AMENDED AND RESTATED
                                CREDIT AGREEMENT

                          Dated as of February 1, 2000


                                      among

                               FINISHMASTER, INC.,

                       THE INSTITUTIONS FROM TIME TO TIME
                            PARTIES HERETO AS LENDERS

                                       and

                             BANK ONE, INDIANA, N.A.
                                    as Agent


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<PAGE>


                                TABLE OF CONTENTS

Section                                                                     Page

ARTICLE I:  DEFINITIONS

         1.1  Certain Defined Terms............................................1
         1.2  References......................................................27

ARTICLE II:  THE TERM LOAN AND REVOLVING LOAN FACILITIES

         2.1. Term Loans......................................................27
         2.2  Revolving Loans.................................................28
         2.3  Swing Line Loans................................................29
         2.4  Rate Options for All Advances...................................31
         2.5  Optional Payments; Mandatory Prepayments........................31
         2.6  Reduction of Commitments........................................33
         2.7  Method of Borrowing.............................................33
         2.8  Method of Selecting Types and Interest Periods for Advances.....34
         2.9  Minimum Amount of Each Advance..................................34
         2.10  Method of Selecting Types and Interest Periods for
                  Conversion and Continuation of Advances.....................34
         2.11  Default Rate...................................................35
         2.12  Method of Payment..............................................35
         2.13  Notes..........................................................35
         2.14  Telephonic Notices.............................................35
         2.15  Promise to Pay; Interest and Commitment Fees;
                  Interest Payment Dates; Interest and
                  Fee Basis; Taxes; Loan and Control Accounts.................36
         2.16  Notification of Advances, Interest Rates, Prepayments
                  and Aggregate Revolving
                  Loan Commitment Reductions..................................42
         2.17  Lending Installations..........................................42
         2.18  Non-Receipt of Funds by the Agent..............................42
         2.19  Termination Date...............................................43
         2.20  Replacement of Certain Lenders.................................43

ARTICLE III: THE LETTER OF CREDIT FACILITY

         3.1  Obligation to Issue.............................................44
         3.2 [Intentionally Omitted]..........................................44
         3.3  Types and Amounts...............................................44
         3.4  Conditions......................................................44
         3.5  Procedure for Issuance of Letters of Credit.....................45
         3.6  Letter of Credit Participation..................................45
         3.7  Reimbursement Obligation........................................46
         3.8  Letter of Credit Fees...........................................46
         3.9  Issuing Bank Reporting Requirements.............................46
         3.10  Indemnification; Exoneration...................................47
         3.11  Cash Collateral................................................48



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<PAGE>


Section                                                                     Page

ARTICLE IV:  CHANGE IN CIRCUMSTANCES

         4.1  Yield Protection................................................48
         4.2  Changes in Capital Adequacy Regulations.........................49
         4.3  Availability of Types of Advances...............................50
         4.4  Funding Indemnification.........................................50
         4.5  Lender Statements; Survival of Indemnity........................50

ARTICLE V:  CONDITIONS PRECEDENT

         5.1  Initial Advances and Letters of Credit..........................50
         5.2  Each Advance and Letter of Credit...............................52

ARTICLE VI:  REPRESENTATIONS AND WARRANTIES

         6.1  Organization; Corporate Powers..................................52
         6.2  Authority.......................................................52
         6.3  No Conflict; Governmental Consents..............................53
         6.4  Financial Statements............................................53
         6.5  No Material Adverse Change......................................54
         6.6  Taxes...........................................................54
         6.7  Litigation; Loss Contingencies and Violations...................54
         6.8  Subsidiaries....................................................55
         6.9  ERISA...........................................................55
         6.10  Accuracy of Information........................................56
         6.11  Securities Activities..........................................56
         6.12  Material Agreements............................................56
         6.13  Compliance with Laws...........................................56
         6.14  Assets and Properties..........................................56
         6.15  Statutory Indebtedness Restrictions............................57
         6.16  Insurance......................................................57
         6.17  Labor Matters..................................................57
         6.18  Environmental Matters..........................................57
         6.19  Solvency.......................................................58

ARTICLE VII :  COVENANTS

         7.1  Reporting.......................................................58
         7.2  Affirmative Covenants...........................................63
         7.3  Negative Covenants..............................................66
         7.4  Financial Covenants.............................................74

ARTICLE VIII:  DEFAULTS

         8.1  Defaults........................................................76

ARTICLE IX:  ACCELERATION, DEFAULTING LENDERS; WAIVERS,
         AMENDMENTS AND REMEDIES


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<PAGE>


Section                                                                     Page

         9.1  Termination of Commitments; Acceleration........................79
         9.2  Defaulting Lender...............................................79
         9.3  Amendments......................................................81
         9.4  Preservation of Rights..........................................82

ARTICLE X:  GENERAL PROVISIONS

         10.1  Survival of Representations....................................82
         10.2  Governmental Regulation........................................82
         10.3  Performance of Obligations.....................................82
         10.4  Headings.......................................................83
         10.5  Entire Agreement...............................................83
         10.6  Several Obligations; Benefits of this Agreement................83
         10.7  Expenses; Indemnification......................................83
         10.8  Numbers of Documents...........................................85
         10.9  Accounting.....................................................85
         10.10  Severability of Provisions....................................85
         10.11  Nonliability of Lenders.......................................86
         10.12  GOVERNING LAW.................................................86
         10.13  CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.......86

ARTICLE XI:  THE AGENT

         11.1  Appointment; Nature of Relationship............................87
         11.2  Powers.........................................................88
         11.3  General Immunity...............................................88
         11.4  No Responsibility for Loans, Creditworthiness, Recitals, Etc...88
         11.5  Action on Instructions of Lenders..............................88
         11.6  Employment of Agents and Counsel...............................88
         11.7  Reliance on Documents; Counsel.................................89
         11.8  The Agent's Reimbursement and Indemnification..................89
         11.9  Rights as a Lender.............................................89
         11.10  Lender Credit Decision........................................89
         11.11  Successor Agent...............................................89
         11.12  Collateral Documents..........................................90

ARTICLE XII:  SETOFF; RATABLE PAYMENTS

         12.1  Setoff.........................................................91
         12.2  Ratable Payments...............................................91
         12.3  Application of Payments........................................91
         12.4  Relations Among Lenders........................................92

ARTICLE XIII:  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

         13.1  Successors and Assigns.........................................93
         13.2  Participations.................................................93


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Section                                                                     Page

         13.3  Assignments....................................................94
         13.4  Confidentiality................................................95
         13.5  Dissemination of Information...................................95

ARTICLE XIV:  NOTICES

         14.1  Giving Notice..................................................96
         14.2  Change of Address..............................................96

ARTICLE XV:  COUNTERPARTS


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<PAGE>



                             EXHIBITS AND SCHEDULES


                                    Exhibits

EXHIBIT A         --       Commitments
                           (Definitions)

EXHIBIT B-1       --       Form of Revolving Note
                                    (Definitions)

EXHIBIT B-2       --       Form of Swing Line Note
                                    (Definitions)

EXHIBIT B-3       --       Form of Term Note
                                    (Definitions)

EXHIBIT B-4       --       Form of Acquisition Facility Note
                                    (Definitions)

EXHIBIT C         --       Form of Borrowing Notice (Section 2.8)

EXHIBIT C-1       --       Form of Borrowing Base Certificate
                          (Sections 5.1 and 7.1(A)(iv))

EXHIBIT D         --       Form of Request for Letter of Credit (Section 3.4)

EXHIBIT E         --       Form of Assignment and Acceptance Agreement
                           (Sections 2.20 and 13.3)

EXHIBIT F         --       Form of Borrower's Counsel's Opinion
                           (Section 5.1)

EXHIBIT G         --       List of Closing Documents
                           (Section 5.1)

EXHIBIT H         --       Form of Officer's Certificate
                           (Sections 5.2 and 7.1(A)(iii))

EXHIBIT I         --       Form of Compliance Certificate
                           (Sections 5.2 and 7.1(A)(iii))


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<PAGE>



                                                     Schedules

Schedule 1.1.1    --       Permitted Existing Indebtedness (Definitions)

Schedule 1.1.2    --       Permitted Existing Investments (Definitions)

Schedule 1.1.3    --       Permitted Existing Liens (Definitions)

Schedule 6.3      --       Conflicts; Governmental Consents (Section 6.3)

Schedule 6.6      --       Taxes (Section 6.6(A))

Schedule 6.7      --       Litigation; Loss Contingencies (Section 6.7)

Schedule 6.8      --       Subsidiaries (Section 6.8)

Schedule 6.9      --       ERISA (Section 6.9)

Schedule 6.18     --       Environmental Matters (Section 6.18)

Schedule 7.3(F)   --       Restricted Payments



                                                       -vi-

<PAGE>



                                       AMENDED AND RESTATED CREDIT AGREEMENT

         This Amended and Restated Credit Agreement dated as of February 1, 2000
is  entered  into  among  FinishMaster,   Inc.,  an  Indiana  corporation,   the
institutions  from time to time parties hereto as Lenders,  whether by execution
of this Agreement or an Assignment  Agreement pursuant to Section 13.3, and Bank
One, Indiana, N.A., in its capacity as contractual representative for itself and
the other Lenders. The parties hereto agree as follows:

ARTICLE I:  DEFINITIONS

         1.1 Certain Defined Terms. In addition to the terms defined above,  the
following  terms  used in this  Agreement  shall  have the  following  meanings,
applicable both to the singular and the plural forms of the terms defined.

         As used in this Agreement:

         "Acquisition"   means  any  transaction,   or  any  series  of  related
transactions,  consummated on or after the date of this Agreement,  by which the
Borrower or any of its  Subsidiaries  (i) acquires any going  business or all or
substantially  all of the assets of any firm,  corporation or division  thereof,
whether  through  purchase of assets,  merger or otherwise  or (ii)  directly or
indirectly  acquires (in one transaction or as the most recent  transaction in a
series  of  transactions)  at least a  majority  (in  number  of  votes)  of the
securities of a corporation which have ordinary voting power for the election of
directors  (other  than  securities  having  such  power  only by  reason of the
happening of a contingency) or a majority (by percentage of voting power) of the
outstanding equity interests of another Person.

         "Acquisition Facility  Availability" means, at any particular time, the
amount by which (a) the Aggregate  Acquisition  Facility Commitment at such time
exceeds (b) the outstanding  principal amount of the Acquisition  Facility Loans
at such time.

         "Acquisition   Facility   Commitment"   means,  for  each  Lender,  the
obligation of such Lender to make  Acquisition  Facility Loans not exceeding the
amount set forth on Exhibit A to this Agreement  opposite its name thereon under
the heading  "Acquisition  Facility  Commitment"  or the  signature  page of the
assignment  and  acceptance  by which it became a Lender,  as such amount may be
modified  from time to time  pursuant to the terms of this  Agreement or to give
effect to any applicable assignment and acceptance.

         "Acquisition Facility Loan" is defined in Section 2.2A hereof.

         "Acquisition Facility Loan Termination Date" means February 1, 2002.

         "Acquisition  Facility Note" means a promissory  note, in substantially
the form of Exhibit B-4 hereto, duly executed by the Borrower and payable to the
order of a Lender in the amount of



                                                        -1-


<PAGE>



its  Acquisition  Facility  Commitment,  including any  amendment,  restatement,
modification, renewal or replacement of such Acquisition Facility Note.

         "Acquisition  Loan Pro Rata Share" shall mean, at any  particular  time
and with  respect to any Lender,  the  percentage  obtained by dividing (A) such
Lender's Acquisition  Facility Commitment (or the outstanding  principal balance
of  such  Lender's  Acquisition  Facility  Loans  if  the  Acquisition  Facility
Commitments have been terminated pursuant to the terms of this Agreement) by (B)
the Aggregate  Acquisition  Facility  Commitment (or the  outstanding  principal
balance  of  the  Acquisition   Facility  Loans  if  the  Acquisition   Facility
Commitments have been terminated pursuant to the terms of this Agreement).

         "Advance"  means a  borrowing  hereunder  consisting  of the  aggregate
amount of the several Loans made by the Lenders to the Borrower of the same Type
and, in the case of Eurodollar Rate Advances, for the same Interest Period.

         "Affected Lender" is defined in Section 2.20 hereof.

         "Affiliate" of any Person means any other Person directly or indirectly
controlling,  controlled by or under common  control with such Person.  A Person
shall be deemed to  control  another  Person  if the  controlling  Person is the
"beneficial  owner" (as defined in Rule 13d-3 under the Securities  Exchange Act
of 1934)  of  greater  than ten  percent  (10%) or more of any  class of  voting
securities (or other voting  interests) of the  controlled  Person or possesses,
directly  or  indirectly,  the power to direct  or cause  the  direction  of the
management or policies of the controlled  Person,  whether through  ownership of
Capital Stock, by contract or otherwise.

         "Agent" means Bank One,  Indiana,  N.A. in its capacity as  contractual
representative  for itself and the Lenders pursuant to Article XI hereof and any
successor Agent appointed pursuant to Article XI hereof.

         "Aggregate  Acquisition Facility Commitment" means the aggregate of the
Acquisition  Facility  Commitments  of all the Lenders,  as reduced from time to
time pursuant to the terms hereof.  The initial Aggregate  Acquisition  Facility
Commitment   is  Seven  Million  Five  Hundred   Thousand  and  00/100   Dollars
($7,500,000).

         "Aggregate  Revolving  Loan  Commitment"  means  the  aggregate  of the
Revolving  Loan  Commitments  of all the  Lenders,  as reduced from time to time
pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is
Sixty Million and 00/100 Dollars ($60,000,000.00).

         "Aggregate Term Loan  Commitment"  means the aggregate of the Term Loan
Commitments  of all the Lenders.  The  Aggregate  Term Loan  Commitment is Forty
Million and 00/100 Dollars ($40,000,000.00).

         "Agreement" means this Amended and Restated Credit Agreement, as it may
be further amended,  restated,  supplemented or otherwise modified and in effect
from time to time.



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<PAGE>



         "Agreement  Accounting  Principles" means generally accepted accounting
principles  as in effect as of the date of this  Agreement,  applied in a manner
consistent with that used in preparing the financial  statements  referred to in
Section  6.4(B)(1)  hereof;  provided,  however,  that all pro  forma  financial
statements  reflecting  Acquisitions  shall be prepared in  accordance  with the
requirements  established  by the  Commission  for  acquisition  accounting  for
reporting acquisitions by public companies (whether or not such Acquisitions are
required to be publicly reported).

         "Alternate  Base  Rate"  means,  for any  day,  a  fluctuating  rate of
interest  per annum  equal to the  higher of (i) the Prime Rate for such day and
(ii)  the sum of (a) the  Federal  Funds  Effective  Rate  for  such day and (b)
one-half of one percent (0.5%) per annum.

         "Applicable  Commitment  Fee  Percentage"  means,  as at  any  date  of
determination,  the rate per annum then applicable in the  determination  of the
amount payable under Section 2.15(C)(i) hereof determined in accordance with the
provisions of Section 2.15(D)(ii) hereof.

         "Applicable  Eurodollar Margin" means, as at any date of determination,
(a) with respect to all Loans other than  Acquisition  Facility Loans,  the rate
per annum then applicable to Eurodollar Rate Loans determined in accordance with
the provisions of Section 2.15(D)(ii) hereof and (b) with respect to Acquisition
Facility Loans, three percent (3%) per annum.

         "Applicable   Floating   Rate  Margin"   means,   as  at  any  date  of
determination,  (a) with  respect to all Loans other than  Acquisition  Facility
Loans, the rate per annum then applicable to Floating Rate Loans,  determined in
accordance  with the  provisions  of  Section  2.15(D)(ii)  hereof  and (b) with
respect to Acquisition Facility Loans, one percent (1%) per annum.

         "Applicable L/C Fee Percentage" means, as at any date of determination,
a rate per annum equal to the Applicable  Eurodollar  Margin for Revolving Loans
in effect on such date.

         "Arranger"means Banc One Capital Markets, Inc. (formerly known as First
Chicago  Capital  Markets,  Inc.),  in its capacity as the arranger for the loan
transactions evidenced by this Agreement.

         "Assignment   Agreement"   shall  mean  an  assignment  and  acceptance
agreement entered into in connection with an assignment pursuant to Section 13.3
hereof in substantially the form of Exhibit E.

         "Asset  Sale"  means,  with  respect to any  Person,  the sale,  lease,
conveyance,  disposition  or other  transfer by such Person of any of its assets
(including  by way of a  sale-leaseback  transaction  and  including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person).

         "Authorized  Officer"  means  any of  the  Chairman,  President,  Chief
Financial  Officer,  Treasurer or Assistant  Secretary of the  Borrower,  acting
singly.



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<PAGE>



         "Bank One" means Bank One, Indiana,  N.A.  (formerly known as NBD Bank,
N.A.), together with its successors.

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

         "Borrower" means FinishMaster,  Inc., an Indiana corporation,  together
with its successors and assigns,  including a debtor-in-possession  on behalf of
the Borrower.

         "Borrower  Security  Agreement" means that certain  Security  Agreement
dated as of November 19, 1997 executed by the Borrower in favor of the Agent for
the  benefit of the  Holders  of  Secured  Obligations,  as  amended,  restated,
supplemented or otherwise modified from time to time.

         "Borrowing  Base" means, as of any date of calculation,  an amount,  as
set forth on the most current Borrowing Base Certificate delivered to the Agent,
equal to: (i) eighty percent (80%) of the Gross Amount of Eligible  Receivables;
plus (ii)  sixty-five  percent  (65%) of the Gross Amount of Eligible  Inventory
minus a reserve  equal to three  months'  rent  with  respect  to any  Inventory
located on premises leased by the Borrower from a landlord that has not executed
a landlord lien waiver  acceptable to the Agent to the extent such  Inventory is
located in a state which the Agent has  determined  has a  statutory  landlord's
lien;  plus (iii) at all times  between  the  Closing  Date and April 30,  2001,
$7,500,000;  plus  (iv) at all  times  between  December  1, 2001 (and each year
thereafter) and April 30, 2002 (and each year thereafter), $5,000,000.

         "Borrowing Base Certificate" means a certificate,  in substantially the
form of Exhibit C-1 attached  hereto and made a part hereof,  setting  forth the
Borrowing Base and the component calculations thereof.

         "Borrowing Date" means a date on which an Advance or Swing Line Loan is
made hereunder.

         "Borrowing Notice" is defined in Section 2.8 hereof.

         "Business  Activity  Report" means (A) a Notice of Business  Activities
Report  from the State of  Minnesota,  Department  of Revenue or (B) any similar
report  required by any other State  relating to the ability of the  Borrower to
enforce its accounts  receivable  claims against  account debtors located in any
such state.

         "Business Day" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing  interest at the Eurodollar Rate, a day (other than a
Saturday  or  Sunday)  on which  banks are open for  business  in  Indianapolis,
Indiana and Chicago, Illinois and on which dealings in Dollars are carried on in
the London interbank market and (ii) for all other purposes a day (other



                                                        -4-


<PAGE>



than a Saturday or Sunday) on which banks are open for business in Indianapolis,
Indiana and Chicago, Illinois.

         "Capital  Expenditures"  means,  for any period,  the  aggregate of all
expenditures  (whether  paid in cash or accrued  as  liabilities  and  including
Capitalized  Leases and Permitted  Purchase Money  Indebtedness) by the Borrower
and its  Subsidiaries  during that period that,  in  conformity  with  Agreement
Accounting  Principles,  are  required  to be included  in or  reflected  by the
property,  plant,  equipment or similar  fixed asset  accounts  reflected in the
consolidated  balance sheet of the Borrower and its  Subsidiaries,  exclusive of
Permitted Acquisitions.

         "Capital  Stock"  means  (i) in the  case of a  corporation,  corporate
stock,  (ii) in the  case of an  association  or  business  entity,  any and all
shares,  interests,   participations,   rights  or  other  equivalents  (however
designated) of corporate stock, (iii) in the case of a partnership,  partnership
interests   (whether  general  or  limited)  and  (iv)  any  other  interest  or
participation  that  confers  on a Person  the  right to  receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.

         "Capitalized  Lease" of a Person  means any lease of  property  by such
Person as lessee which would be  capitalized  on a balance  sheet of such Person
prepared in accordance with Agreement Accounting Principles.

         "Capitalized  Lease  Obligations"  of a Person  means the amount of the
obligations of such Person under  Capitalized  Leases which would be capitalized
on a  balance  sheet  of such  Person  prepared  in  accordance  with  Agreement
Accounting Principles.

         "Cash  Equivalents"  means (i) marketable direct  obligations issued or
unconditionally  guaranteed  by the United States  government  and backed by the
full  faith and  credit of the  United  States  government;  (ii)  domestic  and
Eurodollar  certificates of deposit and time deposits,  bankers' acceptances and
floating rate  certificates  of deposit issued by any commercial  bank organized
under  the laws of the  United  States,  any  state  thereof,  the  District  of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ninety (90)
days);  (iii) shares of money  market,  mutual or similar funds having assets in
excess of  $100,000,000  and the  investments of which are limited to investment
grade  securities  (i.e.,  securities  rated at least Baa by  Moody's  Investors
Service,  Inc. or at least BBB by  Standard & Poor's  Ratings  Group);  and (iv)
commercial  paper of United States and foreign banks and bank holding  companies
and their  subsidiaries  and  United  States  and  foreign  finance,  commercial
industrial or utility companies which, at the time of acquisition, are rated A-1
(or better) by Standard & Poor's  Ratings  Group,  or P-1 (or better) by Moody's
Investors Service,  Inc.;  provided that the maturities of such Cash Equivalents
shall not exceed 365 days.

         "Change" is defined in Section 4.2 hereof.

         "Change of Control" means an event or series of events by which:



                                                        -5-


<PAGE>



                  (a) LDI ceases to own and control directly or indirectly,  51%
         or more of the combined  voting power of the  Borrower's  Capital Stock
         ordinarily having the right to vote at an election of directors; or

                  (b)  during  any period of twelve  (12)  consecutive  calendar
         months,  individuals:  (i) who were  directors  of the  Borrower on the
         first day of such  period,  or (ii) whose  election or  nomination  for
         election to the board of directors of the Borrower was  recommended  or
         approved by at least a majority of the  directors  then still in office
         who were directors of the Borrower on the first day of such period,  or
         whose election or nomination for election was so approved,  shall cease
         to constitute a majority of the board of directors of the Borrower; or

                  (c) the  Borrower  consolidates  with or merges  into  another
         corporation or conveys, transfers or leases all or substantially all of
         its property to any Person,  or any  corporation  consolidates  with or
         merges into the Borrower,  in either event pursuant to a transaction in
         which the outstanding  Capital Stock of the Borrower is reclassified or
         changed into or exchanged for cash, securities or other property.

         "Closing Date" means February 1, 2000.

         "Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

         "Collateral"  means all property and interests in property now owned or
hereafter acquired by the Borrower or any of its Subsidiaries in or upon which a
security interest,  lien or mortgage is granted to the Agent, for the benefit of
the  Holders of Secured  Obligations,  or to the Agent,  for the  benefit of the
Lenders,  whether  under the Security  Agreements,  the Pledge  Agreements,  the
Intellectual Property Agreements, under any of the other Collateral Documents or
under any of the other Loan Documents.

         "Collateral Documents" means all agreements,  instruments and documents
executed in connection with this Agreement,  including,  without limitation, the
Security   Agreements,   the  Pledge  Agreements,   the  Intellectual   Property
Agreements,  the Guarantees and all other security agreements,  loan agreements,
notes,  guarantees,   pledges,  powers  of  attorney,   consents,   assignments,
contracts,  fee letters,  notices,  leases,  financing  statements and all other
written matter whether heretofore (including in connection with the execution of
the Original Credit Agreement), now, or hereafter (including pursuant to Section
7.2(L)  hereof)  executed  by or on  behalf  of  the  Borrower  or  any  of  its
Subsidiaries and delivered to the Agent or any of the Lenders, together with all
agreements and documents referred to therein or contemplated thereby.

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

         "Commitment"  means,  for  each  Lender,  collectively,  such  Lender's
Revolving  Loan  Commitment,  Acquisition  Facility  Commitment  and  Term  Loan
Commitment.



                                                        -6-


<PAGE>



         "Consolidated  Assets"  means the total  assets of the Borrower and its
Subsidiaries  on a consolidated  basis  determined in accordance  with Agreement
Accounting Principles.

         "Consolidated Net Worth" means, at a particular date, all amounts which
would be included under shareholders' equity for any Person and its consolidated
Subsidiaries determined in accordance with Agreement Accounting Principles.

         "Contaminant" means any waste,  pollutant,  hazardous substance,  toxic
substance,  hazardous  waste,  special  waste,  petroleum  or  petroleum-derived
substance  or  waste,  asbestos,  polychlorinated  biphenyls  ("PCBs"),  or  any
constituent of any such  substance or waste,  and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.

         "Contingent   Obligation",   as  applied  to  any  Person,   means  any
Contractual Obligation,  contingent or otherwise, of that Person with respect to
any  Indebtedness  of another  or other  obligation  or  liability  of  another,
including, without limitation, any such Indebtedness, obligation or liability of
another  directly  or  indirectly  guaranteed,   endorsed  (otherwise  than  for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with  recourse  by that  Person,  or in respect of which that  Person is
otherwise  directly or  indirectly  liable,  including  Contractual  Obligations
(contingent or otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such Indebtedness,  obligation or liability or any security
therefor,  or to provide funds for the payment or discharge  thereof (whether in
the  form  of  loans,  advances,  stock  purchases,   capital  contributions  or
otherwise), or to maintain solvency, assets, level of income, or other financial
condition, or to make payment other than for value received.

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

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

         "Controlled Subsidiary" of any Person means a Subsidiary of such Person
(i) 90% or more of the total Equity  Interests or other  ownership  interests of
which (other than  directors'  qualifying  shares) shall at the time be owned by
such Person or by one or more wholly-owned  Subsidiaries of such Person and (ii)
of which such Person possesses,  directly or indirectly,  the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.



                                                        -7-


<PAGE>



         "Conversion/Continuation Notice" is defined in Section 2.10(D) hereof.

         "Cure Loan" is defined in Section 9.2(iii) hereof.

         "Customary Permitted Liens" means:

                  (i) Liens (other than  Environmental  Liens and Liens in favor
         of the  IRS  or the  PBGC)  with  respect  to  the  payment  of  taxes,
         assessments or governmental  charges in all cases which are not yet due
         or (if foreclosure,  distraint, sale or other similar proceedings shall
         not have been  commenced)  which are being  contested  in good faith by
         appropriate  proceedings  properly instituted and diligently  conducted
         and  with  respect  to which  adequate  reserves  or other  appropriate
         provisions are being maintained in accordance with Agreement Accounting
         Principles;

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

                  (iii) Liens (other than Environmental Liens and Liens in favor
         of the IRS or the  PBGC)  incurred  or  deposits  made in the  ordinary
         course  of  business  in   connection   with   worker's   compensation,
         unemployment insurance or other types of social security benefits or to
         secure the performance of bids, tenders,  sales,  contracts (other than
         for the repayment of borrowed  money),  surety,  appeal and performance
         bonds;  provided  that  (A)  all  such  Liens  do not in the  aggregate
         materially   detract  from  the  value  of  the   Borrower's   or  such
         Subsidiary's  assets or property taken as a whole or materially  impair
         the use thereof in the  operation of the  businesses  taken as a whole,
         and (B) all Liens  securing  bonds to stay  judgments or in  connection
         with  appeals do not secure at any time an aggregate  amount  exceeding
         $1,000,000;

                  (iv)  Liens  arising  with  respect  to  zoning  restrictions,
         easements, licenses, reservations,  covenants,  rights-of-way,  utility
         easements,   building   restrictions   and  other  similar  charges  or
         encumbrances  on the  use of real  property  which  do not in any  case
         materially  detract from the value of the property  subject  thereto or
         interfere with the ordinary  conduct of the business of the Borrower or
         any of its Subsidiaries;

                  (v) Liens of attachment or judgment with respect to judgments,
         writs or  warrants  of  attachment,  or  similar  process  against  the
         Borrower or any of its  Subsidiaries  which do not constitute a Default
         under Section 8.1(H) hereof; and

                  (vi)  any  interest  or title of the  lessor  in the  property
         subject to any  operating  lease entered into by the Borrower or any of
         its Subsidiaries in the ordinary course of business.



                                                        -8-


<PAGE>



         "Default" means an event described in Article VIII hereof.

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

         "Dollar"  and "$" means  dollars in the lawful  currency  of the United
States.

         "EBITDA"  means,  for  any  period,  on a  consolidated  basis  for the
Borrower and its Subsidiaries,  the sum of the amounts for such period,  without
duplication,  of (i) Net Income, plus (ii) Interest Expense,  plus (iii) charges
against  income  for  foreign,  federal,  state  and local  taxes to the  extent
deducted in computing Net Income,  plus (iv) depreciation  expense to the extent
deducted in computing  Net Income,  plus (v)  amortization  expense,  including,
without  limitation,  amortization of goodwill and other  intangible  assets and
Transaction  Costs to the extent  deducted in  computing  Net Income,  plus (vi)
other  non-cash  charges  classified as long-term  deferrals in accordance  with
Agreement Accounting  Principles to the extent deducted in computing Net Income,
plus (vii)  other  extraordinary  non-cash  charges to the  extent  deducted  in
computing Net Income.

         "Eligible  Inventory" means Inventory of the Borrower which is held, by
the  Borrower  or any  party  contractually  obligated  to store or  handle  the
inventory,  for sale or lease in the  ordinary  course of business or  furnished
under any contract of service by the Borrower which  continues to meet standards
of eligibility  from time to time established in accordance with this Agreement.
Standards of  eligibility  will be  established  by the Agent in its  reasonable
credit  judgment  and may be  revised  from  time to  time by the  Agent  in its
reasonable credit judgment (which credit judgment shall be exercised in a manner
that is not  arbitrary  or  capricious  and shall be  exercised  in a manner not
inconsistent with the manner in which the initial  ineligibility  standards were
determined). In general, without limiting the foregoing, the following inventory
is not  Eligible  Inventory:  (i)  Inventory  which  is  obsolete,  not in  good
condition,  not either  currently  usable or currently  saleable in the ordinary
course  of the  Borrower's  business  or does not meet  all  material  standards
imposed by any governmental authority having regulatory authority over such item
of  Inventory,  its use or its sale;  (ii)  Inventory  consisting  of  packaging
material,  supplies,  raw material or work in process; (iii) Inventory which (a)
is  consigned  to a third party for sale or (b) is on  consignment  from a third
party to the  Borrower  for sale;  (iv)  Inventory  which  consists  of goods in
transit which has been sold to a dealer or distributor of the Borrower and is in
the process of being  delivered  to that dealer or  distributor;  (v)  Inventory
which is  subject to a Lien in favor of any  Person  other than the Agent  other
than Customary  Permitted Liens or Permitted Existing Liens; (vi) Inventory with
respect  to which the Agent  does not have a first  and valid  fully-  perfected
security  interest;  (vii)  Inventory  which is not  located  either  (a) on the
Borrower's  owned  premises  in the United  States  listed on  Schedule 2 to the
Borrower Security Agreement or (b) in other owned or leased premises, warehouses
or with  bailees  in the United  States  listed on  Schedule  2 to the  Borrower
Security  Agreement or permitted to be established  under the Borrower  Security
Agreement;  (viii)  Inventory  which  is  evidenced  by a  Receivable;  and (ix)
Inventory  which  is  not  in  full  conformity  with  the  representations  and
warranties  made by the  Borrower  to the Agent  with  respect  thereto  whether
contained in this Agreement or the Borrower Security Agreement.



                                                        -9-


<PAGE>



         "Eligible   Receivables"  means  accounts  receivable  created  by  the
Borrower in the ordinary course of its business arising out of the sale of goods
or rendition of services by the Borrower, which receivables are and at all times
shall continue to meet standards of eligibility from time to time established in
accordance with this Agreement.  Standards of eligibility will be established by
the Agent in its reasonable credit judgment and may be revised from time to time
by the Agent in its reasonable  credit  judgment (which credit judgment shall be
exercised in a manner that is not arbitrary or capricious and shall be exercised
in a manner not inconsistent with the manner in which the initial  ineligibility
standards were  determined).  In general,  without  limiting the foregoing,  the
following receivables are not Eligible Receivables:

         (i) receivables  which remain unpaid ninety (90) days after the date of
the original applicable invoice or sixty (60) days after the due date, whichever
is earlier, except those receivables subject to dated terms extended by Borrower
in an aggregate amount not to exceed  $5,000,000 as of the date of determination
will be treated as eligible (subject to the other  eligibility  criteria) to the
extent such  receivables are not unpaid more than ninety (90) days after the due
date and the due date is not more than one hundred  eighty  (180) days after the
date of the original applicable invoice.

         (ii)  receivables  with  respect  to  which  the  account  debtor  is a
director, officer, employee, Subsidiary or Affiliate of the Borrower;

         (iii)  receivables  with  respect  to which the  account  debtor is any
federal governmental authority,  the United States of America, or, in each case,
any department,  agency or instrumentality  thereof,  unless with respect to any
such receivable,  the Borrower has complied to the Agent's satisfaction with the
provisions of the Federal Assignment of Claims Act or other applicable statutes,
including, without limitation,  executing and delivering to Agent all statements
of assignment and/or notification which are in form and substance  acceptable to
Agent and which are deemed  necessary by Agent to effectuate  the  assignment to
the Agent of such receivables.

         (iv)  receivables not denominated in U.S. Dollars or Canadian Dollars;

         (v)  receivables  with respect to which the account debtor is (a) not a
resident  of the United  States  unless the  account  debtor  has  supplied  the
Borrower with an irrevocable letter of credit issued by a financial  institution
satisfactory  to the  Agent  sufficient  to cover  such  receivable  in form and
substance satisfactory to the Agent;

         (vi)  receivables  with  respect  to which the  account  debtor has (a)
asserted a counterclaim,  (b) a right of setoff,  or (c) a receivable owing from
the  Borrower  but only to the extent of such  counterclaim,  setoff,  rebate or
receivable;

         (vii) receivables with respect to which the Agent does not have a first
and valid fully perfected and enforceable security interest for which notice has
been  provided to the Borrower  subject only to  Customary  Permitted  Liens and
Permitted Existing Liens;



                                                       -10-


<PAGE>



         (viii)  receivables  with  respect to which the  account  debtor is the
subject  of  bankruptcy  or a  similar  insolvency  proceeding  or has  made  an
assignment  for the benefit of creditors or whose assets have been conveyed to a
receiver, trustee or assignee for the benefit of creditors;

         (xi) receivables with respect to which the account debtor's  obligation
to pay the receivable is conditional  upon the account  debtor's  approval or is
otherwise subject to any contractual  repurchase  obligation or return right, as
with sales made on a bill-and-hold,  guaranteed sale,  sale-and-return,  sale on
approval  (except with respect to receivables  in connection  with which Account
Debtors  are  entitled to return  Inventory  on the basis of the quality of such
Inventory) or consignment basis;

         (x) receivables  with respect to which the account debtor is located in
Minnesota (or any other jurisdiction which adopts a statute or other requirement
with  respect  to which any  Person  that  obtains  business  from  within  such
jurisdiction or is otherwise  subject to such  jurisdiction's  tax law requiring
such  Person to file a  Business  Activity  Report  or make any  other  required
filings in a timely manner in order to enforce its claims in such jurisdiction's
courts or arising  under such  jurisdiction's  laws);  provided,  however,  such
receivables  shall  nonetheless be eligible if the Borrower has filed a Business
Activity Report (or other applicable report or filing) with the applicable state
office by the time required or is qualified to do business in such  jurisdiction
and, at the time the  receivable  was created,  was  qualified to do business in
such  jurisdiction  or had on file with the  applicable  state  office a current
Business Activity Report (or other applicable report or filing);

         (xi) receivables with respect to which the account debtor's  obligation
does not constitute its legal, valid and binding obligation, enforceable against
it in accordance with its terms;

         (xii)  receivables  with  respect  to which  the  Borrower  has not yet
shipped the applicable  goods,  performed the  applicable  service or issued the
applicable invoice;

         (xiii)   any   receivable   which  is  not  in   conformity   with  the
representations  and  warranties  made by the Borrower to the Agent with respect
thereto whether contained in this Agreement or the Borrower Security Agreement;

         (xiv)  receivables  in connection  with which the Borrower or any other
party to such  Receivable is in default in the  performance or observance of any
of the terms thereof in any material respect; and

         (xv)  receivables  for which the prospect of payment or  performance by
the  account  debtor is or will be impaired  as  determined  by the Agent in the
exercise of its reasonable  credit  judgment (which credit judgment shall not be
exercised in a manner that is arbitrary or capricious  and shall be exercised in
a manner not  inconsistent  with the manner in which the  initial  ineligibility
standards were determined).

         "Environmental,  Health  or  Safety  Requirements  of  Law"  means  all
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or



                                                       -11-


<PAGE>



addressing  pollution or protection of the environment,  or protection of worker
health or safety, including, but not limited to, the Comprehensive Environmental
Response,  Compensation  and  Liability  Act,  42  U.S.C.ss.  9601 et seq.,  the
Occupational  Safety and Health Act of 1970, 29  U.S.C.ss.651  et seq.,  and the
Resource  Conservation  and Recovery Act of 1976, 42 U.S.C. ss. 6901 et seq., in
each case  including any amendments  thereto,  any successor  statutes,  and any
regulations  or  guidance  promulgated  thereunder,   and  any  state  or  local
equivalent thereof.

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

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

         "Equity  Interests"  means Capital  Stock and all warrants,  options or
other rights to acquire  Capital Stock (but  excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended from time to time including (unless the context otherwise  requires) any
rules or regulations promulgated thereunder.

         "Eurodollar  Base Rate" means,  with respect to a Eurodollar  Rate Loan
for any  specified  Interest  Period,  either (i) the rate of interest per annum
equal to the rate for deposits in U.S. Dollars in the approximate  amount of the
pro  rata  share  of Bank  One of such  Eurodollar  Rate  Loan  with a  maturity
approximately equal to such Interest Period which appears on Telerate Page 3750,
or, if there is more than one such rate,  the  average of such rates  rounded to
the nearest 1/100 of 1%, as of 11:00 a.m.  (London time) two Business Days prior
to the first  day of such  Interest  Period or (ii) if no such rate of  interest
appears on Telerate Page 3750 for any  specified  Interest  Period,  the rate at
which deposits in U.S.  Dollars are offered by Bank One to first-class  banks in
the  London  interbank  market at  approximately  11:00 a.m.  (London  time) two
Business Days prior to the first day of such Interest Period, in the approximate
amount of the pro rata share of Bank One of such Eurodollar Rate Loan and having
a maturity  approximately equal to such Interest Period. The term "Telerate Page
3750" means the display  designated as "Page 3750" on the  Associated  Press-Dow
Jones  Telerate  Service  (or such  other page as may  replace  Page 3750 on the
Associated  Press-Dow  Jones  Telerate  Service or such other  service as may be
nominated by the British Bankers'  Association as the information vendor for the
purpose of displaying  British  Bankers'  Association  interest rate  settlement
rates for U.S. Dollars). Any Eurodollar Base Rate determined on the basis of the
rate displayed on Telerate Page 3750 in accordance with the foregoing provisions
of this subparagraph shall be subject to corrections, if any, made in such rate



                                                       -12-


<PAGE>



and displayed by the Associated Press-Dow Jones Telerate Service within one hour
of the time when such rate is first displayed by such service.

         "Eurodollar Rate" means, with respect to a Eurodollar Rate Loan for the
relevant  Interest Period,  the Eurodollar Base Rate applicable to such Interest
Period plus the then Applicable  Eurodollar Margin. The Eurodollar Rate shall be
rounded  to the next  higher  multiple  of 1/100 of 1% if the rate is not such a
multiple.

         "Eurodollar  Rate Advance" means an Advance which bears interest at the
Eurodollar Rate.

         "Eurodollar  Rate Loan" means a Loan, or portion  thereof,  which bears
interest at the Eurodollar Rate.

         "Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the  weighted  average of the rates on  overnight  Federal  funds
transactions  with  members of the Federal  Reserve  System  arranged by Federal
funds  brokers on such day, as published  for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York,  or, if such rate is not so  published  for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions  received by the Agent from three Federal
funds  brokers  of  recognized  standing  selected  by the  Agent  in  its  sole
discretion.

         "Financing"  means, with respect to any Person, the issuance or sale by
such  Person  of any  Equity  Interests  of  such  Person  or  any  Indebtedness
consisting of debt securities of such Person.

         "Fixed Charge Coverage Ratio" is defined in Section 7.4(A) hereof.

         "Floating Rate" means, for any day for any Loan, a rate per annum equal
to the Alternate Base Rate for such day, changing when and as the Alternate Base
Rate changes, plus the then Applicable Floating Rate Margin.

         "Floating  Rate Advance"  means an Advance which bears  interest at the
Floating Rate.

         "Floating  Rate Loan"  means a Loan,  or portion  thereof,  which bears
interest at the Floating Rate.

         "Governmental Acts" is defined in Section 3.10(A) hereof.

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



                                                       -13-


<PAGE>



         "Gross Amount of Eligible Inventory" means Eligible Inventory valued at
cost  determined on a  first-in-first-out  basis  (determined in accordance with
Agreement Accounting  Principles,  consistently  applied) minus such reserves as
the Agent elects to establish in accordance with its reasonable  credit judgment
(which credit  judgment  shall be exercised in a manner that is not arbitrary or
capricious and shall be exercised in a manner not  inconsistent  with the manner
in which the initial ineligibility standards were determined).

         "Gross  Amount of  Eligible  Receivables"  means the  outstanding  face
amount  of  Eligible  Receivables,   determined  in  accordance  with  Agreement
Accounting Principles,  consistently applied, less (i) all finance charges, late
fees and other fees that are  unearned,  (ii) the value of any accrual which has
been recorded by the Borrower  with respect to downward  price  adjustments  and
(iii) and such other  reserves as the Agent elects to  establish  in  accordance
with its reasonable credit judgment (which credit judgment shall be exercised in
a manner that is not arbitrary or capricious  and shall be exercised in a manner
not inconsistent  with the manner in which the initial  ineligibility  standards
were determined).

         "Gross Negligence" means recklessness, or actions taken or omitted with
conscious  indifference  to or the  complete  disregard of  consequences.  Gross
Negligence  does not mean the  absence  of  ordinary  care or  diligence,  or an
inadvertent act or inadvertent failure to act. If the term "gross negligence" is
used with respect to the Agent,  the Arranger or any Lender or any indemnitee in
any of the other Loan Documents, it shall have the meaning set forth herein.

         "Guarantors"  means (i) all of the  Borrower's  Subsidiaries  as of the
Closing  Date and (ii) any other  new  Subsidiaries  which  have  satisfied  the
provisions  of  Section  7.2(L)  hereof,  in  each  case,  together  with  their
respective successors and assigns.

         "Guaranty"  means  any  guaranty  whether   heretofore   (including  in
connection  with the  execution  of the  Original  Credit  Agreement),  now,  or
hereafter  (including pursuant to Section 7.2(L) hereof) executed by a Guarantor
in  favor of the  Agent  for the  ratable  benefit  of the  Holders  of  Secured
Obligations,  in each case, as amended, restated or otherwise modified from time
to time.

         "Hedging Obligations" of a Person means any and all obligations of such
Person,  whether  absolute or contingent and howsoever and  whensoever  created,
arising,   evidenced  or  acquired  (including  all  renewals,   extensions  and
modifications  thereof  and  substitutions  therefor),  under  (i)  any  and all
agreements,  devices  or  arrangements  designed  to protect at least one of the
parties  thereto from the  fluctuations  of interest  rates,  commodity  prices,
exchange rates or forward rates  applicable to such party's assets,  liabilities
or exchange transactions,  including, but not limited to,  dollar-denominated or
cross-currency  interest rate exchange  agreements,  forward  currency  exchange
agreements,  interest  rate cap or collar  protection  agreements,  forward rate
currency or  interest  rate  options,  puts and  warrants,  and (ii) any and all
cancellations,  buy backs, reversals,  terminations or assignments of any of the
foregoing.



                                                       -14-


<PAGE>



         "High Yield Note  Agreement"  means the Indenture  between the Borrower
and a trustee  acting on behalf  of the note  purchasers  pursuant  to which the
Borrower  may plan to issue  notes in the  original  principal  amount  of up to
$100,000,000.

         "Holders of Secured  Obligations" shall mean the holders of the Secured
Obligations from time to time, including, without limitation, (i) each Lender in
respect  of its  Loans,  (ii) each  Issuing  Bank in  respect  of  Reimbursement
Obligations,  (iii) the Agents, the Lenders, the Swing Line Bank and the Issuing
Banks in respect of all other present and future  obligations and liabilities of
the Borrower or any of its  Subsidiaries of every type and  description  arising
under or in connection  with this  Agreement or any other Loan  Document,  (iii)
each Indemnitee in respect of the obligations and liabilities of the Borrower to
such Person hereunder,  (iv) each Lender (or affiliate  thereof),  in respect of
all  Hedging  Obligations  of the  Borrower or any of its  Subsidiaries  to such
Lender (or such affiliate) as exchange party or  counterparty  under any Hedging
Agreement, and (v) their respective successors, transferees and assigns.

         "Indebtedness" of any Person means, without duplication,  such Person's
(a) obligations for borrowed money,  (b) obligations  representing  the deferred
purchase price of property or services  (other than accounts  payable arising in
the ordinary course of such Person's  business payable on terms customary in the
trade), (c) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or production  from property or assets now or hereafter owned or
acquired  by  such  Person,  (d)  obligations  which  are  evidenced  by  notes,
acceptances  or  other  instruments,  (e)  Capitalized  Lease  Obligations,  (f)
Contingent  Obligations,  (g) obligations  with respect to letters of credit and
(h) Hedging  Obligations.  The amount of  Indebtedness of any Person at any date
shall be without  duplication  (i) the  outstanding  balance at such date of all
unconditional  obligations as described  above and the maximum  liability of any
such Contingent Obligations at such date and (ii) in the case of Indebtedness of
others  secured by a Lien to which the  property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject  to a Lien  securing  the  Indebtedness  of others and the amount of the
Indebtedness secured.

         "Indemnified Matters" is defined in Section 10.7(B) hereof.

         "Indemnitees" is defined in Section 10.7(B) hereof.

         "Intellectual  Property Agreement" means any patent security agreement,
trademark  security agreement or copyright security agreement whether heretofore
(including in connection with the execution of the Original  Credit  Agreement),
now, or hereafter  (including pursuant to Section 7.2(L) hereof) executed by the
Borrower  and its  Subsidiaries  in favor of the  Agent for the  benefit  of the
Holders of Secured Obligations,  in each case, as amended, restated or otherwise
modified from time to time.

         "Interest Expense" means, for any period, the total interest expense of
the  Borrower  and  its  consolidated  Subsidiaries,  whether  paid  or  accrued
(including the interest component of Capitalized  Leases,  commitment and letter
of credit fees) as reflected on the income statement of



                                                       -15-


<PAGE>



the Borrower and its consolidated Subsidiaries,  all as determined in conformity
with Agreement Accounting Principles.

         "Interest  Period"  means,  with respect to a  Eurodollar  Rate Loan, a
period of one (1), two (2), three (3) or six (6) months commencing on a Business
Day selected by the Borrower  pursuant to this  Agreement.  Such Interest Period
shall end on (but exclude) the day which  corresponds  numerically  to such date
one, two, three or six months thereafter; provided, however, that if there is no
such  numerically  corresponding  day in  such  next,  second,  third  or  sixth
succeeding  month,  such  Interest  Period shall end on the last Business Day of
such next,  second,  third or sixth succeeding  month, as the case may be. If an
Interest  Period would  otherwise end on a day which is not a Business Day, such
Interest  Period  shall  end on the  next  succeeding  Business  Day;  provided,
however,  that if said next  succeeding  Business  Day  falls in a new  calendar
month, such Interest Period shall end on the immediately preceding Business Day.

         "Interest Rate Agreements" is defined in Section 7.3(P) hereof.

         "Inventory"   shall  mean  any  and  all  goods,   including,   without
limitation,  goods  in  transit,  wheresoever  located,  whether  now  owned  or
hereafter acquired by the Borrower,  which are held for sale or lease, furnished
under any  contract  of  service  or held as raw  materials,  work in process or
supplies,  and all materials  used or consumed in the business of Borrower,  and
shall include all right,  title and interest of the Borrower in any property the
sale or other  disposition of which has given rise to receivables  and which has
been returned to or repossessed or stopped in transit by the Borrower.

         "Investment"  means,  with  respect to any Person,  (i) any purchase or
other acquisition by that Person of any Indebtedness,  Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities,  issued by any other Person,  (ii) any purchase by that Person
of all or  substantially  all of the assets of a business  conducted  by another
Person,  and  (iii)  any loan,  advance  (other  than  deposits  with  financial
institutions  available for  withdrawal on demand,  prepaid  expenses,  accounts
receivable,  advances to  employees  and  similar  items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person,  including  all  Indebtedness  to  such  Person  arising  from a sale of
property by such Person other than in the ordinary course of its business.

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

         "Issuing  Banks"  means(i) Bank One and (ii) any Lender  which,  at the
Borrower's request, agrees, in each such Lender's sole discretion,  to become an
Issuing Bank for the purpose of issuing Letters of Credit,  and their respective
successors and assigns,  in each case in such Lender's  separate  capacity as an
issuer of Letters of Credit  pursuant to Section  3.1.  The  designation  of any
Lender as an Issuing  Bank after the date  hereof  shall be subject to the prior
written consent of the Agent.

         "L/C Draft" means a draft drawn on an Issuing Bank pursuant to a Letter
of Credit.



                                                       -16-


<PAGE>



         "L/C Interest" shall have the meaning  ascribed to such term in Section
3.6 hereof.

         "L/C Obligations" means,  without  duplication,  an amount equal to the
sum of (i) the aggregate of the amount then  available for drawing under each of
the  Letters  of  Credit,  (ii) the face  amount of all  outstanding  L/C Drafts
corresponding  to the Letters of Credit,  which L/C Drafts have been accepted by
the  applicable  Issuing  Bank,  (iii) the aggregate  outstanding  amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of all
Letters of Credit  requested  by the  Borrower  but not yet issued  (unless  the
request for an unissued Letter of Credit has been denied).

         "LDI" means LDI, Ltd., an Indiana limited partnership.

         "Lenders" means the lending  institutions listed on the signature pages
of this Agreement and their respective successors and assigns.

         "Lending  Installation"  means,  with respect to a Lender or the Agent,
any office, branch, subsidiary or affiliate of such Lender or the Agent.

         "Letter  of  Credit"  means the  letters  of credit to be issued by the
Issuing Banks pursuant to Section 3.1 hereof.

         "Leverage Ratio" is defined in Section 7.4(B) hereof.

         "Lien"  means  any  lien  (statutory  or  other),   mortgage,   pledge,
hypothecation,  assignment,  deposit  arrangement,  encumbrance  or  preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever  (including,  without limitation,  the interest of a vendor or lessor
under  any  conditional  sale,   Capitalized  Lease  or  other  title  retention
agreement).

         "Loan(s)" means, with respect to a Lender, such Lender's portion of any
Advance  made  pursuant to Section 2.1,  Section 2.2 or Section 2.2A hereof,  as
applicable,  and in the case of the Swing  Line  Bank,  any Swing Line Loan made
pursuant to Section  2.3  hereof,  and  collectively  all Term Loans,  Revolving
Loans,  Acquisition  Facility  Loans  and  Swing  Line  Loans,  whether  made or
continued as or converted to Floating Rate Loans or Eurodollar Rate Loans.

         "Loan Account" is defined in Section 2.15(F) hereof.

         "Loan  Documents"  means  this  Agreement,  the  Notes  and  all  other
documents,  instruments  and  agreements  executed in  connection  therewith  or
contemplated thereby, as the same may be amended, restated or otherwise modified
and in effect from time to time.

         "Margin  Stock"  shall  have  the  meaning  ascribed  to  such  term in
Regulation U.

         "Material  Adverse Effect" means a material adverse effect upon (a) the
business,   condition   (financial  or  otherwise),   operations,   performance,
properties or prospects of the Borrower,  or the Borrower and its  Subsidiaries,
taken as a whole, (b) the ability of the Borrower



                                                       -17-


<PAGE>



or any of its  Subsidiaries to perform their  respective  obligations  under the
Loan Documents in any material respect, or (c) the ability of the Lenders or the
Agent to enforce in any material respect the Obligations.

         "Multiemployer Plan" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately  preceding six (6) years
was,  contributed  to by either the  Borrower  or any  member of the  Controlled
Group.

         "Net Cash  Proceeds"  means,  with  respect  to any  Asset  Sale or any
Financing by any Person, (a) cash (freely  convertible into Dollars) received by
such Person or any  Subsidiary  of such  Person from such Asset Sale  (including
cash received as  consideration  for the assumption or incurrence of liabilities
incurred  in  connection  with or in  anticipation  of such Asset  Sale) or such
Financing,  after (i)  provision  for all income or other  taxes  measured by or
resulting from such Asset Sale,  (ii) payment of all brokerage  commissions  and
other fees and expenses related to such Asset Sale or such Financing,  and (iii)
all amounts used to repay  Indebtedness  secured by a Lien on any asset disposed
of in such Asset Sale or which is or may be required  (by the  express  terms of
the instrument governing such Indebtedness) to be repaid in connection with such
Asset Sale (including  payments made to obtain or avoid the need for the consent
of any holder of such  Indebtedness);  and (b) cash  payments  in respect of any
other  consideration  received by such Person or any  Subsidiary  of such Person
from such Asset Sale upon  receipt of such cash  payments by such Person or such
Subsidiary.

         "Net Income"  means,  for any period,  the net earnings (or loss) after
taxes of the  Borrower and its  Subsidiaries  on a  consolidated  basis for such
period  taken  as a single  accounting  period  determined  in  conformity  with
Agreement Accounting Principles.

         "New Subsidiary" is defined in Section 7.3(G)(ii) hereof.

         "Non Pro Rata Loan" is defined in Section 9.2 hereof.

         "Notes"  means the  Revolving  Notes,  Swing  Line  Notes,  Acquisition
Facility Notes and Term Notes.

         "Notice of Assignment" is defined in Section 13.3(B) hereof.

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



                                                       -18-


<PAGE>



attorneys' fees and disbursements, paralegals' fees (in each case whether or not
allowed),  and any other sum  chargeable to the Borrower under this Agreement or
any other Loan Document.

         "Original  Credit  Agreement"  means the Credit  Agreement  dated as of
November 19, 1997 among the Borrower, the financial institutions parties thereto
as lenders  and the Agent,  as amended by  Amendment  No. 1 thereto  dated as of
December 10, 1997, Amendment No. 2 thereto dated as of March 27, 1998, Amendment
No. 3 thereto  dated as of October 30, 1998 and Amendment No. 4 thereto dated as
of September 22, 1999.

         "Other Taxes" is defined in Section 2.15(E)(ii) hereof.

         "Participants" is defined in Section 13.2(A) hereof.

         "Payment Date" means the last Business Day of each calendar quarter.

         "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

         "Permitted Acquisition" is defined in Section 7.3(G) hereof.

         "Permitted  Existing   Indebtedness"  means  the  Indebtedness  of  the
Borrower  and its  Subsidiaries  identified  as such on  Schedule  1.1.1 to this
Agreement.

         "Permitted Existing  Investments" means the Investments of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.2 to this Agreement.

         "Permitted  Existing  Liens"  means the Liens on assets of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.3 to this Agreement.

         "Permitted   Purchase  Money   Indebtedness"   is  defined  in  Section
7.3(A)(vii) hereof.

         "Permitted  Refinancing  Indebtedness" means any replacement,  renewal,
refinancing  or extension of any  Indebtedness  permitted by this Agreement that
(i) does not exceed the aggregate  principal  amount (plus accrued  interest and
any  applicable  premium and associated  fees and expenses) of the  Indebtedness
being replaced,  renewed,  refinanced or extended, (ii) does not have a Weighted
Average Life to Maturity at the time of such replacement,  renewal,  refinancing
or  extension  that is less than the  Weighted  Average  Life to Maturity of the
Indebtedness  being replaced,  renewed,  refinanced or extended,  (iii) does not
rank at the time of such replacement,  renewal,  refinancing or extension senior
to the Indebtedness being replaced,  renewed,  refinanced or extended,  and (iv)
does not  contain  terms  (including,  without  limitation,  terms  relating  to
security,  amortization,  interest rate,  premiums,  fees,  covenants,  event of
default  and  remedies)  materially  less  favorable  to the  Borrower or to the
Lenders than those  applicable  to the  Indebtedness  being  replaced,  renewed,
refinanced or extended.

         "Person"  means  any   individual,   corporation,   firm,   enterprise,
partnership,  trust, incorporated or unincorporated association,  joint venture,
joint stock company, limited liability



                                                       -19-


<PAGE>



company or other entity of any kind, or any government or political  subdivision
or any agency, department or instrumentality thereof.

         "Plan" means an employee  benefit plan defined in Section 3(3) of ERISA
in respect of which the  Borrower or any member of the  Controlled  Group is, or
within the immediately  preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.

         "Pledge  Agreement"  means  any  pledge  agreement  whether  heretofore
(including in connection with the execution of the Original  Credit  Agreement),
now, or hereafter  (including pursuant to Section 7.2(L) hereof) executed by the
Borrower or any  Subsidiary of the Borrower with respect to the Capital Stock of
any other  Subsidiary  of the Borrower or such  Subsidiary in favor of the Agent
for the benefit of the Holders of Secured Obligations, in each case, as amended,
restated or otherwise  modified from time to time  (including to add  additional
pledged Capital Stock of additional Subsidiaries).

         "Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not  necessarily
the lowest rate charged to any  customer),  changing when and as said prime rate
changes.

         "Pro Rata Share" means:

                  (i)  with   respect   to  all   payments,   computations   and
         determinations relating to the Term Loan Commitment or Term Loan of any
         Lender, the Term Loan Pro Rata Share;

                  (ii)  with   respect  to  all   payments,   computations   and
         determinations  relating  to  the  Revolving  Loan  Commitment  or  the
         Revolving  Loans of any Lender or such Lender's  interest in Letters of
         Credit   or  Swing   Line   Loans   (including,   without   limitation,
         determinations  of the  commitment fee under Section  2.15(C)(i)),  the
         Revolving Loan Pro Rata Share;

                  (iii)  with  respect  to  all   payments,   computations   and
         determinations  relating to the Acquisition  Facility Commitment or the
         Acquisition Facility Loan of any Lender (including, without limitation,
         determinations  of the  commitment  fee under Section  2.15(C)(ii)  and
         (iii)), the Acquisition Loan Pro Rata Share; and

                  (iv) for all other purposes,  with respect to each Lender, the
         percentage obtained by dividing (A) the sum of such Lender's Term Loan,
         Acquisition  Facility  Commitment and Revolving Loan Commitment at such
         time (in each case, as adjusted  from time to time in  accordance  with
         the  provisions  of this  Agreement)  by (B)  the sum of the  aggregate
         amount of all of the Term Loans,  the  Aggregate  Acquisition  Facility
         Commitment and the Aggregate  Revolving  Loan  Commitment at such time;
         provided, however, if all of the Commitments are terminated pursuant to
         the terms of this Agreement, then "Pro Rata Share" means the percentage
         obtained  by  dividing  (x)  the  sum  of  such   Lender's  Term  Loan,
         Acquisition Facility Loans,  Revolving Loans, L/C Obligations,  and, in
         the case of



                                                       -20-


<PAGE>



         the Swing Line Bank,  Swing Lines Loans, by (y) the aggregate amount of
         all Term  Loans,  Acquisition  Facility  Loans,  Revolving  Loans,  L/C
         Obligations and Swing Line Loans.

         "Purchasers" is defined in Section 13.3(A) hereof.

         "Rate Option" means the Eurodollar Rate or the Floating Rate.

         "Purchasers" is defined in Section 13.3(A) hereof.

         "Rate Option" means the Eurodollar Rate or the Floating Rate.

         "Refinishers  Warehouse" means Refinishers Warehouse,  Inc., a Michigan
corporation.

         "Register" is defined in Section 13.3(C) hereof.

         "Regulation  T" means  Regulation  T of the Board of  Governors  of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities  for the purpose
of purchasing or carrying margin stock (as defined therein).

         "Regulation  U" means  Regulation  U of the Board of  Governors  of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of  purchasing  or carrying  Margin
Stock applicable to member banks of the Federal Reserve System.

         "Regulation  X" means  Regulation  X of the Board of  Governors  of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).

         "Reimbursement Obligation" is defined in Section 3.7 hereof.

         "Release"  means  any  release,  spill,  emission,   leaking,  pumping,
injection, deposit, disposal,  discharge,  dispersal, leaching or migration into
the  indoor or outdoor  environment,  including  the  movement  of  Contaminants
through or in the air, soil, surface water or groundwater.

         "Rentals" of a Person means the aggregate fixed amounts payable by such
Person  under any lease of real or  personal  property  but does not include any
amounts payable under Capitalized Leases of such Person.

         "Replacement Lender" is defined in Section 2.20 hereof.



                                                       -21-


<PAGE>



         "Reportable  Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section,  with respect to a Plan,
excluding,  however,  such events as to which the PBGC by regulation  waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, provided, however, that a failure to meet the minimum funding
standards  of  Section  412 of the Code and of Section  302 of ERISA  shall be a
Reportable  Event  regardless  of the  issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.

         "Required  Lenders"  means  Lenders  whose  Pro  Rata  Shares,  in  the
aggregate, are greater than fifty percent (50%); provided, however, that, if any
of the Lenders shall have failed to fund its Acquisition  Loan Pro Rata Share of
any  Acquisition  Facility Loan  requested by the Borrower or its Revolving Loan
Pro Rata Share of any Revolving  Loan  requested by the Borrower or of any Swing
Line Loan as  requested by the Agent,  which such Lenders are  obligated to fund
under the terms of this Agreement and any such failure has not been cured,  then
for so  long  as  such  failure  continues,  "Required  Lenders"  means  Lenders
(excluding all Lenders whose failure to fund their applicable Pro Rata Shares of
such  Acquisition  Facility  Loans,  Revolving Loans or Swing Line Loans has not
been so cured) whose Pro Rata Shares represent  greater than fifty percent (50%)
of the  aggregate Pro Rata Shares of such Lenders;  provided  further,  however,
that,  if the  Commitments  have been  terminated  pursuant to the terms of this
Agreement,  "Required  Lenders" means Lenders  (without  regard to such Lenders'
performance of their respective  obligations  hereunder) whose aggregate ratable
shares (stated as a percentage) of the aggregate  outstanding  principal balance
of all Loans and L/C Obligations are greater than fifty percent (50%).

         "Requirements of Law" means, as to any Person,  the charter and by-laws
or other organizational or governing documents of such Person, and any law, rule
or  regulation,   or  determination  of  an  arbitrator  or  a  court  or  other
Governmental  Authority,  in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including,  without  limitation,  the  Securities  Act of 1933,  the  Securities
Exchange Act of 1934,  Regulations T, U and X, ERISA,  the Fair Labor  Standards
Act, the Worker  Adjustment  and  Retraining  Notification  Act,  Americans with
Disabilities  Act of 1990, and any certificate of occupancy,  zoning  ordinance,
building,  environmental  or land use  requirement  or permit or  environmental,
labor,  employment,  occupational  safety or  health  law,  rule or  regulation,
including Environmental, Health or Safety Requirements of Law.

         "Reserves" shall mean the maximum reserve requirement, as prescribed by
the Board of Governors of the Federal  Reserve  System (or any  successor)  with
respect to  "Eurocurrency  liabilities"  or in respect of any other  category of
liabilities  which includes  deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or other
assets  which  includes  loans by a  non-United  States  office of any Lender to
United States residents.

         "Restricted  Payment"  means (i) any  dividend  or other  distribution,
direct or  indirect,  on account of any Equity  Interests of the Borrower now or
hereafter  outstanding,  except a  dividend  payable  solely  in the  Borrower's
Capital Stock (other than Disqualified Stock) or in options,



                                                       -22-


<PAGE>



warrants or other rights to purchase such Capital  Stock,  (ii) any  redemption,
retirement,  purchase or other acquisition for value, direct or indirect, of any
Equity  Interests  of the Borrower or any of its  Subsidiaries  now or hereafter
outstanding, (iii) any redemption, purchase, retirement,  defeasance, prepayment
or other acquisition for value,  direct or indirect,  of any Indebtedness  other
than the  Obligations,  (iv) any  payment of a claim for the  rescission  of the
purchase or sale of, or for material  damages  arising from the purchase or sale
of, any Indebtedness (other than the Obligations) or any Equity Interests of the
Borrower or any of the Borrower's Subsidiaries, or of a claim for reimbursement,
indemnification or contribution  arising out of or related to any such claim for
damages  or  rescission  and (v) any  payment of any  management  fee or similar
consulting fee to any Affiliate of the Borrower.

         "Revolving  Credit  Availability"  means,  at any particular  time, the
amount by which (a) the lesser of (i) the Aggregate Revolving Loan Commitment at
such time or (ii) the  Borrowing  Base at such time  exceeds  (b) the  Revolving
Credit Obligations at such time.

         "Revolving Credit  Obligations"  means, at any particular time, the sum
of (i) the  outstanding  principal  amount of the Revolving  Loans at such time,
plus (ii) the outstanding principal amount of the Swing Line Loans at such time,
plus (iii) the L/C Obligations at such time.

         "Revolving Loan" is defined in Section 2.2 hereof.

         "Revolving Loan Commitment"  means, for each Lender,  the obligation of
such Lender to make Revolving Loans and to purchase participations in Letters of
Credit and Swing Line Loans not  exceeding  the amount set forth on Exhibit A to
this  Agreement  opposite its name  thereon  under the heading  "Revolving  Loan
Commitment"  or the signature  page of the assignment and acceptance by which it
became a Lender,  as such amount may be modified  from time to time  pursuant to
the terms of this Agreement or to give effect to any  applicable  assignment and
acceptance.

         "Revolving  Loan Pro Rata Share" shall mean, at any particular time and
with  respect to any  Lender,  the  percentage  obtained  by  dividing  (A) such
Lender's Revolving Loan Commitment (or the outstanding principal balance of such
Lender's  Revolving Loans,  Swing Line Loans (if any) and all L/C Obligations in
which such Lender has an interest,  if the Revolving Loan  Commitments have been
terminated  pursuant  to the  terms  of this  Agreement)  by (B)  the  Aggregate
Revolving Loan Commitment (or the aggregate outstanding principal balance of the
Revolving Loans, Swing Line Loans and all L/C Obligations, if the Revolving Loan
Commitments have been terminated pursuant to the terms of this Agreement).

         "Revolving Loan Termination Date" means November 19, 2003.

         "Revolving Note" means a promissory note, in substantially  the form of
Exhibit B-1 hereto,  duly executed by the Borrower and payable to the order of a
Lender in the amount of its Revolving Loan Commitment,  including any amendment,
restatement, modification, renewal or replacement of such Revolving Note.



                                                       -23-


<PAGE>



         "Risk-Based Capital Guidelines" is defined in Section 4.2 hereof.

         "Secured Obligations" means, collectively, (i) the Obligations and (ii)
all Hedging  Obligations  owing under Interest Rate  Agreements to any Lender or
any affiliate of any Lender.

         "Security  Agreement" means (i) the Borrower Security Agreement or (ii)
any other security  agreement whether  heretofore  (including in connection with
the execution of the Original Credit  Agreement),  now, or hereafter  (including
pursuant  to  Section  7.2(L)  hereof)   executed  by  each  of  the  Borrower's
Subsidiaries  in favor of the Agent for the  benefit  of the  Holders of Secured
Obligations,  in each case, as amended, restated or otherwise modified from time
to time.

         "Single  Employer Plan" means a Plan  maintained by the Borrower or any
member of the  Controlled  Group for  employees of the Borrower or any member of
the Controlled Group.

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

                  (i) the fair value of its assets (both at fair  valuation  and
         at present fair  saleable  value) is equal to or in excess of the total
         amount of its liabilities,  including,  without limitation,  contingent
         liabilities; and

                  (ii) it is then able and  expects  to be able to pay its debts
         as they mature; and

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

With respect to  contingent  liabilities  (such as  litigation,  guarantees  and
pension  plan  liabilities),  such  liabilities  shall be computed at the amount
which,  in  light of all the  facts  and  circumstances  existing  at the  time,
represent  the amount which can be reasonably be expected to become an actual or
matured liability.

         "Specified  Acquisitions" means the two Acquisitions  consummated prior
to the Closing Date which have been disclosed to the Agent and which, subject to
the  satisfaction of the  requirements set forth in Section 7.3(G) as applicable
to  such  Specified  Acquisitions,  shall  be  financed  with  the  proceeds  of
Acquisition Loans.

         "Subordinated Noteholder" means, collectively, LDI, the Howard J. Lacy,
II Trust,  the Harold A. Lacy Trust and any subsequent  assignees or transferees
of any of them, as holders of the Senior Subordinated Notes.

         "Subordinated  Notes" means (i) those notes in the  original  principal
amount of $30,000,000  dated as of November 19, 1997 issued to the  Subordinated
Noteholder and subject to the terms of the Subordination Agreement or (ii) those
certain notes which may be issued pursuant to the High Yield Note Agreement.



                                                       -24-


<PAGE>



         "Subordination  Agreement"  means that  certain  Agreement  dated as of
November 19, 1997 (as amended, restated, supplemented or otherwise modified from
time to time) between the Subordinated Noteholder and the Agent on behalf of the
Lenders with respect to the Subordinated Notes.

         "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding  securities  having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its  Subsidiaries or by such Person and one or more of its  Subsidiaries,  or
(ii)  any   partnership,   association,   joint  venture  or  similar   business
organization  more than 50% of the ownership  interests  having  ordinary voting
power of which  shall at the time be so owned or  controlled.  Unless  otherwise
expressly  provided,  all  references  herein  to a  "Subsidiary"  shall  mean a
Subsidiary of the Borrower.

         "Swing  Line Bank"  means Bank One or any other  Lender as a  successor
Swing Line Bank.

         "Swing Line Commitment"  means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum  principal amount of $5,000,000 at any one
time outstanding.

         "Swing Line Loan" means a Loan made  available  to the  Borrower by the
Swing Line Bank pursuant to Section 2.3 hereof.

         "Swing Line Note" means a promissory note, in substantially the form of
Exhibit B-2 hereto,  duly  executed by the  Borrower and payable to the order of
the Swing Line Bank in the amount of its Swing Line  Commitment,  including  any
amendment, restatement,  modification, renewal or replacement of such Swing Line
Note.

         "Taxes" is defined in Section 2.15(E)(i) hereof.

         "Termination  Date"  means  the  earlier  of  (a)  the  Revolving  Loan
Termination  Date, and (b) the date of  termination  of the Aggregate  Revolving
Loan Commitment  pursuant to Section 2.6 hereof or the  Commitments  pursuant to
Section 9.1 hereof.

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



                                                       -25-


<PAGE>



administer,  any Benefit Plan; or (vi) the partial or complete withdrawal of the
Borrower or any member of the Controlled Group from a Multiemployer Plan.

         "Term Loan" is defined in Section 2.1(A) hereof.

         "Term Loan Commitment"  means, for each Lender,  the obligation of such
Lender  to make its Term  Loan  pursuant  to the  terms  and  conditions  of the
Original Credit Agreement  (which  obligation is reevidenced by this Agreement),
and which shall not exceed the  principal  amount set forth on Exhibit A to this
Agreement opposite its name thereon under the heading "Term Loan Commitment", as
such amount may be modified from time to time pursuant to the terms hereof.

         "Term Loan Pro Rata Share" shall mean, at any particular  time and with
respect to any Lender,  the percentage  obtained by dividing (A) the outstanding
principal  balance of such Lender's  Term Loan by (B) the aggregate  outstanding
principal balance of all Term Loans.

         "Term Loan Termination Date" means November 19, 2003.

         "Term Note"  means a  promissory  note,  in  substantially  the form of
Exhibit B-3 hereto,  duly executed by the Borrower and payable to the order of a
Lender in the  amount  of its Term Loan  Commitment,  including  any  amendment,
restatement, modification, renewal or replacement of such Term Note.

         "Thompson" means Thompson PBE, Inc., a Delaware corporation.

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

         "Transferee" is defined in Section 13.5 hereof.

         "Type" means,  with respect to any Loan,  its nature as a Floating Rate
Loan or a Eurodollar Rate Loan.

         "Unfunded  Liabilities" means (i) in the case of Single Employer Plans,
the amount  (if any) by which the  present  value of all  vested  nonforfeitable
benefits  under all Single  Employer  Plans exceeds the fair market value of all
such Plan assets allocable to such benefits,  all determined as of the then most
recent  valuation  date for such  Plans,  and (ii) in the case of  Multiemployer
Plans,  the withdrawal  liability that would be incurred by the Controlled Group
if  all  members  of  the  Controlled   Group   completely   withdrew  from  all
Multiemployer Plans.

         "Unmatured  Default" means an event which, but for the lapse of time or
the giving of notice, or both, would constitute a Default.

         "Weighted   Average  Life  to  Maturity"  means  when  applied  to  any
Indebtedness  at any date,  the number of years obtained by dividing (i) the sum
of the products obtained by multiplying



                                                       -26-


<PAGE>



(a) the amount of each then remaining installment, sinking fund, serial maturity
or other required payments of principal, including payment at final maturity, in
respect  thereof,  by (b)  the  number  of  years  (calculated  to  the  nearest
one-twelfth)  that will elapse between such date and the making of such payment,
by (ii) the then outstanding principal amount of such Indebtedness.

         "Working Capital" means, as at any date of  determination,  the excess,
if any, of (i) the Borrower's  consolidated current assets, except cash and Cash
Equivalents,  over (ii) the Borrower's consolidated current liabilities,  except
current maturities of long-term debt and Revolving Credit Obligations as of such
date and all accrued interest as of such date.

         The  foregoing  definitions  shall be  equally  applicable  to both the
singular and plural forms of the defined  terms.  Any  accounting  terms used in
this Agreement which are not specifically defined herein shall have the meanings
customarily  given  them  in  accordance  with  generally  accepted   accounting
principles in existence as of the date hereof.

         1.2 References. The existence throughout the Agreement of references to
the Borrower's  Subsidiaries is for a matter of convenience only. Any references
to  Subsidiaries  of the  Borrower  set  forth  herein  shall  not in any way be
construed  as  consent  by  the  Agent  or  any  Lender  to  the  establishment,
maintenance  or  acquisition  of any  Subsidiary,  except  as may  otherwise  be
permitted hereunder.

         1.3  Amendment  and  Restatement  of  Original  Credit  Agreement.  The
Borrower,  the  Lenders,  the Agent,  the Swing Line Bank and the Issuing  Banks
agree that, upon (i) the execution and delivery of this Agreement by each of the
parties  hereto  and  (ii)  satisfaction  (or  waiver  by the  Agent in its sole
discretion) of the conditions  precedent set forth in Section 5.1, the terms and
provisions  of the Original  Credit  Agreement  shall be and hereby are amended,
superseded  and restated in their  entirety by the terms and  provisions of this
Agreement. This Agreement is not intended to and shall not constitute a novation
of the  Original  Credit  Agreement  or  the  indebtedness  created  thereunder,
including,  without limitation,  the "Obligations" or the "Hedging  Obligations"
under and as defined  therein.  All outstanding  "Loans" and "Letters of Credit"
(under and as defined in the Original Credit  Agreement) shall continue as Loans
and  Letters  of  Credit  under  (and  shall be  governed  by the terms of) this
Agreement. The commitments of each Lender that is a party to the Original Credit
Agreement  shall, on the Closing Date,  automatically  be deemed amended and the
only Commitments shall be those hereunder.

ARTICLE II:  THE TERM LOAN AND REVOLVING LOAN FACILITIES

         2.1.  Term Loans.  (A) Amount of Term  Loans.  Subject to the terms and
conditions set forth in the Original Credit Agreement, each Lender party thereto
on November 19, 1997 severally and not jointly made a term loan, in Dollars,  to
the Borrower in an aggregate  amount equal to such Lender's Term Loan Commitment
(each individually, a "Term Loan" and, collectively, the "Term Loans"). All Term
Loans  were  made by such  Lenders  on  November  19,  1997  simultaneously  and
proportionately to their respective Term Loan Pro Rata Shares and such



                                                       -27-


<PAGE>



Term Loans are  reevidenced by this facility  notwithstanding  the amendment and
restatement of the Original Credit Agreement.

         (B) Repayment of the Term Loans.  (i) The unpaid  principal  balance of
the  Term  Loans  shall  be  repaid  in  sixteen  (16)   consecutive   quarterly
installments,  payable on the last  Business  Day of each fiscal  quarter of the
Borrower,  commencing on March 31, 2000 and continuing thereafter until the Term
Loan  Termination  Date, and the Term Loans shall be permanently  reduced by the
amount of each  installment on the date payment thereof is made  hereunder.  The
installments shall be in the aggregate amounts set forth below:

                  Installment Date                     Installment Amount

                  March 31, 2000                              $1,500,000
                  June 30, 2000                               $1,500,000
                  September 30, 2000                          $1,500,000
                  December 31, 2000                           $1,500,000

                  March 31, 2001                              $2,250,000
                  June 30, 2001                               $2,250,000
                  September 30, 2001                          $2,250,000
                  December 31, 2001                           $2,250,000

                  March 31, 2002                              $2,500,000
                  June 30, 2002                               $2,500,000
                  September 30, 2002                          $2,500,000
                  December 31, 2002                           $2,500,000

                  March 31, 2003                              $2,750,000
                  June 30, 2003                               $2,750,000
                  September 30, 2003                          $2,750,000
                  November 19, 2003                           $2,750,000

Notwithstanding  the foregoing,  the final installment shall be in the amount of
the then outstanding principal balance of the Term Loans. In addition,  the then
outstanding  principal  balance  of the  Term  Loans,  if any,  shall be due and
payable  on the  Termination  Date.  No  installment  of any Term Loan  shall be
reborrowed once repaid.

         (ii) In addition  to the  scheduled  payments  on the Term  Loans,  the
Borrower (a) may make the voluntary  prepayments described in Section 2.5(A) for
credit  against the  scheduled  payments  on the Term Loans  pursuant to Section
2.5(A) and (b) shall make the mandatory prepayments prescribed in Section 2.5(B)
for credit against the scheduled  payments on the Term Loans pursuant to Section
2.5(B).

         2.2 Revolving Loans. Upon the satisfaction of the conditions  precedent
set forth in Sections 5.1 and 5.2, from and including the date of this Agreement
and prior to the Termination



                                                       -28-


<PAGE>



Date, each Lender severally and not jointly agrees,  on the terms and conditions
set forth in this  Agreement,  to make revolving loans to the Borrower from time
to time, in Dollars, in an amount not to exceed such Lender's Revolving Loan Pro
Rata Share of Revolving Credit Availability at such time (each  individually,  a
"Revolving Loan" and, collectively,  the "Revolving Loans"); provided,  however,
at no time shall the Revolving Credit Obligations exceed the Aggregate Revolving
Loan Commitment or the Borrowing  Base.  Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow Revolving Loans at any time prior to
the Termination  Date. On the Termination Date, the Borrower shall repay in full
the outstanding  principal  balance of the Revolving  Loans.  Each Advance under
this Section 2.2 shall consist of Revolving Loans made by each Lender ratably in
proportion to such Lender's respective Revolving Loan Pro Rata Share.

         2.2A  Acquisition   Facility  Loans.   Upon  the  satisfaction  of  the
conditions  precedent  set forth in Sections 5.1 and 5.2, from and including the
date of this Agreement and prior to the Termination  Date, each Lender having an
Acquisition  Facility Loan Commitment  severally and not jointly agrees,  on the
terms and conditions set forth in this Agreement, to make revolving loans to the
Borrower from time to time, in Dollars, in an amount not to exceed such Lender's
Acquisition Facility Pro Rata Share of Acquisition Facility Availability at such
time (each individually,  an "Acquisition Facility Loan" and, collectively,  the
"Acquisition  Facility  Loans");  provided,   however,  at  no  time  shall  the
outstanding  principal  balance of the  Acquisition  Facility  Loans  exceed the
Acquisition  Facility  Availability.  Subject  to the  terms  of this  Agreement
(including,  without  limitation,  the  restrictions  on use of  proceeds of the
Acquisition  Facility  Loans as set forth in Section  7.2(J)),  the Borrower may
borrow,  repay and reborrow  Acquisition Facility Loans at any time prior to the
Acquisition  Facility Loan Termination Date. The Acquisition  Facility Loans (if
any) made on the  Closing  Date  shall  initially  be  Floating  Rate  Loans and
thereafter may be continued as Floating Rate Loans or converted into  Eurodollar
Rate  Loans in the manner  provided  in  Section  2.10 and  subject to the other
conditions and  limitations  therein set forth and set forth in this Article II.
On the Acquisition  Facility Loan Termination  Date, the Borrower shall repay in
full the outstanding  principal balance of the Acquisition  Facility Loans. Each
Advance under this Section 2.2A shall consist of Acquisition Facility Loans made
by each Lender  ratably in proportion to such  Lender's  respective  Acquisition
Facility Pro Rata Share.

         2.3  Swing  Line  Loans.  (A)  Amount  of Swing  Line  Loans.  Upon the
satisfaction of the conditions  precedent set forth in Section 5.1 and 5.2, from
and including the date of this Agreement and prior to the Termination  Date, the
Swing Line Bank agrees, on the terms and conditions set forth in this Agreement,
to make swing line loans to the Borrower  from time to time,  in Dollars,  in an
amount not to exceed the Swing Line  Commitment  (each,  individually,  a "Swing
Line Loan" and collectively,  the "Swing Line Loans"); provided,  however, at no
time shall the Revolving Credit Obligations exceed the Aggregate  Revolving Loan
Commitment or the Borrowing Base.  Subject to the terms of this  Agreement,  the
Borrower may borrow,  repay and  reborrow  Swing Line Loans at any time prior to
the Termination Date.

         (B) Borrowing  Notice.  The Borrower shall deliver to the Agent and the
Swing  Line Bank a  Borrowing  Notice,  signed by it,  not later  than 1:00 p.m.
(Indianapolis  time) on the Borrowing  Date of each Swing Line Loan,  specifying
(i) the applicable Borrowing Date (which



                                                       -29-


<PAGE>



shall be a Business Day), and (ii) the aggregate  amount of the requested  Swing
Line Loan which shall be an amount not less than $100,000.  The Swing Line Loans
shall at all times be Floating Rate Loans.

         (C) Making of Swing Line Loans. Promptly after receipt of the Borrowing
Notice  under  Section  2.3(B) in respect of Swing Line  Loans,  the Agent shall
notify  each  Swing Line Bank by telex or  telecopy,  or other  similar  form of
transmission,  of the  requested  Swing  Line  Loan.  Not  later  than 3:00 p.m.
(Indianapolis time) on the applicable  Borrowing Date, the Swing Line Bank shall
make  available  its  Swing  Line  Loan,  in  funds  immediately   available  in
Indianapolis to the Agent at its address specified  pursuant to Article XIV. The
Agent  will  promptly  make the  funds so  received  from the  Swing  Line  Bank
available to the Borrower at the Agent's aforesaid address.

         (D)  Repayment  of Swing Line  Loans.  The Swing  Line  Loans  shall be
evidenced by the Swing Line Note, and each Swing Line Loan shall be paid in full
by the Borrower on or before the fifth Business Day after the Borrowing Date for
such Swing Line  Loan.  The  Borrower  may at any time pay,  without  penalty or
premium, all outstanding Swing Line Loans or, in a minimum amount and increments
of $100,000, any portion of the outstanding Swing Line Loans, upon notice to the
Agent and the Swing Line Bank. In addition, the Agent (i) may at any time in its
sole discretion  with respect to any outstanding  Swing Line Loan, or (ii) shall
on the fifth  Business  Day after the  Borrowing  Date of any Swing  Line  Loan,
require each Lender  (including the Swing Line Bank) to make a Revolving Loan in
the  amount of such  Lender's  Revolving  Loan Pro Rata Share of such Swing Line
Loan, for the purpose of repaying such Swing Line Loan. Not later than 2:00 p.m.
(Indianapolis  time) on the date of any notice received pursuant to this Section
2.3(D),  each  Lender  shall  make  available  its  required  Revolving  Loan or
Revolving Loans, in funds immediately  available in Indianapolis to the Agent at
its address specified  pursuant to Article XIV. Revolving Loans made pursuant to
this Section 2.3(D) shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into  Eurodollar Rate Loans in the
manner  provided  in  Section  2.10 and  subject  to the  other  conditions  and
limitations  therein set forth and set forth in this Article II. Unless a Lender
shall have  notified  the Swing  Line  Bank,  prior to its making any Swing Line
Loan, that any applicable  condition precedent set forth in Sections 5.1 and 5.2
had not then been  satisfied,  such Lender's  obligation to make Revolving Loans
pursuant   to  this   Section   2.3(D)  to  repay  Swing  Line  Loans  shall  be
unconditional, continuing, irrevocable and absolute and shall not be affected by
any circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Agent,
the Swing Line Bank or any other Person,  (b) the occurrence of continuance of a
Default or Unmatured Default, (c) any adverse change in the condition (financial
or  otherwise)  of the Borrower,  or (d) any other  circumstances,  happening or
event  whatsoever.  In the event  that any Lender  fails to make  payment to the
Agent of any amount due under this Section  2.3(D),  the Agent shall be entitled
to receive,  retain and apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until the Agent receives such payment
from such Lender or such obligation is otherwise fully satisfied. In addition to
the  foregoing,  if for any reason any Lender fails to make payment to the Agent
of any amount due under this Section 2.3(D), such Lender shall be deemed, at the
option of the Agent, to have unconditionally and irrevocably  purchased from the
Swing Line Bank,  without  recourse  or  warranty,  an  undivided  interest  and
participation in the applicable



                                                       -30-


<PAGE>



Swing Line Loan in the amount of such  Revolving  Loan,  and such  interest  and
participation  may be recovered from such Lender together with interest  thereon
at the Federal Funds Effective Rate for each day during the period commencing on
the date of  demand  and  ending on the date such  amount  is  received.  On the
Termination  Date,  the Borrower shall repay in full the  outstanding  principal
balance of the Swing Line Loans.

         2.4 Rate Options for All  Advances.  The Revolving  Loans,  Acquisition
Facility  Loans and Term Loans may be Floating Rate Advances or Eurodollar  Rate
Advances, or a combination thereof,  selected by the Borrower in accordance with
Section 2.10.  The Borrower may select,  in accordance  with Section 2.10,  Rate
Options and Interest Periods  applicable to portions of the Revolving Loans, the
Acquisition  Facility Loans and the Term Loans;  provided that there shall be no
more than eight (8) Interest  Periods in effect with respect to all of the Loans
at any time. The Swing Line Loans shall at all times be Floating Rate Loans.

         2.5  Optional Payments; Mandatory Prepayments.

         (A)  Optional  Payments.  The  Borrower  may from time to time repay or
prepay,  without penalty or premium all or any part of outstanding Floating Rate
Advances;  provided,  that the Borrower may not so prepay Floating Rate Advances
consisting  of Term Loans  unless it shall have  provided at least one  Business
Day's written notice to the Agent of such  prepayment.  Eurodollar Rate Advances
may be  voluntarily  repaid or prepaid  prior to the last day of the  applicable
Interest Period, subject to the indemnification  provisions contained in Section
4.4,  provided,  that the Borrower may not so prepay  Eurodollar  Rate  Advances
unless it shall have provided at least three  Business  Days' written  notice to
the Agent of such prepayment. Unless the aggregate outstanding principal balance
of the Term Loans is to be prepaid in full,  voluntary  prepayments  of the Term
Loans  shall be in an  aggregate  minimum  amount  of  $1,000,000  and  integral
multiples of $1,000,000  in excess of that amount,  and shall be applied to each
of the then remaining installments payable thereunder,  on a ratable basis based
upon the respective amounts of such installments.

         (B)  Mandatory Prepayments.

         (i)  Mandatory Prepayments of Term Loans.

                  (a) Upon the  consummation  of any Asset Sale or any Financing
         by the Borrower or any  Subsidiary  of the  Borrower,  other than those
         Asset  Sales  permitted  pursuant  to Section  7.3(B)(i)  except to the
         extent that the Net Cash  Proceeds of such Asset  Sale,  when  combined
         with  the  Net  Cash  Proceeds  of all  such  Asset  Sales  during  the
         immediately  preceding  twelve-month  period, do not exceed $1,000,000,
         and  except  as  provided  in  the  second  sentence  of  this  Section
         2.5(B)(i)(a),  within three (3) Business  Days after the  Borrower's or
         any of its  Subsidiaries' (i) receipt of any Net Cash Proceeds from any
         such  Asset  Sale  or  Financing,  or (ii)  conversion  to cash or Cash
         Equivalents  of non-cash  proceeds  (whether  principal or interest and
         including securities, release of escrow arrangements or lease payments)
         received  from any Asset  Sale,  the  Borrower  shall make a  mandatory
         prepayment of the Obligations in an amount equal to one hundred percent



                                                       -31-


<PAGE>



         (100%)  of such Net  Cash  Proceeds  or such  proceeds  converted  from
         non-cash to cash or Cash Equivalents.  Net Cash Proceeds of Asset Sales
         of capital  assets with respect to which the Borrower  shall have given
         the Agent  written  notice of its  intention  to replace  such  capital
         assets  within  nine  months  following  such  Asset  Sale shall not be
         subject  to the  provisions  of the  first  sentence  of  this  Section
         2.5(B)(i)(a) unless and to the extent that such applicable period shall
         have expired without such replacement having been made.

                  (b) Nothing in this  Section  2.5(B)(i)  shall be construed to
         constitute  the  Lenders'  consent to any  transaction  referred  to in
         clause (a) above which is not expressly  permitted by the terms of this
         Agreement.

                  (c) Each mandatory  prepayment  required by clause (a) of this
         Section   2.5(B)   shall  be  referred  to  herein  as  a   "Designated
         Prepayment."  Designated  Prepayments shall be allocated and applied to
         the Obligations as follows:

                           (I) the amount of each Designated  Prepayment  (other
                  than a Designated  Prepayment  attributable to the issuance of
                  Subordinated  Notes pursuant to the High Yield Note Agreement)
                  shall be  applied to each of the then  remaining  installments
                  payable under the Term Loans in the inverse order of maturity;

                           (II)  the  amount  of  each   Designated   Prepayment
                  attributable to the issuance of Subordinated Notes pursuant to
                  the High Yield  Note  Agreement  shall be applied as  follows:
                  first,  to each of the  then  remaining  installments  payable
                  under the Term Loans in the inverse order of maturity; second,
                  at the Borrower's  option,  up to $5,000,000 may be applied to
                  reduce  the  outstanding   balance  of  the  Revolving  Credit
                  Obligations  (without  reducing the Aggregate  Revolving  Loan
                  Commitment);  third to reduce the  outstanding  balance of the
                  Acquisition  Facility Loans; and fourth,  to repay in full the
                  Subordinated Notes issued to the Subordinated Noteholder as of
                  November 19, 1997; and

                           (III)  following  the  payment  in full  of the  Term
                  Loans,  the  amount  of each  Designated  Prepayment  shall be
                  applied to repay Revolving  Loans (but shall reduce  Revolving
                  Loan  Commitments  only  at the  option  of the  Lenders  with
                  Revolving  Loan Pro Rata  Shares  greater  than fifty  percent
                  (50%)) and  following  the  payment  in full of the  Revolving
                  Loans, to repay  Acquisition  Facility Loans (but shall reduce
                  Acquisition Facility Commitments only at the option of Lenders
                  with  Acquisition  Facility Pro Rata Shares greater than fifty
                  percent  (50%))  and  following  the  payment  in  full of the
                  Acquisition  Facility  Loans,  the  amount of each  Designated
                  Prepayment   shall  be  applied   first  to  interest  on  the
                  Reimbursement   Obligations,   then   to   principal   on  the
                  Reimbursement Obligations,  then to fees on account of Letters
                  of Credit  and then,  to the extent  any L/C  Obligations  are
                  contingent,  deposited  with the Agent as cash  collateral  in
                  respect of such L/C Obligations.



                                                       -32-


<PAGE>



                  (d) On the date any  Designated  Prepayment is received by the
         Agent,  such  prepayment  shall be applied first to Floating Rate Loans
         and to any  Eurodollar  Rate  Loans  maturing  on such date and then to
         subsequently maturing Eurodollar Rate Loans in order of maturity.

         (ii) Mandatory Prepayments of Revolving and Acquisition Facility Loans.
In addition to repayments under Section 2.5(B)(i)(c)(II), if at any time and for
any reason (a) the Revolving  Credit  Obligations are greater than the lesser of
(i) the Aggregate  Revolving Loan  Commitment or (ii) the Borrowing Base, or (b)
the outstanding  principal balance of the Acquisition  Facility Loans is greater
than  the  Aggregate   Acquisition  Facility  Commitment,   the  Borrower  shall
immediately make a mandatory prepayment of the Obligations in an amount equal to
such excess. In addition,  if Revolving Credit  Availability is at any time less
than the amount of  contingent  L/C  Obligations  outstanding  at any time,  the
Borrower shall deposit cash  collateral with the Agent in an amount equal to the
amount by which such L/C Obligations exceed such Revolving Credit Availability.

         (iii) Subject to the preceding  provisions of this Section 2.5(B),  all
of the  mandatory  prepayments  made under this Section  2.5(B) shall be applied
first to Floating Rate Loans and to any  Eurodollar  Rate Loans maturing on such
date  and  then to  subsequently  maturing  Eurodollar  Rate  Loans  in order of
maturity.

         2.6 Reduction of Commitments.  (a) The Borrower may permanently  reduce
the Aggregate  Revolving Loan  Commitment in whole, or in part ratably among the
Lenders,  in an aggregate minimum amount of $1,000,000 with respect to each such
Commitment  and  integral  multiples  of  $100,000 in excess of that amount with
respect to each such Commitment (unless the Aggregate  Revolving Loan Commitment
is reduced in whole),  upon at least one Business  Day's  written  notice to the
Agent,  which notice shall specify the amount of any such  reduction;  provided,
however,  that the amount of the Aggregate  Revolving Loan Commitment may not be
reduced below the aggregate principal amount of the outstanding Revolving Credit
Obligations.

         (b) The  Borrower  may  permanently  reduce the  Aggregate  Acquisition
Facility  Commitment  in whole,  or in part  ratably  among the  Lenders,  in an
aggregate  minimum amount of $1,000,000 with respect to each such Commitment and
integral  multiples  of $100,000  in excess of that amount with  respect to each
such Commitment (unless the Aggregate Acquisition Facility Commitment is reduced
in whole),  upon at least three (3) Business  Days' written notice to the Agent,
which notice shall specify the amount of any such reduction;  provided, however,
that the amount of the  Aggregate  Acquisition  Facility  Commitment  may not be
reduced below the aggregate principal amount of the outstanding principal amount
of the Acquisition Facility Loans.

         (c) All accrued  commitment fees shall be payable on the effective date
of any termination of the obligations of the Lenders to make Loans hereunder.

         2.7 Method of Borrowing.  Not later than 2:00 p.m.  (Indianapolis time)
on each Borrowing  Date,  each Lender shall make  available its Revolving  Loan,
Acquisition  Facility  Loan or Term  Loan,  in funds  immediately  available  in
Indianapolis to the Agent at its address specified



                                                       -33-


<PAGE>



pursuant to Article XIV. The Agent will promptly make the funds so received from
the Lenders available to the Borrower at the Agent's aforesaid address.

         2.8 Method of Selecting  Types and Interest  Periods for Advances.  The
Borrower  shall select the Type of Advance  and, in the case of each  Eurodollar
Rate Advance,  the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Agent  irrevocable  notice in substantially the form
of  Exhibit  C  hereto  (a  "Borrowing   Notice")  not  later  than  10:00  a.m.
(Indianapolis  time) (a) on the Borrowing Date of each Floating Rate Advance and
(b) three  Business  Days before the  Borrowing  Date for each  Eurodollar  Rate
Advance,  specifying:  (i) the Borrowing Date (which shall be a Business Day) of
such  Advance;  (ii) the  aggregate  amount of such  Advance;  (iii) the Type of
Advance  selected;  and (iv) in the case of each  Eurodollar  Rate Advance,  the
Interest Period applicable  thereto.  The Borrower shall select Interest Periods
so that, to the best of the  Borrower's  knowledge,  it will not be necessary to
prepay all or any portion of any  Eurodollar  Rate Advance prior to the last day
of the  applicable  Interest  Period in order to make  mandatory  prepayments as
required  pursuant  to the terms  hereof.  Each  Floating  Rate  Advance and all
Obligations  other than Loans shall bear interest from and including the date of
the making of such Advance to (but not including) the date of repayment  thereof
at the Floating Rate,  changing when and as such Floating Rate changes.  Changes
in the rate of interest on that portion of any Advance  maintained as a Floating
Rate Loan will take effect simultaneously with each change in the Alternate Base
Rate.  Each  Eurodollar  Rate Advance shall bear interest from and including the
first day of the Interest Period  applicable  thereto to (but not including) the
last day of such Interest  Period at the interest rate  determined as applicable
to such Eurodollar Rate Advance.

         2.9 Minimum Amount of Each Advance. Each Advance (other than an Advance
to repay Swing Line Loans or a Reimbursement Obligation) shall be in the minimum
amount of  $1,000,000  (and in  multiples  of  $100,000  if in excess  thereof);
provided,  however,  that any Floating  Rate Advance may be in the amount of the
unused Aggregate  Revolving Loan Commitment or the unused Aggregate  Acquisition
Facility Commitment.

         2.10 Method of Selecting Types and Interest  Periods for Conversion and
Continuation of Advances.

         (A) Right to Convert. The Borrower may elect from time to time, subject
to the  provisions  of Section 2.4 and this Section  2.10, to convert all or any
part of a Loan of any Type into any other Type or Types of Loans;  provided that
any conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.

         (B) Automatic  Conversion and  Continuation.  Floating Rate Loans shall
continue as Floating  Rate Loans unless and until such  Floating  Rate Loans are
converted into  Eurodollar  Rate Loans.  Eurodollar Rate Loans shall continue as
Eurodollar  Rate  Loans  until the end of the then  applicable  Interest  Period
therefor,  at which  time such  Eurodollar  Rate  Loans  shall be  automatically
converted  into  Floating  Rate Loans unless the  Borrower  shall have given the
Agent notice in accordance with Section 2.10(D)  requesting  that, at the end of
such Interest  Period,  such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.



                                                       -34-


<PAGE>



         (C)   No   Conversion    Post-Default   or   Post-Unmatured    Default.
Notwithstanding anything to the contrary contained in Section 2.10(A) or Section
2.10(B),  no Loan may be converted  into or continued as a Eurodollar  Rate Loan
(except with the consent of the Required  Lenders) when any Default or Unmatured
Default has occurred and is continuing.

         (D)  Conversion/Continuation  Notice. The Borrower shall give the Agent
irrevocable notice (a "Conversion/Continuation  Notice") of each conversion of a
Floating Rate Loan into a Eurodollar  Rate Loan or  continuation of a Eurodollar
Rate Loan not later than 10:00 a.m.  (Indianapolis  time)  three  Business  Days
prior to the date of the requested conversion or continuation,  specifying:  (1)
the  requested  date  (which  shall be a  Business  Day) of such  conversion  or
continuation;  (2) the amount and Type of the Loan to be converted or continued;
and (3) the  amount of  Eurodollar  Rate  Loan(s)  into which such Loan is to be
converted  or  continued  and the  duration of the  Interest  Period  applicable
thereto.

         2.11 Default Rate. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
the interest  rate(s)  applicable to the  Obligations and the fees payable under
Section 3.8 with  respect to Letters of Credit shall be increased by two percent
(2.0%) per annum above the Floating  Rate or  Eurodollar  Rate,  as  applicable;
provided,  that solely with  respect to  Acquisition  Facility  Loans,  the fees
payable under Section 2.15(C)(ii) and (iii) and the fees payable pursuant to the
fee letter  dated  December  14,  1999  described  in Section  2.15(C)(iv),  the
interest  rate(s)  applicable to such obligations and fees shall be increased by
three percent (3.0%) per annum above the Floating Rate or the  Eurodollar  Rate,
as applicable.

         2.12 Method of Payment. All payments of principal,  interest,  and fees
hereunder  shall  be  made,  without  setoff,  deduction  or  counterclaim,   in
immediately  available  funds to the  Agent  at the  Agent's  address  specified
pursuant  to Article  XIV,  or at any other  Lending  Installation  of the Agent
specified in writing by the Agent to the  Borrower,  by 2:00 p.m.  (Indianapolis
time) on the date when due and shall be made ratably  among the Lenders  (unless
such amount is not to be shared  ratably in accordance  with the terms  hereof).
Each  payment  delivered  to the Agent for the  account of any  Lender  shall be
delivered  promptly  by the Agent to such Lender in the same type of funds which
the Agent  received at its address  specified  pursuant to Article XIV or at any
Lending  Installation  specified  in a notice  received  by the Agent  from such
Lender. The Borrower  authorizes the Agent to charge the account of the Borrower
maintained with Bank One for each payment of principal,  interest and fees as it
becomes due hereunder. Bank One will notify the Borrower of any such charges.

         2.13 Notes. Each Lender is authorized to record the principal amount of
each of its Loans and each  repayment  with respect to its Loans on the schedule
attached to its  respective  Notes;  provided,  however,  that the failure to so
record shall not affect the Borrower's obligations under any such Note.

         2.14 Telephonic  Notices.  The Borrower  authorizes the Lenders and the
Agent to extend Advances, issue Letters of Credit, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith



                                                       -35-


<PAGE>



believes to be acting on behalf of the Borrower.  The Borrower agrees to deliver
promptly to the Agent a written  confirmation,  signed by an Authorized Officer,
if such confirmation is requested by the Agent or any Lender, of each telephonic
notice.  If the written  confirmation  differs in any material  respect from the
action  taken by the Agent and the  Lenders,  (i) the  telephonic  notice  shall
govern absent  manifest  error and (ii) the Agent or the Lender,  as applicable,
shall promptly notify the Authorized  Officer who provided such  confirmation of
such difference.

         2.15 Promise to Pay;  Interest and Commitment  Fees;  Interest  Payment
Dates; Interest and Fee Basis; Taxes; Loan and Control Accounts.

         (A) Promise to Pay. The Borrower  unconditionally  promises to pay when
due the principal amount of each Loan and all other Obligations  incurred by it,
and to pay all unpaid interest accrued thereon,  in accordance with the terms of
this Agreement and the Notes.

         (B) Interest Payment Dates. Interest accrued on each Floating Rate Loan
shall be payable on each Payment  Date,  commencing  with the first such date to
occur  after the date  hereof,  and at  maturity  (whether  by  acceleration  or
otherwise).  Interest  accrued on each  Eurodollar Rate Loan shall be payable on
the last  day of its  applicable  Interest  Period,  on any  date on  which  the
Eurodollar Rate Loan is prepaid,  whether by  acceleration or otherwise,  and at
maturity.  Interest  accrued on each  Eurodollar  Rate Loan  having an  Interest
Period  longer than three  months  shall also be payable on the last day of each
three-month  interval  during  such  Interest  Period.  Interest  accrued on the
principal  balance of all other  Obligations  shall be payable in arrears (i) on
the last day of each calendar month,  commencing on the first such day following
the incurrence of such  Obligation,  (ii) upon  repayment  thereof in full or in
part,  and  (iii) if not  theretofore  paid in  full,  at the  time  such  other
Obligation becomes due and payable (whether by acceleration or otherwise).

         (C) Commitment  Fees. (i) The Borrower shall pay to the Agent,  for the
account of the Lenders as provided hereinbelow,  from and after the Closing Date
until  the  date on which  the  Aggregate  Revolving  Loan  Commitment  shall be
terminated  in  whole,  a  commitment  fee  accruing  at the  rate  of the  then
Applicable  Commitment Fee Percentage,  on the amount by which (x) the Aggregate
Revolving Loan Commitment exceeds (y) the Revolving Credit Obligations from time
to time.  All such  commitment  fees payable  under this clause  (C)(i) shall be
payable  quarterly  in  arrears  on the last day of each  fiscal  quarter of the
Borrower  occurring  after the Closing Date (with the first such  payment  being
calculated  for the period from the Closing Date and ending on March 31,  2000),
and, in addition,  on the date on which the Aggregate  Revolving Loan Commitment
shall be  terminated  in whole.  The Agent shall pay to each Lender a portion of
such  commitment  fee based on the amount by which such Lender's  Revolving Loan
Commitment exceeds the Revolving Credit Obligations  (excluding,  in the case of
all Lenders other than the Swing Line Bank, the outstanding Swing Line Loans).

         (ii) The  Borrower  shall  pay to the  Agent,  for the  account  of the
Lenders as provided hereinbelow,  from and after the Closing Date until the date
on which the Aggregate  Acquisition  Facility  Commitment shall be terminated in
whole, a commitment fee accruing at the rate of one- half of one percent (0.50%)
per  annum  on the  amount  by  which  (x) the  Aggregate  Acquisition  Facility
Commitment  exceeds (y) the  outstanding  principal  balance of the  Acquisition
Facility



                                                       -36-


<PAGE>



Loans from time to time.  All such  commitment  fees  payable  under this clause
(C)(ii)  shall be payable  quarterly  in arrears on the last day of each  fiscal
quarter of the  Borrower  occurring  after the Closing Date (with the first such
payment  being  calculated  for the period from the  Closing  Date and ending on
March 31, 2000),  and, in addition,  on the earlier of (1) the date on which the
Aggregate  Acquisition  Facility Commitment shall be terminated in whole and (2)
the  Acquisition  Facility Loan  Termination  Date.  The Agent shall pay to each
Lender a  portion  of such  commitment  fee based on such  Lender's  Acquisition
Facility Pro Rata Share.

         (iii) On the Closing Date, the Borrower shall pay to the Agent, for the
account of each Lender in  accordance  with its  Acquisition  Facility  Pro Rata
Share,  a fee equal to one percent (1%) of the  Aggregate  Acquisition  Facility
Commitment.

         (iv) The  Borrower  agrees to pay to the Agent for the sole  account of
the Agent and the Arranger  (unless  otherwise  agreed between the Agent and the
Arranger and any Lender) the fees set forth in the letter  agreements  among the
Agent,  the  Arranger and the  Borrower  dated  October 8, 1997 and December 14,
1999, payable at the times and in the amounts set forth therein.

         (D) Interest and Fee Basis; Applicable Floating Rate Margin, Applicable
Eurodollar Margin and Applicable Commitment Fee Percentage.

         (i) Interest on all  Obligations  and all fees shall be calculated  for
actual days elapsed on the basis of a 360-day  year.  Interest  shall be payable
for the day an  Obligation is incurred but not for the day of any payment on the
amount paid if payment is received prior to 2:00 p.m. (Indianapolis time) at the
place of payment.  If any payment of  principal  of or interest on a Loan or any
payment  of any  other  Obligations  shall  become  due on a day  which is not a
Business  Day, such payment  shall be made on the next  succeeding  Business Day
and,  in the  case of a  principal  payment,  such  extension  of time  shall be
included in computing interest in connection with such payment.

         (ii) The  Applicable  Floating  Rate Margin and  Applicable  Eurodollar
Margin for all Loans other than  Acquisition  Facility  Loans and the Applicable
Commitment Fee Percentage  shall be determined from time to time by reference to
the table set forth below, on the basis of the then applicable Leverage Ratio as
described in this Section 2.15(D)(ii):



                                                       -37-


<PAGE>



                             Applicable    Applicable      Applicable
                             Eurodollar    Floating Rate   Commitment
  Leverage Ratio             Margin        Margin          Fee Percentage

  Greater than or
  equal to 4.0 to 1.0         2.25%         0.75%            0.50%

  Greater than or
  equal to 3.5 to 1.0
  and less than
  4.0 to 1.0                  2.00%         0.50%            0.375%

  Greater than or
  equal to 3.0 to 1.0
  and less than
  3.5 to 1.0                   1.75%        0.25%            0.25%

  Greater than or
  equal to 2.5 to 1.0
  and less than
  3.0 to 1.0                   1.50%        0.00%            0.25%

  Greater than or
  equal to 2.0 to 1.0
  and less than
  2.5 to 1.0                   1.25%        0.00%            0.25%

  Less than 2.0 to 1.0         1.00%        0.00%            0.20%

For purposes of this Section 2.15(D)(ii), the Leverage Ratio shall be determined
as of the last day of each fiscal  quarter based upon (a) for  Indebtedness  for
borrowed money,  Indebtedness for borrowed money as of the last day of each such
fiscal  quarter;  and (b) for  EBITDA,  the actual  amount for the  four-quarter
period ending on such day, calculated,  with respect to Permitted  Acquisitions,
on a pro forma basis using  historical  financial  statements  obtained from the
seller (with EBITDA adjusted solely to add back (i) identifiable  expenses which
will be reduced or eliminated subsequent to the applicable Permitted Acquisition
(including,  but not  limited  to, the effect of margin  improvements)  and (ii)
transaction expenses arising from or in connection with the applicable Permitted
Acquisition),  broken  down  by  fiscal  quarter  in the  Borrower's  reasonable
judgment.  Upon  receipt  of the  financial  statements  delivered  pursuant  to
Sections 7.1(A)(i) and (ii), as applicable, the Applicable Floating Rate Margin,
Applicable  Eurodollar Margin and Applicable  Commitment Fee Percentage shall be
adjusted,  such  adjustment  being  effective  on the first  Business Day of the
fiscal quarter  following the Agent's  receipt of such financial  statements and
the  compliance  certificate  required to be delivered in  connection  therewith
pursuant to Section 7.1(A)(iii);  provided,  that if the Borrower shall not have
timely delivered its financial  statements in accordance with Section  7.1(A)(i)
or (ii), as applicable, then commencing on the



                                                       -38-


<PAGE>



date upon  which  such  financial  statements  should  have been  delivered  and
continuing until such financial  statements are actually delivered,  it shall be
assumed  for  purposes of  determining  the  Applicable  Floating  Rate  Margin,
Applicable  Eurodollar Margin and Applicable  Commitment Fee Percentage that the
Leverage Ratio was greater than or equal to 4.5 to 1.0.

         (E)  Taxes.

                  (i) Any and all  payments by the Borrower  hereunder  shall be
         made free and clear of and without deduction for any and all present or
         future taxes, levies, imposts,  deductions,  charges or withholdings or
         any liabilities with respect thereto  including those arising after the
         date  hereof as a result of the  adoption  of or any change in any law,
         treaty, rule, regulation,  guideline or determination of a Governmental
         Authority or any change in the interpretation or application thereof by
         a Governmental Authority but excluding,  in the case of each Lender and
         the Agent,  such taxes  (including  income taxes,  franchise  taxes and
         branch  profit taxes) as are imposed on or measured by such Lender's or
         Agent's,  as the case may be, income by the United States of America or
         any Governmental  Authority of the jurisdiction under the laws of which
         such Lender or Agent,  as the case may be, is  organized or maintains a
         Lending  Installation (all such non-excluded  taxes,  levies,  imposts,
         deductions, charges, withholdings, and liabilities which the Agent or a
         Lender  determines to be applicable to this  Agreement,  the other Loan
         Documents,  the Term Loan Commitments,  the Revolving Loan Commitments,
         the Loans or the  Letters of Credit  being  hereinafter  referred to as
         "Taxes").  If the Borrower shall be required by law to deduct any Taxes
         from or in respect of any sum payable hereunder or under the other Loan
         Documents  to any Lender or the  Agent,  (i) the sum  payable  shall be
         increased  as may be  necessary  so  that  after  making  all  required
         deductions  (including deductions applicable to additional sums payable
         under this Section  2.15(E))  such Lender or the Agent (as the case may
         be) receives an amount  equal to the sum it would have  received had no
         such   deductions   been  made,  (ii)  the  Borrower  shall  make  such
         deductions,  and (iii) the Borrower shall pay the full amount  deducted
         to the relevant  taxation  authority or other  authority in  accordance
         with  applicable  law.  If a  withholding  tax of the United  States of
         America  or  any  other  Governmental  Authority  shall  be  or  become
         applicable  (y) after the date of this  Agreement,  to such payments by
         the Borrower made to the Lending  Installation or any other office that
         a Lender  may claim as its  Lending  Installation,  or (z)  after  such
         Lender's  selection and designation of any other Lending  Installation,
         to such payments made to such other Lending  Installation,  such Lender
         shall use  reasonable  efforts  to make,  fund and  maintain  its Loans
         through  another  Lending   Installation  of  such  Lender  in  another
         jurisdiction so as to reduce the Borrower's liability hereunder, if the
         making, funding or maintenance of such Loans through such other Lending
         Installation  of such Lender does not, in the  judgment of such Lender,
         otherwise  adversely  affect  such  Loans,  or  obligations  under  the
         Commitments or such Lender.

                  (ii) In addition,  the  Borrower  agrees to pay any present or
         future  stamp or  documentary  taxes or any other  excise  or  property
         taxes,  charges,  or similar  levies  which arise from any payment made
         hereunder,  from the issuance of Letters of Credit  hereunder,  or from
         the execution,  delivery or registration  of, or otherwise with respect
         to, this



                                                       -39-


<PAGE>



         Agreement,  the other Loan Documents,  the  Commitments,  the Term Loan
         Commitments,  the Loans or the Letters of Credit (hereinafter  referred
         to as "Other Taxes").

                  (iii) The Borrower  indemnifies  each Lender and the Agent for
         the  full  amount  of  Taxes  and  Other  Taxes   (including,   without
         limitation,  any  Taxes  or Other  Taxes  imposed  by any  Governmental
         Authority on amounts  payable under this Section  2.15(E)) paid by such
         Lender or the Agent (as the case may be) and any  liability  (including
         penalties,  interest,  and expenses)  arising therefrom or with respect
         thereto,  whether or not such Taxes or Other  Taxes were  correctly  or
         legally asserted. This indemnification shall be made within thirty (30)
         days after the date such Lender or the Agent (as the case may be) makes
         written demand  therefor.  A certificate  as to any  additional  amount
         payable to any Lender or the Agent under this Section 2.15(E) submitted
         to the  Borrower and the Agent (if a Lender is so  submitting)  by such
         Lender or the Agent shall show in reasonable  detail the amount payable
         and the  calculations  used to determine such amount and shall,  absent
         manifest  error,  be final,  conclusive  and  binding  upon all parties
         hereto. With respect to such deduction or withholding for or on account
         of any Taxes and to  confirm  that all such Taxes have been paid to the
         appropriate Governmental Authorities,  the Borrower shall promptly (and
         in any event not later than thirty (30) days after receipt)  furnish to
         each  Lender  and the  Agent  such  certificates,  receipts  and  other
         documents  as may be  required  (in the  judgment of such Lender or the
         Agent) to  establish  any tax credit to which such  Lender or the Agent
         may be entitled.

                  (iv) Within  thirty (30) days after the date of any payment of
         Taxes or Other Taxes by the Borrower, the Borrower shall furnish to the
         Agent the original or a certified copy of a receipt  evidencing payment
         thereof.

                  (v) Without  prejudice to the survival of any other  agreement
         of the  Borrower  hereunder,  the  agreements  and  obligations  of the
         Borrower contained in this Section 2.15(E) shall survive the payment in
         full of  principal  and  interest  hereunder,  the  termination  of the
         Letters of Credit and the termination of this Agreement.

                  (vi) Without  limiting the  obligations  of the Borrower under
         this  Section  2.15(E),  each Lender  that is not created or  organized
         under  the  laws  of  the  United  States  of  America  or a  political
         subdivision  thereof  shall deliver to the Borrower and the Agent on or
         before the Closing  Date,  or, if later,  the date on which such Lender
         becomes  a  Lender  pursuant  to  Section  13.3,  a true  and  accurate
         certificate  executed in duplicate by a duly authorized officer of such
         Lender,  in a form  satisfactory  to the Borrower and the Agent, to the
         effect  that  such  Lender  is  capable  under  the  provisions  of  an
         applicable  tax treaty  concluded  by the United  States of America (in
         which case the certificate  shall be accompanied by two executed copies
         of Form  1001 of the IRS) or under  Section  1442 of the Code (in which
         case the certificate shall be accompanied by two copies of Form 4224 of
         the IRS,  or, if such  Lender is not a "bank"  within  the  meaning  of
         Section  881(c)(3)(A)  of the Code,  two completed and signed copies of
         IRS  Form W-8 or W-9 or the  applicable  successor  form) of  receiving
         payments of interest  hereunder  without  deduction or  withholding  of
         United States federal income tax. Each such Lender further agrees to



                                                       -40-


<PAGE>



         deliver  to the  Borrower  and the  Agent  from time to time a true and
         accurate certificate executed in duplicate by a duly authorized officer
         of such Lender substantially in a form satisfactory to the Borrower and
         the  Agent,  before  or  promptly  upon  the  occurrence  of any  event
         requiring a change in the most recent certificate  previously delivered
         by  it  to  the  Borrower  and  the  Agent  pursuant  to  this  Section
         2.15(E)(vi).   Further,   each  Lender  which  delivers  a  certificate
         accompanied  by Form 1001 of the IRS covenants and agrees to deliver to
         the Borrower and the Agent within fifteen (15) days prior to January 1,
         2001,  and every third (3rd)  anniversary  of such date  thereafter  on
         which this Agreement is still in effect,  another such  certificate and
         two accurate and complete  original  signed copies of Form 1001 (or any
         successor  form or forms  required  under  the  Code or the  applicable
         regulations  promulgated  thereunder),  and each Lender that delivers a
         Form W-8 or W-9 as  prescribed  above or a certificate  accompanied  by
         Form 4224 of the IRS  covenants  and agrees to deliver to the  Borrower
         and the Agent within  fifteen (15) days prior to the  beginning of each
         subsequent  taxable year of such Lender during which this  Agreement is
         still  in  effect,  another  such  Form  W-8  or W-9  or  another  such
         certificate and two accurate and complete original signed copies of IRS
         Form 4224 (or any successor  form or forms  required  under the Code or
         the  applicable   regulations   promulgated   thereunder).   Each  such
         certificate shall certify as to one of the following:

                           (a) that such Lender is capable of receiving payments
                  of interest  hereunder  without  deduction or  withholding  of
                  United States of America federal income tax;

                           (b) that such  Lender  is not  capable  of  receiving
                  payments   of  interest   hereunder   without   deduction   or
                  withholding of United States of America  federal income tax as
                  specified therein but is capable of recovering the full amount
                  of any such deduction or withholding  from a source other than
                  the  Borrower  and will not  seek any such  recovery  from the
                  Borrower; or

                           (c)  that,  as a  result  of the  adoption  of or any
                  change in any law,  treaty,  rule,  regulation,  guideline  or
                  determination of a Governmental Authority or any change in the
                  interpretation  or  application   thereof  by  a  Governmental
                  Authority  after the date such Lender  became a party  hereto,
                  such Lender is not capable of  receiving  payments of interest
                  hereunder without deduction or withholding of United States of
                  America federal income tax as specified therein and that it is
                  not capable of  recovering  the full amount of the same from a
                  source other than the Borrower.

         Each Lender shall  promptly  furnish to the Borrower and the Agent such
         additional  documents as may be reasonably  required by the Borrower or
         the Agent to establish any exemption  from or reduction of any Taxes or
         Other  Taxes  required  to be  deducted  or  withheld  and which may be
         obtained without undue expense to such Lender.



                                                       -41-


<PAGE>



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

         (G) Entries  Binding.  The entries  made in the  Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error,
unless the Borrower  objects to  information  contained in the Register and each
Loan  Account  within  thirty  (30)  days  of the  Borrower's  receipt  of  such
information.

         2.16  Notification  of  Advances,   Interest  Rates,   Prepayments  and
Aggregate Revolving Loan Commitment Reductions.  Promptly after receipt thereof,
the Agent will notify each Lender of the  contents of each  Aggregate  Revolving
Loan Commitment  reduction notice,  Aggregate  Acquisition  Facility  Commitment
reduction  notice,   Borrowing  Notice,   Continuation/Conversion   Notice,  and
repayment notice received by it hereunder.  The Agent will notify each Lender of
the  interest  rate  applicable  to each  Eurodollar  Rate  Loan  promptly  upon
determination  of such  interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.

         2.17  Lending  Installations.  Each  Lender  may book its  Loans at any
Lending  Installation  selected  by such  Lender  and  may  change  its  Lending
Installation  from time to time. All terms of this Agreement  shall apply to any
such Lending  Installation and the Notes shall be deemed held by each Lender for
the  benefit  of such  Lending  Installation.  Each  Lender  may,  by written or
facsimile notice to the Agent and the Borrower, designate a Lending Installation
through  which Loans will be made by it and for whose  account Loan payments are
to be made.

         2.18  Non-Receipt  of Funds by the  Agent.  Unless  the  Borrower  or a
Lender,  as the case may be, notifies the Agent prior to the date on which it is
scheduled  to make  payment  to the  Agent of (i) in the case of a  Lender,  the
proceeds of a Loan or (ii) in the case of the Borrower,  a payment of principal,
interest or fees to the Agent for the account of the  Lenders,  that it does not
intend to make such  payment,  the Agent may assume  that such  payment has been
made.  The Agent may,  but shall not be  obligated  to,  make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such  Lender  or the  Borrower,  as the case may be,  has not in fact  made such
payment to the Agent,  the  recipient  of such payment  shall,  on demand by the
Agent,  repay to the Agent the amount so made  available  together with interest
thereon in respect  of each day  during the period  commencing  on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender,  the
Federal Funds  Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.



                                                       -42-


<PAGE>



         2.19  Termination  Date.  This Agreement  shall be effective  until the
Termination  Date.  Notwithstanding  the  termination  of this  Agreement on the
Termination Date, until all of the Obligations (other than contingent  indemnity
obligations)  shall have been fully and  indefeasibly  paid and  satisfied,  all
financing  arrangements  among the  Borrower  and the  Lenders  shall  have been
terminated  (other than under Interest Rate Agreements or other  agreements with
respect  to Hedging  Obligations)  and all of the  Letters of Credit  shall have
expired, been canceled or terminated,  all of the rights and remedies under this
Agreement and the other Loan Documents shall survive.

         2.20 Replacement of Certain Lenders.  In the event a Lender  ("Affected
Lender")  shall have:  (i) failed to fund its  applicable  Pro Rata Share of any
Advance requested by the Borrower, or to fund a Revolving Loan in order to repay
Swing Line Loans  pursuant to Section  2.3(D) or in respect of L/C  Obligations,
which such Lender is  obligated  to fund under the terms of this  Agreement  and
which failure has not been cured, (ii) requested  compensation from the Borrower
under  Sections  2.15(E),  4.1 or 4.2 to  recover  Taxes,  Other  Taxes or other
additional costs incurred by such Lender which are not being incurred  generally
by the other Lenders,  (iii) delivered a notice pursuant to Section 4.3 claiming
that such Lender is unable to extend  Eurodollar  Rate Loans to the Borrower for
reasons  not  generally  applicable  to the other  Lenders  or (iv) has  invoked
Section 10.2, then, in any such case, the Borrower or the Agent may make written
demand on such Affected Lender (with a copy to the Agent in the case of a demand
by the Borrower and a copy to the Borrower in the case of a demand by the Agent)
for the Affected  Lender to assign,  and such Affected Lender shall use its best
efforts to assign  pursuant to one or more duly executed  Assignment  Agreements
five (5) Business Days after the date of such demand,  to one or more  financial
institutions  that  comply  with the  provisions  of Section  13.3(A)  which the
Borrower or the Agent,  as the case may be,  shall have engaged for such purpose
("Replacement  Lender"),  all of such Affected  Lender's  rights and obligations
under  this  Agreement  and  the  other  Loan  Documents   (including,   without
limitation,  its Revolving Loan Commitment,  Acquisition Facility Commitment all
Loans owing to it, all of its  participation  interests  in existing  Letters of
Credit and Swing Line Loans,  and its  obligation to  participate  in additional
Letters of Credit and Swing Line Loans  hereunder)  in  accordance  with Section
13.3.  The Agent agrees,  upon the  occurrence of such events with respect to an
Affected  Lender  and upon  the  written  request  of the  Borrower,  to use its
reasonable  efforts  to  obtain  the  commitments  from  one or  more  financial
institutions to act as a Replacement  Lender. The Agent is authorized to execute
one or more of such assignment  agreements as attorney-in-fact  for any Affected
Lender  failing to execute and deliver  the same within five (5)  Business  Days
after the date of such  demand.  Further,  with respect to such  assignment  the
Affected Lender shall have concurrently  received,  in cash, all amounts due and
owing to the  Affected  Lender  hereunder  or under  any  other  Loan  Document,
including, without limitation, the aggregate outstanding principal amount of the
Loans owed to such Lender,  together with accrued  interest  thereon through the
date of such assignment,  amounts payable under Sections  2.15(E),  4.1, and 4.2
with respect to such  Affected  Lender and  compensation  payable  under Section
2.15(C) in the event of any replacement of any Affected Lender under clause (ii)
or clause (iii) of this Section 2.20;  provided that upon such Affected Lender's
replacement,  such  Affected  Lender  shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.15(E),  4.1, 4.2, 4.4, and
10.7, as well as to any fees accrued for its account hereunder and not yet paid,
and shall continue to be obligated



                                                       -43-


<PAGE>



under Section 11.8. Upon the replacement of any Affected Lender pursuant to this
Section 2.20, the provisions of Section 9.2 shall continue to apply with respect
to  Borrowings  which are then  outstanding  with  respect to which the Affected
Lender  failed to fund its  applicable  Pro Rata Share and which failure has not
been cured.

ARTICLE III: THE LETTER OF CREDIT FACILITY

         3.1  Obligation to Issue.  Subject to the terms and  conditions of this
Agreement and in reliance upon the representations,  warranties and covenants of
the Borrower herein set forth,  each Issuing Bank hereby agrees to issue for the
account of the  Borrower  through  such  Issuing  Bank's  branches as it and the
Borrower may jointly agree, one or more Letters of Credit denominated in Dollars
in  accordance  with this  Article  III,  from time to time  during the  period,
commencing  on the date  hereof  and  ending  on the  Business  Day prior to the
Termination Date.

         3.2 [Intentionally Omitted].

         3.3 Types and Amounts. No Issuing Bank shall have any obligation to and
no Issuing Bank shall:

                  (i)  issue any  Letter  of Credit if on the date of  issuance,
         before  or after  giving  effect  to the  Letter  of  Credit  requested
         hereunder,  (a) the  Revolving  Credit  Obligations  at such time would
         exceed the Aggregate Revolving Loan Commitment or the Borrowing Base at
         such  time,  or  (b)  the  aggregate  outstanding  amount  of  the  L/C
         Obligations would exceed $10,000,000; or

                  (ii) issue any Letter of Credit which has an  expiration  date
         later than the date which is the earlier of one (1) year after the date
         of issuance thereof or five (5) Business Days immediately preceding the
         Termination Date.

         3.4 Conditions. In addition to being subject to the satisfaction of the
conditions  contained in Sections 5.1 and 5.2, the obligation of an Issuing Bank
to issue any  Letter of Credit is  subject  to the  satisfaction  in full of the
following conditions:

                  (i)  the  Borrower  shall  have  delivered  to the  applicable
         Issuing  Bank at such times and in such manner as such Issuing Bank may
         reasonably  prescribe,  a request for issuance of such Letter of Credit
         in  substantially   the  form  of  Exhibit  D  hereto,   duly  executed
         applications  for such  Letter of  Credit,  and such  other  documents,
         instructions  and  agreements as may be required  pursuant to the terms
         thereof,  and  the  proposed  Letter  of  Credit  shall  be  reasonably
         satisfactory to such Issuing Bank as to form and content; and

                  (ii) as of the date of issuance  no order,  judgment or decree
         of any court, arbitrator or Governmental Authority shall purport by its
         terms to enjoin or restrain  the  applicable  Issuing Bank from issuing
         such Letter of Credit and no law,



                                                       -44-


<PAGE>



         rule or  regulation  applicable  to such Issuing Bank and no request or
         directive  (whether or not having the force of law) from a Governmental
         Authority  with  jurisdiction  over such Issuing Bank shall prohibit or
         request  that such Issuing Bank refrain from the issuance of Letters of
         Credit generally or the issuance of that Letter of Credit.

         3.5  Procedure  for  Issuance of Letters of Credit.  (a) Subject to the
terms and  conditions  of this  Article  III and  provided  that the  applicable
conditions  set forth in Sections  5.1 and 5.2 hereof have been  satisfied,  the
applicable  Issuing Bank shall, on the requested date,  issue a Letter of Credit
on behalf of the  Borrower in  accordance  with such  Issuing  Bank's  usual and
customary  business  practices  and, in this  connection,  such Issuing Bank may
assume that the applicable  conditions set forth in Section 5.2 hereof have been
satisfied unless it shall have received notice to the contrary from the Agent or
a Lender or has knowledge that the applicable conditions have not been met.

         (b) The  applicable  Issuing Bank shall give the Agent written or telex
notice, or telephonic notice confirmed  promptly  thereafter in writing,  of the
issuance of a Letter of Credit,  provided,  however, that the failure to provide
such notice shall not result in any liability on the part of such Issuing Bank.

         (c) No Issuing Bank shall  extend or amend any Letter of Credit  unless
the  requirements  of this  Section 3.5 are met as though a new Letter of Credit
was being requested and issued.

         3.6 Letter of Credit  Participation.  Immediately  upon the issuance of
each Letter of Credit  hereunder,  each  Lender  with a Revolving  Loan Pro Rata
Share shall be deemed to have  automatically,  irrevocably  and  unconditionally
purchased and received from the  applicable  Issuing Bank an undivided  interest
and  participation  in and to such  Letter of  Credit,  the  obligations  of the
Borrower in respect  thereof,  and the liability of such Issuing Bank thereunder
(collectively, an "L/C Interest") in an amount equal to the amount available for
drawing under such Letter of Credit  multiplied by such Lender's  Revolving Loan
Pro Rata  Share.  Each  Issuing  Bank will  notify  each  Lender  promptly  upon
presentation  to it of an L/C  Draft or upon any  other  draw  under a Letter of
Credit.  On or before the Business Day on which an Issuing Bank makes payment of
each such L/C Draft or, in the case of any other draw on a Letter of Credit,  on
demand by the  Agent,  each  Lender  shall make  payment  to the Agent,  for the
account of the  applicable  Issuing Bank, in immediately  available  funds in an
amount  equal to such  Lender's  Revolving  Loan Pro Rata Share of the amount of
such payment or draw.  The  obligation  of each Lender to reimburse  the Issuing
Banks under this Section 3.6 shall be unconditional, continuing, irrevocable and
absolute. In the event that any Lender fails to make payment to the Agent of any
amount due under this  Section  3.6,  the Agent  shall be  entitled  to receive,
retain and apply against such  obligation  the principal and interest  otherwise
payable to such Lender hereunder until the Agent receives such payment from such
Lender or such obligation is otherwise fully satisfied;  provided, however, that
nothing  contained in this sentence  shall relieve such Lender of its obligation
to reimburse the applicable Issuing Bank for such amount in accordance with this
Section 3.6.



                                                       -45-


<PAGE>



         3.7  Reimbursement  Obligation.  The Borrower  agrees  unconditionally,
irrevocably and absolutely to pay  immediately to the Agent,  for the account of
the Lenders,  the amount of each advance which may be drawn under or pursuant to
a Letter of  Credit or an L/C Draft  related  thereto  (such  obligation  of the
Borrower to reimburse  the Agent for an advance made under a Letter of Credit or
L/C Draft being  hereinafter  referred to as a  "Reimbursement  Obligation" with
respect to such  Letter of Credit or L/C  Draft).  If the  Borrower  at any time
fails to repay a  Reimbursement  Obligation  pursuant to this  Section  3.7, the
Borrower  shall be deemed to have  elected  to borrow  Revolving  Loans from the
Lenders,  as of the  date  of  the  advance  giving  rise  to the  Reimbursement
Obligation,   equal  in  amount  to  the  amount  of  the  unpaid  Reimbursement
Obligation.  Such  Revolving  Loans  shall be made as of the date of the payment
giving rise to such Reimbursement Obligation,  automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise applicable
to an Advance of  Revolving  Loans.  Such  Revolving  Loans shall  constitute  a
Floating Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement  Obligation.  If, for any reason,  the  Borrower  fails to repay a
Reimbursement  Obligation on the day such  Reimbursement  Obligation arises and,
for any reason,  the Lenders  are unable to make or have no  obligation  to make
Revolving Loans, then such Reimbursement Obligation shall bear interest from and
after  such day,  until  paid in full,  at the  interest  rate  applicable  to a
Floating Rate Advance.

         3.8 Letter of Credit Fees. The Borrower agrees to pay (i) quarterly, in
arrears,  to the Agent for the  ratable  benefit of the  Lenders,  except as set
forth in Section  9.2,  a letter of credit fee at a rate per annum  equal to the
Applicable  L/C Fee  Percentage  on the average  daily  outstanding  face amount
available for drawing under all Letters of Credit,  (ii) quarterly,  in arrears,
to the Agent  for the sole  account  of each  Issuing  Bank,  a letter of credit
fronting  fee of one-  quarter of one  percent  (0.25%) per annum on the average
daily  outstanding face amount available for drawing under all Letters of Credit
issued by such  Issuing  Bank,  and (iii) to the Agent for the  benefit  of each
Issuing  Bank,  all  customary  fees and  other  issuance,  amendment,  document
examination,  negotiation  and  presentment  expenses  and  related  charges  in
connection with the issuance,  amendment,  presentation  of L/C Drafts,  and the
like  customarily  charged by such  Issuing  Banks with  respect to standby  and
commercial  Letters  of  Credit,   including,   without   limitation,   standard
commissions with respect to commercial Letters of Credit, payable at the time of
invoice of such amounts.

         3.9 Issuing  Bank  Reporting  Requirements.  In addition to the notices
required by Section  3.5(C),  each Issuing  Bank shall,  no later than the tenth
Business Day  following the last day of each month,  provide to the Agent,  upon
the Agent's request, schedules, in form and substance reasonably satisfactory to
the Agent, showing the date of issue, account party, amount, expiration date and
the reference  number of each Letter of Credit issued by it  outstanding  at any
time during such month and the aggregate  amount payable by the Borrower  during
such month. In addition,  upon the request of the Agent, each Issuing Bank shall
furnish to the Agent copies of any Letter of Credit and any  application  for or
reimbursement  agreement with respect to a Letter of Credit to which the Issuing
Bank is party and such other documentation as may reasonably be requested by the
Agent.  Upon the  request of any Lender,  the Agent will  provide to such Lender
information concerning such Letters of Credit.



                                                       -46-


<PAGE>



         3.10 Indemnification;  Exoneration.  (A) In addition to amounts payable
as  elsewhere  provided in this  Article  III,  the  Borrower  hereby  agrees to
protect,  indemnify, pay and save harmless the Agent, each Issuing Bank and each
Lender from and against any and all liabilities and costs which the Agent,  such
Issuing Bank or such Lender may incur or be subject to as a consequence,  direct
or indirect, of (i) the issuance of any Letter of Credit other than, in the case
of the applicable  Issuing Bank, as a result of its Gross  Negligence or willful
misconduct,  as  determined  by the  final  judgment  of a  court  of  competent
jurisdiction,  or (ii) the  failure of the  applicable  Issuing  Bank to honor a
drawing  under a Letter of Credit  as a result of any act or  omission,  whether
rightful or wrongful,  of any present or future de jure or de facto Governmental
Authority (all such acts or omissions herein called "Governmental Acts").

         (B) As among the  Borrower,  the  Lenders,  the  Agent and the  Issuing
Banks, the Borrower assumes all risks of the acts and omissions of, or misuse of
such  Letter  of Credit  by,  the  beneficiary  of any  Letters  of  Credit.  In
furtherance and not in limitation of the foregoing, subject to the provisions of
the Letter of Credit applications and Letter of Credit reimbursement  agreements
executed  by the  Borrower  at the time of  request  for any  Letter of  Credit,
neither the Agent,  any Issuing Bank nor any Lender shall be responsible (in the
absence of Gross Negligence or willful  misconduct in connection  therewith,  as
determined by the final judgment of a court of competent jurisdiction):  (i) for
the form, validity,  sufficiency,  accuracy,  genuineness or legal effect of any
document  submitted  by any party in  connection  with the  application  for and
issuance of the Letters of Credit,  even if it should in fact prove to be in any
or all respects invalid,  insufficient,  inaccurate,  fraudulent or forged; (ii)
for the validity or sufficiency of any instrument  transferring  or assigning or
purporting  to  transfer  or assign a Letter of Credit or the rights or benefits
thereunder  or  proceeds  thereof,  in whole or in part,  which  may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply duly with  conditions  required in order to draw upon
such Letter of Credit;  (iv) for errors,  omissions,  interruptions or delays in
transmission or delivery of any messages, by mail, cable,  telegraph,  telex, or
other  similar  form  of  teletransmission  or  otherwise;  (v)  for  errors  in
interpretation  of  technical  trade  terms;  (vi)  for any loss or delay in the
transmission  or otherwise  of any document  required in order to make a drawing
under  any  Letter  of  Credit  or  of  the  proceeds  thereof;  (vii)  for  the
misapplication  by the  beneficiary of a Letter of Credit of the proceeds of any
drawing  under such Letter of Credit;  and (viii) for any  consequences  arising
from causes beyond the control of the Agent,  the Issuing Banks and the Lenders,
including,  without  limitation,  any Governmental Acts. None of the above shall
affect,  impair,  or prevent the vesting of any Issuing  Bank's rights or powers
under this Section 3.10.

         (C) In furtherance  and extension and not in limitation of the specific
provisions  hereinabove  set forth,  any action  taken or omitted by any Issuing
Bank  under  or in  connection  with  the  Letters  of  Credit  or  any  related
certificates   shall  not,  in  the  absence  of  Gross  Negligence  or  willful
misconduct,  as  determined  by the  final  judgment  of a  court  of  competent
jurisdiction, put the applicable Issuing Bank, the Agent or any Lender under any
resulting  liability  to the  Borrower  or relieve  the  Borrower  of any of its
obligations hereunder to any such Person.

         (D) Without  prejudice  to the  survival of any other  agreement of the
Borrower hereunder,  the agreements and obligations of the Borrower contained in
this Section 3.10 shall survive the



                                                       -47-


<PAGE>



payment in full of principal  and interest  hereunder,  the  termination  of the
Letters of Credit and the termination of this Agreement.

         3.11 Cash Collateral.  Notwithstanding  anything to the contrary herein
or in any  application  for a Letter of Credit,  after the occurrence and during
the continuance of Default, the Borrower shall, upon the Agent's demand, deliver
to the Agent for the  benefit of the Lenders and the  Issuing  Banks,  cash,  or
other collateral of a type satisfactory to the Required Lenders, having a value,
as  determined  by  such  Lenders,   equal  to  the  aggregate  outstanding  L/C
Obligations.  In addition,  if the Revolving Credit  Availability is at any time
less than the amount of contingent L/C Obligations  outstanding at any time, the
Borrower shall deposit cash  collateral with the Agent in an amount equal to the
amount by which such L/C Obligations exceed such Revolving Credit  Availability.
Any  such  collateral  shall  be  held  by  the  Agent  in  a  separate  account
appropriately  designated  as a cash  collateral  account  in  relation  to this
Agreement and the Letters of Credit and retained by the Agent for the benefit of
the Lenders and the Issuing  Banks as  collateral  security  for the  Borrower's
obligations  in respect of this  Agreement and each of the Letters of Credit and
L/C Drafts.  Such amounts  shall be applied to reimburse  the Issuing  Banks for
drawings or payments under or pursuant to Letters of Credit or L/C Drafts, or if
no such  reimbursement is required,  to payment of such of the other Obligations
as the  Agent  shall  determine.  If no  Default  shall be  continuing,  amounts
remaining in any cash collateral  account  established  pursuant to this Section
3.11 which are not to be  applied  to  reimburse  an  Issuing  Bank for  amounts
actually  paid or to be paid by such  Issuing  Bank in  respect  of a Letter  of
Credit or L/C Draft,  shall be returned to the Borrower (after  deduction of the
Agent's expenses incurred in connection with such cash collateral account).

ARTICLE IV:  CHANGE IN CIRCUMSTANCES

         4.1   Yield   Protection.   If  any   law  or   any   governmental   or
quasi-governmental rule, regulation,  policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and having
general  applicability to all banks within the jurisdiction in which such Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of  this  Agreement),  or  any  interpretation  or  application  thereof  by any
Governmental  Authority charged with the interpretation or application  thereof,
or the compliance of any Lender therewith,

                  (i) subjects any Lender or any applicable Lending Installation
         to any tax,  duty,  charge or  withholding on or from payments due from
         the Borrower  (excluding  federal taxation of the overall net income of
         any Lender or applicable Lending Installation), or changes the basis of
         taxation  of  payments  to any Lender in respect of its Loans,  its L/C
         Interests, the Letters of Credit or other amounts due it hereunder, or

                  (ii)  imposes or increases  or deems  applicable  any reserve,
         assessment,  insurance charge,  special deposit or similar  requirement
         against  assets  of,  deposits  with or for the  account  of, or credit
         extended by, any Lender or any applicable Lending  Installation  (other
         than reserves and  assessments  taken into account in  determining  the
         interest rate



                                                       -48-


<PAGE>



         applicable  to  Eurodollar  Rate Loans) with respect to its Loans,  L/C
         Interests or the Letters of Credit, or

                  (iii)  imposes any other  condition  the result of which is to
         increase the cost to any Lender or any applicable Lending  Installation
         of making,  funding or maintaining the Loans,  the L/C Interests or the
         Letters of Credit or reduces  any amount  received by any Lender or any
         applicable Lending  Installation in connection with Loans or Letters of
         Credit, or requires any Lender or any applicable  Lending  Installation
         to make any payment  calculated  by reference to the amount of Loans or
         L/C  Interests  held or interest  received by it or by reference to the
         Letters of Credit, by an amount deemed material by such Lender;

and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement,  then,  within 15 days after
receipt by the  Borrower of written  demand by such  Lender  pursuant to Section
4.5, the Borrower shall pay such Lender that portion of such  increased  expense
incurred or  reduction in an amount  received  which such Lender  determines  is
attributable  to making,  funding  and  maintaining  its Loans,  L/C  Interests,
Letters of Credit and its Revolving Loan Commitment.

         4.2 Changes in Capital Adequacy Regulations. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender,  any
Lending  Installation of such Lender or any corporation  controlling such Lender
is  increased  as a result  of a  "Change"  (as  defined  below),  and (ii) such
increase  in capital  will  result in an  increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to
make Loans  hereunder,  then,  within 15 days after  receipt by the  Borrower of
written  demand by such Lender  pursuant to Section 4.5, the Borrower  shall pay
such Lender the amount  necessary to compensate for any shortfall in the rate of
return on the portion of such increased  capital which such Lender determines is
attributable to this  Agreement,  its Loans,  its L/C Interests,  the Letters of
Credit or its obligation to make Loans hereunder (after taking into account such
Lender's policies as to capital  adequacy).  "Change" means (i) any change after
the date of this Agreement in the "Risk- Based Capital  Guidelines"  (as defined
below)  excluding,  for the avoidance of doubt,  the effect of any phasing in of
such  Risk-Based  Capital  Guidelines or any other capital  requirements  passed
prior to the date  hereof,  or (ii) any  adoption of or change in any other law,
governmental  or  quasi-  governmental  rule,  regulation,   policy,  guideline,
interpretation,  or directive (whether or not having the force of law) after the
date of this  Agreement  and  having  general  applicability  to all  banks  and
financial  institutions  within the  jurisdiction  in which such Lender operates
which affects the amount of capital required or expected to be maintained by any
Lender or any Lending  Installation or any  corporation  controlling any Lender.
"Risk-Based  Capital  Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement,  including transition
rules, and (ii) the corresponding capital regulations  promulgated by regulatory
authorities  outside the United States  implementing the July 1988 report of the
Basle  Committee  on  Banking  Regulation  and  Supervisory  Practices  Entitled
"International  Convergence  of Capital  Measurements  and  Capital  Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.



                                                       -49-


<PAGE>



         4.3  Availability  of Types of Advances.  If (i) any Lender  determines
that maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive,  whether or not
having  the  force  of law,  or (ii) the  Required  Lenders  determine  that (x)
deposits  of a type and  maturity  appropriate  to match  fund  Eurodollar  Rate
Advances  are not  available or (y) the interest  rate  applicable  to a Type of
Advance does not accurately  reflect the cost of making or  maintaining  such an
Advance,  then the Agent shall suspend the  availability of the affected Type of
Advance and, in the case of any  occurrence  set forth in clause (i) require any
Advances of the affected Type to be repaid.

         4.4  Funding  Indemnification.  If any  payment  of a  Eurodollar  Rate
Advance  occurs on a date which is not the last day of the  applicable  Interest
Period, whether because of acceleration, prepayment, conversion or otherwise, or
a Eurodollar  Rate Advance is not made on the date specified by the Borrower for
any reason  other than default by the Lenders,  the  Borrower  indemnifies  each
Lender  for any loss or cost  incurred  by it  resulting  therefrom,  including,
without  limitation,  any  loss or cost in  liquidating  or  employing  deposits
acquired to fund or maintain the Eurodollar Rate Advance.

         4.5 Lender Statements;  Survival of Indemnity.  If reasonably possible,
each Lender shall designate an alternate  Lending  Installation  with respect to
its Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under Sections 4.1 and 4.2 or to avoid the  unavailability  of a Type of Advance
under Section 4.3, so long as such  designation is not  disadvantageous  to such
Lender.  Each Lender  requiring  compensation  pursuant to Section 2.15(E) or to
this Article IV shall use its reasonable  efforts to notify the Borrower and the
Agent in writing of any Change, law, policy, rule, guideline or directive giving
rise to such demand for  compensation  not later than thirty (30) days following
the date upon which the  responsible  account  officer of such  Lender  knows or
should have known of such Change, law, policy, rule, guideline or directive. Any
demand for  compensation  pursuant  to this  Article IV shall be in writing  and
shall state the amount due, if any,  under Section 4.1, 4.2 or 4.4 and shall set
forth in reasonable  detail the calculations  upon which such Lender  determined
such amount.  Such written demand shall be rebuttably  presumed  correct for all
purposes.  Determination  of amounts  payable  under such Sections in connection
with a Eurodollar Rate Loan shall be calculated as though each Lender funded its
Eurodollar  Rate Loan through the purchase of a deposit of the type and maturity
corresponding  to the deposit used as a reference in determining  the Eurodollar
Rate  applicable  to such  Loan,  whether  in fact that is the case or not.  The
obligations  of the  Borrower  under  Sections  4.1,  4.2 and 4.4 shall  survive
payment of the Obligations and termination of this Agreement.

ARTICLE V:  CONDITIONS PRECEDENT

         5.1 Initial  Advances and Letters of Credit.  The Lenders  shall not be
required  to make the initial  Loans or issue any  Letters of Credit  unless the
Borrower  has  furnished  to the Agent each of the  following,  with  sufficient
copies for the Lenders, all in form and substance satisfactory to the Agent, the
Arranger and the Lenders:



                                                       -50-


<PAGE>



                  (1) Copies of a certificate  of good standing  shall have been
         ordered for the Borrower, Refinishers Warehouse and Thompson, certified
         by  the  appropriate   governmental  officer  in  its  jurisdiction  of
         incorporation;

                  (2) Copies,  certified by the Secretary or Assistant Secretary
         of the Borrower,  Refinishers Warehouse and Thompson, of its respective
         Articles  of  Incorporation  (together  with all  amendments  thereto),
         By-Laws and, for the Borrower and Refinishers  Warehouse,  of its Board
         of Directors'  resolutions (and resolutions of other bodies, if any are
         deemed  necessary by counsel for any Lender)  authorizing the execution
         of the Loan Documents;

                  (3) An  incumbency  certificate,  executed by the Secretary or
         Assistant Secretary of each of the Borrower,  Refinishers Warehouse and
         Thompson, which shall identify by name and title and bear the signature
         of the officers of the  Borrower,  Refinishers  Warehouse  and Thompson
         authorized to sign the Loan Documents and to make borrowings hereunder,
         upon which  certificate  the Agent and the Lenders shall be entitled to
         rely until informed of any change in writing by the Borrower;

                  (4) A certificate,  in form and substance  satisfactory to the
         Agent,  signed by the chief financial officer of the Borrower,  stating
         that on Closing Date no Default or  Unmatured  Default has occurred and
         is continuing;

                  (5) A written opinion of the Borrower's counsel,  addressed to
         the Agent and the Lenders,  addressing the issues identified in Exhibit
         F hereto containing  assumptions and  qualifications  acceptable to the
         Agent and the Lenders;

                  (6)  Notes  payable  to the  order  of each of the  applicable
         Lenders (amended and restated where appropriate);

                  (7) Evidence  satisfactory to the Agent that there has been no
         material   adverse  change  in  the  Borrower's   business,   financial
         condition,  operation or prospects,  as of the Borrower's  consolidated
         financial statements dated December 31, 1998;

                  (8)  Evidence  satisfactory  to the Agent that there exists no
         injunction or temporary restraining order which, in the judgment of the
         Agent, would prohibit the making of the Loans or any litigation seeking
         such an injunction or restraining order;

                  (9) Written money transfer  instructions  reasonably requested
         by the  Agent,  addressed  to the  Agent and  signed  by an  Authorized
         Officer;

                  (10) Evidence  satisfactory to the Agent that the Borrower has
         paid to the Agent and the Arranger the fees agreed to in the fee letter
         dated December 14, 1999 among the Agent,  the Arranger and the Borrower
         and the fees due on the Closing Date which the Agent,  the Arranger and
         the Borrower have agreed to herein; and



                                                       -51-


<PAGE>



                  (11) Such  other  documents  as the Agent or any Lender or its
         counsel may have reasonably  requested,  including,  without limitation
         all  of the  documents  reflected  on the  List  of  Closing  Documents
         attached as Exhibit G to this Agreement.

         5.2 Each  Advance  and  Letter  of  Credit.  The  Lenders  shall not be
required  to make any  Advance  or issue  any  Letter of  Credit,  unless on the
applicable  Borrowing  Date,  or in the case of a Letter of Credit,  the date on
which the Letter of Credit is to be issued:

                  (i)  There exists no Default or Unmatured Default; and

                  (ii) The representations  and warranties  contained in Article
         VI are true and correct as of such Borrowing Date except for changes in
         the Schedules to this Agreement  reflecting  transactions  permitted by
         this Agreement.

         Each Borrowing  Notice with respect to each such Advance and the letter
of credit  application  with  respect to a Letter of Credit  shall  constitute a
representation  and warranty by the Borrower  that the  conditions  contained in
Sections  5.2(i) and (ii) have been  satisfied.  Any  Lender may  require a duly
completed  officer's  certificate in substantially  the form of Exhibit H hereto
and/or a duly  completed  compliance  certificate in  substantially  the form of
Exhibit I hereto as a condition to making an Advance.

ARTICLE VI:  REPRESENTATIONS AND WARRANTIES

         In order to  induce  the  Agent  and the  Lenders  to enter  into  this
Agreement and to make the Loans and the other  financial  accommodations  to the
Borrower  and to issue the  Letters of Credit  described  herein,  the  Borrower
represents  and  warrants  as  follows  to each  Lender  and the Agent as of the
Closing Date, and thereafter on each date as required by Section 5.2:

         6.1  Organization;  Corporate  Powers.  The  Borrower  and  each of its
Subsidiaries  (i) is a  corporation  duly  organized,  validly  existing  and in
existence under the laws of the jurisdiction of its  organization,  (ii) is duly
qualified to do business as a foreign  corporation and is in good standing under
the laws of each  jurisdiction  in which  failure to be so qualified and in good
standing could not reasonably be expected to have a Material Adverse Effect, and
(iii) has all  requisite  corporate  power and  authority  to own,  operate  and
encumber its property and to conduct its business as presently  conducted and as
proposed to be conducted.

         6.2  Authority.

         (A) The  Borrower  and  each  of its  Subsidiaries  has  the  requisite
corporate  power and authority to execute,  deliver and perform each of the Loan
Documents.

         (B) The  execution,  delivery  and  performance  of  each  of the  Loan
Documents which have been executed as required by this Agreement or otherwise on
or  prior  to  the  Closing  Date  and  to  which  the  Borrower  or  any of its
Subsidiaries is party,  and the  consummation of the  transactions  contemplated
thereby, have been duly approved by the respective boards of directors and, if



                                                       -52-


<PAGE>



necessary,  the  shareholders  of the  Borrower and its  Subsidiaries,  and such
approvals have not been rescinded.  No other corporate  action or proceedings on
the part of the Borrower or its  Subsidiaries  are necessary to consummate  such
transactions.

         (C) Each of the Loan  Documents  to which  the  Borrower  or any of its
Subsidiaries is a party has been duly executed,  delivered or filed, as the case
may  be,  by it  and  constitutes  its  legal,  valid  and  binding  obligation,
enforceable  against it in accordance  with its terms (except as  enforceability
may be  limited  by  bankruptcy,  insolvency,  or  similar  laws  affecting  the
enforcement of creditors' rights generally),  is in full force and effect and no
material term or condition thereof has been amended, modified or waived from the
terms and  conditions  contained  in the Loan  Documents  delivered to the Agent
pursuant  to Section  5.1  without  the prior  written  consent of the  Required
Lenders,  and the Borrower and its  Subsidiaries  have,  and, to the best of the
Borrower's  and its  Subsidiaries'  knowledge,  all other parties  thereto have,
performed and complied with all the terms, provisions, agreements and conditions
set forth  therein and required to be performed or complied with by such parties
on or before the Closing Date,  and no unmatured  default,  default or breach of
any covenant by any such party exists thereunder.

         6.3 No Conflict;  Governmental  Consents.  The execution,  delivery and
performance  of each of the Loan  Documents  to which the Borrower or any of its
Subsidiaries is a party do not and will not (i) conflict with the certificate or
articles of  incorporation  or by-laws of the  Borrower or any such  Subsidiary,
(ii) constitute a tortious  interference with any Contractual  Obligation of any
Person or conflict  with,  result in a breach of or constitute  (with or without
notice  or  lapse  of time or  both) a  default  under  any  Requirement  of Law
(including,  without  limitation,  any  Environmental  Property Transfer Act) or
Contractual  Obligation  of the  Borrower  or any such  Subsidiary,  or  require
termination of any Contractual  Obligation,  except such  interference,  breach,
default  or  termination  which  individually  or in  the  aggregate  could  not
reasonably  be expected to have a Material  Adverse  Effect,  (iii) result in or
require  the  creation  or  imposition  of any Lien  whatsoever  upon any of the
property  or assets of the  Borrower  or any such  Subsidiary,  other than Liens
permitted by the Loan Documents,  or (iv) require any approval of the Borrower's
or any such Subsidiary's  shareholders except such as have been obtained. Except
as set forth on Schedule  6.3 to this  Agreement,  the  execution,  delivery and
performance  of each of the Loan  Documents  to which the Borrower or any of its
Subsidiaries  is a party do not and  will not  require  any  registration  with,
consent  or  approval  of, or  notice  to, or other  action  to,  with or by any
Governmental Authority, including under any Environmental Property Transfer Act,
except filings,  consents or notices which have been made, obtained or given, or
which,  if not made,  obtained or given,  individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.

         6.4 Financial Statements. Complete and accurate copies of the following
financial  statements and the following related  information have been delivered
to the Agent: (1) the balance sheet of the Borrower as at December 31, 1998, and
the related combined statements of income,  changes in stockholders'  equity and
cash flows of the Borrower for the fiscal year then ended,  and the audit report
related  thereto;  and (2) the  unaudited  balance sheet of the Borrower for the
fiscal  quarter  ended  September  30,  1999,  and  the  related  statements  of
operations,  changes in stockholder's  equity and cash flows of the Borrower for
the fiscal quarter then ended.



                                                       -53-


<PAGE>



         6.5 No Material  Adverse Change.  (A) Since December 31, 1998 up to the
Closing  Date,  there has occurred no material  adverse  change in the business,
financial   condition,   operations   or  prospects  of  the  Borrower  and  its
Subsidiaries  taken  as a whole  or any  other  event  which  has  had or  could
reasonably be expected to result in a Material Adverse Effect.

         (B) Since the Closing  Date,  there has occurred no event which has had
or could reasonably be expected to result in a Material Adverse Effect.

         6.6  Taxes.

         (A) Tax Examinations. All deficiencies which have been asserted against
the Borrower or any of the Borrower's  Subsidiaries  as a result of any federal,
state,  local or foreign tax  examination  for each  taxable  year in respect of
which an examination  has been conducted have been fully paid or finally settled
or are being  contested  in good faith,  and as of the Closing Date no issue has
been  raised  by  any  taxing  authority  in  any  such  examination  which,  by
application  of similar  principles,  reasonably  can be  expected  to result in
assertion by such taxing  authority of a material  deficiency for any other year
not so examined which has not been reserved for in the  Borrower's  consolidated
financial  statements to the extent,  if any,  required by Agreement  Accounting
Principles. Except as permitted pursuant to Section 7.2(D), neither the Borrower
nor any of the Borrower's  Subsidiaries  anticipates  any material tax liability
with respect to the years which have not been closed pursuant to applicable law.

         (B) Payment of Taxes.  Except as  described  on Schedule  6.6,  all tax
returns and reports of the  Borrower and its  Subsidiaries  required to be filed
have been timely filed, and all taxes, assessments,  fees and other governmental
charges  thereupon  and upon  their  respective  property,  assets,  income  and
franchises which are shown in such returns or reports to be due and payable have
been paid except  those items which are being  contested  in good faith and have
been  reserved for in  accordance  with  Agreement  Accounting  Principles.  The
Borrower has no knowledge of any proposed tax assessment against the Borrower or
any of its Subsidiaries that will have or could reasonably be expected to have a
Material Adverse Effect.

         6.7 Litigation; Loss Contingencies and Violations.  Except as set forth
in Schedule 6.7 to this Agreement,  which lists all pending litigation involving
individual  claims against the Borrower or any of its  Subsidiaries of more than
$500,000,  there  is  no  action,  suit,  proceeding,  arbitration  or  (to  the
Borrower's knowledge)  investigation before or by any Governmental  Authority or
private arbitrator pending or, to the Borrower's  knowledge,  threatened against
the  Borrower or any of its  Subsidiaries  or any  property of any of them which
will have or could  reasonably  be expected to have a Material  Adverse  Effect.
There is no material loss contingency within the meaning of Agreement Accounting
Principles which has not been reflected in the consolidated financial statements
of the Borrower prepared and delivered pursuant to Section 7.1(A) for the fiscal
period  during which such material loss  contingency  was incurred.  Neither the
Borrower  nor any of its  Subsidiaries  is (A) in  violation  of any  applicable
Requirements of Law which violation will have or could reasonably be expected to
have a Material Adverse Effect,  or (B) subject to or in default with respect to
any final judgment, writ, injunction, restraining order or order of any



                                                       -54-


<PAGE>



nature,  decree, rule or regulation of any court or Governmental Authority which
will have or could reasonably be expected to have a Material Adverse Effect.

         6.8  Subsidiaries.  Schedule  6.8 to  this  Agreement  (i)  contains  a
description of the corporate structure of the Borrower, its Subsidiaries and any
other  Person in which the Borrower or any of its  Subsidiaries  holds an Equity
Interest (both  narratively  and in chart form);  and (ii) accurately sets forth
(A)  the  correct  legal  name,  the  jurisdiction  of  incorporation   and  the
jurisdictions  in  which  each of the  Borrower  and  the  direct  and  indirect
Subsidiaries  of the  Borrower is  qualified  to transact  business as a foreign
corporation, (B) the authorized,  issued and outstanding shares of each class of
Capital  Stock of the  Borrower and each of its  Subsidiaries  and the owners of
such shares (both as of the Closing Date and on a fully-diluted  basis), and (C)
a summary of the direct and indirect partnership, joint venture, or other Equity
Interests,  if any, of the Borrower and each  Subsidiary  of the Borrower in any
Person that is not a  corporation.  Except as described on Schedule 6.8, none of
the  issued  and  outstanding  Capital  Stock  of  the  Borrower  or  any of its
Subsidiaries is subject to any vesting, redemption, or repurchase agreement, and
there are no warrants or options outstanding with respect to such Capital Stock.
The  outstanding  Capital  Stock  of the  Borrower  and  each of the  Borrower's
Subsidiaries is duly authorized,  validly issued,  fully paid and  nonassessable
and is not Margin Stock.

         6.9 ERISA.  Except as  disclosed  on Schedule  6.9, no Benefit Plan has
incurred any accumulated funding deficiency (as defined in Sections 302(a)(2) of
ERISA and 412(a) of the Code)  whether or not waived.  Neither the  Borrower nor
any member of the Controlled  Group has incurred any liability to the PBGC which
remains outstanding other than the payment of premiums, and there are no premium
payments  which have become due which are unpaid.  Schedule B to the most recent
annual report filed with the IRS with respect to each Benefit Plan and furnished
to the lenders is complete and accurate. Since the date of each such Schedule B,
there has been no material  adverse  change in the funding  status or  financial
condition of the Benefit Plan  relating to such Schedule B. Neither the Borrower
nor any  member  of the  Controlled  Group  has (i)  failed  to make a  required
contribution  or payment  to a  Multiemployer  Plan or (ii) made a  complete  or
partial  withdrawal  under  Sections 4203 or 4205 of ERISA from a  Multiemployer
Plan.  Neither the Borrower nor any member of the Controlled Group has failed to
make a required  installment or any other required  payment under Section 412 of
the  Code on or  before  the due date for  such  installment  or other  payment.
Neither  the  Borrower  nor any member of the  Controlled  Group is  required to
provide security to a Benefit Plan under Section 401(a)(29) of the Code due to a
Plan  amendment  that results in an increase in current  liability  for the plan
year. Neither the Borrower nor any of its Subsidiaries  maintains or contributes
to any employee welfare benefit plan within the meaning of Section 3(1) of ERISA
which provides  benefits to employees after termination of employment other than
as required by Section 601 of ERISA. To Borrower's knowledge, each Plan which is
intended to be qualified under Section 401(a) of the Code as currently in effect
is so qualified,  and each trust related to any such Plan is exempt from federal
income tax under Section 501(a) of the Code as currently in effect. The Borrower
and all  Subsidiaries  are in  compliance  in all  material  respects  with  the
responsibilities,  obligations  and duties imposed on them by ERISA and the Code
with respect to all Plans. To Borrower's knowledge, neither the Borrower nor any
of its  Subsidiaries  nor any  fiduciary  of any Plan has engaged in a nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of



                                                       -55-


<PAGE>



the Code which could reasonably be expected to subject the Borrower to liability
in excess of $1,000,000.  To Borrower's knowledge,  neither the Borrower nor any
member of the  Controlled  Group has  taken or failed to take any  action  which
would  constitute  or result in a  Termination  Event,  which action or inaction
could  reasonably  be expected to subject the Borrower to liability in excess of
$1,000,000.  Neither the Borrower nor any Subsidiary is subject to any liability
under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA and no other member of
the Controlled  Group is subject to any liability  under  Sections  4063,  4064,
4069, 4204 or 4212(c) of ERISA which could reasonably be expected to subject the
Borrower to liability in excess of  $1,000,000.  Neither the Borrower nor any of
its Subsidiaries  has, by reason of the transactions  contemplated  hereby,  any
obligation to make any payment to any employee  pursuant to any Plan or existing
contract or arrangement.

         6.10 Accuracy of  Information.  The  information,  exhibits and reports
furnished  by or on behalf of the Borrower  and any of its  Subsidiaries  to the
Agent or to any Lender in  connection  with the  negotiation  of, or  compliance
with, the Loan Documents, the representations and warranties of the Borrower and
its  Subsidiaries  contained in the Loan  Documents,  and all  certificates  and
documents  delivered to the Agent and the Lenders pursuant to the terms thereof,
taken as a whole,  do not contain as of the date furnished any untrue  statement
of a material fact or omit to state a material  fact  necessary in order to make
the statements  contained herein or therein, in light of the circumstances under
which they were made, not misleading.

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

         6.12  Material  Agreements.   Neither  the  Borrower  nor  any  of  its
Subsidiaries  has received  notice or has knowledge that (i) it is in default in
the performance,  observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual  Obligation applicable to it, or (ii)
any condition  exists  which,  with the giving of notice or the lapse of time or
both,   would  constitute  a  default  with  respect  to  any  such  Contractual
Obligation,  in each case,  except  where  such  default  or  defaults,  if any,
individually  or in the  aggregate  will  not have or could  not  reasonably  be
expected to have a Material Adverse Effect.

         6.13  Compliance  with Laws. The Borrower and its  Subsidiaries  are in
compliance with all  Requirements of Law applicable to them and their respective
businesses,  in each case where the failure to so comply  individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.

         6.14 Assets and Properties.  The Borrower and each of its  Subsidiaries
has good and  marketable  title to all of its  material  assets  and  properties
(tangible and  intangible,  real or personal)  owned by it or a valid  leasehold
interest in all of its material leased assets (except  insofar as  marketability
may be  limited  by any  laws  or  regulations  of  any  Governmental  Authority
affecting  such assets),  and all such assets and property are free and clear of
all Liens, except Liens permitted under Section 7.3(C). Substantially all of the
assets and  properties  owned by, leased to or used by the Borrower  and/or each
such Subsidiary of the Borrower are in adequate operating  condition and repair,
ordinary wear and tear excepted. Neither this Agreement nor any other



                                                       -56-


<PAGE>



Loan Document, nor any transaction  contemplated under any such agreement,  will
affect any right, title or interest of the Borrower or such Subsidiary in and to
any of such assets in a manner that would have or could  reasonably  be expected
to have a Material Adverse Effect.

         6.15 Statutory Indebtedness Restrictions.  Neither the Borrower nor any
of its  Subsidiaries  is subject to regulation  under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate  Commerce Act, or the
Investment  Company  Act of 1940,  or any  other  federal  or state  statute  or
regulation  which  limits its  ability to incur  indebtedness  or its ability to
consummate  the  transactions  contemplated  hereby  or in  connection  with any
Permitted Acquisition and the related transactions.

         6.16 Insurance.  The Borrower maintains insurance policies and programs
reasonably consistent with prudent industry practice.

         6.17  Labor Matters.

         As of the Closing  Date,  no attempt to organize  the  employees of the
Borrower, and no labor disputes, strikes or walkouts affecting the operations of
the  Borrower  or any of its  Subsidiaries,  is pending,  or, to the  Borrower's
knowledge, threatened, planned or contemplated.

         6.18 Environmental Matters. (A) Except as disclosed on Schedule 6.18 to
this Agreement

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

                  (ii) the  Borrower  and its  Subsidiaries  have  all  permits,
         licenses or other authorizations  required under Environmental,  Health
         or Safety  Requirements of Law and are in material compliance with such
         permits;

                  (iii) neither the Borrower, any of its Subsidiaries nor any of
         their respective  present  property or operations,  or, to the best of,
         the  Borrower's  or any of its  Subsidiaries'  knowledge,  any of their
         respective  past property or operations,  are subject to or the subject
         of, any investigation known to the Borrower or any of its Subsidiaries,
         any judicial or administrative  proceeding,  order,  judgment,  decree,
         settlement or other agreement respecting: (A) any material violation of
         Environmental,  Health or Safety  Requirements of Law; (B) any remedial
         action;  or (C) any  material  claims or  liabilities  arising from the
         Release or threatened Release of a Contaminant into the environment;

                  (iv) there is not now,  nor to the best of the  Borrower's  or
         any of its  Subsidiaries'  knowledge  has there  ever been on or in the
         property of the Borrower or any of its Subsidiaries any landfill, waste
         pile,  underground storage tanks,  aboveground  storage tanks,  surface
         impoundment  or  hazardous  waste  storage  facility  of any kind,  any
         polychlorinated  biphenyls  (PCBs)  used in  hydraulic  oils,  electric
         transformers or other



                                                       -57-


<PAGE>



         equipment,  or any asbestos  containing material which in any such case
         could  reasonably  be expected to result in material  liability for the
         Borrower or any of its Subsidiaries; and

                  (v) neither the Borrower nor any of its  Subsidiaries  has any
         material  Contingent  Obligation  in  connection  with any  Release  or
         threatened Release of a Contaminant into the environment.

         (B)  For   purposes  of  this  Section   6.18   "material"   means  any
noncompliance or basis for liability which could reasonably be likely to subject
the Borrower to liability in excess of $1,000,000.

         6.19  Solvency.  After giving effect to the (i) Loans to be made on the
Closing Date or such other date as Loans  requested  hereunder  are made and the
consummation of the other  transactions  contemplated by this Agreement and (ii)
the payment and accrual of all Transaction  Costs with respect to the foregoing,
the  Borrower  and its  Subsidiaries  taken as a whole is Solvent.  After giving
effect to (a) any Permitted  Acquisition  and (b) the payment and accrual of all
Transaction Costs with respect thereto,  the Borrower and its Subsidiaries taken
as a whole is Solvent.

ARTICLE VII :  COVENANTS

         The Borrower  covenants and agrees that so long as any  Commitments are
outstanding  and  thereafter  until  payment  in full of all of the  Obligations
(other than contingent indemnity obligations), unless the Required Lenders shall
otherwise give prior written consent:

         7.1  Reporting.  The Borrower shall:

         (A)  Financial Reporting. Furnish to the Lenders:

                  (i)  Quarterly  Reports.  As soon as  practicable,  and in any
         event within  forty-five (45) days after the end of each fiscal quarter
         in each fiscal year, the consolidated and  consolidating  balance sheet
         of the Borrower and its  Subsidiaries  as at the end of such period and
         the related  consolidated  and  consolidating  statements of income and
         cash flows of the Borrower and its Subsidiaries for such fiscal quarter
         and for the period from the  beginning of the then current  fiscal year
         to the end of such fiscal  quarter,  certified  by the chief  financial
         officer of the Borrower on behalf of the Borrower as fairly  presenting
         the consolidated and consolidating  financial  position of the Borrower
         and its Subsidiaries as at the dates indicated and the results of their
         operations and cash flows for the periods  indicated in accordance with
         Agreement  Accounting  Principles  except  for  the  omission  of  full
         footnotes which may be required under Agreement Accounting  Principles,
         subject to normal year end adjustments,  and a forecasted  consolidated
         and consolidating balance sheet and a consolidated  statement of income
         and  cash  flows  of the  Borrower  for and as of the  end of the  next
         succeeding  fiscal quarter and a comparison of the statements of income
         and cash flows to the most recent budget.



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<PAGE>



                  (ii) Annual Reports. As soon as practicable,  and in any event
         within  ninety  (90) days after the end of each  fiscal  year,  (a) the
         consolidated  balance sheet of the Borrower and its  Subsidiaries as at
         the end of such fiscal year and the related consolidated  statements of
         income,  stockholders'  equity and cash flows of the  Borrower  and its
         Subsidiaries  for  such  fiscal  year,  and  in  comparative  form  the
         corresponding   figures  for  the  previous   fiscal  year  along  with
         consolidating  schedules in form and substance  sufficient to calculate
         the  financial  covenants set forth in Section 7.4, (b) a schedule from
         the  Borrower  setting  forth for each item in clause (a)  hereof,  the
         corresponding  figures from the  consolidated  financial budget for the
         current fiscal year delivered pursuant to Section  7.1(A)(iv),  and (c)
         an audit report on the items listed in clause (a) hereof of independent
         certified public  accountants of recognized  national  standing,  which
         audit report shall be  unqualified  and shall state that such financial
         statements fairly present the consolidated and consolidating  financial
         position of the Borrower and its Subsidiaries as at the dates indicated
         and the  results of their  operations  and cash  flows for the  periods
         indicated in conformity with Agreement  Accounting  Principles and that
         the   examination  by  such   accountants   in  connection   with  such
         consolidated and  consolidating  financial  statements has been made in
         accordance with generally accepted auditing  standards.  The deliveries
         made  pursuant  to this  clause  (ii) shall be  accompanied  by (x) any
         management letter prepared by the above-referenced accountants, and (y)
         a  certificate  of  such  accountants  that,  in the  course  of  their
         examination  necessary for their  certification of the foregoing,  they
         have obtained no knowledge of any Default or Unmatured Default,  or if,
         in the opinion of such  accountants,  any Default or Unmatured  Default
         shall exist, stating the nature and status thereof.

                  (iii)  Officer's  Certificate.  Together with each delivery of
         any  financial  statement (a) pursuant to clauses (i), and (ii) of this
         Section 7.1(A), an Officer's Certificate of the Borrower, substantially
         in the form of  Exhibit  H  attached  hereto  and  made a part  hereof,
         stating that no Default or Unmatured  Default exists, or if any Default
         or Unmatured Default exists,  stating the nature and status thereof and
         (b)  pursuant  to  clauses  (i)  and  (ii) of this  Section  7.1(A),  a
         compliance certificate, substantially in the form of Exhibit I attached
         hereto and made a part hereof, signed by the Borrower's Chief Financial
         Officer or Treasurer,  setting forth  calculations  for the period then
         ended for Section 2.5(B), if applicable,  which demonstrate compliance,
         when  applicable,  with  the  provisions  of  Section  7.4,  and  which
         calculate  the  Leverage  Ratio for  purposes of  determining  the then
         Applicable  Floating  Rate  Margin,  Applicable  Eurodollar  Margin and
         Applicable Commitment Fee Percentage.

                  (iv) As soon as  practicable,  and in any event within  twenty
         (20) days after the close of each  calendar  month,  a  Borrowing  Base
         Certificate, together with such supporting documents as the Agent deems
         desirable,  all  certified  as being  true  and  correct  by the  Chief
         Financial Officer or Treasurer of the Borrower. The Borrower may update
         the Borrowing Base Certificate and supporting documents more frequently
         than monthly and the most recently delivered Borrowing Base Certificate
         shall be the  applicable  Borrowing  Base  Certificate  for purposes of
         determining the Borrowing Base at any time;



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<PAGE>



                  (v) Budgets; Business Plans; Financial Projections. As soon as
         practicable  and in any event not later than thirty (30) days after the
         beginning  of  each  fiscal  year,  a copy  of the  plan  and  forecast
         (including a projected balance sheet,  income statement and a statement
         of cash flow) of the  Borrower  and its  Subsidiaries  for the five (5)
         fiscal years beginning with such fiscal year prepared in such detail as
         shall be reasonably  satisfactory to the Agent,  and any updated budget
         prepared by the Borrower.

         (B)  Notice  of  Default.  Promptly  upon  any of the  chief  executive
officer,  chief  operating  officer,  chief  financial  officer,   treasurer  or
controller  of the Borrower  obtaining  knowledge  (i) of any condition or event
which  constitutes a Default or Unmatured  Default,  or becoming  aware that any
Lender or Agent has given any written  notice with respect to a claimed  Default
or Unmatured Default under this Agreement, or (ii) that any Person has given any
written  notice to the Borrower or any  Subsidiary  of the Borrower or taken any
other action with respect to a claimed default or event or condition of the type
referred to in Section 8.1(E), deliver to the Agent and the Lenders an Officer's
Certificate  specifying  (a) the  nature  and  period of  existence  of any such
claimed default, Default,  Unmatured Default, condition or event, (b) the notice
given or action  taken by such  Person  in  connection  therewith,  and (c) what
action the  Borrower  has taken,  is taking and  proposes  to take with  respect
thereto.

         (C) Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding, governmental
investigation  or  arbitration  against or affecting  the Borrower or any of its
Subsidiaries  or any  property of the  Borrower or any of its  Subsidiaries  not
previously  disclosed pursuant to Section 6.7, which action,  suit,  proceeding,
governmental  investigation or arbitration  exposes,  or in the case of multiple
actions, suits, proceedings, governmental investigations or arbitrations arising
out of the same  general  allegations  or  circumstances  which  expose,  in the
Borrower's  reasonable  judgment,  the  Borrower or any of its  Subsidiaries  to
liability  in an amount  aggregating  $1,000,000  or more  (exclusive  of claims
covered by insurance policies of the Borrower or any of its Subsidiaries  unless
the  insurers of such claims have  disclaimed  coverage or reserved the right to
disclaim  coverage  on such  claims  and  exclusive  of  claims  covered  by the
indemnity of a  financially  responsible  indemnitor in favor of the Borrower or
any of its  Subsidiaries  unless the  indemnitor  has disclaimed or reserved the
right to disclaim  coverage  thereof),  give written notice thereof to the Agent
and  the  Lenders  and  provide  such  other  information  as may be  reasonably
available  to enable each Lender and the Agent and its counsel to evaluate  such
matters;  and (ii) in  addition to the  requirements  set forth in clause (i) of
this Section 7.1(C), upon request of the Agent or the Required Lenders, promptly
give written notice of the status of any action, suit, proceeding,  governmental
investigation or arbitration  covered by a report  delivered  pursuant to clause
(i) above and provide such other  information as may be reasonably  available to
it that would not violate any  attorney-client  privilege by  disclosure  to the
Lenders to enable each  Lender and the Agent and its  counsel to  evaluate  such
matters.

         (D) ERISA  Notices.  Deliver or cause to be  delivered to the Agent and
the Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:



                                                       -60-


<PAGE>



                  (i) (a)  within  ten (10)  Business  Days  after the  Borrower
         obtains  knowledge  that a Termination  Event has  occurred,  a written
         statement of the chief  financial  officer of the  Borrower  describing
         such Termination  Event and the action,  if any, which the Borrower has
         taken,  is taking or proposes to take with  respect  thereto,  and when
         known,  any action  taken or  threatened  by the IRS,  DOL or PBGC with
         respect  thereto and (b) within ten (10) Business Days after any member
         of the Controlled Group obtains  knowledge that a Termination Event has
         occurred which could  reasonably be expected to subject the Borrower to
         liability  in excess of  $1,000,000,  a written  statement of the chief
         financial officer of the Borrower describing such Termination Event and
         the action, if any, which the member of the Controlled Group has taken,
         is taking or proposes to take with respect thereto, and when known, any
         action  taken  or  threatened  by the  IRS,  DOL or PBGC  with  respect
         thereto;

                  (ii) within ten (10)  Business  Days after the Borrower or any
         of its  Subsidiaries  obtains  knowledge that a prohibited  transaction
         (defined  in Sections  406 of ERISA and  Section  4975 of the Code) has
         occurred,  a statement of the chief  financial  officer of the Borrower
         describing  such  transaction and the action which the Borrower or such
         Subsidiary  has  taken,  is taking  or  proposes  to take with  respect
         thereto;

                  (iii)  within  ten  (10)  Business  Days  after  the  material
         increase in the benefits of any existing Plan or the  establishment  of
         any new Benefit Plan or the commencement of, or obligation to commence,
         contributions  to any Benefit Plan or  Multiemployer  Plan to which the
         Borrower  or any  member of the  Controlled  Group  was not  previously
         contributing,    notification   of   such   increase,    establishment,
         commencement   or  obligation  to  commence  and  the  amount  of  such
         contributions;

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

                  (v) within ten (10) Business Days after the  establishment  of
         any foreign employee benefit plan or the commencement of, or obligation
         to  commence,  contributions  to any foreign  employee  benefit plan to
         which the Borrower or any Subsidiary  was not previously  contributing,
         notification  of such  establishment,  commencement  or  obligation  to
         commence and the amount of such contributions;

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

                  (vii) upon the request of the Agent,  within ten (10) Business
         Days after  receipt  by the  Borrower  or any member of the  Controlled
         Group of each  actuarial  report for any Benefit Plan or  Multiemployer
         Plan and each annual report for any Multiemployer  Plan, copies of each
         such report;



                                                       -61-


<PAGE>



                  (viii) within ten (10) Business Days after the filing  thereof
         with the IRS, a copy of each funding  waiver request filed with respect
         to any Benefit Plan and all communications  received by the Borrower or
         a member of the Controlled Group with respect to such request;

                  (ix)  within  ten (10)  Business  Days  after  receipt  by the
         Borrower or any member of the Controlled  Group of the PBGC's intention
         to  terminate  a  Benefit  Plan  or to  have  a  trustee  appointed  to
         administer a Benefit Plan, copies of each such notice;

                  (x)  within  ten  (10)  Business  Days  after  receipt  by the
         Borrower  or any  member  of the  Controlled  Group of a notice  from a
         Multiemployer  Plan regarding the  imposition of withdrawal  liability,
         copies of each such notice;

                  (xi) within ten (10)  Business  Days after the Borrower or any
         member of the Controlled Group fails to make a required  installment or
         any other  required  payment under Section 412 of the Code on or before
         the due date for such  installment or payment,  a notification  of such
         failure; and

                  (xii) within ten (10)  Business Days after the Borrower or any
         member of the  Controlled  Group knows or has reason to know that (a) a
         Multiemployer  Plan has been terminated,  (b) the administrator or plan
         sponsor of a  Multiemployer  Plan intends to terminate a  Multiemployer
         Plan,  or (c) the PBGC has  instituted  or will  institute  proceedings
         under Section 4042 of ERISA to terminate a Multiemployer Plan.

For the purposes of this Section 7.1(D),  the Borrower,  any of its Subsidiaries
and any member of the  Controlled  Group shall be deemed to know all facts known
by the  Administrator of any Plan of which the Borrower,  such Subsidiary or any
member of the Controlled Group is the plan sponsor.

         (E)  Labor  Matters.  Notify  the  Agent and the  Lenders  in  writing,
promptly upon the Borrower's learning thereof, of (i) any material labor dispute
to which the Borrower or any of its Subsidiaries may become a party,  including,
without  limitation,  any strikes,  lockouts or other disputes  relating to such
Persons' plants and other facilities and (ii) any material Worker Adjustment and
Retraining  Notification  Act liability  incurred with respect to the closing of
any plant or other facility of the Borrower or any of its Subsidiaries.

         (F) Other Indebtedness. Deliver to the Agent (i) a copy of each regular
report,   notice  or  communication   regarding  potential  or  actual  defaults
(including any accompanying  officer's certificate) delivered by or on behalf of
the Borrower to the holders of funded Indebtedness  pursuant to the terms of the
agreements  governing  such  Indebtedness,  such delivery to be made at the same
time and by the same means as such notice or other communication is delivered to
such holders, and (ii) a copy of each notice or other communication  received by
the Borrower  from the holders of funded  Indebtedness  pursuant to the terms of
such Indebtedness,  such delivery to be made promptly after such notice or other
communication is received by the Borrower.



                                                       -62-


<PAGE>



         (G) Other  Reports.  Deliver or cause to be  delivered to the Agent and
the Lenders  copies of all financial  statements,  reports and notices,  if any,
sent or made available  generally by the Borrower to its  securities  holders or
filed with the  Commission by the Borrower,  all press  releases made  available
generally by the Borrower or any of the  Borrower's  Subsidiaries  to the public
concerning  material  developments  in the  business of the Borrower or any such
Subsidiary and all notifications received from the Commission by the Borrower or
its Subsidiaries  pursuant to the Securities  Exchange Act of 1934 and the rules
promulgated thereunder.

         (H) Environmental  Notices. As soon as possible and in any event within
ten (10) days after receipt by the  Borrower,  a copy of (i) any notice or claim
to the effect that the Borrower or any of its  Subsidiaries  is or may be liable
to  any  Person  as a  result  of  the  Release  by  the  Borrower,  any  of its
Subsidiaries,  or any other Person of any Contaminant into the environment,  and
(ii) any notice  alleging any violation of any  Environmental,  Health or Safety
Requirements  of Law by the  Borrower or any of its  Subsidiaries  if, in either
case,  such  notice or claim  relates  to an event  which  could  reasonably  be
expected to subject the Borrower to liability in excess of $250,000.

         (I) Other Information.  Promptly upon receiving a request therefor from
the  Agent,  prepare  and  deliver  to the  Agent  and the  Lenders  such  other
information  with  respect  to the  Borrower,  any of its  Subsidiaries,  or the
Collateral,  including, without limitation, schedules identifying and describing
the Collateral and any dispositions  thereof or any Asset Sale or Financing (and
the  use of the Net  Cash  Proceeds  thereof),  as  from  time  to  time  may be
reasonably requested by the Agent.

         7.2  Affirmative Covenants.

         (A) Corporate Existence,  Etc. The Borrower shall, and shall cause each
of its  Subsidiaries  to, at all times  maintain  its  corporate  existence  and
preserve and keep,  or cause to be preserved  and kept, in full force and effect
its rights  and  franchises  material  to its  businesses,  except to the extent
permitted by Section 7.3(I).

         (B) Corporate  Powers;  Conduct of Business.  The Borrower  shall,  and
shall cause each of its  Subsidiaries  to,  qualify and remain  qualified  to do
business in each jurisdiction in which the nature of its business requires it to
be so  qualified  and where the  failure to be so  qualified  will have or could
reasonably be expected to have a Material Adverse Effect. The Borrower will, and
will  cause  each   Subsidiary   to,  carry  on  and  conduct  its  business  in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted.

         (C) Compliance with Laws, Etc. The Borrower shall,  and shall cause its
Subsidiaries  to, (a) comply with all  Requirements  of Law and all  restrictive
covenants  affecting  such  Person  or  the  business,   properties,  assets  or
operations  of such Person,  and (b) obtain as needed all Permits  necessary for
its  operations  and maintain such Permits in good  standing,  unless failure to
comply or obtain  could not  reasonably  be expected to have a Material  Adverse
Effect.

         (D) Payment of Taxes and Claims; Tax Consolidation.  The Borrower shall
pay, and cause each of its  Subsidiaries to pay, (i) all taxes,  assessments and
other governmental charges



                                                       -63-


<PAGE>



imposed  upon it or on any of its  properties  or assets or in respect of any of
its  franchises,  business,  income or  property  before any penalty or interest
accrues thereon, and (ii) all claims (including,  without limitation, claims for
labor,  services,  materials  and  supplies)  for sums which have become due and
payable and which by law have or may become a Lien (other than a Lien  permitted
by Section 7.3(C)) upon any of the Borrower's or such  Subsidiary's  property or
assets,  prior to the time  when any  penalty  or fine  shall be  incurred  with
respect  thereto;  provided,  however,  that  no  such  taxes,  assessments  and
governmental  charges  referred to in clause (i) above or claims  referred to in
clause (ii) above (and interest,  penalties or fines  relating  thereto) need be
paid if being  contested  in good faith by  appropriate  proceedings  diligently
instituted and conducted and if such reserve or other appropriate provision,  if
any, as shall be required in conformity  with  Agreement  Accounting  Principles
shall have been made therefor.

         (E)  Insurance.   The  Borrower  shall  maintain  for  itself  and  its
Subsidiaries,  or shall cause each of its Subsidiaries to maintain in full force
and effect,  the  insurance  policies and programs  reasonably  consistent  with
prudent  industry  practice.  The Borrowers shall deliver to the Agent insurance
certificates  and  endorsements  (y) to all "All Risk" physical damage insurance
policies on all of the Borrowers' tangible real and personal property and assets
and business  interruption  insurance  policies naming the Agent loss payee, and
(z) to all general  liability and other  liability  policies naming the Agent an
additional  insured. In the event the Borrower or any of its Subsidiaries at any
time or times  hereafter shall fail to obtain or maintain any of the policies or
insurance  required  herein or to pay any  premium in whole or in part  relating
thereto,  then the  Agent,  without  waiving or  releasing  any  obligations  or
resulting Default  hereunder,  may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which the Agent
deems advisable. All sums so disbursed by the Agent shall constitute part of the
Obligations, payable as provided in this Agreement.

         (F)  Inspection  of  Property;  Books  and  Records;  Discussions.  The
Borrower shall permit and cause each of the Borrower's  Subsidiaries  to permit,
any  authorized  representative(s)  designated by the Agent to visit and inspect
any of the  properties of the Borrower or any of its  Subsidiaries,  to examine,
audit,  check  and make  copies of their  respective  financial  and  accounting
records, books, journals, orders, receipts and any correspondence and other data
relating to their respective businesses or the transactions  contemplated hereby
(including,  without  limitation,  in connection with environmental  compliance,
hazard or liability),  and to discuss their affairs,  finances and accounts with
their  officers  and,  with  the  consent  of the  Borrower  (which  will not be
unreasonably  withheld)  or  after  a  Default  after  notice  to the  Borrower,
independent certified public accountants, all upon reasonable notice and at such
reasonable  times during normal  business  hours,  as often as may be reasonably
requested.  The  Borrower  shall  keep  and  maintain,  and  cause  each  of the
Borrower's  Subsidiaries to keep and maintain, in all material respects,  proper
books of record  and  account  in which  entries in  conformity  with  Agreement
Accounting Principles shall be made of all dealings and transactions in relation
to their respective businesses and activities.  If a Default has occurred and is
continuing,  the Borrower,  upon the Agent's  request,  shall turn over any such
records to the Agent or its representatives.



                                                       -64-


<PAGE>



         (G) ERISA  Compliance.  The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish,  maintain and operate all Plans to comply
in all material  respects  with the  provisions  of ERISA,  the Code,  all other
applicable  laws, and the  regulations  and  interpretations  thereunder and the
respective requirements of the governing documents for such Plans.

         (H) Maintenance of Property. The Borrower shall cause all property used
or useful in the conduct of its business or the business of any Subsidiary to be
maintained  and kept in good  condition,  repair and working  order and supplied
with all necessary  equipment and shall cause to be made all necessary  repairs,
renewals,  replacements,  betterments and  improvements  thereof,  all as in the
judgment of the Borrower  may be  necessary  so that the business  carried on in
connection therewith may be properly and advantageously  conducted at all times;
provided,  however,  that  nothing in this  Section  7.2(H)  shall  prevent  the
Borrower from discontinuing the operation or maintenance of any of such property
if such  discontinuance  is, in the judgment of the  Borrower,  desirable in the
conduct  of  its   business  or  the   business  of  any   Subsidiary   and  not
disadvantageous in any material respect to the Agent or the Lenders.

         (I) Environmental  Compliance.  The Borrower and its Subsidiaries shall
comply with all  Environmental,  Health or Safety  Requirements  of Law,  except
where  noncompliance  will not have or is not  reasonably  likely to subject the
Borrower to liability in excess of $1,000,000.

         (J)  Use of  Proceeds.  The  Borrower  shall  use the  proceeds  of the
Revolving  Loans and the Term  Loans to (i) repay  existing  Indebtedness,  (ii)
provide  funds for the  additional  working  capital  needs  and  other  general
corporate purposes of the Borrower,  (iii) provide funds for the payment of fees
and expenses  incurred in connection with the negotiation and  documentation  of
this   Agreement  and  the  Loan   Documents  and  (iv)  to  finance   Permitted
Acquisitions.  The Borrower shall use the proceeds of the  Acquisition  Facility
Loans  solely to finance  Permitted  Acquisitions  and to pay fees and  expenses
incurred in connection with such Permitted Acquisitions.  The Borrower will not,
nor will it permit any  Subsidiary  to, use any of the  proceeds of the Loans to
purchase  or carry any  Margin  Stock or to make any  Acquisition,  other than a
Permitted Acquisition pursuant to Section 7.3(G).

         (K) Collateral Documents.  Without in any way limiting the requirements
and  covenants  set forth in the  Collateral  Documents,  if,  subsequent to the
Closing Date,  the Borrower or any  Subsidiary  shall  acquire any  intellectual
property,  securities,  instruments,  chattel paper or other  personal  property
required to be  delivered to the Agent as  Collateral  hereunder or under any of
the Collateral  Documents,  the Borrower shall promptly (and in any event within
five (5) Business  Days) after any  executive  officer of the Borrower or any of
its  Subsidiaries  acquires  knowledge  of same  notify  the Agent of same.  The
Borrower shall, and shall cause each of its Subsidiaries to, take such action at
its own expense as  reasonably  requested  by the Agent to ensure that the Agent
has a first  priority  (subject to any applicable  Lien permitted  under Section
7.3(C))  perfected  Lien to  secure  the  Secured  Obligations  in (i) all owned
personal  property of the  Borrower  and its  Subsidiaries  and (ii) all Capital
Stock of each of the  Borrower's  Subsidiaries;  provided,  however,  that  with
respect to the personal  property and Capital Stock of any  Subsidiary  acquired
pursuant to a Permitted  Acquisition,  the Borrower shall,  and shall cause such
Subsidiary to, take such action within thirty (30) days of the  consummation  of
the applicable Permitted Acquisition. The



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<PAGE>



Borrower  shall,  and shall  cause each of its  Subsidiaries  to,  adhere to the
covenants set forth in the Collateral Documents,  including, without limitation,
the covenants  regarding  the location of personal  property as set forth in the
Security Agreements.

         (L) Addition of Guarantors; Addition of Pledged Capital Stock and other
Collateral.  The Borrower shall cause each Subsidiary that is a Subsidiary as of
the date of this Agreement or at any time thereafter, to deliver to the Agent an
executed  Guaranty and  appropriate  corporate  resolutions,  opinions and other
documentation in form and substance  reasonably  satisfactory to the Agent, such
Guaranty  and other  documentation  to be  delivered to the Agent as promptly as
possible  but in any event (1) on the date of the  consummation  of a  Permitted
Acquisition  involving such Subsidiary and (2) otherwise within thirty (30) days
of  determination   that  a  Subsidiary  needs  to  be  added  as  a  Guarantor.
Simultaneously with any Subsidiary becoming a Guarantor, the Borrower shall (or,
if the Capital Stock of such  Subsidiary is owned by another  Subsidiary,  shall
cause such other  Subsidiary to) deliver to the Agent an executed  supplement to
an  existing  Pledge  Agreement  or  a  new  Pledge  Agreement,   together  with
appropriate corporate resolutions,  opinions, stock certificates, UCC filings or
amendments  and  other  documentation,  in  each  case  in  form  and  substance
reasonably satisfactory to the Agent and the Agent shall be reasonably satisfied
that the Agent has a first priority perfected pledge of all of the Capital Stock
of such  Guarantor  owned by the Borrower and its  Subsidiaries.  Simultaneously
with any  Subsidiary  becoming a Guarantor,  the Borrower  shall also cause such
Subsidiary  to (i)  execute and deliver a Security  Agreement  (and  deliver the
other documents  required thereby,  including,  without  limitation,  restricted
account agreements),  if applicable,  Intellectual  Property Agreements and such
other Collateral  Documents as the Agent or the Required Lenders may require its
or  their  sole  and  reasonable   discretion;   and  (ii)  deliver  such  other
documentation  as the  Agents may  reasonably  require  in  connection  with the
foregoing,   including,   without   limitation,   appropriate   UCC-1  financing
statements,  certified  resolutions  and other  organizational  and  authorizing
documents of such Subsidiary,  favorable  opinions of counsel to such Subsidiary
(which shall cover, among other things, the legality,  validity,  binding effect
and enforceability of the documentation  referred to above and the perfection of
the  Agent's  liens  thereunder)  and other  items of the types  required  to be
delivered by the Borrower and its Subsidiaries pursuant to Section 5.1 as of the
Closing Date,  all in form,  content and scope  reasonably  satisfactory  to the
Agent.

         7.3  Negative Covenants.

         (A)  Indebtedness.  Neither the  Borrower  nor any of its  Subsidiaries
shall directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:

                  (i)  the Obligations;

                  (ii) the  Subordinated  Notes  and any  Permitted  Refinancing
         Indebtedness,  provided,  however,  that with  respect to  Subordinated
         Notes  issued  pursuant  to the High Yield Note  Agreement,  the amount
         thereof may exceed the aggregate  principal  amount of the Subordinated
         Notes issued to the Subordinated Noteholder as of November 19, 1997,



                                                       -66-


<PAGE>



         but such  Subordinated  Notes  issued  pursuant  to the High Yield Note
         Agreement  must (a) have a Weighted  Average  Life to Maturity  that is
         equal  to or  greater  than  the  aggregate  Weighted  Average  Life to
         Maturity of the Subordinated  Notes issued to the Subordinated  Note as
         of November 19, 1997 and (b) must  contain  terms,  including,  without
         limitation,  terms  with  respect to  amount,  maturity,  amortization,
         interest rate, premiums,  fees,  redemption,  covenants,  subordination
         terms, events of default and remedies that are reasonably  satisfactory
         to the Required Lenders;

                  (iii) Permitted Existing Indebtedness;

                  (iv)  Indebtedness  in  respect  of  obligations   secured  by
         Customary Permitted Liens;

                  (v) Indebtedness constituting Contingent Obligations permitted
         by Section 7.3(E);

                  (vi)  Indebtedness  arising from  intercompany  loans from any
         Subsidiary to the Borrower or any wholly-owned Subsidiary;

                  (vii)  secured  or  unsecured   purchase  money   Indebtedness
         (including  Capitalized  Leases) incurred by the Borrower or any of its
         Subsidiaries after the Closing Date to finance the acquisition of fixed
         assets, if (1) at the time of such incurrence,  no Default or Unmatured
         Default  has  occurred  and is  continuing  or would  result  from such
         incurrence,  (2) such Indebtedness has a scheduled  maturity and is not
         due on demand,  (3) such  Indebtedness does not exceed the lower of the
         fair market  value or the cost of the  applicable  fixed  assets on the
         date acquired,  (4) such Indebtedness does not exceed $2,500,000 in the
         aggregate  outstanding  at any  time,  and (5) any Lien  securing  such
         Indebtedness is permitted under Section 7.3(C) (such Indebtedness being
         referred to herein as "Permitted Purchase Money Indebtedness");

                  (viii)  Indebtedness  with  respect  to  surety,   appeal  and
         performance  bonds obtained by the Borrower or any of its  Subsidiaries
         in the ordinary course of business;

                  (ix) Indebtedness  incurred  subsequent to the Closing Date by
         the Borrower or any of its  Subsidiaries to the seller in any Permitted
         Acquisition as part of the consideration  therefor,  provided that such
         Indebtedness does not exceed  $20,000,000 in the aggregate  outstanding
         at any time, is unsecured  and is otherwise on terms  acceptable to the
         Agent; and

                  (x) Indebtedness in respect of Hedging  Obligations  permitted
         under Section 7.3(P).

         (B) Sales of Assets.  Neither the Borrower nor any of its  Subsidiaries
shall  sell,  assign,  transfer,  lease,  convey  or  otherwise  dispose  of any
property,  whether  now owned or  hereafter  acquired,  or any income or profits
therefrom, or enter into any agreement to do so, except:

                  (i)  sales of Inventory in the ordinary course of business;



                                                       -67-


<PAGE>



                  (ii) the  disposition  in the  ordinary  course of business of
         equipment  that  is  obsolete,  excess  or  no  longer  useful  in  the
         Borrower's business;

                  (iii) sales, assignments,  transfers,  leases,  conveyances or
         other  dispositions  of  other  assets  (excluding  any  sales of motor
         vehicles) if such  transaction (a) is for  consideration  consisting at
         least  eighty  percent  (80%) of cash,  (b) is for not less  than  fair
         market value,  and (c) when  combined with all such other  transactions
         (each  such  transaction  being  valued at book  value)  (i) during the
         immediately preceding  twelve-month period,  represents the disposition
         of not greater than five percent (5.0%) of the Borrower's  Consolidated
         Assets at the end of the  fiscal  year  immediately  preceding  that in
         which such  transaction is proposed to be entered into, and (ii) during
         the  period  from  the  Closing  Date  to the  date  of  such  proposed
         transaction, represents the disposition of not greater than ten percent
         (10.0%) of the Borrower's  Consolidated Assets at the end of the fiscal
         year  immediately  preceding that in which such transaction is proposed
         to be entered into; and

                  (iv)  the  sale  or  other   disposition   of  assets  by  any
         consolidated  Subsidiary to another  consolidated  Subsidiary or by any
         consolidated Subsidiary to the Borrower.

         (C) Liens.  Neither  the  Borrower  nor any of its  Subsidiaries  shall
directly or indirectly create,  incur,  assume or permit to exist any Lien on or
with respect to any of their respective property or assets except:

                  (i) Liens  securing  the Secured  Obligations  pursuant to the
         Collateral Documents;

                  (ii) Permitted Existing Liens;

                  (iii)  Customary Permitted Liens; and

                  (iv) purchase money Liens  (including the interest of a lessor
         under a Capitalized Lease and Liens to which any property is subject at
         the time of the  Borrower's  acquisition  thereof)  securing  Permitted
         Purchase Money  Indebtedness;  provided that such Liens shall not apply
         to any  property of the  Borrower or its  Subsidiaries  other than that
         purchased or subject to such Capitalized Lease.

In addition,  neither the Borrower  nor any of its  Subsidiaries  shall become a
party to any agreement,  note, indenture or other instrument,  or take any other
action,  which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent for the benefit of itself and the Lenders, as
collateral for the Obligations;  provided that any agreement, note, indenture or
other  instrument in  connection  with  Permitted  Purchase  Money  Indebtedness
(including  Capitalized  Leases) may prohibit the creation of a Lien in favor of
the Agent for the  benefit  of itself and the  Lenders on the items of  property
obtained with the proceeds of such Permitted Purchase Money Indebtedness.



                                                       -68-


<PAGE>



         (D) Investments.  Except to the extent permitted  pursuant to paragraph
(G) below,  neither the Borrower nor any of its  Subsidiaries  shall directly or
indirectly make or own any Investment except:

                  (i)  Investments in Cash Equivalents;

                  (ii) Permitted  Existing  Investments in an amount not greater
         than the amount thereof on the Closing Date;

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

                  (iv) Investments  consisting of deposit accounts maintained by
         the Borrower;

                  (v) Investments  consisting of non-cash  consideration  from a
         sale, assignment,  transfer,  lease, conveyance or other disposition of
         property permitted by Section 7.3(B);

                  (vi)  Investments  consisting of  intercompany  loans from any
         Subsidiary to the Borrower or any other Subsidiary permitted by Section
         7.3(A)(vi);

                  (vii)  Investments constituting Permitted Acquisitions;

                  (viii)  Investments in addition to those referred to elsewhere
in this Section 7.3(D) in an amount not to exceed $2,000,000 in the aggregate at
any time outstanding;

provided,  however,  that the Investments described in clause (viii) above shall
not be permitted if either a Default or an Unmatured Default shall have occurred
and be continuing on the date thereof or would result therefrom.

         (E)  Contingent  Obligations.  Neither  the  Borrower  nor  any  of its
Subsidiaries  shall  directly or  indirectly  create or become or be liable with
respect to any Contingent Obligation, except: (i) recourse obligations resulting
from endorsement of negotiable instruments for collection in the ordinary course
of business;  (ii)  obligations,  warranties,  and indemnities,  not relating to
Indebtedness  of any Person,  which have been or are  undertaken  or made in the
ordinary  course  of  business  and not for the  benefit  of or in  favor  of an
Affiliate  of the  Borrower  or such  Subsidiary;  (iii)  additional  Contingent
Obligations  which do not exceed  $2,000,000 in the  aggregate at any time;  and
(iv) Contingent Obligations with respect to surety, appeal and performance bonds
obtained by the Borrower or any Subsidiary in the ordinary course of business.

         (F)  Restricted   Payments.   Neither  the  Borrower  nor  any  of  its
Subsidiaries  shall declare or make any  Restricted  Payment except for payments
made to LDI to reimburse LDI for various



                                                       -69-


<PAGE>



services  and  other  accommodations  provided  to the  Borrower  by LDI  and as
permitted pursuant to Section 7.3(Q).

         (G) Conduct of Business;  Subsidiaries;  Acquisitions.  (i) Neither the
Borrower nor any of its Subsidiaries shall engage in any business other than the
businesses  engaged in by the  Borrower on the Closing  Date and any business or
activities which are substantially similar, related or incidental thereto.

                  (ii) The Borrower shall not create,  acquire or capitalize any
Subsidiary  (a  "New  Subsidiary")   after  the  date  hereof  pursuant  to  any
transaction unless such transaction is permitted by or not otherwise  prohibited
by this Agreement and upon the creation or  acquisition of each New  Subsidiary,
the Borrower  shall cause each New  Subsidiary to promptly  deliver to the Agent
the documents,  instruments and agreements  required pursuant to Section 7.2(L),
and all New Subsidiaries shall be Controlled  Subsidiaries.  After the formation
or acquisition of any New Subsidiary  permitted  hereunder,  if requested by the
Agent,  the  Borrower  shall  provide  a  supplement  to  Schedule  6.8 to  this
Agreement.

                  (iii) The  Borrower  shall not and shall not permit any of its
Subsidiaries to make any Acquisitions other than Acquisitions meeting all of the
following   requirements  (each  such  Acquisition   constituting  a  "Permitted
Acquisition"):

                  (a) no Default or Unmatured Default shall have occurred and be
         continuing or would result from such  Acquisition  or the incurrence of
         any Indebtedness in connection therewith;

                  (b) the  Acquisition  shall be  consummated  on a  non-hostile
         basis pursuant to negotiated  acquisition documents satisfactory to the
         Agent with  representations,  indemnities and opinions  satisfactory to
         the Agent and results of due diligence  satisfactory  to the Agent and,
         in the case of an  Acquisition of Equity  Interests of an entity,  such
         Acquisition shall be of not less than one hundred percent (100%) of the
         Equity  Interests  of such  entity  (which  Equity  Interests  shall be
         pledged to the Agent pursuant to a Pledge Agreement);

                  (c) the  businesses  being  acquired  shall  be  substantially
         similar to the  businesses or activities  engaged in by the Borrower on
         the Closing Date;

                  (d) prior to each such Acquisition, the Borrower shall deliver
         to the Agent and the Lenders a certificate  from one of the  Authorized
         Officers,  demonstrating  to the  satisfaction  of the Agent that after
         giving effect to such  Acquisition  and the incurrence or assumption of
         any Indebtedness  permitted by Section 7.3(A) in connection  therewith,
         on a pro forma basis using  historical  financial  statements  obtained
         from  the  seller  (with  EBITDA   adjusted  solely  to  add  back  (i)
         identifiable expenses which will be reduced or eliminated subsequent to
         the applicable Permitted  Acquisition  (including,  but not limited to,
         the  effect  of  margin  improvements)  and (ii)  transaction  expenses
         arising  from  or  in   connection   with  the   applicable   Permitted
         Acquisition), broken down by fiscal quarter in



                                                       -70-


<PAGE>



         the Borrower's  reasonable  judgment,  as if the  Acquisition  and such
         incurrence or assumption of Indebtedness  had occurred on the first day
         of the  twelve-month  period  ending on the last day of the  Borrower's
         most recently  completed  fiscal  quarter,  (1) the Borrower would have
         been in compliance with the financial  covenants in Section 7.4 and not
         otherwise  in Default  and (2) the  Leverage  Ratio  after  taking into
         account such Acquisition is lower than the Leverage Ratio excluding the
         effect of such Acquisition;  provided,  however, that with respect to a
         Specified Acquisition,  the Borrower shall be permitted to deliver such
         certificate  prior to the  occurrence of  Indebtedness  hereunder  with
         respect thereto;

                  (e)  the   aggregate   purchase   price   (including   assumed
         liabilities)  in connection with all such  transactions  from and after
         the  Closing  Date  shall  not  exceed  $20,000,000  and not more  than
         $10,000,000  of such  aggregate  purchase price shall be payable at the
         close  of such  Acquisitions  in  cash;  provided,  however,  that  the
         $20,000,000  and  $10,000,000  limitations  prescribed  in this Section
         7.3(G)(iii)(e)  shall be  increased  to  $40,000,000  and  $20,000,000,
         respectively,  after the Borrower has delivered financial statements in
         accordance  with Section 7.1(A) which indicate a Leverage Ratio of less
         than 3.00 to 1.00 or, if the  Borrower  has issued  Subordinated  Notes
         pursuant to the High Yield Note Agreement,  a Leverage Ratio of 3.50 to
         1.00; and

                  (f) (i) any Acquisition  involving a purchase price (including
         assumed  liabilities)  equal to or in  excess  of  $2,000,000  shall be
         subject to the prior approval of the Acquisition  Facility Lenders with
         more than fifty  percent (50%) of the  Aggregate  Acquisition  Facility
         Commitment,  which  approval shall be granted or denied within ten (10)
         days following the Acquisition  Facility Lenders' receipt of sufficient
         information  as the Agent  determines  to be  reasonably  necessary  to
         assess the Borrower's  ability to comply with clause (d) above and (ii)
         any  Acquisition   involving  a  purchase  price   (including   assumed
         liabilities)  of less than  $2,000,000  shall be  subject  to the prior
         approval of the Agent, which approval shall be granted or denied within
         five (5) Business Days of the Agent's receipt of sufficient information
         as the Agent  determines  to be  reasonably  necessary  to  assess  the
         Borrower's  ability  to  comply  with  clause  (d)  above  (but if such
         Acquisition  Facility  Lenders or the  Agent,  as  applicable,  fail to
         respond  within  such  period,  approval  shall be  deemed to have been
         denied);  provided,  however,  that  in  connection  with  a  Specified
         Acquisition,  any prior approval  required  pursuant to this clause (f)
         shall be  waived,  provided  that  the  requirements  in the  preceding
         clauses (a) through (g) shall have been satisfied with respect thereto.

         (H) Transactions with Shareholders and Affiliates. Neither the Borrower
nor any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including,  without limitation, the purchase, sale, lease
or exchange of any property or the  rendering of any service) with any holder or
holders of any of the Equity Interests of the Borrower, or with any Affiliate of
the Borrower  which is not its  Subsidiary,  on terms that are less favorable to
the Borrower or any of its Subsidiaries, as applicable, than those that might be
obtained in an arm's  length  transaction  at the time from  Persons who are not
such a holder or Affiliate,  except for Restricted Payments permitted by Section
7.3(F).



                                                       -71-


<PAGE>



         (I) Restriction on Fundamental Changes. Neither the Borrower nor any of
its  Subsidiaries  shall enter into any merger or  consolidation,  or liquidate,
wind-up or  dissolve  (or suffer any  liquidation  or  dissolution),  or convey,
lease,  sell,  transfer or otherwise dispose of, in one transaction or series of
transactions,   all  or  substantially   all  of  the  Borrower's  or  any  such
Subsidiary's  business or property,  whether now or hereafter  acquired,  except
transactions  permitted  under  Sections  7.3(B) or 7.3(G),  and  except  that a
consolidated  Subsidiary may merge or consolidate with or into the Borrower or a
consolidated Subsidiary thereof.

         (J)  Sales  and  Leasebacks.  Neither  the  Borrower  nor  any  of  its
Subsidiaries  shall become  liable,  directly,  by  assumption  or by Contingent
Obligation,  with respect to any lease,  whether an operating lease, a synthetic
lease or a  Capitalized  Lease,  of any  property  (whether  real or personal or
mixed) (i) which it or one of its Subsidiaries sold or transferred or is to sell
or transfer  to any other  Person,  or (ii) which it or one of its  Subsidiaries
intends to use for  substantially  the same purposes as any other property which
has been or is to be sold or transferred by it or one of its Subsidiaries to any
other  Person in  connection  with such  lease,  unless in either  case the sale
involved is not  prohibited  under Section  7.3(B) and the lease involved is not
prohibited   under   Section   7.3(A)  and  excluding  any  sale  and  leaseback
transactions involving motor vehicles.

         (K)  Margin   Regulations.   Neither  the   Borrower  nor  any  of  its
Subsidiaries,  shall  use  all or any  portion  of the  proceeds  of any  credit
extended under this Agreement to purchase or carry Margin Stock.

         (L)  ERISA.  The Borrower shall not

                   (i) engage,  or permit any of its Subsidiaries to engage,  in
         any prohibited  transaction  described in Sections 406 of ERISA or 4975
         of the Code for which a statutory or class  exemption is not  available
         or a private  exemption has not been  previously  obtained from the DOL
         which  could  reasonably  be  expected  to result in  liability  to the
         Borrower of $1,000,000 or more;

                  (ii) permit to exist any  accumulated  funding  deficiency (as
         defined in Sections 302 of ERISA and 412 of the Code) of  $1,000,000 or
         more, with respect to any Benefit Plan, whether or not waived;

                  (iii) fail, or permit any  Controlled  Group member to fail to
         pay  timely  required  contributions  or annual  installments  due with
         respect to any waived  funding  deficiency  to any  Benefit  Plan which
         failure  could  reasonably  be expected to result in  liability  to the
         Borrower of $1,000,000 or more;

                  (iv)  terminate,  or permit  any  Controlled  Group  member to
         terminate,  any Benefit  Plan which would  result in  liability  of the
         Borrower  or any  Controlled  Group  member  under Title IV of ERISA of
         $1,000,000 or more;



                                                       -72-


<PAGE>



                  (v) fail to make any material  contribution  or payment to any
         Multiemployer  Plan which the Borrower or any  Controlled  Group member
         may  be  required  to  make  under  any  agreement   relating  to  such
         Multiemployer Plan, or any law pertaining thereto;

                  (vi) fail, or permit any  Controlled  Group member to fail, to
         pay any required  installment  or any other material  payment  required
         under  Section  412 of the  Code on or  before  the due  date  for such
         installment or other payment; or

                  (vii) amend, or permit any Controlled Group member to amend, a
         Plan resulting in a material increase in current liability for the plan
         year such that the Borrower or any Controlled  Group member is required
         to provide security to such Plan under Section 401(a)(29) of the Code.

         (M)  Corporate   Documents.   Neither  the  Borrower  nor  any  of  its
Subsidiaries  shall  amend,  modify  or  otherwise  change  any of the  terms or
provisions in any of their respective  Articles or Certificates of Incorporation
or  By-Laws  as in  effect  on the date  hereof  in any  manner  adverse  to the
interests  of the  Lenders,  without the prior  written  consent of the Required
Lenders.

         (N) Fiscal  Year.  Neither  the  Borrower  nor any of its  consolidated
Subsidiaries  shall change its fiscal year for accounting or tax purposes from a
period  consisting  of the  12-month  period  ending on the last day or the last
Friday before the last day of December of each year.

         (O)  Subsidiary  Covenants.  The Borrower will not, and will not permit
any Subsidiary to, create or otherwise cause to become  effective any consensual
encumbrance  or  restriction of any kind on the ability of any Subsidiary to pay
dividends  or make any  other  distribution  on its  stock,  or make  any  other
Restricted  Payment,  pay  any  Indebtedness  or  other  Obligation  owed to the
Borrower or any other Subsidiary, make loans or advances or other Investments in
the Borrower or any other Subsidiary,  or sell, transfer or otherwise convey any
of its property to the Borrower or any other Subsidiary.

         (P) Hedging  Obligations.  The Borrower  shall not and shall not permit
any of its  Subsidiaries  to enter into any interest rate,  commodity or foreign
currency exchange,  swap,  collar, cap or similar agreements  evidencing Hedging
Obligations,  other than interest rate, foreign currency or commodity  exchange,
swap, collar, cap or similar agreements entered into by the Borrower pursuant to
which the  Borrower has hedged its actual  interest  rate,  foreign  currency or
commodity  exposure.  Such  permitted  hedging  agreements  entered  into by the
Borrower  and any  Lender  or any  affiliate  of any  Lender  to hedge  floating
interest rate risk in an aggregate  notional amount not to exceed at any time an
amount  equal to the  outstanding  balance  of the Term  Loans at such  time are
sometimes referred to herein as "Interest Rate Agreements."

         (Q)  Subordinated  Notes.  The Borrower shall not amend,  supplement or
modify the terms of the  Subordinated  Notes or make any  payment  required as a
result of any amendment or change thereto  without the prior written  consent of
the Agent and the Required Lenders. Except as permitted in Section 2.5(B) hereof
and Section 3 of the  Subordination  Agreement  as in effect on the date hereof,
the  Borrower  shall not  redeem,  purchase,  prepay (by  setoff or  otherwise),
defease



                                                       -73-


<PAGE>



or repay any principal of,  premium,  if any, or other amount payable in respect
of the Subordinated Notes.

         7.4  Financial Covenants. The Borrower shall comply with the following:

         (A)  Minimum  Fixed  Charge  Coverage  Ratio.   The  Borrower  and  its
consolidated Subsidiaries shall maintain a ratio ("Fixed Charge Coverage Ratio")
of (i) the sum of the amounts of (a) EBITDA  minus (b) Capital  Expenditures  to
(ii)  the  sum of the  amounts  of  (a)  Interest  Expense  plus  (b)  scheduled
amortization  payments of the principal  portion of the Term Loans and scheduled
amortization  payments of the principal  portion of all other  Indebtedness  for
borrowed  money of the Borrower made during such period plus (c) cash taxes paid
by the Borrower and its  consolidated  Subsidiaries  during such period plus (d)
Restricted Payments paid during such period of at least:

                  (i)  1.05 to 1.00  for  each  fiscal  quarter  for the  period
         commencing  with the fiscal  quarter  ending March 31, 2000 through the
         fiscal quarter ending March 31, 2001; and

                  (ii) 1.10 to 1.00 for each fiscal quarter thereafter until the
Termination Date.

In each case, the Fixed Charge Coverage Ratio shall be determined as of the last
day of each fiscal  quarter for the four fiscal  quarter  period  ending on such
day, calculated,  with respect to Permitted  Acquisitions,  on a pro forma basis
using  historical  financial  statements  obtained  from the seller (with EBITDA
adjusted solely to add back (i)  identifiable  expenses which will be reduced or
eliminated  subsequent to the applicable Permitted Acquisition  (including,  but
not limited to, the effect of margin improvements) and (ii) transaction expenses
arising from or in connection with the applicable Permitted Acquisition), broken
down by fiscal quarter in the Borrower's reasonable judgment.

         (B) Maximum  Leverage  Ratio.  The Borrower  shall not permit the ratio
(the "Leverage Ratio") of (i) the sum of (a) Indebtedness for borrowed money and
(b)  Capitalized  Lease  Obligations to (ii) EBITDA to be greater than the ratio
set forth  below at the end of the fiscal  quarter  ending on the  corresponding
date set forth below:



                                                       -74-


<PAGE>



         Quarter Ending                              Ratio

         March 31, 2000                              4.40 to 1.00
         June 30, 2000                               4.40 to 1.00
         September 30, 2000                          4.25 to 1.00
         December 31, 2000                           4.25 to 1.00

         March 31, 2001                              4.00 to 1.00
         June 30, 2001                               3.50 to 1.00
         September 30, 2001                          3.50 to 1.00
         December 31, 2001                           3.50 to 1.00

         March 31, 2002                              3.50 to 1.00
         June 30, 2002                               3.25 to 1.00
         September 30, 2002                          3.25 to 1.00
         December 31, 2002                           3.25 to 1.00

         March 31, 2003                              3.25 to 1.00
         June 30, 2003                               3.00 to 1.00
         September 30, 2003                          3.00 to 1.00
         and each quarter
         thereafter

The Leverage Ratio shall be calculated,  in each case, determined as of the last
day of each fiscal  quarter based upon (a) for  Indebtedness  for borrowed money
and  Capitalized  Lease   Obligations,   Indebtedness  for  borrowed  money  and
Capitalized  Lease  Obligations as of the last day of each such fiscal  quarter;
and (b) for EBITDA, the actual amount for the four-quarter period ending on such
day, calculated,  with respect to Permitted  Acquisitions,  on a pro forma basis
using  historical  financial  statements  obtained  from the seller (with EBITDA
adjusted solely to add back (i)  identifiable  expenses which will be reduced or
eliminated  subsequent to the applicable Permitted Acquisition  (including,  but
not limited to, the effect of margin improvements) and (ii) transaction expenses
arising from or in connection with the applicable Permitted Acquisition), broken
down by fiscal quarter in the Borrower's reasonable judgment.

         (C) Minimum  Consolidated  Net Worth. The Borrower shall not permit its
Consolidated  Net Worth at any time to be less  than the sum of (a)  $27,500,000
plus (b) fifty percent (50%) of Net Income (if positive)  calculated  separately
for each fiscal  quarter  ending on or after March 31, 2000 plus (c) one hundred
percent  (100%) of the net cash  proceeds  resulting  from the  issuance  by the
Borrower of any Capital Stock, plus (d) the Consolidated Net Worth of any Person
whose Capital Stock is contributed to the capital of the Borrower.

         (D) Interest  Expense  Coverage  Ratio.  The Borrower  shall maintain a
ratio (the  "Interest  Expense  Coverage  Ratio") of (i) EBITDA to (ii) Interest
Expense  during each four fiscal  quarter  period  ending on the date  described
below of at least:



                                                       -75-


<PAGE>



         Quarter Ending                     Ratio

         March 31, 2000                     2.25 to 1.0
         June 30, 2000                      2.25 to 1.0
         September 30, 2000                 2.25 to 1.0
         December 31, 2000                  2.25 to 1.0

         March 31, 2001                     2.25 to 1.0
         June 30, 2001                      2.50 to 1.0
         September 30, 2001                 2.50 to 1.0
         December 31, 2001                  2.50 to 1.0

         March 31, 2002                     2.75 to 1.0
         June 30, 2002                      2.75 to 1.0
         September 30, 2002                 2.75 to 1.0
         December 31, 2002                  2.75 to 1.0

         March 31, 2003                     3.00 to 1.0
         June 30, 2003                      3.00 to 1.0
         September 30, 2003
         and each quarter
         thereafter                         3.00 to 1.0

In each case, the Interest  Expense Coverage Ratio shall be determined as of the
last day of each fiscal  quarter  described  above for the four  fiscal  quarter
period ending on such day, calculated,  with respect to Permitted  Acquisitions,
on a pro forma basis using  historical  financial  statements  obtained from the
seller (with EBITDA adjusted solely to add back (i) identifiable  expenses which
will be reduced or eliminated subsequent to the applicable Permitted Acquisition
(including,  but not  limited  to, the effect of margin  improvements)  and (ii)
transaction expenses arising from or in connection with the applicable Permitted
Acquisition),  broken  down  by  fiscal  quarter  in the  Borrower's  reasonable
judgment.

ARTICLE VIII:  DEFAULTS

         8.1 Defaults.  Each of the  following  occurrences  shall  constitute a
Default under this Agreement:

         (A) Failure to Make Payments  When Due. The Borrower  shall (i) fail to
pay when due any of the Obligations  consisting of principal with respect to the
Loans or (ii) shall fail to pay within three (3) Business  Days of the date when
due  any of the  other  Obligations  under  this  Agreement  or the  other  Loan
Documents.

         (B)  Breach of  Certain  Covenants.  The  Borrower  shall fail duly and
punctually to perform or observe any agreement,  covenant or obligation  binding
on the Borrower under:



                                                       -76-


<PAGE>



                  (i) Section  7.1(C)  through and including  7.1(I),  7.2(B) or
         7.2(F) and such failure shall continue unremedied for ten (10) Business
         Days;

                  (ii) Sections 7.1(A),  7.1(B),  7.2(A), 7.2(C), 7.2(D), 7.2(E)
         and 7.2(G) through and including 7.2(L) and such failure shall continue
         unremedied for five (5) Business Days; or

                  (iii) Section 7.3 or 7.4.

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

         (D) Other Defaults. The Borrower shall default in the performance of or
compliance  with any term contained in this Agreement  (other than as covered by
paragraphs  (A), (B) or (C) of this Section  8.1), or the Borrower or any of its
Subsidiaries  shall default in the  performance  of or compliance  with any term
contained in any of the other Loan  Documents,  and such default shall  continue
for thirty (30) days after the occurrence thereof.

         (E)  Default  as to  Other  Indebtedness.  The  Borrower  or any of its
Subsidiaries  shall fail to make any  payment  when due  (whether  by  scheduled
maturity, required prepayment,  acceleration,  demand or otherwise) with respect
to any Indebtedness the outstanding principal amount of which Indebtedness is in
excess of $2,500,000 ("Cross Default  Indebtedness"),  or any breach, default or
event of default  shall  occur,  or any other  condition  shall  exist under any
instrument,  agreement  or  indenture  pertaining  to  any  such  Cross  Default
Indebtedness,  if the  effect  thereof  is to cause an  acceleration,  mandatory
redemption, a requirement that the Borrower offer to purchase such Cross Default
Indebtedness or other required repurchase of such Cross Default Indebtedness, or
permit the  holder(s)  of such Cross  Default  Indebtedness  to  accelerate  the
maturity of any such Cross Default Indebtedness or require a redemption or other
repurchase  of such  Cross  Default  Indebtedness;  or any  such  Cross  Default
Indebtedness  shall be otherwise declared to be due and payable (by acceleration
or otherwise) or required to be prepaid,  redeemed or otherwise  repurchased  by
the  Borrower or any of its  Subsidiaries  (other than by a regularly  scheduled
required prepayment) prior to the stated maturity thereof.

         (F)  Involuntary Bankruptcy; Appointment of Receiver, Etc.

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



                                                       -77-


<PAGE>



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

         (G) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower or
any of the Borrower's Subsidiaries shall (i) commence a voluntary case under any
applicable  bankruptcy,  insolvency  or other  similar law now or  hereafter  in
effect, (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary  case to a voluntary case, under any such
law,  (iii) consent to the  appointment  of or taking  possession by a receiver,
trustee or other custodian for all or a substantial  part of its property,  (iv)
make any  assignment  for the  benefit of  creditors  or (v) take any  corporate
action to authorize any of the foregoing.

         (H)  Judgments and  Attachments.  Any money  judgment(s)  (other than a
money  judgment  covered by insurance as to which the insurance  company has not
disclaimed  or  reserved  the right to  disclaim  coverage),  writ or warrant of
attachment,  or similar process against the Borrower or any of its  Subsidiaries
or any of  their  respective  assets  involving  in any  single  case  or in the
aggregate an amount in excess of  $2,500,000  is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.

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

         (J) Loan Documents. At any time, for any reason, any Loan Document as a
whole that materially affects the ability of the Agent, or any of the Lenders to
enforce the Obligations ceases to be in full force and effect or the Borrower or
any  of the  Borrower's  Subsidiaries  party  thereto  seeks  to  repudiate  its
obligations thereunder.

         (K) Termination  Event. Any Termination Event occurs which the Required
Lenders  believe is  reasonably  likely to subject the  Borrower to liability in
excess of $2,000,000.

         (L) Waiver of Minimum Funding  Standard.  If the plan  administrator of
any Plan applies  under  Section  412(d) of the Code for a waiver of the minimum
funding  standards  of Section  412(a) of the Code and any Lender  believes  the
substantial business hardship upon which



                                                       -78-


<PAGE>



the application for the waiver is based could  reasonably be expected to subject
either the  Borrower or any  Controlled  Group  member to liability in excess of
$2,000,000.

         (M) Change of Control. A Change of Control shall occur.

         (N)  Interest  Rate  Agreements.  Nonpayment  by  the  Borrower  of any
obligation  under any Interest  Rate  Agreement or the breach by the Borrower of
any term,  provision or condition  contained in any such Interest Rate Agreement
in either case which could  reasonably  be  expected to result in  liability  in
excess of $2,500,000.

         (O)  Environmental  Matters.  The  Borrower or any of its  Subsidiaries
shall be the subject of any  proceeding or  investigation  pertaining to (i) the
Release by the Borrower or any of its  Subsidiaries of any Contaminant  into the
environment,  (ii) the  liability  of the  Borrower  or any of its  Subsidiaries
arising  from the  Release  by any  other  Person  of any  Contaminant  into the
environment,  or (iii)  any  violation  of any  Environmental,  Health or Safety
Requirements of Law which by the Borrower or any of its Subsidiaries,  which, in
any case,  has or is  reasonably  likely to subject the Borrower to liability in
excess of $1,000,000.

         A Default shall be deemed  "continuing"  until cured or until waived in
writing in accordance with Section 9.3.

ARTICLE IX:  ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES

         9.1 Termination of Commitments;  Acceleration. If any Default described
in Section 8.1(F) or 8.1(G) occurs with respect to the Borrower, the obligations
of the Lenders to make Loans  hereunder and the obligation of the Agent to issue
Letters of Credit  hereunder shall  automatically  terminate and the Obligations
shall  immediately  become due and payable without any election or action on the
part of the Agent or any  Lender.  If any other  Default  occurs,  the  Required
Lenders may  terminate or suspend the  obligations  of the Lenders to make Loans
hereunder  and the  obligation  of the Issuing  Banks to issue Letters of Credit
hereunder,  or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable,  without  presentment,
demand,  protest  or  notice of any kind,  all of which the  Borrower  expressly
waives.

         9.2 Defaulting  Lender.  In the event that any Lender fails to fund its
applicable  Pro Rata Share of any Advance  requested or deemed  requested by the
Borrower (or  requested by an Issuing Bank or the Swing Line Bank in  connection
with the  participation  in Letters of Credit or Swing Line  Loans),  which such
Lender  is  obligated  to fund  under the terms of this  Agreement  (the  funded
portion of such Advance being hereinafter referred to as a "Non Pro Rata Loan"),
until the earlier of such Lender's cure of such failure and the  termination  of
the Revolving Loan Commitments, the proceeds of all amounts thereafter repaid to
the Agent by the Borrower and otherwise  required to be applied to such Lender's
share of all other Obligations  pursuant to the terms of this Agreement shall be
advanced to the Borrower (or Issuing Bank or Swing Line Bank,



                                                       -79-


<PAGE>



as  applicable)  by the Agent on behalf  of such  Lender to cure,  in full or in
part, such failure by such Lender, but shall nevertheless be deemed to have been
paid to such Lender in satisfaction of such other  Obligations.  Notwithstanding
anything in this Agreement to the contrary:

                  (i) the  foregoing  provisions of this Section 9.2 shall apply
         only with respect to the proceeds of payments of Obligations  and shall
         not affect the conversion or  continuation of Loans pursuant to Section
         2.10;

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

                  (iii) amounts  advanced to the Borrower to cure, in full or in
         part,  any such Lender's  failure to fund its applicable Pro Rata Share
         of  any  Advance  ("Cure  Loans")  shall  bear  interest  at  the  rate
         applicable to Floating Rate Loans in effect from time to time,  and for
         all other purposes of this  Agreement  shall be treated as if they were
         Floating Rate Loans;

                  (iv) regardless of whether or not a Default has occurred or is
         continuing,  and notwithstanding the instructions of the Borrower as to
         its  desired  application,   all  repayments  of  principal  which,  in
         accordance with the other terms of this Agreement,  would be applied to
         the outstanding  Floating Rate Loans shall be applied first, ratably to
         all  Floating  Rate  Loans  constituting  Non Pro Rata  Loans,  second,
         ratably to Floating  Rate Loans other than those  constituting  Non Pro
         Rata Loans or Cure Loans and,  third,  ratably to  Floating  Rate Loans
         constituting Cure Loans;

                  (v) for so long as and until the earlier of any such  Lender's
         cure of the  failure  to fund  its  applicable  Pro  Rata  Share of any
         Advance and the termination of the Revolving Loan Commitments, the term
         "Required  Lenders" for purposes of this  Agreement  shall mean Lenders
         (excluding all Lenders whose failure to fund their  respective Pro Rata
         Shares of such  Advance have not been so cured)  whose  applicable  Pro
         Rata Shares represent greater than fifty percent (50%) of the aggregate
         Pro Rata Shares of such Lenders; and

                  (vi) for so long as and until  any such  Lender's  failure  to
         fund its Revolving Loan Pro Rata Share and/or Acquisition  Facility Pro
         Rata Share of any Advance is cured in accordance with Section  9.2(ii),
         (A) such  Lender  shall not be  entitled  to any  commitment  fees with
         respect to its Revolving Loan Commitment  and/or  Acquisition  Facility
         Commitment  and (B) such Lender  shall not be entitled to any letter of
         credit  fees,  which  commitment  fees and letter of credit  fees shall
         accrue in



                                                       -80-


<PAGE>



         favor of the Lenders which have funded their respective  applicable Pro
         Rata Share of such  requested  Advance,  shall be allocated  among such
         performing  Lenders  ratably based upon their  relative  Revolving Loan
         Commitments  and  Acquisition  Facility   Commitments,   and  shall  be
         calculated  based  upon  the  average  amount  by which  the  aggregate
         Revolving Loan  Commitments of such performing  Lenders exceeds the sum
         of (I) the  outstanding  principal  amount of the  Loans  owing to such
         performing Lenders, plus (II) the outstanding Reimbursement Obligations
         owing  to  such   performing   Lenders,   plus   (III)  the   aggregate
         participation interests of such performing Lenders arising with respect
         to undrawn and outstanding Letters of Credit and Swing Line Loans.

         9.3  Amendments.  Subject to the  provisions  of this  Article  IX, the
Required  Lenders  (or the Agent with the  consent  in  writing of the  Required
Lenders) and the Borrower may enter into agreements  supplemental hereto for the
purpose of adding or modifying any  provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:

                  (i) Postpone or extend the Revolving  Loan  Termination  Date,
         the Acquisition Facility Loan Termination Date or Term Loan Termination
         Date or any  other  date  fixed for any  payment  of  principal  of, or
         interest on, the Loans,  the  Reimbursement  Obligations or any fees or
         other  amounts  payable to such Lender  (except with respect to (a) any
         modifications  of the  provisions  relating to prepayments of Loans and
         other Obligations (it being understood that modifications to or waivers
         of any provisions  relating to prepayments of the Acquisition  Facility
         Loans shall require the consent of Lenders whose  Acquisition  Facility
         Pro  Rata  Shares  are  greater  than  50%)  and  (b) a  waiver  of the
         application  of the default  rate of interest  pursuant to Section 2.11
         hereof).

                  (ii)  Reduce  the  principal   amount  of  any  Loans  or  L/C
         Obligations,  or  reduce  the rate or  extend  the time of  payment  of
         interest or fees thereon.

                  (iii) Reduce the  percentage  specified in the  definition  of
         Required Lenders or any other percentage of Lenders specified to be the
         applicable percentage in this Agreement to act on specified matters.

                  (iv) Increase the amount of the Revolving  Loan  Commitment or
         the Acquisition Facility Commitment of any Lender hereunder.

                  (v)  Permit  the  Borrower  to assign  its  rights  under this
         Agreement.

                  (vi)  Release  any  Guarantor  a  significant  portion  of the
         Collateral.

                  (vii)  Amend this Section 9.3.




                                                       -81-


<PAGE>



No amendment of any provision of this Agreement  relating to (a) the Agent shall
be effective  without the written consent of the Agent, and (b) Swing Line Loans
shall be effective without the written consent of the Swing Line Bank. The Agent
may waive payment of the fee required under Section  13.3(B)  without  obtaining
the consent of any of the Lenders.

         9.4 Preservation of Rights.  No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents  shall impair such right or
be construed to be a waiver of any Default or an acquiescence  therein,  and the
making  of a Loan or the  issuance  of a Letter of  Credit  notwithstanding  the
existence  of a  Default  or  the  inability  of the  Borrower  to  satisfy  the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute  any waiver or  acquiescence.  Any single or partial  exercise of any
such right shall not preclude other or further  exercise thereof or the exercise
of any other right,  and no waiver,  amendment or other  variation of the terms,
conditions or provisions of the Loan Documents  whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 9.3, and then only
to the extent in such writing  specifically set forth. All remedies contained in
the Loan  Documents  or by law  afforded  shall be  cumulative  and all shall be
available to the Agent and the Lenders until the  Obligations  have been paid in
full.

ARTICLE X:  GENERAL PROVISIONS

         10.1 Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.

         10.2 Governmental  Regulation.  Anything contained in this Agreement to
the contrary  notwithstanding,  no Lender shall be obligated to extend credit to
the Borrower in  violation  of any  limitation  or  prohibition  provided by any
applicable statute or regulation.

         10.3  Performance of  Obligations.  The Borrower  agrees that the Agent
may,  but  shall  have no  obligation,  after  the  occurrence  and  during  the
continuance of a Default,  to make any other payment or perform any act required
of the  Borrower  under any Loan  Document.  The Agent shall use its  reasonable
efforts to give the Borrower  notice of any action taken under this Section 10.3
prior to the taking of such action or promptly  thereafter  provided the failure
to give such  notice  shall not affect  the  Borrower's  obligations  in respect
thereof. The Borrower agrees to pay the Agent, upon demand, the principal amount
of all funds  advanced  by the Agent  under this  Section  10.3,  together  with
interest  thereon at the rate from time to time  applicable  to Revolving  Loans
that are Floating Rate Loans from the date of such advance until the outstanding
principal balance thereof is paid in full. If the Borrower fails to make payment
in respect of any such  advance  under this Section 10.3 within one (1) Business
Day after the date the Borrower receives written demand therefor from the Agent,
the Agent shall promptly notify each Lender and each Lender agrees that it shall
thereupon  make  available  to the Agent,  in Dollars in  immediately  available
funds, the amount equal to such Lender's Pro Rata Share of such advance. If such
funds are not made available to the Agent by such Lender within one (1) Business
Day after the Agent's demand therefor, the Agent will be entitled to recover any
such amount from such Lender



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together with interest  thereon at the Federal Funds Effective Rate for each day
during the period  commencing  on the date of such demand and ending on the date
such  amount is  received.  The failure of any Lender to make  available  to the
Agent its Pro Rata Share of any such  unreimbursed  advance  under this  Section
10.3 shall neither relieve any other Lender of its obligation  hereunder to make
available to the Agent such other Lender's Pro Rata Share of such advance on the
date such payment is to be made nor increase the  obligation of any other Lender
to make such payment to the Agent.  All  outstanding  principal of, and interest
on, advances made under this Section 10.3 shall constitute Obligations.

         10.4  Headings.   Section  headings  in  the  Loan  Documents  are  for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.

         10.5 Entire  Agreement.  The Loan Documents embody the entire agreement
and  understanding  among the Borrower,  the Agent and the Lenders and supersede
all prior agreements and  understandings  among the Borrower,  the Agent and the
Lenders relating to the subject matter thereof.

         10.6 Several  Obligations;  Benefits of this Agreement.  The respective
obligations  of the  Lenders  hereunder  are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is  authorized  to act as such).  The failure of any Lender to perform
any of its obligations  hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit  upon any Person  other than the parties to this  Agreement
and their respective successors and assigns.

         10.7  Expenses; Indemnification.

         (A) Expenses.  The Borrower shall  reimburse the Agent and the Arranger
for any reasonable costs,  charges for internal legal services and out-of-pocket
expenses  (including  attorneys'  and  paralegals'  fees  and  time  charges  of
attorneys and  paralegals for the Agent,  which  attorneys and paralegals may be
employees  of the  Agent)  paid or  incurred  by the  Agent or the  Arranger  in
connection with the preparation,  negotiation, execution, delivery, syndication,
review, amendment,  modification,  and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent and the Arranger and the Lenders for
any costs,  internal charges and out- of-pocket expenses  (including  attorneys'
and paralegals'  fees and time charges of attorneys and paralegals for the Agent
and  the  Arranger  and the  Lenders,  which  attorneys  and  paralegals  may be
employees of the Agent or the  Arranger or the Lenders)  paid or incurred by the
Agent or the Arranger or any Lender in  connection  with the  collection  of the
Obligations and  enforcement of the Loan Documents.  In addition to expenses set
forth above,  the Borrower  agrees to reimburse  the Agent,  promptly  after the
Agent's request therefor,  for each audit, or other business analysis  performed
by or for the benefit of the Lenders in  connection  with this  Agreement or the
other Loan  Documents in an amount equal to the Agent's then  customary  charges
for each person  employed to perform  such audit or analysis up to an amount not
to exceed  $10,000 per audit,  plus all costs and  expenses  (including  without
limitation, travel expenses) incurred by the Agent in the



                                                       -83-


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performance of such audit or analysis,  provided, however, the Borrower shall be
obligated to reimburse  the Agent for not more than two such audits  between the
Closing  Date  and the  first  anniversary  thereof  and one  such  audit in any
twelve-month  period thereafter if any such audit is conducted at a time when no
Default has occurred and is continuing,  it being  understood  that the Borrower
shall be obligated to reimburse the Agent for any such audits  conducted after a
Default has occurred and is continuing  and to do so without  application of the
$10,000  maximum  prescribed  above.  Agent shall  provide the  Borrower  with a
detailed statement of all reimbursements requested under this Section 10.7(A).

         (B)  Indemnity.   The  Borrower  further  agrees  to  defend,  protect,
indemnify,  and hold  harmless  the Agent,  the Arranger and each and all of the
Lenders  and  each of their  respective  Affiliates,  and each of such  Agent's,
Arranger's,  Lender's, or Affiliate's respective officers, directors, employees,
attorneys  and  agents  (including,   without  limitation,   those  retained  in
connection  with  the  satisfaction  or  attempted  satisfaction  of  any of the
conditions set forth in Article V) (collectively,  the  "Indemnitees")  from and
against  any and  all  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments,  suits,  claims,  costs,  expenses  of any  kind or  nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for such  Indemnitees in connection with any  investigative,  administrative  or
judicial proceeding, whether or not such Indemnitees shall be designated a party
thereto),  imposed on, incurred by, or asserted  against such Indemnitees in any
manner relating to or arising out of:

                  (i) this  Agreement,  the other  Loan  Documents,  or any act,
         event or transaction  related or attendant  thereto or to the making of
         the Loans,  and the issuance of and  participation in Letters of Credit
         hereunder,  the management of such Loans or Letters of Credit,  the use
         or  intended  use of the  proceeds  of the Loans or  Letters  of Credit
         hereunder,  or any of the other  transactions  contemplated by the Loan
         Documents; or

                  (ii) any liabilities, obligations,  responsibilities,  losses,
         damages,  personal injury, death,  punitive damages,  economic damages,
         consequential damages, treble damages,  intentional,  willful or wanton
         injury,  damage or  threat to the  environment,  natural  resources  or
         public  health or  welfare,  costs  and  expenses  (including,  without
         limitation,   attorney,   expert  and  consulting  fees  and  costs  of
         investigation,   feasibility  or  remedial  action   studies),   fines,
         penalties and monetary sanctions,  interest,  direct or indirect, known
         or unknown, absolute or contingent, past, present or future relating to
         violation of any  Environmental,  Health or Safety  Requirements of Law
         arising  from  or in  connection  with  the  past,  present  or  future
         operations of the Borrower, its Subsidiaries or any of their respective
         predecessors   in   interest,   or,   the  past,   present   or  future
         environmental, health or safety condition of any respective property of
         the Borrower or its Subsidiaries,  the presence of  asbestos-containing
         materials   at  any   respective   property  of  the  Borrower  or  its
         Subsidiaries  or the Release or threatened  Release of any  Contaminant
         into the environment (collectively, the "Indemnified Matters");

provided,  however,  the  Borrower  shall have no  obligation  to an  Indemnitee
hereunder  with respect to  Indemnified  Matters  caused  solely by or resulting
solely from the willful  misconduct or Gross  Negligence  of such  Indemnitee or
breach of contract by such Indemnitee with respect to



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the Loan  Documents,  in each  case,  as  determined  by the final  non-appealed
judgment of a court of competent jurisdiction.  If the undertaking to indemnify,
pay and hold harmless set forth in the preceding  sentence may be  unenforceable
because  it is  violative  of any  law or  public  policy,  the  Borrower  shall
contribute  the maximum  portion  which it is permitted to pay and satisfy under
applicable  law, to the  payment and  satisfaction  of all  Indemnified  Matters
incurred by the Indemnitees.

         (C) Waiver of  Certain  Claims;  Settlement  of  Claims.  The  Borrower
further agrees not to assert claims against any of the Indemnitees on any theory
of liability for consequential, special, indirect, exemplary or punitive damages
in excess of $1,000,000 in the aggregate with respect to all such claims against
any or all of such  Indemnities.  No  settlement  shall be  entered  into by the
Borrower  or any if its  Subsidiaries  with  respect to any  claim,  litigation,
arbitration or other  proceeding  relating to or arising out of the transactions
evidenced  by this  Agreement  or the other Loan  Documents  (whether or not the
Agent or any Lender or any Indemnitee is a party thereto) unless such settlement
releases all Indemnitees from any and all liability with respect thereto.

         (D) Survival of  Agreements.  The  obligations  and  agreements  of the
Borrower  under  this  Section  10.7  shall  survive  the  termination  of  this
Agreement.

         10.8 Numbers of Documents. All statements,  notices, closing documents,
and  requests  hereunder  shall  be  furnished  to  the  Agent  with  sufficient
counterparts so that the Agent may furnish one to each of the Lenders.

         10.9  Accounting.  Except  as  provided  to the  contrary  herein,  all
accounting   terms  used  herein  shall  be   interpreted   and  all  accounting
determinations  hereunder shall be made in accordance with Agreement  Accounting
Principles.  If any changes in  generally  accepted  accounting  principles  are
hereafter  required  or  permitted  and are  adopted  by the  Borrower  with the
agreement of its  independent  public  accountants  and such changes result in a
change  in  the  method  of  calculation  of any  of  the  financial  covenants,
restrictions  or standards  herein or in the related  definitions  or terms used
therein  ("Accounting  Changes"),   the  parties  hereto  agree  to  enter  into
negotiations,  in good  faith,  in order to amend  such  provisions  in a credit
neutral  manner so as to reflect  equitably  such  Accounting  Changes  with the
desired  result  that the  criteria  for  evaluating  the  Borrower's  financial
condition  shall be the same after such  changes as if such changes had not been
made;  provided,  however,  until  such  provisions  are  amended  in  a  manner
reasonably  satisfactory  to the Agent and the Required  Lenders,  no Accounting
Change shall be given effect in such  calculations and all financial  statements
and reports  required to be delivered  hereunder shall be prepared in accordance
with Agreement Accounting Principles without taking into account such Accounting
Changes.  In the event  such  amendment  is  entered  into with  respect  to any
Accounting  Changes,  all references to this  Agreement to Agreement  Accounting
Principles shall mean generally accepted accounting principles as of the date of
such amendment.

         10.10  Severability  of Provisions.  Any provision in any Loan Document
that is held to be inoperative,  unenforceable,  or invalid in any  jurisdiction
shall,  as to that  jurisdiction,  be  inoperative,  unenforceable,  or  invalid
without affecting the remaining provisions in that



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<PAGE>



jurisdiction or the operation,  enforceability, or validity of that provision in
any other jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.

         10.11  Nonliability of Lenders.  The relationship  between the Borrower
and the  Lenders  and the Agent  shall be solely  that of  borrower  and lender.
Neither the Agent nor any Lender shall have any  fiduciary  responsibilities  to
the Borrower.  Neither the Agent nor any Lender undertakes any responsibility to
the Borrower to review or inform the Borrower of any matter in  connection  with
any phase of the Borrower's business or operations.

         10.12  GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT OR
THE  ARRANGER  OR ANY LENDER  ARISING  OUT OF,  CONNECTED  WITH,  RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN  DOCUMENTS,  AND WHETHER ARISING IN CONTRACT,
TORT,  EQUITY,  OR OTHERWISE,  SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS  (WITHOUT  REGARD  TO THE  CONFLICTS  OF LAWS  PROVISIONS)  OF THE STATE OF
INDIANA.

         10.13  CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.

         (A)  JURISDICTION.  EXCEPT AS PROVIDED IN  SUBSECTION  (B), EACH OF THE
PARTIES  HERETO  AGREES THAT ALL DISPUTES  AMONG THEM ARISING OUT OF,  CONNECTED
WITH,  RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP  ESTABLISHED  AMONG THEM IN
CONNECTION  WITH,  THIS  AGREEMENT  OR ANY OF THE OTHER LOAN  DOCUMENTS  WHETHER
ARISING IN CONTRACT,  TORT, EQUITY, OR OTHERWISE, MAY BE RESOLVED EXCLUSIVELY BY
STATE OR FEDERAL COURTS LOCATED IN INDIANAPOLIS, INDIANA, BUT THE PARTIES HERETO
ACKNOWLEDGE  THAT ANY APPEALS  FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF INDIANAPOLIS,  INDIANA.  EACH OF THE PARTIES HERETO WAIVES IN
ALL DISPUTES  BROUGHT  PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.

         (B) OTHER  JURISDICTIONS.  THE BORROWER  AGREES THAT THE AGENT,  OR ANY
LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A
COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL  JURISDICTION
OVER THE  BORROWER  OR (2) REALIZE ON ANY  SECURITY  FOR THE  OBLIGATIONS  OR TO
ENFORCE A JUDGMENT  OR OTHER COURT ORDER  ENTERED IN FAVOR OF SUCH  PERSON.  THE
BORROWER  AGREES  THAT IT WILL NOT ASSERT ANY  PERMISSIVE  COUNTERCLAIMS  IN ANY
PROCEEDING BROUGHT BY SUCH PERSON TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS
OR TO ENFORCE A  JUDGMENT  OR OTHER  COURT  ORDER IN FAVOR OF SUCH  PERSON.  THE
BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN



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<PAGE>



WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).

         (C) VENUE. THE BORROWER  IRREVOCABLY  WAIVES ANY OBJECTION  (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON  CONVENIENS)  WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH  ACTION OR  PROCEEDING  WITH  RESPECT  TO THIS  AGREEMENT  OR ANY OTHER
INSTRUMENT,  DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION  HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE.

         (D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,  WHETHER SOUNDING
IN CONTRACT,  TORT, OR OTHERWISE,  ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE  RELATIONSHIP  ESTABLISHED  AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT,  DOCUMENT OR AGREEMENT  EXECUTED OR DELIVERED
IN CONNECTION HEREWITH.  EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM,  DEMAND,  ACTION OR CAUSE OF ACTION  SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL  COUNTERPART  OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN  EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

ARTICLE XI:  THE AGENT

         11.1 Appointment;  Nature of Relationship. Bank One is appointed by the
Lenders as the Agent  hereunder and under each other Loan Document,  and each of
the  Lenders  irrevocably  authorizes  the  Agent  to  act  as  the  contractual
representative  of such  Lender with the rights and duties  expressly  set forth
herein  and in the  other  Loan  Documents.  The  Agent  agrees  to act as  such
contractual representative upon the express conditions contained in this Article
XI.  Notwithstanding  the  use of the  defined  term  "Agent,"  it is  expressly
understood   and   agreed   that  the  Agent   shall  not  have  any   fiduciary
responsibilities to any Lender by reason of this Agreement and that the Agent is
merely acting as the representative of the Lenders with only those duties as are
expressly  set forth in this  Agreement  and the other  Loan  Documents.  In its
capacity  as the  Lenders'  contractual  representative,  the Agent (i) does not
assume any fiduciary duties to any of the Lenders, (ii) is a "representative" of
the Lenders within the meaning of Section 9-105 of the Uniform  Commercial  Code
and (iii) is acting as an independent contractor, the rights and duties of which
are limited to those  expressly  set forth in this  Agreement and the other Loan
Documents.  Each of the Lenders  agrees to assert no claim  against the Agent on
any agency theory or any other theory of liability for breach of fiduciary duty,
all of which claims each Lender waives.



                                                       -87-


<PAGE>



         11.2 Powers.  The Agent shall have and may  exercise  such powers under
the Loan  Documents as are  specifically  delegated to the Agent by the terms of
each thereof,  together with such powers as are reasonably  incidental  thereto.
The Agent shall have no implied  duties or fiduciary  duties to the Lenders,  or
any  obligation to the Lenders to take any action  hereunder or under any of the
other  Loan  Documents  except  any  action  specifically  provided  by the Loan
Documents required to be taken by the Agent.

         11.3  General  Immunity.  Neither  the Agent nor any of its  directors,
officers,  agents or employees  shall be liable to the Borrower,  the Lenders or
any Lender for any action  taken or omitted to be taken by it or them  hereunder
or under any other Loan Document or in connection  herewith or therewith  except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from the Gross Negligence,  willful
misconduct or breach of contract of such Person.

         11.4 No  Responsibility  for Loans,  Creditworthiness,  Recitals,  Etc.
Neither the Agent nor any of its directors,  officers, agents or employees shall
be  responsible  for or have any duty to ascertain,  inquire into, or verify (i)
any  statement,  warranty or  representation  made in  connection  with any Loan
Document or any borrowing  hereunder;  (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction  of any condition  specified in Article V, except  receipt of items
required to be  delivered  solely to the Agent;  (iv) the  existence or possible
existence of any Default or Unmatured Default or (v) the validity, effectiveness
or genuineness of any Loan Document, for the perfection or priority of the Liens
on any of the  Collateral,  or any other  instrument  or  writing  furnished  in
connection  therewith.  The Agent shall not be responsible to any Lender for any
recitals,  statements,  representations  or  warranties  herein or in any of the
other  Loan  Documents,  or  for  the  execution,  effectiveness,   genuineness,
validity,  legality,  enforceability,  collectibility,  or  sufficiency  of this
Agreement or any of the other Loan  Documents or the  transactions  contemplated
thereby,  or for the  financial  condition of any guarantor of any or all of the
Obligations, the Borrower or any of its Subsidiaries.

         11.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan  Document  in  accordance  with  written  instructions  signed by the
Required  Lenders,  and such instructions and any action taken or failure to act
pursuant  thereto  shall be binding on all of the  Lenders and on all holders of
Notes.  The Agent  shall be fully  justified  in failing or refusing to take any
action  hereunder  and under any other Loan  Document  unless it shall  first be
indemnified  to its  satisfaction  by the Lenders  pro rata  against any and all
liability,  cost and expense that it may incur by reason of taking or continuing
to take any such action.

         11.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as the Agent  hereunder  and under any other Loan  Document by or through
employees,  agents,  and  attorney-in-fact  and shall not be  answerable  to the
Lenders,  except  as to money or  securities  received  by it or its  authorized
agents,  for the default or misconduct  of any such agents or  attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of



                                                       -88-


<PAGE>



counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters  pertaining to the Agent's duties  hereunder and under any other
Loan Document.

         11.7  Reliance on  Documents;  Counsel.  The Agent shall be entitled to
rely upon any Note, notice, consent,  certificate,  affidavit, letter, telegram,
statement,  paper or  document  believed  by it to be genuine and correct and to
have been  signed or sent by the proper  person or  persons,  and, in respect to
legal matters,  upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.

         11.8 The Agent's  Reimbursement and Indemnification.  The Lenders agree
to reimburse and  indemnify the Agent ratably in proportion to their  respective
Revolving Loan  Commitments (i) for any amounts,  which are not  unreasonable or
excessive,  not  reimbursed  by the  Borrower for which the Agent is entitled to
reimbursement  by the  Borrower  under  the Loan  Documents,  (ii) for any other
reasonable  expenses  incurred  by  the  Agent  on  behalf  of the  Lenders,  in
connection  with  the  preparation,   execution,  delivery,  administration  and
enforcement  of the Loan Documents and (iii) for any  liabilities,  obligations,
losses, damages, penalties,  actions, judgments, suits, or any reasonable costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted  against the Agent in any way relating to or arising
out of the  Loan  Documents  or  any  other  document  delivered  in  connection
therewith or the transactions contemplated thereby, or the enforcement of any of
the terms thereof or of any such other documents,  provided that no Lender shall
be liable for any of the  foregoing to the extent any of the  foregoing is found
in a final non-appealable  judgment by a court of competent jurisdiction to have
arisen solely from the Gross Negligence or willful misconduct of the Agent.

         11.9 Rights as a Lender. With respect to its Revolving Loan Commitment,
its Term Loan Commitment, its Acquisition Facility Commitment,  Loans made by it
and the Notes  issued to it,  the Agent  shall  have the same  rights and powers
hereunder  and under any other Loan  Document as any Lender and may exercise the
same as through it were not the Agent, and the term "Lender" or "Lenders" shall,
unless the context  otherwise  indicates,  include  the Agent in its  individual
capacity.  The Agent may accept  deposits  from,  lend  money to, and  generally
engage in any kind of trust, debt, equity or other  transaction,  in addition to
those  contemplated  by this  Agreement  or any other  Loan  Document,  with the
Borrower  or any of its  Subsidiaries  in which  such  Person is not  prohibited
hereby from engaging with any other Person.

         11.10 Lender Credit  Decision.  Each Lender  acknowledges  that it has,
independently  and without reliance upon the Agent or any other Lender and based
on the financial  statements  prepared by the Borrower and such other  documents
and information as it has deemed  appropriate,  made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents.  Each Lender
also  acknowledges  that it will,  independently  and without  reliance upon the
Agent or any other  Lender and based on such  documents  and  information  as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.

         11.11  Successor  Agent.  The  Agent  may  resign at any time by giving
written  notice  thereof  to  the  Lenders  and  the  Borrower.  Upon  any  such
resignation, the Required Lenders shall



                                                       -89-


<PAGE>



have the  right to  appoint,  on  behalf  of the  Borrower  and the  Lenders,  a
successor  Agent.  If no  successor  Agent shall have been so  appointed  by the
Required  Lenders and shall have  accepted such  appointment  within thirty days
after the retiring Agent's giving notice of resignation, then the retiring Agent
may  appoint,  on behalf of the Borrower  and the  Lenders,  a successor  Agent.
Notwithstanding  anything  herein to the  contrary,  so long as no  Default  has
occurred  and is  continuing,  each such  successor  Agent  shall be  subject to
approval by the Borrower,  which  approval shall not be  unreasonably  withheld.
Such  successor  Agent shall be a  commercial  bank having  capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment as the
Agent  hereunder by a successor  Agent,  such  successor  Agent shall  thereupon
succeed to and become vested with all the rights, powers,  privileges and duties
of the retiring  Agent,  and the  retiring  Agent shall be  discharged  from its
duties and obligations  hereunder and under the other Loan Documents.  After any
retiring Agent's resignation  hereunder as Agent, the provisions of this Article
XI shall  continue in effect for its benefit in respect of any actions  taken or
omitted to be taken by it while it was acting as the Agent  hereunder  and under
the other Loan Documents.

         11.12  Collateral  Documents.  (a) Each Lender  authorizes the Agent to
enter into each of the  Collateral  Documents to which it is a party and to take
all action  contemplated  by such  documents.  Each Lender agrees that no Lender
shall have the right  individually to seek to realize upon the security  granted
by any Collateral Document,  it being understood and agreed that such rights and
remedies may be exercised  solely by the Agent for the benefit of the Holders of
Secured Obligations upon the terms of the Collateral Documents.

                  (b) In the event that any  Collateral is hereafter  pledged by
any  Person as  collateral  security  for the  Obligations,  the Agent is hereby
authorized  to  execute  and  deliver  on  behalf  of  the  Holders  of  Secured
Obligations  any Loan Documents  necessary or appropriate to grant and perfect a
Lien on such  Collateral  in favor of the  Agent on  behalf  of the  Holders  of
Secured Obligations.

                  (c) The Lenders hereby  authorize the Agent, at its option and
in its discretion,  to release any Lien granted to or held by the Agent upon any
Collateral or release any Guarantor  from its  obligations  under a Guaranty (i)
upon  termination of the Commitments and payment and  satisfaction of all of the
Obligations  at any time  arising  under or in respect of this  Agreement or the
Loan  Documents  or the  transactions  contemplated  hereby or thereby;  (ii) as
permitted  by, but only in accordance  with,  the terms of the  applicable  Loan
Document;  or (iii) if  approved,  authorized  or  ratified  in  writing  by the
Required  Lenders,  unless such release is required to be approved by all of the
Lenders  hereunder.  Upon  request by the Agent at any time,  the  Lenders  will
confirm in writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section 11.12(c).

                  (d)  Upon  any  sale  and  transfer  of  Collateral  or  of  a
Subsidiary  which  is  expressly  permitted  pursuant  to the  terms of any Loan
Document,  or  consented  to in  writing by the  Required  Lenders or all of the
Lenders,  as  applicable,  and upon at least five  Business  Days' prior written
request by the Borrower,  the Agent shall (and is hereby irrevocably  authorized
by the Lenders to) execute  such  documents  as may be necessary to evidence the
release of the Liens



                                                       -90-


<PAGE>



granted to the Agent for the  benefit of the Lenders  herein or pursuant  hereto
upon the  Collateral  that was sold or  transferred  and release the  applicable
Guarantor from its obligations under the applicable Guaranty; provided, however,
that (i) the Agent shall not be  required to execute any such  document on terms
which, in the Agent's opinion, would expose the Agent to liability or create any
obligation  or entail  any  consequence  other  than the  release  of such Liens
without  recourse or  warranty,  and (ii) such  release  shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
the  Borrower or any  Subsidiary  in respect of) all  interests  retained by the
Borrower or any Subsidiary,  including (without  limitation) the proceeds of the
sale, all of which shall continue to constitute part of the Collateral.

ARTICLE XII:  SETOFF; RATABLE PAYMENTS

         12.1 Setoff.  In addition to, and without  limitation of, any rights of
the Lenders under  applicable law, if any Default occurs and is continuing,  any
indebtedness  from any Lender to the Borrower  (including all account  balances,
whether  provisional  or final and whether or not collected or available) may be
offset and applied toward the payment of the  Obligations  owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.

         12.2 Ratable Payments.  If any Lender,  whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments  received pursuant to
Sections  4.1,  4.2 or 4.4) in a greater  proportion  than that  received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender,  whether in connection with
setoff or  amounts  which  might be  subject  to setoff or  otherwise,  receives
collateral or other  protection  for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in  proportion  to the  obligations  owing to them.  In case any such payment is
disturbed by legal process, or otherwise,  appropriate further adjustments shall
be made.

         12.3 Application of Payments. Subject to the provisions of Section 9.2,
the Agent shall,  unless  otherwise  specified at the  direction of the Required
Lenders  which  direction  shall be  consistent  with the last  sentence of this
Section 12.3,  apply all payments and  prepayments in respect of any Obligations
and all proceeds of Collateral in the following order:

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

                  (B)  second,  to pay  interest  on and then  principal  of any
         advance  made under  Section 10.3 for which the Agent has not then been
         paid by the Borrower or reimbursed by the Lenders;

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



                                                       -91-


<PAGE>



                  (D)  fourth,  to pay  Obligations  in  respect  of  any  fees,
         expenses, reimbursements or indemnities then due to the Lenders and the
         issuer(s) of Letters of Credit;

                  (E) fifth, to pay interest due in respect of Swing Line Loans;

                  (F) sixth, to pay interest due in respect of Loans (other than
         Swing Line Loans) and L/C Obligations;

                  (G) seventh, to the ratable payment or prepayment of principal
         outstanding on Swing Line Loans;

                  (H) eighth,  to the ratable payment or prepayment of principal
         outstanding  on Loans  (other  than  Swing Line  Loans),  Reimbursement
         Obligations and Hedging  Obligations  under Interest Rate Agreements in
         such order as the Agent may determine in its sole discretion;

                  (I) ninth, to provide  required cash  collateral,  if required
         pursuant to Section 3.11 and

                  (J) tenth, to the ratable payment of all other Obligations.

Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower,  all principal payments in respect
of Loans  (other  than  Swing  Line  Loans)  shall be  applied  first,  to repay
outstanding  Floating Rate Loans, and then to repay outstanding  Eurodollar Rate
Loans with those  Eurodollar  Rate Loans which have  earlier  expiring  Interest
Periods  being  repaid or  prepaid  prior to those  which  have  later  expiring
Interest  Periods.  The order of priority set forth in this Section 12.3 and the
related  provisions  of this  Agreement  are set forth solely to  determine  the
rights and  priorities  of the Agent,  the Lenders,  the Swing Line Bank and the
issuer(s)  of Letters of Credit as among  themselves.  The order of priority set
forth in clauses (D) through (J) of this  Section  12.3 may at any time and from
time to time be changed by the Required  Lenders without  necessity of notice to
or consent of or approval by the Borrower, or any other Person;  provided,  that
the order of  priority of payments in respect of Swing Line Loans may be changed
only  with the  prior  written  consent  of the Swing  Line  Bank.  The order of
priority  set forth in  clauses  (A)  through  (C) of this  Section  12.3 may be
changed only with the prior written consent of the Agent.

         12.4  Relations Among Lenders.

         (A) Except with respect to the exercise of set-off rights of any Lender
in accordance with Section 12.1, the proceeds of which are applied in accordance
with this  Agreement,  and except as set forth in the following  sentence,  each
Lender  agrees that it will not take any action,  nor  institute  any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Loan Document,  without the prior written consent of the Required Lenders
or, as may be provided in this  Agreement  or the other Loan  Documents,  at the
direction of the Agent.



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         (B) The Lenders are not partners or  co-venturers,  and no Lender shall
be liable for the acts or omissions of, or (except as otherwise set forth herein
in case of the Agent)  authorized to act for, any other Lender.  The Agent shall
have the  exclusive  right on behalf of the Lenders to enforce on the payment of
the  principal  of and  interest  on any Loan after the date such  principal  or
interest has become due and payable pursuant to the terms of this Agreement.

ARTICLE XIII:  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

         13.1  Successors  and  Assigns.  The terms and  provisions  of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders  and  their  respective  successors  and  assigns,  except  that (i) the
Borrower shall not have the right to assign its rights or obligations  under the
Loan  Documents and (ii) any assignment by any Lender must be made in compliance
with Section 13.3 hereof.  Notwithstanding clause (ii) of this Section 13.1, any
Lender may at any time, without the consent of the Borrower or the Agent, assign
all or any portion of its rights under this Agreement and its Notes to a Federal
Reserve  Bank;  provided,  however,  that no such  assignment  shall release the
transferor Lender from its obligations hereunder.  The Agent may treat the payee
of any Note as the owner  thereof for all purposes  hereof unless and until such
payee complies with Section 13.3 hereof in the case of an assignment thereof or,
in the case of any other  transfer,  a written  notice of the  transfer is filed
with the Agent.  Any  assignee  or  transferee  of a Note  agrees by  acceptance
thereof to be bound by all the terms and provisions of the Loan  Documents.  Any
request,  authority  or consent of any  Person,  who at the time of making  such
request or giving such authority or consent is the holder of any Note,  shall be
conclusive and binding on any subsequent holder,  transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.

         13.2  Participations.

         (A) Permitted  Participants;  Effect. Subject to the terms set forth in
this Section 13.2, any Lender may, in the ordinary course of its business and in
accordance  with  applicable law, at any time sell to one or more banks or other
entities  ("Participants")  participating  interests  in any Loan  owing to such
Lender, any Note held by such Lender,  any Acquisition  Facility Loan Commitment
or Revolving Loan Commitment of such Lender,  any L/C Interest of such Lender or
any other  interest of such  Lender  under the Loan  Documents  on a pro rata or
non-pro rata basis.  Notice of such  participation to the Borrower and the Agent
shall be required prior to any participation  becoming effective with respect to
a Participant which is not a Lender or an Affiliate thereof. In the event of any
such sale by a Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain  unchanged,  such Lender shall
remain solely  responsible  to the other parties  hereto for the  performance of
such  obligations,  such Lender shall remain the holder of any such Note for all
purposes  under the Loan  Documents,  all amounts  payable by the Borrower under
this  Agreement  shall  be  determined  as if  such  Lender  had not  sold  such
participating  interests,  and the Borrower and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations  under the Loan  Documents  except that,  for purposes of Article IV
hereof,  the  Participants  shall be entitled to the same rights as if they were
Lenders.



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         (B) Voting Rights.  Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents  other than any amendment,  modification  or
waiver  with  respect to any Loan or  Revolving  Loan  Commitment  in which such
Participant  has an  interest  which  forgives  principal,  interest  or fees or
reduces  the  interest  rate or  fees  payable  pursuant  to the  terms  of this
Agreement with respect to any such Loan or Revolving Loan Commitment,  postpones
any date fixed for any regularly-scheduled  payment of principal of, or interest
or  fees  on,  any  such  Loan or  Revolving  Loan  Commitment,  or  releases  a
significant portion of the Collateral, if any, securing any such Loan.

         (C) Benefit of Setoff.  The Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in Section 12.1 hereof in respect
to its  participating  interest in amounts owing under the Loan Documents to the
same extent as if the amount of its  participating  interest were owing directly
to it as a Lender  under the Loan  Documents,  provided  that each Lender  shall
retain the right of setoff  provided in Section  12.1 hereof with respect to the
amount of participating  interests sold to each Participant except to the extent
such Participant  exercises its right of setoff. The Lenders agree to share with
each  Participant,  and each  Participant,  by  exercising  the  right of setoff
provided in Section  12.1 hereof,  agrees to share with each Lender,  any amount
received  pursuant to the  exercise of its right of setoff,  such  amounts to be
shared in accordance with Section 12.2 as if each Participant were a Lender.

         13.3  Assignments.

         (A) Permitted  Assignments.  Any Lender may, in the ordinary  course of
its business and in accordance with applicable law, at any time assign to one or
more banks or other entities  ("Purchasers")  all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Acquisition
Facility Loan Commitment,  Revolving Loan Commitment, all Loans owing to it, all
of its participation interests in existing Letters of Credit, and its obligation
to participate in additional Letters of Credit hereunder) in accordance with the
provisions of this Section 13.3. Each assignment shall be of a constant, and not
a  varying,  ratable  percentage  of all of the  assigning  Lender's  rights and
obligations under this Agreement.  Such assignment shall be substantially in the
form of  Exhibit E hereto  and  shall not be  permitted  hereunder  unless  such
assignment is either for all of such Lender's rights and  obligations  under the
Loan  Documents  or,  without the prior written  consent of the Agent,  involves
loans and  commitments  in an  aggregate  amount of at least  $5,000,000  (which
minimum  amount may be waived by the Required  Lenders after the occurrence of a
Default or Unmatured  Event of Default).  The consent of the Agent and, prior to
the occurrence of a Default or Unmatured  Default,  the Borrower (which consent,
in each such case, shall not be unreasonably withheld),  shall be required prior
to an assignment  becoming  effective with respect to a Purchaser which is not a
Lender or an Affiliate thereof.

         (B) Effect;  Effective Date. Upon (i) delivery to the Agent of a notice
of  assignment,  substantially  in the form  attached as Appendix I to Exhibit E
hereto (a "Notice of Assignment"), together with any consent required by Section
13.3.(A) hereof,  and (ii), in the case of an assignment to a Purchaser which is
not a Lender or an Affiliate  thereof,  payment of a $3,500 fee to the Agent for
processing such assignment, such assignment shall become effective on the



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effective date specified in such Notice of Assignment.  The Notice of Assignment
shall contain a  representation  by the Purchaser to the effect that none of the
consideration  used  to make  the  purchase  of the  Commitment,  Loans  and L/C
Obligations  under the  applicable  assignment  agreement  are "plan  assets" as
defined  under ERISA and that the rights and  interests of the  Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and after the
effective  date of such  assignment,  such  Purchaser,  if not already a Lender,
shall for all  purposes be a Lender party to this  Agreement  and any other Loan
Documents  executed by the Lenders and shall have all the rights and obligations
of a Lender  under  the Loan  Documents,  to the  same  extent  as if it were an
original  party hereto,  and no further  consent or action by the Borrower,  the
Lenders or the Agent shall be required  to release  the  transferor  Lender with
respect to the percentage of the Aggregate Revolving Loan Commitment,  Loans and
Letter  of  Credit   participations   assigned  to  such  Purchaser.   Upon  the
consummation of any assignment to a Purchaser  pursuant to this Section 13.3(B),
the  transferor  Lender,  the  Agent and the  Borrower  shall  make  appropriate
arrangements so that replacement  Notes are issued to such transferor Lender and
new Notes or, as appropriate,  replacement  Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their Revolving Loan Commitment and
their Term Loans, as adjusted pursuant to such assignment.

         (C) The Register.  The Agent shall maintain at its address  referred to
in  Section  14.1 a copy of each  assignment  delivered  to and  accepted  by it
pursuant  to  this  Section  13.3  and  a  register  (the  "Register")  for  the
recordation  of the names and  addresses of the Lenders and the  Revolving  Loan
Commitment of and principal  amount of the Loans owing to, each Lender from time
to time and whether such Lender is an original Lender or the assignee of another
Lender  pursuant to an assignment  under this Section  13.3.  The entries in the
Register  shall be  conclusive  and binding for all  purposes,  absent  manifest
error, and the Borrower and each of its Subsidiaries,  the Agent and the Lenders
may treat  each  Person  whose  name is  recorded  in the  Register  as a Lender
hereunder for all purposes of this  Agreement.  The Register  shall be available
for  inspection  by the Borrower or any Lender at any  reasonable  time and from
time to time upon reasonable prior notice.

         13.4  Confidentiality.  Subject  to  Section  13.5,  the  Agent and the
Lenders  shall  hold  all  nonpublic   information   obtained  pursuant  to  the
requirements  of this  Agreement  and  identified  as such  by the  Borrower  in
accordance  with such Person's  customary  procedures for handling  confidential
information  of this  nature  and in  accordance  with  safe and  sound  banking
practices  and in  any  event  may  make  disclosure  reasonably  required  by a
prospective  Transferee in connection  with the  contemplated  participation  or
assignment  or as  required  or  requested  by  any  Governmental  Authority  or
representative  thereof or pursuant to legal  process and shall require any such
Transferee to agree (and require any of its Transferees to agree) to comply with
this  Section  13.4.  In no event shall the Agent or any Lender be  obligated or
required to return any materials furnished by the Borrower;  provided,  however,
each  prospective  Transferee  shall be  required  to agree  that if it does not
become a participant  or assignee it shall return all materials  furnished to it
by or on behalf of the Borrower in connection with this Agreement.

         13.5 Dissemination of Information.  The Borrower authorizes each Lender
to disclose to any  Participant  or Purchaser  or any other Person  acquiring an
interest in the Loan Documents by



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<PAGE>



operation of law (each a "Transferee")  and any  prospective  Transferee any and
all  information  in such Lender's  possession  concerning  the Borrower and its
Subsidiaries;  provided  that  prior to any such  disclosure,  such  prospective
Transferee  shall  agree  to  preserve  in  accordance  with  Section  13.4  the
confidentiality of any confidential information described therein.

ARTICLE XIV:  NOTICES

         14.1 Giving Notice.  Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices and other  communications  provided to
any party hereto under this  Agreement or any other Loan  Documents  shall be in
writing or by telex or by facsimile  and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated  by such party in a notice to the other  parties.  Any notice,  if
mailed and properly  addressed with postage prepaid,  shall be deemed given when
received;  any notice,  if  transmitted  by telex or facsimile,  shall be deemed
given when transmitted (answerback confirmed in the case of telexes).

         14.2 Change of Address. The Borrower, the Agent and any Lender may each
change the  address  for service of notice upon it by a notice in writing to the
other parties hereto.

ARTICLE XV:  COUNTERPARTS

         This  Agreement may be executed in any number of  counterparts,  all of
which taken  together shall  constitute  one  agreement,  and any of the parties
hereto  may  execute  this  Agreement  by  signing  any such  counterpart.  This
Agreement  shall be effective  when it has been  executed by the  Borrower,  the
Agent  and the  Lenders  and  each  party  has  notified  the  Agent by telex or
telephone, that it has taken such action.

                  [Remainder of This Page Intentionally Blank]




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         IN  WITNESS  WHEREOF,  the  Borrower,  the  Lenders  and the Agent have
executed this Agreement as of the date first above written.

                                      FINISHMASTER, INC.,
                                        as the Borrower

                                      By:/s/ Robert R. Millard
                                         -------------------------------------
                                           Name: Robert R. Millard
                                           Title:   Senior Vice President and
                                                    Chief Financial Officer

                                      Address:      54 Monument Circle
                                                    7th Floor
                                                    Indianapolis, Indiana  46204

                                      Attention:  Robert R. Millard
                                      Telephone No.:  317-237-3678
                                      Facsimile No.:  317-237-2150





                                                               Signature Page to
                                           Amended and Restated Credit Agreement


<PAGE>



                                   BANK ONE, INDIANA, N.A.,

                                     formerly known as NBD Bank, N.A.,
                                     as Agent, as a Lender, as an Issuing
                                     Bank and as the Swing Line Bank



                                   By:/s/ Scott C. Morrison
                                        Name: Scott C. Morrison
                                        Title:  First Vice President

                                   Address:   Bank One Center Tower, 4th Floor
                                              111 Monument Circle
                                              Mail Code IN1-0040
                                              Indianapolis, Indiana  46277

                                   Attention:  Scott C. Morrison
                                   Telephone No.: 317-321-7409
                                   Facsimile No.: 317-266-6042





                                                               Signature Page to
                                           Amended and Restated Credit Agreement


<PAGE>



                                BANK OF AMERICA, N.A.
                                  formerly known as BANK OF AMERICA
                                  NATIONAL TRUST AND SAVINGS
                                  ASSOCIATION), as a Lender


                                By:/s/ Jeff DeJesus
                                     Name:
                                     Title:

                                     Address:     231 South LaSalle Street
                                                  Chicago, Illinois  60697

                                     Attention:   Jeff DeJesus
                                     Telephone No.: (312) 828-6728
                                      Facsimile No.:  (312) 987-0303



                                                               Signature Page to
                                           Amended and Restated Credit Agreement


<PAGE>



                                    HARRIS TRUST AND SAVINGS BANK,
                                       as a Lender

                                    By:/s/ Thad Rasche
                                         Name:
                                         Title:

                                         Address: 111 West Monroe Street, 10W
                                                  P.O. Box 755
                                                  Chicago, Illinois  60690-0755

                                         Attention:   Thad Rasche
                                         Telephone No.: (312) 461-5739
                                          Facsimile No.:  (312) 461-5225



                                                               Signature Page to
                                           Amended and Restated Credit Agreement


<PAGE>



                                  KEYBANK NATIONAL ASSOCIATION,
                                     as a Lender

                                  By:/s/ Frank Jancar
                                       Name:
                                       Title:

                                       Address:     127 Public Square
                                                    Mailcode OH-01-27-0606
                                                    Cleveland, Ohio  44114-1306

                                       Attention:   Frank Jancar
                                       Telephone No.:  (216) 689-4442
                                        Facsimile No.:   (216) 689-4981



                                                               Signature Page to
                                           Amended and Restated Credit Agreement


<PAGE>



                                   LASALLE BANK NATIONAL ASSOCIATION,
                                      as a Lender

                                   By:/s/ Stephen Picks
                                        Name:
                                        Title:

                                        Address:   One American Square
                                                   Suite 1600
                                                   Indianapolis, Indiana  46282

                                        Attention:   Stephen Ricks
                                        Telephone No.: (317) 756-7011
                                         Facsimile No.:  (317) 756-7021



                                                               Signature Page to
                                           Amended and Restated Credit Agreement


<PAGE>



                              THE NORTHERN TRUST COMPANY,
                                 as a Lender

                              By:/s/ Candelario Martinez
                                   Name:
                                   Title:

                                   Address:     50 South LaSalle Street
                                                Chicago, Illinois  60675

                                   Attention:   Candelario Martinez
                                   Telephone No.: (312) 557-2816
                                    Facsimile No.:  (312) 444-7028



                                                               Signature Page to
                                           Amended and Restated Credit Agreement


<PAGE>



                                   PNC BANK, NATIONAL ASSOCIATION,
                                      as a Lender

                                   By:/s/ Bruce Kintner
                                        Name:
                                        Title:

                                        Address:     201 East Fifth Street
                                                     26th Floor
                                                     Cincinnati, Ohio  45202

                                        Attention:   Bruce Kintner
                                        Telephone No.: (513) 651-7189
                                         Facsimile No.:  (513) 651-8951



                                                               Signature Page to
                                           Amended and Restated Credit Agreement