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                                                                    EXHIBIT 10.3


                           INFORMATION RESOURCES, INC.
                       THIRD AMENDMENT TO CREDIT AGREEMENT

          This Third Amendment to Credit Agreement (herein, the "Amendment") is
entered into as of October 18, 2000, between Information Resources, Inc., the
Banks party thereto, and Harris Trust and Savings Bank, as Agent for the Banks.


                             PRELIMINARY STATEMENTS

          A. The Borrower and the Banks entered into a certain Credit Agreement,
dated as of October 31, 1997 (the Credit Agreement, as amended prior to the date
hereof, being referred to herein as the "Credit Agreement"). All capitalized
terms used herein without definition shall have the same meanings herein as such
terms have in the Credit Agreement.

          B. The Borrower and the Required Banks have agreed to (i) amend the
Cash Flow Coverage Ratio, (ii) add an EBITDA covenant, (iii) amend the
Eurodollar Margin, (iv) amend the Commitment Fee, and (v) make certain other
amendments to the Credit Agreement, under the terms and conditions set forth in
this Amendment.

          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

SECTION 1.        AMENDMENTS.

          1.1. The definition of "Eurodollar Margin" appearing in Section 1.3(b)
of the Credit Agreement shall be amended and restated to read as follows:

                  "Eurodollar Margin" means, from one Pricing Date to the
                  next, a rate per annum determined in accordance with the
                  following schedule:

                           CASH FLOW COVERAGE RATIO            EURODOLLAR
                            FOR SUCH PRICING DATE:               MARGIN:

                  Less than 0.75 to 1.0                           2.00%

                  Equal to or greater than 0.75 to 1.0, but
                  less than 0.90 to 1.0                           1.75%

                  Equal to or greater than 0.90 to 1.0, but
                  less than or equal to 1.00 to 1.0               1.50%

                  Greater than 1.00 to 1.0                        1.25%

                  The Borrower and the Banks acknowledge and agree that
                  from and after the effective date of the Third Amendment
                  to Credit Agreement dated as of October 18, 2000, by and
                  among the Borrower, the Banks, and the Agent (the "Third
                  Amendment"), the



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                  Eurodollar Margin shall be 2.00%, and the Eurodollar
                  Margin shall not be adjusted until the Pricing Date
                  occurring after the Agent's receipt of the Borrower's
                  September 30, 2000, financial statements and
                  corresponding compliance certificate.

          1.2. Section 1 of the Credit Agreement shall be amended by adding the
following new Sections 1.20 and 1.21 immediately after Section 1.19:

                           Section 1.20. Collateral; Security Effective
                  Date; Actions Prior to the Security Effective Date. (a)
                  Collateral. The payment and performance of the
                  Obligations shall be secured by valid and enforceable
                  Liens in favor of the Agent for the benefit of the Banks
                  on all of the Borrower's now existing or hereafter
                  arising or acquired accounts, general intangibles,
                  inventory, equipment and all other goods, chattel paper,
                  instruments, documents and certain other assets and
                  property of the Borrower as more fully described in the
                  Collateral Documents. The Borrower covenants and agrees
                  that it shall comply with all the terms and conditions of
                  each of the Collateral Documents and that it shall, at
                  any time and from time to time as requested by the Agent
                  or the Required Banks, execute and deliver such further
                  instruments and do such acts and things as the Agent or
                  the Required Banks may deem necessary or desirable to
                  provide for or protect or perfect the Lien of the Agent
                  in the Collateral.

                           (b) Security Effective Date. At the request of
                  the Borrower, the Banks have agreed that the provisions
                  of the Security Agreement shall not become effective, and
                  the Agent and the Banks agree not to perfect the liens or
                  security interests created or provided for by the
                  Security Agreement by filing financing statements or
                  taking any other actions to perfect such security
                  interests or liens, unless and until (i) an Event of
                  Default (whether or not subsequently waived) shall have
                  occurred and (ii) any Bank shall direct the Agent in
                  writing to take such action prior to any such waiver (the
                  occurrence of an Event of Default and such direction of
                  the Agent being hereinafter referred to as the "Security
                  Effective Date"). Upon the occurrence of the Security
                  Effective Date, (i) the provisions of the Security
                  Agreement shall become effective, (ii) the Banks and the
                  Agent shall have the right to file the financing
                  statements provided by the Borrower pursuant to Section
                  2.2 of the Third Amendment and any additional financing
                  statements or other instruments theretofore provided
                  pursuant to this Section 1.20, in each case, in order to
                  perfect the security interests and liens created and
                  provided for by the Security Agreement and to take such
                  other actions as the Agent or any Bank shall deem
                  necessary or appropriate to create or provide for liens
                  or



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                  security interest in the Collateral. The Borrower agrees
                  that it will from time to time at the request of the
                  Agent or any Bank after the Security Effective Date,
                  execute and deliver such instruments and documents and do
                  such other acts and things as the Agent or any Bank may
                  reasonably request in order to create or provide for or
                  perfect security interests or liens in the Collateral. It
                  is understood and agreed that the Security Agreement and
                  any financing statements executed by the Borrower and
                  delivered to the Agent pursuant to the Third Amendment
                  will not be filed by the Agent or any Bank prior to the
                  Security Effective Date.

                           (c) Actions Prior to the Security Effective
                  Date. Notwithstanding that the Security Agreement and any
                  other Collateral Documents will become effective only on
                  the Security Effective Date, the Borrower shall provide
                  the Agent with an updated Schedule A to the Security
                  Agreement and any other information to correct Section
                  3(b) thereof to the extent the information contained in
                  such Schedule or Section changes. In addition, if at any
                  time any Collateral described in the Security Agreement
                  is located or to be located outside the jurisdictions for
                  which financing statements have been theretofore
                  delivered, the Borrower shall provide to the Agent
                  executed financing statements for filing in each
                  jurisdiction where such Collateral is located or to be
                  located. In addition to the other fees and expenses
                  payable under this Agreement and without limiting the
                  Borrower's obligations under the Collateral Documents, if
                  the Security Effective Date takes place, the Borrower
                  agrees to pay all of the costs and expenses of the Agent
                  in connection with the recording or filing of any of the
                  Collateral Documents and any lien searches conducted in
                  connection therewith.

                           Section 1.21. Borrowing Base. Notwithstanding
                  anything herein to the contrary, on and after the
                  Security Effective Date, the sum of the aggregate
                  principal amount of all Loans (whether Committed Loans,
                  Swing Loans or Bid Loans) and L/C Obligations at any time
                  outstanding shall not exceed the lesser of (i) the
                  Revolving Credit Commitments in effect at such time and
                  (ii) the Borrowing Base as then determined and computed.
                  The Borrower covenants and agrees that if at any time on
                  or after the Security Effective Date the sum of the
                  aggregate principal amount of all Loans (whether
                  Committed Loans, Swing Loans or Bid Loans) and L/C
                  Obligations then outstanding shall be in excess of the
                  Borrowing Base as then determined and computed, the
                  Borrower shall immediately and without notice or demand
                  pay over the amount of the excess to the Agent for the
                  account of the Banks as and for a mandatory prepayment on
                  such Obligations, with each


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                  such prepayment first to be applied to the Swing Line
                  Note until payment in full thereof, and then to the
                  Committed Loan Notes until payment in full thereof, and
                  then to the Bid Loan Notes until payment in full thereof
                  with any remaining balance to be held by the Agent as
                  collateral security for the L/C Obligations.

          1.3. The last sentence of Section 2.1(a) of the Credit Agreement shall
be amended and restated to read as follows:

                  For purposes hereof, the term "Applicable Commitment Fee"
                  means, from one Pricing Date to the next, a rate per
                  annum determined in accordance with the following:

                           CASH FLOW COVERAGE RATIO            APPLICABLE
                            FOR SUCH PRICING DATE:           COMMITMENT FEE:

                  Less than 0.75 to 1.0                           0.50%

                  Equal to or greater than 0.75 to 1.0, but
                  less than 0.90 to 1.0                           0.35%

                  Equal to or greater than 0.90 to 1.0, but
                  less than or equal to 1.00 to 1.0               0.25%

                  Greater than 1.00 to 1.0                        0.20%

                  The Borrower and the Banks acknowledge and agree that
                  from and after the effective date of the Third Amendment,
                  the Applicable Commitment Fee shall be .50%, and the
                  Applicable Commitment Fee shall not be adjusted until the
                  Pricing Date occurring after the Agent's receipt of the
                  Borrower's September 30, 2000, financial statements and
                  corresponding compliance certificate.

          1.4. The definition of the term "Loan Documents" appearing in Section
4.1 of the Credit Agreement shall be amended and restated to read as follows:

                  "Loan Documents" means this Agreement, the Notes, the
                  Applications, and the Collateral Documents.

          1.5. Section 4.1 of the Credit Agreement shall be amended by inserting
the following new definitions in the appropriate alphabetical order:

                  "Borrowing Base" means, as of any time it is to be
                  determined, 85% of the then outstanding unpaid amount of
                  Eligible Accounts; provided that the Borrowing Base shall
                  be computed only as against and on so much of the
                  Collateral as is included on the certificates to be
                  furnished from time to time by the Borrower pursuant to
                  Section 7.5(e) hereof and, if required by the Agent or


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                  the Required Banks pursuant to any of the terms hereof or
                  any Collateral Document, as verified by such other
                  evidence required to be furnished to the Agent or the
                  Banks pursuant hereto or pursuant to any such Collateral
                  Document.

                  "Collateral" means all properties, rights, interests and
                  privileges from time to time subject to the Liens granted
                  to the Agent for the benefit of the Banks by the
                  Collateral Documents.

                  "Collateral Documents" means the Security Agreement and
                  all other mortgages, deeds of trust, security agreements,
                  assignments, financing statements and other documents as
                  shall from time to time secure the Obligations.

                  "EBITDA" means, with reference to any period,
                  Consolidated Net Income for such period plus all amounts
                  deducted in arriving at such Consolidated Net Income
                  amount (but without duplication) in respect of (i)
                  Consolidated Interest Expense for such period, plus (ii)
                  federal, state and local income taxes for such period,
                  plus (iii) all amounts properly charged for depreciation
                  of fixed assets and amortization of intangible assets
                  during such period on the books of the Borrower and its
                  Consolidated Subsidiaries, plus (iv) all amounts properly
                  charged for amortization of the InfoScan Costs and
                  Software Costs during such period on the books of the
                  Borrower and its Subsidiaries.

                  "Eligible Account" means each account receivable of the
                  Borrower that:

                           (a) arises out of the sale by the Borrower of
                  finished goods inventory delivered to and accepted by, or
                  out of the rendition of services fully performed by the
                  Borrower and accepted by, the account debtor on such
                  account receivable, and such account receivable otherwise
                  represents a final sale;

                           (b) the account debtor on such account
                  receivable is located within the United States of America
                  or, if such right has arisen out of the sale of such
                  goods shipped to an account debtor located in any other
                  country, such right is secured by a valid and irrevocable
                  letter of credit pursuant to which any of the Borrower or
                  its transferee may draw on a lender reasonably acceptable
                  to the Agent for the full amount thereof;

                           (c) is the valid, binding and legally
                  enforceable obligation of the account debtor obligated
                  thereon and such account debtor is not (i) a Subsidiary
                  or an Affiliate of the


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                  Borrower, (ii) a shareholder, director, officer or
                  employee of the Borrower or any Subsidiary, (iii) the
                  United States of America, or any state or political
                  subdivision thereof, or any department, agency or
                  instrumentality of any of the foregoing unless the
                  Borrower has complied with the Assignment of Claims Act
                  or any similar state or local statute, as the case may
                  be, to the satisfaction of the Agent, (iv) a debtor under
                  any proceeding under the United States Bankruptcy Code,
                  as amended, or any other comparable bankruptcy or
                  insolvency law, or (v) an assignor for the benefit of
                  creditors;

                           (d) is not evidenced by an instrument or chattel
                  paper unless the same has been endorsed and delivered to
                  the Agent;

                           (e) is an asset of the Borrower to which it has
                  good and marketable title, is freely assignable, is
                  subject to a perfected, first priority Lien in favor of
                  the Agent for the benefit of the Banks, and is free and
                  clear of any other Lien other than Liens permitted by
                  Section 7.11(a) and (b) hereof;

                           (f) is net of any credit or allowance given by
                  the Borrower to such account debtor;

                           (g) is not owing from an account debtor who is
                  also creditor or supplier of the Borrower, is not subject
                  to any offset, counterclaim or other defense with respect
                  thereto and, with respect to said account receivable or
                  the contract or purchase order out of which the same
                  arose, no surety bond was required or given in connection
                  therewith;

                           (h) is not unpaid more than 60 days after the
                  original invoice date (which must be not more than 5 days
                  subsequent to the shipment date or the date services were
                  fully performed by the Borrower);

                           (i) is not owed by an account debtor who is
                  obligated on accounts receivable owed to the Borrower
                  more than 5% of the aggregate unpaid balance of which
                  have been past due for longer than the relevant period
                  specified in subsection (h) above unless the Agent has
                  approved the continued eligibility thereof;

                           (j) would not cause the total accounts
                  receivable owing from any one account debtor and its
                  Affiliates to exceed 5% of all Eligible Accounts; and



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                           (k) does not arise from a sale to an account
                  debtor on a bill-and-hold, guaranteed sale,
                  sale-or-return, sale-on-approval, consignment or any
                  other repurchase or return basis.

                  "Security Agreement" means the Security Agreement dated
                  as of October 18, 2000, from the Borrower to the Agent,
                  as the same may from time to time be modified, amended or
                  restated.

          1.6. Section 7.5 of the Credit Agreement shall be amended by deleting
the period appearing at the end of subsection (d) thereof and substituting
therefor a semicolon followed by the word "and" and then adding the following
new subsection (e) to read as follows:

                           (e) as soon as available, and in any event
                  within 10 days after the last day of each calendar month
                  (commencing with the first such date occurring after the
                  Security Effective Date), a Borrowing Base certificate in
                  the form attached hereto as Schedule 7.5(e) showing the
                  computation of the Borrowing Base in reasonable detail as
                  of the close of business on the last day of such month,
                  prepared by the Borrower and certified to by its chief
                  financial officer.

          1.7. Section 7.8 of the Credit Agreement shall be amended and restated
to read as follows:

                           Section 7.8. Cash Flow Coverage Ratio. The
                  Borrower shall, as of the last day of each quarter-annual
                  accounting period of the Borrower ending during the
                  periods specified below, maintain the ratio of
                  Consolidated Cash Flow for the four fiscal quarters of
                  the Borrower then ended to Consolidated Fixed Charges for
                  the same four fiscal quarters then ended (the "Cash Flow
                  Coverage Ratio") of not less than:

                                                               CASH FLOW
                    FROM AND            TO AND               COVERAGE RATIO
                    INCLUDING          INCLUDING         SHALL NOT BE LESS THAN:

                     6/30/00            12/30/00               .70 to 1.0

                    12/31/00             9/29/01               .90 to 1.0

                     9/30/01  and at all times thereafter      1.0 to 1.0

          1.8. Section 7.9 of the Credit Agreement shall be amended and restated
to read as follows:

                           Section 7.9. Restricted Payments. The Borrower
                  shall not directly or indirectly purchase, redeem or
                  otherwise acquire or


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                  retire any of its common stock, except that the Borrower
                  may repurchase, from and after the effective date of the
                  Third Amendment through the Termination Date, portions of
                  its common stock so long as (a) at the time of, and after
                  giving effect to, any such repurchase, no Event of
                  Default exists, (b) such repurchases are made only in
                  connection with the Borrower's existing employee stock
                  purchase program, and (c) the total expenditure by the
                  Borrower from the date of the Third Amendment through the
                  Termination Date for all of such repurchases, net of
                  amounts received by the Borrower in respect of sales by
                  the Borrower of its common stock under its existing
                  employee stock purchase program, shall not exceed
                  $2,000,000 in the aggregate.

          1.9.  Section 7.11(d) of the Credit Agreement shall be amended and
restated to read as follows:

                           (d) Liens in favor of the Agent pursuant to the
                  Collateral Documents and liens, mortgages and security
                  interests existing as of December 22, 1992 and disclosed
                  in the financial statements referred to in Section 5.4
                  hereof; and

          1.10. Section 7.17 of the Credit Agreement shall be amended and
restated to read as follows:

                           Section 7.17. Use of Proceeds. The Borrower
                  shall use the proceeds of all credit extended under this
                  Agreement for its general corporate purposes which may
                  include the repurchases of its common stock to the extent
                  permitted by Section 7.9 hereof.

          1.11. Section 7 of the Credit Agreement shall be amended by adding the
following new Section 7.18 immediately after Section 7.17:

                           Section 7.18. EBITDA. The Borrower shall, as of
                  the last day of each quarter-annual accounting period of
                  the Borrower ending during the periods specified below,
                  maintain its EBITDA for the four fiscal quarters of the
                  Borrower then ended at not less than:

                    FROM AND              TO AND               EBITDA SHALL
                    INCLUDING            INCLUDING           NOT BE LESS THAN:

                     6/30/00              12/30/00              $110,000,000

                    12/31/00               6/29/01              $135,000,000

                     6/30/01              12/30/01              $145,000,000

                    12/31/01    and at all times thereafter     $165,000,000



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          1.12. Section 8.1(b) of the Credit Agreement shall be amended and
restated to read as follows:

                           (b) default in the observance or performance of
                  any covenant set forth in Sections 7.5(e), 7.6, 7.7, 7.8,
                  7.9, 7.10, 7.13, 7.14, 7.17 or 7.18 hereof; or

          1.13. The Credit Agreement shall be further amended by adding a new
Schedule 7.5(e) thereto which shall read as set forth on Annex A to this
Amendment.

SECTION 2.        CONDITIONS PRECEDENT.

          The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:

          2.1. The Borrower and the Required Banks shall have executed and
delivered this Amendment.

          2.2. The Borrower shall have executed and delivered to the Agent the
Security Agreement and any UCC financing statements required by the Agent in
connection therewith.

          2.3. The Agent shall have received copies (executed or certified, as
may be appropriate) of all legal documents or proceedings taken in connection
with the execution and delivery of this Amendment to the extent the Agent or its
counsel may reasonably request.

          2.4. Legal matters incident to the execution and delivery of this
Amendment and the Security Agreement shall be satisfactory to the Agent and its
counsel; and the Agent shall have received the favorable written opinion of
counsel for the Borrower in form and substance satisfactory to the Agent and its
counsel.

          2.5. The Agent shall have received, for the benefit of each Bank
executing this Amendment on or before October 18, 2000, an amendment fee equal
to 0.25% of the Commitment of such Bank.

SECTION 3.        REPRESENTATIONS.

          In order to induce the Banks to execute and deliver this Amendment,
the Borrower hereby represents to the Banks that as of the date hereof, the
representations and warranties set forth in Section 5 of the Credit Agreement
are and shall be and remain true and correct (except that the representations
contained in Section 5.4 shall be deemed to refer to the most recent financial
statements of the Borrower delivered to the Banks) and the Borrower is in
compliance with the terms and conditions of the Credit Agreement and no Default
or Event of Default has occurred and is continuing under the Credit Agreement or
shall result after giving effect to this Amendment.


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SECTION 4.        MISCELLANEOUS.

          4.1. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.

          4.2. The Borrower agrees to pay on demand all costs and expenses of or
incurred by the Agent in connection with the negotiation, preparation, execution
and delivery of this Amendment and the replacement Notes, including the fees and
expenses of counsel for the Agent.

          4.3. This Amendment may be executed in any number of counterparts, and
by the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.



                           [SIGNATURE PAGES TO FOLLOW]








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          This Third Amendment, to Credit Agreement is dated as of the date
first above written.

                                        INFORMATION RESOURCES, INC.



                                        By
                                          Name _________________________________
                                          Title ________________________________

          Accepted and agreed to as of the date and year first above written.

                                        HARRIS TRUST AND SAVINGS BANK, in its
                                          individual capacity as a Bank and as
                                          Agent



                                        By
                                          Name _________________________________
                                          Title ________________________________



                                        LASALLE BANK NATIONAL ASSOCIATION



                                        By
                                          Name _________________________________
                                          Title ________________________________



                                        THE BANK OF NEW YORK



                                        By
                                          Name _________________________________
                                          Title ________________________________





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                 ANNEX A TO THIRD AMENDMENT TO CREDIT AGREEMENT


                                 SCHEDULE 7.5(E)


                           BORROWING BASE CERTIFICATE



To:  Harris Trust and Savings Bank, as
     Agent under, and the Banks party to,
     the Credit Agreement described below.

     Pursuant to the terms of the Credit Agreement dated as of October 31, 1997
among us as amended from time to time (the "Credit Agreement"), we submit this
Borrowing Base Certificate to you and certify that the information set forth
below and on any attachments to this Certificate is true, correct and complete
as of the date of this Certificate.

A.   ACCOUNTS IN BORROWING BASE

     1.   Gross Accounts                                             ___________

          Less

          (a)  Ineligible sales (i.e. not within the
               U.S. or not supported by an eligible
               letter of credit)                         ___________

          (b)  Owed by an account debtor who is a
               Subsidiary or an Affiliate                ___________

          (c)  Owed by an account debtor who is in an
               insolvency or reorganization proceeding   ___________

          (d)  Credits/allowances/retainage              ___________

          (e)  Unpaid more than 60 days                  ___________

          (f)  Ineligible because of 5% concentration
               factor                                    ___________

          (g)  Otherwise ineligible                      ___________

     2.   Total Deductions (sum of lines A1a - A1g)                  ___________

     3.   Eligible Accounts (line A1 minus line A2)                  ___________

     4.   Accounts in Borrowing Base
          (line A3 x .85)                                            ___________


<PAGE>   13

B.   REVOLVING CREDIT ADVANCES

     1.   Committed Loans                                ___________

     2.   Swing Loans                                    ___________

     3.   Bid Loans                                      ___________

     4.   L/C Obligations                                ___________

     5.   Total Revolving Credit Advances (sum of
          lines B1 - B4)                                             ___________


C.   UNUSED AVAILABILITY

          (line A4 minus line B5)                                    ___________


     Dated as of this ___________ day of __________________, 20____.


                                        INFORMATION RESOURCES, INC.



                                        By
                                          Name _________________________________
                                          Title ________________________________





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<PAGE>   14


                           INFORMATION RESOURCES, INC.
                               SECURITY AGREEMENT

          This Security Agreement (the "Agreement") dated as of October 13,
2000, by and between Information Resources, Inc. a Delaware corporation with its
principal place of business and mailing address at 150 North Clinton Street,
Chicago, Illinois 60606 (the "Company"), and Harris Trust and Savings Bank, an
Illinois banking corporation ("Harris Bank") with its mailing address 111 West
Monroe Street, Chicago, Illinois 60603 acting as agent hereunder for the Lenders
hereinafter identified and defined (said Harris Bank acting as such agent and
any successor or successors to said Harris Bank acting in such capacity being
hereinafter referred to as the "Agent");


                                WITNESSETH THAT:

          WHEREAS, the Company, Harris Bank individually and as agent, certain
other financial institutions have entered into a Credit Agreement dated as
October 31, 1997, as amended and currently in effect (such Credit Agreement, as
so amended, as the same may be further amended, modified or restated from time
to time being hereinafter referred to as the "Credit Agreement"), pursuant to
which such lenders (those lenders which are now or which from time to time
hereafter become party to the Credit Agreement being hereinafter referred to
collectively as the "Lenders" and individually as a "Lender") have agreed,
subject to certain terms and conditions, to extend a revolving credit facility
to the Company;

          WHEREAS, the Company may from time to time enter into one or more
interest rate exchange, cap, collar, floor or other agreements with one or more
of the Lenders party to the Credit Agreement or their affiliates for the purpose
of hedging or otherwise protecting the Company against changes in interest rates
on the Notes (the liability of the Company in respect of such agreements with
such Lenders or their affiliates being hereinafter referred to as the "Hedging
Liability"); and

          WHEREAS, as a condition precedent to maintaining the credit facilities
to the Company under the Credit Agreement, the Lenders have required, among
other things, that the Company grant to the Agent a lien on and security
interest in certain personal properties of the Company as collateral security
for such credit facilities and related obligations pursuant to this Agreement
and various other instruments and documents (this Agreement and such other
instruments and documents being hereinafter referred to as the "Collateral
Documents");

          NOW, THEREFORE, for and in consideration of the execution and delivery
by the Lenders of the Third Amendment to Credit Agreement dated as of even date
herewith, and other good and valuable consideration, receipt whereof is hereby
acknowledged, the parties hereto hereby agree as follows:

          Section 1. Grant of Security Interest in the Collateral; Obligations
Secured.

          (a) The Company hereby grants to the Agent for the benefit of the
Lenders (and, in the case of Hedging Liability, their affiliates) a security
interest in and right of set-off against, and

<PAGE>   15

acknowledges and agrees that the Agent has and shall continue to have for the
benefit of the Lenders (and, in the case of Hedging Liability, their affiliates)
a continuing security interest in and right of set-off against, any and all
right, title and interest of the Company, whether now owned or existing or
hereafter created, acquired or arising, in and to the following:

               (i) Receivables. Receivables, whether now owned or existing or
          hereafter created, acquired or arising, and however evidenced or
          acquired, or in which the Company now has or hereafter acquires any
          rights (the term "Receivables" means and includes all accounts,
          accounts receivable, contract rights, instruments, notes, drafts,
          acceptances, documents, chattel paper, any right of the Company to
          payment for goods sold or leased or for services rendered, whether
          arising out of the sale of Inventory (as hereinafter defined) or
          otherwise and whether or not earned by performance, and all other
          forms of obligations owing to the Company, and all of the Company's
          rights to any merchandise or other goods (including without limitation
          any returned or repossessed goods and the right of stoppage in
          transit) which is represented by, arises from or is related to any of
          the foregoing);

               (ii) General Intangibles. All general intangibles, whether now
          owned or existing or hereafter created, acquired or arising, or in
          which the Company now has or hereafter acquires any rights, including,
          without limitation, all patents, patent applications, patent licenses,
          trademarks, trademark registrations, trademark licenses, trade styles,
          trade names, copyrights, copyright registrations, copyright licenses
          and other licenses and similar intangibles, all customer, client and
          supplier lists (in whatever form maintained), all rights in leases and
          other agreements relating to real or personal property, all causes of
          action and tax refunds of every kind and nature, all privileges,
          franchises, immunities, licenses, permits and similar intangibles, all
          rights to receive payments in connection with the termination of any
          pension plan or employee stock ownership plan or trust established for
          the benefit of employees of the Company and all other personal
          property (including things in action) not otherwise covered by this
          Agreement;

               (iii) Inventory. Inventory, whether now owned or existing or
          hereafter created, acquired or arising, or in which the Company now
          has or hereafter acquires any rights and all documents of title at any
          time evidencing or representing any part thereof (the term "Inventory"
          means and includes all goods which are held for sale or lease or are
          to be furnished under contracts of service or consumed in the
          Company's business, all goods which are raw materials,
          work-in-process, finished goods, materials or supplies of every kind
          and nature, in each case used or usable in connection with the
          acquisition, manufacture, processing, supply, servicing, storing,
          packing, shipping, advertising, selling, leasing or furnishing of such
          goods, and any constituents or ingredients thereof, and all goods
          which are returned or repossessed goods);

               (iv) Equipment. Equipment, whether now owned or existing or
          hereafter created, acquired or arising, or in which the Company now
          has or hereafter acquires any rights (the term "Equipment" means and
          includes all equipment, machinery, tools, trade fixtures, furniture,
          furnishings, office equipment, vehicles (including vehicles subject to
          a certificate of title law) and all other goods now or hereafter used
          or usable in connection


                                      -2-
<PAGE>   16


          with the Company's business, together with all parts, accessories and
          attachments relating to any of the foregoing);

               (v) Investment Property. All Investment Property, whether now
          owned or existing or hereafter created, acquired, or arising, or in
          which the Company now has or hereafter acquires any rights (the term
          "Investment Property" means and includes all investment property and
          any other securities (whether certificated or uncertificated),
          security entitlements, securities accounts, commodity contracts, and
          commodity accounts, including all substitutions and additions thereto,
          all dividends, distributions, and sums distributable or payable from,
          upon, or in respect of such property, and all rights and privileges
          incident to such property);

               (vi) Deposits and Property in Possession. All deposit accounts
          (whether general, specific or otherwise) maintained with the Agent or
          any of the Lenders and all sums now or hereafter on deposit therein or
          payable thereon, and any and all other property or interests in
          property which now is or may from time to time hereafter come into the
          possession, custody or control of the Agent or any of the Lenders, or
          any agent of any of them, in any way and for any purpose (whether for
          safekeeping, custody, pledge, transmission, collection or otherwise);

               (vii) Records. Supporting evidence and documents relating to any
          of the above-described property, including, without limitation,
          computer programs, disks, tapes, and related electronic data
          processing media, and all rights of the Company to retrieve the same
          from third parties, written applications, credit information, account
          cards, payment records, correspondence, delivery and installation
          certificates, invoice copies, delivery receipts, notes and other
          evidences of indebtedness, insurance certificates and the like,
          together with all books of account, ledgers and cabinets in which the
          same are reflected or maintained, all whether now existing or
          hereafter arising;

               (viii) Accessions and Additions. All accessions and additions to
          and substitutions and replacements of any and all of the foregoing,
          whether now existing or hereafter arising; and

               (ix) Proceeds and Products. All proceeds and products of the
          foregoing and all insurance of the foregoing and proceeds thereof,
          whether now existing or hereafter arising;

all of the foregoing being herein sometimes referred to as the "Collateral".

          (b) This Agreement is made and given to secure, and shall secure, the
payment and performance of (i) any and all indebtedness, obligations and
liabilities of the Company under or in connection with or evidenced by (w) the
Credit Agreement or (x) the Notes of the Company heretofore or hereafter issued
under the Credit Agreement and the obligations of the Company to reimburse the
Agent for the amount of all drawings on all Letters of Credit issued for the
account of the Company pursuant to the Credit Agreement, and all other
obligations of the Company under any and all Applications for such Letters of
Credit or (y) any of the Collateral Documents


                                      -3-
<PAGE>   17


or (z) agreements with any one or more of the Lenders or their affiliates with
respect to Hedging Liability, in each case whether now existing or hereafter
arising (and whether arising before or after the filing of a petition in
bankruptcy), due or to become due, direct or indirect, absolute or contingent,
and howsoever evidenced, held or acquired and (ii) any and all expenses and
charges, legal or otherwise, suffered or incurred by the Agent and the Lenders
in collecting or enforcing any of such indebtedness, obligations and liabilities
or in realizing on or protecting or preserving any security therefor, including,
without limitation, the lien and security interest granted hereby (all of the
indebtedness, obligations, liabilities, expenses and charges described in
clauses (i) and (ii) above being hereinafter referred to as the "Obligations").

          Section 2. Terms Defined in Credit Agreement. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement.

          Section 3. Covenants, Agreements, Representations and Warranties. The
Company hereby covenants and agrees with, and represents and warrants to, the
Agent and the Lenders that:

               (a) The Company is a corporation duly organized, validly existing
          and in good standing under the laws of the State Delaware is the sole
          and lawful owner of the Collateral and has full right, power and
          authority to enter into this Agreement and to perform each and all of
          the matters and things herein provided for; and the execution and
          delivery of this Agreement, and the observance and performance of any
          of the matters and things herein set forth, will not contravene or
          constitute a default under any provision of law or any judgment,
          injunction, order or decree binding upon the Company or any provision
          of the Company's charter, articles of incorporation or by-laws or of
          any covenant, indenture or agreement of or affecting the Company or
          any of its properties, or result in the creation or imposition of any
          lien or encumbrance on any property of the Company. The Company's
          Federal tax identification number is 36-2947987.

               (b) The Collateral is and will remain in the Company's possession
          or control at the locations listed under Item 1 on Schedule A attached
          hereto (collectively, the "Permitted Collateral Locations"), except
          for Collateral which in the ordinary course of the Company's business
          is in transit between the Permitted Collateral Locations. If for any
          reason Collateral is at any time kept or located at locations other
          than the Permitted Collateral Locations, the Agent shall nevertheless
          have and retain a security interest therein. The Company owns and will
          at all times own all Permitted Collateral Locations, except to the
          extent otherwise indicated on Schedule A. The Company's chief
          executive office and principal place of business is at, and the
          Company keeps and shall keep all of its books and records relating to
          Receivables only at, 150 North Clinton Street, Chicago, Illinois 60606
          and the Company has no other executive offices or places of business
          other than those listed under Item 2 on Schedule A. The Company will
          not maintain an executive office or place of business at a location
          other than those specified pursuant to the immediately preceding
          sentence without first providing the Agent 30 days' prior written
          notice of the Company's intent to do so; provided, however, that the
          Company


                                      -4-
<PAGE>   18


          will at all times maintain its chief executive office in the
          contiguous continental United States of America.

               (c) The Collateral and every part thereof is and will be free and
          clear of all security interests, liens (including, without limitation,
          mechanics', laborers' and statutory liens), attachments, levies and
          encumbrances of every kind, nature and description and whether
          voluntary or involuntary, except for the security interest of the
          Agent therein and as otherwise permitted by Section 7.11 of the Credit
          Agreement. The Company will warrant and defend the Collateral against
          any claims and demands of all persons or entities at any time claiming
          the same or any interest in the Collateral adverse to the Agent or any
          Lender.

               (d) The Company will promptly pay when due all taxes, assessments
          and governmental charges and levies upon or against the Company or the
          Collateral, in each case before the same become delinquent and before
          penalties accrue thereon, unless and to the extent that the same are
          being contested in good faith by appropriate proceedings which prevent
          foreclosure on or other realization upon any Collateral and preclude
          interference with the operation of the Company's business in the
          ordinary course and the Company shall have established adequate
          reserves therefor.

               (e) The Company will not waste or destroy the Collateral or any
          part thereof and will not be negligent in the care or use of any
          Collateral. The Company will not use, manufacture, sell or distribute
          any Collateral in violation of any statute, ordinance or other
          governmental requirement. The Company will perform in all material
          respects its obligations under any contract or other agreement
          constituting part of the Collateral, it being understood and agreed
          that the Agent and the Lenders have no responsibility to perform such
          obligations.

               (f) Subject to Sections 4(b), 5(a), 6(b) and 6(c) hereof, the
          Company will not, without the Agent's prior written consent, sell,
          assign, mortgage, lease or otherwise dispose of the Collateral or any
          interest therein.

               (g) The Company will insure the Collateral which is insurable
          against such risks and hazards as other companies similarly situated
          insure against, and including in any event loss or damage by fire,
          theft, burglary, pilferage, loss in transit and such other hazards as
          the Agent may reasonably specify, in amounts and under policies
          containing loss payable clauses to the Agent as its interest may
          appear (and, if the Agent requests, naming the Agent and the Lenders
          as additional insureds therein) by insurers reasonably acceptable to
          the Agent. All premiums on such insurance shall be paid by the Company
          and the policies of such insurance (or certificates therefor)
          delivered to the Agent. All insurance required hereby shall provide
          that any loss shall be payable notwithstanding any act or negligence
          of the Company, shall provide that no cancellation thereof shall be
          effective until at least thirty (30) days after receipt by the Company
          and the Agent of written notice thereof, and shall be satisfactory to
          the Agent in all other respects. In case of any material loss, damage
          to or destruction of the Collateral or any part thereof, the Company
          shall promptly give written notice thereof to the Agent and the
          Lenders


                                      -5-
<PAGE>   19

          generally describing the nature and extent of such damage or
          destruction. In case of any loss, damage to or destruction of the
          Collateral or any part thereof, the Company, whether or not the
          insurance proceeds, if any, received on account of such damage or
          destruction shall be sufficient for that purpose, at the Company's
          cost and expense, will promptly repair or replace the Collateral so
          lost, damaged or destroyed, except to the extent (i) such Collateral,
          prior to its loss, damage or destruction, had become uneconomical,
          obsolete or worn out or (ii) such Collateral is not necessary for or
          of importance to the proper conduct of the Company's business in the
          ordinary course and such Collateral and all other Collateral lost,
          damaged or destroyed during the immediately preceding 12 calendar
          months had an aggregate fair market value, prior to its loss, damage
          or destruction, of less than $1,000,000. In the event the Company
          shall receive any proceeds of such insurance, the Company will
          immediately pay over such proceeds to the Agent. The Company hereby
          authorizes the Agent, at the Agent's option, to adjust, compromise and
          settle any losses under any insurance afforded at any time after the
          occurrence and during the continuation of any Default or Event of
          Default, and the Company does hereby irrevocably constitute the Agent,
          its officers, agents and attorneys, as the Company's
          attorneys-in-fact, with full power and authority to effect such
          adjustment, compromise and/or settlement and to endorse any drafts
          drawn by an insurer of the Collateral or any part thereof and to do
          everything necessary to carry out such purposes and to receive and
          receipt for any unearned premiums due under policies of such
          insurance. Unless the Agent elects to adjust, compromise or settle
          losses as aforesaid, any adjustment, compromise and/or settlement of
          any losses under any insurance shall be made by the Company subject to
          final approval of the Agent in the case of losses exceeding
          $1,000,000. Net insurance proceeds received by the Agent under the
          provisions hereof or under any policy or policies of insurance
          covering the Collateral or any part thereof shall be applied to the
          reduction of the Obligations (whether or not then due); provided,
          however, that the Agent agrees to release such insurance proceeds to
          the Company for replacement or restoration of the portion of the
          Collateral lost, damaged or destroyed required by this Agreement to be
          so replaced or restored if, but only if, (i) at the time of release no
          Default or Event of Default exists hereunder, (ii) written application
          for such release is received from the Company within 30 days of
          receipt of such proceeds and (iii) the Agent has received evidence
          reasonably satisfactory to it that the Collateral lost, damaged or
          destroyed has been or will be replaced or restored to its condition
          immediately prior to the loss, destruction or other event giving rise
          to the payment of such insurance proceeds. All insurance proceeds
          shall be subject to the lien and security interest of the Agent
          hereunder.

               UNLESS THE COMPANY PROVIDES THE AGENT WITH EVIDENCE OF THE
          INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY PURCHASE
          INSURANCE AT THE COMPANY'S EXPENSE TO PROTECT THE AGENT'S INTERESTS IN
          THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT THE
          COMPANY'S INTERESTS IN THE COLLATERAL. THE COVERAGE PURCHASED BY THE
          AGENT MAY NOT PAY ANY CLAIMS THAT THE COMPANY MAKES OR ANY CLAIM THAT
          IS MADE AGAINST THE COMPANY IN CONNECTION WITH THE COLLATERAL. THE
          COMPANY MAY LATER CANCEL ANY SUCH INSURANCE PURCHASED BY THE AGENT,
          BUT ONLY AFTER PROVIDING THE AGENT WITH EVIDENCE THAT THE COMPANY HAS
          OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE AGENT
          PURCHASES INSURANCE


                                      -6-
<PAGE>   20


          FOR THE COLLATERAL, THE COMPANY WILL BE RESPONSIBLE FOR THE COSTS OF
          THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT THE
          AGENT MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE,
          UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE
          INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE OBLIGATIONS
          SECURED HEREBY. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST
          OF INSURANCE THE COMPANY MAY BE ABLE TO OBTAIN ON ITS OWN.

               (h) The Company will at all times allow the Agent, any Lender and
          their respective representatives free access to and right of
          inspection of the Collateral, provided that prior to the occurrence of
          any Default or Event of Default hereunder any such access or
          inspection shall only be required during the Company's normal business
          hours.

               (i) If any Collateral is in the possession or control of any of
          the Company's agents or processors and the Agent so requests, the
          Company agrees to notify such agents or processors in writing of the
          Agent's security interest therein and instruct them to hold all such
          Collateral for the Agent's account and subject to the Agent's
          instructions. The Company will, upon request of the Agent, authorize
          and instruct all bailees and any other parties, if any, at any time
          processing, labeling, packaging, holding, storing, shipping or
          transferring all or any part of the Collateral to permit the Agent,
          any Lender and their respective representatives to examine and inspect
          any of the Collateral then in such party's possession and to verify
          from such party's own books and records any information concerning the
          Collateral or any part thereof which the Agent, any Lender or their
          respective representatives may seek to verify. As to any premises not
          owned by the Company wherein any of the Collateral is located, if any,
          the Company shall, unless the Agent requests otherwise, cause each
          party having any right, title or interest in, or lien on, any of such
          premises to enter into an agreement (any such agreement to contain a
          legal description of such premises) whereby such party disclaims any
          right, title and interest in, and lien on, the Collateral, allowing
          the removal of such Collateral by the Agent or by the Lenders and
          otherwise in form and substance acceptable to the Agent; provided,
          however, that no such agreement need be obtained with respect to any
          one location wherein the value of the Collateral as to which such
          agreement has not been obtained aggregates less than $1,000,000 and
          the value of all Collateral as to which such agreements have not been
          obtained aggregates less than $2,000,000.

               (j) The Company agrees from time to time to deliver to the Agent
          and any Lender such evidence of the existence, identity and location
          of the Collateral and of its availability as collateral security
          pursuant hereto (including, without limitation, schedules describing
          all Receivables created or acquired by the Company, copies of customer
          invoices or the equivalent and original shipping or delivery receipts
          for all merchandise and other goods sold or leased or services
          rendered, together with the Company's warranty of the genuineness
          thereof, and reports stating the book value of Inventory and Equipment
          by major category and location), in each case as the Agent or such
          Lender may reasonably request. The Agent shall have the right to
          verify all or any part of the Collateral in any manner, and through
          any medium, which the Agent or the Lenders consider appropriate, and
          the Company agrees to furnish all assistance and information, and
          perform any acts,


                                      -7-
<PAGE>   21


          which the Agent may reasonably require in connection therewith. The
          Company will promptly notify the Agent and each Lender of any
          Collateral which the Company has determined to have been rendered
          obsolete stating the prior book value of such Collateral, its type and
          location.

               (k) The Company will comply in all material respects with the
          terms and conditions of any and all leases, easements, right-of-way
          agreements and other agreements binding upon the Company or affecting
          the Collateral, in each case which cover the premises wherein the
          Collateral is located, and any orders, ordinances, laws or statutes of
          any city, state or other governmental entity, department or agency
          having jurisdiction with respect to such premises or the conduct of
          business thereon.

               (l) The Company has not invoiced Receivables or otherwise
          transacted business, and does not invoice Receivables or otherwise
          transact business, under any trade names other than the Company's name
          set forth in the introductory paragraph of this Agreement. The Company
          will not change its name or transact business under any other trade
          name, in each case without first giving the Agent 30 days' prior
          written notice of its intent to do so.

               (m) The Company agrees to execute and deliver to the Agent such
          further agreements and assignments or other instruments and documents
          and to do all such other things as the Agent may reasonably deem
          necessary or appropriate to assure the Agent its security interest
          hereunder, including such financing statement or statements or
          amendments thereof or supplements thereto or other instruments and
          documents as the Agent may from time to time reasonably require in
          order to comply with the Uniform Commercial Code as enacted in the
          State of Illinois and any successor statute(s) thereto (the "Code").
          The Company hereby agrees that a carbon, photographic or other
          reproduction of this Agreement or any such financing statement is
          sufficient for filing as a financing statement by the Agent without
          notice thereof to the Company wherever the Agent in its sole
          discretion desires to file the same. In the event for any reason the
          law of any jurisdiction other than Illinois becomes or is applicable
          to the Collateral or any part thereof, or to any of the Obligations,
          the Company agrees to execute and deliver all such instruments and
          documents and to do all such other things as the Agent in its sole
          discretion deems necessary or appropriate to preserve, protect and
          enforce the security interest of the Agent under the law of such other
          jurisdiction. The Company agrees to mark its books and records to
          reflect the security interest of the Agent in the Collateral.

               (n) On failure of the Company to perform any of the covenants and
          agreements herein contained, the Agent may at its option perform the
          same and in so doing may expend such sums as the Agent may reasonably
          deem advisable in the performance thereof, including, without
          limitation, the payment of any insurance premiums, the payment of any
          taxes, liens and encumbrances, expenditures made in defending against
          any adverse claims, and all other expenditures which the Agent may be
          compelled to make by operation of law or which the Agent may make by
          agreement or otherwise for the protection of the security hereof. All
          such sums and amounts so expended shall be repayable by the Company
          immediately without notice or demand, shall constitute


                                      -8-
<PAGE>   22


          additional Obligations secured hereunder and shall bear interest from
          the date said amounts are expended at the rate per annum (computed on
          the basis of a 360-day year for the actual number of days elapsed)
          determined by adding 2% to the Domestic Rate as from time to time in
          effect with any change in such rate per annum as so determined by
          reason of a change in such Domestic Rate to be effective on the date
          of such change in said Domestic Rate (such rate per annum as so
          determined being hereinafter referred to as the "Default Rate"). No
          such performance of any covenant or agreement by the Agent on behalf
          of the Company, and no such advancement or expenditure therefor, shall
          relieve the Company of any default under the terms of this Agreement
          or in any way obligate the Agent or any Lender to take any further or
          future action with respect thereto. The Agent in making any payment
          hereby authorized may do so according to any bill, statement or
          estimate procured from the appropriate public office or holder of the
          claim to be discharged without inquiry into the accuracy of such bill,
          statement or estimate or into the validity of any tax assessment,
          sale, forfeiture, tax lien or title or claim. The Agent in performing
          any act hereunder shall be the sole judge of whether the Company is
          required to perform the same under the terms of this Agreement. The
          Agent is hereby authorized to charge any depository or other account
          of the Company maintained with the Agent for the amount of such sums
          and amounts so expended.

          Section 4. Special Provisions Re: Receivables.

          (a) As of the time any Receivable becomes subject to the security
interest provided for hereby and at all times thereafter, the Company shall be
deemed to have warranted as to each and all of such Receivables that all
warranties of the Company set forth in this Agreement are true and correct with
respect to each such Receivable; that each Receivable and all papers and
documents relating thereto are genuine and in all respects what they purport to
be; that each Receivable is valid and subsisting and, if such Receivable is an
account, arises out of a bona fide sale of goods sold and delivered by the
Company to, or in the process of being delivered to, or out of and for services
theretofore actually rendered by the Company to, the account debtor named
therein; that no such Receivable is evidenced by any instrument or chattel paper
unless such instrument or chattel paper has theretofore been endorsed by the
Company and delivered to the Agent (except to the extent the Agent specifically
requests the Company not to do so with respect to any such instrument or chattel
paper); that no surety bond was required or given in connection with such
Receivable or the contracts or purchase orders out of which the same arose; and
that if said Receivable is scheduled, listed or referred to on any certificate
evidencing the Borrowing Base or is otherwise a Receivable which the Company
wants the Lenders to consider as an Eligible Account, that said Receivable
qualifies as an Eligible Account. Without limiting the foregoing, if any
Receivable which the Company desires to qualify as an Eligible Account arises
out of a contract with the United States of America or any of its departments,
agencies or instrumentalities, the Company agrees to notify the Agent and
execute whatever instruments and documents are required by the Agent in order
that such Receivable shall be assigned to the Agent and that proper notice of
such assignment shall be given under the federal Assignment of Claims Act (or
any successor statute).

          (b) Unless and until an Event of Default hereunder occurs, any
merchandise or other goods which are returned by a customer or account debtor or
otherwise recovered may be resold


                                      -9-
<PAGE>   23


by the Company in the ordinary course of its business as presently conducted in
accordance with Section 6(b) hereof; upon the occurrence and during the
continuation of any Event of Default hereunder, such merchandise and other goods
shall be set aside at the request of the Agent and held by the Company as
trustee for the Agent and the Lenders and shall remain part of the Collateral.
Unless and until an Event of Default hereunder occurs, the Company may settle
and adjust disputes and claims with its customers and account debtors, handle
returns and recoveries and grant discounts, credits and allowances in the
ordinary course of its business as presently conducted for amounts and on terms
which the Company in good faith considers advisable. Upon the occurrence and
during the continuation of any Event of Default hereunder, unless the Agent
requests otherwise, the Company shall notify the Agent promptly of all returns
and recoveries and, on the Agent's request, deliver any such merchandise or
other goods to the Agent. Upon the occurrence and during the continuation of any
Event of Default hereunder, unless the Agent requests otherwise, the Company
shall also notify the Agent promptly of all disputes and claims and settle or
adjust them at no expense to the Agent or the Lenders hereunder, but no
discount, credit or allowance other than on normal trade terms in the ordinary
course of business as presently conducted shall be granted to any customer or
account debtor and no returns of merchandise or other goods shall be accepted by
the Company without the Agent's consent. The Agent may, at all times upon the
occurrence and during the continuation of any Event of Default hereunder, settle
or adjust disputes and claims directly with customers or account debtors for
amounts and upon terms which the Agent considers advisable.

          Section 5. Collection of Receivables.

          (a) Except as otherwise provided in this Agreement, the Company shall
make collection of all Receivables and may use the same to carry on its business
in accordance with sound business practice and otherwise subject to the terms
hereof.

          (b) Whether or not any Default or Event of Default has occurred
hereunder and whether or not the Agent has exercised any or all of its rights
under other provisions of this Section 5, in the event the Agent requests the
Company to do so:

               (i) all instruments and chattel paper at any time constituting
          part of the Receivables (including any postdated checks) shall, upon
          receipt by the Company, be immediately endorsed to and deposited with
          Agent; and/or

               (ii) the Company shall instruct all customers and account debtors
          to remit all payments in respect of Receivables to a lockbox or
          lockboxes under the sole custody and control of Agent and which are
          maintained at post offices selected by the Agent.

          (c) Upon the occurrence and during the continuation of any Default or
Event of Default hereunder, whether or not the Agent has exercised any or all of
its rights under other provisions of this Section 5, the Agent or its designee
may notify the Company's customers and account debtors at any time that
Receivables have been assigned to the Agent or of the Agent's security interest
therein, and either in its own name, or the Company's name, or both, demand,
collect (including, without limitation, through a lockbox analogous to that
described in Section 5(b)(ii) hereof), receive, receipt for, sue for, compound
and give acquittance for any or all amounts due or


                                      -10-
<PAGE>   24


to become due on Receivables, and in the Agent's discretion file any claim or
take any other action or proceeding which the Agent may deem reasonably
necessary or appropriate to protect and realize upon the security interest of
the Agent in the Receivables.

          (d) Any proceeds of Receivables or other Collateral transmitted to or
otherwise received by the Agent pursuant to any of the provisions of Sections
5(b) or 5(c) hereof may be handled and administered by the Agent in and through
a remittance account or accounts maintained at the Agent or by the Agent at a
commercial bank or banks selected by the Agent (each a "Depositary Bank"), and
the Company acknowledges that the maintenance of such remittance accounts by the
Agent is solely for the Agent's convenience and that the Company does not have
any right, title or interest in such remittance accounts or any amounts at any
time standing to the credit thereof. The Agent may apply all or any part of any
proceeds of Receivables or other Collateral received by it from any source to
the payment of the Obligations (whether or not then due and payable), such
applications to be made in such amounts, in such manner and order and at such
intervals as the Agent may from time to time in its discretion determine, but
not less often than once each week. The Agent need not apply or give credit for
any item included in proceeds of Receivables or other Collateral until the
relevant Depositary Bank has received final payment therefor at its office in
cash or final solvent credits current at the site of deposit acceptable to the
Agent and the relevant Depositary Bank as such. However, if the Agent does
permit credit to be given for any item prior to a Depositary Bank receiving
final payment therefor and such Depositary Bank fails to receive such final
payment or an item is charged back to the Agent or any Depositary Bank for any
reason, the Agent may at its election in either instance charge the amount of
such item back against any such remittance accounts or any depository account of
the Company maintained with the Agent, together with interest thereon at the
Default Rate. Concurrently with each transmission of any proceeds of Receivables
or other Collateral to any remittance account, the Company shall furnish the
Agent with a report in such form as Agent shall reasonably require identifying
the particular Receivable or such other Collateral from which the same arises or
relates. Unless and until a Default or an Event of Default shall have occurred
and be continuing hereunder, the Agent will cause proceeds of Collateral which
the Agent has not applied to the Obligations as provided above to be released
from the remittance accounts from time to time or otherwise make such proceeds
available to the Company at its request, but not less often than once per week.
The Company hereby indemnifies the Agent and the Lenders from and against all
liabilities, damages, losses, actions, claims, judgments, costs, expenses,
charges and attorneys' fees suffered or incurred by the Agent or any Lender
because of the maintenance of the foregoing arrangements; provided, however,
that the Company shall not be required to indemnify the Agent or any Lender for
any of the foregoing to the extent they arise solely from the gross negligence
or willful misconduct of the person seeking to be indemnified. The Agent and the
Lenders shall have no liability or responsibility to the Company for the Agent
or any other Depositary Bank accepting any check, draft or other order for
payment of money bearing the legend "payment in full" or words of similar import
or any other restrictive legend or endorsement whatsoever or be responsible for
determining the correctness of any remittance.

          Section 6. Special Provisions Re: Inventory and Equipment.

          (a) The Company will at its own cost and expense maintain, keep and
preserve the Inventory in good and merchantable condition and keep and preserve
the Equipment in good


                                      -11-
<PAGE>   25


repair, working order and condition, ordinary wear and tear excepted, and,
without limiting the foregoing, make all necessary and proper repairs,
replacements and additions to the Equipment so that the efficiency thereof shall
be fully preserved and maintained.

          (b) The Company may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, use, consume
and sell the Inventory in the ordinary course of its business, but a sale in the
ordinary course of business shall not under any circumstance include any
transfer or sale in satisfaction, partial or complete, of a debt owing by the
Company.

          (c) The Company may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, sell (i)
obsolete, worn out or unusable Equipment which is concurrently replaced with
similar Equipment at least equal in quality and condition to that sold and owned
by the Company free of any lien, charge or encumbrance other than the security
interest granted hereby and (ii) Equipment which this Agreement would not
require the Company to repair or replace if the same were lost, damaged or
destroyed pursuant to Section 3(g) hereof.

          (d) As of the time any Inventory or Equipment becomes subject to the
security interest provided for hereby and at all times thereafter, the Company
shall be deemed to have warranted as to any and all of such Inventory and
Equipment that all warranties of the Company set forth in this Agreement are
true and correct with respect to such Inventory and Equipment; that all of such
Inventory and Equipment is located at a location set forth pursuant to Section
3(b) hereof. The Company warrants and agrees that no Inventory is or will be
consigned to any other person or entity without the Agent's prior written
consent.

          (e) Upon the Agent's request, the Company shall at its own cost and
expense cause the lien of the Agent in and to any portion of the Collateral
subject to a certificate of title law to be duly noted on such certificate of
title or to be otherwise filed in such manner as is prescribed by law in order
to perfect such lien and will cause all such certificates of title and evidences
of lien to be deposited with the Agent.

          (f) Except for Equipment from time to time located on the real estate
described on Schedule B attached hereto and as otherwise disclosed to the
Lenders in writing, none of the Equipment is or will be attached to real estate
in such a manner that the same may become a fixture.

          (g) If any of the Inventory is at any time evidenced by a document of
title, such document shall be promptly delivered by the Company to the Agent.



                                      -12-
<PAGE>   26


          Section 7. Special Provisions Re: Investment Property.

          (a) Unless and until an Event of Default has occurred and is
continuing and thereafter until notified to the contrary by the Agent pursuant
to Section 9(d) hereof:

               (i) The Company shall be entitled to exercise all voting and/or
          consensual powers pertaining to the Investment Property or any part
          thereof, for all purposes not inconsistent with the terms of this
          Agreement or any other document evidencing or otherwise relating to
          any Obligations; and

               (ii) The Company shall be entitled to receive and retain all cash
          dividends paid upon or in respect of the Investment Property.

          (b) At the Agent's request, certificates for all securities now or at
any time constituting Investment Property shall be promptly delivered by the
Company to the Agent duly endorsed in blank for transfer or accompanied by an
appropriate assignment or assignments or an appropriate undated stock power or
powers, in every case sufficient to transfer title thereto, including, without
limitation, all stock received in respect of a stock dividend or resulting from
a split-up, revision, or reclassification of the Investment Property or any part
thereof or received in addition to, in substitution of, or in exchange for the
Investment Property or any part thereof as a result of a merger, consolidation,
or otherwise. With respect to any Investment Property held by a securities
intermediary, commodity intermediary, or other financial intermediary of any
kind, at the Agent's request, the Company shall execute and deliver, and shall
cause any such intermediary to execute and deliver, an agreement among the
Company, the Agent, and such intermediary in form and substance reasonably
satisfactory to the Agent which provides, among other things, for the
intermediary's agreement that it shall comply with entitlement orders, and apply
any value distributed on account of any Investment Property maintained in an
account with such intermediary, as directed by the Agent without further consent
by the Company. The Agent may at any time, after the occurrence of an Event of
Default or an event or condition which with the lapse of time or the giving of
notice, or both, would constitute an Event of Default, cause to be transferred
into its name or the name of its nominee or nominees all or any part of the
Investment Property hereunder.

          (c) Unless and until an Event of Default, or an event or condition
which with the lapse of time or the giving of notice, or both, would constitute
an Event of Default, has occurred and is continuing, the Company may sell or
otherwise dispose of any Investment Property, provided that sales or other
dispositions of capital stock of any direct or indirect Subsidiary shall be in
accordance with the terms of the Credit Agreement. After the occurrence and
during the continuation of any Event of Default or of any event or condition
which with the lapse of time or the giving of notice, or both, would constitute
an Event of Default, the Company shall not sell all or any part of the
Investment Property without the prior written consent of the Agent.

          (d) The Company represents that on the date of this Agreement, none of
the Investment Property consists of margin stock (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System) except to
the extent the Company has delivered to the Agent a duly executed and completed
Form U-1 with respect to such stock. If at any time the


                                      -13-
<PAGE>   27


Investment Property or any part thereof consists of margin stock, the Company
shall promptly so notify the Agent and deliver to the Agent a duly executed and
completed Form U-1 and such other instruments and documents reasonably requested
by the Agent in form and substance reasonably satisfactory to the Agent.

          (e) Notwithstanding anything to the contrary contained herein, in the
event any Investment Property is subject to the terms of a separate security
agreement in favor of the Agent, the terms of such separate security agreement
shall govern and control unless otherwise agreed to in writing by the Agent.

          Section 8. Power of Attorney. In addition to any other powers of
attorney contained herein, the Company hereby appoints the Agent, its nominee,
or any other person whom the Agent may designate as the Company's attorney in
fact, with full power upon the occurrence and during the continuation of an
Event of Default hereunder to sign the Company's name on verifications of
accounts, to send requests for verification of Receivables to the Company's
customers and account debtors, to endorse the Company's name on any checks,
notes, acceptances, money orders, drafts and any other forms of payment or
security that may come into the Agent's possession, to sign the Company's name
on any invoice or bill of lading relating to any Receivables, on claims to
enforce collection of any Receivable, on notices to and drafts against customers
and account debtors, on schedules and assignments of Receivables, on notices of
assignment and on public records, to notify the post office authorities to
change the address for delivery of the Company's mail to an address designated
by the Agent, to receive, open and dispose of all mail addressed to the Company
and to do all things necessary to carry out this Agreement. The Company hereby
ratifies and approves all acts of any such attorney and agrees that neither the
Agent nor any such attorney will be liable for any acts or omissions nor for any
error of judgment or mistake of fact or law other than their gross negligence or
willful misconduct. The foregoing power of attorney, being coupled with an
interest, is irrevocable until the Obligations have been fully paid and
satisfied and the commitments of the Lenders to extend credit to or for the
account of the Company under the Credit Agreement have terminated. The Agent may
file one or more financing statements disclosing its security interest in any or
all of the Collateral without the Company's signature appearing thereon. The
Company also hereby grants the Agent a power of attorney to execute any such
financing statements, or amendments and supplements to financing statements, on
behalf of the Company without notice thereof to the Company, which power of
attorney is coupled with an interest and is irrevocable until the Obligations
have been fully paid and satisfied and the commitments of the Lenders to extend
credit to or for the account of the Company under the Credit Agreement have
terminated.

          Section 9. Defaults and Remedies.

          (a) The occurrence of any event or the existence of any condition
which is specified as an "Event of Default" under the Credit Agreement shall
constitute an "Event of Default" hereunder.

          (b) Upon the occurrence and during the continuation of any Event of
Default hereunder, the Agent shall have, in addition to all other rights
provided herein or by law, the rights and remedies of a secured party under the
Code (regardless of whether the Code is the law of the


                                      -14-
<PAGE>   28


jurisdiction where the rights or remedies are asserted and regardless of whether
the Code applies to the affected Collateral), and further the Agent may, without
demand and without advertisement, notice, hearing or process of law, all of
which the Company hereby waives, at any time or times, sell and deliver any or
all Collateral held by or for it at public or private sale, for cash, upon
credit or otherwise, at such prices and upon such terms as the Agent deems
advisable, in its sole discretion. In addition to all other sums due the Agent
or any Lender hereunder, the Company shall pay the Agent and any Lender all
costs and expenses incurred by the Agent or such Lender, including attorneys'
fees and court costs, in obtaining, liquidating or enforcing payment of
Collateral or the Obligations or in the prosecution or defense of any action or
proceeding by or against the Agent, such Lender or the Company concerning any
matter arising out of or connected with this Agreement or the Collateral or the
Obligations, including, without limitation, any of the foregoing arising in,
arising under or related to a case under the United States Bankruptcy Code (or
any successor statute). Any requirement of reasonable notice shall be met if
such notice is personally served on or mailed, postage prepaid, to the Company
in accordance with Section 13(b) hereof at least ten days before the time of
sale or other event giving rise to the requirement of such notice; provided
however, no notification need be given to the Company if the Company has signed,
after an Event of Default hereunder has occurred, a statement renouncing any
right to notification of sale or other intended disposition. The Agent shall not
be obligated to make any sale or other disposition of the Collateral regardless
of notice having been given. The Agent or any Lender may be the purchaser at any
such sale. The Company hereby waives all of its rights of redemption from any
such sale. Subject to the provisions of applicable law, the Agent may postpone
or cause the postponement of the sale of all or any portion of the Collateral by
announcement at the time and place of such sale, and such sale may, without
further notice, be made at the time and place to which the sale was postponed or
the Agent may further postpone such sale by announcement made at such time and
place.

          (c) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default hereunder, the Agent shall have
the right, in addition to all other rights provided herein or by law, to take
physical possession of any and all of the Collateral and anything found therein,
the right for that purpose to enter without legal process any premises where the
Collateral may be found (provided such entry be done lawfully), and the right to
maintain such possession on the Company's premises (the Company hereby agreeing
to lease such premises without cost or expense to the Agent or its designee if
the Agent so requests) or to remove the Collateral or any part thereof to such
other places as the Agent may desire. Upon the occurrence and during the
continuation of any Event of Default hereunder, the Agent shall have the right
to exercise any and all rights with respect to deposit accounts of the Company
maintained with the Agent or any Lender, including, without limitation, the
right to collect, withdraw and receive all amounts due or to become due or
payable under each such deposit account. Upon the occurrence and during the
continuation of any Event of Default hereunder, the Company shall, upon the
Agent's demand, assemble the Collateral and make it available to the Agent at a
place designated by the Agent. If the Agent exercises its right to take
possession of the Collateral, the Company shall also at its expense perform any
and all other steps requested by the Agent to preserve and protect the security
interest hereby granted in the Collateral, such as placing and maintaining signs
indicating the security interest of the Agent, appointing overseers for the
Collateral and maintaining Collateral records.


                                      -15-
<PAGE>   29


          (d) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default, all rights of the Company to
exercise the voting and/or consensual powers which it is entitled to exercise
pursuant to Section 7(a)(i) hereof and/or to receive and retain the
distributions which it is entitled to receive and retain pursuant to Section
7(a)(ii) hereof, shall, at the option of the Agent, cease and thereupon become
vested in the Agent, which, in addition to all other rights provided herein or
by law, shall then be entitled solely and exclusively to exercise all voting and
other consensual powers pertaining to the Investment Property and/or to receive
and retain the distributions which the Company would otherwise have been
authorized to retain pursuant to Section 7(a)(ii) hereof and shall then be
entitled solely and exclusively to exercise any and all rights of conversion,
exchange, or subscription or any other rights, privileges, or options pertaining
to any Investment Property as if the Agent were the absolute owner thereof.
Without limiting the foregoing, the Agent shall have the right to exchange, at
its discretion, any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization, or other readjustment of the
respective issuer thereof or upon the exercise by or on behalf of any such
issuer or the Agent of any right, privilege, or option pertaining to any
Investment Property and, in connection therewith, to deposit and deliver any and
all of the Investment Property with any committee, depositary, transfer agent,
registrar, or other designated agency upon such terms and conditions as the
Agent may determine. In the event the Agent in good faith believes any of the
Collateral constitutes restricted securities within the meaning of any
applicable securities laws, any disposition thereof in compliance with such laws
shall not render the disposition commercially unreasonable.

          (e) Without in any way limiting the foregoing, the Company hereby
grants to the Agent and the Lenders a royalty-free irrevocable license and right
to use all of the Company's patents, patent applications, patent licenses,
trademarks, trademark registrations, trademark licenses, trade names, trade
styles, and similar intangibles in connection with any foreclosure or other
realization by the Agent or the Lenders on all or any part of the Collateral.
The license and right granted the Agent and the Lenders hereby shall be without
any royalty or fee or charge whatsoever.

          (f) The powers conferred upon the Agent hereunder are solely to
protect its interest in the Collateral and shall not impose on it any duty to
exercise such powers. The Agent shall be deemed to have exercised reasonable
care in the custody and preservation of Investment Property in its possession if
such Collateral is accorded treatment substantially equivalent to that which the
Agent accords its own property, consisting of similar type assets, it being
understood, however, that the Agent shall have no responsibility for
ascertaining or taking any action with respect to calls, conversions, exchanges,
maturities, tenders, or other matters relating to any such Collateral, whether
or not the Agent has or is deemed to have knowledge of such matters. This
Agreement constitutes an assignment of rights only and not an assignment of any
duties or obligations of the Company in any way related to the Collateral, and
the Agent shall have no duty or obligation to discharge any such duty or
obligation. The Agent shall have no responsibility for taking any necessary
steps to preserve rights against any parties with respect to any Collateral or
initiating any action to protect the Collateral against the possibility of a
decline in market value. Neither the Agent nor any party acting as attorney for
the Agent shall be liable for any acts or omissions or for any error of judgment
or mistake of fact or law other than their gross negligence or willful
misconduct.


                                      -16-
<PAGE>   30


          (g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between the Company and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. Neither the Agent or any Lender, nor any party
acting as attorney for the Agent or any Lender, shall be liable hereunder for
any acts or omissions or for any error of judgment or mistake of fact or law
other than their gross negligence or willful misconduct. The rights and remedies
of the Agent and the Lenders under this Agreement shall be cumulative and not
exclusive of any other right or remedy which the Agent or the Lenders may have.
For purposes of this Agreement, a Default or Event of Default shall be construed
as continuing after its occurrence until the same is waived in writing by the
Lenders or the Required Lenders, as the case may be, in accordance with the
Credit Agreement or, in the case of a Default, the same is cured by the Company
within any applicable cure period.

          Section 10. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default hereunder shall, when received by the Agent
in cash or its equivalent, be applied by the Agent as follows:

               (a) first, to the payment of any outstanding costs and expenses
          incurred by the Agent in monitoring, verifying, protecting, preserving
          or enforcing the Liens on the Collateral, and in protecting,
          preserving or enforcing rights under this Agreement or any of the
          other Loan Documents, and in any event including all costs and
          expenses of a character which the Company has agreed to pay under
          Section 11.15 of the Credit Agreement (such funds to be retained by
          the Agent for its own account unless it has previously been reimbursed
          for such costs and expenses by the Lenders, in which event such
          amounts shall be remitted to the Lenders to reimburse them for
          payments theretofore made to the Agent);

               (b) second, to the payment of any outstanding interest or other
          fees or amounts due under this Agreement or any of the other Loan
          Documents other than for principal, pro rata as among the Agent and
          the Lenders in accord with the amount of such interest and other fees
          or amounts owing each;

               (c) third, to the payment of the principal of the Notes and any
          liabilities in respect of unpaid drawings under the Letters of Credit,
          pro rata as among the Lenders in accord with the then respective
          unpaid principal balances of the Notes and the then unpaid liabilities
          in respect of unpaid drawings under the Letters of Credit;

               (d) fourth, to the Agent, to be held as collateral security for
          any undrawn Letters of Credit, until the Agent is holding an amount of
          cash equal to the then outstanding amount of all Letters of Credit;
          and

               (e) fifth, to the Agent and the Lenders pro rata in accord with
          the amounts of any other Obligations (including, without limitation,
          Hedging Liability) owing to them and secured hereby unless and until
          all such Obligations have been fully paid and satisfied.


                                      -17-
<PAGE>   31


The Company shall remain liable to the Agent and the Lenders for any deficiency.
Any surplus remaining after the full payment and satisfaction of the Obligations
shall be returned to the Company or to whomsoever the Agent reasonably
determines is lawfully entitled thereto.

          Section 11. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Obligations, both for principal and interest, have been fully paid and
satisfied and the commitments of the Lenders to extend credit to or for the
account of the Company under the Credit Agreement have terminated. Upon such
termination of this Agreement, the Agent shall, upon the request and at the
expense of the Company, forthwith release its security interest hereunder.

          Section 12. The Agent. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges and
immunities provided in Section 10 of the Credit Agreement, all of which
provisions of said Section 10 are incorporated by reference herein with the same
force and effect as if set forth herein in their entirety. The Agent hereby
disclaims any representation or warranty to the Lenders concerning the
perfection of the security interest granted hereunder or in the value of any of
the Collateral.

          Section 13.    Miscellaneous.

          (a) This Agreement cannot be changed or terminated orally. This
Agreement shall create a continuing security interest in the Collateral and
shall be binding upon the Company, its successors and assigns and shall inure,
together with the rights and remedies of the Agent and the Lenders hereunder, to
the benefit of the Agent, the Lenders, and their successors and assigns;
provided, however, that the Company may not assign its rights or delegate its
duties hereunder without the Agent's prior written consent. Without limiting the
generality of the foregoing, and subject to the provisions of Section 11.12 of
the Credit Agreement, any Lender may assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any other person or entity,
and such other person or entity shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise, subject,
however, to the provisions of the Credit Agreement. The Company hereby releases
the Agent and each Lender from any liability for any act or omission relating to
the Collateral or this Agreement, except for the Agent's or such Lender's gross
negligence or willful misconduct.

          (b) Except as otherwise specified herein, all notices hereunder shall
be in writing (including, without limitation, notice by telecopy) and shall be
given to the relevant party, and shall be deemed to have been made when given to
the relevant party, in accordance with Section 11.8 of the Credit Agreement.

          (c) No Lender shall have the right to institute any suit, action or
proceeding in equity or at law for the foreclosure or other realization upon any
Collateral subject to this Agreement or for the execution of any trust or power
hereof or for the appointment of a receiver, or for the enforcement of any other
remedy under or upon this Agreement; it being understood and intended that no
one or more of the Lenders shall have any right in any manner whatsoever to
affect, disturb or prejudice the lien and security interest of this Agreement by
its or their action or to


                                      -18-
<PAGE>   32


enforce any right hereunder, and that all proceedings at law or in equity shall
be instituted, had and maintained by the Agent in the manner herein provided for
the benefit of the Lenders.

          (d) In the event that any provision hereof shall be deemed to be
invalid or unenforceable by reason of the operation of any law or by reason of
the interpretation placed thereon by any court, this Agreement shall be
construed as not containing such provision, but only as to such jurisdictions
where such law or interpretation is operative, and the invalidity or
unenforceability of such provision shall not affect the validity of any
remaining provisions hereof, and any and all other provisions hereof which are
otherwise lawful and valid shall remain in full force and effect.

          (e) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. All terms which are used in this Agreement which are
defined in the Code shall have the same meanings herein as said terms do in the
Code unless this Agreement shall otherwise specifically provide. The headings in
this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning of any provision hereof.

          (f) This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same agreement.

          (g) This Agreement shall be and become effective on the Security
Effective Date as defined in Section 1.20(b) of the Credit Agreement.

          IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and delivered as of the date first above written.


                                        INFORMATION RESOURCES, INC.


                                        By
                                          Name _________________________________
                                          Title ________________________________


          Accepted and agreed to as of the date first above written.


                                        HARRIS TRUST AND SAVINGS BANK, as Agent
                                          as aforesaid for the Lenders


                                        By
                                          Name _________________________________
                                          Title ________________________________




                                      -19-
<PAGE>   33


                                   SCHEDULE A


                                    LOCATIONS

Item 1.    Debtor's chief financial office and principal place of business:

               150 North Clinton Street
               Chicago, Illinois  60606



Item 2.    Additional Places of Business and/or Permitted Collateral Locations:

           IRI CORPORATE AND BRANCH OFFICES

<TABLE>
<CAPTION>
           OFFICE LOCATION        STREET ADDRESS                         CITY             STATE     ZIP
           <S>                    <C>                                    <C>              <C>       <C>
           Chicago                150 N. Clinton                         Chicago          IL        60661
           Chicago (12/1/2000)    550 W. Washington                      Chicago          IL        60661
           Chicago                564 W. Randolph                        Chicago          IL        60661
           Chicago                6616 N. Cumberland                     Chicago          IL        60656
           Wood Dale              341-361 Haynes Drive                   Wood Dale        IL        60191
           Atlanta                7840 Rosewell Road, Building #100,     Atlanta          GA        30350
                                  Suite
           Cincinnati             Chiquita Center - Suite #700, 250 E.   Cincinnati       OH        45202
                                  Fifth
           Fairfield              Greenbrook Corporate Center, 100       Fairfield        NJ        07004
                                  Passi
           Fort Washington        500 Office Center Drive                Fort Washington  PA        19034
           Los Angeles            200 North Sepulveda Blvd., Suite #800  El Segundo       CA        90245
           Minneapolis            7650 Edinborough Way, Suite #650       Edina            MN        55435
           Norwalk                383 Main Avenue                        Norwalk          CT        06851
           San Francisco          525 Market Street, 24th Floor          San Francisco    CA        94105
           Waltham                1601 Trapelo Road                      Waltham          MA        02451
           Winston-Salem, N.C.    150 South Stratford Road, Suite #530   Winston-Salem    NC        27103
           Toronto                4711 Yonge Street                      North York       Ontario   M2N 6K8

           B'SCAN MARKETS 1/1/2001

           OFFICE LOCATION        STREET ADDRESS                         CITY             STATE     ZIP

           #10 Cedar Rapids       819 Fifth Street, S.E.                 Cedar Rapids     IA        52401
           #3 Eau Claire          3540 Jeffers Road                      Eau Claire       WI        54703
           #7 Grand Junction      Solarus Square, 2829 North Avenue      Grand Junction   CO        81501
           #4 Midland             15 Byron Road                          Midland          TX        79703
           #1 Pittsifeld          631 North Street                       Pittsfield       MA        01201
           #1 Visalia             2043 South Court Street                Visalia          CA        93277

           B'SCAN STUDIOS 1/1/2001

           OFFICE LOCATION        STREET ADDRESS                         CITY             STATE     ZIP

           Cedar Rapids           6300 Council St., N.E., Suite #8       Cedar Rapids     IA        52402
           Eau Claire             1040 Mary Lane                         Eau Claire       WI        54703
           Midland                2528 South Midkiff Avenue              Midland          TX        79701
           Pittsfield             4 Fredrico Drive, Suite #C             Pittsfield       MA        01201
</TABLE>

<PAGE>   34



                                   SCHEDULE B


                         REAL ESTATE LEGAL DESCRIPTIONS





                                    --NONE--