "Effective  Close Date" for the  applicable  fiscal  month as set
forth on Schedule 1.01.2 attached hereto, respectively, for the Borrower and its
Subsidiaries.

                  "Fiscal  Quarter"  means each  period  commencing  on the date
immediately  succeeding the "Effective  Close Date" for the prior fiscal quarter
and ending on the "Effective  Close Date" for the  applicable  fiscal quarter as
set forth on Schedule 1.01.2 attached hereto, respectively, for the Borrower and
its Subsidiaries.

                  "Fiscal  Year" means the fiscal year of the  Borrower  and its
Subsidiaries for accounting and tax purposes, which shall be the 12-month period
ending on December 31 of each calendar year.

                  "Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a) the amount  calculated as (i) Consolidated  EBITDA minus (ii) all federal
income  taxes paid in cash  during  such  period  attributable  to the income of
continuing  operations  for that  period  minus  (iii) the  aggregate  amount of
Capital  Expenditures  made in cash during such period minus (iv) repurchases by
the  Borrower of Capital  Stock of the  Borrower  during such period paid for in
cash (other than as permitted under Section 9.06(b),  (d), (e), (f), (g) and (h)
and  repurchases of  approximately  578,236 shares of Capital Stock and warrants
for Capital  Stock of the  Borrower  from former  employees  of the Borrower not
referenced  in such  clauses of  Section  9.06 and  former  Subsidiaries  of the
Borrower  during the period  January 1 through  February  29, 1996) to (b) Fixed
Charges.

                  "Fixed Charges" means,  for any period,  Consolidated Net Cash
Interest Expense plus the aggregate amount of scheduled payments of principal of
Funded Debt during such period,  plus the aggregate amount of stock  repurchases
under the ESOP  Documents  paid for in cash by the Borrower  during such period,
plus  repurchases  by the Borrower of Capital Stock of the Borrower  during such
period paid for in cash as permitted  under  Section 9.06 (f), (g) and (h), plus
the scheduled  reduction,  if any, in the Revolving Credit Commitment during the
period  to the  extent  of (i)  twenty  percent  (20%)  of the  amount  of Loans
outstanding  on March 14, 1998 for the period  commencing  on March 14, 1998 and
ending on March 13,  1999 and (ii) twenty  percent  (20%) of the amount of Loans
outstanding  on March 14, 1999 for the period  commencing  on March 14, 1999 and
ending on March 13, 2000.

                  "Foreign  Employee  Benefit  Plan" means any employee  benefit
plan as defined in Section 3(3) of ERISA which is maintained or  contributed  to
for the benefit of the employees of the Borrower, any of its Subsidiaries or any
of its ERISA  Affiliates  and is not covered by ERISA  pursuant to ERISA Section
4(b)(4).

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

                  "Foreign  Subsidiary" means a Subsidiary  domiciled outside of
the United States of America and its states, districts and possessions.

                  "Fronting Fee" is defined in Section 4.03(a).

                  "Funded  Debt"  means  Indebtedness  of the  Borrower  and its
Subsidiaries for borrowed money (determined in accordance with GAAP), including,
without limitation,  Indebtedness under Capital Leases, and Indebtedness arising
under the Securitization Program.

                  "Funding  Date" means,  with respect to any Loan,  the date of
funding of such Loan.

                  "GAAP" means  generally  accepted  accounting  principles  set
forth in the opinions and  pronouncements of the American Institute of Certified
Public  Accountants'   Accounting  Principles  Board  and  Financial  Accounting
Standards  Board or in such other  statements  by such other entity as may be in
general use by significant segments of the accounting profession as in effect on
the date hereof (unless otherwise  specified herein as in effect on another date
or dates).

                  "General  Intangibles"  means, with respect to any Person, all
of such  Person's  present  and future (i)  general  intangibles,  (ii)  rights,
interests,  choses in  action,  causes of action,  claims  and other  intangible
property of every kind and nature (other than Receivables),  (iii) corporate and
other business records, (iv) loans, royalties, and other obligations receivable,
(v) trademarks,  registered trademarks,  trademark applications,  service marks,
registered  service  marks,  service  mark  applications,   patents,  registered
patents,  patent  applications,  trade names, rights of use of any name, labels,
fictitious  names,  inventions,   designs,  trade  secrets,  computer  programs,
software,  printouts  and other  computer  materials,  goodwill,  registrations,
copyrights,  copyright applications,  permits,  licenses,  franchises,  customer
lists, credit files,  correspondence,  and advertising materials,  (vi) customer
and supplier  contracts,  firm sale orders,  rights under  license and franchise
agreements,  rights  under  tax  sharing  agreements,  and other  contracts  and
contract rights, in each instance other than contracts and such agreements which
by their  respective terms are  non-assignable,  (vii) interests in partnerships
and joint ventures,  in each instance other than interests which by the terms of
the  partnership  or joint  venture  documents  are  non-assignable,  (viii) tax
refunds and tax refund  claims,  (ix) right,  title and interest  under  leases,
subleases,  licenses and concessions and other agreements  relating to property,
in each instance  other than leases,  subleases,  licenses,  concession and such
other agreements which by their respective terms are non-assignable, (x) deposit
accounts (general or special) with any bank or other financial institution, (xi)
credits with and other claims  against  third  parties  (including  carriers and
shippers),  (xii)  rights to  indemnification  and with  respect to support  and
keep-well  agreements,  (xiii)  reversionary  interests  in  pension  and profit
sharing plans and  reversionary,  beneficial  and residual  interests in trusts,
(xiv) proceeds of insurance of which such Person is beneficiary, (xv) letters of
credit and proceeds thereof,  guarantees,  Liens,  security  interests and other
security  held  by or  granted  to  such  Person,  (xvi)  rights  in  and  under
instruments,  securities  (certificated and uncertificated),  documents of title
and  investment  property,  and (xvii) all rights in any goods,  merchandise  or
Inventory which any of the foregoing may represent.

                  "Government  Contract"  means any  contract,  agreement,  work
authorization,  lease,  commitment for sale or purchase order of Borrower or its
Subsidiaries that is with the United States  Government,  or any state, local or
foreign  government,  including,  without  limitation,  all  contracts  and work
authorizations to supply goods and services to the United States Government,  or
any state, local or foreign government.

                  "Governmental  Authority" means any nation or government,  any
federal,  state,  local or other  political  subdivision  thereof and any entity
exercising  executive,  legislative,   judicial,  regulatory  or  administrative
functions of or pertaining to government.

                  "Guarantor  Pledge  Agreements"  means  those  certain  Pledge
Agreements  executed by  Guarantors in favor of the Agent for the benefit of the
Holders  pursuant  to  which  the  issued  and  outstanding   Capital  Stock  of
Subsidiaries  of the Guarantors  executing and delivering the same is pledged as
part of the Collateral securing the payment and performance of the Obligations.

                  "Guarantor  Security  Agreements" means those certain Security
Agreements  executed by  Guarantors in favor of the Agent for the benefit of the
Holders pursuant to which the personal Property and interests in Property of the
Guarantors  executing and  delivering the same, as more  specifically  described
therein,  are  pledged  as part  of the  Collateral  securing  the  payment  and
performance of the Obligations.

                  "Guarantors" means those Persons identified on Schedule 1.01.3
attached  hereto,  each  Person that  becomes a  Subsidiary  of the  Borrower in
connection with the making of a Permitted Acquisition,  each Material Subsidiary
formed or acquired after the date hereof which is a Wholly-Owned Subsidiary, and
any other  Subsidiary  of the Borrower  executing  and  delivering a guaranty of
payment  and  performance  of all or any portion of the  Obligations;  provided,
however,  that no Foreign Subsidiary of the Borrower shall be required to become
a Guarantor.

                  "Hedge  Agreement"  means any  agreement,  including,  without
limitation, interest rate exchange, swap, collar or cap agreement, interest rate
future or option  contract,  currency swap agreement,  currency future or option
contract,  and other similar  agreement  evidencing an agreement or  arrangement
intended  to protect  against  fluctuation  in  interest  rates  and/or  foreign
exchange  rates or  conversion  rates for  conversion  of foreign  currencies to
Dollars.

                  "Holder"  means any  Person  entitled  to  enforce  any of the
Obligations,  whether or not such Person  holds any  evidence  of  Indebtedness,
including,  without  limitation,  the Agent, each Lender, each Issuing Bank, the
Affiliate of the Agent at which the Citibank  Collection Account is established,
and each Indemnified Party.

                  "Indebtedness",  as applied to any Person, means, at any time,
without duplication,  (a) all indebtedness,  obligations or other liabilities of
such Person (i) for borrowed money or evidenced by debt Securities,  debentures,
acceptances,  notes or other similar instruments, and any accrued interest, fees
and charges relating thereto, (ii) under agreements in respect of obligations to
redeem, repurchase or exchange any Securities of such Person or to pay dividends
in respect of any Capital  Stock  (other than  obligations  with respect to puts
arising  under the ESOP  Documents),  (iii)  with  respect  to letters of credit
issued for such Person's  account,  (iv) to pay the deferred  purchase  price of
property or  services,  except  accounts  payable,  accrued  expenses  and other
current liabilities  arising in the ordinary course of business,  (v) in respect
of  Capital  Leases,   or  (vi)  under  warranties  and  indemnities;   (b)  all
indebtedness,  obligations  or other  liabilities of others secured by a Lien on
any property of such Person,  whether or not such  indebtedness,  obligations or
liabilities  are  assumed  by  such  Person,  all  as  of  such  time;  (c)  all
indebtedness,  obligations  or other  liabilities  of such  Person in respect of
Hedge Agreements,  net of liabilities owed to such Person by the  counterparties
thereon; (d) all preferred stock subject (upon the occurrence of any contingency
or otherwise) to mandatory  redemption;  (e) all  indebtedness,  obligations  or
other liabilities of such Person under the Securitization  Program;  and (f) all
contingent  liabilities  accrued in accordance  with GAAP with respect to any of
the foregoing.

                  "Indemnified Matters" is defined in Section 14.03.

                  "Indemnitees" is defined in Section 14.03.

                  "Indenture"  means the  Indenture  date as of  January 1, 1992
between Dyn Funding, as issuer, and Bankers Trust Company, as trustee,  relating
to the 8.54% Contract Receivable Collateralized Notes, Series 1992-1, due 1997.

                  "Interest  Coverage Ratio" means, for any period, the ratio of
(i)  Borrower's  Consolidated  EBITDA  to (ii)  Consolidated  Net Cash  Interest
Expense.

                  "Internal  Market" means a stock trading market  maintained by
the Borrower or DynEx,  Inc. (a  Subsidiary of the  Borrower)  whereon  existing
stockholders and other employees of the Borrower are able to buy and sell shares
of the Borrower's common stock at prices  established by the Borrower's board of
directors on trading dates intended to be held once per calendar quarter.

                  "Internal  Revenue  Code" means the  Internal  Revenue Code of
1986,  as  amended  to the date  hereof  and from  time to time  hereafter,  any
successor statute and any regulations or guidance promulgated thereunder.

                  "Inventory"  means,  with  respect to any Person,  all of such
Person's  present and future (i) inventory,  (ii) goods,  merchandise  and other
personal property  furnished or to be furnished under any contract of service or
intended for sale or lease,  and all  consigned  goods and all other items which
have  previously  constituted  Equipment  of such Person but are then  currently
being held for sale or lease in the ordinary  course of such Person's  business,
(iii) raw  materials,  work-in-process  and finished  goods,  (iv) materials and
supplies of any kind,  nature or  description  used or consumed in such Person's
business or in connection with the manufacture,  production,  packing, shipping,
advertising,  finishing or sale of any of the property  described in clauses (i)
through  (iii)  above,  (v)  goods in  which  such  Person  has a joint or other
interest or right of any kind  (including,  without  limitation,  goods in which
such  Person has an interest  or right as  consignee),  and (vi) goods which are
returned  to or  repossessed  by  such  Person;  in  each  case  whether  in the
possession of such Person, a bailee, a consignee,  or any other Person for sale,
storage, transit, processing, use or otherwise, and any and all documents for or
relating to any of the foregoing.

                  "Investment"  means,  with  respect  to any  Person,  (i)  any
purchase or other  acquisition by that Person of Securities,  or of a beneficial
interest in  Securities,  issued by any other Person,  (ii) any purchase by that
Person of all or  substantially  all of the  assets of a business  conducted  by
another Person,  and (iii) any loan, advance (other than deposits with financial
institutions  available for  withdrawal on demand,  prepaid  expenses,  accounts
receivable,  advances to  employees  and  similar  items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person,  including  all  Indebtedness  to  such  Person  arising  from a sale of
property by such Person other than in the ordinary  course of its business.  The
amount of any Investment shall be the original cost of such Investment, plus the
cost of all  additions  thereto  less the  amount of any  return of  capital  or
principal or adjustments for decreases in value,  write-downs or write-offs with
respect to such Investment.

                  "IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.

                  "Issuing Bank" means Citibank and each Lender designated as an
"Issuing Bank" on the signature  pages of the Assignment and Acceptance by which
it became a Lender and each other Lender  approved by the Agent and Borrower who
has agreed to become an  Issuing  Bank for the  purpose  of  issuing  Letters of
Credit pursuant to Section 2.04.

                  "Lender"  means,  as  of  the  Closing  Date,  each  financial
institution  which is a  signatory  hereto as a Lender  and,  at any other given
time, each financial institution which is a party hereto as a Lender, whether as
a signatory hereto or pursuant to an Assignment and Acceptance.

                  "Letter of Credit" means any Commercial Letter of Credit or
Standby Letter of Credit other than an Existing Letter of Credit.

                  "Letter of Credit Fee" is defined in Section 4.03(a).

                  "Letter of Credit  Obligations" means, at any particular time,
the sum of (i) all outstanding  Reimbursement Obligations at such time plus (ii)
the aggregate  undrawn face amount of all  outstanding  Letters of Credit,  plus
(iii) the  aggregate  face  amount of all  Letters  of Credit  requested  by the
Borrower but not yet issued (unless the request for an unissued Letter of Credit
has been denied by the Issuing Bank as referenced  in Section  2.04(c)(i) or has
been withdrawn by the Borrower in writing prior to the issuance thereof).

                  "Letter of Credit Reimbursement Agreement" means, with respect
to  a  Letter  of  Credit,  such  form  of  application  therefor  and  form  of
reimbursement  agreement  therefor  (whether  in a single or several  documents,
taken  together) as the respective  Issuing Bank from which the Letter of Credit
is requested may employ in the ordinary  course of business for its own account,
with such  modifications  thereto as may be agreed upon by such Issuing Bank and
the Borrower and as are not materially  adverse (in the judgment of such Issuing
Bank and the Agent) to the interests of the Lenders;  provided,  however, in the
event of any  conflict  between the terms of any Letter of Credit  Reimbursement
Agreement and this Agreement, the terms of this Agreement shall control, and the
terms of this Agreement,  the Borrower Pledge  Agreement,  the Borrower Security
Agreement, the Guarantor Pledge Agreements and the Guarantor Security Agreements
shall control with respect to matters pertaining to the Collateral.

                  "Liabilities  and Costs" means all  liabilities,  obligations,
responsibilities,   losses,   damages,   punitive  damages,   economic  damages,
consequential damages, treble damages, and damages arising from injury or damage
or threat of damage to the  environment,  natural  resources or public health or
welfare, costs and expenses (including, without limitation, attorney, expert and
consulting fees and costs and fees and costs associated with any  investigation,
feasibility  or  Remedial  Action  studies),   fines,   penalties  and  monetary
sanctions,   interest,  direct  or  indirect,  known  or  unknown,  absolute  or
contingent, past, present or future.

                  "Lien"   means   any   mortgage,   deed  of   trust,   pledge,
hypothecation,  assignment,  conditional  sale agreement,  deposit  arrangement,
security interest,  encumbrance, lien (statutory or other and including, without
limitation,  any  Environmental  Lien),  preference,  priority or other security
agreement  or  preferential  arrangement  of any kind or  nature  whatsoever  in
respect of any property of a Person,  whether granted  voluntarily or imposed by
law, and  includes  the interest of a lessor under a Capital  Lease or under any
financing  lease having  substantially  the same  economic  effect as any of the
foregoing  and the filing of any  financing  statement or similar  notice (other
than a financing statement filed by a "true" lessor pursuant to ss. 9-408 of the
Uniform Commercial Code), naming the owner of such property as debtor, under the
Uniform Commercial Code or other comparable law of any jurisdiction.

                  "Loan" is defined in Section 2.01(a).

                  "Loan Account" is defined in Section 3.03(b).

                  "Loan  Documents"  means this  Agreement,  the Notes,  and all
other instruments,  agreements and written  Contractual  Obligations between the
Borrower or any  Guarantor  and the Agent or any Lender  delivered to either the
Agent  or  such  Lender  pursuant  to or in  connection  with  the  transactions
contemplated hereby.

                  "Margin Stock" means "margin stock" as such term is defined in
Regulation U and Regulation G.

                  "Material Adverse Effect" means a material adverse effect upon
(i) the financial condition,  operations, assets or business of the Borrower and
its  Subsidiaries  taken as a whole,  (ii) the ability of the Borrower or any of
its  Subsidiaries  to  perform  their  respective  obligations  under  the  Loan
Documents,  or (iii) the  ability of the  Lenders or the Agent to enforce any of
the Loan Documents against the Borrower or the Guarantors.

                  "Material  Government  Contract" means any Government Contract
(or group of  present  or  future  related  Government  Contracts),  other  than
Government  Contracts for which the period of  performance  has been  completed,
with  respect  to which the  estimated  revenues  generated  or to be  generated
pursuant thereto equals or exceeds $10,000,000 per annum.

                  "Material Subsidiary" means,  individually,  Dyn Funding, each
Subsidiary  of the  Borrower  formed or  acquired  after the date  hereof  which
receives an initial contract to perform work for a customer, and each Guarantor;
"Material Subsidiaries" means, collectively,  Dyn Funding, all such Subsidiaries
of the Borrower, and all Guarantors.

                  "MIS" means  computerized  management  information  system for
recording and  maintenance of information  regarding  purchases,  sales,  aging,
categorization,  and locations of Inventory,  creation and aging of Receivables,
and accounts payable (including agings thereof).

                  "Multiemployer  Plan" means a "multiemployer  plan" as defined
in Section  4001(a)(3)  of ERISA (other than a Foreign  Employee  Benefit  Plan)
which (i) is, or within the immediately preceding six (6) years was, contributed
to by either  the  Borrower  or any ERISA  Affiliate  or in respect of which the
Borrower or any ERISA  Affiliate  has assumed  any  liability  and (ii) is not a
Foreign Employee Benefit Plan.

                  "Net Cash Proceeds of Issuance of Equity Securities" means net
cash proceeds  (including,  cash equivalents  readily convertible into cash, and
such  proceeds of any notes  received  as  consideration  or any other  non-cash
consideration)  received by the  Borrower or any  Subsidiary  of the Borrower on
account of the issuance of equity  Securities of Borrower or any such Subsidiary
(other than (i) equity  Securities  of a Subsidiary  issued to the  Borrower,  a
Subsidiary of the  Borrower,  the holder of a minority  equity  interest in such
Subsidiary  or the  holder of a fifty  percent  (50%)  equity  interest  in such
Subsidiary if the Borrower or a Subsidiary  of the Borrower  holds the remaining
fifty percent (50%) equity interest in such  Subsidiary,  and (ii) Capital Stock
issued pursuant to Permitted Equity  Securities  Options) net of all transaction
costs and underwriters' discounts with respect thereto; provided,  however, that
(a) cash proceeds, in an amount not to exceed $1,000,000 in the aggregate in any
Fiscal Year, of (1) Capital Stock issued upon conversion of existing outstanding
warrants,  (2) Capital  Stock issued upon  exercise of options,  and (3) Capital
Stock sold by the Borrower  under the  Internal  Market for  Borrower's  Capital
Stock,  and (b) Capital  Stock  contributions  to the ESOP which are made in the
form of Capital  Stock  purchased  with matching  contributions  of the purchase
price  therefor,  will be  deemed  not to be cash  proceeds  on  account  of the
issuance  of  equity   Securities  for  purposes  of  this  definition  and  the
requirements of Section 3.01(b)(iv); and provided further that, in the event the
amount of cash proceeds  described in the foregoing proviso which is received in
any Fiscal Year is less than  $1,000,000,  the amount of the difference  between
$1,000,000  and the actual amount of cash proceeds  received in such Fiscal Year
shall be permitted to carry-over to succeeding Fiscal Years, until received, for
purposes of  determining  the amount of Net Cash  Proceeds of Issuance of Equity
Securities required to be remitted to the Agent under Section 3.01(b)(iv).

                  "Net Cash  Proceeds of Asset  Securitization"  means  proceeds
received by the Borrower or any of its  Subsidiaries  in cash  (including  cash,
equivalents  readily  convertible  into  cash,  and such  proceeds  of any notes
received as  consideration of any other non-cash  consideration)  from the sale,
assignment  or  other  disposition  of  (i)  "Receivables"  (as  defined  in the
Receivables Purchase Agreement) and "Transferor  Receivables" (as defined in the
Servicing  Agreement) of such Persons  which,  immediately  prior to the time of
such  sale,   assignment  or  other  disposition  is  subject  to  the  Existing
Securitization Program and (ii) other Receivables of such Persons sold, assigned
or otherwise disposed of as part of the same transaction,  in each instance, net
of the costs of sale, assignment or other disposition;  provided,  however, that
proceeds  received in connection with the 1997  Receivables  Purchase  Documents
shall not be deemed to be Net Cash Proceeds of Asset  Securitization;  provided,
however,  that Net Cash  Proceeds  of Asset  Securitization  shall  not  include
proceeds  received by Dyn Funding from the repurchase or  re-assignment  of such
"Receivables" and "Transferor Receivables" from Dyn Funding.

                  "Net Cash  Proceeds  of Sale" means  proceeds  received by the
Borrower or any of its Subsidiaries in cash (including cash, equivalents readily
convertible  into cash, and such proceeds of any notes received in consideration
of any other  non-cash  consideration)  from the sale,  assignment,  transfer or
other  disposition  of  Property  other  than  (i)  Property  described  in  the
definition  of "Net Cash  Proceeds of Asset  Securitization"  and (ii)  Property
described in Sections 9.02(a), (b), (c), (d), and (e), in each instance,  net of
the costs of, and taxes incurred in respect of, such sale, assignment,  transfer
or other  disposition and amounts  reimbursed to a Governmental  Authority under
Government  Contracts  as a result of such sale,  assignment,  transfer or other
disposition;  provided,  however,  that such  proceeds  received by a Subsidiary
which is not a  Wholly-Owned  Subsidiary  of the  Borrower  included in Net Cash
Proceeds of Sale shall be limited to the amount  thereof which is transferred to
the Borrower or a Wholly-Owned Subsidiary.

                  "Net  ESOP  Contributions"  means,  for any  period,  (i) cash
contributions  made to the ESOP, but only to the extent that such  contributions
are repaid by the ESOP to the  Borrower in the form of either (a) cash  payments
made  under  loan  agreements  between  the  Borrower  and the  ESOP or (b) cash
proceeds received from the sale of the Borrower's  Capital Stock which is common
stock to the ESOP,  plus (ii) to the extent  expensed,  the fair market value of
the  Borrower's  Capital  Stock which is common stock  contributed  to the ESOP,
minus  (iii) the amount of  principal  payments  made  pursuant  to third  party
ESOP-related  financing  agreements,  all determined on a consolidated  basis in
accordance with GAAP.

                  "New   Stockholders   Agreement"   means  that   certain   New
Stockholders  Agreement  dated as of March  11,  1994  among the  Borrower,  the
"Management  Stockholders"  (as defined therein) and the "Investors" (as defined
therein), as in effect on the Closing Date.

                  "1995 Credit  Agreement"  means that certain Credit  Agreement
dated as of July 25, 1995 entered into by and among Borrower,  Citicorp as agent
thereunder, and Citicorp as lender thereunder, as amended.

                  "1997 Receivables  Purchase Documents" means those agreements,
instruments and documents executed and delivered as contemplated by Section 8.12
to effect the replacement of the Existing Receivables Purchase Documents.

                  "Non Pro Rata Loan" is defined in Section 3.02(b)(v).

                  "Note" means a promissory  note in the form attached hereto as
Exhibit B payable  to a Lender,  evidencing  the Loans  made by such  Lender and
executed by the  Borrower as  required  by Section  3.03(a),  as the same may be
amended,  supplemented,  modified  or  restated  from  time  to  time,  and  any
promissory note issued in substitution  therefor;  "Notes" means,  collectively,
all of such Notes outstanding at any given time.

                  "Notice of Borrowing" means a notice substantially in the form
of Exhibit C attached hereto and made a part hereof.

                  "Notice   of    Conversion/Continuation"    means   a   notice
substantially  in the form of Exhibit D attached  hereto and made a part  hereof
with respect to a proposed  conversion  or  continuation  of a Loan  pursuant to
Section 4.01(c).

                  "Obligations" means all Loans,  advances  (including,  without
limitation, Protective Advances), debts, liabilities, obligations, covenants and
duties  owing by the  Borrower to the Agent,  any Lender,  any  Affiliate of the
Agent or any  Lender,  or any Person  entitled  to  indemnification  pursuant to
Section  14.03 of this  Agreement,  of any kind or  nature,  present  or future,
whether or not  evidenced  by any note,  guaranty or other  instrument,  arising
under this Agreement,  the Notes or any other Loan Document,  whether or not for
the payment of money, whether arising by reason of an extension of credit, loan,
guaranty,  indemnification,  or in any other manner,  whether direct or indirect
(including  those acquired by  assignment),  absolute or  contingent,  due or to
become due,  now existing or hereafter  arising and however  acquired.  The term
includes, without limitation, all interest,  charges, expenses, fees, attorneys'
fees and  disbursements  and any other sum chargeable to the Borrower under this
Agreement or any other Loan Document.

                  "Officer's   Certificate"  means,  as  to  a  corporation,   a
certificate   executed  on  behalf  of  such  corporation  by  the  chairman  or
vice-chairman  of  its  board  of  directors  or  its  president,   any  of  its
vice-presidents, its chief financial officer, or its treasurer.

                  "Operating  Lease" means, as applied to any Person,  any lease
of any property (whether real, personal or mixed) by that Person as lessee which
is not a Capital Lease.

                  "Organizational   Documents"   means,   with  respect  to  any
corporation,    limited    liability    company,    or   partnership   (i)   the
articles/certificate   of  incorporation   (or  the  equivalent   organizational
documents)  of  such  corporation  or  limited  liability   company,   (ii)  the
partnership  agreement  executed by the partners in the  partnership,  (iii) the
by-laws (or the  equivalent  governing  documents) of the  corporation,  limited
liability  company  or  partnership,  and (iv) any  document  setting  forth the
designation,  amount and/or relative rights,  limitations and preferences of any
class or series of such  corporation's  Capital Stock or such limited  liability
company's or partnership's equity or ownership interests.

                  "OSHA" means the  Occupational  Safety and Health Act of 1970,
29 U.S.C. ss.ss. 651 et seq., any amendments thereto, any successor statutes and
any regulations or guidance promulgated thereunder.

                  "PBGC" means the Pension Benefit Guaranty  Corporation and any
Person succeeding to the functions thereof.

                  "Permits" means any permit,  approval,  authorization license,
variance,  or  permission  required  from  a  Governmental  Authority  under  an
applicable Requirement of Law.

                  "Permitted  Acquisition"  means any acquisition of the Capital
Stock,  assets or  operations  of any  Person by the  Borrower  or any  Material
Subsidiary  (other than Dyn Funding) using proceeds of Acquisition  Loans to pay
the purchase price and related fees and expenses; provided that such acquisition
is made at a time when,  after giving effect to such acquisition and the related
financing thereof:

         (i)  no Event of Default or Potential Event of Default exists or would
         occur;

         (ii) on an historical,  pro forma  consolidated  basis giving effect to
         the  acquisition  for the twelve (12)  consecutive  months  immediately
         preceding the acquisition  closing date with adjustments  acceptable to
         the  Lenders  and  Borrower,  the ratio of  Borrower's  Funded  Debt to
         Consolidated  EBITDA does not exceed the then applicable maximum levels
         set forth in Section 10.05;

         (iii) the  Person  which is the  subject of such  acquisition  shall be
         engaged  in  the  business  of  government  or  commercial   enterprise
         management,   information   technology,   or  aerospace  services,   or
         associated with the operation of such a business or activities  related
         thereto;

         (iv)  the Revolving Credit Availability shall be at least $15,000,000;

         (v)  the aggregate outstanding Acquisition Loans shall not exceed
         $25,000,000; and

         (vi) the  Person  acquiring  such  assets  or  operations  shall be the
         Borrower or a Guarantor or, in the event of an  acquisition  of Capital
         Stock  of  a  Person,   such  Person  shall  become  a  Guarantor  upon
         consummation of such acquisition.

                  "Permitted Equity Securities Options" means the subscriptions,
options,  warrants,  rights,  convertible  securities  and other  agreements  or
commitments relating to the issuance of equity Securities of the Borrower or any
Subsidiary of the Borrower identified as such on Schedule 1.01.4.

                  "Permitted  Existing  Accommodation  Obligations"  means those
Accommodation  Obligations  of the Borrower and its  Subsidiaries  identified as
such on Schedule 1.01.5.

                  "Permitted Existing Capital Leases" means those Capital Leases
of the Borrower and its Subsidiaries identified as such on Schedule 1.01.6.

                  "Permitted Existing Indebtedness" means the Indebtedness of
the Borrower and its Subsidiaries identified as such on Schedule 1.01.7.

                  "Permitted  Existing   Investments"  means  those  Investments
identified as such on Schedule  1.01.8 and those  Investments in Subsidiaries of
the Borrower identified on Schedule 6.01-C.

                  "Permitted  Existing  Liens"  means the Liens on assets of the
Borrower or any of its Subsidiaries identified as such on Schedule 1.01.9.

                  "Person"  means  any  natural  person,  corporation,   limited
liability  company,  limited  partnership,   general  partnership,  joint  stock
company, joint venture,  association,  company, trust, bank, trust company, land
trust, business trust or other organization,  whether or not a legal entity, and
any Governmental Authority.

                  "Plan" means an employee  benefit plan defined in Section 3(3)
of ERISA (other than a Foreign  Employee  Benefit  Plan) (i) in respect of which
the Borrower or any ERISA Affiliate is, or within the immediately  preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA or the Borrower
or any ERISA Affiliate has assumed any liability and (ii) which is not a Foreign
Employee Benefit Plan.

                  "Potential  Event of Default"  means an event which,  with the
giving of notice or the lapse of time,  or both,  would  constitute  an Event of
Default.

                  "Principals"  has the meaning set forth in paragraph (a)(2) of
Section 52.209-5 of the Federal Acquisition Regulation.

                  "Process Agent" is defined in Section 14.17(a)(i).

                  "Projections"  means  the  financial  projections  (including,
without limitation,  capital expenditure budget) and assumptions prepared by the
Borrower dated as of the Closing Date and attached hereto as Exhibit E.

                  "Property"  means  any Real  Property  or  personal  property,
underground  storage tank or unit,  Equipment,  Inventory,  General  Intangible,
Receivable,  or other asset  owned,  leased or  operated by the  Borrower or any
Subsidiary of the Borrower, as applicable, (including any surface water thereon,
and soil and groundwater thereunder).

                  "Pro Rata  Share"  means,  with  respect  to any  Lender,  the
percentage obtained by dividing (i) the amount of such Lender's Revolving Credit
Commitment  (as adjusted from time to time in accordance  with the provisions of
this Agreement or any Assignment and Acceptance to which such Lender is a party)
by  (ii)  the  aggregate  amount  of  all of the  Revolving  Credit  Commitments
(notwithstanding the termination of any such Commitments).

                  "Protective Advance" is defined in Section 12.09(a).

                  "RCRA" means the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss.ss. 6901 et seq., any amendments thereto, any successor
statutes, and any regulations promulgated thereunder.

                  "Real Property" means, with respect to any Person, all of such
Person's  present  and future  right,  title and  interest  (including,  without
limitation,  any leasehold estate) in (i) any plots,  pieces or parcels of land,
(ii) any  improvements,  buildings,  structures  and  fixtures  now or hereafter
located or erected thereon or attached  thereto of every nature  whatsoever (the
rights  and  interests  described  in  clauses  (i) and  (ii)  above  being  the
"Premises"),  (iii) all  easements,  rights  of way,  gores of land or any lands
occupied by streets, ways, alleys,  passages, sewer rights, water courses, water
rights  and  powers,  and  public  places  adjoining  such  land,  and any other
interests  in property  constituting  appurtenances  to the  Premises,  or which
hereafter shall in any way belong,  relate or be appurtenant  thereto,  (iv) all
hereditaments,  gas, oil, minerals (with the right to extract,  sever and remove
such gas, oil and minerals), and easements, of every nature whatsoever,  located
in or on the  Premises  and  (v)  all  other  rights  and  privileges  thereunto
belonging  or  appertaining   and  all  extensions,   additions,   improvements,
betterments, renewals, substitutions and replacements to or of any of the rights
and interests described in clauses (iii) and (iv) above.

                  "Receivables"  means, with respect to any Person,  all of such
Person's present and future (i) accounts,  (ii) contract rights,  chattel paper,
instruments,  documents,  deposit  accounts,  and other rights to payment of any
kind,  whether or not arising out of or in connection  with the sale or lease of
goods or the  rendering of services,  and whether or not earned by  performance,
(iii) any of the  foregoing  which are not evidenced by  instruments  or chattel
paper, (iv) intercompany  receivables,  and any security  documents  executed in
connection  therewith,  (v)  proceeds  of any  letters  of credit  or  insurance
policies on which such Person is named as beneficiary, (vi) claims against third
parties  for  advances  and  other  financial   accommodations   and  any  other
obligations whatsoever owing to such Person, (vii) rights in and to all security
agreements, leases, guarantees, instruments,  securities, documents of title and
other contracts securing, evidencing, supporting or otherwise relating to any of
the foregoing,  together with all rights in any goods,  merchandise or Inventory
which any of the  foregoing  may  represent,  and (viii)  rights in returned and
repossessed  goods,  merchandise  and  Inventory  which  any  of  the  same  may
represent,  including,  without  limitation,  any right of  stoppage in transit.
Notwithstanding anything herein to the contrary, "Receivables" as defined herein
shall not  include  any  "Receivable"  as  defined in the  Receivables  Purchase
Agreement or any "Transferor  Receivable" as defined in the Servicing  Agreement
or any item  described in clauses (i) through  (viii) above  transferred  to Dyn
Funding  pursuant to the  Receivables  Purchase  Agreement or transferred by Dyn
Funding to the Trustee pursuant to the Servicing Agreement.

                  "Receivables  Purchase Agreement" means,  collectively,  those
certain  Sale and  Purchase  Agreements  dated as of or after  January  1,  1992
between  Dyn Funding and the sellers  identified  on Schedule  1.01.10  attached
hereto pursuant to which such sellers have sold and, from time to time hereafter
will sell, certain of their accounts to Dyn Funding.

                  "Receivables  Purchase  Documents"  means,  collectively,  the
Existing  Receivables  Purchase  Documents  and the  1997  Receivables  Purchase
Documents, in each instance, during the term the same are in effect.

                  "Register" is defined in Section 14.01(c).

                  "Regulation A" means Regulation A of the Federal Reserve Board
as in effect from time to time.

                  "Regulation G" means Regulation G of the Federal Reserve Board
as in effect from time to time.

                  "Regulation T" means Regulation T of the Federal Reserve Board
as in effect from time to time.

                  "Regulation U" means Regulation U of the Federal Reserve Board
as in effect from time to time.

                  "Regulation X" means Regulation X of the Federal Reserve Board
as in effect from time to time.

                  "Reimbursement Date" is defined in Section 2.04(d)(i)(A).

                  "Reimbursement Obligations" means the aggregate non-contingent
reimbursement  or repayment  obligations of the Borrower with respect to amounts
drawn under Letters of Credit.

                  "Release"  means  any  release,   spill,  emission,   leaking,
pumping,  pouring,  dumping,  injection,  deposit,  disposal,   abandonment,  or
discarding of barrels,  containers or other  receptacles,  discharge,  emptying,
escape, dispersal,  leaching or migration into the indoor or outdoor environment
or into or out of any Property,  including the movement of Contaminants  through
or in the air, soil, surface water, groundwater or Property.

                  "Remedial  Action"  means  actions  required  to (i) clean up,
remove,  treat or in any other way address Contaminants in the indoor or outdoor
environment;  (ii)  prevent  the  Release or threat of Release or  minimize  the
further  Release  of  Contaminants;  or (iii)  investigate  and  determine  if a
remedial  response  is needed and to design  such a response  and  post-remedial
investigation, monitoring, operation and maintenance and care.

                  "Reportable  Event"  means  any of  the  events  described  in
Section 4043(b) of ERISA and the regulations promulgated thereunder as in effect
from time to time  other  than an event for which  the  thirty  (30) day  notice
requirement has been waived by the PBGC.

                  "Requirements of Law" means, as to any Person, the charter and
by-laws or other  organizational or governing  documents of such Person, and any
law, rule or regulation,  or  determination of an arbitrator or a court or other
Governmental  Authority,  in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including,  without limitation, the Securities Act, the Securities Exchange Act,
Regulations  G, T, U and X,  ERISA,  the Fair Labor  Standards  Act,  the Worker
Adjustment and Retraining  Notification Act,  Americans with Disabilities Act of
1990,  and  any   certificate   of  occupancy,   zoning   ordinance,   building,
environmental or land use requirement or Permit or and Environmental,  Health or
Safety Requirement of Law.

                  "Requisite  Lenders"  means Lenders whose Pro Rata Shares,  in
the aggregate,  are greater than fifty-one  percent  (51%);  provided,  however,
that,  in the event any of the  Lenders  shall have  failed to fund its Pro Rata
Share of any Loan  requested by the Borrower which such Lenders are obligated to
fund under the terms of this  Agreement and any such failure has not been cured,
then for so long as such failure  continues,  "Requisite  Lenders" means Lenders
(excluding all Lenders whose failure to fund their respective Pro Rata Shares of
such Loans have not been so cured)  whose Pro Rata  Shares  represent  more than
fifty-one  percent  (51%) of the  aggregate  Pro Rata  Shares  of such  Lenders;
provided,  further,  however,  that, in the event that the Commitments have been
terminated  pursuant to the terms of this Agreement,  "Requisite  Lenders" means
Lenders  (without  regard  to such  Lenders'  performance  of  their  respective
obligations  hereunder) whose aggregate  ratable shares (stated as a percentage)
of the  aggregate  outstanding  principal  balance of all Loans are greater than
fifty-one percent (51%).

                  "Responsible  Officer"  means any of the  president  and chief
executive officer,  executive vice presidents,  senior vice presidents,  general
counsel, and Financial Officers of the Borrower.

                  "Restricted  Junior  Payment"  means (i) any dividend or other
distribution,  direct or  indirect,  on  account  of any  shares of any class of
Capital  Stock  of the  Borrower  or any of its  Subsidiaries  now or  hereafter
outstanding,  except a dividend  payable solely in shares of that class of stock
or in any  junior  class  of  stock  to the  holders  of that  class,  (ii)  any
redemption,  retirement,  sinking  fund or similar  payment,  purchase  or other
acquisition for value, direct or indirect,  of any shares of any class of equity
Securities  of  the  Borrower  or  any of  its  Subsidiaries  now  or  hereafter
outstanding,  and (iii) any  payment  made to redeem,  purchase,  repurchase  or
retire,  or to obtain the surrender  of, any  outstanding  warrants,  options or
other rights to acquire  shares of any class of Capital Stock of the Borrower or
any of its Subsidiaries now or hereafter outstanding.

                  "Restricted Stock Plan" means that certain DynCorp  Restricted
Stock  Plan  dated  May  26,  1989  relating  to the  award  of up to  1,025,037
restricted  stock  units and  vesting  thereof  based upon  certain  performance
criteria.

                  "Revolving Credit Availability" means, at any particular time,
the amount by which the Revolving  Credit  Commitments  at such time exceeds the
Revolving Credit Obligations at such time.

                  "Revolving  Credit  Commitment"  means,  with  respect  to any
Lender,  the  obligation of such Lender to make Loans  pursuant to the terms and
conditions of this  Agreement,  in an aggregate  amount at any time  outstanding
which shall not exceed the  principal  amount set forth  opposite  such Lender's
name under the heading  "Revolving  Credit  Commitment"  on the signature  pages
hereof or the signature page of the Assignment and Acceptance by which it became
a Lender,  as modified from time to time pursuant to the terms of this Agreement
or to give effect to any applicable  Assignment and  Acceptance,  and "Revolving
Credit Commitments" means the aggregate principal amount of the Revolving Credit
Commitments  of all the  Lenders,  the  maximum  amount  of  which  shall be (i)
$50,000,000 during the period commencing on the Closing Date and ending on March
13, 1998, (ii)  $40,000,000  during the period  commencing on March 14, 1998 and
ending on March 13, 1999, and (iii) $30,000,000  during the period commencing on
March 14, 1999,  in each case,  as reduced from time to time pursuant to Section
3.01.

                  "Revolving Credit  Obligations" means, at any particular time,
the sum of (i) the aggregate  amount of the outstanding  principal amount of the
Loans at such time plus (ii) the Letter of Credit Obligations at such time.

                  "Revolving  Credit  Termination  Date"  means the  earliest to
occur of (i) March 13,  2000 (or,  if not a  Business  Day,  the next  preceding
Business  Day),  (ii) in the event the  provisions of Section 8.12 are not fully
complied  with,  the date  any Net Cash  Proceeds  of Asset  Securitization  are
received  by the  Borrower  and/or  any of its  Subsidiaries,  (iii) the date of
termination of the Revolving  Credit  Commitments  pursuant to the terms of this
Agreement,  and (iv) the date of  acceleration  of the  Obligations  pursuant to
Section 11.02.

                  "SARP" means the DynCorp Savings and Retirement Plan  amended
and restated as of January 1, 1989.

                  "SARP  Documents"  means the SARP and related trust  agreement
dated July 1, 1993 between the Borrower and Merril Lynch Trust Company.

                  "Securities"  means any Capital  Stock,  shares,  voting trust
certificates,  limited partnership  certificates,  bonds,  debentures,  notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, and investment property commonly known as "securities", including,
without  limitation,  any "security" as such term is defined in Section 8-102 of
the Uniform  Commercial  Code,  or any  certificates  of  interest,  shares,  or
participations  in  temporary  or  interim  certificates  for  the  purchase  or
acquisition  of, or any right to  subscribe  to,  purchase or acquire any of the
foregoing,  but  shall  not  include  the  Notes or any  other  evidence  of the
Obligations.

                  "Securities  Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.

                  "Securities Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.

                  "Securitization  Program" means the financing transactions set
forth in the Existing  Receivables  Purchase  Documents or the 1997  Receivables
Purchase Documents.

                  "Servicing  Agreement" means that certain Servicing  Agreement
dated as of January 1, 1992 among the  Borrower,  Dyn Funding,  and the Trustee,
together with any and all supplements executed and delivered thereunder.

                  "Solvent", when used with respect to any Person, means that at
the time of determination:

                  (i) the Fair  Market  Value of its  assets is in excess of the
         total  amount  of  its  liabilities  (including,   without  limitation,
         contingent liabilities); and

                 (ii) the present fair saleable  value of its assets is greater
         than its  probable  liability  on its  existing  debts as such debts
         become absolute and matured; and

                 (iii)  it is then  able  and  expects  to be  able to pay its
         debts (including, without limitation, contingent debts and other
         commitments)as they mature; and

                 (iv) it has capital  sufficient  to carry on its business as
         conducted and as proposed to be conducted.

                  "Standby  Letter of Credit"  means any letter of credit issued
for the account of the Borrower or any of the Borrower's  Subsidiaries  which is
not a Commercial Letter of Credit.

                  "Subsidiary"  of  a  Person  means  any  corporation,  limited
liability  company,  general or limited  partnership,  or other  entity of which
securities or other ownership  interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing similar functions
with  respect to such  entity are at the time  directly or  indirectly  owned or
controlled by such Person,  one or more of the other subsidiaries of such Person
or any combination thereof.

                  "Taxes" is defined in Section 13.01(a).

                  "Termination  Event" means (i) a Reportable Event with respect
to any Benefit Plan;  (ii) the withdrawal of the Borrower or any ERISA Affiliate
from a  Benefit  Plan  during a plan year in which the  Borrower  or such  ERISA
Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of ERISA
or the cessation of operations which results in the termination of employment of
20% of Benefit Plan  participants who are employees of the Borrower or any ERISA
Affiliate;  (iii) the  imposition  of an obligation on the Borrower or any ERISA
Affiliate under Section 4041 of ERISA to provide affected parties written notice
of intent to  terminate a Benefit  Plan in a distress  termination  described in
Section  4041(c) of ERISA;  (iv) the  institution  by the PBGC of proceedings to
terminate a Benefit Plan; or (v) any event or condition  which could  reasonably
be  expected  to  constitute  grounds  under  Section  4042  of  ERISA  for  the
termination of, or the appointment of a trustee to administer, any Benefit Plan.

                  "Transaction Costs" means the fees, costs and expenses payable
by the Borrower in connection  with the execution,  delivery and  performance of
the Loan Documents.

                  "Transaction Documents" means the Loan Documents and the
Receivables Purchase Documents.

                  "Trustee" means Bankers Trust Company, as Trustee under the
Indenture.

                  "Uniform Commercial Code" means the Uniform Commercial Code as
enacted in the State of New York, as it may be amended from time to time.

                  "Unused Commitment Fee" is defined in Section 4.03(b).

                  "Wholly-Owned  Subsidiary" means a corporation (i) one hundred
percent (100%) of the Capital Stock of which is owned by the Borrower and/or any
Subsidiary  of the Borrower or (ii) greater than  ninety-eight  percent (98%) of
the  Capital  Stock of which is owned by the  Borrower  or a  Subsidiary  of the
Borrower and the  remainder of which  Capital Stock is owned by a nominee of the
Borrower or such Subsidiary solely to comply with the Requirements of Law of the
jurisdiction governing such corporation's organization and existence.

                  1.02. Computation of Time  PeriodsComputation of Time Periods.
In this  Agreement,  in the computation of periods of time from a specified date
to a later  specified  date,  the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding". Periods of days referred to
in this  Agreement  shall be counted in calendar  days unless  Business Days are
expressly prescribed. Any period determined hereunder by reference to a month or
months or year or years shall end on the day in the relevant  calendar  month in
the relevant year, if  applicable,  immediately  preceding the date  numerically
corresponding  to the first day of such  period;  provided  that if such  period
commences on the last day of a calendar month (or on a day for which there is no
numerically  corresponding day in the calendar month during which such period is
to end), such period shall,  unless  otherwise  expressly  required by the other
provisions  of this  Agreement,  end on the last day of the  calendar  month and
further provided that Fiscal Months and Fiscal Quarters for the Borrower and its
Subsidiaries,  respectively, shall end on the dates set forth in Schedule 1.01.2
for such Persons.

                  1.03.  Accounting  TermsAccounting  Terms.  Subject to Section
14.04,  for  purposes of this  Agreement,  all  accounting  terms not  otherwise
defined herein shall have the meanings assigned to them in conformity with GAAP.

                  1.04.  Other  TermsOther  Terms.  All other terms contained in
this Agreement shall, unless the context indicates otherwise,  have the meanings
assigned to such terms by the Uniform Commercial Code to the extent the same are
defined therein.

                                   ARTICLE II
                           AMOUNTS AND TERMS OF LOANS
                              AND LETTERS OF CREDIT

                  2.01. Revolving Credit  FacilityRevolving Credit Facility. (a)
Availability.  Subject to the terms and conditions set forth in this  Agreement,
each Lender hereby  severally and not jointly agrees to make revolving loans, in
Dollars  (each  individually,  a "Loan" and,  collectively,  the "Loans") to the
Borrower  from time to time  during  the  period  from the  Closing  Date to the
Business Day next preceding the Revolving Credit  Termination Date, in an amount
not to exceed such Lender's Pro Rata Share of the Revolving Credit  Availability
at such time. All Loans comprising the same Borrowing under this Agreement shall
be  made  by the  Lenders  simultaneously  and  proportionately  to  their  then
respective  Pro  Rata  Shares,  it  being  understood  that no  Lender  shall be
responsible  for any failure by any other  Lender to perform its  obligation  to
make a Loan hereunder nor shall the Revolving Credit Commitment of any Lender be
increased  or  decreased  as a  result  of  any  such  failure.  Subject  to the
provisions of this Agreement, the Borrower may repay any outstanding Loan on any
day which is a Business Day and any amounts so repaid may be  reborrowed,  up to
the amount  available  under this Section 2.01(a) at the time of such Borrowing,
until the Business Day next  preceding the Revolving  Credit  Termination  Date;
provided,  however,  the Borrower  shall,  without notice or demand of any kind,
immediately  make such repayments of the Loans to the extent necessary to reduce
the aggregate  outstanding  principal amount of the Revolving Credit Obligations
to an amount less than or equal to the Revolving Credit Commitments as in effect
from time to time.

                  (b) Notice of Borrowing.  When the Borrower  desires to borrow
under this Section  2.01,  it shall  deliver to the Agent a Notice of Borrowing,
signed by it, (i) on the Closing  Date,  in the case of a Borrowing  of Loans on
the  Closing  Date and (ii) no later than 11:00 a.m.  (New York time) (A) on the
Funding Date  therefor,  in the case of a Borrowing of Base Rate Loans after the
Closing Date and (B) at least three (3) Business Days in advance of the proposed
Funding Date therefor, in the case of a Borrowing of Eurodollar Rate Loans after
the  Closing  Date.  Such Notice of  Borrowing  shall  specify (i) the  proposed
Funding  Date (which shall be a Business  Day),  (ii) the amount of the proposed
Borrowing, (iii) the Revolving Credit Availability as of the date of such Notice
of Borrowing,  (iv) whether the proposed Borrowing will be of Base Rate Loans or
Eurodollar Rate Loans,  (v) in the case of Eurodollar Rate Loans,  the requested
Eurodollar  Interest Period,  and (vi)  instructions for the disbursement of the
proceeds  of the  proposed  Borrowing;  and,  in the event the  proceeds  of the
proposed  Borrowing  are to be used to  acquire  the  Capital  Stock,  assets or
operations of another Person, include the certification of a Responsible Officer
that such acquisition is a Permitted Acquisition.  The Loans made on the Closing
Date shall  initially be Base Rate Loans and thereafter may be continued as Base
Rate Loans or converted into  Eurodollar  Rate Loans,  in the manner provided in
Section  4.01(c) and subject to the conditions  therein set forth and in Section
4.02. In lieu of delivering such a Notice of Borrowing (except with respect to a
Borrowing  of  Loans on the  Closing  Date),  the  Borrower  may give the  Agent
telephonic  notice of any  proposed  Borrowing by the time  required  under this
Section  2.01(b),  if the  Borrower  confirms  such  notice by  delivery  of the
required  Notice of Borrowing to the Agent by facsimile  transmission  promptly,
but in no event  later  than 2:00  p.m.  (New  York  time) on the same day,  the
original of which  facsimile  copy shall be  delivered to the Agent within three
(3) days  after  the date of such  transmission.  Any  Notice of  Borrowing  (or
telephonic  notice in lieu thereof) given pursuant to this Section 2.01(b) shall
be irrevocable.

                  (c) Making of Loans. (i) Promptly after receipt of a Notice of
Borrowing  under Section  2.01(b) (or telephonic  notice in lieu  thereof),  the
Agent  shall  notify  each  Lender  by  telecopy,   or  other  similar  form  of
transmission,  of the proposed  Borrowing.  Each Lender shall  deposit an amount
equal to its Pro Rata Share of the amount  requested  by the Borrower to be made
as Loans  with the Agent at its  office in New York,  New York,  in  immediately
available  funds, (A) on the Closing Date with respect to the Borrowing of Loans
on such date specified in the initial Notice of Borrowing and (B) not later than
12:00 noon (New York time) on any other  Funding Date for Loans.  Subject to the
fulfillment  of the  conditions  precedent  set forth in Section 5.01 or Section
5.02, as applicable,  the Agent shall promptly make the proceeds of such amounts
received by it available to the Borrower at the Agent's  office in New York, New
York on such  Funding  Date (or on the date  received if later than such Funding
Date) and shall promptly  deposit such proceeds to the  Borrower's  disbursement
Account  No.  4067-7374  at  Citibank.  The failure of any Lender to deposit the
amount  described above with the Agent on the applicable  Funding Date shall not
relieve any other Lender of its  obligations  hereunder to make its Loan on such
Funding Date. In the event the conditions precedent set forth in Section 5.01 or
5.02, as applicable,  are not fulfilled as of the proposed  Funding Date for any
Borrowing,  the Agent shall  promptly  return,  by wire transfer of  immediately
available funds, the amount deposited by each Lender to such Lender.

                  (ii) Unless the Agent  shall have been  notified by any Lender
on the Business Day immediately preceding the applicable Funding Date in respect
of any  Borrowing  of Loans  that such  Lender  does not intend to fund its Loan
requested to be made on such Funding Date, the Agent may assume that such Lender
has funded its Loan and is depositing the proceeds thereof with the Agent on the
Funding Date therefor,  and the Agent in its sole  discretion may, but shall not
be  obligated  to,  disburse  a  corresponding  amount  to the  Borrower  on the
applicable  Funding Date. If the Loan proceeds  corresponding to that amount are
advanced  to the  Borrower by the Agent but are not in fact  deposited  with the
Agent by such Lender on or prior to the  applicable  Funding  Date,  such Lender
agrees to pay,  and in  addition  the  Borrower  agrees  to repay,  to the Agent
forthwith on demand such corresponding  amount,  together with interest thereon,
for each day from the date such amount is disbursed to or for the benefit of the
Borrower  until the date such amount is paid or repaid to the Agent,  (A) in the
case of the Borrower,  at the interest rate applicable to such Borrowing and (B)
in the case of such  Lender,  at the Federal  Funds Rate for the first three (3)
Business Days, and thereafter at the interest rate applicable to such Borrowing.
If such Lender shall pay to the Agent the  corresponding  amount,  the amount so
paid  shall  constitute  such  Lender's  Loan,  and if both such  Lender and the
Borrower shall pay and repay such corresponding amount, the Agent shall promptly
pay to the Borrower such corresponding amount. This Section 2.01(c)(ii) does not
relieve any Lender of its obligation to make its Loan on any applicable  Funding
Date or prejudice  any rights the  Borrower  may have  against  such  defaulting
Lender.

                  (d) Revolving  Credit  Termination  Date. The Revolving Credit
Commitments  shall  terminate on the  Revolving  Credit  Termination  Date.  All
outstanding  Revolving Credit Obligations shall be paid in full on the Revolving
Credit Termination Date.

                  (e)  Maximum   Revolving  Credit   Facility.   Notwithstanding
anything in this  Agreement  to the  contrary,  in no event shall the  aggregate
principal Revolving Credit Obligations exceed the amount of the Revolving Credit
Commitments  in  effect  from time to time,  as  reduced  by the  amount of each
permanent reduction of the Revolving Credit Commitments made pursuant to Section
3.01.

                  2.02.  Authorized Officers and  AgentsAuthorized  Officers and
Agents.  On the Closing Date the Borrower shall  deliver,  and from time to time
thereafter  the  Borrower may  deliver,  to the Agent an  Officer's  Certificate
setting  forth the names of the  officers,  employees  and agents  authorized to
request Loans and Letters of Credit, and to request a conversion/continuation of
any Loan, in each instance containing a specimen signature of each such officer,
employee or agent.  The officers,  employees and agents so authorized shall also
be authorized  to act for the Borrower in respect of all other matters  relating
to the  Loan  Documents.  The  Agent  and  Lenders  shall  be  entitled  to rely
conclusively on such officer's, employee's, or agent's authority to request such
Loan or such conversion/continuation until the Agent and Lenders receive written
notice to the contrary.  None of the Agent or the Lenders shall have any duty to
verify  the  authenticity  of the  signature  appearing  on any  such  Officer's
Certificate,  written Notice of Borrowing or Notice of  Conversion/Continuation,
or any other  document,  and, with respect to an oral request for such a Loan or
such  conversion/continuation,  the  Agent  shall  have no duty  to  verify  the
identity of any person  representing  himself or herself as one of the officers,
employees  or agents  authorized  to make such  request or  otherwise  to act on
behalf  of the  Borrower.  Neither  the  Agent nor any  Lender  shall  incur any
liability to the Borrower or any other Person in acting upon any  telephonic  or
facsimile  notice  referred to above which the Agent or such Lender  believes to
have been given by a duly  authorized  officer  or other  person  authorized  to
borrow on behalf of the Borrower.

                  2.03.  Use of  Proceeds  of Loans.  The  proceeds of the Loans
shall be used for  working  capital  and capital  expenditures  in the  ordinary
course  of the  respective  businesses  of the  Borrower  and its  Subsidiaries,
payment of tax liabilities,  contributions to the ESOP, permitted repurchases of
Capital Stock of the Borrower, or for other lawful general corporate purposes of
the Borrower and its Subsidiaries not prohibited hereunder; and, with respect to
Acquisition Loans, the proceeds thereof shall be used for payment of part or all
of the  purchase  price of, and  related  fees and  expenses  with  respect  to,
Permitted Acquisitions and shall not exceed $25,000,000, in the aggregate at any
time outstanding.

                  2.04.  Letters of Credit.  Subject to the terms and conditions
set forth in this Agreement,  each Issuing Bank hereby severally agrees to issue
for the account of the  Borrower,  or for the  account of any of the  Borrower's
Subsidiaries if the Borrower is jointly and severally  liable for  reimbursement
of amounts  drawn  under such Letter of Credit,  one or more  Letters of Credit,
subject to the following provisions:

                  (a) Types and  Amounts.  An  Issuing  Bank  shall not have any
obligation to issue,  amend or extend, and shall not issue, amend or extend, any
Letter of Credit at any time:

                  (i) if the aggregate Letter of Credit Obligations with respect
         to such Issuing Bank, after giving effect to the issuance, amendment or
         extension of the Letter of Credit requested hereunder, shall exceed any
         limit imposed by law or regulation upon such Issuing Bank;

                  (ii) if the  Issuing  Bank  receives  written  notice from the
         Agent  at or  before  11:00  a.m.  (New  York  time) on the date of the
         proposed issuance, amendment or extension of such Letter of Credit that
         (A)  immediately  after  giving  effect to the  issuance,  amendment or
         extension  of  such  Letter  of  Credit,   (I)  the  Letter  of  Credit
         Obligations  at  such  time  would  exceed  $15,000,000,  or  (II)  the
         Revolving  Credit  Obligations  at such time would exceed the Revolving
         Credit  Commitments  at such time, or (B) one or more of the conditions
         precedent contained in Sections 5.01 or 5.02, as applicable,  would not
         on such  date be  satisfied,  unless  such  conditions  are  thereafter
         satisfied  and  written  notice  of such  satisfaction  is given to the
         Issuing Bank by the Agent (and an Issuing  Bank shall not  otherwise be
         required to determine  that,  or take notice  whether,  the  conditions
         precedent set forth in Sections 5.01 or 5.02, as applicable,  have been
         satisfied);

                  (iii) which has an  expiration  date later than the earlier of
         (A) the date one (1) year after the date of issuance (without regard to
         any automatic renewal provisions  thereof) or (B) the Business Day next
         preceding the scheduled  Revolving Credit  Termination Date unless Cash
         Collateral in an amount equal to (1) the undrawn face amount thereof in
         the case of Standby Letters of Credit and (2) one hundred three percent
         (103%) of the  undrawn  face amount  thereof in the case of  Commercial
         Letters of Credit  plus,  in either  case,  fees  payable over the term
         thereof is  deposited  with the Agent or Issuing Bank on the date which
         is one (1) year prior to the  scheduled  Revolving  Credit  Termination
         Date; or

                  (iv)  which  is  in  a  currency  other  than  Dollars  unless
         otherwise   agreed  by  the  Issuing  Bank  and  Agent  and   provision
         satisfactory  to the Issuing  Bank and Lenders is made for the Borrower
         to bear the risk of currency fluctuations.

                  (b)   Conditions.   In  addition  to  being   subject  to  the
satisfaction of the conditions precedent contained in Sections 5.01 and 5.02, as
applicable,  the  obligation  of an Issuing  Bank to issue,  amend or extend any
Letter  of  Credit  is  subject  to the  satisfaction  in full of the  following
conditions:

                  (i) if the Issuing Bank so  requests,  the Borrower or, in the
         case  of  Letters  of  Credit  issued  for  the  account  of any of the
         Borrower's  Subsidiaries,  the Borrower and such Subsidiary  shall have
         executed  and  delivered to such Issuing Bank and the Agent a Letter of
         Credit  Reimbursement  Agreement and such other documents and materials
         as may be required pursuant to the terms thereof; and

                  (ii) the  terms of the  proposed  Letter  of  Credit  shall be
         satisfactory to the Issuing Bank in its sole discretion.

                  (c) Issuance of Letters of Credit. (i) The Borrower shall give
an Issuing Bank and the Agent  written  notice that it has selected such Issuing
Bank to issue a Letter of Credit not later  than  11:00 a.m.  (New York time) on
the third (3rd) Business Day preceding the requested  date for issuance  thereof
under  this  Agreement,  or such  shorter  notice as may be  acceptable  to such
Issuing Bank and the Agent.  Such notice shall be  irrevocable  unless and until
such  request  is denied by the  applicable  Issuing  Bank or the  Issuing  Bank
receives written notice from the Borrower to hold,  cancel or amend the proposed
Letter of Credit  prior to the issuance  thereof and shall  specify (A) that the
requested Letter of Credit is either a Commercial  Letter of Credit or a Standby
Letter of Credit,  (B) that such  Letter of Credit is solely for the  account of
the Borrower or the name of the  Subsidiary of the Borrower which is jointly and
severally  applying  for such  Letter of Credit,  (C) the  stated  amount of the
Letter of Credit  requested,  (D) the effective  date (which shall be a Business
Day) of issuance of such Letter of Credit,  (E) the date on which such Letter of
Credit is to expire (which,  except to the extent otherwise  provided in Section
2.04(a)(iii),  shall be a  Business  Day and no  later  than  the  Business  Day
immediately  preceding the scheduled Revolving Credit Termination Date), (F) the
Person  for whose  benefit  such  Letter of  Credit is to be  issued,  (G) other
relevant terms of such Letter of Credit, (H) the Revolving Credit Commitments at
such  time,  and (I)  the  amount  of the  then  outstanding  Letter  of  Credit
Obligations.  Such Issuing Bank shall notify the Agent  immediately upon receipt
of a written  notice  from the  Borrower  requesting  that a Letter of Credit be
issued,  or that an existing  Letter of Credit be extended or amended and,  upon
the Agent's request therefor, send a copy of such notice to the Agent.

                  (ii) The Issuing Bank shall give (A) the Agent written notice,
or telephonic notice confirmed promptly  thereafter in writing, of the issuance,
amendment or extension  of a Letter of Credit and (B)  promptly  after  issuance
thereof, provide the Agent and the Borrower with a copy of each Letter of Credit
issued and each amendment thereto.

                  (d)      Reimbursement Obligations; Duties of Issuing Banks.

                  (i)  Notwithstanding any provisions to the contrary in any
Letter of Credit Reimbursement Agreement:

                  (A) the Borrower shall reimburse,  or cause its Subsidiary for
         whose  account a Letter of Credit is issued to  reimburse,  the Issuing
         Bank for  amounts  drawn under such  Letter of Credit,  in Dollars,  no
         later  than  the  date  (the  "Reimbursement  Date")  which  is one (1)
         Business  Day after  the  Borrower  receives  written  notice  from the
         Issuing  Bank that payment has been made under such Letter of Credit by
         the Issuing Bank; and

                  (B) all  Reimbursement  Obligations with respect to any Letter
         of Credit shall bear interest at the rate applicable to Base Rate Loans
         in  accordance  with  Section  4.01(a)  from the  date of the  relevant
         drawing  under such Letter of Credit until the  Reimbursement  Date and
         thereafter at the rate applicable to Base Rate Loans in accordance with
         Section 4.01(d).

                  (ii) The Issuing Bank shall give the Agent written notice,  or
telephonic  notice  confirmed  promptly  thereafter in writing,  of all drawings
under a Letter of Credit and the payment (or the failure to pay when due) by the
Borrower or its applicable  Subsidiary on account of a Reimbursement  Obligation
(which notice the Agent shall promptly transmit by telegram,  telex, telecopy or
similar transmission to each Lender).

             (iii) No action  taken or omitted in good faith by an Issuing  Bank
under or in  connection  with any Letter of Credit  shall put such  Issuing Bank
under  any  resulting  liability  to  any  Lender,  the  Borrower  or any of its
Subsidiaries except for actions taken or omitted resulting from gross negligence
or wilfull  misconduct of the Issuing Bank as determined by a court of competent
jurisdiction,  or, so long as it is not issued in violation of Section  2.04(a),
relieve any Lender of its obligations  hereunder to such Issuing Bank. Solely as
between the Issuing Banks and the Lenders,  in determining  whether to pay under
any Letter of Credit,  the  respective  Issuing Bank shall have no obligation to
the Lenders  other than to confirm that any  documents  required to be delivered
under a respective  Letter of Credit appear to have been delivered and that they
appear on their face to comply with the requirements of such Letter of Credit.

                  (e)  Participations.  (i)  Immediately  upon  issuance  by  an
Issuing Bank of any Letter of Credit in accordance with the procedures set forth
in this Section 2.04 and immediately upon conversion of a letter of credit of an
Issuing Bank to a Letter of Credit  pursuant to Section 2.04,  each Lender shall
be deemed to have  irrevocably and  unconditionally  purchased and received from
that  Issuing  Bank,  without  recourse or warranty,  an undivided  interest and
participation  in such Letter of Credit to the extent of such  Lender's Pro Rata
Share,  including,  without  limitation,  all  obligations  of the Borrower with
respect  thereto  (other than amounts  owing to the Issuing  Bank under  Section
2.04(g)) and any security therefor and guaranty pertaining thereto.

                  (ii) If any Issuing Bank makes any payment under any Letter of
Credit and the Borrower or the  Subsidiary of the Borrower for whose account the
Letter of Credit was issued does not repay such  amount to the  Issuing  Bank on
the Reimbursement  Date, the Issuing Bank shall promptly notify the Agent, which
shall  promptly  notify  each  Lender,   and  each  Lender  shall  promptly  and
unconditionally  pay to the Agent  for the  account  of such  Issuing  Bank,  in
immediately  available funds, the amount of such Lender's Pro Rata Share of such
payment (net of that portion of such payment, if any, made by such Lender in its
capacity as an Issuing  Bank),  and the Agent shall  promptly pay to the Issuing
Bank such amounts  received by it, and any other  amounts  received by the Agent
for the Issuing Bank's account, pursuant to this Section 2.04(e). All amounts so
paid to the Issuing Bank shall be deemed to constitute  Loans.  If a Lender does
not make its Pro Rata  Share of the  amount  of such  payment  available  to the
Agent,  such  Lender  agrees to pay to the Agent for the  account of the Issuing
Bank,  forthwith on demand, such amount together with interest thereon,  for the
first three (3)  Business  Days after the date such payment was first due at the
Federal Funds Rate, and thereafter at the interest rate then  applicable to Base
Rate Loans in accordance with Section 4.01(a). The failure of any Lender to make
available  to the Agent for the account of an Issuing Bank its Pro Rata Share of
any such  payment  shall  neither  relieve  any other  Lender of its  obligation
hereunder  to make  available  to the Agent for the account of such Issuing Bank
such other Lender's Pro Rata Share of any payment on the date such payment is to
be made nor increase the  obligation of any other Lender to make such payment to
the Agent.

                  (iii)  Whenever an Issuing Bank  receives a payment on account
of a Reimbursement  Obligation,  including any interest thereon, as to which the
Agent has previously  received  payments from any Lender for the account of such
Issuing Bank pursuant to this Section 2.04(e),  such Issuing Bank shall promptly
pay to the Agent and the Agent shall promptly pay to such Lender an amount equal
to such Lender's Pro Rata Share thereof. Each such payment shall be made by such
Issuing Bank or the Agent, as the case may be, on the Business Day on which such
Person  receives  the  funds  paid  to such  Person  pursuant  to the  preceding
sentence,  if received prior to 11:00 a.m. (New York time) on such Business Day,
and otherwise on the next succeeding Business Day.

                  (iv) Upon the  request of any  Lender,  an Issuing  Bank shall
furnish  such  Lender  copies  of any  Letter  of  Credit  or  Letter  of Credit
Reimbursement  Agreement  to which  such  Issuing  Bank is party and such  other
documentation as reasonably may be requested by such Lender.

                  (v) The  obligations of a Lender to make payments to the Agent
for the account of any Issuing  Bank with respect to a Letter of Credit shall be
irrevocable,  shall not be subject to any qualification or exception  whatsoever
except willful misconduct or gross negligence of such Issuing Bank, and shall be
honored in accordance with this Article III (irrespective of the satisfaction of
the  conditions  described in Sections 5.01 and 5.02, as  applicable)  under all
circumstances,   including,   without   limitation,   any   of   the   following
circumstances:

                  (A)      any lack of validity or enforceability of this
         Agreement or any of the other Loan Documents;

                  (B) the existence of any claim, setoff, defense or other right
         which the Borrower may have at any time against a beneficiary  named in
         a Letter of Credit or any transferee of a beneficiary named in a Letter
         of Credit (or any Person for whom any such  transferee  may be acting),
         the Agent, the Issuing Bank, any Lender,  or any other Person,  whether
         in  connection  with  this  Agreement,   any  Letter  of  Credit,   the
         transactions   contemplated   herein  or  any  unrelated   transactions
         (including  any underlying  transactions  between the account party and
         beneficiary named in any Letter of Credit);

                  (C) any draft,  certificate  or any other  document  presented
         under  the  Letter of  Credit  having  been  determined  to be  forged,
         fraudulent,  invalid or  insufficient  in any respect or any  statement
         therein being untrue or inaccurate in any respect;

                  (D)      the surrender or impairment of any security for the
         performance or observance of any of the terms of any of the Loan
         Documents;

                  (E)      any failure by that Issuing Bank to make any reports
         required pursuant to Section 2.04(h) or the inaccuracy of any such
         report; or

                  (F) the occurrence of any Event of Default or Potential  Event
of Default.

                  (f) Payment of  Reimbursement  Obligations.  (i) The  Borrower
unconditionally  agrees to pay,  or cause  its  Subsidiary  for whose  account a
Letter of Credit is issued to pay, to each Issuing Bank, in Dollars,  the amount
of all  Reimbursement  Obligations,  interest and other amounts  payable to such
Issuing Bank under or in connection with the Letters of Credit when such amounts
are due and payable,  irrespective of any claim, setoff,  defense or other right
which the  Borrower  may have at any time  against any Issuing Bank or any other
Person.

             (ii) In the event any payment by the  Borrower  or such  Subsidiary
received by an Issuing Bank with  respect to a Letter of Credit and  distributed
by the Agent to the Lenders on account of their participations is thereafter set
aside,  avoided or  recovered  from such  Issuing  Bank in  connection  with any
receivership,  liquidation or bankruptcy proceeding,  each Lender which received
such  distribution  shall,  upon demand by such Issuing  Bank,  contribute  such
Lender's Pro Rata Share of the amount set aside,  avoided or recovered  together
with  interest  at the rate  required to be paid by such  Issuing  Bank upon the
amount required to be repaid by it.

                  (g) Issuing Bank Charges. The Borrower shall pay, or cause its
Subsidiary  for whose  account  a Letter  of  Credit  is issued to pay,  to each
Issuing Bank, solely for its own account,  the standard charges assessed by such
Issuing Bank in  connection  with the  issuance,  administration,  amendment and
payment or cancellation of Letters of Credit and such compensation in respect of
such  Letters of Credit for the  Borrower's  or such  Subsidiary's  account,  as
applicable, as may be agreed upon prior to issuance of such Letters of Credit by
the  Borrower  and such  Issuing  Bank.  In no event  shall an  Issuing  Bank be
relieved of its  obligation to issue  Letters of Credit in  accordance  with the
terms of this Agreement based upon the Borrower's not agreeing to any such other
compensation in addition to the aforesaid standard charges.

                  (h) Issuing  Bank  Reporting  Requirements.  Each Issuing Bank
shall,  no later than the tenth (10th)  Business Day  following  the last day of
each  calendar  month,  provide  to the Agent,  the  Borrower,  and each  Lender
separate  schedules  for  Commercial  Letters of Credit and  Standby  Letters of
Credit  issued  as  Letters  of  Credit,   in  form  and  substance   reasonably
satisfactory  to the  Agent,  setting  forth  the  aggregate  Letter  of  Credit
Obligations  outstanding  to it at the end of each month and,  to the extent not
otherwise provided in accordance with the provisions of Section 2.04(c)(ii), any
information  requested  by the  Agent or the  Borrower  relating  to the date of
issue,  account  party,  amount,  expiration  date and reference  number of each
Letter of Credit issued by it.

                  (i) Indemnification; Exoneration. (i) In addition to all other
amounts  payable to an  Issuing  Bank,  the  Borrower  hereby  agrees to defend,
indemnify,  and save the Agent,  each Issuing Bank and each Lender harmless from
and against any and all claims, demands, liabilities, penalties, damages, losses
(other than loss of profits),  costs, charges and expenses (including reasonable
attorneys' fees but excluding taxes) which the Agent,  such Issuing Bank or such
Lender may incur or be subject to as a consequence,  direct or indirect,  of (A)
the  issuance  of any  Letter  of  Credit  other  than as a result  of the gross
negligence  or willful  misconduct of the Issuing Bank, as determined by a court
of  competent  jurisdiction,  or (B) the failure of the Issuing  Bank  issuing a
Letter of Credit to honor a drawing  under such  Letter of Credit as a result of
any act or omission,  whether rightful or wrongful,  of any present or future de
jure or de facto  government or  Governmental  Authority.  In no event shall the
Issuing  Bank be liable to the  Borrower  or any  Lender  for  consequential  or
special damages.

             (ii) As between the Borrower and any of its  Subsidiaries for whose
account a Letter of Credit is issued on the one hand and the Agent,  the Lenders
and the Issuing Banks on the other hand,  the Borrower  assumes all risks of the
acts and  omissions  of, or misuse of  Letters  of  Credit  by,  the  respective
beneficiaries of the Letters of Credit.  In furtherance and not in limitation of
the foregoing,  subject to the provisions of the Letter of Credit  Reimbursement
Agreements,  the Issuing Banks and the Lenders shall not be responsible for: (A)
the form, validity, legality, sufficiency, accuracy, genuineness or legal effect
of any document  submitted by any party in connection  with the  application for
and issuance of the Letters of Credit,  even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B)
the  validity,  legality  or  sufficiency  of  any  instrument  transferring  or
assigning or  purporting  to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason; (C) failure of the beneficiary of a
Letter of Credit to comply duly with  conditions  required in order to draw upon
such  Letter  of  Credit;  (D)  errors,  omissions,  interruptions  or delays in
transmission or delivery of any messages,  by mail, cable,  telegraph,  telex or
otherwise,  whether or not they be in cipher;  (E) errors in  interpretation  of
technical  terms;  (F) any loss or delay in the transmission or otherwise of any
document  required  in order to make a drawing  under any Letter of Credit or of
the proceeds thereof;  (G) the  misapplication by the beneficiary of a Letter of
Credit of the proceeds of any drawing  under such Letter of Credit;  and (H) any
consequences  arising from causes  beyond the control of the Agent,  the Issuing
Banks or the Lenders.

                  (j) Obligations  Several. The obligations of each Issuing Bank
and each  Lender  under this  Section  2.04 are  several  and not joint,  and no
Issuing Bank or Lender shall be responsible  for the obligation to issue Letters
of Credit or  participation  obligation  hereunder,  respectively,  of any other
Issuing Bank or Lender.


                             ARTICLE III       PAYMENTS AND PREPAYMENTS

                  3.01.  Prepayments; Reductions in CommitmentsPrepayments;
Reductions in Commitments.

                   (a)  Voluntary   Prepayments/Reductions.   (i)  Notice.   The
Borrower  may repay  Loans,  without  prior  written  notice to the Agent or any
Lender, at any time and from time to time;  provided,  however,  Eurodollar Rate
Loans may only be prepaid (A) in whole or in part on the expiration  date of the
then applicable  Eurodollar  Interest  Period,  upon at least three (3) Business
Days' prior written notice to the Agent (which the Agent shall promptly transmit
to each  Lender),  or (B)  otherwise  upon  payment of the amounts  described in
Section  13.05.  Any notice of prepayment  given to the Agent under this Section
3.01(a)(i)  shall  specify the Loans to be prepaid,  the date (which  shall be a
Business  Day)  of  prepayment,  and  the  aggregate  principal  amount  of  the
prepayment.  When notice of  prepayment  is  delivered as provided  herein,  the
principal  amount of the Loans  specified  in the  notice  shall  become due and
payable on the prepayment date specified in such notice.

                  (ii) Voluntary  Revolving Credit  Commitment  Reductions.  The
Borrower,  upon at least three (3) Business  Days' prior  written  notice to the
Agent (which the Agent shall promptly  transmit to each Lender),  shall have the
right,  at any time and from time to time, to terminate in whole or  permanently
reduce in part the  Revolving  Credit  Commitments;  provided  that the Borrower
shall have made whatever  payment may be required to reduce the Revolving Credit
Obligations to an amount less than or equal to the Revolving Credit  Commitments
as  reduced  or  terminated.  Any  partial  reduction  of the  Revolving  Credit
Commitments  shall be in an aggregate  minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount, and shall reduce the Revolving
Credit Commitment of each Lender proportionately in accordance with its Pro Rata
Share.  Any notice of  termination  or  reduction  given to the Agent under this
Section  3.01(a)(ii)  shall  specify the date (which shall be a Business Day) of
such  termination  or reduction  and, with respect to a partial  reduction,  the
aggregate  principal amount thereof.  When notice of termination or reduction is
delivered as provided herein, the principal amount of the Loans specified in the
notice shall become due and payable on the date specified in such notice.

                  (b) Mandatory Prepayments. (i) Immediately upon the Borrower's
or any  of  its  Subsidiaries'  receipt  of  any  Net  Cash  Proceeds  of  Asset
Securitization  if the  provisions of Section 8.12 have not been fully  complied
with, the Borrower shall make or cause to be made a mandatory  prepayment of the
Revolving Credit Obligations in an amount equal to one hundred percent (100%) of
such Net Cash  Proceeds  of Asset  Securitization  (not to exceed the  aggregate
Revolving Credit Obligations).

                  (ii) No later than the  Business Day next  succeeding  any day
when the Revolving Credit  Obligations  exceed the Revolving Credit  Commitments
then in  effect,  the  Borrower  shall  make  or  cause  to be made a  mandatory
prepayment of the Revolving Credit  Obligations in an amount equal to the amount
of such excess as required pursuant to Section 2.01(a).

                  (iii) Promptly upon Borrower's or any Subsidiary of Borrower's
receipt  of Net Cash  Proceeds  of Sale in  excess  of  $250,000  from the sale,
transfer or other  disposition of Property in a single  transaction or series of
related  transactions in any Fiscal Year, the Borrower shall make or cause to be
made a mandatory  prepayment of the Revolving  Credit  Obligations  in an amount
equal to such Net Cash Proceeds of Sale.

                  (iv)  Promptly  upon  Borrower's  or  any  Subsidiary  of  the
Borrower's  receipt of any Net Cash  Proceeds of Issuance of Equity  Securities,
the  Borrower  shall  make or cause  to be made a  mandatory  prepayment  of the
Revolving  Credit  Obligations  in an amount equal to such Net Cash  Proceeds of
Issuance  of Equity  Securities.  Notwithstanding  the  foregoing,  in the event
Borrower  commits to the Agent, in writing,  upon the issuance of any Securities
giving rise to Net Cash Proceeds of Issuance of Equity Securities, that Net Cash
Proceeds of Issuance of Equity Securities so received will be used in Borrower's
or its Subsidiaries' operations or for Investments by the Borrower or a Material
Subsidiary  (other than Dyn  Funding) to acquire  the Capital  Stock,  assets or
operations of any Person  complying  with the criteria set forth in clause (iii)
of the definition of "Permitted Acquisition",  the required mandatory prepayment
under this  clause  (iv) shall be equal to fifty  percent  (50%) of the Net Cash
Proceeds of Issuance of Equity Securities received.

                  (c) No Prepayment Fee. The prepayments and payments  described
in Section 3.01(a) may be made without premium or penalty (except as provided in
Section 13.05).  Designated Prepayments shall be made without premium or penalty
(except as provided in Section 13.05);  provided,  however, that, in the event a
Designated  Prepayment  which is to be applied to a Eurodollar Rate Loan becomes
due and payable at a time when no Event of Default exists but on a date which is
other than the last day of the Eurodollar  Interest Period  applicable  thereto,
the  Lenders  (i)  hereby  authorize  the  Agent to  retain  the  amount of such
Designated  Prepayment  delivered to it for  application on such Eurodollar Rate
Loan as Cash Collateral  therefor until the last day of the Eurodollar  Interest
Period applicable  thereto and to apply such amount to such Eurodollar Rate Loan
only on such last day of such  Eurodollar  Interest  Period  and (ii) agree that
Borrower's delivery of the amount of such Designated  Prepayment to the Agent as
aforesaid  shall be deemed to have  complied  with the  requirements  of Section
3.01(b).  All Cash Collateral held by the Agent pursuant to this Section 3.01(c)
shall be held by the Agent in a Cash Collateral  Account and all interest earned
on such Cash Collateral  shall be the property of the Borrower and shall be paid
to the Borrower quarterly.

                  (d) No Waiver or Consent.  Nothing in Section 3.01(b) shall be
construed to constitute the Lenders'  consent to any  transaction  referenced in
clauses (i), (iii) or (iv) above which is not expressly permitted by Article IX.

                  (e) Notice.  The Borrower  shall give the Agent prior  written
notice or  telephonic  notice  promptly  confirmed in writing (each of which the
Agent shall promptly transmit to each Lender) when a Designated  Prepayment will
be made (which date of prepayment  shall be no later than the date on which such
Designated Prepayment becomes due and payable pursuant to Section 3.01(b)).

                  (f)  Application of Designated Prepayments.  Designated
Prepayments shall be allocated and applied as follows:

                  (i) to  the  principal  amount  of,  and  accrued  and  unpaid
         interest  on,  the  Loans  outstanding  on the date of such  Designated
         Prepayment until paid in full and then

                  (ii) to the  Letter of Credit  Obligations  until paid in full
         (or,  to the extent any Letter of Credit  Obligations  are  contingent,
         retained by the Agent as Cash  Collateral in respect of such contingent
         Letter of  Credit  Obigations  unless  (A) such  Designated  Prepayment
         becomes due and  payable  during the period  commencing  on the Closing
         Date and ending on March 13, 1999 and at such time the Revolving Credit
         Availability is at least $10,000,000 or (B) such Designated  Prepayment
         becomes  due and  payable  after  March  13,  1999 and at such time the
         Revolving Credit Availability is at least $5,000,000,  in which case no
         such Cash  Collateral  will be required and provided that the amount of
         Cash  Collateral  required to be retained  shall in no event exceed the
         amount of such contingent Letter of Credit Obligations).  All such Cash
         Collateral held by the Agent shall be held in a Cash Collateral Account
         and all interest on such Cash  Collateral  shall be the property of the
         Borrower and shall be paid to the Borrower quarterly.

In the event the amount of a Designated  Prepayment  exceeds the amount required
to comply with  clauses (i) and (ii) above,  the amount by which the  Designated
Prepayment exceeds the required amount, shall be retained by the Borrower.

                  (g)  Commitment   Reduction.   On  the  date  each  Designated
Prepayment  (other than a  Designated  Prepayment  described  in clause  (b)(ii)
above)  is  due  and  payable,   the  Revolving  Credit   Commitments  shall  be
automatically and permanently reduced by the aggregate amount of such Designated
Prepayment  applied to principal  of the Loans and Letter of Credit  Obligations
and  held  as  Cash  Collateral  in  respect  of  contingent  Letter  of  Credit
Obligations.

                  3.02.  PaymentsPayments.  (a) Manner and Time of Payment.  All
payments  of  principal  of and  interest  on the Loans  and  other  Obligations
(including,  without  limitation,  fees and  expenses)  which are payable to the
Agent or any Lender shall be made without  condition  or  reservation  of right,
and,  with respect to payments made other than from  application  of deposits in
the Citibank Collection Account,  in immediately  available funds,  delivered to
the Agent not later than 1:00 p.m.  (New York time) on the date and at the place
due, to such  account of the Agent as it may  designate,  for the account of the
Agent or the  Lenders,  as the case may be;  and funds  received  by the  Agent,
including,  without limitation, funds in respect of any Loans to be made on that
date,  not later than 1:00 p.m. (New York time) on any given  Business Day shall
be credited  against payment to be made that day and funds received by the Agent
after  that  time  shall be  deemed  to have  been  paid on the next  succeeding
Business  Day.  Payments  actually  received by the Agent for the account of the
Lenders,  or any of them,  shall  be paid to them by the  Agent  promptly  after
receipt thereof.

                  (b)  Apportionment of Payments.  (i) Subject to the provisions
of Section 3.01 and Section  3.02(b)(v),  all payments of principal and interest
in respect of outstanding  Loans, all payments of fees and all other payments in
respect of any other  Obligations,  shall be allocated among such of the Lenders
as are entitled  thereto,  in proportion to their  respective Pro Rata Shares or
otherwise as provided  herein.  Except as provided in Section  3.02(b)(ii)  with
respect to payments and proceeds of Collateral  received after the occurrence of
an Event of Default,  all such  payments and any other  amounts  received by the
Agent from or for the benefit of the Borrower shall be applied:

         (A) first, to pay principal of and interest on any portion of the Loans
which the Agent may have  advanced on behalf of any Lender  other than  Citicorp
for which the Agent has not then been reimbursed by such Lender or the Borrower,

         (B) second, to pay principal of and interest on any Protective  Advance
for which the Agent has not then been paid by the Borrower or  reimbursed by the
Lenders,

         (C) third,  to pay the  principal  of the Loans then due and payable in
the order described  hereinbelow and interest on the Loans then due and payable,
ratably, based on the then outstanding balances of the Loans,

         (D)  fourth, to pay all other Obligations then due and payable,
ratably, and

         (E) fifth, as the Borrower so designates.

All such  principal  and interest  payments in respect of Loans shall be applied
first,  to repay  outstanding  Base  Rate  Loans  and then to repay  outstanding
Eurodollar  Rate Loans  with those  Eurodollar  Rate  Loans  which have  earlier
expiring  Eurodollar  Interest  Periods  being  repaid prior to those which have
later expiring Eurodollar Interest Periods.

             (ii) After the occurrence of an Event of Default and while the same
is continuing,  the Agent shall apply all payments in respect of any Obligations
and all proceeds of Collateral in the following order:

         (A) first, to pay principal of and interest on any portion of the Loans
which the Agent may have  advanced on behalf of any Lender  other than  Citicorp
for which the Agent has not then been reimbursed by such Lender or the Borrower;

         (B) second, to pay principal of and interest on any Protective  Advance
for which the Agent has not then been paid by the Borrower or  reimbursed by the
Lenders;

         (C)  third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;

         (D)      fourth, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Lenders;

         (E)      fifth, to pay interest due in respect of the Loans, ratably,
in accordance with the Lenders' respective Pro Rata Shares;

         (F)      sixth, to the ratable payment or prepayment of principal
outstanding on all Loans;

         (G)  seventh, to the ratable payment of all other Obligations; and

         (H) eighth, as the Borrower so designates.

Notwithstanding  the  foregoing,  (i) in the  event the  Agent is  holding  Cash
Collateral for Reimbursement Obligations,  such Cash Collateral shall be applied
to such Reimbursement Obligations immediately upon the occurrence of an Event of
Default and (ii) in the event the Agent is holding Cash Collateral for Letter of
Credit  Obligations other than Reimbursement  Obligations,  such Cash Collateral
shall be retained  by the Agent  until all  Letters of Credit  have  expired (or
otherwise been cancelled and returned to the Issuing Bank) undrawn or been drawn
upon and the  Reimbursement  Obligations  with respect thereto have been paid in
full in cash.  All Cash  Collateral  held by the  Agent  shall be held in a Cash
Collateral  Account  and all  interest  thereon  shall  be the  property  of the
Borrower and shall be paid to the Borrower quarterly.  The order of priority set
forth in this Section  3.02(b) and the related  provisions of this Agreement are
set forth  solely to  determine  the rights  and  priorities  of the Agent,  the
Lenders, and other Holders as among themselves.

                  (iii) Upon the  occurrence  and during the  continuance  of an
Event of Default  under  Section  11.01(a),  the Agent,  in its sole  discretion
subject  only to the  terms  of this  Section  3.02(b)(iii),  may pay  from  the
proceeds of Loans made to the Borrower hereunder,  following a deemed request by
the Borrower as provided in this Section 3.02(b)(iii),  all amounts when due and
payable by the Borrower hereunder,  including,  without limitation,  amounts due
and payable with respect to payments of  principal,  interest,  and fees and all
reimbursements  for expenses  pursuant to Section  14.02.  The  Borrower  hereby
irrevocably authorizes the Lenders to make Loans, which Loans shall be Base Rate
Loans,  in each case,  upon notice from the Agent as described in the  following
sentence for the purpose of paying  principal,  interest,  and fees due from the
Borrower,  reimbursing expenses pursuant to Section 14.02 and paying any and all
other amounts due and payable by the Borrower  hereunder or under the Notes, and
the  Borrower  agrees  that all such  Loans so made shall be deemed to have been
requested  by it pursuant to Section  2.01 as of the date of the  aforementioned
notice.  The Agent shall request Loans on behalf of the Borrower as described in
the preceding  sentence by notifying the Lenders by telecopy,  telegram or other
similar form of transmission  (which notice the Agent shall thereafter  promptly
transmit  to the  Borrower),  of the amount  and  Funding  Date of the  proposed
Borrowing and that such Borrowing is being  requested on the  Borrower's  behalf
pursuant to this Section  3.02(b)(iii).  On the  proposed  Funding Date for such
Loan,  the  Lenders  shall  make  the  requested  Loans in  accordance  with the
procedures and subject to the conditions specified in Section 2.01.

                  (iv) Subject to Section  3.02(b)(v),  the Agent shall promptly
distribute  to each Lender at its primary  address set forth on the  appropriate
signature  page hereof or the signature page to the Assignment and Acceptance by
which it became a Lender,  or at such other  address as a Lender or other Holder
may  request in  writing,  such funds as such Person may be entitled to receive;
provided that the Agent shall under no circumstances be bound to inquire into or
determine the validity,  scope or priority of any interest or entitlement of any
Holder and may  suspend  all  payments or seek  appropriate  relief  (including,
without limitation,  instructions from the Requisite Lenders or an action in the
nature  of  interpleader)  in  the  event  of any  doubt  or  dispute  as to any
apportionment or distribution contemplated hereby.

                  (v) In the event  that any  Lender  fails to fund its Pro Rata
Share of any Loan  requested by the  Borrower  which such Lender is obligated to
fund under the terms of this  Agreement  (the funded  portion of such Loan being
hereinafter  referred  to as a "Non Pro Rata  Loan"),  until the earlier of such
Lender's  cure of such  failure  and the  termination  of the  Revolving  Credit
Commitments,  the proceeds of all amounts  thereafter repaid to the Agent by the
Borrower  and  otherwise  required to be applied to such  Lender's  share of all
other  Obligations  pursuant to the terms of this Agreement shall be advanced to
the Borrower by the Agent on behalf of such Lender to cure,  in full or in part,
such failure by such Lender,  but shall nevertheless be deemed to have been paid
to such  Lender  in  satisfaction  of such  other  Obligations.  Notwithstanding
anything in this Agreement to the contrary:

                  (A) the foregoing  provisions of this Section 3.02(b)(v) shall
         apply only with respect to the proceeds of payments of Obligations  and
         shall not affect the  conversion or  continuation  of Loans pursuant to
         Section 4.01(c);

                  (B) a Lender shall be deemed to have cured its failure to fund
         its Pro Rata Share of any Loan at such time as an amount  equal to such
         Lender's original Pro Rata Share of the requested  principal portion of
         such Loan is fully funded to the Borrower,  whether made by such Lender
         itself or by  operation of the terms of this  Section  3.02(b)(v),  and
         whether  or not the Non Pro Rata Loan  with  respect  thereto  has been
         repaid, converted or continued;

                  (C) amounts  advanced to the  Borrower to cure,  in full or in
         part, any such Lender's  failure to fund its Pro Rata Share of any Loan
         ("Cure Loans") shall bear interest at the rate  applicable to the other
         Loans   comprising  such  Borrowing  and  shall  be  treated  as  Loans
         comprising such Borrowing for all other purposes in this Agreement; and

                  (D)  regardless  of  whether  or not an Event of  Default  has
         occurred or is continuing,  and notwithstanding the instructions of the
         Borrower as to its desired  application,  all  repayments  of principal
         which, in accordance  with the other terms of this Section 3.02,  would
         be applied to the outstanding  Loans which are Base Rate Loans shall be
         applied first, ratably to all such Base Rate Loans constituting Non Pro
         Rata  Loans,  second,  ratably to such Base Rate Loans other than those
         constituting  Non Pro Rata Loans or Cure Loans and,  third,  ratably to
         such Base Rate Loans constituting Cure Loans.

                  (c) Payments on Non-Business Days.  Whenever any payment to be
made by the  Borrower  hereunder or under the Notes is stated to be due on a day
which is not a  Business  Day,  the  payment  shall  instead  be due on the next
succeeding  Business  Day  (except  as set forth in  Section  4.02(b)(iii)  with
respect  to  payments  due on the next  preceding  Business  Day),  and any such
extension  of time  shall be  included  in the  computation  of the  payment  of
interest and fees hereunder.

                  3.03.  Promise to Repay; Evidence of IndebtednessPromise to
Repay; Evidence of Indebtedness.

                  (a) Promise to Repay.  The Borrower  hereby agrees to pay when
due the principal amount of each Loan which is made to it, and further agrees to
pay all unpaid interest  accrued  thereon,  in accordance with the terms of this
Agreement and the Notes.  The Borrower  shall execute and deliver to each Lender
on the Closing Date a Note evidencing the Loans and thereafter shall execute and
deliver such other Notes as are necessary to evidence Loans owing to the Lenders
after giving effect to any assignment thereof pursuant to Section 14.01.

                  (b) Loan  Account.  Each Lender shall  maintain in  accordance
with its usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness  of the Borrower to such Lender  resulting  from each Loan owing to
such Lender from time to time,  including  the amount of principal  and interest
payable  and paid to such  Lender  from  time to time  hereunder  and  under its
respective Note.

                  (c) Control  Account.  The  Register  maintained  by the Agent
pursuant to Section 14.01(c) shall include a control  account,  and a subsidiary
account for each Lender,  in which accounts  (taken  together) shall be recorded
(i) the date and  amount  of each  Borrowing  made  hereunder,  the type of Loan
comprising such Borrowing and any Eurodollar Interest Period applicable thereto,
(ii) the effective date and amount of each  Assignment and Acceptance  delivered
to and accepted by it and the parties thereto, (iii) the amount of any principal
or interest  due and payable or to become due and payable  from the  Borrower to
each  Lender  hereunder  or under  the  Notes,  and (iv) the  amount  of any sum
received  by the Agent  from the  Borrower  hereunder  and each  Lender's  share
thereof.

                  (d) Entries Binding. The entries made in the Register and each
Loan Account shall be conclusive and binding for all purposes,  absent  manifest
error.


                  3.04.  Collections and Collection  Account  Arrangements.  (a)
Establishment.  (i) The Borrower shall  maintain  deposit  account  4067-5918 at
Citibank,  N.A. (the "Citibank Collection Account"),  into which all proceeds of
Collateral, subject to the provisions of Sections 9.14, 9.15, and 9.16, shall be
deposited  by  transfer,  as and  when  set  forth  hereinbelow,  from  the Cash
Management Account or other depository  accounts  maintained by the Borrower and
the  Guarantors.  Subject to the  provisions  of Sections  9.14,  9.15 and 9.16,
Borrower  shall cause all  proceeds of  Collateral  to be  deposited in the Cash
Management Account or the aforesaid  depository accounts for subsequent transfer
to the Citibank Collection Account and such proceeds shall be deemed received by
the Borrower or  applicable  Guarantor and to have been received by the Borrower
or such  Guarantor as the Agent's  trustee.  All amounts  received by the Agent,
whether through payment, deposit in the Citibank Collection Account as described
above,  or otherwise,  will be the sole property of the Agent for the benefit of
the Holders and will be (i) deemed  received by the Agent for application to the
Obligations  then due and payable  pursuant to Section 3.02 and (ii)  thereafter
held by the Agent,  for the benefit of the Holders,  as Cash  Collateral for the
Obligations,  subject to the rights of the Borrower set forth in Section 3.04(b)
and the rights of the Agent set forth in Section 3.05.

                  (ii)  Borrower,  in  its  capacity  as  "Servicer"  under  the
Servicing  Agreement,  shall  deliver  the  written  request  for  reimbursement
described in Section  3.04(a) of the Servicing  Agreement at any time the amount
available for  withdrawal  under  Section 3.04 of the Servicing  Agreement is at
least  $300,000;  provided,  however,  that in no event shall more than ten (10)
consecutive  Business Days elapse  between the Servicer's  written  requests for
reimbursement  (notwithstanding  the amount then available for withdrawal);  and
further  provided that,  after the  occurrence and during the  continuance of an
Event of Default,  the  Borrower  shall  deliver  such  written  request on each
Business Day, notwithstanding the amount then available for withdrawal. Borrower
shall cause all amounts  withdrawn  as aforesaid to be deposited in the Citibank
Collection Account.

                  (iii)  Borrower  shall make requests no less  frequently  than
every  consecutive ten (10) Business Days for all  reimbursements  available for
withdrawal  by it  from  time  to  time  under  the  1997  Receivables  Purchase
Documents;  provided  that such  request  shall be made on each  Business Day on
which a  reimbursement  of at least  $300,000 is  available  to the Borrower and
further  provided that,  after the  occurrence and during the  continuance of an
Event of Default,  the Borrower  shall make such  requests on each Business Day,
notwithstanding  the amount then available for  withdrawal.  Borrower shll cause
all amounts  withdrawn as  aforesaid to be deposited in the Citibank  Collection
Account.

                  (b) Pre-Default  Withdrawals from Citibank Collection Account.
The  Borrower  shall have the right to direct  disbursements  from the  Citibank
Collection  Account,  so long as no Event of Default  shall have occurred and be
continuing or unwaived.  Amounts on deposit in the Citibank  Collection  Account
shall be invested in such Cash  Equivalents  as the  Borrower may select as more
particularly  described  in Section  3.04(d).  The Borrower  hereby  irrevocably
authorizes  and directs the Agent to withdraw  such  amounts  from the  Citibank
Collection  Account as may from time to time be required to pay (i)  Obligations
as they  become  due and apply the same as set forth in Section  3.02(b)(i)  and
(ii)  principal  of the  Loans;  provided  that,  (A) an  amount  in  excess  of
$10,000,000  is on deposit in the  Citibank  Collection  Account in  immediately
available  funds as of 2:00 p.m.  (New York time) on the  Business  Day on which
such payment is due or such Loans are outstanding, (B) the amount that the Agent
is  authorized  to so withdraw  and apply shall not exceed the lesser of (1) the
amount of such excess over  $10,000,000 or (2) an amount equal to the sum of the
Obligations  then due and payable plus the principal  balance of the Loans which
is then outstanding and (C) applications on the principal  balances of the Loans
shall be made first to Loans which are not Acquisition  Loans until paid in full
and then to Loans which are Acquisition  Loans.  The aforesaid  authorization of
and  direction to the Agent to withdraw  amounts  from the  Citibank  Collection
Account  shall not be deemed  to  provide  authorization  and  direction  to pay
Eurodollar Rate Loans prior to the Eurodollar  Interest  Payment Date applicable
thereto.
                  (c) Reasonable Care. The Agent shall exercise  reasonable care
in the custody and  preservation  of any funds held in the  Citibank  Collection
Account  and  shall be  deemed to have  exercised  such  care if such  funds are
accorded treatment substantially  equivalent to that which the Agent accords its
own  like  property,  it being  understood  that the  Agent  shall  not have any
responsibility  for taking any steps  necessary to preserve  rights  against any
parties with respect to any such funds but may do so at its option. In the event
the Agent  takes any such  steps,  it shall  provide  the  Borrower  with prompt
written notice thereof. All reasonable expenses incurred in connection therewith
shall be for the sole account of the Borrower and shall  constitute  Obligations
hereunder.

                  (d)  Investments.  If  requested  by the  Borrower,  the Agent
shall,  so long as no Event of Default  shall have  occurred and be  continuing,
from time to time invest funds on deposit in the Citibank Collection Account and
accrued interest  thereon,  reinvest  proceeds of any such investments which may
mature or be sold,  and invest  interest or other income  received from any such
Investments,  in each case in such Cash  Equivalents as the Borrower may select.
Such funds, interest, proceeds or income which are not so invested or reinvested
in Cash  Equivalents  shall,  except as otherwise  provided in Section  3.05, be
deposited and held by the Agent in the Citibank Collection Account.  Neither the
Agent nor any Lender  shall be liable to the  Borrower  for, or with respect to,
any decline in value of amounts on deposit in the  Citibank  Collection  Account
which shall have been invested pursuant to this Section 3.04(d) at the direction
of the Borrower.  Cash Equivalents from time to time purchased and held pursuant
to this Section 3.04(d) shall constitute Cash Collateral and shall, for purposes
of this  Agreement,  be  deemed  to be part of the  funds  held in the  Citibank
Collection Account.

                  3.05.  Post-Default  Withdrawals from the Citibank  Collection
Account.  Notwithstanding any other provision of this Agreement,  from and after
the  occurrence of an Event of Default and for so long as the same is continuing
unwaived, neither the Borrower nor any Person or entity claiming on behalf of or
through the  Borrower  shall have any right to withdraw any of the funds held in
the Citibank  Collection  Accounts other than funds in excess of the Obligations
then due and payable. The Agent may, at any time after the occurrence and during
the  continuance  of an Event of  Default,  (a) apply  amounts on deposit in the
Citibank  Collection  Account  to  payment  of the  outstanding  Loans and other
Obligations in accordance  with Section  3.02(b)(ii) and (b) sell or cause to be
sold any Cash  Equivalents  being held by the Agent in the  Citibank  Collection
Account as Cash  Collateral at any broker's  board or at public or private sale,
in one or more sales or lots, at such price as the Agent may deem best,  without
assumption  of any  credit  risk,  and the  purchaser  of any or all  such  Cash
Equivalents  so sold shall  thereafter  own the same,  absolutely  free from any
claim, encumbrance or right of any kind whatsoever. The Agent or any Holder may,
in its  own  name  or in the  name of a  designee  or  nominee,  buy  such  Cash
Equivalents  at any public sale and, if  permitted by  applicable  law, buy such
Cash  Equivalents at any private sale. The Agent shall apply the proceeds of any
such sale, net of any reasonable expenses incurred in connection therewith,  and
any other funds deposited in the Citibank  Collection  Account to the payment of
the Obligations in accordance with Section 3.02(b)(ii). The Borrower agrees that
any sale of Cash Equivalents  conducted in conformity with reasonable commercial
practices of banks,  commercial finance companies,  insurance companies or other
financial  institutions  disposing of property  similar to such Cash Equivalents
shall be deemed to be commercially reasonable and any requirements of reasonable
notice shall be met if such notice is given by the Agent  within a  commercially
reasonable time prior to such disposition,  the time of delivery of which notice
the parties  hereto  agree shall in no event be required to be greater  than ten
(10)  Business  Days before the date of the intended  sale or  disposition.  Any
other  requirement of notice,  demand or advertisement for sale is waived to the
extent  permitted  by law. The Agent may adjourn any public or private sale from
time to time by  announcement at the time and place fixed therefor and such sale
may,  without further  notice,  be made at the time and place to which it was so
adjourned.

                                   ARTICLE IV
                                INTEREST AND FEES

                  4.01. Interest on the Loans and other  ObligationsInterest  on
the Loans and other Obligations.  (a) Rate of Interest. (i) All Loans shall bear
interest on the unpaid  principal  amount  thereof  from the date such Loans are
made until paid in full,  except as otherwise  provided in Section  4.01(d),  as
follows:

                  (A) If a Base Rate Loan,  at a rate per annum equal to the sum
         of (1) the  Base  Rate,  as in  effect  from  time to time as  interest
         accrues plus (2) the applicable Base Rate Margin; and

                  (B) If a  Eurodollar  Rate Loan,  at a rate per annum equal to
         the sum of (1)  the  Eurodollar  Rate  determined  for  the  applicable
         Eurodollar  Interest  Period , plus (2) the applicable  Eurodollar Rate
         Margin.

                  (ii) The applicable basis for determining the rate of interest
on the Loans shall be selected by the Borrower at the time a Notice of Borrowing
or a Notice of  Conversion/Continuation  is  delivered  by the  Borrower  to the
Agent; provided, however, the Borrower may not select the Eurodollar Rate as the
applicable basis for determining the rate of interest on such a Loan if (A) such
Loan is to be made on the Closing  Date or (B) at the time of such  selection an
Event of Default or a Potential Event of Default would occur or has occurred and
is  continuing.  If on any day any Loan is  outstanding  with  respect  to which
notice has not been timely  delivered to the Agent in accordance  with the terms
of this Agreement  specifying the basis for  determining the rate of interest on
that  day,  then for that day  interest  on that  Loan  shall be  determined  by
reference to the Base Rate.

                  (b) Interest Payments.  (i) Interest accrued on each Base Rate
Loan shall be payable in arrears (A) on the first day of each  calendar  quarter
for the immediately preceding calendar quarter, commencing on the first such day
following the making of such Base Rate Loan,  (B) upon the payment or prepayment
thereof in full or in part,  if a  concurrent  reduction in the  Commitments  is
made,  (C) upon  conversion  thereof to a Eurodollar  Rate Loan,  and (D) if not
theretofore paid in full, on the Revolving Credit Termination Date.

                  (ii) Interest  accrued on each  Eurodollar  Rate Loan shall be
payable in arrears (A) on each  Eurodollar  Interest  Payment Date applicable to
such Loan,  (B) upon the payment or prepayment  thereof in full or in part,  and
(C) if not theretofore paid in full, on the Revolving Credit Termination Date.

                  (c)  Conversion or  Continuation.  (i) The Borrower shall have
the option (A) to convert at any time all or any part of  outstanding  Base Rate
Loans to Eurodollar  Rate Loans;  (B) to convert all or any part of  outstanding
Eurodollar  Rate Loans having  Eurodollar  Interest  Periods which expire on the
same date to Base Rate Loans on such expiration  date; or (C) to continue all or
any part of outstanding Eurodollar Rate Loans having Eurodollar Interest Periods
which  expire on the same date as  Eurodollar  Rate  Loans,  and the  succeeding
Eurodollar  Interest  Period of such  continued  Loans  shall  commence  on such
expiration date;  provided,  however,  no such outstanding Loan may be continued
as, or be converted into, a Eurodollar Rate Loan (i) if the  continuation of, or
the conversion into, would violate any of the provisions of Section 4.02 or (ii)
if an Event of  Default  or a  Potential  Event of  Default  would  occur or has
occurred and is continuing.  Any conversion  into or  continuation of Eurodollar
Rate Loans under this Section 4.01(c) shall be in a minimum amount of $1,000,000
and in integral  multiples of  $1,000,000 in excess of that amount except in the
case of a conversion  into or a continuation  of an entire  Borrowing of Non Pro
Rata Loans.

                  (ii) To convert or continue a Loan under  Section  4.01(c)(i),
the Borrower shall deliver a Notice of  Conversion/Continuation  to the Agent no
later than  11:00  a.m.  (New York  time) at least  three (3)  Business  Days in
advance   of  the   proposed   conversion/continuation   date.   A   Notice   of
Conversion/Continuation  shall specify (A) the proposed  conversion/continuation
date (which shall be a Business Day), (B) the principal amount of the Loan to be
converted/continued,  (C) whether such Loan shall be converted and/or continued,
and (D) in the case of a conversion to, or  continuation  of, a Eurodollar  Rate
Loan, the requested  Eurodollar  Interest Period. In lieu of delivering a Notice
of Conversion/Continuation, the Borrower may give the Agent telephonic notice of
any proposed  conversion/continuation  by the time  required  under this Section
4.01(c)(ii),  and such notice  shall be  confirmed  in writing  delivered to the
Agent by facsimile  transmission  promptly (but in no event later than 5:00 p.m.
(New York time) on the same day), the original of which  facsimile copy shall be
delivered   to  the  Agent  within  three  (3)  days  after  the  date  of  such
transmission.  Promptly  after  receipt  of a Notice of  Conversion/Continuation
under this Section 4.01(c)(ii) (or telephonic notice in lieu thereof), the Agent
shall notify each Lender by telecopy, or other similar form of transmission,  of
the proposed conversion/continuation.  Any Notice of Conversion/Continuation for
conversion to, or continuation of, a Loan (or telephonic notice in lieu thereof)
shall be irrevocable,  and the Borrower shall be bound to convert or continue in
accordance therewith.

                  (d)  Default  Interest.   (i)  Notwithstanding  the  rates  of
interest  specified in Section 4.01(a),  effective on the date of the occurrence
of an Event of  Default,  and for as long  thereafter  as such  Event of Default
shall be continuing,  (A) the principal balance of all Loans shall bear interest
at a rate which is equal to the sum of (1) two percent (2.0%) per annum plus (2)
the rate of interest  otherwise  applicable  to such Loans from time to time and
(B) to the extent  permitted by  applicable  law, the  principal  balance of all
other  Obligations  shall bear  interest at a per annum rate equal to the sum of
(1) the Base Rate,  as in effect from time to time as interest  accrues plus (2)
the then  applicable  Base Rate Margin  plus (3) two percent  (2.00%) per annum;
provided that,  except in the case of an Event of Default  arising under Section
11.01(a)(i)  or Section  11.01(a)(ii),  the Agent shall have given the  Borrower
written notice of the provisions of this Section 4.01(d) becoming effective.

                  (ii)  Interest  accrued  on  the  principal   balance  of  all
Obligations other than the Loans shall be payable in arrears (A) on the last day
of each  calendar  quarter,  commencing  on the  first  such day  following  the
incurrence of such Obligation and (B) upon payment of such Obligation in full or
in part.

                  (e) Computation of Interest. Interest on all Obligations shall
be  computed  on the basis of the  actual  number of days  elapsed in the period
during which interest  accrues and a year of 360 days. In computing  interest on
any Loan,  the date of the  making of the Loan or the first day of a  Eurodollar
Interest  Period,  as the case may be, shall be included and the date of payment
or the  expiration  date of a Eurodollar  Interest  Period,  as the case may be,
shall be  excluded;  provided,  however,  if a Loan is repaid on the same day on
which  it is  made,  one (1)  day's  interest  shall  be paid on such  Loan.  In
computing interest on any other Obligation, the date of incurrence thereof shall
be included and the date of payment thereof shall be excluded.

                  4.02.  Special Provisions Governing Eurodollar Rate Loans.
With respect to Eurodollar Rate Loans:

                  (a) Amount of Eurodollar Rate Loans. Each Eurodollar Rate Loan
shall be for a  minimum  amount  of  $1,000,000  and in  integral  multiples  of
$1,000,000 in excess of that amount.

                  (b)  Determination of Eurodollar  Interest  Period.  By giving
notice  as set  forth  in  Section  2.01(b)  (with  respect  to a  Borrowing  of
Eurodollar  Rate Loans) or Section 4.01(c) (with respect to a conversion into or
continuation  of  Eurodollar  Rate Loans),  the Borrower  shall have the option,
subject to the other  provisions  of this  Section  4.02,  to select an interest
period (each, a "Eurodollar Interest Period") to apply to the Loans described in
such notice, subject to the following provisions:

                  (i) The Borrower may only select, as to a particular Borrowing
         of Eurodollar Rate Loans, a Eurodollar  Interest Period of one or three
         months in duration;

                  (ii) In the case of immediately successive Eurodollar Interest
         Periods  applicable  to a Borrowing  of  Eurodollar  Rate  Loans,  each
         successive  Eurodollar  Interest  Period  shall  commence on the day on
         which the next preceding Eurodollar Interest Period expires;

                  (iii) If any Eurodollar Interest Period would otherwise expire
         on a day which is not a Business Day, such  Eurodollar  Interest Period
         shall be extended to expire on the next succeeding  Business Day if the
         next succeeding  Business Day occurs in the same calendar month, and if
         there will be no succeeding  Business Day in such calendar  month,  the
         Eurodollar  Interest Period shall expire on the  immediately  preceding
         Business Day;

                  (iv) The Borrower may not select a Eurodollar  Interest Period
         as to any Loan if such Eurodollar Interest Period terminates later than
         the scheduled Revolving Credit Termination Date; and

                  (v) There shall be no more than three (3) Eurodollar  Interest
         Periods in effect at any one time.

                  (c)  Determination of Interest Rate. As soon as practicable on
the  second  Business  Day prior to the first  day of each  Eurodollar  Interest
Period (the  "Eurodollar  Interest Rate  Determination  Date"),  the Agent shall
determine (pursuant to the procedures set forth in the definition of "Eurodollar
Rate") the  interest  rate which  shall apply to the  Eurodollar  Rate Loans for
which an interest rate is then being  determined for the  applicable  Eurodollar
Interest  Period  and shall  promptly  give  notice  thereof  (in  writing or by
telephone  confirmed in writing) to the Borrower and to each Lender. The Agent's
determination shall be presumed to be correct,  absent manifest error, and shall
be binding upon the Borrower.

                  (d) Interest Rate  Unascertainable,  Inadequate or Unfair.  In
the event that at least one (1) Business Day before the Eurodollar Interest Rate
Determination Date:

                  (i) the Agent is advised by Citibank  that deposits in Dollars
         (in the  applicable  amounts) are not being  offered by Citibank in the
         London interbank market for such Eurodollar Interest Period; or

                  (ii) the Agent  determines that adequate and fair means do not
         exist for  ascertaining  the applicable  interest rates by reference to
         which the Eurodollar Rate then being determined is to be fixed; or

                  (iii)  the  Requisite   Lenders  advise  the  Agent  that  the
         Eurodollar  Rate for Eurodollar  Rate Loans  comprising  such Borrowing
         will not  adequately  reflect  the cost to such  Requisite  Lenders  of
         obtaining funds in Dollars in the London interbank market in the amount
         substantially  equal to such Lenders'  Eurodollar Rate Loans in Dollars
         and for a period equal to such Eurodollar Interest Period;

then the Agent shall  forthwith give notice  thereof to the Borrower,  whereupon
(until the Agent  notifies the Borrower  that the  circumstances  giving rise to
such  suspension  no longer  exist) the right of the  Borrower  to elect to have
Loans bear interest based upon the  Eurodollar  Rate shall be suspended and each
outstanding Eurodollar Rate Loan shall be converted into a Base Rate Loan on the
last  day  of  the   then   current   Eurodollar   Interest   Period   therefor,
notwithstanding any prior election by the Borrower to the contrary.

                  (e) Booking of  Eurodollar  Rate  Loans.  Any Lender may make,
carry or  transfer  Eurodollar  Rate  Loans at, to, or for the  account  of, its
Eurodollar  Lending  Office or  Eurodollar  Affiliate  or its other  offices  or
Affiliates. No Lender shall be entitled,  however, to receive any greater amount
under any  provision  of Article  XIII as a result of the  transfer  of any such
Eurodollar Rate Loan to any office (other than such  Eurodollar  Lending Office)
or any Affiliate  (other than such Eurodollar  Affiliate) than such Lender would
have been entitled to receive immediately prior thereto, unless (i) the transfer
occurred at a time when circumstances  giving rise to the claim for such greater
amount did not exist and (ii) such claim would have arisen even if such transfer
had not occurred.

                  (f) Affiliates Not Obligated. No Eurodollar Affiliate or other
Affiliate of any Lender shall be deemed a party to this  Agreement or shall have
any liability or obligation under this Agreement.

                  4.03. FeesFees.  (a) Letter of Credit Fees. In addition to any
charges paid  pursuant to Section  2.04(g),  the  Borrower  shall pay to the (i)
Issuing  Bank a fee equal to  one-quarter  of one  percent  (0.25%)  on the face
amount of each Letter of Credit issued hereunder upon issuance of such Letter of
Credit (the "Fronting Fee") and (ii) Agent, for the account of the Lenders based
on their respective Pro Rata Shares, a fee (the "Letter of Credit Fee") accruing
at a per annum rate equal to the  Eurodollar  Rate Margin in effect from time to
time minus one-quarter of one percent (0.25%) on the undrawn face amount of each
outstanding Letter of Credit, payable quarterly,  in arrears, on the last day of
each calendar quarter;  provided that upon the occurrence of an Event of Default
and  for so long  thereafter  as such  Event  of  Default  shall  be  continuing
unwaived,  the rate at which the Letter of Credit Fee would otherwise accrue and
be payable shall be increased by two percent (2.0%) per annum.

                  (b) Unused  Commitment  Fee. (i) The Borrower shall pay to the
Agent,  for the account of the Lenders in accordance  with their  respective Pro
Rata  Shares,  a fee (the  "Unused  Commitment  Fee"),  accruing  at the rate of
one-half of one percent  (0.50%) per annum on the average  daily amount by which
the Revolving Credit Commitments exceed the Revolving Credit Obligations for the
period  commencing  on the  Closing  Date and  ending  on the  Revolving  Credit
Termination  Date,  such Unused  Commitment Fee being payable (A) quarterly,  in
arrears,  commencing on the last day of the calendar quarter next succeeding the
Closing Date and (B) on the Revolving Credit Termination Date.

                  (ii)  Notwithstanding  the  foregoing,  in the event  that any
Lender  fails to fund its Pro Rata Share of any Loan  requested  by the Borrower
which such Lender is  obligated to fund under the terms of this  Agreement,  (A)
such Lender shall not be entitled to any Unused  Commitment Fees with respect to
its Revolving Credit  Commitment until such failure has been cured in accordance
with Section  3.02(b)(v)(B)  and (B) until such time, the Unused  Commitment Fee
shall accrue in favor of the Lenders which have funded their respective Pro Rata
Shares of such requested Loan, shall be allocated among such performing  Lenders
ratably based upon their relative  Revolving  Credit  Commitments,  and shall be
calculated based upon the average amount by which the aggregate Revolving Credit
Commitments of such performing Lenders exceeds the outstanding  principal amount
of the Loans owing to such performing Lenders.

                  (c) Calculation and Payment of Fees. The Unused Commitment Fee
shall be  calculated  on the basis of the  actual  number of days  elapsed  in a
360-day year.  All of the fees described in this Section 4.03 and the Fee Letter
shall be payable in  addition  to, and not in lieu of,  interest,  compensation,
expense reimbursements,  indemnification and other Obligations, shall be payable
to the Agent at its office in New York, New York in immediately available funds,
shall constitute Obligations, and shall be secured by the Collateral.
All such fees shall be fully earned and nonrefundable when paid.


                                    ARTICLE V
                    CONDITIONS TO LOANS AND LETTERS OF CREDIT

                  5.01. Conditions Precedent to the Initial Loans and Letters of
CreditConditions  Precedent  to the  Initial  Loans and  Letters of Credit.  The
obligation  of each Lender on the Closing Date to make any Loan  requested to be
made by it, and the obligation of each Issuing Bank on the Closing Date to issue
any  Letter of Credit  requested  to be issued by it,  shall be  subject  to the
satisfaction of all of the following conditions precedent:

                  (a)  Documents.  The Agent shall have received on or before
the Closing Date all of the following:

                  (i)  this  Agreement,  the  Notes  and all  other  agreements,
         documents  and  instruments  relating  to the  loan  and  other  credit
         transactions  contemplated  by this Agreement and described in the List
         of  Closing  Documents  attached  hereto  as  Exhibit F and made a part
         hereof,  each duly executed where appropriate and in form and substance
         satisfactory to the Agent; without limiting the foregoing, the Borrower
         hereby directs its counsel, Brown & Wood, to prepare and deliver to the
         Agent, the Lenders and Sidley & Austin, the opinion referred to in such
         List of Closing Documents;

                  (ii)  the Projections, in form and substance satisfactory to
         the Agent;

                  (iii) an Officer's  Certificate  executed and delivered by the
         president  or  vice  president  of the  Borrower  certifying  that  all
         conditions precedent have been met and no Potential Event of Default or
         Event of Default has occurred or is continuing;

                  (iv)  a Notice of Borrowing dated as of the Closing Date with
         respect to Loans requested to be made on the Closing Date; and

                  (v)  such additional documentation as the Agent may reasonably
         request.

                  (b) Perfection of Liens;  Lien Search  Reports.  Evidence that
all financing statements relating to the Collateral have been filed or recorded,
certificates  representing  Capital Stock  included in the  Collateral  (and not
previously  delivered  pursuant to the Borrower  Pledge  Agreement and Guarantor
Pledge  Agreements)  have been  delivered to the Agent (with duly executed stock
powers) and all recording fees and filing taxes have been paid.

                  (c) No Legal Impediments. No law, regulation,  order, judgment
or decree of any  Governmental  Authority  shall,  and the Agent  shall not have
received any notice that litigation is pending or threatened  which is likely to
(i)  enjoin,  prohibit  or  restrain  the making of the  requested  Loans on the
Closing Date or (ii) result in a Material Adverse Effect.

                  (d) No Change in Condition. No change in the business, assets,
management,  operations,  or  financial  condition of the Borrower or any of its
Subsidiaries, shall have occurred since September 28, 1995, which change, in the
judgment of the Agent,  will, or is  reasonably  likely to, result in a Material
Adverse Effect.  No change in the corporate or capital structure of the Borrower
and its  Subsidiaries  shall have  occurred  since  February 8, 1996.  Except as
otherwise disclosed to the Agent in writing prior to the Closing Date, no change
in the  composition  of the Boards of Directors or  Responsible  Officers of the
Borrower  or of  Borrower's  vice  presidents  acting as heads of its  strategic
business units shall have occurred after February 8, 1996.

                  (e)  Financial  Statements;   Budgets.   Borrower  shall  have
delivered  to the Lenders its most  recently  audited  and  unaudited  Financial
Statements and five-year  budgets for the Borrower and the  Guarantors,  in each
case satisfactory to the Agent and the Lenders.

                  (f) No Market  Changes.  Since  February 8, 1996,  no material
adverse change shall have occurred in the loan syndication, financial or capital
markets conditions generally that, in the judgment of Citicorp Securities, Inc.,
would materially impair syndication of the Revolving Credit Commitments.

                  (g) No Default.  No "Event of Default" or "Potential  Event of
Default"  (in each case as  defined  in the 1995  Credit  Agreement)  shall have
occurred and be continuing and no Event of Default or Potential Event of Default
hereunder  shall have occurred and be continuing or would result from the making
of the Loans.

                  (h) Representations and Warranties. All of the representations
and warranties  contained in Section 6.01 and in any of the other Loan Documents
shall be true and  correct in all  material  respects  on and as of the  Closing
Date.

                  (i) Litigation.  No litigation  shall be pending or threatened
nor  shall  any  claim  have  been  made  with  respect  to  any  aspect  of the
transactions contemplated by this Agreement and the other Loan Documents.

                  (j) Fees and Expenses Paid.  There shall have been paid to the
Agent,  for the accounts of the Lenders and the Agent,  as applicable,  all fees
and expenses due and payable on or before the Closing Date,  including,  without
limitation, all fees and expenses due and payable pursuant to the Fee Letter and
under the 1995 Credit Agreement.  5.02.  Conditions  Precedent to All Subsequent
Loans and Letters of  CreditConditions  Precedent  to All  Subsequent  Loans and
Letters of Credit.  The  obligation of each Lender to make any Loan requested to
be made by it on any Funding  Date and of each  Issuing Bank to issue any Letter
of Credit  requested  to be issued  by it on any day after the  Closing  Date is
subject to the following  conditions precedent as of each such date, both before
and after  giving  effect to the Loans to be made,  or  Letters  of Credit to be
issued, on such date:

                  (a) Representations and Warranties. All of the representations
and  warranties of the Borrower  contained in Section 6.01 and in any other Loan
Document (other than  representations and warranties which expressly speak as of
a different date) shall be true and correct in all material respects.

                  (b)  No Defaults.  No Event of Default or Potential Event of
Default shall have occurred and be continuing or would result from the making of
the requested Loan.

                  (c) No Legal Impediments. No law, regulation,  order, judgment
or decree of any  Governmental  Authority  shall,  and the Agent  shall not have
received from any Lender notice that, in the judgment of such Lender, litigation
is pending or threatened  which is  reasonably  likely to,  enjoin,  prohibit or
restrain,  or  impose  or  result  in the  imposition  of any  material  adverse
condition upon, such Lender's making of the requested Loan.

                  (d)  No Material Adverse Effect.  No event shall have occurred
since the date of this Agreement which has resulted, or is reasonably likely to
result, in a Material Adverse Effect.

The obligation of each Lender to make any Loan requested to be made by it on any
Funding Date,  the proceeds of which will be used to acquire any Capital  Stock,
assets or operations of any other  Person,  is subject to the further  condition
that  such  acquisition  is a  Permitted  Acquisition.  Each  submission  by the
Borrower  to the Agent of a Notice of  Borrowing  with  respect to any Loan or a
Notice of  Conversion/Continuation  with respect to any Loan, each acceptance by
the  Borrower  of the  proceeds  of  each  Loan  made,  converted  or  continued
hereunder,  and each  submission  of an  application  for a Letter of Credit and
acceptance  by the  Borrower  of  delivery  of a Letter of Credit  issued  shall
constitute a representation  and warranty by the Borrower as of the Funding Date
in respect of such Loan,  the date of  conversion or  continuation,  the date of
such  application  and the date of  issuance  of a Letter of Credit that all the
conditions  contained  in this  Section  5.02 have been  satisfied  or waived in
accordance with Section 14.07.


                                   ARTICLE VI
                         REPRESENTATIONS AND WARRANTIES

                  6.01.     Representations     and     Warranties     of    the
BorrowerRepresentations  and Warranties of the Borrower.  In order to induce the
Lenders  to enter  into  this  Agreement  and to make the  Loans  and the  other
financial  accommodations to the Borrower  described herein, the Borrower hereby
represents  and  warrants  to each  Lender  and the  Agent  that  the  following
statements are true, correct and complete:

                  (a) Organization;  Corporate Powers. (i) The Borrower and each
Material Subsidiary (A) is a corporation duly organized, validly existing and in
good standing under the laws of the  jurisdiction  of its  organization,  (B) is
duly qualified to do business as a foreign  corporation  and is in good standing
under the laws of each  jurisdiction  in which failure to be so qualified and in
good  standing  will have or is  reasonably  likely to have a  Material  Adverse
Effect,  (C)  has  filed  and  maintained  effective  (unless  exempt  from  the
requirements for filing) a current Business Activity Report with the appropriate
Governmental  Authority in the states of Minnesota  and New Jersey,  and (D) has
all requisite  corporate power and authority to own, operate and (in the case of
the  Borrower)  encumber  its  Property and to conduct its business as presently
conducted and as proposed to be conducted in  connection  with and following the
consummation of the transactions contemplated by this Agreement.

                  (ii) As of the Closing Date, true, correct and complete copies
of the  Organizational  Documents  identified on Schedule 6.01-A attached hereto
have been delivered to the Agent, each of which is in full force and effect, has
not been modified or amended except to the extent indicated  therein and, to the
best  of  the   Borrower's   knowledge,   there  are  no  defaults   under  such
Organizational Documents and no events which, with the passage of time or giving
of  notice  or both,  would  constitute  a  default  under  such  Organizational
Documents.

                  (b)  Authority.  (i) The Borrower and each  Guarantor  has the
requisite corporate power and authority (A) to execute, deliver and perform each
of the Loan  Documents  which  have  been  executed  by it as  required  by this
Agreement  on or prior to the  Closing  Date and (B) to file or record  the Loan
Documents  which have been filed or recorded by it as required by this Agreement
on or prior to the Closing Date, with any Governmental Authority.

                  (ii)  The  execution,  delivery,  performance  and  filing  or
recording,  as the case may be, of each of the Loan  Documents  which  have been
executed,  filed or recorded as  required by this  Agreement  on or prior to the
Closing  Date  and  to  which  the  Borrower  or  Guarantor  is  party  and  the
consummation of the transactions  contemplated  thereby, have been duly approved
by the respective boards of directors and, if necessary, the shareholders of the
Borrower and Guarantors and such  approvals  have not been  rescinded.  No other
corporate action or proceedings on the part of the Borrower or any Guarantor are
necessary to consummate such transactions.

                  (iii) Each of the Loan  Documents to which the Borrower or any
Guarantor is a party (A) has been duly executed,  delivered,  filed or recorded,
as the case may be, by it,  (B) where  applicable,  creates  valid  Liens in the
Collateral  covered  thereby  securing  the  payment  of all of the  Obligations
purported to be secured thereby,  which Liens will be perfected upon the Agent's
filing  appropriate   financing   statements  with  respect  thereto  or  taking
possession of the underlying  Collateral as may be required under the applicable
Requirements of Law, (C)  constitutes  the Borrower's or respective  Guarantor's
(as applicable) legal, valid and binding  obligation,  enforceable against it in
accordance  with its terms,  except as the same may be  limited  by  bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of creditors'
rights generally, and (D) is in full force and effect. To the best of Borrower's
knowledge,  there are no Liens  against  any of the  Collateral  which  would be
senior to the Liens granted under the Borrower Pledge  Agreement or the Borrower
Security  Agreement,  other than Liens  permitted by Section  9.03.  Each of the
Borrower and the  Guarantor  parties to the Loan  Documents  have  performed and
complied with all the terms,  provisions,  agreements  and  conditions set forth
therein and  required to be  performed  or complied  with by such  parties on or
before the Closing Date (except to the extent waived by the required  party(ies)
to this Agreement),  all filings and recordings and other actions on the part of
the Borrower  which are  necessary or desirable to perfect and protect the Liens
granted pursuant to the Loan Documents and preserve their required priority have
been duly taken,  and no Potential  Event of Default or Event of Default  exists
thereunder.

                  (c)  Subsidiaries;  Ownership of Equity  Securities.  Schedule
6.01-C attached hereto (i) contains a diagram indicating the corporate structure
of the Borrower and its  Subsidiaries  and a list of all other  Persons in which
the Borrower or any of its Subsidiaries holds a direct or indirect  partnership,
joint venture or other equity interest and indicates the nature of such interest
with  respect to each Person  included on such list;  and (ii)  accurately  sets
forth  (A) the  correct  legal  name of such  Person,  the  jurisdiction  of its
incorporation or organization and the  jurisdictions in which it is qualified to
transact business as a foreign  corporation or otherwise and (B) the authorized,
issued and outstanding shares or interests of each class of equity Securities of
the  Borrower  and each of its  Subsidiaries  and the  owners of such  shares or
interests.  None of the issued and outstanding equity Securities of any Material
Subsidiary is subject to any vesting,  redemption,  or repurchase agreement, and
there are no  warrants  or  options  (other  than  Permitted  Equity  Securities
Options)  outstanding  with respect to such equity  Securities.  The outstanding
equity  Securities of each Material  Subsidiary  are free and clear of any Liens
other than those  contemplated  by the Loan Documents.  The  outstanding  equity
Securities  of the  Borrower  and  each of the  Material  Subsidiaries  are duly
authorized,  validly  issued,  fully paid and  nonassessable  and are not Margin
Stock.

                  (d) No Conflict.  The execution,  delivery and  performance of
each of the Loan  Documents to which the Borrower or any Guarantor is a party do
not and will not (i) conflict with the Organizational  Documents of the Borrower
or any  such  Guarantor,  (ii)  constitute  a  tortious  interference  with  any
Contractual Obligation of such Person or conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under any
Requirement  of Law  or  Contractual  Obligation  of the  Borrower  or any  such
Guarantor,   or  require   termination  of  any  Contractual   Obligation,   the
consequences of which violation,  breach,  default or termination,  singly or in
the aggregate,  will, or is reasonably  likely to, result in a Material  Adverse
Effect or is reasonably likely to subject the Agent or any of the Lenders to any
liability,  (iii)  result in or require the creation or  imposition  of any Lien
whatsoever  upon any of the  Property  or  assets  of the  Borrower  or any such
Guarantor,  other than Liens contemplated by the Loan Documents, or (iv) require
any approval of the  Borrower's  or any such  Guarantor's  shareholders,  equity
holders or members, as the case may be, which has not been obtained.

                  (e)  Governmental  Consents.  Except as set forth on  Schedule
6.01-E attached hereto,  the execution,  delivery and performance of each of the
Loan Documents to which the Borrower or any Guarantor is a party do not and will
not  require any  registration  with,  consent or approval  of, or notice to, or
other  action to, with or by any  Governmental  Authority,  except (i)  filings,
consents or notices  which have been made,  obtained  or given and (ii)  filings
necessary to create or perfect security interests in the Collateral.

                  (f)  Governmental  Regulation.  Neither the Borrower,  nor any
Guarantor is subject to regulation  under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the  Interstate  Commerce Act, or the Investment
Company Act of 1940, or any other  federal or state statute or regulation  which
limits its  ability to incur  indebtedness  or its  ability  to  consummate  the
transactions contemplated hereby or by the Loan Documents.

                  (g) Restricted Junior Payments. Since January 1, 1996, neither
the Borrower nor any of its  Subsidiaries  has directly or indirectly  declared,
ordered, paid or made or set apart any sum or Property for any Restricted Junior
Payment or agreed to do so, except as permitted pursuant to Section 9.06 of this
Agreement  (prior  to  the  Closing  Date  and as of the  Closing  Date)  and as
otherwise described on Schedule 6.01-G.

                  (h) Financial  Position.  Complete and accurate  copies of the
following  Financial  Statements,  materials  and  other  information  have been
delivered to the Agent: (i) the Borrower's Annual Report on Form 10-K (including
audited  financial  statements)  for each of the Fiscal Years ended December 31,
1993,  December 31, 1994, and December 31, 1995,  (ii) the Borrower's  Quarterly
Report on Form 10-Q for the  quarter  ending  September  28,  1995 and (iii) the
Borrower's  Current  Report on Form 8-K dated  September 11, 1995. All Financial
Statements  included in such materials were prepared in all material respects in
conformity with GAAP,  except as otherwise noted therein,  and fairly present in
all material respects the respective  consolidated financial positions,  and the
consolidated  results  of  operations  and cash  flows  for each of the  periods
covered thereby of the Borrower and its  Subsidiaries as at the respective dates
thereof.  Neither the Borrower nor any of its Subsidiaries has any Accommodation
Obligation, contingent liability or liability for any taxes, long-term leases or
commitments,  not  permitted  by the terms of Article IX, not  reflected  in the
audited Financial  Statements  delivered to the Agent on or prior to the Closing
Date as aforesaid,  or not  otherwise  disclosed to the Agent and the Lenders in
writing,  which will have or is  reasonably  likely to have a  Material  Adverse
Effect.

                  (i) Projections.  Projections have been delivered to the Agent
on or before the Closing  Date which,  as of the Closing  Date,  are  reasonable
based on the information  available to the Borrower at the time so furnished and
which were prepared based on assumptions reviewed by the Agent.

                  (j)  Indebtedness.  Schedule  1.01.7  sets  forth,  as of  the
Closing Date,  all Funded Debt in an aggregate  amount of $1,000,000 or more and
there are no defaults  in the payment of  principal  or interest  (after  giving
effect to any applicable  grace periods) on any such Funded Debt and no payments
thereunder have been deferred or extended  beyond their stated maturity  (except
as disclosed on such Schedule).

                  (k)  Litigation;  Adverse  Effects.  Except  as set  forth  in
Schedule 6.01-K attached hereto,  there is no action, suit,  proceeding,  Claim,
investigation or arbitration before or by any Governmental  Authority or private
arbitrator pending or, to the knowledge of the Borrower,  threatened against the
Borrower or any of its  Subsidiaries  or any of the Property (i) challenging the
validity or the enforceability of any of the Transaction  Documents,  (ii) which
will, or is  reasonably  likely to, result in any Material  Adverse  Effect,  or
(iii) under the  Racketeering  Influenced and Corrupt  Organizations  Act or any
similar  federal or state statute where such Person is a defendant in a criminal
indictment  that  provides  for the  forfeiture  of assets  to any  Governmental
Authority as a criminal  penalty.  There is no material loss contingency  within
the  meaning  of GAAP  which  has  not  been  reflected  in the  annual  audited
consolidated  Financial  Statements  of the  Borrower  or its  filings  with the
Commission. Neither the Borrower nor any of its Subsidiaries is (A) in violation
of any  applicable  Requirements  of Law  which  violation  will  result,  or is
reasonably  likely to result, in a Material Adverse Effect, or (B) subject to or
in default with respect to any final  judgment,  writ,  injunction,  restraining
order  or  order of any  nature,  decree,  rule or  regulation  of any  court or
Governmental  Authority  which will,  or is  reasonably  likely to,  result in a
Material Adverse Effect.

                  (l) No  Material  Adverse  Effect.  Other  than  as  otherwise
disclosed  in the  Schedules  attached  hereto  and the  filings  made  with the
Commission and referenced in this Agreement, since September 28, 1995, there has
occurred no event which has resulted,  or is reasonably  likely to result,  in a
Material Adverse Effect.

                  (m) Tax  Examinations.  The IRS has examined (or is foreclosed
from  examining by applicable  statutes)  the  Borrower's  consolidated  federal
income tax returns for all tax periods  prior to and  including the taxable year
ending December 31, 1993. All deficiencies  which have been asserted against the
Borrower or any Material Subsidiary as a result of any federal,  state, local or
foreign tax examination for each taxable year in respect of which an examination
has been conducted have been fully paid or finally settled (subject, in the case
of tax periods  from 1989  through  1993,  to review by the Joint  Committee  on
Taxation) or are being contested in good faith,  and no issue has been raised in
any such examination which, by application of similar principles, reasonably can
be expected to result in assertion of a material  deficiency  for any other year
not so examined which has not been reserved for in the  Borrower's  consolidated
Financial  Statements  to the  extent,  if any,  required  by GAAP.  Neither the
Borrower nor any of the Material  Subsidiaries has taken any reporting positions
for  which it does not  have a  reasonable  basis  and does not  anticipate  any
further  material  tax  liability  (which  has  not  been  reserved  for  in the
Borrower's  consolidated Financial Statements to the extent, if any, required by
GAAP)  with  respect  to the  years  which  have not  been  closed  pursuant  to
applicable law.

                  (n) Payment of Taxes.  All material tax returns and reports of
each of the  Borrower and the  Material  Subsidiaries  required to be filed have
been  timely  filed,  and all  taxes,  assessments,  fees and other  charges  of
Governmental  Authorities  thereupon  and upon or relating  to their  respective
Property,  assets,  income  and  franchises  which are shown in such  returns or
reports  to be due and  payable  have been  paid,  except to the extent (i) such
taxes, assessments,  fees and other charges are being contested in good faith by
an  appropriate  proceeding  diligently  pursued  as  permitted  by the terms of
Section  8.04 or do not exceed  $250,000  and (ii)  non-payment  of the  amounts
thereof  would  not,  individually  or in the  aggregate,  result in a  Material
Adverse  Effect.  The Borrower  has no knowledge of any proposed tax  assessment
against  the  Borrower  or any of the  Material  Subsidiaries  that will,  or is
reasonably likely to, result in a Material Adverse Effect.

                  (o)  Performance.   No  Responsible  Officer  has  any  actual
knowledge,  that the Borrower or any of the Material  Subsidiaries  has received
any notice,  citation,  or allegation,  nor has actual  knowledge,  that (i) the
Borrower or any Material Subsidiary is in default in the performance, observance
or fulfillment of any of the obligations,  covenants or conditions  contained in
any Contractual  Obligation  applicable to it, (ii) any Property of the Borrower
or any Material  Subsidiary is in violation of any  Requirement of Law, or (iii)
any condition  exists  which,  with the giving of notice or the lapse of time or
both,   would  constitute  a  default  with  respect  to  any  such  Contractual
Obligation,  in each case, except where such violation,  violations,  default or
defaults,  if any,  will not, or will not  reasonably  be likely to, result in a
Material Adverse Effect.

                  (p)  Disclosure.  The  representations  and  warranties of the
Borrower and Guarantors  contained in the Loan Documents,  and all  certificates
and other documents delivered to the Agent pursuant to the terms thereof, do not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements  contained herein or therein, in light
of the  circumstances  under  which  they  were  made,  taken  as a  whole,  not
misleading.  The Borrower has not intentionally withheld any fact from the Agent
or the Lenders in regard to any matter which will, or is  reasonably  likely to,
result in a Material Adverse Effect.

                  (q)  Requirements  of  Law.  The  Borrower  and  the  Material
Subsidiaries  are in compliance with all  Requirements of Law applicable to them
and their  respective  businesses,  in each case where the  failure to so comply
individually or in the aggregate  will, or is reasonably  likely to, result in a
Material Adverse Effect.

                  (r)  Environmental Matters.  (i) Except to the extent that
none of the following will result in a Material Adverse Effect or except as
disclosed on Schedule 6.01-R attached hereto, to the knowledge of the
Responsible Officers:

                  (A)  the   operations   of  the   Borrower  and  the  Material
Subsidiaries comply in all material respects with all applicable  Environmental,
Health or Safety Requirements of Law;

                  (B) the  Borrower and each of the  Material  Subsidiaries  has
obtained  all  environmental,  health  and  safety  Permits  necessary  for  its
respective  operations,  all such Permits are in good standing, and the Borrower
and each of the Material  Subsidiaries are currently in material compliance with
all terms and conditions of such Permits;

                  (C) none of the Borrower or the Material  Subsidiaries  or any
of their respective present or past Real Property or operations,  are subject to
or the subject of any judicial or administrative  proceeding,  order,  judgment,
decree,  dispute,  negotiations,  agreement,  or settlement arising out of their
respective  ownership  of or  operations  on any past or  present  Property  and
respecting (I) any Environmental, Health or Safety Requirements of Law, (II) any
Remedial  Action,  (III) any Claims or  Liabilities  and Costs  arising from the
Release or threatened Release of a Contaminant into the environment, or (IV) any
violation of or liability under any Environmental,  Health or Safety Requirement
of Law that Borrower or any Material Subsidiary  reasonably believes will result
in a material expenditure of money;

                  (D) neither the Borrower nor any Material Subsidiary has filed
any notice under any applicable  Requirement of Law (I) reporting a Release of a
Contaminant  where remedial  action has not been, or is not being,  conducted to
the satisfaction of the appropriate  Governmental Authority;  (II) under Section
103(c) of CERCLA, indicating past or present treatment, storage or disposal of a
hazardous  waste, as that term is defined under 40 C.F.R.  Part 261 or any state
equivalent;  or (III)  reporting a violation  of any  applicable  Environmental,
Health or Safety Requirement of Law where such violation has not been, or is not
being, corrected to the satisfaction of the appropriate Governmental Authority;

                  (E)  none  of the  Borrower's  or the  Material  Subsidiaries'
present or past Real  Property is listed or proposed for listing on the National
Priorities List ("NPL") pursuant to CERCLA or on the Comprehensive Environmental
Response  Compensation  Liability  Information  System List  ("CERCLIS")  or any
similar state list of sites requiring Remedial Action;

                  (F) neither the Borrower nor any of the Material  Subsidiaries
has sent or directly  arranged  for the  transport  of any waste  generated as a
result of their  respective  operations  to any  current or  proposed  NPL site,
CERCLIS or any similar state list of sites requiring Remedial Action;

                  (G)  there is not now in  connection  with or  resulting  from
Borrower's or any Material Subsidiary's operations,  nor, has there ever been on
or in any of the Real Property (I) any treatment, recycling, storage or disposal
of any hazardous waste  requiring a permit under 40 C.F.R.  Parts 264 and 265 or
any state equivalent, (II) any landfill, waste pile, underground storage tank or
surface impoundment,  (III) any asbestos-containing  material, or (IV) a Release
of any  polychlorinated  biphenyls  (PCB)  used in  hydraulic  oils,  electrical
transformers or other Equipment;

                  (H) neither  the  Borrower  nor any  Material  Subsidiary  has
received any notice or Claim to the effect that any of such Persons is or may be
liable to any  Person as a result of the  Release  or  threatened  Release  of a
Contaminant into the environment;

                  (I) there have been no  Releases  of any  Contaminants  to the
environment  from any Real  Property  except in compliance  with  Environmental,
Health or Safety  Requirements  of Law, or which have not been  corrected to the
satisfaction of the appropriate Governmental Authorities;

                  (J)  no Environmental Lien has attached to any Property owned
by the Borrower or any Material Subsidiary;

                  (K)  none of the Real  Property  owned  by the  Borrower  or a
Material Subsidiary is subject to any Environmental Property Transfer Act, or to
the extent such acts are applicable to any such  Property,  the Borrower and the
Material Subsidiaries have fully complied with the requirements of such acts.

                  (ii) Except as  otherwise  disclosed on Schedule  6.01-R,  the
Borrower and each of the Material  Subsidiaries are conducting and will continue
to conduct their respective  business and operations in material compliance with
Environmental,  Health or Safety  Requirements  of Law, and the Borrower and the
Material  Subsidiaries,  taken as a whole,  have not been, and have no reason to
believe that they will be,  subject to  Liabilities  and Costs arising out of or
relating to environmental, health or safety matters that will, or are reasonably
likely to, result in a Material Adverse Effect.

                  (s)  ERISA.  Neither  the  Borrower  nor any  ERISA  Affiliate
maintains or  contributes to any Benefit Plan or  Multiemployer  Plan other than
those listed on Schedule  6.01-S  attached  hereto.  Each Plan maintained by the
Borrower or an ERISA  Affiliate  which is intended to be qualified under Section
401(a) of the  Internal  Revenue  Code as  currently  in effect  either  (i) has
received  a  favorable  determination  letter  from  the IRS that the Plan is so
qualified or (ii) an application for determination of such tax-qualified  status
will be made to the IRS prior to the end of the  applicable  remedial  amendment
period under Section 401(a) of the Internal Revenue Code as currently in effect,
and the  Borrower  or an  ERISA  Affiliate  shall  diligently  seek to  obtain a
determination  letter with respect to such application.  Except as identified on
Schedule 6.01-S,  neither the Borrower nor any of its Subsidiaries  maintains or
contributes to any employee  welfare  benefit plan within the meaning of Section
3(1) of  ERISA  which  provides  benefits  to  employees  after  termination  of
employment  other than as required by Section 601 of ERISA.  To the knowledge of
the  plan  administrator,  the  Borrower  and  each of its  Subsidiaries  are in
compliance in all material respects with the  responsibilities,  obligations and
duties  imposed on them by ERISA and the  Internal  Revenue Code with respect to
all Plans. Except as otherwise disclosed on Schedule 6.01-S, no Benefit Plan has
incurred any accumulated funding deficiency (as defined in Sections 302(a)(2) of
ERISA and 412(a) of the Internal Revenue Code) whether or not waived.  Except as
otherwise  disclosed  on Schedule  6.01-S,  neither the  Borrower  nor any ERISA
Affiliate  nor any fiduciary of any Plan which is not a  Multiemployer  Plan (i)
has engaged in a nonexempt prohibited  transaction  described in Sections 406 of
ERISA or 4975 of the  Internal  Revenue Code or (ii) has taken or failed to take
any action which would  constitute or result in a Termination  Event,  which, in
either event,  will result in an  obligation to pay a material  amount of money.
Neither the Borrower nor any ERISA  Affiliate has any potential  liability under
Sections  4063,  4064,  4069,  4204 or 4212(c) of ERISA which,  singly or in the
aggregate,  will  result in an  obligation  to pay a  material  amount of money.
Neither the Borrower nor any ERISA  Affiliate  has incurred any liability to the
PBGC which remains outstanding other than the payment of premiums, and there are
no premium  payments  which have become due which are unpaid.  Schedule B to the
most recent  annual  report filed with the IRS with respect to each Benefit Plan
maintained  by the Borrower or an ERISA  Affiliate and furnished to the Agent is
complete  and  accurate in all  material  respects.  Since the date of each such
Schedule B, there has been no material  adverse  change in the funding status or
financial condition of the Benefit Plan relating to such Schedule B. Neither the
Borrower nor any ERISA  Affiliate  has,  within the past five (5) years,  made a
complete  or  partial  withdrawal  under  Sections  4203 or 4205 of ERISA from a
Multiemployer  Plan.  Neither the Borrower nor any ERISA Affiliate has failed to
make a required  installment or any other required  payment under Section 412 of
the  Internal  Revenue  Code on or before the due date for such  installment  or
other  payment.  Neither the  Borrower  nor any ERISA  Affiliate  is required to
provide  security to a Benefit  Plan under  Section  401(a)(29)  of the Internal
Revenue  Code due to a Benefit  Plan  amendment  that  results in an increase in
current  liability  for the  plan  year.  Neither  the  Borrower  nor any of its
Subsidiaries  has,  by  reason  of the  transactions  contemplated  hereby,  any
obligation to make any payment to any employee  pursuant to any Plan or existing
contract or arrangement.  The Borrower has made available to the Agent copies of
all of the following:  each Benefit Plan and related trust agreement  (including
all  amendments  to such Plan and trust) in  existence or committed to as of the
Closing  Date and in respect of which the  Borrower  or any ERISA  Affiliate  is
currently an "employer" as defined in section 3(5) of ERISA, and the most recent
summary plan description,  actuarial report, and determination  letter issued by
the IRS filed in respect of each such Benefit Plan in existence;  and as to each
employee  welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees of the Borrower or any of its Subsidiaries  after
termination  of employment  other than as required by Section 601 of ERISA,  the
most recent summary plan  description for such plan and the aggregate  amount of
the most recent annual  payments made to  terminated  employees  under each such
plan.

                  (t) Foreign Employee Benefit Matters. Neither the Borrower nor
any of its  Subsidiaries  or ERISA  Affiliates  maintains or  contributes to any
Foreign  Employee  Benefit Plan or Foreign  Pension  Plan,  the  maintenance  or
participation  in which,  or the  failure  to comply  with  Requirements  of Law
applicable thereto, will or is reasonably likely to result in a Material Adverse
Effect.

                  (u) Labor  Matters.  There are no  strikes,  lockouts or other
grievances  relating to any collective  bargaining or similar agreement to which
the Borrower or any of its  Subsidiaries is a party which are reasonably  likely
to result in a Material Adverse Effect.

                  (v)  Securities Activities.  Neither the Borrower nor any of
its Subsidiaries is engaged in the business of extending credit for the purpose
of purchasing or carrying Margin Stock.

                  (w) Solvency.  After giving effect to the Loans to be made and
Letters of Credit to be issued on the  Closing  Date or such other date as Loans
or  Letters  of  Credit  requested   hereunder  are  made  or  issued,  and  the
disbursement   of  the  proceeds  of  such  Loans  pursuant  to  the  Borrower's
instructions,  the Borrower and its Subsidiaries  (on a consolidated  basis) and
each of the Borrower and Dyn Funding, individually, are Solvent.

                  (x) Patents,  Trademarks,  Permits,  Etc. (i) The Borrower and
each of the Material Subsidiaries, as applicable, owns, is licensed or otherwise
has the lawful right to use, all patents,  trademarks,  trade names,  registered
copyrights,  technology,  know-how,  and processes  used in or necessary for the
conduct of its respective  business as currently conducted which are material to
its  operations and assets,  taken as a whole.  No claims are pending or, to the
best of Borrower's  knowledge  following  diligent inquiry,  threatened that the
Borrower  or  any  of the  Material  Subsidiaries  is  infringing  or  otherwise
adversely  affecting  the rights of any  Person  with  respect to such  patents,
trademarks, trade names, copyrights, technology, know-how, and processes, except
for such claims and infringements as do not, in the aggregate,  give rise to any
liability on the part of the Borrower or any Material  Subsidiary which will, or
is reasonably likely to, result in a Material Adverse Effect.

                  (ii) The consummation of the transactions  contemplated by the
Loan  Documents will not impair the ownership of or rights under (or the license
or other right to use, as the case may be) any patents, trademarks, trade names,
copyrights,  technology,  know-how, or processes by the Borrower or any Material
Subsidiary  in any manner which will,  or is  reasonably  likely to, result in a
Material Adverse Effect.

                  (iii)  Except to the extent  otherwise  provided  herein,  the
Borrower and each of the Material Subsidiaries has all Permits necessary for the
conduct of its  respective  business  which are material to its  operations  and
assets,  except  to the  extent  the  failure  to have  such  Permits  would not
reasonably be likely to result in a Material Adverse Effect.

                  (y)  Assets  and  Properties.  The  Borrower  and  each of the
Material  Subsidiaries has good and marketable title to substantially all of the
assets and Property  (tangible and  intangible)  owned by it (except  insofar as
marketability  may be limited  by any laws or  regulations  of any  Governmental
Authority affecting such assets),  and all such assets and Property are free and
clear of all Liens except Liens  securing the  Obligations  and Liens  permitted
under Section  9.03.  Substantially  all of the assets and Property  owned by or
leased to and used by the Borrower and/or each such Material Subsidiary which is
material  to  the  operation  of  their  respective  businesses  is in  adequate
operating  condition and repair,  ordinary wear and tear  excepted,  is free and
clear of any known defects except such defects as do not substantially interfere
with the continued use thereof in the conduct of normal operations,  and is able
to serve the function for which they are  currently  being used,  except in each
case where the failure of such asset to meet such requirements  would not, or is
not  reasonably  likely to, result in a Material  Adverse  Effect.  Neither this
Agreement nor any other Loan Document,  nor any transaction  contemplated  under
any such agreement,  will affect any right, title or interest of the Borrower or
any Material Subsidiary of the Borrower in and to any of such assets in a manner
that would, or is reasonably likely to, result in a Material Adverse Effect.

                  (z) Insurance. Schedule 6.01-Z attached hereto accurately sets
forth as of the Closing Date all  insurance  policies and programs  currently in
effect with  respect to the  respective  Property and assets and business of the
Borrower  and its  Material  Subsidiaries,  specifying  for each such policy and
program, (i) the amount thereof,  (ii) the risks insured against thereby,  (iii)
the name of the insurer and each insured  party  thereunder,  (iv) the policy or
other identification  number thereof, (v) the expiration date thereof,  (vi) the
annual  premium with respect to property  and  business  interruption  insurance
included on such Schedule, and (vii) a list of claims made thereunder during the
immediately  preceding three (3) calendar years,  under which the amount claimed
exceeds,  individually,  $500,000.  On or before the Closing Date,  the Borrower
made copies of all such insurance  policies available to the Agent for review at
Borrower's  chief  executive  office.  Such insurance  policies and programs are
currently  in full force and effect,  in  compliance  with the  requirements  of
Section  8.05 and are in amounts,  subject to the  limitations  of coverage  set
forth  therein,  sufficient  to cover the  replacement  value of the  respective
Property and assets of the Borrower  and the  Material  Subsidiaries  reasonably
anticipated to be subject to a claim thereunder at any given time.

                  (aa) Pledge of Capital  Stock.  The  granting of the  security
interest  by (i) the  Borrower in the  Capital  Stock of the those  Subsidiaries
identified in the Borrower Pledge  Agreement and (ii) certain  Guarantors in the
Capital  Stock  of  their  Subsidiaries   identified  in  the  Guarantor  Pledge
Agreements,  in each  case,  constituting  a portion of the  Collateral  for the
benefit  of the  Holders  and the  perfection  of  such  security  interest,  as
contemplated by the terms of the Borrower Pledge  Agreement and Guarantor Pledge
Agreements,  is not made in  violation  of the  registration  provisions  of the
Securities  Act, any  applicable  provisions of other federal  securities  laws,
state securities or "Blue Sky" law, or applicable general  corporation law or in
violation of any other Requirement of Law.

                  (bb) Government  Contracts.  For purposes of the provisions of
this Agreement relating solely to Government  Contracts only, the term "Material
Subsidiary" shall include all Subsidiaries of the Borrower performing Government
Contracts with the United States Government worldwide.

                  (i)  Neither   the   Borrower   nor  any  of  the   Borrower's
Subsidiaries  is  party  to  any  Contractual   Obligation  or  subject  to  any
Requirement of Law relating to  organizational  conflicts of interest between or
among the Borrower and its  Subsidiaries  or otherwise  that would result in the
termination of any Material  Government Contract or that is reasonably likely to
impose any material  limitation on the Borrower's or such Material  Subsidiary's
ability to perform such  contract or which is  reasonably  likely to result in a
material adverse effect on the Borrower's or such Material Subsidiary to receive
similar Government contracts in the future.

                  (ii)  To the  best  of  Borrower's  knowledge  after  diligent
inquiry,  no  payment  has  been  made by the  Borrower  or any of the  Material
Subsidiaries,  or by any Person authorized to act on their behalf, to any Person
within the past three (3) years in connection  with any  Government  Contract of
the Borrower or any Material  Subsidiary,  which payment would be a violation of
applicable  procurement laws or regulations or of the Foreign Corrupt  Practices
Act or of any other Requirement of Law.

                  (iii) With  respect to each  Government  Contract to which the
Borrower  or any  of the  Material  Subsidiaries  is a  party,  to the  best  of
Borrower's  Principals'  knowledge,  except  as set forth on  Schedule  6.01-BB,
within the last three (3) years:  (A) neither the United States  Government  nor
any prime contractor, subcontractor or other Person has notified the Borrower or
any such  Material  Subsidiary,  in writing,  that the  Borrower or any Material
Subsidiary  has  breached or violated any  material  Requirement  of Law, or any
material  certificate  or  representation,  or any  material  clause  which  has
resulted in a cure notice;  and (B) solely with  respect to Material  Government
Contracts,  no termination for default is currently in effect  pertaining to any
such Material Government Contract.

                  (iv) Except as otherwise disclosed to the Agent in writing, to
the best of Borrower's Principals' knowledge, (A) none of the Borrower or any of
the Material  Subsidiaries or any of their  respective  directors or officers is
(or during the last five (5) years has been)  under civil  investigation  by the
United  States  Department  of  Justice  or a state  attorney  general  or under
criminal investigation by any Governmental  Authority, or is under indictment by
any  Governmental  Authority with respect to any  irregularity,  misstatement or
omission  arising  under or relating to any  activities  of the  Borrower or any
Material Subsidiary of the Borrower under a Government Contract;  and (B) during
the  last  five  (5)  years,  none  of the  Borrower  or  any  of  the  Material
Subsidiaries  has made a voluntary  disclosure to the United  States  Government
with respect to any  irregularity,  misstatement  or omission  arising  under or
relating to a Government  Contract,  in each case except  (with  respect to such
matters occurring after the Closing Date) as disclosed to the Lenders.

                  (v) Except as  otherwise  disclosed  to the Agent in  writing,
there exist (A) no  outstanding  material  claims against the Borrower or any of
the Material  Subsidiaries,  either by the United  States  Government  or by any
prime contractors,  subcontractor, vendor or other third party, arising under or
relating to any Government  Contract;  and (B) no material  disputes between the
Borrower or any of the Material  Subsidiaries  and the United States  Government
under the  Contract  Disputes  Act or any other  Federal  statute or between the
Borrower  or  any  of  the  Material  Subsidiaries  and  any  prime  contractor,
subcontractor  or  vendor  arising  under or  relating  to any  such  Government
Contract, which is reasonably likely to result in a Material Adverse Effect.

                  (vi) To the best of Borrower's knowledge, none of the Borrower
or any of the  Material  Subsidiaries  or  any of  their  respective  directors,
officers or employees is (or during the last five (5) years has been)  suspended
or debarred  from doing  business  with the United  States  Government or is (or
during  such  period  was) the  subject  of a finding  of  nonresponsibility  or
ineligibility for United States Government contracting.

                  (cc) No Challenged Costs. To the best of Borrower's knowledge,
no cost incurred pertaining to any Government Contract of the Borrower or any of
the  Material  Subsidiaries  is the  subject  of any  investigation  or has been
disallowed  by the United  States  Government  or any of its  agencies  which is
reasonably likely to result in a Material Adverse Effect.

                  (dd) No Money Withheld.  To the Borrower's  knowledge,  within
the past year, no more than  $1,000,000 has been withheld or set off for payment
of contract  debts,  as described  in Federal  Acquisition  Regulation  Sections
32.611 and 32.612,  with respect to any Receivables arising under any Government
Contract  of  the  Borrower  or any of the  Material  Subsidiaries,  except  for
retainages  contracted  for under certain such  Government  Contracts  and, with
respect to the year preceding the Closing Date,  amounts  disclosed to the Agent
prior to the Closing Date.

                  (ee) Cost Accounting and Property Systems. The cost accounting
and property  systems with respect to  Government  Contracts of the Borrower and
the Material Subsidiaries are in compliance with all applicable  Requirements of
Law and Contractual  Obligations,  except to the extent non-compliance therewith
would not be reasonably likely to result in a Material Adverse Effect.

                  (ff)   Receivables   Purchase   Transaction.   All  conditions
precedent  to, and all consents  necessary to permit,  the  consummation  of the
transactions  contemplated  by the  Receivables  Purchase  Documents  have  been
satisfied  or  delivered,  or  waived,  and no  material  breach  of any term or
provision of any Receivables  Purchase Document has occurred which is continuing
and no  action  has  been  taken by any  competent  authority  which  restrains,
prevents or imposes  material  adverse  conditions  upon,  or seeks to restrain,
prevent or impose  material  adverse  conditions  upon, the  consummation of the
transactions contemplated by the Receivables Purchase documents or the continued
performance of the parties to the Receivables  Purchase  Documents in accordance
with the terms thereof.  Except as disclosed in Schedule  6.01-FF,  the terms of
the Existing  Receivables Purchase Documents continue in effect unmodified since
July  25,  1995.  The  Borrower  and its  Subsidiaries  have  complied  with all
applicable  laws  and  regulatory  approval  requirements  and  all  contractual
approval and consent requirements with respect to the transactions  contemplated
by the  Receivables  Purchase  Documents,  and no material breach of any term or
provision of any instrument or document  pertaining to the Receivables  Purchase
Documents has  occurred.Schedule  6.01-FF, the terms of the Existing Receivables
Purchase  Documents  continue  in effect  unmodified  since July 25,  1995.  The
Borrower  and its  Subsidiaries  have  complied  with  all  applicable  laws and
regulatory  approval  requirements  and all  contractual  approval  and  consent
requirements  with respect to the  transactions  contemplated by the Receivables
Purchase  Documents,  and no  material  breach of any term or  provision  of any
instrument or document  pertaining  to the  Receivables  Purchase  Documents has
occurred.

                                   ARTICLE VII
                               REPORTING COVENANTS

                  The  Borrower  covenants  and  agrees  that  so  long  as  any
Commitments are  outstanding and thereafter  until payment in full of all of the
Obligations  (other than indemnities not yet due),  unless the Requisite Lenders
shall otherwise give their prior written consent thereto:

                  7.01. Financial  StatementsFinancial  Statements. The Borrower
shall  maintain,  and cause each of its  Subsidiaries  to maintain,  a system of
accounting  established  and  administered  in  accordance  with sound  business
practices to permit  preparation of  consolidated  and  consolidating  Financial
Statements  in  conformity  with  GAAP  and  each  of the  Financial  Statements
described  below shall be prepared  from such system and  records.  The Borrower
shall deliver or cause to be delivered to the Agent and the Lenders:

                  (a) Monthly Reports. As soon as practicable,  and in any event
within  forty-five  (45) days after the end of each Fiscal Month of the Borrower
(other than the Fiscal  Month  ending in December for which such period shall be
sixty (60) days) in each Fiscal Year,  the  consolidated  balance  sheets of the
Borrower and its  Subsidiaries  as at the end of such period (i) for such Fiscal
Month and (ii) for the period beginning on the first day of such Fiscal Year and
ending  on the  last  day of  such  Fiscal  Month,  together  with  the  related
consolidated  statements  of  income  and  cash  flow  of the  Borrower  and its
Subsidiaries  for such periods,  setting forth in each case in comparative  form
the corresponding  figures for the corresponding  periods of the previous Fiscal
Year and the corresponding figures from the consolidated  financial forecast for
the current  Fiscal Year  delivered  on the Closing  Date or pursuant to Section
7.01(e),  as applicable,  certified by a Financial  Officer as fairly presenting
the consolidated  financial  position of the Borrower and its Subsidiaries as at
the dates  indicated and the results of their  operations  and cash flow for the
Fiscal Months of the Borrower indicated, subject to normal year end adjustments.

                  (b) Annual Reports.  As soon as practicable,  and in any event
within  one  hundred  (100)  days  after the end of each  Fiscal  Year,  (i) the
consolidated  and   consolidating   balance  sheets  of  the  Borrower  and  its
Subsidiaries as at the end of such Fiscal Year and the related  consolidated and
consolidating  statements of income,  stockholders'  equity and cash flow of the
Borrower and its Subsidiaries  for such Fiscal Year,  setting forth in each case
in comparative form the  corresponding  figures for the previous Fiscal Year and
the  corresponding  figures  from the  consolidated  financial  forecast for the
current  Fiscal  Year  delivered  on the  Closing  Date or  pursuant  to Section
7.01(e),  as  applicable,  and (ii) a report with  respect to such  consolidated
Financial  Statements  of Arthur  Andersen  LLP or other  independent  certified
public  accountants  acceptable to the Agent,  which report shall be unqualified
and shall state that such Financial  Statements  fairly present the consolidated
financial  position  of the  Borrower  and  its  Subsidiaries  as at  the  dates
indicated  and the  results of their  operations  and cash flow for the  periods
indicated in conformity with GAAP (except for changes with which Arthur Andersen
LLP or any such other independent  certified public accountants,  if applicable,
shall concur and which shall have been  disclosed in the notes to the  Financial
Statements) and that the examination by such accountants in connection with such
consolidated  Financial  Statements  has been made in accordance  with generally
accepted auditing standards.

                  (c) Officer's Certificate.  Together with each delivery of any
Financial  Statement pursuant to paragraph (a) and (b) of this Section 7.01, (i)
an Officer's Certificate of the Borrower  substantially in the form of Exhibit G
attached  hereto and made a part  hereof,  stating  that the  Financial  Officer
signatory thereto has reviewed the terms of the Loan Documents, and has made, or
caused to be made under his/her  supervision,  a review in reasonable  detail of
the transactions and consolidated and consolidating  financial  condition of the
Borrower  and its  Subsidiaries  during the  accounting  period  covered by such
Financial Statements, that such review has not disclosed the existence during or
at the end of such  accounting  period,  and  that  such  Person  does  not have
knowledge of the existence as at the date of such Officer's Certificate,  of any
condition or event which  constitutes an Event of Default or Potential  Event of
Default,  or, if any such  condition or event existed or exists,  specifying the
nature and period of  existence  thereof and what action the  Borrower or any of
its Subsidiaries has taken, is taking and proposes to take with respect thereto;
and (ii) a certificate  (the  "Compliance  Certificate"),  signed by a Financial
Officer  setting  forth  calculations  (with such  specificity  as the Agent may
reasonably request) for the period then ended which demonstrate compliance, when
applicable, with the provisions of Article X.

                  (d) Accountant's  Statement and Privity Letter.  Together with
each  delivery of the Financial  Statements  referred to in Section  7.01(b),  a
written statement of the firm of independent certified public accountants giving
the report  thereon (i)  stating  that their audit  examination  has  included a
review of the terms of this Agreement as it relates to accounting matters,  (ii)
stating whether,  in connection with their audit  examination,  any condition or
event which  constitutes  an Event of Default or Potential  Event of Default has
come to  their  attention,  and if such  condition  or  event  has come to their
attention,  specifying the nature and period of existence thereof; provided that
such  accountants  shall  not be  liable  by  reason  of any  failure  to obtain
knowledge  of any such  condition  or event that would not be  disclosed  in the
course of their audit  examination,  and (iii) stating that based on their audit
examination  nothing has come to their  attention  which  causes them to believe
that the information  contained in either or both of the certificates  delivered
therewith  pursuant to Section  7.01(c) (as the  information  contained  in such
certificates  relates to the covenants set forth in Article X) is not correct or
that the matters set forth in the  Compliance  Certificate  delivered  therewith
pursuant to Section 7.01(c)(ii) for the applicable Fiscal Year are not stated in
accordance  with the terms of this  Agreement.  The statement  referred to above
shall be accompanied by (x) a copy of the draft management letter or any similar
report  delivered to the Borrower or to any officer or employee  thereof by such
accountants  in connection  with such  Financial  Statements and (y) a letter in
substantially  the form of Exhibit H attached hereto and made a part hereof from
the Borrower to such accountants informing such accountants that the Lenders are
relying upon the Financial  Statements audited by such accountants and delivered
to the Agent and the Lenders  pursuant to Section  7.01(b).  The Borrower  shall
deliver the final executed  management letter (a draft of which is referenced in
clause (x) above)  delivered  by such  accountants,  promptly  after its receipt
thereof. The Agent and each Lender may, with the written consent of the Borrower
(which  consent  shall not be  unreasonably  withheld or  delayed),  communicate
directly with such accountants.

                  (e) Budgets; Business Plans; Financial Projections. As soon as
practicable  and in any event not later than the last day of each  Fiscal Year a
preliminary  budget by Fiscal  Quarter of the Borrower  for the next  succeeding
Fiscal Year and business  plan for the next  succeeding  four (4) Fiscal  Years,
substantially in the form of the business plan heretofore delivered to the Agent
and the Lenders;  and within  forty-five  days (45) after the end of each Fiscal
Year of the Borrower,  a consolidated plan and financial  forecast,  prepared in
accordance  with  the  Borrower's  normal  accounting  procedures  applied  on a
consistent basis, for the five (5) Fiscal Year period of the Borrower commencing
in the  Fiscal  Year in which  delivered,  including,  without  limitation,  (i)
forecasted  consolidated  balance  sheets and statements of cash flow and income
statement of the Borrower for such Fiscal Years,  (ii)  forecasted  consolidated
and consolidating balance sheets, statement of cash flow and income statement of
the Borrower and its  Subsidiaries for and as of the end of each Fiscal Month of
such Fiscal Years, (iii) the amount of forecasted Capital  Expenditures for such
Fiscal Years,  and (iv) forecasted  compliance with the provisions of Article X,
each of the foregoing prepared for each Fiscal Month in the first Fiscal Year of
such five Fiscal Year period and accompanied by a report explaining all material
changes  and  departures  for the first of such five (5)  Fiscal  Years from the
preliminary business plan delivered to the Agent and the Lenders for such Fiscal
Year.

                  (f) Monthly Bank  Statements.  As soon as available  after the
Agent's  request  therefor,  a copy of each  monthly  statement  prepared by the
applicable  depositary  bank with  respect  to each of the  Borrower's  and each
Guarantor's depositary accounts identified by the Agent in such request.

                  (g) Notices of  Indemnities  and  Warranties.  Promptly  after
entering into a Contractual Obligation under which the Borrower or any Guarantor
incurs  obligations or liabilities for any indemnities or warranties  outside of
the ordinary  course of its business,  written notice thereof and, to the extent
possible,  an estimate of the projected  amount of such  obligation or liability
and the time period over which the same is likely to be incurred.

                  7.02. Events of DefaultEvents of Default. Promptly upon any of
the chief executive officer or any Financial Officer obtaining  knowledge (a) of
any condition or event which  constitutes an Event of Default or Potential Event
of Default,  or becoming aware that any Lender or the Agent has given any notice
with respect to a claimed  Event of Default or Potential  Event of Default under
this Agreement,  (b) that any Person has given any notice to the Borrower or any
Material  Subsidiary or taken any other action with respect to a claimed default
or event or condition of the type referred to in Section 11.01(e), or (c) of any
condition or event which has resulted,  or is reasonably  likely to result, in a
Material  Adverse Effect or affect the value of, or the Agent's interest in, the
Collateral in any material respect,  the Borrower shall deliver to the Agent and
the Lenders an  Officer's  Certificate  specifying  (i) the nature and period of
existence  of any such claimed  default,  Event of Default,  Potential  Event of
Default,  condition  or event,  (ii) the  notice  given or action  taken by such
Person in connection therewith, and (iii) what action the Borrower has taken, is
taking and proposes to take with respect thereto.

                  7.03.   LawsuitsLawsuits.   (a)  Institution  of  Proceedings.
Promptly upon a Responsible Officer's obtaining knowledge of the institution of,
or written threat of, any action, suit, proceeding,  governmental  investigation
or arbitration  against or affecting the Borrower or any of its  Subsidiaries or
any of the Property not previously disclosed pursuant to Section 6.01(k),  which
action,  suit,   proceeding,   governmental   investigation  or  arbitration  is
reasonably  likely  to  expose,  or in the  case  of  multiple  actions,  suits,
proceedings, governmental investigations or arbitrations arising out of the same
general  allegations or circumstances  which are reasonably likely to expose, in
the Borrower's reasonable judgment,  the Borrower and/or any of its Subsidiaries
to liability in an amount  aggregating  $1,000,000 or more  (exclusive of claims
covered  by  insurance  policies  of the  Borrower  and its  Subsidiaries),  the
Borrower  shall give  written  notice  thereof to the Agent and the  Lenders and
provide such other information as may be reasonably  available,  and not subject
to attorney-client privilege which would be abrogated by such provision thereof,
to enable  the each  Lender  and the  Agent and its  counsel  to  evaluate  such
matters.

                  (b) Additional  Reports.  In addition to the  requirements set
forth in clause (a) of this Section  7.03,  the  Borrower  shall  promptly  give
written  notice of any change in the  status of any  action,  suit,  proceeding,
governmental investigation or arbitration covered by a report delivered pursuant
to clause (a) and provide such other information as may be reasonably  available
to it to enable  each  Lender  and the Agent and its  counsel to  evaluate  such
matters.

                  7.04. ERISA NoticesERISA  Notices.  The Borrower shall deliver
or cause  to be  delivered  to the  Agent  and the  Lenders,  at the  Borrower's
expense,  the following  information and notices as soon as reasonably possible,
and in any event:

                  (a) within ten (10) Business Days after the Borrower  knows or
         has reason to know that a  Termination  Event has  occurred,  a written
         statement of a Financial Officer  describing such Termination Event and
         the  action,  if any,  which the  Borrower or any ERISA  Affiliate  has
         taken,  is taking or proposes to take with  respect  thereto,  and when
         known,  any action  taken or  threatened  by the IRS,  DOL or PBGC with
         respect thereto;

                  (b) within ten (10) Business Days after the Borrower  knows or
         has  reason  to know that an  assessment  of a  prohibited  transaction
         excise  tax  under  Section  4975  of the  Internal  Revenue  Code  has
         occurred,   a  statement  of  a  Financial   Officer   describing  such
         transaction  and the action which the  Borrower or any ERISA  Affiliate
         has taken, is taking or proposes to take with respect thereto;

                  (c) within ten (10) Business Days after the filing of the same
         with the DOL,  IRS or PBGC,  copies of each  annual  report  (form 5500
         series),  including  Schedule  B thereto,  filed  with  respect to each
         Benefit Plan;

                  (d)  within  ten  (10)  Business  Days  after  receipt  by the
         Borrower  or any  ERISA  Affiliate  of each  actuarial  report  for any
         Benefit Plan, copies of each such report;

                  (e) within ten (10) Business Days after the filing of the same
         with the IRS, a copy of each funding  waiver request filed with respect
         to any Benefit Plan and all communications  received by the Borrower or
         any ERISA Affiliate with respect to such request;

                  (f) within ten (10)  Business  Days after the  occurrence  any
         material  increase in the benefits of any existing  Benefit Plan or the
         establishment   of  any  new  Benefit  Plan  or  the   commencement  of
         contributions  to any Benefit  Plan to which the  Borrower or any ERISA
         Affiliate  was  not  previously  contributing,   notification  of  such
         increase, establishment or commencement;

                  (g) within ten (10)  Business  Days after the  Borrower or any
         ERISA Affiliate  receives notice of the PBGC's intention to terminate a
         Benefit  Plan or to have a trustee  appointed  to  administer a Benefit
         Plan, copies of each such notice;

                  (h) within ten (10) Business Days after the Borrower  receives
         notice of any unfavorable  determination  letter from the IRS regarding
         the  qualification  of a Plan  under  Section  401(a)  of the  Internal
         Revenue Code, copies of each such notice and letter; and

                  (i) within three (3) Business Days after a Responsible Officer
         obtains  knowledge that Borrower or any ERISA Affiliate has failed,  to
         make a required installment or any other required payment under Section
         412 of the  Internal  Revenue  Code on or before  the due date for such
         installment or payment, a notification of such failure.

For purposes of this Section 7.04, the Borrower and any ERISA Affiliate shall be
deemed to know all  facts  known by the  Administrator  of any Plan of which the
Borrower or any ERISA Affiliate is the plan sponsor.

                  7.05.  Environmental NoticesEnvironmental Notices.  (a) The
Borrower shall notify the Agent and the Lenders in writing, promptly upon any
Responsible Officer's learning thereof, of any:

                  (i) notice or claim to the  effect  that the  Borrower  or any
         Material  Subsidiary  is or is  reasonably  likely  to be liable to any
         Person  as a  result  of  the  Release  or  threatened  Release  of any
         Contaminant into the environment  which could  reasonably  result in an
         expenditure of $1,000,000 or more;

                  (ii) notice that the  Borrower or any Material  Subsidiary  is
         subject  to  investigation  by any  Governmental  Authority  evaluating
         whether  any  Remedial  Action is needed to respond  to the  Release or
         threatened  Release of any Contaminant into the environment which could
         reasonably result in an expenditure of $1,000,000 or more;

                  (iii)  notice that any owned Property is subject to an
         Environmental Lien;

                  (iv) notice to the Borrower or any Material  Subsidiary of any
         material violation of any  Environmental,  Health or Safety Requirement
         of Law which is  reasonably  likely to  result  in a  Material  Adverse
         Effect;

                  (v)  condition  which  might  reasonably  result in a material
         violation of any  Environmental,  Health or Safety  Requirement  of Law
         which is reasonably likely to result in a Material Adverse Effect;

                  (vi)  commencement or threat of any judicial or administrative
         proceeding  alleging  a  material  violation  by  the  Borrower  or any
         Material Subsidiary of any Environmental,  Health or Safety Requirement
         of Law which is  reasonably  likely to  result  in a  Material  Adverse
         Effect;

                  (vii) any proposed  acquisition of stock, assets, real estate,
         or leasing of  property,  or any other  action by the  Borrower  or any
         Material  Subsidiary  that could  subject the  Borrower or any Material
         Subsidiary to  environmental,  health or safety  Liabilities  and Costs
         which could reasonably  result in an expenditure of $1,000,000 or more;
         or

                  (viii)  any  filing  or  report  made by the  Borrower  or any
         Material Subsidiary with any Governmental Authority with respect to any
         unpermitted  Release or threatened Release of a Contaminant which could
         reasonably result in an expenditure of $1,000,000 or more.

                  (b) Within  forty-five  (45) days after the end of each Fiscal
Year,  the  Borrower  shall  submit  to the  Agent  and  the  Lenders  a  report
summarizing any material adverse change in the status of  environmental,  health
or safety  compliance,  hazard or liability  issues not otherwise  identified in
notices required pursuant to Section 7.05(a) or disclosed on Schedule 6.01-R.

                  7.06. Labor  MattersLabor  Matters.  The Borrower shall notify
the Agent and the  Lenders in writing,  promptly  upon the  Borrower's  learning
thereof,  of any  material  labor  dispute to which the Borrower or any Material
Subsidiary  may become a party,  including,  without  limitation,  any  strikes,
lockouts  or  other  grievances  relating  to such  Persons'  plants  and  other
facilities, which is reasonably likely to result in a Material Adverse Effect.

                  7.07.  Receivables Purchase Documents.  From and after Agent's
request therefor,  the Borrower shall deliver a copy of the following,  promptly
upon its receipt thereof (where applicable),  and concurrently with its delivery
thereof  (where  applicable),  to the Agent and the Lenders:  (a) each notice or
other communication (other than routine daily reports) delivered by or on behalf
of the Borrower or Dyn Funding to any Person in connection with any agreement or
other  document  relating  to  the  transactions  contemplated  by  any  of  the
Receivables  Purchase  Documents  by the  same  means  as such  notice  or other
communication  is delivered to such Person;  (b) each  material  notice or other
material  communication  received by the Borrower or Dyn Funding from any Person
in connection with any agreement or other document  relating to the transactions
contemplated  by any of the  Receivables  Purchase  Documents;  (c) each  report
(other than routine daily reports,  but including,  without limitation,  monthly
determination date statements)  delivered by or on behalf of the Borrower or Dyn
Funding to any Person  pursuant to the  requirements  of any of the  Receivables
Purchase Documents by the same means as such report is delivered to such Person;
(d)  each  written  request  delivered  by the  "Servicer"  (as  defined  in the
Receivables  Purchase Documents) to the "Trustee" (as defined in the Receivables
Purchase  Documents)  under Section  3.04(a) of the  Servicing  Agreement of the
Existing   Receivables   Purchase  Documents  or  like  provision  of  the  1997
Receivables  Purchase  Documents;  and (e) the  monthly  accounting  of  amounts
withdrawn and paid to the  "Servicer"  pursuant to such Section  3.04(b) or like
provision provided by the aforesaid "Trustee" to the "Servicer".

                  7.08. Other ReportsOther  Reports.  The Borrower shall deliver
or cause to be  delivered to the Agent and the Lenders  copies of all  Financial
Statements,  material  reports  and  material  notices,  if  any,  sent  or made
available  generally by the Borrower to its Securities holders or filed with the
Commission (to the extent not otherwise delivered by the Borrower hereunder) and
all material  notifications  received by the Borrower or any  Subsidiary  of the
Borrower  pursuant  to the  Securities  Exchange  Act and the rules  promulgated
thereunder.  The  Borrower  shall use its best efforts to deliver or cause to be
delivered  to the  Agent and the  Lenders  copies  of all  press  releases  made
available  generally by the Borrower or a  Subsidiary  to the public  concerning
material developments in the business of the Borrower or any such Subsidiary.

                  7.09.  Other  InformationOther   Information.   Promptly  upon
receiving  a request  therefor  from the  Agent or the  Requisite  Lenders,  the
Borrower  shall  prepare  and  deliver to the Agent and the  Lenders  such other
information  with  respect  to the  Borrower,  any of its  Subsidiaries,  or the
Collateral,  including, without limitation, schedules identifying and describing
the  Collateral  and  any  dispositions  thereof,  as from  time to time  may be
reasonably requested by the Agent or the Requisite Lenders.

                  7.10. Government Contracts.  (i) The Borrower shall notify the
Agent in writing  promptly  after the  Borrower  knows  thereof,  of any loss or
threatened loss of the security clearances  referenced in Section 8.10; and (ii)
the Borrower shall notify the Agent in writing promptly upon (and, in any event,
within  five (5)  Business  Days of) the  Borrower  obtaining  knowledge  of any
material  adverse  change  in  the  status  of  any  action,  suit,  proceeding,
governmental  investigation  or other matter  disclosed on or arising out of the
matters  disclosed on Schedule 6.01-BB and shall provide such other  information
as may be  reasonably  available  to it to enable the Lender and its  counsel to
evaluate such matters.

                                  ARTICLE VIII
                              AFFIRMATIVE COVENANTS

                  Borrower  covenants and agrees that so long as any Commitments
are outstanding  and thereafter  until payment in full of all of the Obligations
(other  than  indemnities  not yet due),  unless  the  Requisite  Lenders  shall
otherwise give prior written consent:

                  8.01. Corporate Existence,  Etc.Corporate Existence,  Etc. The
Borrower  shall,  and shall cause each of the Material  Subsidiaries  to, at all
times  maintain its  corporate  existence  and preserve and keep, or cause to be
preserved and kept, in full force and effect its rights and franchises  material
to its  businesses,  except  where the loss or  termination  of such  rights and
franchises is not reasonably likely to result in a Material Adverse Effect.

                  8.02. Corporate Powers;  Conduct of BusinessCorporate  Powers;
Conduct of Business.  The Borrower  shall,  and shall cause each of the Material
Subsidiaries  to,  qualify and remain  qualified to do business and maintain its
good standing in each  jurisdiction  in which the nature of its business and the
ownership of its Property  requires it to be so qualified and in good  standing,
except  where  the  failure  to be so  qualified  and in  good  standing  is not
reasonably  likely to result in a Material  Adverse Effect or impair the ability
of the Borrower, the Material Subsidiaries,  or the Agent to enforce Receivables
owing by account debtors in such jurisdictions.

                  8.03. Compliance with Laws, Etc.Compliance with Laws, Etc. The
Borrower shall, and shall cause each of the Material Subsidiaries to, (a) comply
with all Requirements of Law and all restrictive  covenants  affecting it or its
business,  Property,  assets or operations  and (b) obtain as needed all Permits
necessary for its operations and maintain such Permits in good standing,  except
in the case  where  noncompliance  with  either  clause  (a) or (b) above is not
reasonably likely to result in a Material Adverse Effect.

                  8.04. Payment of Taxes and Claims; Tax ConsolidationPayment of
Taxes and Claims; Tax Consolidation. The Borrower shall, and shall cause each of
its  Subsidiaries  to, pay (a) all  taxes,  assessments  and other  governmental
charges imposed upon it or on any of its Property or assets or in respect of any
of its franchises,  business,  income or Property by any U.S. federal, state, or
local Governmental  Authority,  which singly or collectively are in an amount of
$1,000,000 or more, before any penalty or interest accrues thereon,  and (b) all
material Claims  (including,  without  limitation,  claims for labor,  services,
materials  and supplies) for sums which have become due and payable and which by
law have or may become a Lien (other than a Lien permitted by Section 9.03) upon
any of the Borrower's or such Subsidiary's Property or assets, prior to the time
when any  penalty or fine shall be  assessed  with  respect  thereto;  provided,
however,  that  failure  to pay any such  taxes,  assessments  and  governmental
charges  referred  to in clause  (a) above or Claims  referred  to in clause (b)
above  shall not result in a  Potential  Event of Default or Event of Default if
being contested in good faith by appropriate  proceedings  diligently instituted
and conducted  and if such reserve or other  appropriate  provision,  if any, as
shall be  required in  conformity  with GAAP shall have been made  therefor  and
further  provided  that  upon  the  payment  of  such  taxes,   assessments  and
governmental  charges  referred  to in clause  (a) above and all  penalties  and
interest  associated  therewith,  the  amount  of such  taxes,  assessments  and
governmental  charges  shall not be included in  determination  of the aforesaid
$1,000,000  threshhold.  The  Borrower  will not,  nor will it permit any of its
Subsidiaries  to, file or consent to the filing of any  consolidated  income tax
return with any Person (other than the Borrower and its Subsidiaries).

                  8.05.  InsuranceInsurance.  The  Borrower  shall  maintain for
itself  and the  Material  Subsidiaries,  or shall  cause  each of the  Material
Subsidiaries  to maintain in full force and effect the  insurance  policies  and
programs  listed  on  Schedule  6.01-Z or  substantially  similar  policies  and
programs or other policies and programs as are acceptable to the Agent. All such
insurance including any self-insurance programs shall be reasonably satisfactory
to the  Agent;  all such  policies  and  programs  otherwise  obtained  shall be
maintained with responsible and reputable  insurance  companies or associations,
in such amounts and covering  such risks as are usual for  companies  engaged in
similar  businesses and owning similar  property in the same general  geographic
areas in which the  Borrower  and/or the  Material  Subsidiaries  operate.  Each
policy  pertaining  to  insurance  coverage  with respect to the  Collateral  or
business  interruption  shall, if requested in writing by the Agent,  contain an
endorsement  naming the Agent as an  additional  insured,  as its  interests may
appear,  under such policy or be subject to a loss payable  endorsement  in form
and substance  satisfactory  to the Agent.  Such  endorsement  or an independent
instrument  furnished to the Agent shall  provide that the  insurance  companies
will give the Agent at least thirty (30) days'  written  notice  before any such
policy or policies of insurance  shall be altered  adversely to the interests of
the Holders or  cancelled  and that no act,  whether  willful or  negligent,  or
default of the Borrower,  any of its Material  Subsidiaries  or any other Person
shall affect the right of the Agent to recover  under such policy or policies of
insurance  in case of loss or damage.  In the event the  Borrower  or any of the
Material  Subsidiaries,  at any time or times  hereafter shall fail to obtain or
maintain any of the policies or  insurance  required  herein with respect to its
Property  or  business  interruption  or to pay any  premium in whole or in part
relating thereto,  then the Agent,  without waiving or releasing any obligations
or resulting  Event of Default  hereunder,  may at any time or times  thereafter
(but shall be under no obligation to do so) obtain and maintain such policies of
insurance and pay such  premiums and take any other action with respect  thereto
which  the Agent  deems  advisable.  All sums so  disbursed  by the Agent  shall
constitute Protective Advances hereunder and be part of the Obligations, payable
as provided in this Agreement.

                  8.06.    Inspection   of   Property;    Books   and   Records;
DiscussionsInspection of Property; Books and Records;  Discussions. The Borrower
shall,  and  shall  cause  each of the  Material  Subsidiaries  to,  permit  any
authorized  representative(s)  designated  by either  the Agent or any Lender to
visit  and  inspect,   whether  by  access  to   Borrower's   and  the  Material
Subsidiaries'  MIS or  otherwise,  any office or other  location of thereof,  to
examine, audit, check and make copies of its respective financial and accounting
records,  books, journals,  orders,  receipts and any correspondence (other than
privileged  correspondence with legal counsel,  information and materials deemed
proprietary for competitive  purposes,  and information and materials subject to
Requirements  of Law  relating to  confidentiality)  and other data  relating to
their  respective   businesses  or  the  transactions   contemplated  hereby  or
referenced   herein   (including,   without   limitation,   in  connection  with
environmental  compliance,  hazard or liability),  and to discuss their affairs,
finances and accounts with their officers, management personnel, and independent
certified  public  accountants,  all upon reasonable  written notice and at such
reasonable  times during normal  business  hours,  as often as may be reasonably
requested. Each such visitation and inspection (i) by or on behalf of any Lender
shall be at such Lender's expense and (ii) by or on behalf of the Agent shall be
at the Borrower's expense. The Borrower shall keep and maintain,  and cause each
of the Material  Subsidiaries to keep and maintain,  in all material respects on
its MIS and  otherwise  proper  books of record and account in which  entries in
conformity with GAAP shall be made of all dealings and  transactions in relation
to its respective  businesses and  activities,  including,  without  limitation,
transactions  and other dealings with respect to the Collateral.  If an Event of
Default has occurred and is continuing,  the Borrower, upon the Agent's request,
shall turn over any such records to the Agent or its  representatives  which the
Agent may reasonably request in connection with enforcement of the Liens granted
to it and/or the Contractual Obligations arising with respect to the Collateral;
provided,  however,  that the Borrower may, in its discretion,  retain copies of
such records.

                  8.07. ERISA  ComplianceERISA  Compliance.  The Borrower shall,
and shall  cause each of the  Material  Subsidiaries  and ERISA  Affiliates  to,
establish,  maintain  and operate all Plans to comply in all  respects  with the
provisions of ERISA,  the Internal  Revenue Code, all other applicable laws, and
the regulations and interpretations  thereunder and the respective  requirements
of  the  governing   documents  for  such  Plans,  except  to  the  extend  such
non-compliance  would not  reasonably be likely to result in a Material  Adverse
Effect.

                  8.08. Deposit  AccountsDeposit  Accounts.  The Borrower shall,
and shall cause each of the Guarantors to, enter into  agreements  substantially
in the form  attached  hereto as  Exhibit I with  respect to each  lock-box  and
blocked  depository  account maintained by the Borrower or any Guarantor for the
collection of Receivables and other proceeds of Collateral.

                  8.09.  Maintenance  of  PropertyMaintenance  of Property.  The
Borrower shall, and shall cause each of the Material  Subsidiaries to, maintain,
in all material  respects,  in good,  safe and  insurable  condition and repair,
ordinary wear and tear excepted, all of its respective owned and leased Property
which is material to the continued operations of the owner or lessee thereof.
                  8.10. Security Clearances. The Borrower shall, and shall cause
each of its  Subsidiaries  to,  apply for and  maintain  all  facility  security
clearances  required  of the  Borrower  or any of  its  Subsidiaries  under  all
Requirements  of Law to  perform  and  deliver  under  any  and  all  Government
Contracts  and  as  otherwise  may be  necessary  to  continue  to  perform  the
Borrower's  business and such personnel  security  clearances as are required to
assure  continuation of the Borrower's and its  Subsidiaries'  performance under
Government  Contracts.Security  Clearances.  The Borrower shall, and shall cause
each of its  Subsidiaries  to,  apply for and  maintain  all  facility  security
clearances  required  of the  Borrower  or any of  its  Subsidiaries  under  all
Requirements  of Law to  perform  and  deliver  under  any  and  all  Government
Contracts  and  as  otherwise  may be  necessary  to  continue  to  perform  the
Borrower's  business and such personnel  security  clearances as are required to
assure  continuation of the Borrower's and its  Subsidiaries'  performance under
Government Contracts.

                  8.11.  Future  Assurances.  Upon the request of the Agent, the
Borrower shall execute and deliver to the Agent, for the benefit of the Holders,
such  other  agreements,  documents,  and  instruments  which  the  Agent  deems
necessary or desirable,  in form and  substance  satisfactory  to the Agent,  to
enable the Agent to perfect,  or maintain  perfected,  Liens in the  Collateral;
provided,  however,  that the  foregoing  shall only  pertain to  requests  with
respect to vehicle titles made after the  occurrence and during the  continuance
of an Event of Default.

                  8.12. Securitization  Replacement.  The Borrower shall provide
the Agent and the Lenders by December 15, 1996 with  assurances  satisfactory to
the Agent and the Lenders (e.g. by way of a highly confident letter satisfactory
to the Agent and the Lenders,  Borrower having investors therein  "circled",  or
Borrower's having obtained a commitment  therefor) that the facilities  provided
under the Existing Receivables Purchase Documents will be replaced by a facility
having  terms  reasonably  acceptable  to the  Agent  and  the  Borrower,  which
replacement facility will close by January 31, 1997.


                                   ARTICLE IX
                               NEGATIVE COVENANTS

                  Borrower  covenants  and agrees that it shall  comply with the
following  covenants so long as any  Commitments  are outstanding and thereafter
until payment in full of all of the Obligations  (other than indemnities not yet
due), unless the Requisite Lenders shall otherwise give prior written consent:

                  9.01.  IndebtednessIndebtedness.  The  Borrower  shall not and
shall not permit any of its  Subsidiaries  to  directly  or  indirectly  create,
incur,  assume or otherwise become or remain directly or indirectly  liable with
respect to any Indebtedness, except:

                  (a)      the Obligations;

                  (b)  Indebtedness for trade payables, wages and other accrued
         expenses incurred in the ordinary course of business;

                  (c)  the Transaction Costs which have not been paid on or as
         of the Closing Date;

                  (d)  Permitted  Existing   Indebtedness  and  any  extensions,
         renewals,  refundings or replacements  thereof;  provided that any such
         extension,  renewal,  refunding  or  replacement  is  in  an  aggregate
         principal  amount not greater than the  principal  amount of, and is on
         terms no less  favorable  to the  Borrower or its  Subsidiary  than the
         terms of, the Permitted  Existing  Indebtedness  so extended,  renewed,
         refunded or replaced;

                  (e)  Permitted Existing Capital Leases;

                  (f) to the extent  permitted by Article X, and in any event in
         an aggregate amount not to exceed  $5,000,000  outstanding at any time,
         Indebtedness   with  respect   Capital   Leases  and   purchase   money
         Indebtedness  incurred to finance the acquisition or sale and leaseback
         of fixed assets;

                  (g)   Indebtedness   in   respect   of   taxes,   assessments,
         governmental  charges and Claims for labor,  materials or supplies,  to
         the extent that  payment  thereof is not  required  pursuant to Section
         8.04;

                  (h)  Indebtedness with respect to contingent liabilities
         incurred in the ordinary course of business of the Borrower and its
         Subsidiaries;

                  (i) Indebtedness  arising from intercompany loans (i) from the
         Borrower to any of its  Subsidiaries  which is a Guarantor or (ii) from
         any such Subsidiary to the Borrower or any other such Subsidiary;

                  (j)  Indebtedness  arising  from  intercompany  loans from the
         Borrower or any Guarantor to any Subsidiaries of the Borrower which are
         not Guarantors in an amount outstanding at any given time not to exceed
         one percent (1.0%) of the Borrower's  consolidated revenue for the then
         immediately preceding twelve month period;

                  (k)  Indebtedness  arising  from  intercompany  loans from any
         Subsidiary of the Borrower  which is not a Guarantor to the Borrower or
         any  Subsidiary  of the  Borrower  which is a  Guarantor  in an  amount
         outstanding  at any given time not to exceed  one-half  of one  percent
         (0.50%) of the Borrower's consolidated revenue for the then immediately
         preceding twelve month period;

                  (l)  Indebtedness  arising  from  intercompany  loans from any
         Subsidiary  of the  Borrower  which  is not a  Guarantor  to any  other
         Subsidiary of the Borrower which is not a Guarantor;

                  (m)  Indebtedness in respect of profit sharing plans to the
         extent permitted under Section 9.04;

                  (n)  Indebtedness  with respect to warranties and  indemnities
         made under (i) any agreements for asset sales  permitted  under Section
         9.02, (ii) Contractual Obligations of the Borrower or any Subsidiary of
         the Borrower  entered into in the ordinary course of its business,  and
         (iii)  Contractual  Obligations  of the Borrower  and its  Subsidiaries
         identified on Schedule 9.01-N attached hereto;

                  (o)  Indebtedness   under  appeal  bonds  in  connection  with
         judgments  which do not result in an Event of  Default  or a  Potential
         Event of  Default  or any other  breach  hereunder,  provided  that the
         aggregate amount of all such Indebtedness does not exceed $5,000,000;

                  (p)  Indebtedness in respect of Existing Letters of Credit
         until the expiry date therefor set forth on Schedule 1.01.1;

                  (q) the Computran Indebtedness;

                  (r)  Indebtedness under the 1997 Receivables Purchase
         Documents;

                  (s)  Indebtedness  in respect  of Letters of Credit  issued by
         Persons other than the Issuing Banks from and after March 14, 1999; and
                  (t) in addition to the  Indebtedness  permitted by clauses (a)
         through (s) above,  other  Indebtedness  in an aggregate  amount not to
         exceed $10,000,000 at any time outstanding.

For purposes of this Section 9.01, the amount of  Indebtedness of any Subsidiary
of the Borrower  which is not a  Wholly-Owned  Subsidiary  shall be deemed to be
equal to that percentage of the Indebtedness of such Subsidiary which equals the
equity ownership  percentage of the equity Securities of such Subsidiary held by
the Borrower or by a Wholly-Owned Subsidiary.

                  9.02.  Sales of AssetsSales of Assets.  The Borrower shall not
and shall not permit any of its Subsidiaries to sell, assign,  transfer,  lease,
convey or  otherwise  dispose of any  Property,  whether now owned or  hereafter
acquired, or any income or profits therefrom,  or enter into any agreement to do
so, except:

                  (a)  the sales of accounts receivable in accordance with the
provisions of the Receivable Purchase Documents;

                  (b) the  transfer of  Property  (i) from a  Subsidiary  of the
         Borrower to the Borrower or (ii) from a  Subsidiary  of the Borrower to
         another  Subsidiary  of the  Borrower,  provided  that  the  Subsidiary
         transferee is a Guarantor;

                  (c) the transfer of Property having a book value not to exceed
         $750,000 in the  aggregate  from the  Borrower or a  Subsidiary  of the
         Borrower  which is a Guarantor to a Subsidiary of the Borrower which is
         not a Guarantor;

                  (d) the sale of Inventory in the ordinary course of Borrower's
         and its Subsidiaries'  respective  businesses and the sale, trade-in or
         other  disposition of surplus,  obsolete,  or worn out Equipment in the
         ordinary  course  of  Borrower's  and  its   Subsidiaries'   respective
         businesses and consistent with past practices;

                  (e) the sale of any Real Property owned by the Borrower or any
         Subsidiary of the Borrower;

                  (f)  the sale of Investments in Cash Equivalents and cash
         equivalents permitted pursuant to Section 9.04(a) and (b);

                  (g)  the sales permitted pursuant to Section 9.10; and

                  (h) other sales or transfers of Property  having a fair market
         value not to exceed  $1,000,000 in the aggregate per Fiscal Year of the
         Borrower; provided that,to the extent the fair market value of Property
         sold or  transferred  under this clause (h) in any given Fiscal Year of
         the Borrower is less than  $1,000,000,  the amount equal to  $1,000,000
         minus the fair market value of such Property for such Fiscal Year shall
         be carried over to succeeding Fiscal Years.

                  9.03. LiensLiens.  The Borrower shall not and shall not permit
any of its  Subsidiaries  to directly or  indirectly  create,  incur,  assume or
permit to exist any Lien on or with respect to any of their respective  Property
or assets except:

                  (a) Liens  created  pursuant to (i) the  Receivables  Purchase
         Documents as in effect on the Closing  Date,  (ii) the Loan  Documents,
         and (iii) agreements executed and delivered in connection with the 1997
         Receivables Purchase Documents;

                  (b)  Permitted Existing Liens;

                  (c)  Customary Permitted Liens;

                  (d) purchase  money Liens  (including the interest of a lessor
         under a Capital Lease or an Operating  Lease having  substantially  the
         same economic  effect and Liens to which any Property is subject at the
         time of the Borrower's or its Subsidiary's  purchase  thereof) securing
         an amount not to exceed $5,000,000 in the aggregate at any time or from
         time to time,  provided that such Liens shall not apply to any Property
         of the  Borrower  or its  Subsidiaries  other  than that  purchased  or
         subject to such  Capital  Lease and such  purchase  money  Indebtedness
         shall not be in addition to the amounts otherwise  permitted by Section
         9.01(f);

                  (e) extensions, renewals, refundings and replacements of Liens
         referred to in clauses (a) and (b) of this Section 9.03;  provided that
         any  such  extension,  renewal,  refunding  or  replacement  of a  Lien
         referred to in clause (b) shall be limited to the  Property  covered by
         the  Lien  extended,   renewed,  refunded  or  replaced  and  that  the
         obligations  secured  by any  such  extension,  renewal,  refunding  or
         replacement  Lien shall be in an amount not greater  than the amount of
         the obligations then secured by the Lien extended, renewed, refunded or
         replaced; and

                  (f)  Liens on cash or cash  equivalents  securing  Letters  of
         Credit permitted under Section 9.01(s).

                  9.04.  InvestmentsInvestments.  The Borrower shall not and
         shall not permit any of its Subsidiaries to directly or indirectly make
         or own any Investment except:

                  (a)  Investments  in  Cash  Equivalents  and,  so  long as any
         Existing  Letters  of  Credit  are  outstanding  for  which  such  cash
         equivalents are held as cash collateral, cash equivalents maintained in
         investment and other accounts at Crestar Bank in Alexandria, Virginia;

                  (b)  Investments in cash equivalents held as cash collateral
         for Letters of Credit permitted under Section 9.01(s);

                  (c)  Permitted Existing Investments;

                  (d)  Investments  in the form of advances to  employees in the
         ordinary course of business for moving, relocation and travel expenses;
         and other loans to employees for any lawful purpose,  provided that (i)
         each loan  permitted  under  this  clause (d) shall be  evidenced  by a
         promissory  note and (ii) the  aggregate  principal  amount of all such
         advances and loans at any time outstanding shall not exceed $2,500,000;

                  (e) Investments  received in connection with the bankruptcy or
         reorganization   of  suppliers  and  customers  and  in  settlement  of
         delinquent  obligations  of, and other  disputes  with,  customers  and
         suppliers arising in the ordinary course of business;

                  (f)   Investments   which,   if  they  were  in  the  form  of
         intercompany loans, would be permitted under Sections 9.01(i), (j), (k)
         or (l), and which, if aggregated with  intercompany  loans described in
         such clauses  would not exceed the  limitations  as to amount set forth
         therein;

                  (g)  Investments in Persons which are not  Subsidiaries of the
         Borrower or a  Wholly-Owned  Subsidiary;  provided  that such Person is
         engaged in a business substantially similar to that of the Borrower and
         its Subsidiaries as of the Closing Date;

                  (h)  Investments made in connection with Permitted
         Acquisitions;

                  (i)  Investments in any Person(s)  engaged in a business which
         is  not  substantially   similar  to  that  of  the  Borrower  and  its
         Subsidiaries  as of the  Closing  Date in an  aggregate  amount  not to
         exceed $5,000,000 at any time;

                  (j)  Investments in instruments required to be posted by the
         Borrower and its Subsidiaries in connection with their obtaining
         insurance coverage; and

                  (k) to the extent they constitute  Investments,  contributions
         to and  payments  of  benefits  under any Plan in  existence  as of the
         Closing Date as required by the benefit  commitments in such Plan as of
         the Closing Date.

                  9.05.  Accommodation ObligationsAccommodation Obligations.
         The Borrower shall not and shall not permit any of its Subsidiaries to
         directly or indirectly create or become or be liable with respect to
         any Accommodation Obligation, except:

                  (a)  recourse obligations resulting from endorsement of
         negotiable instruments for collection in the ordinary course of its
         business;

                  (b)  Permitted  Existing  Accommodation  Obligations  and  any
         extensions,   renewals  or  replacements  thereof,  provided  that  the
         aggregate Indebtedness under any such extension, renewal or replacement
         is not greater than the  Indebtedness  under,  and shall be on terms no
         less  favorable to the Borrower or such  Subsidiary  than the terms of,
         the Permitted Existing Accommodation Obligation so extended, renewed or
         replaced;

                  (c)  Accommodation Obligations (i) arising under the Loan
         Documents or Letters of Credit or (ii) permitted under Section 9.10;

                  (d)  Accommodation Obligations arising with respect to
         performance guarantees by the Borrower of Contractual Obligations of
         its Subsidiaries;

                  (e) Accommodation  Obligations  arising in the ordinary course
         of the  Borrower's  business with respect to payment  guarantees by the
         Borrower of the Contractual Obligations of employees of the Borrower or
         a Subsidiary  of the Borrower or of any Person in which the Borrower or
         any of its  Subsidiaries  holds a minimum of ten  percent  (10%) of the
         equity Securities thereof; and

                  (f) in addition to the Accommodation  Obligations permitted by
         clauses   (a)  through  (e)  above,   other   unsecured   Accommodation
         Obligations in an aggregate amount not to exceed $2,000,000 at any time
         outstanding.

                  9.06.  Restricted Junior PaymentsRestricted Junior Payments.
The Borrower shall not and shall not permit any of its Subsidiaries to declare
or make any Restricted Junior Payment, except:

                  (a) dividends or  distributions to the Borrower on the Capital
         Stock  of  any  of  its  Subsidiaries  or  to  any  of  the  Borrower's
         Subsidiaries  from any other Subsidiary of the Borrower existing on the
         date of this Agreement or acquired by  Investment(s)  made as permitted
         in  Section  9.04(g);  provided,  however,  that  Subsidiaries  of  the
         Borrower which are not Wholly-Owned  Subsidiaries may pay dividends and
         may make  distributions to the extent the Borrower or Subsidiary of the
         Borrower  which is a holder of the Capital  Stock with respect to which
         such  dividend or  distribution  is paid or made  receives its pro rata
         share thereof;

                  (b)  repurchase by the Borrower of its Capital Stock  pursuant
         to the terms of the ESOP Documents and the Restricted Stock Plan or any
         other plan identified on Schedule 6.01-G;

                  (c) repurchases  under the New  Stockholders  Agreement by the
         Borrower of its  Capital  Stock from  employees  who are  resigning  or
         retiring in an aggregate  amount not to exceed $750,000 per Fiscal Year
         of the Borrower;

                  (d)  repurchases of Capital Stock of the Borrower  distributed
         from non-qualified  deferred  compensation accounts in order to provide
         cash for payment of payroll and withholding taxes;

                  (e) repurchase of approximately 42,664 shares of Borrower's
         Capital Stock held by James H.Duggan;

                  (f)  repurchase of 125,714 shares of Borrower's Capital Stock
         held by James Chatman and subject to existing put rights;

                  (g)  repurchase or escheat of  approximately  51,258 shares of
         pre-merger  common stock of the  Borrower  subject to rights under that
         certain Amended and Restated  Merger  Agreement dated as of January 24,
         1988 between Borrower and DME Holdings, Inc., et al;

                  (h)  repurchase or escheat of approximately 7,397 shares of
         Borrower's called, but unsurrendered, Class A Preferred Stock;

                  (i) repurchases and/or redemptions of Borrower's Capital Stock
         not otherwise permitted under this Section 9.06 so long as, on the date
         of such repurchase  and/or  redemption and after giving effect thereto,
         Borrower's  Fixed  Charge  Coverage  Ratio is at least 1.25 : 1 and the
         Revolving Credit Availability is at least $10,000,000;

provided,  however, the Restricted Junior Payments described in clauses (a), (b)
and (c) above (other than pursuant to the terms of the ESOP Documents) shall not
be permitted  after the  occurrence  and during the  continuance  of an Event of
Default or a Potential Event of Default or if an Event of Default or a Potential
Event  of  Default  would  result  therefrom  and  provided,  further,  that the
restrictions set forth in clause (i) above shall not apply to repurchases and/or
redemptions arising with respect to the exercise of put rights under the ESOP.

                  9.07.  Conduct of  BusinessConduct  of Business.  The Borrower
shall not and shall not permit any of its Subsidiaries to engage in any business
other than (a) the businesses engaged in by the Borrower and its Subsidiaries on
the date  hereof and (b) any  business  or  activities  which are  substantially
similar, related or incidental thereto.

                  9.08.       Transactions       with      Shareholders      and
AffiliatesTransactions  with Shareholders and Affiliates. The Borrower shall not
and shall not permit any of its  Subsidiaries  to directly or  indirectly  enter
into or permit to exist any  transaction  (including,  without  limitation,  the
purchase,  sale,  lease or exchange  of any  property  or the  rendering  of any
service)  with any holder or holders of more than five percent (5%) of any class
of equity  Securities  of the Borrower  (other than the DynCorp  Employee  Stock
Ownership  Trust  established  pursuant to the Trust  Agreement  with respect to
transactions contemplated by the ESOP Documents or SARP Documents or holders who
are trustees or  beneficiaries  under any Plan),  or with any other Affiliate of
the Borrower  which is not its  Subsidiary,  on terms that are less favorable to
the Borrower or such Subsidiary of the Borrower, as applicable,  than those that
might be obtained in an arm's  length  transaction  at the time from Persons who
are not such a holder or Affiliate. Nothing contained in this Section 9.08 shall
prohibit (a) any  transaction  expressly  permitted by Sections 9.05,  9.06, and
9.12; (b) increases in  compensation  and benefits for officers and employees of
the Borrower or any of its  Subsidiaries  which are customary in the industry or
consistent with the past business  practice of the Borrower or such  Subsidiary;
(c) payment of customary directors' fees and indemnities;  or (d) performance of
any obligations arising under the Transaction Documents.

                  9.09.   Restriction  on  Fundamental   ChangesRestriction   on
Fundamental  Changes.  The  Borrower  shall not and shall not  permit any of its
Subsidiaries to enter into any merger or consolidation, or liquidate, wind-up or
dissolve (or suffer any liquidation or  dissolution),  or convey,  lease,  sell,
transfer or otherwise  dispose of, in one transaction or series of transactions,
all or substantially all of such Person's  business or Property,  whether now or
hereafter acquired,  except (a) in connection with transactions  permitted under
Section 9.02,  (b) in connection  with the merger of any Guarantor with and into
any other Guarantor,  (c) in connection with the merger of any Subsidiary of the
Borrower which is not a Material  Subsidiary with and into any other  Subsidiary
of the  Borrower  and/or (d) the  dissolution  of  Subsidiaries  of the Borrower
identified on Schedule  6.01-C as inactive  Subsidiaries  of the Borrower or the
dissolution of Subsidiaries of the Borrower which are not Material Subsidiaries.

                  9.10. Sales and  LeasebacksSales  and Leasebacks.  Except with
respect to the  Property  identified  on Schedule  9.10  attached  hereto and as
otherwise  permitted  by Sections  9.01(f),  (h) and (o) and Section  9.05,  the
Borrower shall not or permit any of its Subsidiaries to become liable, directly,
by assumption or by Accommodation Obligation, with respect to any lease, whether
an Operating Lease or a Capital Lease, of any Property (whether real or personal
or mixed) which it or one of its  Subsidiaries  (a) sold or transferred or is to
sell or transfer to any other  Person,  or (b) intends to use for  substantially
the same  purposes  as any  other  Property  which  has been or is to be sold or
transferred  by it or one of its  Subsidiaries  to any other  Person,  in either
instance, in connection with such lease.

                  9.11.  Margin Regulations; Securities LawsMargin Regulations;
Securities Laws.  The Borrower shall not or permit any of its Subsidiaries to
use all or any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.

                  9.12.  ERISAERISA.  The Borrower shall not:

                  (a) knowingly  engage,  or permit any of its  Subsidiaries  to
         engage,  in any  prohibited  transaction  described  in Sections 406 of
         ERISA or 4975 of the  Internal  Revenue  Code for which a statutory  or
         class  exemption is not  available or a private  exemption has not been
         previously obtained from the DOL;

                  (b) permit to exist any  accumulated  funding  deficiency  (as
         defined in Sections 302 of ERISA and 412 of the Internal Revenue Code),
         with respect to any Benefit Plan  maintained  by the Borrower or any of
         its Subsidiaries, whether or not waived;

                  (c) fail, or permit any ERISA Affiliate to fail, to pay timely
         required  contributions or annual  installments due with respect to any
         waived funding deficiency to any Benefit Plan;

                  (d) terminate, or permit any ERISA Affiliate to terminate, any
         Benefit  Plan which would  result in any  liability  of Borrower or any
         ERISA Affiliate under Title IV of ERISA;

                  (e) fail,  or permit any ERISA  Affiliate to fail,  to pay any
         required installment or any other payment required under Section 412 of
         the  Internal  Revenue  Code  on  or  before  the  due  date  for  such
         installment or other payment; or

                  (f) amend,  or permit any ERISA  Affiliate to amend, a Benefit
         Plan  resulting in an increase in current  liability  for the plan year
         such that the  Borrower or any ERISA  Affiliate  is required to provide
         security to such Plan under Section  401(a)(29) of the Internal Revenue
         Code

if such event  results,  either  singly or in the  aggregate,  after taking into
account all other such events and any  liabilities  associated  therewith,  in a
material liability for the payment of money.

                  9.13. Organizational Documents;  ESOPOrganizational Documents;
ESOP.  The Borrower  shall not and shall not permit any  Subsidiary  the Capital
Stock of which is part of the  Collateral to amend,  modify or otherwise  change
any of the terms or  provisions  in any of (a) their  respective  Organizational
Documents as in effect on the Closing Date,  except  amendments  (i) to effect a
change  of name  (A) of the  Borrower  as  permitted  by the  Borrower  Security
Agreement or (B) of a Subsidiary of the Borrower, written notice of which change
of name the Borrower  shall have provided the Agent within sixty (60) days prior
to the effective  date of any such name change,  (ii) with respect to mergers or
dissolutions   permitted   by   Section   9.09  and  (iii)  to  the   Borrower's
Organizational Documents that would not result in a Material Adverse Effect, (b)
the Existing  Receivables  Purchase  Documents as in effect on the Closing Date,
(c) the 1997  Receivables  Purchase  Documents as in effect on the date executed
and  delivered as provided in Section  8.12,  or (d) the ESOP  Documents or SARP
Documents  as in effect on the Closing  Date,  except with  respect to terms and
conditions  the  amendment  of which  would not result in any  material  adverse
financial consequences to the Borrower.

                  9.14.  Domestic  Bank  AccountsDomestic  Bank  Accounts.   The
Borrower  shall not and shall not permit any  Wholly-Owned  Subsidiaries  (other
than Foreign  Subsidiaries,  which shall be subject to the provisions of Section
9.16 below) to  establish  or  maintain  any  deposit  account  other than those
identified  as existing  on the  Closing  Date and  disclosed  on Schedule  9.14
attached hereto (as the same may be supplemented  from time to time in writing);
such deposit accounts established and maintained by Subsidiaries of the Borrower
which are not Foreign  Subsidiaries  to be used solely for "petty cash" purposes
and to receive  deposits solely from checks drawn on, or wire transfers of funds
in, the Cash Management Account; and the aggregate amount on deposit in all such
accounts (other than accounts of Dyn Funding  established  and maintained  under
and pursuant to the Receivables  Purchase Documents) not to exceed $3,250,000 at
any given time; provided, however, that in the event any Subsidiary which is not
a Foreign Subsidiary establishes any deposit account and maintains the same in a
manner not in compliance with the foregoing requirements, the Borrower shall (a)
within fifteen (15) days after any Financial Officer's learning thereof,  close,
or cause to be closed,  such account and transfer,  or cause to be  transferred,
all deposits therein to an account permitted to be maintained under the terms of
this  Agreement  or (b)  within  seven (7) days  after any  Financial  Officer's
learning thereof,  transfer, or cause to be transferred,  an amount equal to the
excess over $3,250,000 on deposit in such accounts to an account permitted to be
maintained under the terms of this Agreement.

                  9.15.  Crestar  Account.  Notwithstanding  anything in Section
9.14 to the  contrary,  the Borrower  shall be permitted to maintain the Crestar
Account subject to the terms of a deposit account agreement in the form attached
hereto as Exhibit J;  provided,  however,  that the Borrower  shall not maintain
deposits  in the  Crestar  Account  in excess of  $1,000,000  as of the close of
business on any two (2) consecutive Business Days.

                  9.16. Foreign Bank Accounts. The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to,  establish or maintain any deposit
account  outside the United States other than those  identified on Schedule 9.14
as a "foreign  account"  and shall not permit the  deposit of monies in any such
"foreign account" except for deposit payments, payments received from operations
of the Borrower or such Subsidiary in a foreign country and transfers  necessary
to maintain such foreign operations and otherwise not prohibited under the terms
of this Agreement.

                  9.17. Fiscal YearFiscal Year. The Borrower shall not and shall
not  permit any of its  Material  Subsidiaries  to change  its  Fiscal  Year for
accounting  or tax purposes  from a period  consisting  of the  12-month  period
ending  on  December  31 of each  calendar  year or any  Fiscal  Month or Fiscal
Quarter.

                  9.18.  Cash Payments to ESOP and SARP.  The Borrower shall not
make any  payments in cash to the ESOP or the SARP  unless,  on the date of such
payment and after giving effect thereto, the ESOP Fixed Charge Coverage Ratio is
at least 1.1 : 1 and the Revolving Credit  Availability is at least  $5,000,000;
provided,  however,  that  the  foregoing  prohibition  shall  not  apply to (i)
payments to the SARP from amounts  withheld  from  salaries,  wages,  or bonuses
otherwise payable to employees,  (ii) cash  contributions to the ESOP to be used
by the  ESOP to  repay  loans,  including  interest  accrued  thereon,  from the
Borrower,  the  proceeds  of which were used to  purchase  Capital  Stock of the
Borrower from the Borrower,  (iii) the company matching portion of contributions
to the SARP, where participants' investments are made in funds other than a fund
investing solely in the Capital Stock of the Borrower, and (iv) payments made to
participants  as a result of the exercise of put rights under the ESOP Documents
or SARP Documents.

                                    ARTICLE X
                               FINANCIAL COVENANTS


                  The  Borrower  covenants  and  agrees  that  so  long  as  any
Commitments are  outstanding and thereafter  until payment in full of all of the
Obligations (other than indemnities not yet due):

                  10.01. Interest Coverage Ratio. The Borrower shall maintain an
Interest  Coverage Ratio of at least the ratio set forth below, as determined as
of the last day of each Fiscal  Quarter of the Borrower set forth below,  (a) in
the case of Fiscal  Quarters  ending June 27,  1996,  September  26,  1996,  and
December 31, 1996, on a cumulative basis for the period commencing on January 1,
1996 and ending on such date, and (b) for all other periods, for the four Fiscal
Quarter period then ending:

         Fiscal Quarter Ending                       Ratio

         June 27, 1996                               2.75 to 1.00
         September 26, 1996                          2.75 to 1.00
         December 31, 1996                           3.00 to 1.00

         March 27, 1997                              3.25 to 1.00
         June 26, 1997                               3.50 to 1.00
                  and each Fiscal
                  Quarter of the
                  Borrower thereafter


                  10.02.   Fixed  Charge  Coverage  Ratio.  The  Borrower  shall
maintain a Fixed Charge  Coverage  Ratio of at least 1.05 to 1.00, as determined
as of the last day of each (a) Fiscal  Quarter of the  Borrower  ending June 27,
1996,  September 26, 1996,  and December 31, 1996 on a cumulative  basis for the
period  commencing  on January  1, 1996 and  ending on such date,  and (b) other
Fiscal Quarter of the Borrower, for the four Fiscal Quarter period then ending.

                  10.03.  Capital Expenditures.  The Borrower shall not make
Capital Expenditures during any Fiscal Year (commencing with its Fiscal Year
beginning on January 1, 1996) in excess of $7,000,000 in the aggregate.

                  10.04.  Tangible Net Worth.  The Borrower  shall, at all times
during the Fiscal Quarters set forth below, maintain a consolidated tangible net
worth  (plus   intangible   assets   recorded  in  connection   with   Permitted
Acquisitions) of no less than the amount set forth below opposite the respective
Fiscal Quarter:

         Fiscal Quarter Ending              Minimum Tangible Net Worth


         March 28, 1996                              ($28,000,000)
         June 27, 1996                                (27,000,000)
         September 26, 1996                           (23,000,000)
         December 31, 1996                            (18,000,000)

         March 27, 1997                               (18,000,000)
         June 26, 1997                                (18,000,000)
         September 25, 1997                           (15,000,000)
         December 31, 1997                            (10,000,000)

         March 26, 1998                               (9,000,000)
         June 26, 1998                                (8,000,000)
         September 24, 1998                           (5,000,000)
         December 31, 1998                                0

         March 25, 1999                                1,000,000
         June 24, 1999                                 2,000,000
         September 23, 1999                            4,000,000
         December 31, 1999                             8,000,000

                  10.05. Funded Debt/EBITDA. The Borrower shall maintain a ratio
of the average of Borrower's Funded Debt as of the last day of each Fiscal Month
in the  Fiscal-Quarter  ending on the respective dates set forth below to EBITDA
for the  four-Fiscal-Quarter  period  then  ended of not more than the ratio set
forth opposite such Fiscal Quarter:

         Fiscal Quarter Ending                       Ratio

         March 28, 1996                              4.50 to 1.00
         June 27, 1996                               4.50 to 1.00
         September 26, 1996                          4.50 to 1.00
         December 31, 1996                           4.25 to 1.00

         March 27, 1997                              4.25 to 1.00
         June 26, 1997                               4.00 to 1.00
                  and each Fiscal Quarter
                  ending thereafter


                                   ARTICLE XI
                     EVENTS OF DEFAULT; RIGHTS AND REMEDIES

                  11.01.  Events of DefaultEvents of Default.  Each of the
following occurrences shall constitute an Event of Default under this Agreement:

                  (a) Failure to Make Payments When Due. The Borrower shall fail
to pay (i) any  principal of any Loan or  Reimbursement  Obligation  when due or
(ii) any of the Obligations for fees or interest  described in Article IV within
three (3) Business Days after the date such  Obligations are due or (iii) any of
the other  Obligations  within thirty (30) days after the date such  Obligations
are due.

                  (b) Breach of Certain Covenants.  The Borrower shall fail duly
and  punctually  to perform or observe any  agreement,  covenant  or  obligation
binding on such Person under Sections 7.02,  8.01, 8.02, 8.03, 8.04, 8.06, 8.11,
and 8.12, Article IX or Article X.

                  (c) Breach of Representation or Warranty.  Any  representation
or  warranty  made or deemed  made by the  Borrower  to the Agent or any  Lender
herein or by the Borrower or any Guarantor in any of the other Loan Documents or
in any statement or certificate at any time given by any such Person pursuant to
any of the Loan Documents  shall be false or misleading in any material  respect
on the date as of which made (or deemed made).

                  (d)  Other  Defaults.   The  Borrower  shall  default  in  the
performance of or compliance  with any term  contained in this Agreement  (other
than as  identified  in clauses (a),  (b) or (c) of this  Section  11.01) or any
default or event of default  shall occur under any of the other Loan  Documents,
and such default or event of default  shall  continue for thirty (30) days after
the date on which notice of the occurrence thereof is given to or by the Agent.

                  (e) Default as to Other  Indebtedness;  Operating Leases.  The
Borrower  or  Material  Subsidiaries  shall  fail to make any  payment  when due
(whether by scheduled maturity,  required  prepayment,  acceleration,  demand or
otherwise,  but after giving effect to any applicable  cure period) with respect
to any Indebtedness  (other than an Obligation) of the Borrower and the Material
Subsidiaries  aggregating  $5,000,000 or more.  Any breach,  default or event of
default shall occur,  or any other  condition  shall exist under any instrument,
agreement  or  indenture  pertaining  to any Funded Debt of the  Borrower or any
Material  Subsidiary,  if  the  effect  thereof  is to  cause  an  acceleration,
mandatory redemption or other required repurchase of such Funded Debt, or permit
the holder(s) of such Funded Debt to accelerate  the maturity of any such Funded
Debt or require a redemption  or other  repurchase  of such Funded Debt;  or any
such  Funded  Debt  shall  be  otherwise  declared  to be due  and  payable  (by
acceleration  or  otherwise)  or required to be prepaid,  redeemed or  otherwise
repurchased by the Borrower or Material  Subsidiaries (other than by a regularly
scheduled required prepayment) prior to the stated maturity thereof. Any breach,
default or event of default on the part of the Borrower or Material Subsidiaries
shall  occur under any  Operating  Lease to which the  Borrower or any  Material
Subsidiary is a party which breach, default or event of default shall materially
adversely  affect the rights of the  Borrower or any  Material  Subsidiary  with
respect to the Property  subject to any  Operating  Lease on which the remaining
payments exceed $2,000,000.

                  (f) Involuntary Bankruptcy;  Appointment of Receiver, Etc. (i)
An  involuntary  case shall be  commenced  against  the  Borrower  or any of its
Subsidiaries  and  the  petition  shall  not be  dismissed,  stayed,  bonded  or
discharged  within sixty (60) days after  commencement  of the case;  or a court
having  jurisdiction in the premises shall enter a decree or order for relief in
respect of the Borrower or any of its Subsidiaries in an involuntary case, under
any applicable bankruptcy, insolvency or other similar law now or hereinafter in
effect;  or any other  similar  relief  shall be  granted  under any  applicable
federal, state, local or foreign law.

                  (ii) A decree or order of a court having  jurisdiction  in the
premises for the appointment of a receiver, liquidator,  sequestrator,  trustee,
custodian or other officer having similar powers over the Borrower or any of its
Subsidiaries  or over all or a substantial  part of the Property of the Borrower
or any of its Subsidiaries shall be entered; or an interim receiver,  trustee or
other  custodian  of the  Borrower  or any  of its  Subsidiaries  or of all or a
substantial  part of the  Property of the  Borrower  or any of its  Subsidiaries
shall be appointed  or a warrant of  attachment,  execution  or similar  process
against  any  substantial  part of the  Property  of the  Borrower or any of its
Subsidiaries shall be issued and any such event shall not be stayed,  dismissed,
bonded  or  discharged  within  sixty  (60) days  after  entry,  appointment  or
issuance.

                  (g) Voluntary  Bankruptcy;  Appointment of Receiver,  Etc. The
Borrower or any of its  Subsidiaries  shall  commence a voluntary case under any
applicable  bankruptcy,  insolvency  or other  similar law now or  hereafter  in
effect,  or shall consent to the entry of an order for relief in an  involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law,  or shall  consent to the  appointment  of or taking  possession  by a
receiver,  trustee  or  other  custodian  for all or a  substantial  part of its
Property;  or the Borrower or any of its Subsidiaries  shall make any assignment
for the benefit of creditors or shall be unable or fail, or admit in writing its
inability,  to pay its debts as such debts become due; or the board of directors
(or  equivalent)  of the Borrower or any of its  Subsidiaries  (or any committee
thereof) adopts any resolution or otherwise authorizes any action to approve any
of the foregoing.

                  (h)  Dissolution.  Any  order,  judgment  or  decree  shall be
entered  against  the  Borrower  or  any  of  its  Subsidiaries   decreeing  its
involuntary dissolution or split up and such order shall remain undischarged and
unstayed  for a period in excess of sixty (60) days;  or the  Borrower or any of
its  Subsidiaries  shall  otherwise  dissolve,  be dissolved,  or cease to exist
except as specifically permitted by this Agreement.

                  (i) Loan Documents;  Failure of Security. At any time, for any
reason,  (i) any Loan  Document  ceases to be in full  force  and  effect or the
Borrower  or  Guarantor   party  thereto  seeks  to  repudiate  its  obligations
thereunder  and the Liens  intended to be created  thereby  are, or the Borrower
seeks to render such Liens,  invalid or  unperfected,  or (ii) Liens in favor of
the Agent for the  benefit of the  Holders  contemplated  by the Loan  Documents
shall,  at any time, for any reason,  be invalidated or otherwise cease to be in
full force and effect, or such Liens shall be subordinated or shall not have the
priority  contemplated by this Agreement or the Loan Documents,  other than as a
result of the actions or failure to act on the part of the Agent or any Lender.

                  (j) Judgments and  Attachments.  (i) Any money judgment (other
than a money judgment covered by insurance; provided that no Responsible Officer
has received any written notice from the  applicable  insurer that it has denied
coverage),  writ or  warrant  of  attachment,  or similar  process  against  the
Borrower or any of its Subsidiaries or any of their respective  assets involving
in any case an amount  in  excess  of  $250,000  is  entered  and  shall  remain
undischarged,  unvacated, unbonded or unstayed for a period of the lesser of (A)
sixty (60) days, (B) such shorter period required by any applicable  Requirement
of Law, or (C) five (5) days prior to the date of any proposed sale  thereunder;
provided,  however,  if any such  judgment,  writ or  warrant of  attachment  or
similar process is in excess of $5,000,000,  the entry thereof shall immediately
constitute an Event of Default hereunder.

                  (ii) A federal tax Lien is filed  against the  Borrower or any
of its  Property  which is not  discharged  of record,  bonded over or otherwise
secured to the  satisfaction of the Agent within  forty-five (45) days after the
filing thereof or the date upon which the Agent receives actual knowledge of the
filing thereof for an amount which,  either  separately or when  aggregated with
the amount of any  judgments  described in clause (i) above and/or the amount of
any Environmental Lien Claims described in clause (iii) below, equals or exceeds
$5,000,000.

                  (iii) An  Environmental  Lien is filed against any Property of
the  Borrower or any  Material  Subsidiary  with  respect to Claims in an amount
which,  when  aggregated  with the amount of  judgments  set forth in clause (i)
above and/or the federal tax Lien Claims described in clause (ii) above,  equals
or exceeds $5,000,000.

                  (k)  Termination Event.  Any Termination Event occurs which
could reasonably be expected to subject either the Borrower or any ERISA
Affiliate to liability in excess of $1,000,000.

                  (l) Waiver Application.  The plan administrator of any Benefit
Plan  applies  under  Section  412(d)  of the Code for a waiver  of the  minimum
funding  standards of Section 412(a) of the Internal  Revenue Code and the Agent
believes that the substantial  business  hardship upon which the application for
the waiver is based could subject either the Borrower or any ERISA  Affiliate to
an obligation to pay more than $1,000,000.

                  (m)      Change in Control.  A Change of Control shall occur.

                  (n)      Material Adverse Effect.  An event shall occur which
results in a Material Adverse Effect.

                  (o) Receivables Purchase Defaults.  Any "Event of Default" (as
defined in the Servicing  Agreement) shall occur under the Servicing  Agreement;
any "Event of  Default"  (as  defined in the  Indenture)  shall  occur under the
Indenture or any mandatory  prepayment  shall be required to be made pursuant to
the terms of the  Indenture;  or any  "Termination  Event"  (as  defined  in the
Receivables  Purchase  Agreement)  shall  occur under the  Receivables  Purchase
Agreement.

Notwithstanding  anything in clauses (f), (g), or (h) above to the contrary,  no
Event of Default  shall be deemed to have  occurred in the event an  involuntary
case  under  any  applicable  bankruptcy,  insolvency  or other  similar  law is
commenced against any of the Subsidiaries of the Borrower identified on Schedule
6.01-C as inactive  Subsidiaries of the Borrower (the "Inactive  Subsidiaries"),
any  Inactive  Subsidiary  commences  a  voluntary  case  under  any  applicable
bankruptcy,  insolvency or other  similar law, or any order,  judgment or decree
shall be entered  against any  Inactive  Subsidiary  decreeing  its  involuntary
dissolution or split up.

                  An Event of Default shall be deemed  "continuing"  until cured
or waived in writing in accordance with Section 14.07.

              11.02.  Rights and RemediesRights and Remedies.

                  (a) Acceleration  and Termination.  Upon the occurrence of any
Event of Default  described in Sections  11.01(f),  (g) or (h) as applied to the
Borrower or any Material Subsidiary, the Lenders' respective obligations to make
Loans under the Revolving Credit Commitments shall automatically and immediately
terminate and the unpaid  principal  amount of, and any and all accrued interest
on, the Obligations and all accrued fees shall automatically  become immediately
due and payable,  without presentment,  demand, or protest or other requirements
of  any  kind  (including,  without  limitation,   valuation  and  appraisement,
diligence,  presentment,  notice  of  intent  to  demand  or  accelerate  and of
acceleration),  all of which are hereby  expressly  waived by the Borrower;  and
upon the  occurrence  and during the  continuance of any other Event of Default,
the  Agent  shall at the  request,  or may with the  consent,  of the  Requisite
Lenders,  by written  notice to the  Borrower,  (i)  declare  that the  Lenders'
respective  obligations to make Loans under the Revolving Credit Commitments are
terminated,  whereupon such obligation of each Lender to make any Loan hereunder
shall immediately terminate,  and/or (ii) declare the unpaid principal amount of
and any and all accrued and unpaid  interest on the  Obligations  to be, and the
same  shall  thereupon  be,  immediately  due and  payable,  without  (except as
specifically  set  forth  herein)  presentment,  demand,  or  protest  or  other
requirements  of  any  kind  (including,   without  limitation,   valuation  and
appraisement,  diligence,  presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by the Borrower.

                  (b)  Rescission.  If at  any  time  after  termination  of the
Lenders' obligations to make Loans under the Revolving Credit Commitments and/or
acceleration of the maturity of the Loans, the Borrower shall pay all arrears of
interest  and all payments on account of principal of the Loans which shall have
become due otherwise  than by  acceleration  (with interest on principal and, to
the extent permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other than
nonpayment  of  principal  of and accrued  interest on the Loans due and payable
solely  by virtue of  acceleration)  shall be  remedied  or waived  pursuant  to
Section  14.07,  then upon the  written  consent of the  Requisite  Lenders  and
written  notice  to  the  Borrower,   the  termination  of  Lenders'  respective
obligations  to make Loans under the  Revolving  Credit  Commitments  and/or the
aforesaid  acceleration and its consequences may be rescinded and annulled;  but
such action shall not affect any subsequent  Event of Default or Potential Event
of Default or impair any right or remedy consequent  thereon.  The provisions of
the  preceding  sentence are  intended  merely to bind the Lenders to a decision
which  may be  made at the  election  of the  Requisite  Lenders;  they  are not
intended  to benefit  the  Borrower  and do not give the  Borrower  the right to
require  the  Lenders  to  rescind  or annul any  termination  of the  aforesaid
obligations of the Lenders or any acceleration hereunder, even if the conditions
set forth herein are met.

                  (c) Enforcement.  The Borrower  acknowledges that in the event
the Borrower or any  Guarantor  fails to perform,  observe or  discharge  any of
their  respective  obligations or liabilities  under this Agreement or any other
Loan Document,  any remedy of law may prove to be inadequate relief to the Agent
and the Lenders;  therefore,  the Borrower agrees that the Agent and the Lenders
shall be entitled to temporary and permanent  injunctive relief in any such case
without the necessity of proving actual damages.

                                   ARTICLE XII
                                    THE AGENT

                  12.01.  AppointmentAppointment.  (a) Each  Lender and  Issuing
Bank  hereby  designates  and  appoints  Citicorp as the Agent of such Lender or
Issuing  Bank under this  Agreement,  and each  Lender and  Issuing  Bank hereby
irrevocably  authorizes  the Agent to take such  action on its behalf  under the
provisions of this  Agreement and the Loan Documents and to exercise such powers
as are set forth  herein or  therein  together  with  such  other  powers as are
reasonably  incidental  thereto.  The Agent agrees to act as such on the express
conditions contained in this Article XII.

                  (b) The  provisions  of this  Article  XII are  solely for the
benefit of the Agent,  the  Lenders  and the  Issuing  Banks,  and  neither  the
Borrower nor any  Subsidiary of the Borrower shall have any rights to rely on or
enforce  any of the  provisions  hereof  (other than as  expressly  set forth in
Section 12.07). In performing its functions and duties under this Agreement, the
Agent shall act solely as agent of the  Lenders  and Issuing  Banks and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency,  trustee or fiduciary  with or for the Borrower or any  Affiliate of the
Borrower. The Agent may perform any of its duties hereunder,  or under the other
Loan Documents, by or through its agents or employees.

                  12.02.  Nature of DutiesNature of Duties.  The Agent shall not
have any duties or  responsibilities  except those  expressly  set forth in this
Agreement or in the Loan Documents.  The duties of the Agent shall be mechanical
and  administrative  in  nature.  The  Agent  shall  not have by  reason of this
Agreement a  fiduciary  relationship  in respect of any Holder.  Nothing in this
Agreement or any of the Loan Documents,  expressed or implied, is intended to or
shall be construed to impose upon the Agent any  obligations  in respect of this
Agreement  or any of the other  Loan  Documents  except as  expressly  set forth
herein or therein.  Each Lender and Issuing Bank shall make its own  independent
investigation  of the  financial  condition  and  affairs  of the  Borrower  and
Affiliates  in  connection  with the  making  and the  continuance  of the Loans
hereunder  and  shall  make its own  appraisal  of the  creditworthiness  of the
Borrower and Guarantor  initially and on a continuing basis, and the Agent shall
not have any duty or responsibility,  either initially or on a continuing basis,
to provide any Holder with any credit or other  information with respect thereto
(except for reports  required  to be  delivered  by the Agent under the terms of
this  Agreement).  If the Agent  seeks the consent or approval of the Lenders or
Issuing Banks to the taking or refraining  from taking of any action  hereunder,
the Agent shall send notice  thereof to each Lender and Issuing Bank.  The Agent
shall promptly  notify each Lender and Issuing Bank at any time that the Lenders
so required  hereunder  have  instructed the Agent to act or refrain from acting
pursuant hereto. As to any matters not expressly  provided for by this Agreement
(including,  without  limitation,  enforcement or collection of the Notes or any
amount  payable  under any  provision  of Article IV when due) or the other Loan
Documents,  the Agent shall not be required to exercise any  discretion  or take
any action. Notwithstanding the foregoing, the Agent shall be required to act or
refrain  from acting (and shall be fully  protected  in so acting or  refraining
from  acting)  upon  the  instructions  of the  Requisite  Lenders  (unless  the
instructions  or  consent  of  all of  the  Lenders  is  required  hereunder  or
thereunder)  and such  instructions  shall be binding upon all Lenders,  Issuing
Banks, and Holders of Notes; provided,  however, the Agent shall not be required
to take any action  which (i) the Agent  reasonably  believes  will expose it to
personal liability unless the Agent receives an indemnification  satisfactory to
it from the  Lenders  with  respect to such  action or (ii) is  contrary to this
Agreement, the other Loan Documents or applicable law.

                  12.03. Rights, Exculpation,  Etc.Rights, Exculpation, Etc. (a)
Liabilities; Responsibilities. None of the Agent, any Affiliate of the Agent, or
any of their respective officers, directors, employees or agents shall be liable
to any Holder for any action taken or omitted by them  hereunder or under any of
the Loan Documents,  or in connection therewith,  except that no Person shall be
relieved  of any  liability  imposed  by law for  gross  negligence  or  willful
misconduct.  The Agent shall not be liable for any apportionment or distribution
of payments  made by it in good faith  pursuant to Section  3.02(b),  and if any
such apportionment or distribution is subsequently  determined to have been made
in error the sole  recourse of any Holder to whom payment was due, but not made,
shall be to recover  from other  Holders  any payment in excess of the amount to
which  they are  determined  to have  been  entitled.  The  Agent  shall  not be
responsible  to any  Holder for any  recitals,  statements,  representations  or
warranties herein or for the execution,  effectiveness,  genuineness,  validity,
legality,  enforceability,  collectibility,  or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or for
the  financial  condition  of the  Borrower  or any  of  its  Affiliates  or the
Guarantor. The Agent shall not be required to make any inquiry concerning either
the  performance or observance of any of the terms,  provisions or conditions of
this Agreement or any of the other Loan Documents, or the financial condition of
the Borrower or any of its  Affiliates  or the  Guarantor,  or the  existence or
possible existence of any Potential Event of Default or Event of Default.

                  (b) Right to Request  Instructions.  The Agent may at any time
request  instructions  from the Lenders and  Issuing  Banks with  respect to any
actions or approvals  which by the terms of any of the Loan  Documents the Agent
is permitted or required to take or to grant,  and the Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval and shall
not be under any  liability  whatsoever  to any Person for  refraining  from any
action or  withholding  any approval  under any of the Loan  Documents  until it
shall have received such  instructions from those Lenders from whom the Agent is
required to obtain such instructions for the pertinent matter in accordance with
the Loan Documents.  Without limiting the generality of the foregoing, no Holder
shall have any right of action  whatsoever  against the Agent as a result of the
Agent acting or  refraining  from acting under the Loan  Documents in accordance
with the instructions of the Requisite Lenders or, where required by the express
terms of this Agreement, a greater proportion of the Lenders.

                  12.04.  Reliance.  The Agent shall be entitled to rely
upon any written notices, statements, certificates, orders or other documents or
any telephone message believed by it in good faith to be genuine and correct and
to have been signed,  sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it.

                  12.05. Indemnification.  To the extent that the
Agent is required to be reimbursed  and  indemnified  by the Borrower but is not
reimbursed  and  indemnified  by the  Borrower,  the Lenders will  reimburse and
indemnify  the  Agent  for and  against  any and all  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or  asserted  against it in any way  relating  to or arising out of the Loan
Documents or any action taken or omitted by the Agent under the Loan  Documents,
in proportion to each Lender's Pro Rata Share.  The  obligations  of the Lenders
under this Section  12.05 shall survive the payment in full of the Loans and all
other Obligations and the termination of this Agreement.

     12.06.  Citicorp  Individually.  With  respect to its Pro Rata Share of the
Commitments  hereunder,  if any,  and the  Loans  made by it,  if any, Citicorp
shall  have and may  exercise  the same  rights  and  powers hereunder and is
subject to the same  obligations  and  liabilities as and to the extent set
forth  herein  for any other  Lender.  The terms "Lenders" or "Requisite
Lenders" or any similar  terms shall,  unless the context clearly otherwise
indicates,  include  Citicorp in its individual capacity as a Lender or one of
the  Requisite  Lenders.  Citicorp and its Affiliates may accept  deposits from,
lend money to, and generally  engage in any kind of banking,  trust or other
business with the Borrower or any of its Affiliates as if it were not acting as
the Agent pursuant hereto.

     12.07. Successor Agents. (a) Resignation. The Agent may resign from the
performance of all its functions and duties  hereunder at any time by giving at
least thirty (30) Business  Days' prior written  notice to the  Borrower and the
Lenders.  Such  resignation  shall take effect upon the acceptance by a
successor Agent of appointment pursuant to this Section 12.07.

                  (b) Appointment by Requisite Lenders.  Upon any such notice of
resignation,  the Requisite  Lenders shall have the right to appoint a successor
Agent selected from among the Lenders which  appointment shall be subject to the
prior written approval of the Borrower (which may not be unreasonably  withheld,
and shall not be required upon the occurrence  and during the  continuance of an
Event of Default).

                  (c)  Appointment by Retiring Agent. If a successor Agent shall
not have been appointed  within the thirty (30) Business Day period  provided in
clause (a) of this Section 12.07,  the retiring  Agent,  with the consent of the
Borrower (which may not be unreasonably withheld, and shall not be required upon
the  occurrence and during the  continuance of an Event of Default),  shall then
appoint a successor  Agent who shall serve as Agent until such time,  if any, as
the Requisite Lenders appoint a successor Agent as provided above.

                  (d) Rights of the  Successor  and  Retiring  Agents.  Upon the
acceptance of any  appointment  as Agent  hereunder by a successor  Agent,  such
successor  Agent  shall  thereupon  succeed  to and become  vested  with all the
rights,  powers,  privileges and duties of the retiring Agent,  and the retiring
Agent shall be discharged from its duties and obligations  under this Agreement.
After any retiring  Agent's  resignation  hereunder as Agent,  the provisions of
this  Article XII shall inure to its benefit as to any actions  taken or omitted
to be taken by it while it was the Agent under this Agreement.

                  12.08.  Relations Among  LendersRelations  Among Lenders. Each
Lender and  Issuing  Bank agrees  (except as provided in Section  14.05) that it
will not take any legal  action,  nor  institute  any  actions  or  proceedings,
against  the  Borrower or any other  obligor  hereunder  or with  respect to any
Collateral,  without the prior written consent of the Requisite Lenders. Without
limiting  the  generality  of the  foregoing,  no  Lender  or  Issuing  Bank may
accelerate or otherwise enforce its portion of the Obligations,  or unilaterally
terminate its Commitments except in accordance with Section 11.02(a).

                  12.09.    Concerning    the    Collateral    and   the    Loan
DocumentsConcerning  the  Collateral  and the  Loan  Documents.  (a)  Protective
Advances.  The Agent may from time to time, before or after the occurrence of an
Event of Default,  make such  disbursements  and  advances  pursuant to the Loan
Documents which the Agent, in its sole discretion,  deems necessary or desirable
to preserve or protect the  Collateral or any portion  thereof or to enhance the
likelihood  or  maximize  the  amount  of  repayment  of  the  Loans  and  other
Obligations  ("Protective  Advances").  The Agent shall  notify the Borrower and
each  Lender in writing of each such  Protective  Advance,  which  notice  shall
include a description of the purpose of such  Protective  Advance.  The Borrower
agrees to pay the Agent,  upon demand,  the principal  amount of all outstanding
Protective  Advances,  together with  interest  thereon at the rate from time to
time  applicable  to Base Rate  Loans from the date of such  Protective  Advance
until the outstanding principal balance thereof is paid in full. If the Borrower
fails to make  payment  in  respect  of any  Protective  Advance  within one (1)
Business Day after the date the Borrower  receives  written demand therefor from
the Agent,  the Agent shall  promptly  notify each Lender and each Lender agrees
that it shall  thereupon make available to the Agent,  in Dollars in immediately
available  funds,  the  amount  equal to such  Lender's  Pro Rata  Share of such
Protective  Advance.  If such funds are not made  available to the Agent by such
Lender within one (1) Business Day after the Agent's demand therefor,  the Agent
will be entitled to recover  any such  amount  from such  Lender  together  with
interest  thereon  at the  Federal  Funds  Rate for each day  during  the period
commencing  on the date of such  demand  and  ending on the date such  amount is
received.  The failure of any Lender to make available to the Agent its Pro Rata
Share of any such  Protective  Advance shall neither relieve any other Lender of
its obligation  hereunder to make available to the Agent such other Lender's Pro
Rata Share of such Protective Advance on the date such payment is to be made nor
increase the  obligation  of any other Lender to make such payment to the Agent.
All  outstanding  principal  of, and  interest  on,  Protective  Advances  shall
constitute  Obligations  secured  by the  Collateral  until  paid in full by the
Borrower.

                  (b)  Authority.  Each Lender and Issuing Bank  authorizes  and
directs the Agent to enter into the Loan  Documents  relating to the  Collateral
for the benefit of the Lenders and Issuing  Banks.  Each Lender and Issuing Bank
agrees that any action taken by the Agent or the  Requisite  Lenders (or,  where
required by the express  terms of this  Agreement,  a greater  proportion of the
Lenders) in accordance  with the  provisions of this Agreement or the other Loan
Documents,  and the exercise by the Agent or the Requisite Lenders (or, where so
required,  such greater  proportion)  of the powers set forth herein or therein,
together with such other powers as are reasonably  incidental thereto,  shall be
authorized and binding upon all of the Lenders.  Without limiting the generality
of the  foregoing,  the  Agent  shall  have  the sole and  exclusive  right  and
authority to (i) act as the disbursing and collecting agent for the Lenders with
respect  to all  payments  and  collections  arising  in  connection  with  this
Agreement and the Loan Documents  relating to the  Collateral;  (ii) execute and
deliver each Loan Document  relating to the  Collateral  and accept  delivery of
each such  agreement  delivered  by the  Borrower,  any of its  Subsidiaries  or
Guarantor a party  thereto;  (iii) act as  collateral  agent for the Lenders for
purposes of the  perfection of all security  interests and Liens created by such
agreements and all other purposes stated therein;  provided,  however, the Agent
hereby appoints,  authorizes and directs the Lenders and Issuing Banks to act as
collateral  sub-agent  for the Agent,  the  Lenders  and the  Issuing  Banks for
purposes of the  perfection of all security  interests and Liens with respect to
the  Property  at any time in the  possession  of such  Lender or Issuing  Bank,
including,  without  limitation,  deposit accounts maintained with, and cash and
Cash  Equivalents  held by, such Lender or Issuing Bank; (iv) manage,  supervise
and otherwise deal with the Collateral;  (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security  interests and
liens created or purported to be created by the Loan Documents;  and (vi) except
as may be otherwise  specifically  restricted by the terms of this  Agreement or
any other Loan Document,  exercise all remedies given to the Agent,  the Lenders
or the Issuing  Banks with respect to the  Collateral  under the Loan  Documents
relating thereto, applicable law or otherwise.

                  (c)      Release of Collateral; Release of Guarantors.  (i)
Each Lender and Issuing Bank hereby directs, in accordance with the terms of
this Agreement, the Agent to release any Lien held by the Agent for the benefit
of the Holders:

                  (A)      against all of the Collateral, upon final and
         indefeasible payment in full of the Obligations and termination of
this Agreement;

                  (B)  against  any part of the  Collateral  sold or disposed of
         (directly or indirectly) by the Borrower or any of its Subsidiaries, if
         such sale or  disposition  is permitted by Section 9.02 or is otherwise
         consented to by the Requisite Lenders, as certified to the Agent by the
         Borrower in an Officer's Certificate; and/or

                  (C)  against  any  part  of  the  Collateral  consisting  of a
         promissory  note,  upon final and  indefeasible  payment in full of the
         Indebtedness evidenced thereby.

                  (ii) Each Lender and Issuing Bank hereby  directs the Agent to
execute and deliver or file such termination and partial release  statements and
do such other things as are necessary to release  Liens to be released  pursuant
to this Section 12.09(c) promptly upon the effectiveness of any such release.


                                  ARTICLE XIII
                                YIELD PROTECTION


                  13.01. TaxesTaxes.  (a) Payment of Taxes. Any and all payments
by the Borrower  hereunder or under any Note or other  document  evidencing  any
Obligations  shall be made, in accordance  with Section 3.02,  free and clear of
and without reduction for any and all present or future taxes, levies,  imposts,
deductions,  charges,  withholdings,  or levies  which arise from the payment or
performance  under,  or otherwise  with respect to, any of the Loan Documents or
the Commitments and all other liabilities with respect thereto excluding, in the
case of each Lender and the Agent, taxes imposed on or measured by net income or
overall gross receipts and capital and franchise  taxes imposed on it by (i) the
United States, (ii) the Governmental Authority of the jurisdiction in which such
Lender's  Applicable  Lending  Office is  located or any  political  subdivision
thereof or (iii) the  Governmental  Authority in which such Person is organized,
managed  and  controlled  or  any  political   subdivision   thereof  (all  such
non-excluded taxes, levies, imposts, deductions,  charges and withholdings being
hereinafter  referred  to as  "Taxes").  If the  Borrower  shall be  required by
applicable  Requirements  of Law to  withhold  or deduct  any  Taxes  from or in
respect of any sum payable  hereunder  or under any such Note or document to any
Lender or the Agent,  (x) the sum  payable to such  Lender or the Agent shall be
increased as may be necessary so that after making all required  withholding  or
deductions  (including  withholding or deductions  applicable to additional sums
payable under this Section  13.01) such Lender or the Agent (as the case may be)
receives  an  amount  equal  to the  sum it  would  have  received  had no  such
withholding  or  deductions   been  made,  (y)  the  Borrower  shall  make  such
withholding  or  deductions,  and (z) the  Borrower  shall  pay the full  amount
withheld or deducted to the relevant  taxation  authority or other  authority in
accordance with applicable law.

                  (b)  Indemnification.  The Borrower will indemnify each Lender
and the Agent against,  and reimburse each on demand for, the full amount of all
Taxes and all stamp or  documentary  taxes,  excise  taxes,  ad  valorem  taxes,
charges  and  other  taxes  imposed  on the value of the  Property,  (including,
without   limitation,   any  additional  income  or  franchise  taxes  resulting
therefrom)  incurred or paid by or on behalf of such Lender or the Agent (as the
case  may be) by any of  their  respective  Affiliates  in  connection  with the
execution,  delivery  or  registration  of the Loan  Documents,  or from and any
liability (including  penalties,  interest,  and out-of-pocket  expenses paid to
third parties) arising  therefrom or with respect  thereto,  whether or not such
Taxes were  lawfully  payable.  A  certificate  in  reasonable  detail as to any
additional amount payable to any Person under this Section 13.01 submitted by it
to the Borrower shall,  absent manifest error, be final,  conclusive and binding
upon all parties  hereto.  Each Lender  agrees,  within a reasonable  time after
receiving a written  request from the Borrower,  to provide the Borrower and the
Agent with such  certificates  as are reasonably  required,  and take such other
actions as are reasonably  necessary to claim such exemptions as such Lender may
be  entitled  to claim in  respect  of all or a portion  of any Taxes  which are
otherwise  required to be paid or deducted or withheld  pursuant to this Section
13.01 in respect of any payments under this Agreement or under the Notes.


                  (c)  Receipts.  Within  thirty (30) days after the date of any
payment of Taxes by the Borrower,  it will furnish to the Agent,  at its address
referred to in Section  14.08,  the  original  or a certified  copy of a receipt
evidencing payment thereof.

                  (d) Foreign Bank  Certifications.  (i) Each Lender that is not
created  or  organized  under  the  laws of the  United  States  or a  political
subdivision  thereof  shall deliver to the Borrower and the Agent on the Closing
Date or the date on which such Lender becomes a Lender pursuant to Section 14.01
hereof  a  true  and  accurate  certificate  executed  in  duplicate  by a  duly
authorized  officer of such Lender to the effect that such Lender is eligible to
receive payments  hereunder and under the Notes without deduction or withholding
of United States  federal  income tax (I) under the  provisions of an applicable
tax treaty  concluded by the United States (in which case the certificate  shall
be accompanied  by two duly completed  copies of IRS Form 1001 (or any successor
or substitute form or forms)), (II) under Sections 1442(c)(1) and 1442(a) of the
Internal Revenue Code (in which case the certificate shall be accompanied by two
duly completed  copies of IRS Form 4224 (or any successor or substitute  form or
forms)),  or (III) due to such  Lender's not being a "bank" as such term is used
in  Section  881(c)(3)(A)  of the  Internal  Revenue  Code (in which  case,  the
certificate  shall be accompanied by two accurate and complete  original  signed
copies of IRS Form W-8 (or any successor or substitute form or forms)).

                  (ii) Each Lender further agrees to deliver to the Borrower and
the  Agent  from  time to time,  a true and  accurate  certificate  executed  in
duplicate by a duly  authorized  officer of such Lender  before or promptly upon
the  occurrence of any event  requiring a change in the most recent  certificate
previously  delivered  by it to the  Borrower  and the  Agent  pursuant  to this
Section  13.01(d).  Each certificate  required to be delivered  pursuant to this
Section 3.01(d)(ii) shall certify as to one of the following:

                  (A)  that  such  Lender  can  continue  to  receive   payments
         hereunder  and under the Notes  without  deduction  or  withholding  of
         United States federal income tax;

                  (B) that such  Lender  cannot  continue  to  receive  payments
         hereunder  and under the Notes  without  deduction  or  withholding  of
         United  States  federal  income tax as  specified  therein but does not
         require additional  payments pursuant to Section 13.01(a) because it is
         entitled  to  recover  the  full  amount  of  any  such   deduction  or
         withholding from a source other than the Borrower; or

                  (C)  that  such  Lender  is no  longer  capable  of  receiving
         payments hereunder and under the Notes without deduction or withholding
         of United States federal income tax as specified therein and that it is
         not  capable of  recovering  the full  amount of the same from a source
         other than the Borrower.

Each  Lender  agrees to  deliver  to the  Borrower  and the Agent  further  duly
completed  copies of the  above-mentioned  IRS forms on or before the earlier of
(x) the date that any such form  expires or becomes  obsolete  or  otherwise  is
required to be  resubmitted  as a  condition  to  obtaining  an  exemption  from
withholding  from United  States  federal  income tax and (y) fifteen  (15) days
after the  occurrence  of any event  requiring  a change in the most recent form
previously delivered by such Lender to the Borrower and Agent, unless any change
in treaty,  law,  regulation,  or official  interpretation  thereof  which would
render  such form  inapplicable  or which  would  prevent  the Lender  from duly
completing and delivering  such form has occurred prior to the date on which any
such delivery would  otherwise be required and the Lender  promptly  advises the
Borrower  that it is not capable of receiving  payments  hereunder and under the
Notes without any deduction or withholding of United States federal income tax.

                  13.02. Increased  CapitalIncreased  Capital. If after the date
hereof any Lender  determines that (i) the adoption or  implementation of or any
change in or in the interpretation or administration of any law or regulation or
any guideline or request from any central bank or other  Governmental  Authority
or quasi-governmental  authority exercising jurisdiction,  power or control over
any Lender or banks or financial  institutions  generally (whether or not having
the force of law),  compliance  with which affects or would affect the amount of
capital  required or expected to be maintained by such Lender or any corporation
controlling  such Lender and (ii) the amount of such  capital is increased by or
based  upon the  making  or  maintenance  by any  Lender  of its  Loans or other
advances  made  hereunder or the  existence of any Lender's  obligation  to make
Loans,  then,  upon written demand by such Lender (with a copy of such demand to
the Agent),  the Borrower shall  immediately pay to the Agent for the account of
such Lender,  from time to time as specified by such Lender,  additional amounts
sufficient to compensate such Lender or such corporation  therefor.  Such demand
shall be  accompanied by a statement as to the amount of such  compensation  and
include a brief summary of the basis for such demand.  Such  statement  shall be
conclusive and binding for all purposes, absent manifest error.

                  13.03. Changes;  Legal Restrictions.  If after the date hereof
any Lender determines that the adoption or implementation of or any change in or
in the  interpretation  or  administration  of  any  law  or  regulation  or any
guideline or request from any central  bank or other  Governmental  Authority or
quasi-governmental authority exercising jurisdiction,  power or control over any
Lender or over banks or financial  institutions generally (whether or not having
the force of law), compliance with which:

                  (a) does or will subject a Lender (or its  Applicable  Lending
         Office or Eurodollar  Affiliate)  to charges  (other than taxes) of any
         kind which such Lender  reasonably  determines  to be applicable to the
         Commitments of the Lenders to make  Eurodollar Rate Loans or change the
         basis of  taxation  of  payments  to that  Lender of  principal,  fees,
         interest,  or any  other  amount  payable  hereunder  with  respect  to
         Eurodollar Rate Loans; or

                  (b) does or will impose,  modify,  or hold applicable,  in the
         determination of a Lender,  any reserve (other than reserves taken into
         account  in  calculating  the  Eurodollar   Rate),   special   deposit,
         compulsory loan, FDIC insurance or similar  requirement  against assets
         held by, or  deposits  or other  liabilities  in or for the account of,
         advances or loans by, commitments made, or other credit extended by, or
         any other  acquisition of funds by, a Lender or any Applicable  Lending
         Office or Eurodollar Affiliate of that Lender;

and the result of any of the foregoing is to increase the cost to that Lender of
making,  renewing or  maintaining  the Loans or to reduce any amount  receivable
thereunder;  then, in any such case,  upon written demand by such Lender (with a
copy of such demand to the Agent),  the Borrower  shall  immediately  pay to the
Agent for the account of such  Lender,  from time to time as  specified  by such
Lender,  such amount or amounts as may be necessary to compensate such Lender or
its Eurodollar Affiliate for any such additional cost incurred or reduced amount
received.  Such demand shall be  accompanied  by a statement as to the amount of
such compensation and include a brief summary of the basis for such demand. Such
statement  shall be  conclusive  and binding for all purposes,  absent  manifest
error.

                  13.04.  Illegality.  (i) If at any time any Lender  determines
(which  determination  shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any Eurodollar Rate
Loan has become unlawful or  impermissible by compliance by that Lender with any
law,  governmental  rule,  regulation  or  order of any  Governmental  Authority
(whether  or not  having the force of law and  whether or not  failure to comply
therewith would be unlawful or would result in costs or penalties), then, and in
any such event, such Lender may give notice of that  determination,  in writing,
to the Borrower and the Agent, and the Agent shall promptly  transmit the notice
to each other Lender.

             (ii) When notice is given by a Lender under Section  13.04(i),  (A)
the Borrower's  right to request from such Lender and such Lender's  obligation,
if any, to make Eurodollar Rate Loans shall be immediately  suspended,  and such
Lender  shall  make a Base  Rate  Loan  as part of any  requested  Borrowing  of
Eurodollar Rate Loans and (B) if the affected  Eurodollar Rate Loan or Loans are
then outstanding,  the Borrower shall immediately, or if permitted by applicable
law, no later than the date  permitted  thereby,  upon at least one (1) Business
Day's prior written  notice to the Agent and the affected  Lender,  convert each
such Loan into a Base Rate Loan.

            (iii)  If at any time  after a Lender  gives  notice  under  Section
13.04(i) such Lender determines that it may lawfully make Eurodollar Rate Loans,
such Lender shall promptly give notice of that determination, in writing, to the
Borrower and the Agent, and the Agent shall promptly transmit the notice to each
other Lender. The Borrower's right to request, and such Lender's obligation,  if
any, to make Eurodollar Rate Loans shall thereupon be restored.

                  13.05. Compensation. In addition to all amounts required to be
paid by the Borrower  pursuant to Section 4.01,  the Borrower  shall  compensate
each Lender, upon demand, for all losses,  expenses and liabilities  (including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment  of  deposits  or other  funds  acquired  by such Lender to fund or
maintain such Lender's  Eurodollar  Rate Loans to the Borrower but excluding any
loss of  Applicable  Eurodollar  Rate Margin on the  relevant  Loans) which that
Lender  may  sustain  (i) if for any  reason  a  Borrowing,  conversion  into or
continuation  of  Eurodollar  Rate  Loans  does not  occur  on a date  specified
therefor in a Notice of Borrowing or a Notice of  Conversion/Continuation  given
by  the   Borrower  or  in  a  telephonic   request  by  it  for   borrowing  or
conversion/continuation  or a  successive  Eurodollar  Interest  Period does not
commence after notice therefor is given pursuant to Section 4.01(c), (ii) if for
any reason any Eurodollar Rate Loan is prepaid  (including,  without limitation,
mandatorily pursuant to Section 3.01) on a date which is not the last day of the
applicable  Eurodollar  Interest  Period,  (iii) as a consequence  of a required
conversion  of a Eurodollar  Rate Loan to a Base Rate Loan as a result of any of
the events indicated in Section 4.02(d), or (iv) as a consequence of any failure
by the  Borrower to repay  Eurodollar  Rate Loans when  required by the terms of
this Agreement.  The Lender making demand for such compensation shall deliver to
the Borrower  concurrently  with such demand a written  statement in  reasonable
detail as to such losses, expenses and liabilities,  and this statement shall be
conclusive as to the amount of compensation due to that Lender,  absent manifest
error.
                  13.06.   Limitation  on  Additional  Amounts  Payable  by  the
Borrower. Notwithstanding the provisions of Section 13.01(a), the Borrower shall
not be required to pay any additional  amounts thereunder to a Lender if (a) the
obligation  to pay such  additional  amounts  would  not have  arisen  but for a
failure by the Lender to comply with the requirements described in Section 13.01
or (b) the Lender shall not have furnished the Borrower with such forms or shall
not have taken such other  action as  reasonably  may be  available  to it under
applicable tax laws and any  applicable tax treaty to obtain an exemption  from,
or  reduction  (to the lowest  applicable  rate) of  withholding  of such United
States federal income tax; provided,  however, the Borrower's  obligation to pay
such  additional  amounts  shall be  reinstated  upon  receipt  of such forms or
evidence that action with respect to obtaining  such  exemption or reduction has
been   taken.Limitation   on  Additional   Amounts   Payable  by  the  Borrower.
Notwithstanding  the provisions of Section  13.01(a),  the Borrower shall not be
required  to pay  any  additional  amounts  thereunder  to a  Lender  if (a) the
obligation  to pay such  additional  amounts  would  not have  arisen  but for a
failure by the Lender to comply with the requirements described in Section 13.01
or (b) the Lender shall not have furnished the Borrower with such forms or shall
not have taken such other  action as  reasonably  may be  available  to it under
applicable tax laws and any  applicable tax treaty to obtain an exemption  from,
or  reduction  (to the lowest  applicable  rate) of  withholding  of such United
States federal income tax; provided,  however, the Borrower's  obligation to pay
such  additional  amounts  shall be  reinstated  upon  receipt  of such forms or
evidence that action with respect to obtaining  such  exemption or reduction has
been taken.

                  13.07.  Change in  Lending  Office.  Any Lender  claiming  any
additional  amounts  payable  pursuant  to Section  13.01  shall use  reasonable
efforts   (consistent   with  its  internal  policy  and  legal  and  regulatory
restrictions) to change the Lending Office designated by it for purposes of this
Agreement to a Lending Office in another  jurisdiction,  if the making of such a
change  would avoid the need for,  or reduce the amount of, any such  additional
amounts  which may  thereafter  accrue and would not,  in the  judgment  of such
Lender, be otherwise disadvantageous to such Lender.


                                   ARTICLE XIV
                                  MISCELLANEOUS

                  14.01.   Assignments   and    ParticipationsAssignments    and
Participations.  (a)  Assignments.  No  assignments  or  participations  of  any
Lender's  rights or  obligations  under this  Agreement  shall be made except in
accordance  with this  Section  14.01.  Each  Lender  may  assign to one or more
Eligible  Assignees  all or a portion of its rights and  obligations  under this
Agreement  (including  all of its rights  and  obligations  with  respect to the
Loans) in accordance with the provisions of this Section 14.01.

                  (b)  Limitations  on  Assignments.  Each  assignment  shall be
subject to the  following  conditions:  (i) each such  assignment  shall be of a
constant, and not a varying, ratable percentage of all of the assigning Lender's
rights and obligations under this Agreement which are subject to such assignment
and, in the case of a partial assignment, shall be in a minimum principal amount
of $5,000,000, (ii) each such assignment shall be to an Eligible Assignee, (iii)
the Borrower shall have the right to approve each such Eligible Assignee and any
assignee  which is an Affiliate of a Lender which is not domiciled in the United
States,  which approval shall not be  unreasonably  withheld or delayed and (iv)
the parties to each such assignment  shall execute and deliver to the Agent, for
its acceptance and recording in the Register, an Assignment and Acceptance. Upon
such  execution,  delivery,  acceptance and recording in the Register,  from and
after the effective date specified in each  Assignment and Acceptance and agreed
to by the Agent,  (A) the assignee  thereunder  shall, in addition to any rights
and obligations  hereunder held by it immediately  prior to such effective date,
if any, have the rights and obligations  hereunder that have been assigned to it
pursuant to such  Assignment  and  Acceptance  and shall,  to the fullest extent
permitted by law,  have the same rights and benefits  hereunder as if it were an
original Lender  hereunder,  (B) the assigning  Lender shall, to the extent that
rights and  obligations  hereunder  have been  assigned  by it  pursuant to such
Assignment  and  Acceptance,  relinquish  its  rights and be  released  from its
obligations  under  this  Agreement  (and,  in the  case  of an  Assignment  and
Acceptance  covering all or the  remaining  portion of such  assigning  Lender's
rights and obligations under this Agreement, the assigning Lender shall cease to
be a party  hereto),  and (C) the  Borrower  shall  execute  and  deliver to the
assignee thereunder one or more Notes, as applicable, evidencing its obligations
to such assignee with respect to the Loans.

                  (c) The  Register.  The Agent  shall  maintain  at its address
referred to in Section 14.08 a copy of each Assignment and Acceptance  delivered
to and accepted by it and a register (the "Register") for the recordation of the
names and  addresses of the Lenders and the  Commitment  under each Loan of, and
principal  amount of the Loans  under each  facility  owing to, each Lender from
time to time and whether  such Lender is an original  Lender or the  assignee of
another  Lender  pursuant to an Assignment  and  Acceptance.  The entries in the
Register  shall be  conclusive  and binding for all  purposes,  absent  manifest
error, and the Borrower and each of its Subsidiaries,  the Agent and the Lenders
may treat  each  Person  whose  name is  recorded  in the  Register  as a Lender
hereunder for all purposes of this  Agreement.  The Register  shall be available
for  inspection  by the Borrower or any Lender at any  reasonable  time and from
time to time upon reasonable prior notice.

                  (d) Fee.  Upon its  receipt of an  Assignment  and  Acceptance
executed by the assigning  Lender and an Eligible  Assignee and a processing and
recordation fee of $2,500 (payable by the assigning  Lender or the assignee,  as
shall  be  agreed  between  them),  the  Agent  shall,  if such  Assignment  and
Acceptance  has been  completed and is in compliance  with this Agreement and in
substantially  the form of Exhibit A, (i) accept such Assignment and Acceptance,
(ii) record the  information  contained  therein in the  Register and (iii) give
prompt notice thereof to the Borrower and the other Lenders.

                  (e) Participations. Each Lender may sell participations to one
or more other financial institutions in or to all or a portion of its rights and
obligations  under and in respect of any and all facilities under this Agreement
(including,  without  limitation,  all  or a  portion  of  any  or  all  of  its
Commitments  hereunder and the Loans owing to it); provided,  however,  that (i)
such Lender's obligations under this Agreement  (including,  without limitation,
its Commitments hereunder) shall remain unchanged, (ii) such Lender shall remain
solely  responsible  to the other  parties  hereto for the  performance  of such
obligations,  (iii) the Borrower, the Agent and the other Lenders shall continue
to deal solely and directly  with such Lender in  connection  with such Lender's
rights and obligations under this Agreement and (iv) such  participant's  rights
to agree or to  restrict  such  Lender's  ability to agree to the  modification,
waiver or release of any of the terms of the Loan Documents or to the release of
any  Collateral  covered  by the Loan  Documents,  to  consent  to any action or
failure  to act by any  party  to any  of the  Loan  Documents  or any of  their
respective  Affiliates,  or to exercise or refrain from exercising any powers or
rights  which any Lender may have under or in respect of the Loan  Documents  or
any Collateral,  shall be limited to the right to consent to (A) increase in the
Commitment of the Lender from whom such  participant  purchased a participation,
(B) reduction of the principal of, or rate or amount of interest on the Loans(s)
subject to such participation (other than by the payment or prepayment thereof),
(C)  postponement of any date fixed for any payment of principal of, or interest
on, the Loan(s) subject to such  participation  and (D) release of any guarantor
of the Obligations or all or a substantial  portion of the Collateral  except as
provided in Section 12.09(c).

                  (f)  Information  Regarding the  Borrower.  Any Lender may, in
connection  with any  assignment  or  participation  or proposed  assignment  or
participation  pursuant  to this  Section  14.01,  disclose  to the  assignee or
participant or proposed assignee or participant, any information relating to the
Borrower or its  Subsidiaries  furnished to such Lender by the Agent or by or on
behalf  of the  Borrower;  provided  that,  prior to any such  disclosure,  such
assignee or participant,  or proposed  assignee or participant,  shall agree, in
writing, to preserve in accordance with Section 14.20 the confidentiality of any
confidential information described therein.

                  (g) Payment to Participants. Anything in this Agreement to the
contrary notwithstanding,  in the case of any participation, all amounts payable
by the Borrower  under the Loan  Documents  shall be calculated  and made in the
manner and to the parties required hereby as if no such  participation  had been
sold.

                  (h) Lenders' Creation of Security  Interests.  Notwithstanding
any other  provision  set forth in this  Agreement,  any  Lender may at any time
create a  security  interest  in all or any  portion  of its  rights  under this
Agreement (including, without limitation,  Obligations owing to it and any Notes
held by it) in favor of any Federal Reserve bank in accordance with Regulation A
of the Federal Reserve Board.

                  14.02.  ExpensesExpenses.

                  (a)  Generally.  The  Borrower  agrees  upon demand to pay, or
reimburse  the Agent for,  all of the Agent's  reasonable  internal and external
audit,  legal,   appraisal,   valuation,   filing,   document   duplication  and
reproduction   and   investigation   expenses  and  for  all  reasonable   other
out-of-pocket  costs and expenses of every type and nature  (including,  without
limitation,  the reasonable fees, expenses and disbursements of Sidley & Austin,
local legal counsel, auditors, accountants,  appraisers, printers, insurance and
environmental  advisers, and other consultants and agents) incurred by the Agent
in connection with (i) the Agent's review and  investigation of the Borrower and
its  Affiliates  and  the  Collateral  in  connection   with  the   preparation,
negotiation,  and  execution  of the Loan  Documents  and the  Agent's  periodic
reviews and audits of the Borrower; (ii) the preparation, negotiation, execution
and  interpretation  of  this  Agreement  (including,  without  limitation,  the
satisfaction  or attempted  satisfaction  of any of the  conditions set forth in
Article V) and the other Loan  Documents and the making of the Loans  hereunder;
(iii)  the  creation,  perfection  or  protection  of the  Liens  under the Loan
Documents (including,  without limitation,  any reasonable fees and expenses for
local counsel in various jurisdictions); (iv) the ongoing administration of this
Agreement,  the other Loan Documents and the Loans,  including consultation with
attorneys in  connection  therewith  and with respect to the Agent's  rights and
responsibilities  under this  Agreement  and the other Loan  Documents;  (v) the
protection,  collection  or  enforcement  of  any  of  the  Obligations  or  the
enforcement of any of the Loan  Documents;  (vi) the  commencement  of any court
proceeding having as parties thereto Lenders, participants, the Agent and/or the
Borrower  or any  Subsidiary  of the  Borrower  and  relating  in any way to the
Obligations,  the Collateral, this Agreement or any of the other Loan Documents,
or the defense or  intervention in any court  proceeding  relating in any way to
the  Obligations,  the Property,  the Borrower,  any of its  Subsidiaries,  this
Agreement  or any of the other  Loan  Documents;  (vii)  the  response  to,  and
preparation for, any subpoena or request for document  production with which the
Agent is served or deposition  or other  proceeding in which the Agent is called
to testify, in each case, relating in any way to the Obligations,  the Property,
the Borrower,  any of its Subsidiaries,  this Agreement or any of the other Loan
Documents;   and  (viii)  any  amendments,   consents,   waivers,   assignments,
restatements,  or supplements to any of the Loan Documents and the  preparation,
negotiation, and execution of the same.

                  (b)  After  Default.  The  Borrower  further  agrees to pay or
reimburse the Agent and the Lenders upon demand for all reasonable out-of-pocket
costs and expenses,  including,  without limitation,  reasonable attorneys' fees
(including allocated costs of internal counsel and costs of settlement) incurred
by the Agent or any Lender after the occurrence, and during the continuance,  of
an Event of Default (i) in  enforcing  any Loan  Document or  Obligation  or any
security therefor or exercising or enforcing any other right or remedy available
by reason of such Event of Default;  (ii) in connection  with any refinancing or
restructuring  of the credit  arrangements  provided under this Agreement in the
nature of a "work-out" or in any insolvency or bankruptcy  proceeding;  (iii) in
commencing,  defending or intervening in any litigation or in filing a petition,
complaint, answer, motion or other pleadings in any legal proceeding relating to
the  Obligations,  the  Property,  the Borrower or any of its  Subsidiaries  and
related to or arising out of the transactions  contemplated  hereby or by any of
the other Loan Documents; and (iv) in taking any other action in or with respect
to any suit or proceeding  (bankruptcy  or  otherwise)  described in clauses (i)
through (iii) above.

                  14.03.  IndemnityIndemnity.  The  Borrower  further  agrees to
defend, protect,  indemnify, and hold harmless the Agent and each and all of the
Lenders and each of their respective officers, directors,  employees,  attorneys
and agents (including, without limitation, those retained in connection with the
satisfaction  or attempted  satisfaction  of any of the  conditions set forth in
Article  V)  (collectively,  the  "Indemnitees")  from and  against  any and all
liabilities,   obligations,  losses  (other  than  loss  of  profits),  damages,
penalties,  actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature  whatsoever  (excluding any taxes and  including,  without
limitation,   the  reasonable  fees  and   disbursements  of  counsel  for  such
Indemnitees in connection  with any  investigative,  administrative  or judicial
proceeding,  whether  or not  such  Indemnitees  shall  be  designated  a  party
thereto),  imposed on, incurred by, or asserted  against such Indemnitees in any
manner  relating  to or  arising  out of (i) this  Agreement  or the other  Loan
Documents,  or any act, event or transaction  related or attendant thereto,  the
making of the Loans,  the use or intended use of the  proceeds of the Loans,  or
any of the other transactions contemplated by any of the Loan Documents, or (ii)
any  Liabilities  and Costs  relating to any  violation  by the  Borrower or any
Material  Subsidiary,  or  their  respective   predecessors-in-interest  of  any
Environmental, Health or Safety Requirements of Law, the past, present or future
operations  of  the  Borrower  or any  Material  Subsidiary,  or  any  of  their
respective   predecessors  in  interest,   or,  the  past,   present  or  future
environmental,  health or safety  condition of any respective  past,  present or
future  Property of the  Borrower or any  Material  Subsidiary,  the presence of
asbestos-containing materials at any respective past, present or future Property
of the Borrower or any Material Subsidiary, or the Release or threatened Release
of any  Contaminant  into  the  environment  by  the  Borrower  or any  Material
Subsidiary,  or their  respective  predecessors-in-interest,  or the  Release or
threatened  Release  of any  Contaminant  into  the  environment  from or at any
facility to which the Borrower or any Material  Subsidiary,  or their respective
predecessors-in-interest   sent  or  directly  arranged  the  transport  of  any
Contaminant (collectively,  the "Indemnified Matters");  provided,  however, the
Borrower  shall have no obligation to an  Indemnitee  hereunder  with respect to
Indemnified  Matters caused by or resulting from the willful misconduct or gross
negligence  of  such   Indemnitee,   as  determined  by  a  court  of  competent
jurisdiction.  To the extent that the  undertaking  to  indemnify,  pay and hold
harmless set forth in the preceding sentence may be unenforceable  because it is
violative of any law or public policy, the Borrower shall contribute the maximum
portion  which it is permitted to pay and satisfy under  applicable  law, to the
payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.
The Agent and the Lenders  agree to notify the  Borrower of the  institution  or
assertion of any  Indemnified  Matter,  but the parties hereto hereby agree that
the failure to so notify the Borrower  shall not release the  Borrower  from its
obligations hereunder.

                  14.04.  Change in  Accounting  PrinciplesChange  in Accounting
Principles.  If any change in the accounting  principles used in the preparation
of the  most  recent  Financial  Statements  referred  to in  Section  7.01  are
hereafter  required or permitted by the rules,  regulations,  pronouncements and
opinions of the Financial  Accounting  Standards Board or the American Institute
of Certified Public  Accountants (or successors thereto or agencies with similar
functions) and are adopted by the Borrower with the agreement of its independent
certified  public  accountants and such changes result in a change in the method
of  calculation  of any of the  covenants,  standards  or terms found in Article
VIII,  Article  IX,  and  Article  X, the  parties  hereto  agree to enter  into
negotiations in order to amend such  provisions so as to equitably  reflect such
changes with the desired result that the criteria for evaluating compliance with
such covenants, standards and terms by the Borrower shall be the same after such
changes as if such changes had not been made;  provided,  however,  no change in
GAAP that  would  affect  the  method of  calculation  of any of the  covenants,
standards  or terms  shall be  given  effect  in such  calculations  until  such
provisions are amended,  in a manner  satisfactory to the Requisite  Lenders and
the Borrower, to so reflect such change in accounting principles.

                  14.05.  SetoffSetoff.  In addition to any Liens  granted under
the Loan Documents and any rights now or hereafter granted under applicable law,
upon the  occurrence  and during the  continuance  of any Event of Default under
Section 11.01(a) or acceleration of, or declaration that Obligations are due and
payable under Section  11.02(a),  each Lender and any Affiliate of any Lender is
hereby  authorized  by the  Borrower  at any time or from time to time,  without
notice to any Person (any such notice being hereby expressly  waived) to set off
and to  appropriate  and to apply  any and all  deposits  (general  or  special,
including,  but not  limited  to,  indebtedness  evidenced  by  certificates  of
deposit,  whether matured or unmatured (but not including  trust  accounts)) and
any other  Indebtedness  at any time held or owing by such  Lender or any of its
Affiliates  to or for the credit or the account of the  Borrower  against and on
account  of the  Obligations  of  the  Borrower  to  such  Lender  or any of its
Affiliates,  including,  but not  limited  to,  all Loans and all  claims of any
nature or  description  arising  out of or in  connection  with this  Agreement,
irrespective  of  whether  or not (i) such  Lender  shall  have made any  demand
hereunder or (ii) the Agent, at the request or with the consent of the Requisite
Lenders,  shall have  declared  the  principal  of and interest on the Loans and
other amounts due hereunder to be due and payable as permitted by Article XI and
even though such Obligations may be contingent or unmatured.  Each Lender agrees
that it shall not,  without the express  consent of the Requisite  Lenders,  and
that it shall, to the extent it is lawfully  entitled to do so, upon the request
of the  Requisite  Lenders,  exercise its setoff  rights  hereunder  against any
accounts of the Borrower or any Guarantor now or hereafter  maintained with such
Lender or any Affiliate of such Lender.

                  14.06. Ratable SharingRatable Sharing. The Lenders agree among
themselves  that (i) with  respect  to all  amounts  received  by them which are
applicable to the payment of the  Obligations  (excluding  the fees described in
Section 4.03 and Article XIII),  equitable  adjustment  will be made so that, in
effect,  all such amounts will be shared among them ratably in  accordance  with
their Pro Rata Shares, whether received by voluntary payment, by the exercise of
the right of setoff or banker's lien, by  counterclaim or cross-action or by the
enforcement  of any or all of the  Obligations  (excluding the fees described in
Sections 4.03 and Article XIII) or the Collateral,  (ii) if any of them shall by
voluntary  payment  or by the  exercise  of any right of  counterclaim,  setoff,
banker's  lien or  otherwise,  receive  payment of a proportion of the aggregate
amount of the  Obligations  held by it,  which is greater  than the amount which
such Lender is entitled to receive  hereunder,  the Lender receiving such excess
payment shall purchase,  without recourse or warranty, an undivided interest and
participation  (which it shall be deemed  to have done  simultaneously  upon the
receipt of such payment) in such Obligations owed to the others so that all such
recoveries  with  respect  to such  Obligations  shall  be  applied  ratably  in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess  payment  received by the purchasing  party is thereafter  recovered
from it, those  purchases  shall be rescinded  and the purchase  prices paid for
such  participations  shall be returned to such party to the extent necessary to
adjust  for such  recovery,  but  without  interest  except  to the  extent  the
purchasing  party is required to pay interest in connection  with such recovery.
The Borrower agrees that any Lender so purchasing a  participation  from another
Lender  pursuant to this Section 14.06 may, to the fullest  extent  permitted by
law,  exercise all its rights of payment  (including,  subject to Section 14.05,
the right of  setoff)  with  respect to such  participation  as fully as if such
Lender  were  the  direct  creditor  of the  Borrower  in  the  amount  of  such
participation.

                  14.07.  Amendments  and  WaiversAmendments  and  Waivers.  (a)
General Provisions. Unless otherwise provided for or required in this Agreement,
no amendment or  modification  of any provision of this  Agreement or any of the
other Loan  Documents  shall be effective  without the written  agreement of the
Requisite  Lenders (which the Requisite Lenders shall have the right to grant or
withhold  in their  sole  discretion)  and the  Borrower  or  Guarantor  a party
thereto.  No  termination or waiver of any provision of this Agreement or any of
the other Loan Documents, or consent to any departure by the Borrower therefrom,
shall be effective  without the written  concurrence  of the Requisite  Lenders,
which the  Requisite  Lenders shall have the right to grant or withhold in their
sole  discretion.  All  amendments,  modifications,  waivers  and  consents  not
specifically  reserved  to Lenders  and the Agent in Section  14.07(b),  Section
14.07(c)  and in other  provisions  of this  Agreement  shall  require  only the
approval of the Requisite Lenders. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the  Borrower in any case shall  entitle the  Borrower to
any other or further notice or demand in similar or other circumstances.

                  (b)  Amendments,  Consents  and  Waivers by all  Lenders.  Any
amendment,  modification,  termination, waiver or consent with respect to any of
the following  provisions of this Agreement shall be effective only by a written
agreement, signed by each Lender:

         (i) waiver of any of the conditions specified in Sections 5.01 and 5.02
         (except  with respect to a condition  based upon  another  provision of
         this  Agreement,  the waiver of which requires only the  concurrence of
         the Requisite Lenders),

         (ii)  increase in the amount of any of the  Commitments  of such Lender
         (except  with   respect  to  an  increase  in  the  amount,   or  other
         modification  to  the  terms  or  components,  of  the  Borrowing  Base
         Certificate,  each of which shall require only the  concurrence  of the
         Requisite Lenders),

         (iii)  reduction of the principal of, rate or amount of interest on the
         Loans or any fees or other  amounts  payable to such Lender (other than
         by the payment or prepayment thereof),

         (iv)  postponement of the Revolving  Credit  Termination  Date any date
         fixed for any payment of principal of, or interest on, the Loans or any
         fees or other amounts payable to such Lender,

         (v)  change in the definition of Revolving Credit Commitments,

         (vi)  release of any guarantor of the Obligations or all or a
         substantial portion of the Collateral (except as provided in Section
         12.09(c)),

         (vii) change in the (A)  definitions  of  Requisite  Lenders or (B) the
         aggregate Pro Rata Share of the Lenders which shall be required for the
         Lenders or any of them to take action under this Agreement or the other
         Loan Documents,

         (viii)  amendment of Section 14.01, Section 14.06 or this Section
14.07,
         (ix)  assignment of any right or interest in or under this Agreement or
         any of the other Loan Documents by the Borrower, and

         (x) waiver of any Event of Default described in Sections 11.01(a), (f),
(g), (h), and (m).

                  (c)  Agent  Authority.  The  Agent  may,  but  shall  have  no
obligation to, with the written  concurrence of any Lender,  execute amendments,
modifications,  waivers or  consents on behalf of that  Lender.  Notwithstanding
anything  to the  contrary  contained  in  this  Section  14.07,  no  amendment,
modification,  waiver or consent  shall affect the rights or duties of the Agent
under this  Agreement  or the other Loan  Documents,  unless made in writing and
signed by the  Agent in  addition  to the  Lenders  required  above to take such
action;  and the order of  priority  set forth in  clauses  (A)  through  (C) of
Section  3.02(b)(ii)  may be changed only with the prior written  consent of the
Agent.  Notwithstanding  anything herein to the contrary,  in the event that the
Borrower  shall  have  requested,  in  writing,  that  any  Lender  agree  to an
amendment,  modification,  waiver or  consent  with  respect  to any  particular
provision or provisions of this Agreement or the other Loan Documents,  and such
Lender  shall  have  failed  to state,  in  writing,  that it  either  agrees or
disagrees  (in full or in  part)  with  all  such  requests  (in the case of its
statement of agreement,  subject to  satisfactory  documentation  and such other
conditions it may specify) within thirty (30) days after such request, then such
Lender shall be deemed to not have approved such amendment, modification, waiver
or consent and the Agent shall thereupon  determine whether the Lenders required
above to take the  requested  action have  approved the same within the required
time and communicate such determination to the Borrower and the Lenders.

                  14.08. Notices.  Unless otherwise specifically provided
herein,  any notice or other  communication  herein  required or permitted to be
given  shall  be in  writing  and  may  be  personally  served,  sent  facsimile
transmission  or courier  service or United States  certified  mail and shall be
deemed to have been given when delivered in person or by courier  service,  upon
receipt of a facsimile transmission,  or four (4) Business Days after deposit in
the United States mail with postage prepaid and properly  addressed.  Notices to
the Agent  pursuant  to  Articles  II, IV or XIII shall not be  effective  until
received by the Agent.  For the purposes  hereof,  the  addresses of the parties
hereto  (until  notice of a change  thereof is  delivered  as  provided  in this
Section  14.08) shall be as set forth below each  party's name on the  signature
pages hereof or the signature page of any applicable  Assignment and Acceptance,
or, as to each party,  at such other  address as may be designated by such party
in a written notice to all of the other parties to this Agreement.

                  14.09.  Survival  of  Warranties  and   Agreements.  All
representations  and warranties made herein and all obligations of the Borrower
in respect of taxes, indemnification and expense reimbursement shall survive the
execution and delivery of this Agreement and the other Loan Documents, the
making and repayment of the Loans, and the termination of this  Agreement and
shall not be limited in any way by the passage of time or occurrence of any
event.

                  14.10.   Failure   or   Indulgence   Not   Waiver;    Remedies
Cumulative.  No failure or delay on the part of the Agent or any Lender in the
exercise of any power,  right or privilege  under any of the Loan Documents
shall  impair such power,  right or  privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right,  power or privilege.  All rights and remedies existing under
the Loan Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.

                  14.11.  Marshalling;  Payments Set Aside.  Neither the Agent
nor any Lender  shall be under any  obligation  to marshall  any assets in favor
of the  Borrower or any other Person or against or in payment of any or all of
the  Obligations.  To the extent  that the  Borrower makes a payment or payments
to the Agent,  the  Lenders or any of such  Persons receives  payment from the
proceeds of the Collateral or exercises its rights of setoff,  and such  payment
or payments or the  proceeds of such enforcement or setoff or any part thereof
are  subsequently  invalidated,  declared  to be fraudulent  or  preferential,
set aside or  required to be repaid to a trustee, receiver or any other party,
then to the extent of such recovery, the obligation or part thereof  originally
intended to be satisfied,  and all Liens, right and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

                  14.12.  Severability.  In case any provision in or
obligation  under this Agreement or the other Loan  Documents  shall be invalid,
illegal  or  unenforceable  in any  jurisdiction,  the  validity,  legality  and
enforceability of the remaining provisions or obligations,  or of such provision
or  obligation  in any other  jurisdiction,  shall not in any way be affected or
impaired thereby.

                  14.13.  Headings.  Section  headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement or be given any substantive effect.

                  14.14.  Governing Law.  THIS AGREEMENT SHALL BE INTERPRETED,
AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

                  14.15.  Limitation of  LiabilityLimitation  of  Liability.  No
claim may be made by the Borrower, any Lender, the Agent, any Indemnitee, or any
other Person against the Borrower, the Agent, any Lender, any Indemnitee, or the
Affiliates,  directors,  officers, employees, attorneys or agents of any of them
for any indirect,  special,  consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability  arising out of or
related to the transactions  contemplated by or provisions of this Agreement, or
any act, omission or event occurring in connection therewith;  and the Borrower,
each Lender,  and the Agent hereby  waives,  releases and agrees not to sue upon
any such claim for any such  damages,  whether or not accrued and whether or not
known or suspected to exist in its favor.

                  14.16.  Successors  and  AssignsSuccessors  and Assigns.  This
Agreement and the other Loan Documents  shall be binding upon the parties hereto
and their  respective  successors  and assigns and shall inure to the benefit of
the parties hereto and the successors and permitted assigns of the Lenders.  The
rights hereunder of the Borrower,  or any interest therein,  may not be assigned
without the written consent of all Lenders.


                  14.17.  Certain Consents and Waivers of the Borrower.

                  (a) Personal Jurisdiction. (i) EACH OF THE AGENT, THE LENDERS,
AND THE BORROWER  IRREVOCABLY AND  UNCONDITIONALLY  SUBMITS,  FOR ITSELF AND ITS
PROPERTY,  TO THE  NONEXCLUSIVE  JURISDICTION  OF ANY NEW  YORK  STATE  COURT OR
FEDERAL COURT SITTING IN NEW YORK, NEW YORK,  AND ANY COURT HAVING  JURISDICTION
OVER  APPEALS  OF MATTERS  HEARD IN SUCH  COURTS,  IN ANY  ACTION OR  PROCEEDING
ARISING OUT OF,  CONNECTED  WITH,  RELATED TO OR INCIDENTAL TO THE  RELATIONSHIP
ESTABLISHED  AMONG  THEM IN  CONNECTION  WITH THIS  AGREEMENT  OR ANY OTHER LOAN
DOCUMENT,  WHETHER  ARISING  IN  CONTRACT,  TORT,  EQUITY OR  OTHERWISE,  OR FOR
RECOGNITION  OR  ENFORCEMENT  OF ANY  JUDGMENT,  AND EACH OF THE PARTIES  HERETO
IRREVOCABLY  AND  UNCONDITIONALLY  AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING  MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE
EXTENT  PERMITTED  BY LAW,  IN SUCH  FEDERAL  COURT.  THE  BORROWER  IRREVOCABLY
DESIGNATES AND APPOINTS MARKET INTELLIGENCE  CORPORATION,  635 MADISON AVENUE, 4
THE FLOOR,  NEW YORK,  NEW YORK 10022,  AS ITS AGENT (THE  "PROCESS  AGENT") FOR
SERVICE OF ALL PROCESS IN ANY SUCH  PROCEEDING  IN ANY SUCH COURT,  SUCH SERVICE
BEING HEREBY  ACKNOWLEDGED TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.
EACH OF THE AGENT, THE LENDERS, AND THE BORROWER AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING  SHALL BE CONCLUSIVE  AND MAY BE ENFORCED IN OTHER
JURISDICTIONS  BY SUIT ON THE JUDGMENT OR IN ANY OTHER  MANNER  PROVIDED BY LAW.
THE  BORROWER  WAIVES  IN ALL  DISPUTES  ANY  OBJECTION  THAT IT MAY HAVE TO THE
LOCATION OF ANY COURT  CONSIDERING  THE DISPUTE  WHICH IS DESCRIBED IN THE FIRST
SENTENCE OF THIS CLAUSE (a) OR IN CLAUSE (ii) BELOW.

                  (ii) THE  BORROWER  AGREES THAT THE AGENT SHALL HAVE THE RIGHT
TO PROCEED  AGAINST  THE  BORROWER OR ITS  PROPERTY  IN A COURT IN ANY  LOCATION
HAVING  JURISDICTION  OVER THE  BORROWER OR ITS PROPERTY TO ENABLE THE AGENT AND
THE  LENDERS  TO  REALIZE  ON THE  COLLATERAL  OR ANY  OTHER  SECURITY  FOR  THE
OBLIGATIONS,  OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER  ENTERED IN FAVOR OF
THE  AGENT OR ANY  LENDER.  THE  BORROWER  AGREES  THAT IT WILL NOT  ASSERT  ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE AGENT OR ANY LENDER TO
REALIZE ON THE  COLLATERAL  OR ANY OTHER  SECURITY  FOR THE  OBLIGATIONS,  OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT OR ANY LENDER. THE
BORROWER  WAIVES ANY OBJECTION  THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE AGENT OR ANY  LENDER  MAY  COMMENCE  A  PROCEEDING  DESCRIBED  IN THIS
SECTION.

                  (b) Service of Process.  THE BORROWER  IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES  THEREOF BY  REGISTERED  OR CERTIFIED  MAIL,
RETURN  RECEIPT  REQUESTED,  POSTAGE  PREPAID,  TO  THE  PROCESS  AGENT  OR  THE
BORROWER'S NOTICE ADDRESS SPECIFIED BELOW, SUCH SERVICE TO BECOME EFFECTIVE FIVE
(5)  BUSINESS  DAYS AFTER SUCH  MAILING.  THE  BORROWER  IRREVOCABLY  WAIVES ANY
OBJECTION (INCLUDING,  WITHOUT LIMITATION,  ANY OBJECTION OF THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON  CONVENIENS)  WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE  BRINGING  OF ANY SUCH  ACTION OR  PROCEEDING  WITH  RESPECT TO THIS
AGREEMENT  OR ANY OTHER  LOAN  DOCUMENT  IN ANY  JURISDICTION  SET FORTH  ABOVE.
NOTHING  HEREIN  SHALL  AFFECT THE RIGHT TO SERVE  PROCESS  IN ANY OTHER  MANNER
PERMITTED  BY LAW OR SHALL  LIMIT THE  RIGHT OF THE  AGENT TO BRING  PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

                  (c) Waiver of Jury Trial. EACH OF THE AGENT,  LENDERS, AND THE
BORROWER  IRREVOCABLY  WAIVES  TRIAL BY JURY IN ANY  ACTION OR  PROCEEDING  WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.  ANY OF THE BORROWER,  THE
AGENT,  OR THE  LENDERS  MAY  FILE  AN  ORIGINAL  COUNTERPART  OR A COPY OF THIS
AGREEMENT  WITH ANY COURT AS WRITTEN  EVIDENCE  OF THE  CONSENT  OF THE  PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

                  14.18.  Counterparts; Effectiveness; Inconsistencies. This
Agreement and any  amendments,  waivers,  consents,  or supplements  hereto may
be executed in counterparts, each of which when so executed and delivered shall
be deemed an original,  but all such counterparts together shall constitute but
one and the same  instrument.  This Agreement shall become  effective  against
the Borrower, each Lender, and the Agent on the Closing Date.  This Agreement
and each of the other  Loan  Documents  shall  be  construed  to  the  extent
reasonable  to be consistent  one with the other,  but to the extent that the
terms and conditions of this Agreement are actually inconsistent with the terms
and conditions of any other Loan Document, this Agreement shall govern.

                  14.19. Limitation on  AgreementsLimitation on Agreements.  All
agreements between the Borrower, the Agent and each Lender in the Loan Documents
are hereby expressly limited so that in no event shall any of the Loans or other
amounts  payable by the Borrower  under any of the Loan Documents be directly or
indirectly secured (within the meaning of Regulation U) by Margin Stock.

                  14.20.  ConfidentialityConfidentiality.   Subject  to  Section
14.01(f),  the  Agent  and the  Lenders  shall  hold all  nonpublic  information
identified as such by the Borrower and obtained  pursuant to the requirements of
this  Agreement and in accordance  with such Lender's  customary  procedures for
handling confidential information of this nature and in accordance with safe and
sound banking practices and in any event may make disclosure reasonably required
by a bona  fide  offeree,  transferee  or  participant  in  connection  with the
contemplated  transfer  or  participation  or as required  or  requested  by any
Governmental  Authority or  representative  thereof or pursuant to legal process
and shall require any such  offeree,  transferee  or  participant  to agree (and
require any of its offerees, transferees or participants to agree in writing) to
comply with this  Section  14.20.  In no event shall any Lender be  obligated or
required to return any materials furnished by the Borrower;  provided,  however,
each offeree  shall be required to agree that if it does not become a transferee
or participant it shall return all materials  furnished to it by the Borrower in
connection with this Agreement.  Any and all confidentiality  agreements entered
into between any Lender and the  Borrower  shall  survive the  execution of this
Agreement.  Except as  specifically  prohibited by  applicable  law or any court
order, the Agent and each Lender agrees to notify the Borrower,  in writing,  of
any request of any Governmental Authority or representative thereof or any legal
process pursuant to which any request is made for such information  prior to its
disclosure thereof.

                  14.21. Entire AgreementEntire Agreement. This Agreement, taken
together with all of the other Loan Documents, embodies the entire agreement and
understanding  among the parties hereto and  supersedes  the  Commitment  Letter
(except for provisions  therein  specifically  referred to herein) and all prior
agreements and understandings,  written and oral, relating to the subject matter
hereof.

                  14.22.  Advice  of  Counsel.  The  Borrower  and  each  Lender
understand  that  the  Agent's  counsel  represents  only  the  Agent's  and its
Affiliates'  interests  and that the Borrower  and other  Lenders are advised to
obtain their own counsel.  The Borrower represents and warrants to the Agent and
the other Holders that it has discussed this Agreement with its counsel.

                  IN WITNESS  WHEREOF,  this Agreement has been duly executed as
of the date first above written.



BORROWER:                DYNCORP


                         By
                            Name: T. Eugene Blanchard
                            Title: Senior Vice President
                                   and Chief Financial Officer

                            Notice Address:

                            2000 Edmund Halley Drive
                            Reston, Virginia  22091-3436
                            Attn: T. Eugene Blanchard
                                  Senior Vice President and
                                  Chief Financial Officer
                                  Telecopier No. (703) 264-9355

                                  with a copy to Borrower's Senior Vice
                                  President and General Counsel at the same
                                  notice address



AGENT:                   CITICORP NORTH AMERICA, INC., as Agent


                         By
                            Name: Shapleigh B. Smith
                              Title: Vice President

                            Notice Address:

                            Citicorp North America, Inc.
                            399 Park Avenue
                            New York, New York 10043
                            Attn: Shapleigh B. Smith
                            Telecopier No. (212) 793-1290

                            with a copy to:
                                 Sidley & Austin
                                 One First National Plaza
                                 Chicago, Illinois  60603
                                 Attn: DeVerille A. Huston
                                 Telecopier No.  (312) 853-7036



ISSUING BANK:            CITIBANK, N.A.



                         By
                           Name:
                           Title: Vice President

                           Notice Address
                            and Domestic Lending Office:

                            Citibank, N.A.
                            c/o Citicorp North America, Inc.
                            399 Park Avenue
                            New York, New York  10043
                            Attn:  Shapleigh B. Smith
                            Telecopier No. (212) 793-1290


LENDER:                  CITICORP NORTH AMERICA, INC.


                         By
                            Name: Shapleigh B. Smith
                            Title: Vice President

                            Notice Address
                              and Domestic Lending Office:

                            Citicorp North America, Inc.
                            399 Park Avenue
                            New York, New York 10043
                            Attn: Shapleigh B. Smith
                            Telecopier No. (212) 793-1290


                           Eurodollar Lending Office or
                              Eurodollar Affiliate:

                              Citicorp North America, Inc.
                              c/o Citibank, N.A.
                              399 Park Avenue
                              New York, New York  10043
                              Attn: Shapleigh B. Smith
                              Telecopier No. (212) 793-1290


                           Pro Rata Share:          100%

                           Revolving Credit Commitment: $50,000,000


                           EXHIBITS



Exhibit A  --  Form of Assignment and Acceptance

Exhibit B  --  Form of Note

Exhibit C  --  Form of Notice of Borrowing

Exhibit D  --  Form of Notice of Conversion/Continuation

Exhibit E  --  Projections

Exhibit F  --  List of Closing Documents

Exhibit G  --  Form of Officer's Certificate to Accompany Reports

Exhibit H  --  Form of Letter to Accountants

Exhibit I  --  Form of Collection Account Agreement

Exhibit J  --  Form of Deposit Account Agreement (Crestar)


                           SCHEDULES

Schedule 1.01.1   --  Existing Letters of Credit and Expiry Dates

Schedule 1.01.2   --  Fiscal Months; Fiscal Quarters

Schedule 1.01.3   --  Guarantors

Schedule 1.01.4   --  Permitted Equity Securities Options

Schedule 1.01.5   --  Permitted Existing Accommodation
                            Obligations

Schedule 1.01.6   --  Permitted Existing Capital Leases

Schedule 1.01.7   --  Permitted Existing Indebtedness

Schedule 1.01.8   --  Permitted Existing Investments

Schedule 1.01.9   --  Permitted Existing Liens

Schedule 1.01.10  --  List of Sellers to Dyn Funding

Schedule 6.01-A   --  Organizational Documents

Schedule 6.01-C   --  Organizational Structure

Schedule 6.01-E   --  Governmental Consents

Schedule 6.01-K   --  Pending Actions

Schedule 6.01-G   --  Compensation and Employee Benefit Plans;
                            Stock Redemptions, Repurchases and
                            Issuances

Schedule 6.01-R   --  Environmental Matters

Schedule 6.01-S   --  ERISA Matters

Schedule 6.01-Z   --  Insurance Policies

Schedule 6.01-BB  --  Government Contract Matters

Schedule 6.01-FF  --  Amendment to & Termination of Receivables Purchase
                           Documents

Schedule 9.01-N   --  Existing Indemnities and Warranties

Schedule 9.10     --  Permitted Sale/Leaseback Transactions

Schedule 9.14     --  Depository Accounts