CREDIT AGREEMENT

                                    among

                           CARSON PRODUCTS COMPANY

                                     and

                      BANQUE INDOSUEZ, NEW YORK BRANCH,

                                  AS AGENT,

                                     and

                    THE LENDING INSTITUTIONS LISTED HEREIN

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


                         Dated as of October 18, 1996

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

                                 $40,000,000












DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                               TABLE OF CONTENTS


                                                                          Page


SECTION 1.      Amount and Terms of Credit............................     1

      1.01      Commitments ..........................................     1
      1.02      Minimum Amount of Each Borrowing;
                  Maximum Number of Borrowings........................     3
      1.03      Notice of Borrowings..................................     3
      1.04      Disbursement of Funds.................................     4
      1.05      Notes.................................................     5
      1.06      Conversions; Continuations............................     6
      1.07      Pro Rata Borrowings...................................     7
      1.08      Interest..............................................     7
      1.09      Interest Periods......................................     8
      1.10      Special Provisions Governing Reserve
                  Adjusted Eurodollar Loans...........................     9
      1.11      Capital Requirements..................................    14
      1.12      Total Loan Commitments; Limitations
                  on Outstanding Loan Amounts.........................    15
      1.13      Letters of Credit.....................................    15

SECTION 2.      Commitments...........................................    25

      2.01      Voluntary Reduction of Commitments....................    25
      2.02      Mandatory Adjustments of Commitments,
                  etc.................................................    25
      2.03      Commitment Commission.................................    26

SECTION 3.      Payments..............................................    26

      3.01      Voluntary Prepayments.................................    26
      3.02      Mandatory Prepayments.................................    27
      3.03      Method and Place of Payment...........................    31
      3.04      Net Payments..........................................    32

SECTION 4.      Conditions Precedent..................................    34

      4.01      Conditions Precedent to Initial Loans.................    34
      4.02      Conditions Precedent to All Loans.....................    43
      4.03      Conditions Precedent to All Letters
                  of Credit...........................................    44

 SECTION 5.     Representations, Warranties and
                  Agreements..........................................    44

      5.01      Corporate Status......................................    45
      5.02      Corporate Power and Authority; Business...............    45
      5.03      No Violation..........................................    46

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151
                                     -i-

<PAGE>


                                                                          Page


      5.04      Litigation............................................    46
      5.05      Use of Proceeds.......................................    47
      5.06      Governmental Approvals, etc...........................    47
      5.07      Investment Company Act................................    47
      5.08      Public Utility Holding Company Act....................    47
      5.09      True and Complete Disclosure..........................    48
      5.10      Holdings IPO; Repayment of
                  Subordinated Debt...................................    48
      5.11      Financial Condition; Financial
                  Statements; Projections.............................    48
      5.12      Security Interests....................................    50
      5.13      Tax Returns and Payments..............................    51
      5.14      ERISA.................................................    51
      5.15      Subsidiaries..........................................    53
      5.16      Patents, etc..........................................    53
      5.17      Compliance with Laws, etc.............................    53
      5.18      Properties............................................    53
      5.19      Securities............................................    54
      5.20      Collective Bargaining Agreements......................    54
      5.21      Indebtedness Outstanding..............................    54
      5.22      Environmental Matters.................................    54
      5.23      Environmental Investigations..........................    56
      5.24      Fine Products Company.................................    57

SECTION 6.      Affirmative Covenants.................................    57

      6.01      Information Covenants.................................    57
      6.02      Books, Records and Inspections........................    63
      6.03      Maintenance of Property; Insurance....................    64
      6.04      Payment of Taxes......................................    64
      6.05      Corporate Franchises..................................    65
      6.06      Compliance with Statutes, etc.........................    65
      6.07      ERISA.................................................    65
      6.08      Performance of Obligations............................    66
      6.09      End of Fiscal Years; Fiscal Quarters..................    66
      6.10      Use of Proceeds.......................................    66
      6.11      Equal Security for Loans and Notes;
                  No Further Negative Pledges.........................    67
      6.12      Lender Meeting........................................    67
      6.13      Pledge of Additional Collateral
      6.14      Security Interests....................................    68
      6.15      Environmental Events..................................    68
      6.16      New Subsidiaries......................................    69
      6.17      Repayment of Existing Subordinated Debt...............    70

SECTION 7.      Negative Covenants....................................    70

      7.01      Changes in Business...................................    70

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151
                                     -ii-

<PAGE>


                                                                          Page


      7.02      Amendments or Waivers of Certain
                  Documents...........................................    70
      7.03      Liens.................................................    70
      7.04      Indebtedness..........................................    73
      7.05      Advances, Investments and Loans.......................    74
      7.06      Prepayments of Indebtedness; Amendments...............    75
      7.07      Dividends, etc........................................    75
      7.08      Transactions with Affiliates..........................    76
      7.09      Total Interest Coverage Ratio.........................    77
      7.10      Fixed Charge Coverage Ratio...........................    77
      7.11      Leverage Ratio........................................    78
      7.12      Issuance of Subsidiary Stock..........................    78
      7.13      Disposition of Assets.................................    78
      7.14      Contingent Obligations................................    81
      7.15      ERISA.................................................    82
      7.16      Merger and Consolidations.............................    82
      7.17      Sale and Lease-Backs..................................    83
      7.18      Sale or Discount of Receivables.......................    83
      7.19      Fine Products Company.................................    83

SECTION 8.      Events of Default.....................................    83

      8.01      Payments..............................................    83
      8.02      Representations, etc..................................    84
      8.03      Covenants.............................................    84
      8.04      Default Under Other Agreements........................    84
      8.05      Bankruptcy, etc.......................................    84
      8.06      ERISA.................................................    85
      8.07      Security Documents....................................    86
      8.08      Guarantees............................................    86
      8.09      Judgments.............................................    86
      8.10      Ownership.............................................    86

SECTION 9.      Definitions...........................................    88

SECTION 10.     The Agent.............................................   122

      10.01     Appointment...........................................   122
      10.02     Delegation of Duties..................................   122
      10.03     Exculpatory Provisions................................   122
      10.04     Reliance by the Agent.................................   123
      10.05     Notice of Default.....................................   124
      10.06     Non-Reliance on Agent and Other Banks.................   124
      10.07     Indemnification.......................................   125
      10.08     The Agent in Its Individual Capacity..................   125
      10.09     Successor Agent.......................................   125
      10.10     Resignation by Agent..................................   126


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151
                                    -iii-

<PAGE>



SECTION 11.     Miscellaneous.........................................   126

      11.01     Payment of Expenses, etc..............................   126
      11.02     Right of Setoff.......................................   127
      11.03     Notices...............................................   128
      11.04     Benefit of Agreement..................................   128
      11.05     No Waiver; Remedies Cumulative........................   131
      11.06     Payments Pro Rata.....................................   131
      11.07     Calculations; Computations............................   132
      11.08     Governing Law; Submission to
                  Jurisdiction; Venue.................................   132
      11.09     Counterparts..........................................   133
      11.10     Effectiveness.........................................   133
      11.11     Headings Descriptive..................................   133
      11.12     Amendment or Waiver...................................   134
      11.13     Survival..............................................   134
      11.14     Domicile of Loans.....................................   134
      11.15     Waiver of Jury Trial..................................   134
      11.16     Independence of Covenants.............................   134

ANNEX I         - List of Banks
ANNEX II        - Bank Addresses
ANNEX III       - Schedule of Existing Debt
ANNEX IV        - Schedule of Subsidiaries
ANNEX V         - Schedule of Collective Bargaining Agreements
ANNEX VI        - Summary of Corporate Insurance Policies
ANNEX VII       - Schedule of Liens
ANNEX VIII      - List of Mortgaged Real Property
ANNEX IX        - Schedule of Litigation
ANNEX X         - Schedule of Consents
ANNEX XI        - Schedule of Restrictions
ANNEX XII       - Environmental Matters
ANNEX XIII      - Taxes
ANNEX XIV       - Schedule of Intellectual Property
ANNEX XV        - Schedule of Existing Leases
ANNEX XVI       - Compliance with Laws


Exhibit A       - Form of Revolving Note
Exhibit B-1     - Form of A Term Note
Exhibit B-2     - Form of B Term Note
Exhibit C-1     - Form of Opinion of Milbank, Tweed, Hadley &  McCloy
Exhibit C-2     - Form of Opinion of Hunter, Maclean, Exley & Dunn,
                  P.C.
Exhibit C-3     - Form of Local Counsel Opinion
Exhibit D       - Form of Mortgage
Exhibit E       - Form of Holdings Guarantee
Exhibit F-1     - Form of Borrower Securities Pledge Agreement
Exhibit F-2     - Form of Holdings Securities Pledge Agreement

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151
                                     -iv-

<PAGE>



Exhibit G       - Form of Borrower Intellectual Property Security
                    Agreement
Exhibit H       - Form of Borrower General Security Agreement
Exhibit I-1     - Form of Notice of Assignment
Exhibit I-2     - Form of Assignment and Assumption Agreement
Exhibit J       - Form of Notice of Borrowing
Exhibit K       - Form of Notice of Conversion/Continuation
Exhibit L       - Form of Officer's Solvency Certificate
Exhibit M       - Form of Borrowing Base Certificate
Exhibit N       - Form of Officer's Certificate Regarding
                    Environmental Review
Exhibit O       - Form of Landlord Lien Assurance Agreement
Exhibit P       - Form of Consolidated Financial Plan
Exhibit Q       - Form of Non-U.S. Lender Certificate
Exhibit R       - Form of Subsidiary Guarantee


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151
                                     -v-

<PAGE>






            CREDIT  AGREEMENT,  dated as of October 18, 1996 (the  "Agreement"),
among CARSON PRODUCTS COMPANY, a Delaware corporation  (subsequent to its merger
with DNL Savannah  Acquisition Corp., the "Borrower"),  the lending institutions
listed in Annex I (each a "Bank" and,  collectively,  the  "Banks")  and the New
York branch of BANQUE INDOSUEZ  ("Indosuez")  as the agent and collateral  agent
for the Banks (in such capacity, the "Agent").  Unless otherwise defined herein,
all capitalized terms used herein and defined in Section 9 are used herein as so
defined.

                                  WITNESSETH:

            WHEREAS, Carson, Inc. (formerly known as DNL Savannah
Holding Corp.), a Delaware corporation ("Holdings") shall
consummate, on the Closing Date, an initial public offering of its
common stock (the "Holdings IPO");

            WHEREAS,  in  conjunction  with the Holdings  IPO,  Holdings and the
Borrower  wish to refinance  the  existing  indebtedness  of the  Borrower  (the
Holdings IPO and the use of proceeds therefrom, and the Borrowings and the Notes
hereunder are, collectively, the "Refinancing");

            WHEREAS,  Holdings will execute a Guarantee,  secured by a pledge of
the  shares  of  capital  stock of the  Borrower,  guaranteeing  the  Borrower's
obligations hereunder;

            WHEREAS,  the  Borrower  desires to incur Loans from the Banks,  the
proceeds of which will be applied,  to the extent  necessary,  to consummate the
Refinancing, to provide working capital to the Borrower, to pay certain fees and
expenses  incurred in connection with the Refinancing and for general  corporate
purposes; and

            WHEREAS,  the  Banks  are  willing  to  make  available  the  credit
facilities provided for herein.

            NOW, THEREFORE, IT IS AGREED:

            SECTION 1.  Amount and Terms of Credit.

            1.01  Commitments.  Subject  to and upon the  terms  and  conditions
herein set forth, each Bank severally agrees, in the case of any Borrowing under
the A Term Loan  Facility  or the B Term Loan  Facility,  in each  case,  on the
Closing Date and, in the case of any Borrowing under the Revolving  Portion,  at
any time and from time to time on and after  the  Closing  Date and prior to the
Revolving  Loan  Commitment  Termination  Date,  to make a Loan or  Loans to the
Borrower, which Loans shall be drawn under the Loan Facility

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -2-



(including the Revolving Portion and Term Portion thereof), as set
forth below.

            (a) Loans under the Term Portion of the Loan Facility  (each a "Term
      Loan" and,  collectively,  the "Term  Loans") may be made to the  Borrower
      under the A Term Loan Facility  (each an "A Term Loan" and,  collectively,
      the "A Term Loans") or the B Term Loan Facility (each a "B Term Loan" and,
      collectively, the "B Term Loans").

                   (i) Each A Term Loan under the A Term Loan Facility (A) shall
            be made to the Borrower as a single drawing on the Closing Date, (B)
            except as hereinafter  provided,  shall  initially be made as a Base
            Rate Loan and, 60 days after the Closing  Date or such  earlier time
            as the Agent may agree,  shall,  at the option of the  Borrower,  be
            Base Rate Loans or Reserve Adjusted Eurodollar Loans;  provided that
            all Term  Loans  made by all Banks  pursuant  to the same  Borrowing
            shall,  unless  otherwise   specifically  provided  herein,  consist
            entirely  of Loans of the same Type and (C) shall not exceed for any
            Bank at any time  outstanding the aggregate  principal  amount which
            equals the A Term Loan Commitment of such Bank.

                  (ii) Each B Term Loan under the B Term Loan Facility (A) shall
            be made to the Borrower as a single drawing on the Closing Date, (B)
            except as hereinafter  provided,  shall  initially be made as a Base
            Rate Loan and, 60 days after the Closing  Date or such  earlier time
            as the Agent may agree,  shall,  at the option of the  Borrower,  be
            Base Rate Loans or Reserve Adjusted Eurodollar Loans;  provided that
            all Term  Loans  made by all Banks  pursuant  to the same  Borrowing
            shall,  unless  otherwise   specifically  provided  herein,  consist
            entirely  of Loans of the same Type and (C) shall not exceed for any
            Bank at any time  outstanding the aggregate  principal  amount which
            equals the B Term Loan Commitment of such Bank.

            (b) Loans under the Revolving  Portion of the Loan Facility  (each a
      "Revolving Loan" and,  collectively,  the "Revolving  Loans") (i) shall be
      made at any time and  from  time to time on and  after  the  Closing  Date
      (including  up to $3,000,000 on the Closing Date for purposes of financing
      the  Refinancing  and paying related fees and expenses;  provided that the
      Borrower has  utilized  the full amount of the Total Term Loan  Commitment
      for financing the  Refinancing  and paying  related fees and expenses) and
      prior to the Revolving Loan  Commitment  Termination  Date, (ii) except as
      hereinafter

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -3-



      provided,  shall  initially  be Base Rate  Loans  and,  60 days  after the
      Closing Date or such earlier  time as the Agent may agree,  shall,  at the
      option of the Borrower,  be Base Rate Loans or Reserve Adjusted Eurodollar
      Loans; provided that all Revolving Loans made by all Banks pursuant to the
      same Borrowing  shall,  unless  otherwise  specifically  provided  herein,
      consist  entirely  of Loans of the same  Type,  (iii)  may be  repaid  and
      reborrowed in accordance with the provisions hereof, (iv) shall not exceed
      for any Bank at any time outstanding the Revolving Loan Commitment of such
      Bank at such  time and (v)  shall  not be made  pursuant  to a  particular
      Notice of Borrowing if the aggregate  principal  amount of Revolving Loans
      then  outstanding,  after giving effect to the Revolving Loan requested by
      such  Notice of  Borrowing,  plus the then  outstanding  Letters of Credit
      Usage,  after  giving  effect to the  issuance  of all  Letters  of Credit
      subject to outstanding  requests for issuance,  would exceed the lesser of
      the Borrower's  Borrowing Base as shown in the Borrowing Base  Certificate
      that was last  required to be  delivered  pursuant to Section  6.01 or the
      Total Revolving Loan Commitment.

            1.02 Minimum Amount of Each Borrowing; Maximum Number of Borrowings.
The minimum  aggregate  principal amount of a Borrowing of Term Loans consisting
of Reserve  Adjusted  Eurodollar  Loans or Base Rate Loans  shall be the Minimum
Borrowing  Amount and, if greater,  shall be in integral  multiples of $100,000;
provided,  however, that the Banks' Term Loan Commitments shall terminate,  on a
pro rata basis,  with respect to any portion of the Total Term Loan  Commitments
not  utilized  by the  Borrower  on the  Closing  Date.  The  minimum  aggregate
principal  amount of a  Borrowing  of  Revolving  Loans  consisting  of  Reserve
Adjusted  Eurodollar  Loans or Base Rate Loans  shall be the  Minimum  Borrowing
Amount  (other than a Borrowing of Base Rate Loans such that the total amount of
Revolving  Loans and  Letters of Credit  Usage to be  outstanding  after  giving
effect to such Borrowing shall be equal to the Total Revolving  Commitment) and,
if greater, shall be in integral multiples of $100,000.  More than one Borrowing
may be incurred on any date; provided that at no time shall there be outstanding
more than 6 Borrowings of Reserve Adjusted Eurodollar Loans.

            1.03 Notice of  Borrowings.  Whenever the Borrower  desires that the
Banks make Reserve  Adjusted  Eurodollar Loans under the Revolving Loan Facility
it shall give the Agent at the  Agent's  Office  prior to 10:00  A.M.  (New York
time) at least three Business  Days' prior written notice (or telephonic  notice
promptly  confirmed  in  writing)  of each such  Borrowing  of Reserve  Adjusted
Eurodollar  Loans.  Whenever the Borrower  desires that the Banks make Base Rate
Revolving Loans on a same-day basis under the Revolving Loan

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -4-



Facility it shall give the Agent at the Agent's  office prior to 10:00 A.M. (New
York time) written notice (or telephonic  notice promptly  confirmed in writing)
of each such  Borrowing  of Base Rate Loans.  Each such  notice,  which shall be
substantially  in the form of Exhibit J hereto  (each a "Notice of  Borrowing"),
shall be irrevocable,  shall be deemed a representation by the Borrower that all
conditions  precedent  to such  Borrowing  set forth in  Section  4.02 have been
satisfied and shall specify (i) the aggregate  principal  amount in U.S. dollars
of the  Loans to be made  pursuant  to such  Borrowing,  all of  which  shall be
specified  in such  manner as is  necessary  to comply with all  limitations  on
Revolving   Loans   outstanding   hereunder,   including   without   limitation,
availability  under the Borrowing Base, (ii) the date of Borrowing  (which shall
be a Business Day) and (iii) whether the respective  Borrowing  shall consist of
Base Rate Loans or Reserve  Adjusted  Eurodollar  Loans and, if Reserve Adjusted
Eurodollar Loans, the Interest Period to be initially  applicable  thereto.  The
Agent  shall as  promptly  as  practicable  give each Bank  written  notice  (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing,  of
such Bank's  proportionate share thereof and of the other matters covered by the
Notice of Borrowing.

            1.04  Disbursement  of Funds.  (a) No later than 1:00 P.M. (New York
time) on the date  specified  in each Notice of  Borrowing,  each Bank will make
available  to the  Agent  in New York its pro  rata  portion  of each  Borrowing
requested to be made on such date in the manner provided below.

            (b) Each Bank shall make  available  all amounts it is to fund under
any Borrowing on or after the Closing Date in immediately available funds to the
Agent to the  account  specified  therefor  by the Agent or if no  account is so
specified at the Agent's Office and the Agent will make such funds  available to
the Borrower,  no later than 4:00 P.M. (New York time) on the date  specified in
each Notice of Borrowing, by depositing to the account specified therefor by the
Borrower or if no account is so specified  to its account at the Agent's  Office
the  aggregate of the amounts so made  available in the type of funds  received.
Unless the Agent  shall have been  notified by any Bank prior to the date of any
such Borrowing that such Bank does not intend to make available to the Agent its
portion of the Borrowing or  Borrowings  to be made on such date,  the Agent may
assume that such Bank has made such amount  available  to the Agent on such date
of Borrowing, and the Agent, in reliance upon such assumption,  may (in its sole
discretion and without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Bank and the Agent has made available same to the Borrower,
the Agent shall be entitled to

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -5-



recover such corresponding amount from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent shall
promptly  notify the Borrower,  and the Borrower shall upon the Agent's  request
immediately pay such corresponding  amount to the Agent. The Agent shall also be
entitled to recover from such Bank or the Borrower, as the case may be, interest
on such  corresponding  amount  in  respect  of each  day  from  the  date  such
corresponding amount was made available by the Agent to the Borrower to the date
such  corresponding  amount is recovered by the Agent, at a rate per annum equal
to (x) if  paid by  such  Bank,  the  Federal  Funds  Rate or (y) if paid by the
Borrower (and/or one or more other Credit Parties),  the then applicable rate of
interest,  calculated in accordance with Section 1.08, for the respective Loans.
The Agent shall also be entitled to recover from any Bank an amount equal to any
other  losses  incurred  by the Agent as a result of the failure of such Bank to
provide such amount as provided in this Agreement.

            (c)  Nothing  herein  shall be deemed to  relieve  any Bank from its
obligation to fulfill its Commitments hereunder or to prejudice any rights which
the  Borrower or any other Credit Party may have against any Bank as a result of
any default by such Bank hereunder.

            1.05 Notes.  (a) The  Borrower's  obligation to pay the principal of
and interest on all the Loans made to it by each Bank shall be evidenced  (i) if
Revolving   Loans,  by  a  promissory  note  (each,  a  "Revolving   Note"  and,
collectively, the "Revolving Notes") duly executed and delivered by the Borrower
substantially  in the  form of  Exhibit  A  hereto,  with  blanks  appropriately
completed in conformity  herewith,  and (ii) if Term Loans, by a promissory note
(an "A Term Note" or a "B Term  Note,"  respectively,  as the case may be,  and,
collectively,  the "Term  Notes") duly  executed and  delivered by the Borrower,
substantially  in the form of Exhibits B- 1 and B-2 hereto,  respectively,  each
with blanks appropriately completed in conformity herewith.

            (b) The Revolving Note of the Borrower issued to each Bank shall (i)
be  executed by the  Borrower,  (ii) be payable to the order of such Bank and be
dated the  Closing  Date,  (iii) be in a stated  principal  amount  equal to the
Revolving Loan Commitment of such Bank and be payable in the aggregate principal
amount of the outstanding  Revolving Loans evidenced thereby,  (iv) mature, with
respect to each Loan  evidenced  thereby,  on the Final  Revolving Loan Maturity
Date, (v) be subject to mandatory  prepayment as provided in Section 3.02,  (vi)
bear interest as provided in the  appropriate  clause of Section 1.08 in respect
of the Base Rate Loans and Reserve  Adjusted  Eurodollar  Loans, as the case may
be, evidenced

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -6-



thereby and (vii) be entitled to the  benefits of this  Agreement  and the other
applicable Credit Documents.

            (c) Each of the Term Notes of the Borrower issued to each Bank shall
(i) be executed by the  Borrower,  (ii) be payable to the order of such Bank and
be dated the Closing Date,  (iii) be in a stated principal amount equal to the A
Term Loan Commitment of such Bank or the B Term Loan Commitment of such Bank, as
the case may be, and be payable in the aggregate  principal amount of the A Term
Loans or the B Term Loans evidenced thereby,  (iv) mature,  with respect to each
Loan evidenced  thereby,  on the Final A Term Loan Maturity Date with respect to
the A Term Loans and the Final B Term Loan  Maturity  Date with respect to the B
Term Loans represented  thereby, as the case may be, (v) be subject to mandatory
prepayment  as provided in Section  3.02,  (vi) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and Reserve
Adjusted  Eurodollar  Loans, as the case may be, evidenced  thereby and (vii) be
entitled  to the  benefits of this  Agreement  and the other  applicable  Credit
Documents.

            (d) Each Bank will note on its  internal  records the amount of each
Loan made by it and each  payment  in  respect  thereof  and will,  prior to any
transfer  of  any  of  its  Notes,  endorse  on the  reverse  side  thereof  the
outstanding  principal  amount of Loans evidenced  thereby.  Failure to make any
such notation shall not affect the Borrower's or any Credit Party's  obligations
hereunder  or under the other  applicable  Credit  Documents  in respect of such
Loans.

            1.06 Conversions;  Continuations. The Borrower shall have the option
to convert  on any  Business  Day  commencing  on the  earlier of receipt of the
Agent's  approval  or 60 days  after the  Closing  Date all or a portion  (which
portion shall not be less than the Minimum  Borrowing Amount) of the outstanding
principal amount of the Loans owing by the Borrower pursuant to a single Portion
of the Loan Facility into a Borrowing or Borrowings  pursuant to such Portion of
another Type of Loan, or to continue all or a portion of such  Borrowings as the
same Type of Loan;  provided  that (i) except as  otherwise  provided in Section
1.10(b), Reserve Adjusted Eurodollar Loans may be converted into Base Rate Loans
or continued  as Reserve  Adjusted  Eurodollar  Loans only on the last day of an
Interest Period  applicable to such Reserve Adjusted  Eurodollar  Loans, (ii) no
such partial  conversion of Reserve  Adjusted  Eurodollar Loans shall reduce the
outstanding principal amount of Reserve Adjusted Eurodollar Loans under the Loan
Facility (or Portion  thereof) made pursuant to a single  Borrowing to less than
the Minimum Borrowing Amount, (iii) one Type of Loan may only be continued as or
converted into Reserve Adjusted Eurodollar Loans if

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -7-



no Default or Event of Default is in  existence  on the date of the  conversion,
(iv) Borrowings  resulting from  conversions or  continuations  pursuant to this
Section  1.06 shall be limited in amount and number as provided in Section  1.02
and (v) all or a portion of the outstanding  principal amount of Base Rate Loans
may not be converted into Reserve  Adjusted  Eurodollar  Loans if such Base Rate
Loans  or  portions  thereof  will  mature  within  30  days  of  such  proposed
conversion.  Each such  conversion  (or  continuation)  shall be effected by the
Borrower by giving the Agent at the Agent's Office prior to 10:00 A.M. (New York
time)  at least  three  Business  Days'  (or one  Business  Day in the case of a
conversion  into Base Rate Loans) prior  written  notice (or  telephonic  notice
promptly  confirmed  in  writing)  (each a "Notice of  Conversion/Continuation")
specifying  the Loans to be so converted or  continued,  the Type of Loans to be
converted into or continued and, if to be converted into or continued as Reserve
Adjusted  Eurodollar  Loans,  the  Interest  Period to be  initially  applicable
thereto. The Agent shall give each Bank notice as promptly as practicable of any
such  proposed   conversion  or   continuation   affecting  any  of  its  Loans.
Notwithstanding the foregoing or the provisions of Section 1.09, if a Default or
Event of  Default  is in  existence  on the last day of any  Interest  Period in
respect of any Borrowing of Reserve Adjusted  Eurodollar  Loans,  such Loans may
not be  continued  as Reserve  Adjusted  Eurodollar  Loans but instead  shall be
automatically  converted on the last day of such Interest  Period into Base Rate
Loans.  If no Notice of  Conversion/Continuation  has been duly  delivered  with
respect to a Reserve  Adjusted  Eurodollar  Loan on or before the third Business
Day  prior to the last  day of the  Interest  Period  applicable  thereto,  such
Reserve Adjusted  Eurodollar Loan shall be  automatically  converted into a Base
Rate Loan.

            1.07 Pro Rata Borrowings.  All Borrowings under this Agreement shall
be loaned by the Banks pro rata on the basis of their A Term Loan Commitments, B
Term Loan Commitments or Revolving Loan Commitments, as the case may be. No Bank
shall be responsible for any default by any other Bank in its obligation to make
Loans  hereunder and each Bank shall be obligated to make the Loans  provided to
be made by it hereunder,  regardless of the failure of any other Bank to fulfill
its commitments hereunder.

            1.08  Interest.  (a) The unpaid  principal  amount of each Base Rate
Loan shall bear interest from the date of the Borrowing  thereof until  maturity
(whether by  acceleration  or  otherwise)  (or unless  sooner  converted  into a
Reserve  Adjusted  Eurodollar  Loan) at a rate per annum equal to the sum of (i)
the Base  Rate in  effect  from  time to time and (ii) the  applicable  Interest
Margin.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -8-



            (b) The unpaid principal amount of each Reserve Adjusted  Eurodollar
Loan shall bear interest from the date of the Borrowing  thereof until  maturity
(whether by  acceleration  or otherwise)  (or unless sooner  converted to a Base
Rate Loan) at a rate per annum equal to the sum of (i) the  relevant  Eurodollar
Rate and (ii) the applicable Interest Margin.

            (c) Overdue  principal and, to the extent  permitted by law, overdue
interest  in respect of each Loan shall bear  interest at a rate per annum equal
to the sum of (i) the  rate of  interest  applicable  to such  Loan and (ii) 2%;
provided  that the amount of the  overdue  principal  of each  Reserve  Adjusted
Eurodollar Loan shall bear interest at the rate of interest  applicable  thereto
plus 2% for the balance of the then current Interest Period.

            (d)  Interest  shall  accrue  from  and  including  the  date of any
Borrowing  to but  excluding  the date of any  repayment  thereof  and  shall be
payable (i) in respect of each Base Rate Loan,  quarterly in arrears on the last
Business Day of each March,  June,  September  and December  beginning  December
1996; (ii) in respect of each Reserve  Adjusted  Eurodollar  Loan, in arrears on
the last day of each Interest Period  applicable  thereto and, in the case of an
Interest Period in excess of three months, on each date occurring at three-month
intervals after the first date of such Interest Period;  and (iii) in respect of
each Loan, on any prepayment (on the amount  prepaid),  at maturity  (whether by
acceleration or otherwise) and, after such maturity, on demand.

            (e)  All  computations  of  interest  hereunder  shall  be  made  in
accordance with Section 11.07(b).

            (f) The Agent,  upon determining the interest rate for any Borrowing
of Reserve Adjusted  Eurodollar  Loans for any Interest  Period,  shall promptly
notify the Borrower and the Banks  thereof.  Such  determination  shall,  absent
manifest error, be final, conclusive and binding upon all parties hereto.

            1.09 Interest  Periods.  At the time the Borrower  gives a Notice of
Borrowing or Notice of  Conversion/Continuation  in respect of the making of, or
conversion into or continuation of, a Borrowing of Reserve  Adjusted  Eurodollar
Loans,  it shall have the right to elect, by giving the Agent written notice (or
telephonic notice promptly confirmed in writing), the Interest Period applicable
to such Borrowing,  which Interest Period shall, at the option of such Borrower,
be a one,  two,  three or six  month  period.  Notwithstanding  anything  to the
contrary contained above:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -9-



            (a) the  initial  Interest  Period  for  any  Borrowing  of  Reserve
      Adjusted  Eurodollar  Loans shall  commence on the date of such  Borrowing
      (including the date of any conversion from a Borrowing of Base Rate Loans)
      and each Interest Period occurring thereafter in respect of such Borrowing
      shall  commence on the date on which the next  preceding  Interest  Period
      expires;

            (b) if any  Interest  Period  relating  to a  Borrowing  of  Reserve
      Adjusted  Eurodollar  Loans  begins  on a  date  for  which  there  is  no
      numerically  corresponding  date  in the  calendar  month  in  which  such
      Interest  Period ends, such Interest Period shall end on the last Business
      Day of such calendar month;

            (c) if any Interest Period would otherwise  expire on a day which is
      not a  Business  Day,  such  Interest  Period  shall  expire  on the  next
      succeeding  Business Day;  provided that if any Interest Period in respect
      of a Reserve  Adjusted  Eurodollar  Loan would  otherwise  expire on a day
      which  is not a  Business  Day but is a day of the  month  after  which no
      further  Business  Day occurs in such month,  such  Interest  Period shall
      expire on the next preceding Business Day;

            (d) no Interest  Period shall extend beyond the Final Revolving Loan
      Maturity  Date (in the case of  Revolving  Loans) or the Final A Term Loan
      Maturity  Date  (in the case of A Term  Loans)  or the  Final B Term  Loan
      Maturity Date (in the case of B Term Loans); and

            (e) no Interest  Period  with  respect to any  Borrowing  of Reserve
      Adjusted  Eurodollar  Loans  shall  extend  beyond any date upon which the
      Borrower thereof is required to make a scheduled payment of principal with
      respect to the Term Loans if, after giving effect to the selection of such
      Interest Period, the aggregate principal amount of A Term Loans and B Term
      Loans  maintained  as Reserve  Adjusted  Eurodollar  Loans  with  Interest
      Periods  ending  after such date of scheduled  payment of principal  would
      exceed  the  amount  of A  Term  Loans  and B  Term  Loans,  respectively,
      permitted to be outstanding after such scheduled payment of principal.

            1.10 Special Provisions Governing Reserve Adjusted Eurodollar Loans.
Notwithstanding any other provisions of this Agreement, the following provisions
shall govern with respect to Reserve Adjusted Eurodollar Loans as to the matters
covered:

            (a)   On an Interest Rate Determination Date, the Agent
      shall determine (which determination shall, absent

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -10-



      demonstrable  error,  be final,  conclusive  and binding  upon all parties
      hereto)  the  interest  rate which  shall  apply to the  Reserve  Adjusted
      Eurodollar  Loans for which an interest rate is then being  determined for
      the applicable  Interest Period and shall promptly give notice thereof (in
      writing or by telephone  confirmed in writing) to the Borrower thereof and
      to each Bank.

            (b) In the event that (x) in the case of clause (i) below, the Agent
      or (y) in the case of clause  (ii) or (iii)  below,  any Bank  shall  have
      determined  (which  determination  shall,  absent  demonstrable  error, be
      final, conclusive and binding upon all parties hereto):

                   (i) on any date for  determining  the Eurodollar Rate for any
            Interest  Period that, by reason of any changes  arising on or after
            the  Effective  Date  affecting  the  interbank  eurodollar  market,
            adequate and fair means do not exist for ascertaining the applicable
            interest  rate  on the  basis  provided  for in  the  definition  of
            Eurodollar Rate;

                  (ii) at any time that such Bank shall incur increased costs or
            reductions  in the amounts  received or  receivable  hereunder  with
            respect to any Reserve  Adjusted  Eurodollar Loans or its obligation
            to make Reserve Adjusted  Eurodollar Loans because of (x) any change
            since the Effective Date  (including  changes  proposed or published
            prior to the Effective  Date) in any  applicable  law,  governmental
            rule,  regulation,  guideline or order (or in the  interpretation or
            administration thereof and including the introduction of any new law
            or governmental rule, regulation,  guideline or order) (such as, for
            example,   but  not  limited  to,  a  change  in  official   reserve
            requirements,  but, in all events, excluding reserves required under
            Regulation  D to  the  extent  included  in the  computation  of the
            Eurodollar  Rate),  including  a change in the basis of  taxation of
            payments to any Bank of the principal of or interest on the Notes or
            any other amounts payable  hereunder (except for changes in the rate
            of tax on, or  determined by reference to, the net income or profits
            of such Bank pursuant to the laws of the jurisdiction in which it is
            organized or in which its  principal  office or  applicable  lending
            office is located or any subdivision  thereof or therein) and/or (y)
            other  circumstances  affecting such Bank, the interbank  eurodollar
            market, or the position of such Bank in such market; or

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -11-




                 (iii) at any time that the making or continuance of any Reserve
            Adjusted  Eurodollar  Loan has become unlawful by compliance by such
            Bank in good  faith  with any law,  governmental  rule,  regulation,
            guideline  or order (or would  conflict  with any such  governmental
            rule,  regulation,  guideline  or order not  having the force of law
            even though the failure to comply  therewith would not be unlawful),
            or has become  impracticable as a result of a contingency  occurring
            after the Effective Date which materially and adversely  affects the
            interbank eurodollar market;

      then, and in any such event,  the Agent in the case of clause (i) above or
      such Bank in the case of clause (ii) or (iii) above  shall  promptly  give
      notice (by  telephone  confirmed  in writing) in  accordance  with Section
      1.10(h)  hereof to the Borrower of the Loan  affected  and, in the case of
      clause (ii) or (iii) to the Agent, of such determination (which notice the
      Agent shall promptly transmit to each of the other Banks).  Thereafter (x)
      in the case of clause (i) above,  Reserve Adjusted  Eurodollar Loans shall
      no longer be available  until such time as the Agent notifies the Borrower
      and the Banks that the  circumstances  giving  rise to such  notice by the
      Agent  no  longer  exist,  and  any  Notice  of  Borrowing  or  Notice  of
      Conversion/Continuation   given  by  the  Borrower  with  respect  to  the
      borrowing of or  conversion  into (or  continuation  of) Reserve  Adjusted
      Eurodollar  Loans  which  have  not yet  been  incurred  shall  be  deemed
      rescinded  by the  Borrower,  (y) in the case of clause  (ii)  above,  the
      Borrower  shall pay to such Bank,  within 10 Business Days after a written
      demand therefor, such additional amounts (in the form of an increased rate
      of, or a different  method of  calculating,  interest or otherwise as such
      Bank in its reasonable discretion shall determine) as shall be required to
      compensate  such Bank for such  increased  costs or  reductions in amounts
      receivable  hereunder (a written notice pursuant to Section 1.10(h) hereof
      as to  the  additional  amounts  owed  to  such  Bank,  setting  forth  in
      reasonable detail the basis for the calculation thereof,  submitted to the
      Borrower  shall,  absent  demonstrable  error,  be final,  conclusive  and
      binding  upon all  parties  hereto)  and (z) in the case of  clause  (iii)
      above,  the  Borrower  shall take one of the actions  specified in Section
      1.10(c) as promptly as possible and, in any event,  within the time period
      required by law.

            (c) At any  time  that  any  Reserve  Adjusted  Eurodollar  Loan  is
      affected by the circumstances  described in Section  1.10(b)(ii) or (iii),
      the Borrower may (and in the case of a Reserve  Adjusted  Eurodollar  Loan
      affected pursuant

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -12-



      to Section  1.10(b)(iii)  shall)  either (i) if a Notice of  Borrowing  or
      Notice of  Conversion/Continuation  has been  given  with  respect  to the
      affected Reserve Adjusted Eurodollar Loan, cancel said Notice of Borrowing
      or Notice of Conversion/Continuation by giving the Agent telephonic notice
      (confirmed  promptly in writing) thereof on the same date (if the Borrower
      has been notified by not later than 3:00 P.M.,  New York time, or the next
      Business  Day if  otherwise)  that the  Borrower  was  notified  by a Bank
      pursuant to Section  1.10(b)(ii) or (iii), or (ii) if the affected Reserve
      Adjusted Eurodollar Loan is then outstanding, upon at least three Business
      Days' notice to the Agent,  require the affected Bank to convert each such
      Reserve  Adjusted  Eurodollar  Loan into a Base Rate Loan,  or prepay such
      Reserve Adjusted  Eurodollar Loan;  provided that if more than one Bank is
      affected  at any time,  then all  affected  Banks must be treated the same
      pursuant to this Section 1.10(c); and provided, further, that the Borrower
      shall compensate any such affected Banks as set forth in Section 1.10(f).

            (d)  Anything  herein  to the  contrary  notwithstanding,  if on any
      Interest Rate Determination Date no Eurodollar Rate is available by reason
      of the  inability  of  the  Agent  to  determine  such  interest  rate  in
      accordance with the definition thereof,  the Agent shall give the Borrower
      and each Bank prompt notice thereof and the Loans  requested to be made as
      Reserve Adjusted Eurodollar Loans shall,  subject to the applicable notice
      requirements, be made as Base Rate Loans.

            (e) Each Bank  agrees  that,  as promptly  as  practicable  after it
      becomes  aware  of the  occurrence  of any  event  or the  existence  of a
      condition that would cause it to be an affected Bank under Section 1.10(b)
      (ii) or (iii),  it will, to the extent not  inconsistent  with such Bank's
      internal policies or any legal or regulatory restrictions,  use reasonable
      efforts to make, fund or maintain the affected Reserve Adjusted Eurodollar
      Loans of such Bank  through  another  lending  office of such Bank if as a
      result thereof the additional  moneys which would otherwise be required to
      be paid in respect of such Loans pursuant to Section  1.10(b)(ii) would be
      materially reduced or the illegality or other adverse  circumstances which
      would otherwise require conversion or prepayment of such Loans pursuant to
      Section  1.10(b)(iii)  would cease to exist, and if, as determined by such
      Bank, in its reasonable discretion,  the making, funding or maintaining of
      such  Loans  through  such  other  lending   office  would  not  otherwise
      materially  adversely  affect such Loans or such Bank. The Borrower hereby
      agrees to pay all reasonable expenses incurred by any Bank in utilizing

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -13-



      another lending office of such Bank pursuant to this Section
      1.10(e).

            (f) The Borrower shall compensate each Bank, within 10 Business Days
      after a written  request by that Bank (which  request shall be accompanied
      by  a  written  notice  pursuant  to  Section  1.10(h)  setting  forth  in
      reasonable detail the basis for the calculation of such amounts),  for all
      reasonable   losses,   expenses  and   liabilities   (including,   without
      limitation,  such factors as any interest  paid by that Bank to lenders of
      funds  borrowed  by it to make or carry its  Reserve  Adjusted  Eurodollar
      Loans and any loss sustained by that Bank in connection with re-employment
      of such funds  (based upon the  difference  between  the amount  earned in
      connection with  re-employment of such funds and the amount payable by the
      Borrower if such funds had been borrowed or remained  outstanding))  which
      that Bank may sustain  with  respect to the  Borrower's  Reserve  Adjusted
      Eurodollar  Loans: (i) if for any reason (other than a default or error by
      that Bank) a Borrowing of any such Reserve  Adjusted  Eurodollar Loan does
      not  occur on a date  specified  therefor  in a Notice of  Borrowing  or a
      Notice of Conversion/Continuation or in a telephonic request for borrowing
      or conversion or continuation,  or a successive Interest Period in respect
      of any such  Reserve  Adjusted  Eurodollar  Loan does not  commence  after
      notice  therefor is given pursuant to Section 1.06, (ii) if any prepayment
      or conversion (as required by Sections 3.01 and 3.02, by  acceleration  or
      otherwise) of any of such Bank's Reserve Adjusted  Eurodollar Loans to the
      Borrower occurs on a date which is not the last day of the Interest Period
      applicable  to that  Loan,  (iii) if any  prepayment  of any  such  Bank's
      Reserve Adjusted  Eurodollar Loans to the Borrower is not made on any date
      specified in a notice of prepayment  given by the  Borrower,  or (iv) as a
      consequence  of any other  failure by the  Borrower  to repay such  Bank's
      Reserve  Adjusted  Eurodollar  Loans to the Borrower  when required by the
      terms of this Agreement.

            (g) Any Bank claiming any  additional  amounts  payable  pursuant to
      this Section 1.10 agrees to use reasonable  efforts  (consistent with such
      Bank's internal policies, legal and regulatory restrictions and commercial
      considerations)  to designate a different  lending office if the making of
      such a designation  would avoid the need for, or reduce the amount of, any
      such additional amounts and would not, in the reasonable  judgment of such
      Bank, be in any way otherwise disadvantageous to such Bank.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -14-



            (h) Each Bank shall notify the Borrower of any event occurring after
      the date hereof  entitling such Bank to  compensation  under the foregoing
      paragraphs  of this  Section 1.10 as promptly as  practicable,  but in any
      event within 90 days,  after such Bank obtains actual  knowledge  thereof;
      provided  that if any Bank fails to give such notice  within 90 days after
      it  obtains  actual  knowledge  of such an event,  such Bank  shall,  with
      respect to compensation  payable  pursuant to this Section 1.10 in respect
      of any costs or other  amounts  resulting  from or relating to such event,
      only be  entitled  to payment  under this  Section  1.10 for such costs or
      other  amounts from and after the date 90 days prior to the date that such
      Bank does give such  notice.  Each Bank will  furnish  to the  Borrower  a
      certificate  setting  forth in  reasonable  detail the basis and amount of
      each  request  by such Bank for  compensation  under  this  Section  1.10.
      Determinations by any Bank for purposes of this Section 1.10, including of
      the effect of any regulatory change pursuant to Section 1.10(b)(ii) on its
      costs of maintaining  Loans or its obligation to make Loans, or on amounts
      receivable  by it in  respect of Loans,  and of the  amounts  required  to
      compensate  such  Bank  under  this  Section  1.10,  shall  be  made  on a
      reasonable basis.

            1.11 Capital  Requirements.  If any Bank shall have  determined that
the adoption or  effectiveness  after the Effective Date of any applicable  law,
rule or regulation  regarding  capital adequacy,  or any change therein,  or any
change in the  interpretation  or  administration  thereof  by any  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration  thereof,  or  compliance by such Bank or such Bank's parent with
any request or directive  regarding  capital adequacy (whether or not having the
force  of  law)  of any  such  authority,  central  bank  or  comparable  agency
(including in each case any such change  proposed or published prior to the date
hereof),  has or would  have the effect of  reducing  the rate of return on such
Bank's or such Bank's parent's capital or assets as a consequence of such Bank's
obligations  hereunder  to a level  below that  which  such Bank or such  Bank's
parent could have achieved but for such adoption,  effectiveness or change or as
a consequence of an increase in the amount of capital  required to be maintained
by such Bank as a consequence of such Bank's obligations hereunder (including in
each case,  without  limitation,  with respect to any Bank's  Commitment  or any
Loan), then from time to time, within 15 Business Days after demand by such Bank
(with a copy to the Agent),  the Borrower shall pay to such Bank such additional
amount or amounts as will  compensate  such Bank or such Bank's  parent,  as the
case may be, for such reduction. Each Bank, upon determining in

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -15-



good faith that any additional  amounts will be payable pursuant to this Section
1.11,  will give prompt  written  notice  thereof to the Borrower,  which notice
shall set  forth in  reasonable  detail  the  basis of the  calculation  of such
additional amounts, although any delay in giving any notice shall not release or
diminish any of the Borrower's obligations to pay additional amounts pursuant to
this Section 1.11.

            1.12  Total  Loan  Commitments;   Limitations  on  Outstanding  Loan
Amounts.  The original amount of the (i) Total Commitments is $40,000,000,  (ii)
Total  A  Term  Loan  Commitments  is  $15,000,000,  (iii)  Total  B  Term  Loan
Commitments  is  $10,000,000  and  (iv)  Total  Revolving  Loan  Commitments  is
$15,000,000, including up to $5,000,000 of Letters of Credit. Anything contained
in this Agreement to the contrary notwithstanding, (a) in no event shall the sum
of the aggregate  principal  amount of all outstanding  Term Loans and Revolving
Loans  of any  Bank  at  any  time  exceed  such  Bank's  portion  of the  Total
Commitments,  (b) in no event shall the sum of the aggregate principal amount of
all Term Loans and  Revolving  Loans from all Banks at any time exceed the Total
Commitments  and (c) in no event shall the Total  Utilization  of Revolving Loan
Commitments  and  Letters  of  Credit  Usage  exceed  the Total  Revolving  Loan
Commitments.

            1.13  Letters of Credit.

            (A) Letters of Credit.  Subject to the terms and  conditions of this
Agreement  and in  reliance  upon  the  representations  and  warranties  of the
Borrower  set forth  herein and in the other  Credit  Documents,  in addition to
requesting  that the Banks make  Revolving  Loans  pursuant to Section 1.03, the
Borrower may request,  in accordance  with the  provisions of this Section 1.13,
that one or more  Issuing  Banks issue  Letters of Credit for the account of the
Borrower;  provided that (i) the Borrower  shall not request that any Bank issue
any  Letter of Credit and a Bank  shall not be  required  to issue any Letter of
Credit,  if after giving  effect to such  issuance the sum of (a) the Letters of
Credit Usage on the date of such  issuance,  after giving effect to the issuance
of all  Letters of Credit  subject to  outstanding  requests  for  issuance of a
Letter of Credit,  plus (b) the aggregate  principal  amount of Revolving  Loans
then outstanding,  after giving effect to the making of all Revolving Loans then
requested by all outstanding but unfunded Notices of Borrowing, would exceed the
lesser of the Borrower's  Borrowing Base as would be shown in the Borrowing Base
Certificate  that was last required to be delivered  pursuant to Section 6.01 or
the Total Revolving Loan  Commitment then in effect,  (ii) in no event shall any
Issuing Bank issue (w) any Letter of Credit having an expiration date later than
ten

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -16-



(10) Business Days prior to the Final Revolving Loan Maturity Date, after giving
effect to any possible  renewal of such Letter of Credit pursuant to the proviso
to the following  clause (ii)(x),  (x) subject to the foregoing  clause (ii)(w),
any Letter of Credit having an expiration date more than one year after its date
of issuance; provided that, subject to the foregoing clause (ii)(w), this clause
(x)  shall  not  prevent  any  Issuing  Bank  from  issuing  a Letter  of Credit
containing   a  provision  to  the  effect  that  such  Letter  of  Credit  will
automatically  be renewed  annually for a period not to exceed one year, so long
as such  renewable  Letter of Credit  provides  that it shall not at any time be
renewed for an additional year if (I) the Borrower  notifies the Issuing Bank in
writing one Business Day prior to the applicable  renewal date that the Borrower
elects to allow the Letter of Credit to expire  without being  renewed,  or (II)
the Issuing Bank or the Required Banks notify the Borrower in writing,  prior to
the date set forth in such Letter of Credit as the date by which the beneficiary
thereof is to be notified  whether such Letter of Credit is to be renewed,  that
such  Letter of Credit  shall not be so  renewed,  in which case such  Letter of
Credit  shall not be so renewed,  (y) any Letter of Credit,  the initial  stated
amount of which is less than  $5,000,  or (z) any  Letter of Credit (I) which is
governed by laws other than the laws of the State of New York, without regard to
the principles of conflicts of laws, or (II) as to which the  beneficiary is not
required,  by acceptance of the Letter of Credit, to be subject to the exclusive
jurisdiction  of any  competent  state or federal court in the State of New York
with  regard to such Letter of Credit and (iii) the  Borrower  shall not request
that any Issuing Bank issue and no Issuing Bank shall issue any Letter of Credit
if, after giving effect to such issuance and the issuance of all other requested
Letters of Credit,  the then  outstanding  Letters of Credit Usage in respect of
all Letters of Credit  would  exceed  $5,000,000.  The issuance of any Letter of
Credit in  accordance  with the  provisions  of this Section 1.13 shall be given
effect in the calculation of the aggregate  principal  amount of Revolving Loans
outstanding  and the Letters of Credit Usage and shall require the  satisfaction
of each condition set forth in Sections 4.02 and 4.03.

            Immediately  upon the  issuance of each Letter of Credit,  each Bank
other than the Issuing  Bank or Banks shall be deemed to, and hereby  agrees to,
be  irrevocably  obligated  to reimburse  the Issuing  Bank (such  reimbursement
obligation of each Bank in each Letter of Credit being  hereinafter  referred to
as its  "Letter of Credit  Participation")  under such Letter of Credit and each
drawing  thereunder in an amount equal to such Bank's pro rata share (determined
on the basis of such Bank's  Revolving  Loan  Commitment)  of the maximum amount
which is or at any time may become available to be drawn thereunder.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -17-




            Each  Letter of Credit may provide  that the  Issuing  Bank may (but
shall not be required to) pay the beneficiary  thereof upon the occurrence of an
Event of Default and the acceleration of the maturity of the Revolving Loans or,
if payment is not then due to the beneficiary,  provide for the deposit of funds
in an  account  to  secure  payment  to the  beneficiary  and that any  funds so
deposited shall be paid to the beneficiary of the Letter of Credit if conditions
to such payment are  satisfied or returned to the Issuing Bank for  distribution
to the Banks (or, if all Obligations  shall have been indefeasibly paid in full,
to the  Borrower) if no payment to the  beneficiary  has been made and the final
date available for drawings under the Letter of Credit has passed.  Each payment
or deposit of funds by an Issuing  Bank as provided in this  paragraph  shall be
treated for all  purposes of this  Agreement  as a drawing  duly honored by such
Issuing Bank under the related Letter of Credit.

            (B) Request for Issuance. Whenever the Borrower desires the issuance
of a Letter of Credit, it shall deliver to the Agent a request for issuance of a
Letter of Credit no later than 1:00 P.M. (New York time) at least three Business
Days,  or such  shorter  period as may be agreed to by any  Issuing  Bank in any
particular  instance,  in advance of the proposed date of issuance.  The request
for issuance with respect to any Letter of Credit shall specify (i) the proposed
date  of  issuance  (which  shall  be a  business  day  under  the  laws  of the
jurisdiction of the Issuing Bank) of such Letter of Credit, (ii) the face amount
of such Letter of Credit, (iii) the expiration date of such Letter of Credit and
(iv) the name and address of the  beneficiary of such Letter of Credit.  As soon
as  practicable  after  delivery  of such  request  for  issuance of a Letter of
Credit,  the  Issuing  Bank for such  Letter of Credit  shall be  determined  as
provided in Section 1.13(C).  Prior to the date of issuance,  the Borrower shall
specify a precise  description  of the  documents  and the verbatim  text of any
certificate  to be presented by the  beneficiary of such Letter of Credit which,
if presented by such  beneficiary  prior to the expiration date of the Letter of
Credit,  would  require the  Issuing  Bank to make  payment  under the Letter of
Credit;  provided  that the  Issuing  Bank,  in its sole  judgment,  may require
changes in any such documents and certificates;  and provided,  further, that no
Letter of Credit shall  require  payment  against a conforming  draft to be made
thereunder  earlier  than 1:00 P.M. in the time zone of the Issuing  Bank on the
Business Day (which  shall be a business day under the laws of the  jurisdiction
of the Issuing Bank) next succeeding the Business Day (which shall be a business
day under the laws of the  jurisdiction  of the Issuing Bank) that such draft is
presented. In determining whether to pay under any Letter of Credit, the Issuing
Bank shall be responsible only to determine that the documents and

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -18-



certificates  required  to be  delivered  under that  Letter of Credit have been
delivered  and that they  comply on their  face  with the  requirements  of that
Letter of Credit.  Promptly  after receipt of a request for issuance of a Letter
of Credit and the  determination  of the Issuing Bank  thereof,  the Agent shall
notify each Bank of the proposed issuance,  the identity of the Issuing Bank and
the amount of each other Bank's respective participation therein,  determined in
accordance with Section 1.13(A).

            (C)   Determination of Issuing Bank.

            (1) Upon receipt by the Agent of a request for issuance  pursuant to
Section  1.13(B)  with  respect  to a Letter of  Credit,  in the event the Agent
elects to issue such Letter of Credit,  the Agent shall so notify the  Borrower,
and the Agent shall be the Issuing Bank with respect thereto.  In the event that
the Agent,  in its sole  discretion,  elects not to issue such Letter of Credit,
the Agent shall  promptly so notify the  Borrower,  and the Borrower may request
any other Bank to issue such Letter of Credit.  Each such Bank so  requested  to
issue such Letter of Credit  shall  promptly  notify the  Borrower and the Agent
whether or not, in its sole  discretion,  it has elected to issue such Letter of
Credit, and any such Bank that so elects to issue such Letter of Credit shall be
the Issuing Bank with respect  thereto.  In the event that all other Banks shall
have declined to issue such Letter of Credit, notwithstanding the prior election
of the Agent not to issue such Letter of Credit, the Agent shall be obligated to
issue the Letter of Credit  requested  by the  Borrower and shall be the Issuing
Bank with  respect to such  Letter of Credit.  In no event  shall any Bank be an
Issuing  Bank if such Bank  would  incur  increased  costs  pursuant  to Section
1.13(H)  as a result of being  the  Issuing  Bank,  unless  consented  to by the
Borrower.  No Issuing  Bank shall  issue any Letter of Credit  denominated  in a
currency other than Dollars.

            (2) Each  Issuing Bank that elects to issue a Letter of Credit shall
promptly give written notice to the Agent and each other Bank of the information
required under Sections 1.13(B)(i)- (iv) relating to the Letter of Credit.

            (D) Payment of Amounts Drawn Under  Letters of Credit.  In the event
of any  request  for  drawing  under any  Letter  of  Credit by the  beneficiary
thereof,  the Issuing  Bank shall notify the Borrower and the Agent on or before
the date on which such  Issuing  Bank  intends to honor  such  drawing,  and the
Borrower  shall  reimburse such Issuing Bank on the day on which such drawing is
honored  in an  amount in same day funds  equal to the  amount of such  drawing;
provided   that,   anything   contained  in  this   Agreement  to  the  contrary
notwithstanding, (i) unless the Borrower shall have

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -19-



notified the Agent and such Issuing Bank prior to 10:00 A.M.  (New York time) on
the  Business  Day of the date of such  drawing  that the  Borrower  intends  to
reimburse such Issuing Bank for the amount of such drawing with funds other than
the proceeds of  Revolving  Loans,  the Borrower  shall be deemed to have timely
given a Notice of Borrowing to the Agent  requesting the Banks to make Revolving
Loans that are Base Rate  Loans on the date on which such  drawing is honored in
an amount equal to the amount of such drawing,  and (ii) subject to satisfaction
or waiver of the conditions  specified in Section 4.02, the Banks shall,  on the
date of such  drawing,  make  Revolving  Loans  that are Base Rate  Loans in the
amount of such drawing,  the proceeds of which shall be applied  directly by the
Agent to  reimburse  such  Issuing  Bank for the  amount  of such  drawing;  and
provided  further that if, for any reason,  proceeds of Revolving  Loans are not
received by such  Issuing  Bank on such date in an amount equal to the amount of
such drawing,  the Borrower  shall  reimburse such Issuing Bank, on the Business
Day (which  shall be a business day under the laws of the  jurisdiction  of such
Issuing Bank)  immediately  following the date of such drawing,  in an amount in
same day funds equal to the excess of the amount of such drawing over the amount
of such Revolving Loans, if any, that are so received,  plus accrued interest on
such amount at the rate set forth in Section 1.13(F)(1)(i).

            (E) Payment by Banks.  In the event that the Borrower  shall fail to
reimburse an Issuing  Bank as provided in Section  1.13(D) in an amount equal to
the amount of any drawing  honored by such Issuing Bank under a Letter of Credit
issued  by it,  such  Issuing  Bank  shall  promptly  notify  each  Bank  of the
unreimbursed amount of such drawing and of such Bank's respective  participation
therein.  Each Bank shall make available to such Issuing Bank an amount equal to
its respective  participation  in same day funds,  at the office of such Issuing
Bank  specified in such notice,  not later than 1:00 P.M. (New York time) on the
Business Day (which  shall be a business day under the laws of the  jurisdiction
of such Issuing Bank) after the date notified by such Issuing Bank. In the event
that any Bank fails to make  available  to such  Issuing Bank the amount of such
Bank's  participation  in such  Letter  of Credit as  provided  in this  Section
1.13(E),  such  Issuing  Bank shall be entitled to recover such amount on demand
from such Bank together with interest at the customary rate set by the Agent for
the  correction of errors among banks for three  Business Days and thereafter at
the Base Rate.  Each Issuing Bank shall  distribute to each other Bank which has
paid all amounts  payable by it under this  Section  1.13(E) with respect to any
Letter of Credit issued by such Issuing Bank such other Bank's pro rata share of
all payments received by such Issuing Bank from the Borrower in reimbursement of
drawings honored by such Issuing Bank under such Letter of Credit

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -20-



when such payments are received. Nothing in this Section 1.13(E) shall be deemed
to relieve any Bank from its  obligation to pay all amounts  payable by it under
this Section  1.13(E) with respect to any Letter of Credit  issued by an Issuing
Bank or to  prejudice  any rights  that the  Borrower or any other Bank may have
against a Bank as a result of any  default  by such Bank  hereunder  and no Bank
shall be responsible for the failure of any other Bank to pay its pro rata share
payable under this Section 1.13(E).

            (F)   Compensation.

            (1) The Borrower agrees to pay the following  amount with respect to
all Letters of Credit:

             (i) with  respect  to  drawings  made  under any  Letter of Credit,
      interest,  payable on demand,  on the amount paid by such  Issuing Bank in
      respect of each such  drawing from and  including  the date of the drawing
      through the date such amount is reimbursed by the Borrower  (including any
      such  reimbursement  out of the  proceeds of Revolving  Loans  pursuant to
      Section  1.13(D))  at a rate  which  is equal to the  interest  rate  then
      applicable to Base Rate Loans for the period from the date of such drawing
      to and including the first Business Day after the date of such drawing and
      thereafter  at a rate  equal  to 2% per  annum  in  excess  of the rate of
      interest otherwise payable under this Agreement for Base Rate Loans during
      such period;  provided that if the Banks make a Revolving  Loan on any day
      the  proceeds  of which are to be applied to payment of the amount paid by
      such Issuing Bank,  the Borrower shall not be obligated to pay interest on
      such amount for such day pursuant to this clause (i); and

            (ii) with  respect to the  amendment  or  transfer of each Letter of
      Credit  and each  drawing  made  thereunder,  documentary  and  processing
      charges in accordance with such Issuing Bank's standard  schedule for such
      charges in effect at the time of such amendment,  transfer or drawing,  as
      the case may be.

            (2) The Borrower agrees to pay to the Agent for distribution to each
Bank in respect of all Letters of Credit  outstanding such Bank's pro rata share
of a commission  equal to 2% per annum of the maximum amount available from time
to time to be drawn under such outstanding Letters of Credit, payable in arrears
on and  through  the  last  day of  each  fiscal  quarter  of the  Borrower  and
calculated on the basis of a 365-day year and the actual number of days elapsed.
Upon the happening and during the  continuance of an Event of Default  described
in Section 8.01, the commission  referred to in the preceding  sentence shall be
4% per annum.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -21-




            (3) The  Borrower  agrees to pay to each  Issuing Bank in respect of
each Letter of Credit  issued by each such  Issuing Bank on the date of issuance
an amount  equal to the greater of (A) 1/4% of the maximum  amount  available at
any time to be drawn under such Letter of Credit or (B) $1,500.

            Amounts payable under clauses (1)(i) and (2) of this Section 1.13(F)
shall be paid to the Agent on  behalf of the  Banks.  The Agent  shall  promptly
distribute to each Bank its pro rata share of such amount. Amounts payable under
clauses  (1)(ii) and (3) of this Section  1.13(F)  shall be paid directly to the
Issuing Bank.

            (G)  Obligations  Absolute.   The  obligation  of  the  Borrower  to
reimburse each Issuing Bank for drawings made under the Letters of Credit issued
by it  and  the  obligations  of  the  Banks  under  Section  1.13(E)  shall  be
unconditional  and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances  including,  without limitation,
the following circumstances:

            (1)   any lack of validity or enforceability of any Letter
      of Credit;

            (2) the existence of any claim, setoff,  defense or other right that
      the Borrower or any Affiliate of the Borrower or any other Person may have
      at any time  against a  beneficiary  or any  transferee  of any  Letter of
      Credit  (or any  persons  or  entities  for whom any such  beneficiary  or
      transferee  may be  acting),  such  Issuing  Bank,  any Bank or any  other
      Person,  whether  in  connection  with this  Agreement,  the  transactions
      contemplated herein or any unrelated transaction;

            (3) any draft,  demand,  certificate or any other document presented
      under any Letter of Credit  proving to be forged,  fraudulent,  invalid or
      insufficient  in any  respect or any  statement  therein  being  untrue or
      inaccurate in any respect, if not apparent from the documents presented;

            (4) payment by such Issuing Bank under any Letter of Credit  against
      presentation of a demand, draft or certificate or other document that does
      not comply  with the terms of such Letter of Credit  unless  such  Issuing
      Bank  shall have acted in bad faith or with  willful  misconduct  or gross
      negligence in issuing such payment;

            (5)   any other circumstance or happening whatsoever that
      is similar to any of the foregoing; or


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -22-



            (6) the fact that a Default or Event of Default  shall have occurred
      and be continuing.

            (H)  Additional  Payments.  If by reason of (a) any change after the
Effective  Date in  applicable  law,  regulation,  rule,  decree  or  regulatory
requirement or any change in the  interpretation  or application by any judicial
or  regulatory  authority of any law,  regulation,  rule,  decree or  regulatory
requirement  or (b)  compliance  by  any  Issuing  Bank  or any  Bank  with  any
direction,  request or  requirement  (whether or not having the force of law) of
any governmental or monetary authority including, without limitation, Regulation
D:

             (i) such  Issuing  Bank or any Bank  shall be  subject  to any tax,
      levy,  charge or withholding of any nature or to any variation  thereof or
      to any penalty  with  respect to the  maintenance  or  fulfillment  of its
      obligations  under this Section  1.13,  whether  directly or by such being
      imposed  on or  suffered  by  such  Issuing  Bank or any  Bank;  provided,
      however,  that no payment  shall be  required  to be made by the  Borrower
      pursuant to this clause (i) with respect to changes in the rate of any tax
      on or measured by the net income of a Bank  (including  any  franchise  or
      similar  tax so  measured)  pursuant  to the income tax laws of the United
      States or of the  jurisdiction in which it is incorporated or organized or
      the jurisdiction where such Bank's lending office is located;

            (ii) any  reserve,  deposit  or similar  requirement  is or shall be
      applicable,  imposed or modified in respect of any Letter of Credit issued
      by such Issuing Bank or participations therein purchased by any Bank; or

           (iii)  there  shall be imposed on such  Issuing  Bank or any Bank any
      other  condition  regarding this Section 1.13, any Letter of Credit or any
      participation therein;

and the result of the foregoing is to directly or  indirectly  increase the cost
to such Issuing Bank or any Bank of issuing, making or maintaining any Letter of
Credit or of purchasing or maintaining any participation  therein,  or to reduce
the amount  receivable in respect thereof by such Issuing Bank or any Bank, then
and in any such case such Issuing Bank or such Bank shall,  after the additional
cost is incurred or the amount received is reduced,  notify the Borrower and the
Borrower  shall pay within 10 Business  Days after  demand such  amounts as such
Issuing Bank or such Bank may specify to be necessary to compensate such Issuing
Bank or such Bank for such  additional  cost or reduced  receipt,  together with
interest on such amount from the date demanded until

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -23-



payment  in full  thereof  at a rate per  annum  equal at all  times to the rate
applicable to Base Rate Loans then in effect; provided that if any Bank fails to
give such notice  within 90 days after it obtains  actual  knowledge  of such an
event,  such Bank shall,  with respect to compensation  payable pursuant to this
Section  1.13(H)  in  respect of any costs or other  amounts  resulting  from or
relating to such event,  only be entitled to payment under this Section  1.13(H)
for such  costs or other  amounts  from and after the date 90 days  prior to the
date that such Bank does give such notice; and provided, further, that each Bank
agrees that, as promptly as practicable  after it becomes aware of the existence
of the foregoing  conditions,  it will, to the extent not inconsistent with such
Bank's internal policies or any legal or regulatory restrictions, use reasonable
efforts to issue,  make or maintain the affected Letter of Credit or purchase or
maintain any  participation  therein through another lending office of such Bank
if as a result thereof the additional  moneys which would  otherwise be required
to be paid to  compensate  for such  additional  cost or  reduced  receipt  with
respect to such  Letter of Credit  pursuant  to this  Section  1.13(H)  would be
reduced and if, as determined by such Bank, in its  reasonable  discretion,  the
issuance,  making or  maintaining  of such Letter of Credit or the purchasing or
maintaining of any participation therein through such other lending office would
not otherwise  materially  adversely  affect such Letter of Credit or such Bank.
Each Bank will furnish to the Borrower a certificate setting forth in reasonable
detail the basis and amount of each request by such Bank for compensation  under
this Section  1.13(H).  Determinations  by any Bank for purposes of this Section
1.13(H),  including of the effect of any regulatory  change  pursuant to Section
1.13(H) on its costs of making or  maintaining  Letters of Credit (or purchasing
or  maintaining  participations  therein),  or on  amounts  receivable  by it in
respect of Letters of Credit,  and of the amounts  required to  compensate  such
Bank  under  this  Section  1.13(H),  shall  be made on a  reasonable  basis.  A
certificate  in  reasonable  detail as to the amount of such  increased  cost or
reduced receipt, submitted to the Borrower and the Agent by that Issuing Bank or
any Bank, as the case may be, shall,  except for  demonstrable  error, be final,
conclusive and binding for all purposes.

            If any Bank shall be entitled to payments  under this Section  1.13,
such Bank,  within a reasonable  time after becoming  entitled to such payments,
shall (unless otherwise  required by a governmental  authority or as a result of
any law, rule,  regulation,  order or similar directive applicable to such Bank)
designate a different  lending office from that initially  selected by such Bank
to which  payments  are to be made  under  this  Agreement  or under any  Credit
Document, if such designation would avoid the need for (or

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -24-



materially  reduce the amount of) such payments and would not, in the reasonable
opinion of the Bank, be otherwise disadvantageous to such Bank.

            (I) Indemnification; Nature of Issuing Bank's Duties. In addition to
amounts payable as elsewhere provided in this Section 1.13, without duplication,
the Borrower hereby agrees to protect, indemnify, pay and save each Issuing Bank
harmless  from and against any and all claims,  demands,  liabilities,  damages,
losses,  costs, charges and expenses (including  reasonable  attorneys' fees and
allocated  costs of internal  counsel)  which such  Issuing Bank may incur or be
subject to as a  consequence,  direct or  indirect,  of (i) the  issuance of the
Letters of Credit or (ii) the  failure of such  Issuing  Bank to honor a drawing
under any  Letter of  Credit,  in each case as a result of any act or  omission,
whether  rightful  or  wrongful,  of any  present  or future de jure or de facto
government or Governmental  Authority (all such acts or omissions  herein called
"Government Acts").

            As between the Borrower and each Issuing Bank, the Borrower  assumes
all risks of the acts and  omissions  of, or  misuse  of the  Letters  of Credit
issued by such Issuing Bank by, the respective  beneficiaries of such Letters of
Credit. In furtherance and not in limitation of the foregoing, such Issuing Bank
shall not be responsible:  (i) for the form,  validity,  sufficiency,  accuracy,
genuineness  or  legal  effects  of  any  document  submitted  by any  party  in
connection  with the  application for and issuance of any such Letter 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  any such  Letter  of  Credit  or the  rights  or  benefits
thereunder  or  proceeds  thereof,  in whole or in  part,  that may  prove to be
invalid or ineffective  for any reason;  (iii) for failure of the beneficiary of
any such Letter of Credit to comply fully 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  otherwise,  whether  or not  they are in  cipher;  (v) for  errors  in
interpretation   of  technical  terms;  (vi)  for  any  loss  or  delay  in  the
transmission  or otherwise  of any document  required in order to make a drawing
under  any such  Letter  of Credit  or of the  proceeds  thereof;  (vii) for the
misapplication  by the  beneficiary of any such 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 such Issuing Bank, including,  without
limitation, any Government Acts. None of the above shall affect,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -25-



impair, or prevent the vesting of any of such Issuing Bank's rights
or powers hereunder.

            In  furtherance  and extension and not in limitation of the specific
provisions  hereinabove  set forth,  any action  taken or omitted by any Issuing
Bank in  connection  with the  Letters  of Credit  issued  by it or the  related
certificates, if taken or omitted in good faith, shall not put such Issuing Bank
under any resulting liability to the Borrower.

            Notwithstanding  anything to the contrary  contained in this Section
1.13(I),  the Borrower shall have no obligation to indemnify any Issuing Bank or
any Bank in respect of any liability  incurred by such Issuing Bank or such Bank
arising solely out of the gross negligence,  bad faith or willful  misconduct of
such Issuing  Bank or such Bank or out of the wrongful  dishonor by such Issuing
Bank or such Bank of a proper  demand for  payment  under the  Letters of Credit
issued by it.

            SECTION 2.  Commitments.

            2.01 Voluntary Reduction of Commitments.  Upon at least one Business
Day's prior written notice (or telephonic notice promptly  confirmed in writing)
to the Agent at the  Agent's  Office  (which  notice  the Agent  shall  promptly
transmit  to each of the  Banks),  the  Borrower  shall have the right,  without
premium or penalty,  to terminate the unutilized  portion of the Total Revolving
Loan  Commitments,  in part or in whole;  provided that (x) any such termination
shall  apply to  proportionately  and  permanently  reduce  the  Revolving  Loan
Commitment of each of the Banks and (y) any partial  reduction  pursuant to this
Section 2.01 shall be in the amount of at least $500,000 and integral  multiples
of  $100,000  in  excess  of that  amount;  provided,  further,  that the  Total
Revolving  Loan  Commitments  shall not be  reduced  to an amount  less than the
aggregate Revolving Loans and Letters of Credit Usage then outstanding.

            2.02  Mandatory Adjustments of Commitments, etc.
(a)  The Total Revolving Loan Commitments shall terminate on the
Revolving Loan Commitment Termination Date.

            (b) The  Total A Term Loan  Commitments  shall  terminate  as to the
amount of any portion of the Total A Term Loan  Commitments  not utilized by the
Borrower on the Closing Date.

            (c) The  Total B Term Loan  Commitments  shall  terminate  as to the
amount of any portion of the Total B Term Loan  Commitments  not utilized by the
Borrower on the Closing Date.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -26-




            (d) The Total Term Loan Commitments shall  automatically be reduced,
on a pro rata basis,  between the Total A Term Loan  Commitments and the Total B
Term Loan  Commitments,  by the amount of any reduction of the funding necessary
for the Refinancing.

            (e) The Total Term Loan Commitments  shall be reduced on the date on
which any payments of principal on the Term Loans are made (other than  pursuant
to Section 3.02(A)(a)) in an aggregate amount equal to such payments.

            (f) Each reduction to the Total A Term Loan Commitments or the Total
B Term Loan  Commitments or termination of the Total Revolving Loan  Commitments
pursuant to this  Section  2.02 shall apply  proportionately  to the A Term Loan
Commitment,  the B Term Loan Commitment or the Revolving Loan Commitment, as the
case may be, of each Bank.

            (g) The  Total  Revolving  Loan  Commitments  shall  be  permanently
reduced in the amount and at the time of any payment on the Loans required to be
applied to the Revolving  Loans or the  Revolving  Loan  Commitment  pursuant to
Section 3.02(B)(a).

            2.03 Commitment  Commission.  The Borrower agrees to pay the Agent a
commitment commission ("Commitment Commission") for the account of each Bank for
the period from and including the Closing Date to but not including the date the
Total Revolving Loan Commitments have been terminated,  computed at a rate equal
to 1/2% per annum on the  daily  average  Unutilized  Commitment  of such  Bank.
Accrued  Commitment  Commission  shall be due and payable in arrears on the last
Business Day of each March,  June,  September and December  commencing  December
1996 and on the Revolving Loan Commitment  Termination Date, based on the actual
number of days elapsed over a year of 360 days.

            SECTION 3.  Payments.

            3.01  Voluntary  Prepayments.  The Borrower  shall have the right to
prepay  Term  Loans and  Revolving  Loans in whole or in part from time to time,
without  premium or penalty,  on the  following  terms and  conditions:  (i) the
Borrower  shall  give  the  Agent  at the  Agent's  Office  written  notice  (or
telephonic  notice  promptly  confirmed  in writing) of its intent to prepay the
Loans,  the  amount of such  prepayment  and,  in the case of  Reserve  Adjusted
Eurodollar Loans, the specific  Borrowing or Borrowings  pursuant to which made,
which  notice  shall be given by the Borrower at least one Business Day prior to
the date of such  prepayment  and which notice shall  promptly be transmitted by
the Agent to each of the Banks;  (ii) each partial  prepayment  of any Borrowing
shall be in an

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -27-



aggregate  principal  amount of at least  $500,000  and  integral  multiples  of
$100,000  in excess of that  amount;  provided  that no  partial  prepayment  of
Reserve Adjusted  Eurodollar Loans made pursuant to a single Borrowing under the
Loan  Facility  (or Portion  thereof)  shall reduce the  outstanding  Loans made
pursuant to such Borrowing to an amount less than the Minimum  Borrowing Amount;
and (iii) Reserve Adjusted Eurodollar Loans may only be prepaid pursuant to this
Section 3.01 on the last day of an Interest Period applicable thereto. Voluntary
prepayments of Term Loans shall be applied to the prepayment of the  outstanding
principal  amount of Term Loans pro rata between the A Term Loans and the B Term
Loans.  Voluntary  prepayments  of Loans under the A Term Loan Facility shall be
applied to the prepayment of the  outstanding  principal  amount of A Term Loans
pro rata to all remaining  Scheduled A Term Loans  Principal  Payments such that
each Scheduled A Term Loans Principal Payment then remaining shall be reduced by
an amount  equal to the product of (A) such  payment and (B) a fraction of which
the  numerator is equal to the amount of such  Scheduled A Term Loans  Principal
Payment  then  remaining  and the  denominator  is  equal to the  amount  of all
Scheduled A Term Loans Principal Payments  remaining.  Voluntary  prepayments of
Loans under the B Term Loan Facility  shall be applied to the  prepayment of the
outstanding principal amount of B Term Loans pro rata to all remaining Scheduled
B Term Loans Principal  Payments such that each Scheduled B Term Loans Principal
Payment then remaining shall be reduced by an amount equal to the product of (A)
such payment and (B) a fraction of which the numerator is equal to the amount of
such Scheduled B Term Loans Principal Payment then remaining and the denominator
is  equal  to the  amount  of all  Scheduled  B Term  Loans  Principal  Payments
remaining.

            3.02  Mandatory Prepayments.

            (A)   Requirements:

            (a) The Borrower shall prepay the  outstanding  principal  amount of
      the A Term Loans, the B Term Loans or the Revolving Loans, as the case may
      be, on any date on which the  aggregate  outstanding  principal  amount of
      such Loans (after giving effect to any other  repayments or prepayments on
      such day together with, in the case of Revolving  Loans,  the  outstanding
      principal amount of Letters of Credit Usage) exceeds the Total A Term Loan
      Commitments, the Total B Term Loan Commitments or the Total Revolving Loan
      Commitments, as the case may be, in the amount of such excess.

            (b)   If the aggregate principal amount of outstanding
      Revolving Loans and Letters of Credit Usage exceeds the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -28-



      Borrowing Base as set forth in the Borrower's  most recent  Borrowing Base
      Certificate  required to be  delivered  pursuant  to Section  6.01 of this
      Agreement (such amount is hereinafter  referred to as the "Excess"),  then
      the Borrower shall prepay its Revolving Loans in a principal  amount equal
      to such  Excess no later than two  Business  Days after the  Borrower  has
      delivered,  or was required to deliver, such Borrowing Base Certificate to
      the Agent and the Banks.

            (c) The Borrower  shall cause to be paid each Scheduled A Term Loans
      Principal  Payment on the A Term Loans  until the A Term Loans are paid in
      full in the  amounts  and at the  times  specified  in the  definition  of
      Scheduled A Term Loans Principal  Payments to the extent that  prepayments
      have not previously  been applied to such Scheduled A Term Loans Principal
      Payments  (and such  Scheduled A Term Loans  Principal  Payments  have not
      otherwise been reduced) pursuant to the terms hereof.

            (d) The Borrower  shall cause to be paid each Scheduled B Term Loans
      Principal  Payment on the B Term Loans  until all B Term Loans are paid in
      full,  in the  amounts  and at the time  specified  in the  definition  of
      Scheduled B Term Loans Principal  Payments to the extent that  prepayments
      have not previously  been applied to such Scheduled B Term Loans Principal
      Payments  (and such  Scheduled B Term Loans  Principal  Payments  have not
      otherwise been reduced) pursuant to the terms hereof.

            (e)  As  promptly  as  practicable,  but in any  event  within  five
      Business Days of the date of receipt by Holdings,  the Borrower and/or any
      of the Borrower's  Subsidiaries,  as the case may be, of Net Cash Proceeds
      or Net  Financing  Proceeds,  an amount equal to such Net Cash Proceeds or
      Net Financing Proceeds shall be applied as provided in Section 3.02(B)(a);
      provided  that with respect to any Net Cash Proceeds of the sale of equity
      securities of Holdings,  the Borrower or any of its  Subsidiaries,  clause
      (g) of this  Section  3.02(A) will govern and that with respect to any Net
      Cash Proceeds from any  Destruction or Taking,  clause (i) of this Section
      3.02(A) will govern.

            (f) As  promptly  as  practicable,  but in any event  within 90 days
      after the last day of each fiscal year of the  Borrower,  commencing  with
      fiscal  year  1997,  an amount  equal to 50% of Excess  Cash Flow for such
      fiscal year shall be applied as provided in Section 3.02(B)(a).


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -29-



            (g)  As  promptly  as  practicable,  but in any  event  within  five
      Business Days of the date of the receipt thereof by Holdings, the Borrower
      and/or any of its  Subsidiaries,  an amount  equal to 100% of the proceeds
      received by the  Borrower or Holdings  (including  capital  contributions,
      other  than  those  referred  to in  clauses  (i),  (ii) and (iii) of this
      paragraph  (g),  received by the Borrower or any of its  Subsidiaries)  or
      such Subsidiary  (net of underwriting  discounts and commissions and other
      costs and expenses  directly  associated  therewith) of the sale after the
      Closing Date of equity  securities  (other than proceeds from the issuance
      of capital stock (i) of Holdings,  the Borrower or any of its Subsidiaries
      pursuant to any pension,  stock option,  profit  sharing or other employee
      benefit  plan  or  agreement  of  Holdings,  the  Borrower  or  any of its
      Subsidiaries in the ordinary  course of business,  (ii) by a Subsidiary to
      another  Subsidiary  or to the Borrower or (iii)  pursuant to the Holdings
      IPO, except (x) to the extent necessary in connection with the Refinancing
      as   contemplated   by  this   Agreement  and  (y)  with  respect  to  the
      Overallotment  Option,  the net proceeds of which shall be applied without
      penalty or premium (other than Reserve  Adjusted  Eurodollar Rate breakage
      costs,  if any) to  repay  Revolving  Loans  in an  amount  equal  to such
      proceeds, if any) shall be applied as provided in Section 3.02(B)(a).

            (h)  As  promptly  as  practicable,  but in any  event  within  five
      Business Days of the date of the receipt thereof by the Borrower or any of
      its Subsidiaries, an amount equal to 100% of any surplus net assets of any
      Pension Plan returned to the Borrower or any of its Subsidiaries  shall be
      applied as provided in Section 3.02(B)(a).

            (i) At the  Agent's  discretion,  on the date of receipt  thereof by
      Holdings, the Borrower and/or any of its Subsidiaries,  an amount equal to
      100%  of  any  proceeds  received  due to  loss,  damage,  destruction  or
      condemnation of or to Assets  (collectively,  "Loss  Proceeds"),  less any
      portion of such proceeds not in excess of $500,000, in the aggregate,  per
      fiscal year to be used for rebuilding,  repairing or replacing  productive
      assets of a kind then used or usable in the  business of the  Borrower and
      its  Subsidiaries  (in each case to the extent  permitted by the Mortgages
      and the  Security  Documents)  within  180 days of  receipt  of such  Loss
      Proceeds  (or such  longer  periods as may be  consented  to by the Agent,
      which consent shall not be  unreasonably  withheld)  shall be delivered by
      Holdings,  the Borrower and/or its Subsidiaries to the Agent to be held by
      the Agent in a cash  collateral  account bearing  interest  payable to the
      Borrower at a rate per annum

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -30-



      (meaning 360 days) equal to the Federal  Funds Rate.  Upon the  Borrower's
      request,   Agent  shall   release  such   proceeds  to  the  Borrower  for
      reinvestment, rebuilding, repair or replacement as described above. To the
      extent the Borrower fails to use any or all of such released  proceeds for
      such rebuilding,  repair or replacement of assets within 180 days (or such
      longer  periods as may be consented to by the Agent,  which  consent shall
      not be unreasonably  withheld) of such release, the Borrower shall, at the
      Agent's  discretion,  return the unused  portion of such released funds to
      the Agent and  authorize  and direct the Agent to apply such  proceeds  as
      provided in Section 3.02(B)(a).

            (j)  As  promptly  as  practicable,  but in any  event  within  five
      Business Days of the date of receipt by Holdings,  the Borrower and/or its
      Subsidiaries  of any tax  refund,  an amount  equal to 100% of such refund
      paid to Holdings,  the Borrower  and/or any of its  Subsidiaries  shall be
      applied as provided in Section  3.02(B)(a);  provided  that such refund or
      refunds are not promptly  applied by Holdings,  the Borrower and/or any of
      its Subsidiaries to the payment of future tax liabilities.

      (B)   Application:

            (a)  Prepayments to be applied  pursuant to this Section  3.02(B)(a)
      shall be applied without  penalty or premium (other than Reserve  Adjusted
      Eurodollar Rate breakage costs, if any) as follows: (i) first, to the Term
      Portion,  pro rata between the Scheduled A Term Loans  Principal  Payments
      and the Scheduled B Term Loans  Principal  Payments,  in pro rata order of
      maturity;  and  (ii)  second,  to repay  Revolving  Loans;  provided  that
      prepayments  required by Section  3.02(A)(b) hereof shall be applied first
      to repay Revolving Loans.

            (b) With  respect to each  prepayment  of Loans  required by Section
      3.02(A),  the Borrower  shall give the Agent two Business  Days notice and
      may designate the Types of Loans and the specific  Borrowing or Borrowings
      which are to be prepaid;  provided that (i)(x) Reserve Adjusted Eurodollar
      Loans may be designated for prepayment  pursuant to this Section 3.02 only
      on the  last day of an  Interest  Period  applicable  thereto  unless  all
      Reserve  Adjusted  Eurodollar  Loans with Interest  Periods ending on such
      date of  required  prepayment  and all Base  Rate  Loans  have been or are
      concurrently  being  paid in full  and (y) if any  prepayment  of  Reserve
      Adjusted Eurodollar Loans made pursuant to a single Borrowing shall reduce
      the  outstanding  Loans made pursuant to such  Borrowing to an amount less
      than the Minimum Borrowing Amount, such Borrowing shall

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -31-



      immediately be converted into Base Rate Loans; and (ii) each prepayment of
      any Loans made  pursuant to a single  Borrowing  shall be applied pro rata
      among such Loans.  In the absence of a designation  by the  Borrower,  the
      Agent  shall,  subject to the  above,  make such  designation  in its sole
      discretion.  All prepayments  shall include payment of accrued interest on
      the  principal  amount so  prepaid,  shall be  applied  to the  payment of
      interest  before  application  to  principal  and  shall  include  amounts
      payable, if any, under Section 1.10(f).

            3.03  Method  and  Place  of  Payment.   (a)  Except  as   otherwise
specifically provided herein, all payments under this Agreement shall be made to
the Agent, for the ratable account of the Banks entitled thereto, not later than
1:00 P.M. (New York time) on the date when due and shall be made in  immediately
available  funds in lawful money of the United  States of America to the account
specified  therefor by the Agent or if no account has been so  specified  at the
Agent's Office,  it being  understood that written notice by the Borrower to the
Agent to make a payment from the funds in the Borrower's  account at the Agent's
Office shall  constitute  the making of such payment to the extent of such funds
held in such account.  The Agent will thereafter  cause to be distributed on the
same day (if payment is actually received by the Agent in New York prior to 1:00
P.M. (New York time) on such day) funds  relating to the payment of principal or
interest or fees  ratably to the Banks  entitled to receive any such  payment in
accordance with the terms of this Agreement.  If and to the extent that any such
distribution  shall  not be so made by the  Agent  in full on the  same  day (if
payment is actually  received by the Agent prior to 1:00 P.M. (New York time) on
such day),  the Agent shall pay to each Bank its ratable amount thereof and each
such Bank shall be entitled to receive from the Agent, upon demand,  interest on
such amount at the Federal  Funds Rate for each day from the date such amount is
paid to the Agent until the date the Agent pays such amount to such Bank.

            (b) Any payments under this Agreement which are made by the Borrower
later than 1:00 P.M.  (New York  time)  shall be deemed to have been made on the
next succeeding Business Day. Whenever any payment to be made hereunder shall be
stated  to be due on a day which is not a  Business  Day,  the due date  thereof
shall be extended  to the next  succeeding  Business  Day and,  with  respect to
payments of principal,  interest  shall be payable  during such extension at the
applicable rate in effect immediately prior to such extension,  except that with
respect to Reserve Adjusted Eurodollar Loans, if such next succeeding applicable
Business  Day is not in the same month as the date on which such  payment  would
otherwise be due

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -32-



hereunder or under any Note, the due date with respect thereto shall be the next
preceding applicable Business Day.

            3.04 Net Payments. (a) Except as provided in Section 3.04(d) hereof,
all payments by the Borrower under this  Agreement or under any Credit  Document
shall be made  without  set-off or  counterclaim  and in such  amounts as may be
necessary in order that all such payments (after deduction or withholding for or
on account of any  present or future  taxes,  levies,  imposts,  duties or other
charges  of  whatsoever  nature  imposed  by any  government  or  any  political
subdivision or taxing  authority  thereof,  other than any tax on or measured by
the net  income of a Bank  (including  without  limitation  franchise  taxes and
branch profits taxes) pursuant to the laws of the United States or any political
subdivision  thereof or of the  jurisdiction  in which it is incorporated or the
jurisdiction  where such Bank's lending office is located or in which it has any
other  contacts  or  connection  that  would  subject  it  to  taxation  therein
(collectively,  "Taxes")) shall not be less than the amounts otherwise specified
to be paid under this Agreement and/or any Credit Document.  A certificate as to
the  calculation of any additional  amounts payable to a Bank under this Section
3.04 submitted to the Borrower by such Bank shall, absent demonstrable error, be
final,  conclusive  and binding for all purposes upon all parties  hereto.  With
respect to each  deduction or  withholding  for or on account of any Taxes,  the
Borrower  shall  within  30 days  after  it is  required  by law to  remit  such
deduction or withholding to any relevant taxing  authority  furnish to each Bank
such  certificates,  receipts  and other  documents  as may be required  (in the
reasonable judgment of such Bank) to establish any tax credit to which such Bank
may be entitled.

            (b)  Without  prejudice  to the  provisions  of  clause  (a) of this
Section 3.04, and except as provided in Section 3.04(d) hereof,  if any Bank, or
the Agent on its  behalf,  is  required by law to make any payment on account of
Taxes on or in relation to any sum received or receivable  under this  Agreement
and/or the other Credit  Documents by such Bank, or the Agent on its behalf,  or
any  liability  for Tax in respect of any such  payment  is  imposed,  levied or
assessed  against  any  Bank,  or the Agent on its  behalf,  the  Borrower  will
promptly  indemnify such person against such Tax payment or liability,  together
with any interest, penalties and reasonable expenses (including counsel fees and
expenses)  payable or incurred in connection  therewith,  including any Taxes of
any Bank  arising by virtue of payments  under this  clause  (b),  computed in a
manner  consistent  with clause (a) of this Section 3.04. A certificate  by such
Bank,  or the Agent on its  behalf,  as to the  calculation  and  amount of such
payments shall, absent demonstrable

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -33-



error, be final, conclusive and binding upon all parties hereto for
all purposes.

            (c)  (i)  Each  Bank  that  is  organized  under  the  laws  of  any
jurisdiction  other than the United States or any State thereof  (including  the
District of Columbia) (a "Foreign  Bank")  agrees to furnish to the Borrower and
the Agent,  prior to the date it receives  any payment  under this  Agreement or
other  Credit  Documents,  two signed  copies of either  U.S.  Internal  Revenue
Service Form 4224 or U.S.  Internal  Revenue  Service Form 1001 or any successor
form  thereto  (wherein  such  Foreign  Bank  claims  entitlement  to a complete
exemption  from U.S.  federal  withholding  tax on interest paid by the Borrower
hereunder).  Each  Foreign  Bank  that  is  not  a  bank  described  in  Section
881(c)(3)(A) of the Code and cannot deliver U.S.  Internal  Revenue Service Form
1001 entitling it to a complete  exemption from withholding tax or U.S. Internal
Revenue Service Form 4224 pursuant to this Section  3.04(c)(i) agrees to furnish
to the Borrower  and the Agent (x) a  certificate  substantially  in the form of
Exhibit Q hereto and (y) two copies of U.S.  Internal  Revenue Service Form W-8,
or successor form (wherein such Foreign Bank makes the certifications  necessary
to entitle it to a complete  exemption  from United  States  withholding  tax on
interest paid by the Borrower hereunder).

          (ii) In addition,  each Foreign Bank that delivers  forms  pursuant to
Section 3.04(c)(i) hereof agrees to provide subsequently to the Borrower and the
Agent  additional  signed copies of such forms,  or any successor  forms thereto
(wherein such Bank claims  entitlement  to a complete  exemption from or reduced
rate  of  U.S.  federal  withholding  tax  on  interest  paid  by  the  Borrower
hereunder),  as may be  reasonably  requested  in writing by the Borrower or the
Agent.  A Foreign  Bank shall be required  to furnish a form under this  Section
3.04(c)(ii)  only if it is entitled to claim an exemption from or a reduced rate
of withholding tax under applicable law. A Bank that is not entitled to claim an
exemption from or a reduced rate of withholding under applicable law at the time
that a request to provide  forms is  received  from the  Borrower  or the Agent,
shall so inform the Borrower and the Agent in writing.

            (d) The Borrower  shall not be required to pay any increased  amount
on account of Taxes pursuant to Section  3.04(a) or (b) to any Bank or Agent (i)
to the  extent  that such  Taxes  would not have  been  payable  if the Bank had
furnished a form  (properly and accurately  completed in all material  respects)
which it was otherwise  required to furnish in accordance  with Section  3.04(c)
hereof, (ii) if the Bank was not able to furnish a form (properly and accurately
completed in all material respects) which it was

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -34-



required to furnish in accordance with Section  3.04(c)(i)  hereof,  or (iii) if
the  Bank  failed  to  comply  with   applicable   certification,   information,
documentation  or  other  reporting  requirements  concerning  the  nationality,
residence,  identity or connections  with the United States of such Bank if such
compliance  is  required  by statute  or  regulation  of the United  States as a
precondition to relief or exemption from such Taxes.

            (e) With  respect  to any Taxes  imposed on a Bank which are paid or
reimbursed  by the Borrower in  accordance  with the  provisions of this Section
3.04, each Bank receiving the benefit of such payments of Taxes hereby agrees to
pay to the Borrower any amounts  refunded to such Bank  (including  any interest
thereon) which such Bank reasonably determines to be a refund in respect of such
Taxes.

            (f) If any Bank shall be  entitled to  payments  under this  Section
3.04,  such Bank,  within a  reasonable  time after  becoming  entitled  to such
payments,  shall (unless otherwise required by a governmental  authority or as a
result of any law, rule,  regulation,  order or similar directive  applicable to
such Bank) designate a different lending office from that initially  selected by
such Bank to which  payments  are to be made under this  Agreement  or under any
Credit  Document,  if such  designation  would avoid the need for (or materially
reduce the amount of) such payments and would not, in the reasonable  opinion of
such Bank, be otherwise disadvantageous to such Bank.

            SECTION 4.  Conditions Precedent.

            4.01 Conditions  Precedent to Initial Loans.  The obligations of the
Banks to make the Initial Loans to the Borrower  hereunder  are subject,  at the
time of the making of each such Initial  Loan  (except as otherwise  hereinafter
indicated), to the satisfaction of the following conditions:

            (A)   Credit Agreement.  The Borrower shall have duly
      executed and delivered this Agreement.

            (B) Officer's  Certificates.  On the Closing  Date,  the Agent shall
      have received (i) a certificate  dated such date signed by an  appropriate
      officer of the Borrower stating that all of the applicable  conditions set
      forth in Sections  4.01(D),  (E),  (F), (I), (K), (L), (N), (P), (Q), (R),
      (S), (T) and (U) (in each case  disregarding  any  reference  therein that
      such  condition  be deemed  satisfactory  by the Agent and/or the Required
      Banks) have been satisfied in all material respects (without giving effect
      to any materiality or similar

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -35-



      exceptions  contained  therein)  or  waived  as of such  date  and  (ii) a
      certificate  with respect to environmental  matters,  substantially in the
      form set forth on Exhibit N hereto.

            (C) Opinions of Counsel.  On the Closing Date,  the Agent shall have
      received an opinion or opinions  addressed  to each of the Banks and dated
      the Closing Date,  each in form and substance  satisfactory  to the Agent,
      from (i)  Milbank,  Tweed,  Hadley & McCloy,  counsel to the  Borrower and
      Holdings, which opinion shall address the matters contained in Exhibit C-1
      hereto, (ii) Hunter,  Maclean, Exley & Dunn, P.C., special Georgia counsel
      to the Borrower and  Holdings,  which  opinion  shall  address the matters
      contained in Exhibit C-2 hereto and (iii) local counsel to the Borrower in
      each  jurisdiction  in which  Mortgaged  Real  Property is located,  which
      opinions shall address the matters contained in Exhibit C-3 hereto.

            (D) Corporate  Proceedings.  All corporate and legal proceedings and
      all  instruments  and  agreements  in  connection  with  the  transactions
      contemplated  by the Credit  Documents  shall be  satisfactory in form and
      substance to the Agent,  and the Agent shall have received all information
      and copies of all certificates, documents and papers, including records of
      corporate proceedings and governmental  approvals, if any, which the Agent
      reasonably  may  have  requested  from  Holdings,  the  Borrower  and  any
      Affiliate  of any thereof in  connection  therewith,  such  documents  and
      papers  where   appropriate  to  be  certified  by  proper   corporate  or
      governmental authorities.  Without limiting the foregoing, the Agent shall
      have received (i) evidence  satisfactory to it that the Board of Directors
      of each of Holdings and the Borrower  shall have approved and  recommended
      the  Refinancing,  (ii) resolutions of the Board of Directors of Holdings,
      the Borrower or any  Affiliate  thereof  approving  and  authorizing  such
      documents  and actions as are  contemplated  hereby in form and  substance
      satisfactory to the Agent including  without  limitation the execution and
      delivery of all Credit Documents,  certified by its corporate secretary or
      an  assistant  secretary  as  being  in  full  force  and  effect  without
      modification or amendment, and (iii) signature and incumbency certificates
      of officers of Holdings,  the Borrower or any Affiliate  thereof executing
      instruments, documents or agreements required to be executed in connection
      with the Refinancing.

            (E)  Holdings  IPO. On the Closing  Date,  the Holdings IPO shall be
      consummated  concurrently  with the making of the Initial Loans hereunder.
      As a result of the Holdings  IPO,  Holdings  shall have  received not less
      than $37,500,000, and

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -36-



      the net proceeds of the Holdings IPO shall have been
      contributed to the Borrower.

            (F)  Repayment of Existing  Subordinated  Debt. On the Closing Date,
      the  Borrower  shall  have  purchased  and  cancelled  each of the  Senior
      Subordinated  Notes,  the Subordinated  Notes and the Junior  Subordinated
      Notes concurrently with the making of the Initial Loans hereunder.

            (G)  Organizational  Documentation,  etc. On or prior to the Closing
      Date,  the  Agent  shall  have  received  copies  of a true  and  complete
      certified  copy of the  following  documents  of each of Holdings  and the
      Borrower, the provisions of which shall be reasonably  satisfactory to the
      Agent:

                  (1) Its respective  Certificate of Incorporation,  which shall
            be certified and be accompanied by a good standing  certificate from
            the  Secretary  of State of the State of Delaware or its  respective
            jurisdiction of incorporation  and good standing  certificates  from
            the  jurisdictions  in which it is  qualified  to do  business  as a
            foreign  corporation,  each to be dated a recent  date  prior to the
            Closing Date;

                  (2)   Its respective By-laws, certified as of the
            Closing Date by its corporate secretary.

            (H) Solvency. On the Closing Date, the Banks shall have received the
      Officers'  Solvency  Certificate,  substantially  in the form of Exhibit L
      annexed  hereto,  in  form  and  substance   satisfactory  to  the  Agent,
      supporting the  conclusions  that,  after giving effect to the Refinancing
      and the contemplated  borrowings in connection herewith,  the Borrower and
      its Subsidiaries will not be insolvent,  will not be rendered insolvent by
      the indebtedness  incurred in connection  herewith,  will not be left with
      unreasonably  small  capital  with  which to  engage  in their  respective
      businesses  and  will  not  have  incurred  debts,   including  Contingent
      Obligations,  beyond their respective  abilities to pay such debts as they
      mature.

            (I) Options and  Warrants.  There  shall be no  outstanding  capital
      stock (or right,  option,  warrant or other  arrangement  to acquire  such
      capital stock) of the Borrower, other than that owned by Holdings.

            (J)   Notes.  There shall have been delivered to the Agent
      for the account of each of the Banks the Term Notes and the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -37-



      Revolving Notes executed by the Borrower in the amount and maturity and as
      otherwise provided herein.

            (K)  Certain  Fees.   All  reasonable   costs,   fees  and  expenses
      (including,  without  limitation,  reasonable  legal  fees  and  expenses)
      payable to  Indosuez  by the  Borrower  pursuant  to the letter  agreement
      between  Holdings and Indosuez  dated August 12, 1996 shall have been paid
      in full and the  Borrower  shall  have paid or have  caused to be paid the
      commitment  and other fees and expenses  (including,  without  limitation,
      reasonable  legal  fees  and  expenses)   contemplated  hereby  and/or  in
      connection with the other Credit Documents.

            (L)  Conditions   Relating  to  Mortgaged  Real  Property  and  Real
      Property.  On or prior to the Closing Date, the Borrower shall have caused
      to be  delivered  to the  Agent,  on behalf of the  Banks,  the  following
      documents and instruments:

                   (i) a Mortgage  encumbering  each  Mortgaged Real Property in
            favor of the  Agent,  as  Collateral  Agent for the  benefit  of the
            Banks,  duly executed and  acknowledged  by the Credit Party that is
            the  owner  of or  holder  of an  interest  in such  Mortgaged  Real
            Property,  and  otherwise  in form for  recording  in the  recording
            office of each political  subdivision where each such Mortgaged Real
            Property is situated,  together with such certificates,  affidavits,
            questionnaires  or returns as shall be required in  connection  with
            the  recording or filing  thereof to create a lien under  applicable
            law,  and  such  UCC-1   financing   statements  and  other  similar
            statements as are contemplated by the counsel opinions  described in
            Section 4.01(C)(ii) in respect of such Mortgage,  all of which shall
            be in form and substance  reasonably  satisfactory to the Agent, and
            any other  instruments  necessary to grant a mortgage lien under the
            laws of any  applicable  jurisdiction,  which Mortgage and financing
            statements  and other  instruments  shall be  effective  to create a
            first priority Lien on such  Mortgaged  Real Property  subject to no
            Liens other than Prior Liens;

                  (ii)  with  respect  to each  Mortgaged  Real  Property,  such
            consents,  approvals,  amendments,  supplements,  estoppels,  tenant
            subordination  agreements  or  other  instruments  as  necessary  or
            required to consummate the  transactions  contemplated  hereby or as
            shall  reasonably be deemed  necessary by the Agent in order for the
            owner or holder of the fee or leasehold  interest  constituting such
            Mortgaged Real Property to grant the Lien

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -38-



            contemplated by the Mortgage with respect to such
            Mortgaged Real Property;

                 (iii) with respect to each Mortgage, a policy (or commitment to
            issue a  policy)  of title  insurance  insuring  (or  committing  to
            insure) the Lien of such Mortgage as a valid first  mortgage Lien on
            the real property  described therein in an amount not less than 115%
            of the fair market value thereof as determined by appraisal reports,
            which  policies  (or  commitment)  shall  (a) be issued by the Title
            Company, (b) include such reinsurance  arrangements (with provisions
            for direct  access) as shall be reasonably  acceptable to the Agent,
            (c) contain a "tie-in" or "cluster"  endorsement  (if applicable and
            if available  under  applicable  law) (i.e.,  policies  which insure
            against  losses  regardless  of location or  allocated  value of the
            insured  property up to a stated maximum  coverage  amount) and have
            been  supplemented by such  endorsements (or where such endorsements
            are not available, opinions of special counsel reasonably acceptable
            to the Agent to the extent that such  opinions  can be obtained at a
            cost  which is  reasonable  with  respect  to the  value of the Real
            Property subject to such Mortgage) as shall be reasonably  requested
            by the Agent (including, without limitation, endorsements on matters
            relating  to  usury,   first  loss,  last  dollar,   contiguity  (as
            applicable), revolving credit, doing business, zoning, variable rate
            and   so-called    comprehensive   coverage   over   covenants   and
            restrictions) and (d) contain only such exceptions to title as shall
            be Prior Liens or are  otherwise  agreed to by the Agent on or prior
            to the Closing Date with respect to such Mortgaged Real Property;

                  (iv)  with respect to each Mortgaged Real Property,
            a Survey;

                   (v) with respect to each Mortgaged Real Property, policies or
            certificates  of  insurance  as  required by the  Mortgage  relating
            thereto,  which  policies  or  certificates  shall  comply  with the
            insurance requirements contained in such Mortgage;

                  (vi)  with  respect  to each  Mortgaged  Real  Property,  UCC,
            judgment and tax lien searches confirming that the personal property
            comprising a part of such  Mortgaged  Real Property is subject to no
            Liens other than Prior Liens;

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -39-




                 (vii)  with  respect  to each  Mortgaged  Real  Property,  such
            affidavits, certificates, information (including financial data) and
            instruments of indemnification  (including,  without  limitation,  a
            so-called "gap"  indemnification) as shall be required to induce the
            Title  Company to issue the policy or policies (or  commitment)  and
            endorsements contemplated in subparagraph (iii) above;

                (viii) evidence reasonably acceptable to the Agent of payment by
            the Borrower of all title insurance premiums, search and examination
            charges, survey costs and related charges, mortgage recording taxes,
            fees, charges,  costs and expenses required for the recording of the
            Mortgages and issuance of the title insurance  policies  referred to
            in subparagraph (iii) above;

                  (ix) with  respect to each Real  Property  or  Mortgaged  Real
            Property,  copies of all  Leases in which a Credit  Party  holds the
            landlord's,  tenant's  or other  interest  and any other  agreements
            relating to possessory  interests in such Real Property or Mortgaged
            Real  Property.  To  the  extent  any of the  foregoing  affect  any
            Mortgaged Real Property,  such Leases shall be reasonably acceptable
            to the Agent; and

                   (x)  with  respect  to  each  Mortgaged  Real  Property,   an
            Officers'  Certificate or other evidence reasonably  satisfactory to
            the Agent that as of the date thereof, to the best of such officer's
            knowledge,  there (a) have been  issued and are in effect  valid and
            proper  certificates of occupancy or other local equivalents for the
            use then being made of such  Mortgaged  Real  Property to the extent
            currently  required  by  law  in  the  jurisdiction  in  which  such
            Mortgaged  Real  Property  is  located  which  certificates  if  not
            obtained or maintained would have a material adverse effect upon the
            value  of  the  Mortgaged  Real  Property  and  that  there  is  not
            outstanding  any citation,  violation or similar  notice  indicating
            that such Mortgaged Real Property contains  conditions which are not
            in  compliance  in  all  material   respects  with  local  codes  or
            ordinances  relating  to  building  or  fire  safety  or  structural
            soundness,  (b) has not  occurred any Taking or  Destruction  of any
            Mortgaged  Real  Property  that has not been  repaired  or  restored
            except  as set  forth  therein  and (c) is no  litigation  regarding
            boundary  lines,  encroachment  or possession of any Mortgaged  Real
            Property and no state of facts known to any Credit Party which

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -40-



            could give rise to any such claim, except as set forth
            therein.

            (M) Financial Statements,  etc. Prior to the Closing Date, the Agent
      shall have received audited financial statements including a balance sheet
      and  statements  of income  and  shareholders'  equity  and cash  flows of
      Holdings and its consolidated Subsidiaries for the fiscal year ended March
      31, 1996,  which audited  financial  statements  shall reflect no material
      changes from the unaudited financial  statements  previously  delivered to
      the  Agent.  The  Borrower  shall  have  delivered  to the Agent pro forma
      financial  statements for the Borrower and its  consolidated  Subsidiaries
      for the fiscal  year  ended  June 30,  1996,  after  giving  effect to the
      Refinancing,  and interim  financial  statements  for the Borrower and its
      consolidated Subsidiaries through August 31, 1996. The Borrower shall have
      delivered to the Agent financial  projections with respect to the Borrower
      for the  fiscal  years  ending  March 31,  1997  through  March 31,  2002,
      inclusive,   accompanied   by  a  statement  by  the  Borrower  that  such
      projections  are  based  on  estimates  and  assumptions  believed  by the
      Borrower in good faith to be reasonable in light of the  conditions  which
      existed  at the  time of  their  preparation  as to the  future  financial
      performance  of  the  Borrower,  reasonably  satisfactory  to  the  Agent;
      provided,  however, that in addition to the financial projections referred
      to above,  the Borrower shall also have  delivered to the Agent  financial
      projections  on a monthly  basis for each of the monthly  periods from the
      Closing Date through March 31, 1997.  Since the time of the preparation of
      such financial projections, no fact or facts have come to the attention of
      the Borrower to cause the  Borrower to believe  that any of the  estimates
      and assumptions on which such projections are based are not reasonable.

            (N)  Insurance.  Set forth on Annex VI is a summary of all insurance
      policies  maintained  by  the  Borrower  and  its  Subsidiaries,  and  the
      insurance  coverage provided for the Borrower and its Subsidiaries by such
      insurance policies shall be reasonably satisfactory to the Agent.

            (O)  Performance  Bonds.  On the  Closing  Date,  the Agent shall be
      reasonably  satisfied  that  the  Borrower  will be able  to  service  and
      maintain any performance bonds that may be required in the ordinary course
      of business on reasonable terms and conditions.

            (P)   Indebtedness, etc.  On or prior to the Closing Date
      and except as set forth on Annex X, the Borrower and its

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -41-



      Subsidiaries  shall have  received  all  necessary  consents or waivers or
      amended,  supplemented  or otherwise  modified,  repaid or defeased  their
      outstanding  Indebtedness in a manner and on terms reasonably satisfactory
      to the Agent such that there exists no default or  potential  default with
      respect to such Indebtedness or under any note,  evidence of indebtedness,
      mortgage,  deed of trust, security document or other agreement relating to
      such Indebtedness and such indentures,  notes,  evidences of indebtedness,
      mortgages,   deeds  of  trust  or  other   agreements   relating  to  such
      Indebtedness  shall not,  other than as set forth on Annex XI, contain any
      restriction on the ability of the Borrower or any of its  Subsidiaries  to
      enter into the Mortgages, Pledge Agreements or the granting of any Lien in
      favor of the Banks in  connection  therewith,  or  contain  any  financial
      covenants,  agreements  or tests  applicable to the Borrower or any of its
      Subsidiaries.  Annex VII sets  forth a true list of all Liens  other  than
      Permitted   Encumbrances   on  the   property  of  the  Borrower  and  its
      Subsidiaries as of the Closing Date.

            (Q)  Management  Agreement and  Employment  Agreements.  Each of the
      Management  Agreement and the Employment  Agreements  shall remain in full
      force and effect and shall be reasonably satisfactory to the Agent.

            (R) Security  Documents and Guarantees.  The Security  Documents and
      Guarantees  shall have been duly executed and delivered by the  respective
      parties  thereto  and there  shall  have been  delivered  to the Agent (i)
      certificates  representing all Pledged Securities,  together with executed
      and undated stock powers and/or assignments in blank, (ii) evidence of the
      filing and due execution of  appropriate  financing  statements  under the
      provisions  of the  UCC,  applicable  domestic  or  local  laws,  rules or
      regulations  in each of the  offices  where such  filing is  necessary  or
      appropriate to grant to the Agent a perfected  first priority Lien in such
      Collateral  superior  to and prior to the rights of all third  persons and
      subject to no other Liens other than Prior Liens,  (iii) certified  copies
      of Requests for Information (Form UCC-11 or the equivalent), or equivalent
      reports or lien search reports listing all effective financing  statements
      which name  Holdings,  the  Borrower  or any  domestic  Subsidiary  of the
      Borrower as debtor and which are filed in those jurisdictions in which any
      of the Collateral is located and the jurisdictions in which Holdings', the
      Borrower's  and each such  Subsidiary's  principal  place of  business  is
      located,  none of which,  except as set forth in the  applicable  Security
      Documents,  shall encumber the Collateral covered or intended or purported
      to be covered by

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -42-



      the Security Documents, and (iv) evidence that arrangements have been made
      for the prompt  completion of all  recordings and filings of each Security
      Document  related to Mortgaged  Real Property and delivery to the Agent of
      such other  security and other  documents  as may be necessary  or, in the
      reasonable  opinion of Agent,  desirable to perfect the Liens created,  or
      purported or intended to be created, by the Security Documents.

            (S)  Consents,  Etc.  All  material  governmental  and  third  party
      approvals  and  consents  (including,  without  limitation,  all  material
      approvals  and  consents  required in  connection  with any  environmental
      statutes,   rules  or  regulations),   if  any,  in  connection  with  the
      transactions  contemplated by the Credit Documents and otherwise  referred
      to herein or therein to be  completed  on or before the Closing Date shall
      have been  obtained  and  remain in  effect,  and all  applicable  waiting
      periods shall have expired without any action being taken by any competent
      authority  which  restrains,  prevents or imposes,  in the judgment of the
      Agent  or the  Required  Banks,  materially  adverse  conditions  upon the
      consummation  of the  Refinancing.  There  shall  not  exist  any  adverse
      judgment,  order,  injunction  or other  restraint  issued  or filed  with
      respect to the making of the Loans  hereunder or the  consummation  of the
      Refinancing.

            (T) Borrowing Base Certificate. Prior to the initial Revolving Loan,
      the Agent and the Banks shall have received and the Agent and the Required
      Banks shall be satisfied  (both as to form and substance) with a pro forma
      Borrowing Base  Certificate  which shall be prepared as of a date prior to
      the Closing Date and which shall  indicate that the Borrowing  Base on the
      Closing  Date will  exceed  the  initial  Borrowings  under the  Revolving
      Portion by not less than $5,000,000.

            (U) Leases.  All Capital Leases and Operating Leases of the Borrower
      outstanding  immediately prior to the Refinancing shall remain outstanding
      after  giving  effect to the  Refinancing,  on terms  satisfactory  to the
      Agent.

            The  acceptance  of the proceeds of each  Borrowing of Initial Loans
shall constitute a  representation  and warranty by each Credit Party to each of
the Banks that all of the applicable  conditions  specified  above (in each case
disregarding any reference therein that such condition be deemed satisfactory by
the Agent  and/or the Required  Banks) have been  satisfied or waived as of that
time. All of the  certificates,  legal  opinions and other  documents and papers
referred to in this Section 4.01, unless otherwise specified, shall be delivered
to the Agent at the Agent's Office

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -43-



(or such other  location  as may be  specified  by the Agent) for the account of
each of the Banks and in sufficient counterparts for each of the Banks and shall
be satisfactory in form and substance to the Agent.

            4.02 Conditions  Precedent to All Loans. The obligation of the Banks
to make all Loans (which term shall not include a conversion or  continuation of
a Loan) is subject,  at the time of each such Loan, to the  satisfaction  of the
following conditions:

            (A)  Effectiveness.  This Agreement  shall have become  effective as
      provided in Section 11.10.

            (B) No Default;  Representations and Warranties.  At the time of the
      making of each Loan and also after giving  effect  thereto (i) there shall
      exist no  Default  or Event of Default  and (ii) all  representations  and
      warranties  made by any  Credit  Party  contained  herein  or in the other
      Credit  Documents  in effect at such time shall be true and correct in all
      material respects with the same effect as though such  representations and
      warranties had been made on and as of the date of the making of such Loan,
      unless such  representation  and warranty  expressly  indicates that it is
      being made as of any other  specific  date in which case on and as of such
      other date.

            (C)  Documentation  and  Opinions of  Counsel.  The Agent shall have
      received such documentation and opinion or opinions,  addressed to each of
      the  Banks,  from  counsel  to  each  Credit  Party  as may be  reasonably
      required, with reasonable notice under the circumstances, by, and shall be
      reasonably satisfactory to the Agent, from (i) such counsel to each Credit
      Party as  reasonably  requested  by the Agent and (ii)  appropriate  local
      counsel,  which opinions shall cover such matters as reasonably  requested
      by, and be in form and substance reasonably satisfactory to, the Agent.

            (D) Margin Rules.  On the date of each  Borrowing of Loans,  neither
      the making of any Loan nor the use of the  proceeds  thereof  will violate
      the provisions of Regulation G, T, U or X of the Board of Governors of the
      Federal Reserve System.

            (E) Borrowing  Base  Certificate.  The Agent and the Required  Banks
      shall have received and shall be reasonably satisfied (both as to form and
      substance)  with the  Borrowing  Base  Certificate  last  delivered to the
      Banks.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -44-



            The  acceptance  of the  proceeds of each  Borrowing  of Loans shall
constitute  a  representation  and  warranty by each Credit Party to each of the
Banks that all of the applicable  conditions  specified in Section 4.02 (in each
case   disregarding  any  reference   therein  that  such  condition  be  deemed
satisfactory  by the Agent  and/or the  Required  Banks) have been  satisfied or
waived.

            All of the  certificates,  legal  opinions and other  documents  and
papers referred to in this Section 4.02,  unless otherwise  specified,  shall be
delivered to the Agent at the Agent's  Office (or such other  location as may be
specified  by the Agent) for the account of each of the Banks and in  sufficient
counterparts  for  each of the  Banks  and  shall  be  satisfactory  in form and
substance to the Agent.

            4.03 Conditions Precedent to All Letters of Credit. The right of the
Borrower  to obtain  the  issuance  of any  Letter of Credit  that the  relevant
Issuing Bank determines to issue in its sole discretion  hereunder is subject to
prior or concurrent satisfaction of all of the following conditions:

            (A) Required Documentation. On or prior to the date of issuance of a
      Letter of Credit,  the Agent shall have received,  in accordance  with the
      provisions of Section 1.13(B), a request for issuance with respect to such
      Letter of Credit (the  furnishing by the Borrower of each such request for
      issuance  shall be deemed to constitute a  representation  and warranty of
      the Borrower to the effect that the  conditions  set forth in Section 4.02
      (in each case  disregarding  any reference  therein that such condition be
      deemed  satisfactory by the Agent and/or the Required Banks) are satisfied
      as of the date of delivery and will be  satisfied on the relevant  date of
      issuance),  all other information  specified in Section 1.13(B),  and such
      other  documents as the Issuing Bank may reasonably  require in connection
      with the issuance of such Letter of Credit.

            (B)  Conditions.  On the date of  issuance  of each  such  Letter of
      Credit,  all  conditions  precedent  described  in  Section  4.02 shall be
      satisfied  to the same  extent as though the  issuance  of such  Letter of
      Credit were the making of a Revolving Loan.

            SECTION 5. Representations,  Warranties and Agreements.  In order to
induce the Banks to enter into this Agreement and to make the Loans provided for
herein,  each of Holdings and the Borrower  makes the following  representations
and warranties to, and  agreements  with, the Banks,  all of which shall survive
the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -45-



execution  and delivery of this  Agreement and the making of the Loans (with the
execution and delivery of this Agreement and the making of each Loan  thereafter
being  deemed to  constitute  a  representation  and  warranty  that the matters
specified in this Section 5 are true and correct in all material  respects  both
before and after giving effect to the Refinancing  and the related  transactions
and as of the date of each such Loan unless  such  representation  and  warranty
expressly indicates that it is being made as of any specific date):

            5.01 Corporate Status. Each Credit Party (i) is a duly organized and
validly existing corporation in good standing under the laws of the jurisdiction
of its organization;  (ii) has the corporate or other  organizational  power and
authority  and,  other than as set forth on Annex X, has obtained all  requisite
governmental licenses, authorizations, consents and approvals to own and operate
its  property and assets and to transact the business in which it is engaged and
presently proposes to engage including,  without limitation, those in compliance
with or required by the  Environmental  Laws  except as  described  in Annex XII
hereto and except for those governmental licenses,  authorizations,  consents or
approvals  the  failure of which to be so obtained  would not have a  Materially
Adverse  Effect and (iii) is duly qualified and is authorized to do business and
is in good standing in all jurisdictions where it is required to be so qualified
and where the failure to be so qualified would have a Materially Adverse Effect.

            5.02 Corporate Power and Authority;  Business. (a) Each Credit Party
has the  corporate  power and  authority  to execute,  deliver and carry out the
terms and  provisions  of the  Credit  Documents  to which it is a party and has
taken all necessary  corporate  action to authorize the execution,  delivery and
performance  of the Credit  Documents to which it is a party.  Each Credit Party
has duly executed and delivered each Credit  Document to which it is a party and
each such Credit Document constitutes the legal, valid and binding obligation of
such Person enforceable  against such Person in accordance with its terms except
as may be limited  by  bankruptcy,  insolvency,  reorganization,  moratorium  or
similar laws relating to or affecting  creditors' rights generally and except as
such  enforceability  may be limited by the application of general principles of
equity (regardless of whether such  enforceability is considered in a proceeding
in equity or at law).

            (b)   Holdings was incorporated on May 10, 1995 and the
Borrower was incorporated as Aminco, Inc. in Delaware on March 20,
1990.  Prior to the Closing Date, Holdings will not have engaged in
any business or incurred any liabilities except for activities,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -46-



expenses and liabilities incident to its organization and to the
carrying out of the transactions contemplated by the Credit
Documents and the Holdings IPO.

            5.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Credit  Documents to which it is a party nor  compliance
with the terms and provisions thereof,  nor the consummation of the transactions
contemplated  therein (i) will  contravene any applicable  provision of any law,
statute,  rule,  regulation,  order, writ,  injunction or decree of any court or
governmental  instrumentality,  (ii) will  conflict or be  inconsistent  with or
result in any breach of any of the terms,  covenants,  conditions  or provisions
of, or  constitute  a default  under,  or (other than  pursuant to the  Security
Documents)  result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the  property  or assets of any Credit  Party or
its  Subsidiaries  pursuant  to the terms of any  indenture,  mortgage,  deed of
trust, material agreement or other material instrument to which any Credit Party
or its  Subsidiaries  is a party or by which it or any of its property or assets
is bound or to which it may be subject or (iii) will  violate any  provision  of
the charter or by-laws of any Credit Party or its Subsidiaries,  except, in each
such case, where such contravention,  conflict, inconsistency,  breach, default,
creation, imposition, obligation or violation does not have a Materially Adverse
Effect.  The  consummation  of the Refinancing and the terms of the financing in
connection  therewith will not conflict or be inconsistent with or result in any
breach  of any  of  the  terms,  covenants,  conditions  or  provisions  of,  or
constitute a default  under,  or result in the creation or imposition of (or the
obligation  to create or  impose)  any Lien  (except  pursuant  to the  Security
Documents) upon any of the property or assets of Holdings or the Borrower or any
of their  respective  Subsidiaries  pursuant  to the  terms of,  any  indenture,
mortgage,  deed of trust,  material instrument or material agreement relating to
Indebtedness  for borrowed  money or the  equivalent  thereof or other  material
agreement  to  which  Holdings  or  the  Borrower  or any  of  their  respective
Subsidiaries is a party or by which it or any of its property or assets is bound
or to which it may be subject,  except,  in each such case, where such conflict,
inconsistency, breach, default, creation, imposition or obligation does not have
a Materially Adverse Effect.

            5.04  Litigation.  Except  as set  forth on Annex  IX,  there are no
actions,  judgments,  suits or  proceedings  pending  or,  to  Holdings'  or the
Borrower's  knowledge,  threatened in any court of competent  jurisdiction  with
respect to any Credit Party or its Subsidiaries that are, individually or in the
aggregate, likely to have a Materially Adverse Effect.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -47-




            5.05 Use of  Proceeds.  (a) All the proceeds of all Term Loans to be
made hereunder shall be utilized to provide a portion of the financing  required
to consummate the Refinancing and to pay related fees and expenses.

            (b) Up to $3,000,000 of the proceeds of Revolving  Loans may be used
by the  Borrower  on the  Closing  Date to  provide a portion  of the  financing
required to consummate the  Refinancing and to pay related fees and expenses and
the remaining proceeds of Revolving Loans may be utilized to finance the ongoing
working  capital  requirements  of the  Borrower  and its  Subsidiaries  and for
general corporate purposes.

            (c)  Neither  the making of any Loan  hereunder,  nor the use of the
proceeds  thereof,  will  violate  or be  inconsistent  with the  provisions  of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System.

            5.06  Governmental  Approvals,  etc.  No order,  consent,  approval,
license,  authorization,  or validation of, or filing, recording or registration
with, or exemption  by, any third party or any foreign or domestic  Governmental
Authority   (other   than   those   orders,   consents,   approvals,   licenses,
authorizations  or validations  which, if not obtained or made, would not have a
Materially  Adverse  Effect or which have  previously  been obtained or made and
except  for  filings to  perfect  security  interests  granted  pursuant  to the
Security  Documents) is required to authorize or is required in connection  with
(i) the  execution,  delivery  and  performance  of any Credit  Document  or the
transactions contemplated therein or (ii) the legality, validity, binding effect
or  enforceability  of any  Credit  Document.  At the time of the  making of the
Initial  Loans,  there does not exist any judgment,  order,  injunction or other
restraint issued or filed with respect to the consummation of the Refinancing or
the  making  of  Loans  or  the  performance  by the  Credit  Parties  of  their
obligations under the Credit Documents.

            5.07 Investment Company Act. None of Holdings, the Borrower or their
respective  Subsidiaries  is, or will be after giving effect to the transactions
contemplated  hereby,  an "investment  company" or a company  "controlled" by an
"investment  company," within the meaning of the Investment Company Act of 1940,
as amended.

            5.08  Public Utility Holding Company Act.  None of
Holdings, the Borrower or their respective Subsidiaries is, or will
be after giving effect to the transactions contemplated hereby, a
"holding company," or a "subsidiary company" of a "holding

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -48-



company," or an "affiliate" of a "holding company" or of a "subsidiary  company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

            5.09 True and Complete Disclosure. All factual information (taken as
a whole) heretofore or contemporaneously  furnished by or on behalf of Holdings,
the  Borrower or any of their  Subsidiaries  in writing to any Bank  (including,
without  limitation,  all  information  contained in the Credit  Documents)  for
purposes of or in connection with this Agreement or any transaction contemplated
herein is (or was, on the date of making the Initial Loans),  and all other such
factual  information  (taken as a whole) hereafter  furnished by or on behalf of
any such  Person  in  writing  to any Bank  will be,  true and  accurate  in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information  not  misleading  at such time in light of the  circumstances  under
which such  information  was provided.  The  projections and pro forma financial
information  contained in such  materials are based on good faith  estimates and
assumptions believed by such Persons to be reasonable at the time made. There is
no fact known to any Credit  Party which has a Materially  Adverse  Effect which
has not been  disclosed  herein or in such  other  documents,  certificates  and
written  statements  furnished  to the  Banks  for use in  connection  with  the
transactions contemplated hereby.

            5.10 Holdings IPO;  Repayment of  Subordinated  Debt. At the time of
making the Initial Loans,  the Holdings IPO shall  concurrently  be consummated,
and the  Senior  Subordinated  Notes,  the  Subordinated  Notes  and the  Junior
Subordinated Notes shall have concurrently been purchased and cancelled.

            5.11 Financial Condition; Financial Statements;  Projections. (a) No
Credit Party is entering into the  arrangements  contemplated  hereby and by the
other Credit Documents, or intends to make any transfer or incur any obligations
hereunder or thereunder  with actual intent to hinder,  delay or defraud  either
present or future creditors. On and as of the Closing Date, on a pro forma basis
after giving  effect to the  Refinancing  and to all  Indebtedness  incurred and
Liens  and  Guarantees  created,  or to be  created,  by each  Credit  Party  in
connection  with the  Refinancing,  (w) the Borrower  does not expect that final
judgments  against any Credit Party in actions for money damages with respect to
pending or  threatened  litigation  will be  rendered  at a time when,  or in an
amount such that, such Credit Party will be unable to satisfy any such judgments
promptly  in  accordance  with their  terms  (taking  into  account  the maximum
reasonable amount of such judgments in any such

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -49-



actions  and the  earliest  reasonable  time at which  such  judgments  might be
rendered and the cash available to each Credit Party,  after taking into account
all other  anticipated  uses of the cash of such  Credit  Party  (including  the
payments on or in respect of debts (including  their  Contingent  Obligations));
(x) no Credit Party will have  incurred or intends to, or believes that it will,
incur debts  beyond its ability to pay such debts as such debts  mature  (taking
into  account the timing and amounts of cash to be received by such Credit Party
from any  source,  and  amounts  to be payable on or in respect of debts of such
Credit Party and the amounts  referred to in the preceding clause (w)); (y) each
Credit Party,  after taking into account all other  anticipated uses of the cash
of such Credit Party, anticipates being able to pay all amounts on or in respect
of debts of such Credit Party when such amounts are required to be paid; and (z)
each Credit Party will have sufficient capital with which to conduct its present
and proposed  business and the property of such Credit Party does not constitute
unreasonably  small  capital  with which to  conduct  its  present  or  proposed
business.  For purposes of this Section  5.11,  "debt" means any  liability on a
claim,  and "claim" means a (i) right to payment  whether or not such a right is
reduced to  judgment,  liquidated,  unliquidated,  fixed,  contingent,  matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment,  whether or not such  right to an  equitable  remedy is reduced to
judgment, fixed, contingent,  matured, unmatured,  disputed, undisputed, secured
or  unsecured.  On the date of each  Borrowing  (and after giving  effect to all
Borrowings  as of such  date),  the  representations  set forth in this  Section
5.11(a)  shall be true and correct  with  respect to each  Credit  Party on such
date.

            (b)  The  Borrower  has  heretofore   delivered  to  the  Banks  the
consolidated  audited financial statements including a balance sheet as at March
31, 1996 and statements of income and shareholders' equity and cash flows of the
Borrower and its  consolidated  Subsidiaries for the fiscal year ended March 31,
1996. All the financial  statements  referred to in the preceding  sentence were
prepared in accordance with GAAP consistently applied. Such financial statements
present fairly, in all material respects, the consolidated financial position of
the Borrower and its  consolidated  Subsidiaries for each of the periods covered
thereby. There has also been delivered the pro forma (after giving effect to the
Refinancing)  consolidated  balance  sheet of the Borrower and its  consolidated
Subsidiaries  as at June 30, 1996,  which  presents a good faith estimate of the
consolidated pro forma financial  condition of the Borrower and its consolidated
Subsidiaries  at the date  thereof,  and interim  financial  statements  for the
Borrower and its consolidated Subsidiaries through August 31, 1996. Except as

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -50-



contemplated  hereby,  since March 31,  1996 (on a pro forma basis after  giving
effect to the  Refinancing)  no event or events have occurred that are likely to
have a Materially Adverse Effect.

            (c) There  have  heretofore  been  delivered  to the Banks pro forma
consolidated income projections for the Borrower and its Subsidiaries, pro forma
consolidated balance sheet projections for the Borrower and its Subsidiaries and
pro  forma   consolidated  cash  flow  projections  for  the  Borrower  and  its
Subsidiaries,  all for the fiscal years  ending June 30, 1996 through  March 31,
2002,  inclusive,  as well as such financial  projections on a monthly basis for
each of the monthly  periods from the Closing  Date through  March 31, 1997 (the
"Projected Financial Statements"),  which give effect to the Refinancing and all
Indebtedness  and Liens incurred or created in connection with the  Refinancing.
The Projected Financial  Statements are based on estimates and assumptions which
are  believed  by the  Borrower in good faith to be  reasonable  in light of the
conditions  which  existed  at the time of their  preparation  as to the  future
financial performance of the Borrower.

            (d) As of the  Closing  Date,  except  as  adequately  reflected  or
reserved against in the financial  statements and the notes thereto described in
Section  5.11(b)  or as set forth in  Annexes  IX,  XII and XVI,  there  were no
liabilities  or  obligations  with respect to  Holdings,  the Borrower or any of
their  respective  Subsidiaries  of any  nature  whatsoever  (whether  absolute,
accrued,  contingent  or  otherwise  and  whether  or  not  due)  which,  either
individually or in the aggregate, would be material to Holdings, the Borrower or
any of their respective Subsidiaries,  except as incurred by any Credit Party in
connection with the  Refinancing.  As of the Closing Date, the Borrower knows of
no basis  for the  assertion  against  Holdings,  the  Borrower  or any of their
respective  Subsidiaries of any liability or obligation of any nature whatsoever
that is not  adequately  reflected  in the  financial  statements  described  in
Section 5.11(b) or (c) or otherwise disclosed herein,  except as incurred by any
Credit Party in connection with the Refinancing,  which,  either individually or
in the aggregate,  could reasonably be expected to be material to Holdings,  the
Borrower or any of their respective Subsidiaries.

            5.12  Security  Interests.  At all times after the  execution of the
Security  Documents,  the Security  Documents create, in favor of the Collateral
Agent for the benefit of the Banks, as security for the obligations purported to
be secured thereby,  a valid and enforceable  perfected first priority  security
interest  in and Lien upon all of the  Collateral,  superior to and prior to the
rights  of all  third  persons  and  subject  to no Liens,  except  Prior  Liens
applicable to such Collateral. The mortgagor under each

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -51-



Mortgage has good and  marketable  title to the Mortgaged Real Property free and
clear of all Liens other than Prior Liens and Liens  expressly  permitted by the
applicable Mortgage. The respective pledgor or assignor, as the case may be, has
(or on and after the time it executes the  respective  Security  Document,  will
have)  good and  marketable  title to all items of  Collateral  (other  than the
Mortgaged Real Property) covered by such Security Document free and clear of all
Liens  except  Prior  Liens  and Liens  expressly  permitted  by the  applicable
Security Document. No filings or recordings are required in order to perfect the
security  interests  created under any Security  Document  except for filings or
recordings  required in connection  with any such Security  Document which shall
have been made prior to or  contemporaneously  with the  execution  and delivery
thereof.

            5.13 Tax  Returns  and  Payments.  Except as set forth on Annex XIII
hereto,  each Credit  Party has filed all  material  tax returns  required to be
filed by it and has paid all mater-ial taxes and assessments payable by it which
have  become  due,  other  than  those not yet  delinquent  and except for those
contested in good faith and for which adequate  reserves have been  established.
Except as set forth on Annex XIII  hereto,  each Credit  Party has paid,  or has
provided  adequate  reserves (in  accordance  with GAAP) for the payment of, all
material  federal,  state,  local and foreign income taxes  (including,  without
limitation,  franchise taxes based upon income)  applicable for all prior fiscal
years and for the current fiscal year to the date hereof.  The Borrower knows of
no proposed tax assessment  against the Borrower or any of its Subsidiaries that
could  reasonably be expected to have a Materially  Adverse  Effect which is not
being  actively  contested  in good faith by such Person to the extent  affected
thereby  in good  faith  and by  appropriate  proceedings;  provided  that  such
reserves  or other  appropriate  provisions,  if any,  as shall be  required  in
conformity with GAAP shall have been made or provided therefor.

            5.14 ERISA.  (A) Each Credit Party and its ERISA  Affiliates  are in
compliance  with all  applicable  provisions  of ERISA and the  regulations  and
published interpretations thereunder with respect to all employee benefit plans,
Pension Plans and  Multiemployer  Plans except for any failures to comply which,
individually or in the aggregate, would not have a Materially Adverse Effect.

            (B) No Termination  Event has occurred or is reasonably  expected to
occur with  respect to any  Pension  Plan which  resulted  or would  result in a
liability to any Credit Party or any ERISA Affiliate.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -52-



            (C)  The  sum  of  the  amount  of  unfunded   benefit   liabilities
(determined in accordance with Statement of Financial  Accounting  Standards No.
87)  under all Title IV Plans  (excluding  each  Title IV Plan with an amount of
unfunded benefit liabilities of zero or less) is not more than $2,500,000. As of
the Closing Date, there are no unfunded benefit  liabilities (within the meaning
of Section 4001(a)(18) of ERISA) under any Title IV Plans.

            (D) As of the Closing Date, no Credit Party nor any ERISA  Affiliate
has any  obligation to  contribute  to or any  liability or potential  liability
(including,  but not limited to, actual or potential withdrawal  liability) with
respect to any employee  benefit plan of the type described in Sections 4063 and
4064 of ERISA or in  Section  413(c) of the Code.  Each  Credit  Party and their
ERISA Affiliates have complied in all material respects with the requirements of
ERISA  Section  515 with  respect  to each  Multiemployer  Plan.  The  aggregate
potential  withdrawal  payments,  as determined  in accordance  with Title IV of
ERISA,  of each Credit  Party and their  ERISA  Affiliates  with  respect to all
Multiemployer  Plans does not exceed  $2,500,000.  No Credit Party nor any ERISA
Affiliate has incurred or reasonably  expects to incur any withdrawal  liability
under  Section 4201 et seq. of ERISA to any  Multiemployer  Plan or any employee
benefit  plan of the type  described  in  Sections  4063 and 4064 of ERISA or in
Section 413(c) of the Code.

            (E) No  Credit  Party  nor any  ERISA  Affiliate  has  incurred  any
accumulated  funding  deficiency  (whether  or not waived)  with  respect to any
Pension Plan.

            (F) No  Credit  Party  nor any  ERISA  Affiliate  has or  reasonably
expects to become  subject to a Lien in favor of any Pension Plan under  Section
302(f) or 307 of ERISA or Section 401(a)(29) or 412(n) of the Code.

            (G) Assuming  that no portion of the Loans to be advanced  hereunder
is attributable,  directly or indirectly,  to the assets of any employee benefit
plan, the  execution,  performance  and delivery of the Credit  Documents by any
party thereto will not involve any prohibited  transaction within the meaning of
Section  406 of  ERISA or  Section  4975 of the  Code  for  which  an  exemption
therefrom is not available.

            As  used  in  this  Section  5.14,  the  term  "accumulated  funding
deficiency" has the meaning specified in Section 302 of ERISA and Section 412 of
the Code,  and the term  "employee  benefit  plan" has the meaning  specified in
Section 3(3) of ERISA.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -53-



            5.15  Subsidiaries.  Annex IV hereto  lists each direct and indirect
Subsidiary of Holdings existing on the Closing Date.

            5.16  Patents,  etc.  Each Credit Party owns or  possesses  adequate
licenses or other rights to use all patents,  patent  applications,  trademarks,
trademark applications,  servicemarks,  servicemark  applications,  trade names,
copyrights,  trade  secrets  and  know  how  (collectively,   the  "Intellectual
Property"),  that are necessary for the operation of their respective businesses
as presently conducted and as proposed to be conducted.  No claim is pending or,
to the best of the  Borrower's  knowledge,  threatened  to the  effect  that the
Borrower or any of its  Subsidiaries  infringes upon the asserted  rights of any
other person under any Intellectual  Property, and to the best of the Borrower's
knowledge  there is no basis  for any such  claim  (whether  or not  pending  or
threatened),  in each case where such claim could reasonably be expected to have
a  Materially  Adverse  Effect.  No  claim  is  pending  or,  to the best of the
Borrower's  knowledge,  threatened  to the  effect  that any  such  Intellectual
Property owned or licensed by the Borrower or any of its  Subsidiaries  or which
the  Borrower  or any of its  Subsidiaries  otherwise  has the  right  to use is
invalid or unenforceable by the Borrower or such Subsidiary, and, to the best of
the Borrower's  knowledge,  there is no basis for any such claim (whether or not
pending  or  threatened),  in each case where such  claim  could  reasonably  be
expected to have a Materially Adverse Effect.

            5.17  Compliance  with Laws,  etc.  Except as set forth in Annex XVI
hereto,  each Credit Party is in material  compliance with all material laws and
regulations,  including  without  limitation  those relating to equal employment
opportunity  and employee safety but excluding  Environmental  Laws (as to which
Section 5.22 is applicable), in all jurisdictions in which it is presently doing
business,  and each Credit Party will comply and cause each of its  Subsidiaries
to comply with all such laws and regulations  which may be imposed in the future
in  jurisdictions  in which it or such  Subsidiary may then be doing business in
each such case other than those the  non-compliance  with which would not have a
Materially Adverse Effect.

            5.18 Properties. The Borrower and each of its Subsidiaries have good
and  marketable  title  to and  beneficial  ownership  of all  their  respective
properties  owned  by them,  including  after  the  Closing  Date  all  property
reflected in the most recent  balance sheet  referred to in Section  5.11(b) and
except as sold or otherwise  disposed of since the date of such balance sheet in
the ordinary course of business,  free and clear of all Liens,  other than Prior
Liens and Permitted Encumbrances.  The Borrower and each Subsidiary thereof hold
all material licenses,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -54-



certificates of occupancy or operation and similar  certificates  and clearances
of municipal  and other  authorities  necessary to own and operate the Mortgaged
Real  Property  in the manner and for the  purposes  currently  operated by such
party which if not obtained or maintained  would have a material  adverse effect
upon the value of the Mortgaged Real Property.  There are no actual  defaults or
defaults  alleged  in  writing  or,  to the  best  knowledge  of  the  Borrower,
threatened  defaults,  in each case of a  material  nature  with  respect to any
leases of real property under which the Borrower or any of its  Subsidiaries  is
lessor or lessee.

            5.19  Securities.  On the  Closing  Date,  the  common  stock of the
Borrower and of each  Subsidiary  whose stock is being pledged as of the Closing
Date will be duly  authorized,  issued  and  delivered  and will be fully  paid,
nonassessable  and free of preemptive  rights.  There are not, as of the Closing
Date and  thereafter,  any existing  options,  warrants,  calls,  subscriptions,
convertible  or  exchangeable  securities,  rights,  agreements,  commitments or
arrangements  for any person to acquire any capital stock of the Borrower or any
other securities  convertible into,  exchangeable for or evidencing the right to
subscribe for any such capital stock.

            5.20 Collective Bargaining  Agreements.  Set forth on Annex V hereto
is a list and  description  (including  dates of  termination) of all collective
bargaining or similar  agreements  between or applicable to the Borrower and its
Subsidiaries  as of the date hereof and any union,  labor  organization or other
bargaining   agent  in  respect  of  the  employees  of  the  Borrower  and  its
Subsidiaries on the date indicated in Annex V hereto.

            5.21  Indebtedness  Outstanding.  Set forth on Annex III hereto is a
complete list and description of all Indebtedness of Holdings,  the Borrower and
their Subsidiaries  (other than the Loans) that will be outstanding  immediately
after the Closing Date and set forth on Annex III hereto is a complete  list and
description of all Indebtedness of Holdings, the Borrower and their Subsidiaries
that will be repaid,  defeased,  transferred or otherwise terminated on or prior
to the Closing Date.

            5.22  Environmental Matters.

            (A) Except as set forth in Annex XII  hereto,  each of the  Borrower
and its  Subsidiaries  and the  properties  and  assets  used in its  businesses
(including the Real  Properties) is in compliance in all material  respects with
all  applicable   Environmental   Laws,  which  compliance   includes,   without
limitation, the possession of all material licenses, permits,  registrations and
other governmental

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -55-



authorizations  (collectively,  "Environmental  Authorizations")  required under
applicable  Environmental Laws, and compliance in all material respects with the
terms and conditions  thereof,  and there are no circumstances of a nature which
may materially  prevent or interfere with such compliance in the future.  Except
as  set  forth  in  Annex  XII  hereto,  neither  the  Borrower  nor  any of its
Subsidiaries has been notified by any  Governmental  Authority or, has any basis
to  believe,  that  any  such  Environmental  Authorizations  will be  modified,
suspended  or  revoked  or cannot be  renewed  or  otherwise  maintained  in the
ordinary  course of  business.  Except as set forth in Annex XII hereto,  in the
last five years,  neither the Borrower nor any of its  Subsidiaries has received
any  communication,  whether  from  a  Governmental  Authority,  citizen  group,
employee or otherwise, that alleges that the Borrower or any of its Subsidiaries
or  any of  the  properties  or  assets  used  in  their  respective  businesses
(including the Real Properties) is not in compliance with Environmental Laws.

            (B)  Except  as  set  forth  in  Annex  XII  hereto,   there  is  no
Environmental  Notice  that (i) is  pending  or,  to the best  knowledge  of the
Borrower or any of its Subsidiaries,  threatened  against the Borrower or any of
its Subsidiaries or (ii) is pending or, to the best knowledge of the Borrower or
any of its Subsidiaries,  threatened against any Person whose liability for such
Environmental Notice may have been retained or assumed by or could reasonably be
imputed  or  attributed  by  law  or  contract  to  the  Borrower  or any of its
Subsidiaries.

            (C) Except as set forth in Annex XII hereto,  to the best  knowledge
of the  Borrower  and its  Subsidiaries,  there are no past or present  actions,
activities, circumstances, conditions, events or incidents arising out of, based
upon,  resulting  from or relating  to the  operation,  ownership  or use of any
properties  or assets  (including  the Real  Properties)  currently  or formerly
owned,  operated,  leased or used by the Borrower or any of its Subsidiaries (or
any predecessor in interest of any of them), including,  without limitation, the
emission,  discharge, disposal or other release of any Hazardous Materials in or
into the  Environment,  that (i) could  reasonably  be expected to result in the
incurrence of costs in excess of $50,000, individually, under Environmental Laws
or (ii) could  reasonably  be  expected  to form the basis of any  Environmental
Notice  against or with respect to the Borrower or any of its  Subsidiaries,  or
against any person or entity whose  liability for any  Environmental  Notice may
have been  retained  or assumed by or could be imputed or  attributed  by law or
contract to the Borrower or any of its Subsidiaries.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -56-



            (D)  Except  as set forth in Annex XII  hereto,  without  in any way
limiting  the  generality  of the  foregoing,  (i)  there  are,  and to the best
knowledge  of the  Borrower  and its  Subsidiaries,  have been,  no  underground
storage tanks,  or related piping,  located on, at or under property  (including
the Real Properties) owned,  operated,  leased or used by the Borrower or any of
its  Subsidiaries  (or any  predecessor in interest of any of them),  (ii) there
are, and, to the best knowledge of the Borrower and its Subsidiaries,  have been
no  polychlorinated  biphenyls  used or  stored  by the  Borrower  or any of its
Subsidiaries,  located on, at or under property  (including the Real Properties)
owned,  operated,  leased or used by the  Borrower  or any of its  Subsidiaries,
(iii)  there are and have been no  properties  (including  the Real  Properties)
currently or formerly owned, operated,  managed,  leased or used by the Borrower
or any of its  Subsidiaries  (or any  predecessor in interest of any of them) at
which Hazardous Materials generated,  used, owned, managed, stored or controlled
by the Borrower or any of its  Subsidiaries  (or any  predecessor in interest of
any  of  them)  may  have  been  disposed  of or  otherwise  released  into  the
Environment  except  such  disposals  or other  releases  which were both (a) in
compliance with  Environmental  Laws and  Environmental  Authorizations  and (b)
could  not  result  in  costs  in  excess  of   $50,000,   individually,   under
Environmental Laws and (iv) there is no friable asbestos contained in or forming
part of any  building,  building  component,  structure  or office  space owned,
operated, leased or used by the Borrower or any of its Subsidiaries.

            (E) No Lien has been recorded under  Environmental Laws with respect
to any properties,  assets or facilities  (including the Real Properties) owned,
operated, managed, leased or used by the Borrower or any of its Subsidiaries.

            (F)  Prior  to the  Closing  Date,  the  Borrower  and  each  of its
Subsidiaries  shall have made all  notifications,  registrations  and filings in
accordance  with  all  applicable  State  and  Local  Real  Property  Disclosure
Requirements,  including, without limitation, the use of forms provided by state
or local agencies,  where such forms exist, whether to the Agent or to, or with,
the state or local agency, provided, that where such notification,  registration
or  filing  was made  to,  or with,  a state  or  local  agency,  a copy of such
notification, registration or filing shall be provided to the Agent prior to the
Closing Date.

            5.23  Environmental Investigations.  All material
environmental investigations, studies, audits, assessments or
reviews conducted of which the Borrower is in possession in
relation to the current or prior business of the Borrower or any
Subsidiary or any Real Property or facility now or previously

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -57-



owned,  operated,  leased,  used or  controlled  by the  Borrower  or any of its
Subsidiaries, including, without limitation those relating to compliance with or
liability under any Environmental  Law, have been delivered to the Agent through
its attorneys, Cahill Gordon & Reindel.

            5.24 Fine Products Company.  As of the date of this Agreement and as
of the  Closing  Date,  Fine  Products  Company,  a Georgia  corporation  ("Fine
Products"),  has capital of $113,000  and has no other assets or, to the best of
the  Borrower's  knowledge,  liabilities  of any kind (other than its rights and
obligations  under the Purchase  Agreement  dated as of February 1, 1994 between
Fine  Products,  Aminco  Delaware and Gilliam Candy Co.,  Inc.,  and certain tax
attributes).  There are no  actions,  claims,  judgments,  suits or  proceedings
pending or, to the  Borrower's  knowledge,  threatened in any court of competent
jurisdiction  with respect to Fine Products and the Borrower is not aware of any
facts or circumstances  which would provide the basis for the assertion  against
Fine Products of any such actions, claims, suits or proceedings.

            SECTION 6. Affirmative Covenants.  The Borrower covenants and agrees
that on the Closing  Date and  thereafter  for so long as this  Agreement  is in
effect and until the  Commitments  have  terminated  and the Loans together with
interest,  fees and all other  Obligations  incurred  hereunder are paid in full
(except as  otherwise  agreed or  consented  to or waived,  in  writing,  by the
Required Banks):

            6.01  Information Covenants.  The Borrower will furnish
or cause to be furnished to the Agent, who will distribute copies
to each Bank:

            (a) As soon as  available  and in any event within 90 days after the
      close of each fiscal year of the Borrower,  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, of shareholders' equity and
      of cash flows for such fiscal year, setting forth comparative consolidated
      figures for the  preceding  fiscal year and a report on such  consolidated
      balance sheets and financial  statements by independent  certified  public
      accountants  of recognized  national  standing,  which report shall not be
      qualified as to the scope of audit or as to the status of the Borrower and
      its Subsidiaries as a going concern and shall state that such consolidated
      financial  statements  present  fairly,  in  all  material  respects,  the
      consolidated financial position of the Borrower and its Subsidiaries as at
      the dates

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -58-



      indicated and the results of their operations and their cash flows for the
      periods  indicated in conformity  with GAAP applied on a basis  consistent
      with prior  years  (except  for such  changes  with which the  independent
      certified  public   accountants   concur)  and  the  examination  by  such
      accountants was conducted in accordance with generally  accepted  auditing
      standards.

            (b) As soon as  available  and in any event within 45 days after the
      close of each of the first  three  quarterly  accounting  periods  in each
      fiscal  year  of the  Borrower,  the  consolidated  balance  sheet  of the
      Borrower and its  Subsidiaries as at the end of such quarterly  accounting
      period and the related consolidated statements of income, of shareholders'
      equity and of cash flows for such quarterly  accounting period and for the
      elapsed  portion  of the  fiscal  year  ended  with  the  last day of such
      quarterly  accounting  period,  setting forth in comparative form the same
      information for the corresponding periods of the prior fiscal year.

            (c) As soon as practicable and in any event within 30 days after the
      end of the  month  of  October  1996 and each  month  thereafter,  (i) the
      consolidated  balance sheet of the Borrower and its Subsidiaries as at the
      end of such period and (ii) the related consolidated  statements of income
      and cash flows of the Borrower  each in the form  customarily  prepared by
      management, in each case for such fiscal month and for the period from the
      beginning of the then current fiscal year to the end of such fiscal month,
      setting  forth  in  comparative   form  the  same   information   for  the
      corresponding  periods of the prior fiscal year (including a comparison of
      such  monthly  financial  results  against  the  budgets  required  to  be
      submitted  pursuant  to  subsection  (e)  hereof,  together  with a  brief
      narrative  discussion and analysis  prepared by management  describing the
      Borrower's results of operations for such fiscal month.

            (d)  Together  with each  delivery of  financial  statements  of the
      Borrower and its Subsidiaries  pursuant to subsection (a) above, a written
      statement by the independent  public accountants giving the report thereon
      (i) stating  that their  audit  examination  has  included a review of the
      terms of Sections  7.04,  7.05,  7.07 (as to the  Borrower  only) and 7.09
      through 7.11  (inclusive)  of this  Agreement as they relate to accounting
      matters but without having  conducted any special  auditing  procedures in
      connection therewith, (ii) stating whether, in connection with their audit
      examination,  any condition or event which  constitutes a Default or Event
      of

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -59-



      Default has come to their attention,  and if such a condition or event has
      come to their  attention,  specifying  the nature and period of  existence
      thereof;  provided that such accountants  shall not be liable by reason of
      any failure to obtain  knowledge  of any such  Default or Event of Default
      that would not be disclosed in the course of their audit examination,  and
      (iii)  stating that based on their audit  examination  nothing has come to
      their  attention  which  causes them to believe that as of the end of such
      fiscal year of the Borrower there existed a Default or an Event of Default
      related to the breach of any  covenant set forth in Sections  7.04,  7.05,
      7.07 (as to the Borrower only) and 7.09 through 7.11 (inclusive),  as they
      relate to accounting matters, and if such a condition or event has come to
      their attention, specifying the nature and period of existence thereof and
      what action the  Borrower  has taken,  is taking and proposes to take with
      respect thereto.

            (e) Prior to the commencement of each fiscal year, annual budgets of
      the Borrower and its  Subsidiaries in reasonable  detail for each month of
      such fiscal year, as  customarily  prepared by management for its internal
      use, setting forth, with appropriate discussion, the principal assumptions
      upon  which  such  budgets  are  based.  Together  with each  delivery  of
      financial  statements  pursuant to Section  6.01(c),  a comparison  of the
      current year to date financial  results against the budgets required to be
      submitted pursuant to this subsection (e) shall be presented.

            (f) At the time of the delivery of the financial statements provided
      for in Sections 6.01(a), (b) and (c), a certificate of the chief executive
      officer, chief financial officer,  controller, chief accounting officer or
      other Authorized Officer of the Borrower to the effect that such financial
      statements  are true and  complete in all  material  respects  and that no
      Default or Event of Default exists, or, if any Default or Event of Default
      does exist,  specifying the nature and extent thereof,  which  certificate
      shall,  with respect to the financial  statements  provided for in Section
      6.01(c),  at the time of delivery of such  statements for the months ended
      September 30, December 31, March 31 and June 30,  beginning with the month
      ended December 31, 1996, be  accompanied by a Compliance  Certificate in a
      form  reasonably  acceptable to the Agent  setting forth the  calculations
      required to establish  whether the Borrower and its  Subsidiaries  were in
      compliance  with  the  covenants  in  this  Agreement  (including  without
      limitation the covenants set

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -60-



      forth in Sections  7.09  through 7.11  (inclusive))  as at the end of such
      fiscal period or year, as the case may be.

            (g) Promptly upon receipt thereof, a copy of each annual "management
      letter"  submitted  to the  Borrower  by its  independent  accountants  in
      connection with any annual audit made by them of the books of the Borrower
      or any of its Subsidiaries.

            (h)  Promptly  upon  their   becoming   available,   copies  of  all
      consolidated financial statements,  reports,  notices and proxy statements
      sent or made available  generally by the Borrower or any Subsidiary of the
      Borrower to its  security  holders  (other than to the Borrower or another
      Subsidiary),  of all regular  and  periodic  reports and all  registration
      statements and  prospectuses,  if any, filed by the Borrower or any of its
      Subsidiaries with any securities exchange or with the SEC and of all press
      releases and other statements made available  generally by the Borrower or
      any  Subsidiary  of  the  Borrower  to  the  public  concerning   material
      developments in the business of the Borrower and its Subsidiaries.

            (i) Promptly upon any Senior Officer obtaining  knowledge (w) of any
      condition  or event which  constitutes  a Default or Event of Default,  or
      becoming  aware  that any Bank has given any  written  notice or taken any
      other action with respect to a claimed  Default or Event of Default  under
      this  Agreement,  (x) 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  8.04,  or (y) of a material  adverse  change in the  business,
      operations,  properties, assets, nature of assets, condition (financial or
      otherwise)  or prospects of the Borrower and its  Subsidiaries  taken as a
      whole,  an  Officers'  Certificate  specifying  the  nature  and period of
      existence of any such  condition or event,  or specifying the notice given
      or action  taken by such  holder or Person and the nature of such  claimed
      Default, Event of Default, event or condition, or material adverse change,
      and what action the  Borrower  has taken,  is taking and  proposes to take
      with respect thereto.

            (j) (i) Promptly upon any Senior Officer obtaining  knowledge of the
      institution  of, or  written  threat  of, any  action,  suit,  proceeding,
      governmental  investigation or arbitration  against or affecting Holdings,
      the Borrower or any of its  Subsidiaries or any property of Holdings,  the
      Borrower or any of its Subsidiaries not previously disclosed to the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -61-



      Banks,  which action,  suit,  proceeding,  governmental  investigation  or
      arbitration seeks (or in the case of multiple actions, suits, proceedings,
      governmental  investigations  or  arbitrations  arising  out of  the  same
      general  allegations or circumstances  which seek) recovery from Holdings,
      the  Borrower  or any of its  Subsidiaries  aggregating  $500,000  or more
      (exclusive  of claims  covered by  insurance  policies  of  Holdings,  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),  the  Borrower  shall give notice  thereof to the Banks and
      provide such other  information  as may be reasonably  available to enable
      the Banks and their  counsel to  evaluate  such  matters;  (ii) as soon as
      practicable  and in any event  within 45 days after the end of each fiscal
      quarter,  the Borrower  shall  provide a report to the Banks  covering any
      institution  of, or  written  threat  of, any  action,  suit,  proceeding,
      governmental   investigation  or  arbitration  (not  previously  reported)
      against or affecting Holdings,  the Borrower or any of its Subsidiaries or
      any property of  Holdings,  the  Borrower or any of its  Subsidiaries  not
      previously  disclosed  to  the  Banks,  which  action,  suit,  proceeding,
      governmental  investigation  or  arbitration  seeks  (or  in the  case  of
      multiple  actions,  suits,  proceedings,  governmental  investigations  or
      arbitrations  arising out of the same general allegations or circumstances
      which  seek)  recovery  from   Holdings,   the  Borrower  or  any  of  its
      Subsidiaries  aggregating $250,000 or more (exclusive of claims covered by
      insurance  policies of Holdings,  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 shall  provide such
      other  information  at such time as may be reasonably  available to enable
      the Banks and their counsel to evaluate such matters; (iii) in addition to
      the  requirements  set  forth  in  clauses  (i) and  (ii) of this  Section
      6.01(j),  the Borrower  upon  request  shall  promptly  give notice of the
      status of any action,  suit,  proceeding,  governmental  investigation  or
      arbitration  covered by a report delivered to the Banks pursuant to clause
      (i) or (ii) above to the Banks and provide such other  information  as may
      be  reasonably  available  to it to enable the Banks and their  counsel to
      evaluate such matters and (iv) promptly upon any Senior Officer  obtaining
      knowledge of any material  dispute in respect of or the institution of, or
      written   threat   of,  any   action,   suit,   proceeding,   governmental
      investigation  or arbitration  in respect of any material  contract of the
      Borrower  or any of its  Subsidiaries,  the  Borrower  shall  give  notice
      thereof to the Banks and shall provide such other

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -62-



      information  as may be reasonably  available to enable the Banks and their
      counsel to evaluate such matters.

            (k)  Within  90 days of the  last  day of  each  fiscal  year of the
      Borrower, a summary report,  substantially in the form of Annex VI hereto,
      outlining  all material  insurance  coverage  maintained as of the date of
      such  report  by the  Borrower  and its  Subsidiaries  and  outlining  all
      material  insurance  coverage planned to be maintained by the Borrower and
      its Subsidiaries in the subsequent fiscal year.

            (l) To the extent  reasonably  requested  by the  Agent,  as soon as
      practicable and in any event within ten Business Days of the later of such
      request  and the  making  of any  such  amendment  or  waiver,  copies  of
      amendments or waivers with respect to  Indebtedness of the Borrower or any
      of its Subsidiaries.

            (m) The  Borrower  shall  provide to the Agent  prior to the Closing
      Date a consolidated  plan,  substantially in the form of Exhibit P hereto,
      for the  remainder  of the fiscal  year  ending  March 31,  1997,  and the
      Borrower  shall  provide to the Agent on or prior to December 31, 1996 and
      each December 31 thereafter a consolidated plan, substantially in the form
      of  Exhibit P hereto,  for each  month in the  current  fiscal  year and a
      consolidated plan,  substantially in the form of Exhibit P hereto, for the
      next  succeeding  five fiscal  years,  in each case prepared in accordance
      with the Borrower's normal accounting procedures (and which will represent
      management's  reasonable estimate of the Borrower's projected  performance
      during such periods)  applied on a consistent  basis,  including,  without
      limitation,  (i)  forecasted  consolidated  balance  sheets,  consolidated
      statements of operations, of stockholders' equity and of cash flows of the
      Borrower and its  Subsidiaries  on a consolidated  basis for such periods,
      (ii) the  amount  of  forecasted  capital  expenditures  for  such  fiscal
      periods, and (iii) forecasted compliance with Sections 7.09-7.11; provided
      that if any  such  forecast  indicates  that  the  Borrower  may not be in
      compliance  with any provision of this Agreement at some future date, such
      forecast  shall  not  constitute  a  Default  or an  Event of  Default  or
      anticipatory or other breach thereof.

            (n) Within  fifteen  (15) days after the last  Business  Day of each
      month, the Borrower shall deliver to Agent for distribution to each Bank a
      borrowing base certificate in the form of Exhibit M hereto (the "Borrowing
      Base Certificate")  detailing the Borrower's  Eligible Accounts Receivable
      and

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -63-



      Eligible Inventory as of the last day of such month, certified as complete
      and  correct on behalf of the  Borrower  by a Senior  Officer or any other
      Authorized  Officer.  In addition,  each Borrowing Base Certificate  shall
      have attached to it such additional  schedules and/or other information as
      the Agent may  reasonably  request.  If the Borrower  fails to deliver any
      such Borrowing Base Certificate within twenty-five (25) days after the end
      of any such month,  then the Borrower's  Borrowing Base shall be deemed to
      be $0  until  such  time  as the  Borrower  shall  deliver  such  required
      Borrowing Base Certificate.

            (o) (i) On or prior to the Closing Date and within 90 days after the
      commencement  of each fiscal year,  a complete  and  accurate  list of the
      officers  and  directors  of the  Borrower  and (ii) within 30 days of any
      change  in  personnel  affecting  the  accuracy  of such  list,  a  notice
      specifying such change in personnel.

            (p) With reasonable promptness, such other information and data with
      respect to the Borrower or any of its  Subsidiaries  or any other  similar
      entity in which the Borrower or any Subsidiary has an investment,  as from
      time to time may be reasonably requested by any Bank and may be reasonably
      available to the Borrower.

            (q) The Borrower  shall  deliver to the Agent,  within 15 days after
      filing  with  the  SEC,  copies  of  Holdings'  annual  report  and of the
      information,  documents  and other  reports (or copies of such portions of
      any of the  foregoing as the SEC may by rules and  regulations  prescribe)
      which is filed by Holdings with the SEC pursuant to Section 13 or 15(d) of
      the Exchange Act within the time periods  prescribed  under such rules and
      regulations.  In  addition,  the  Borrower  shall cause  Holdings'  annual
      reports to  shareholders  and any  quarterly  or other  financial  reports
      furnished  by  Holdings  to  shareholders  generally  to be filed with the
      Agent.

            6.02 Books,  Records and  Inspections.  The Borrower  will, and will
cause each of its  Subsidiaries  to, keep true books of records and  accounts in
which full and correct entries will be made of all their business  transactions,
and  will   reflect  in  its   financial   statements   adequate   accruals  and
appropriations to reserves,  all in accordance with GAAP. The Borrower will, and
will cause each of its Subsidiaries to, permit,  upon reasonable prior notice to
the chief financial officer,  controller,  chief accounting officer or any other
Authorized Officer of the Borrower,  officers and designated  representatives of
the Agent or any Bank to visit and  inspect any of the  properties  or assets of
the Borrower and any

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -64-



of its  Subsidiaries  in  whomsoever's  possession,  and to examine the books of
account of the  Borrower  and any of its  Subsidiaries  and discuss the affairs,
finances and accounts of the Borrower and of any of its  Subsidiaries  with, and
be advised as to the same by, its and their officers and independent accountants
(in the presence of such officers),  all at such reasonable times during regular
business hours and intervals and to such  reasonable  extent as the Agent or any
Bank may reasonably request.

            6.03 Maintenance of Property;  Insurance. (a) The Borrower will, and
will cause each of its Subsidiaries to, exercise commercially reasonable efforts
to  maintain  or  cause to be  maintained  in good  repair,  working  order  and
condition  (subject  to  normal  wear  and  tear)  all  properties  used  in its
businesses  and from  time to time  will  make or cause to be made all  repairs,
renewals and  replacements  thereof which the Borrower deems  appropriate in its
commercially  reasonable  judgment and will  maintain and renew as necessary all
licenses,  permits and other clearances necessary in its commercially reasonable
judgment to use and occupy such properties of the Borrower and each  Subsidiary,
as the case may be.

            (b) The Borrower will, and will cause each of its  Subsidiaries  to,
maintain  or  cause to be  maintained,  with  financially  sound  and  reputable
insurers,  insurance with respect to its properties and business against loss or
damage of the kinds  customarily  insured against by corporations of established
reputation engaged in the same or similar businesses and similarly situated,  of
such  types  and in  such  amounts  as are  customarily  carried  under  similar
circumstances by such other  corporations to the extent that such types and such
amounts of  insurance  are  available  at  commercially  reasonable  rates.  The
Borrower will, and will cause each of its Subsidiaries to, furnish to each Bank,
upon reasonable request,  information as to the insurance carried,  and will not
cancel any such insurance without the consent of the Required Banks.

            (c) Without  limiting  subsection  6.03(b) above, the Borrower will,
and will cause each of its Subsidiaries to, maintain in full force the insurance
coverages specified in the Mortgages and the other Security Documents.

            6.04 Payment of Taxes. The Borrower will pay and discharge, and will
cause  each  of its  Subsidiaries  to pay and  discharge,  all  material  taxes,
assessments  and  governmental  charges  or levies  imposed  upon it or upon its
income or profits, or upon any properties  belonging to it, prior to the date on
which material penalties attach thereto, and all lawful claims which, if unpaid,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -65-



might become a Lien or charge upon any  properties of the Borrower or any of its
Subsidiaries  or cause a failure or forfeiture of title  thereto;  provided that
neither the Borrower nor any  Subsidiary  shall be required to pay any such tax,
assessment,  charge,  levy or claim that is being contested in good faith and by
proper  proceedings  timely  instituted  and  diligently  conducted  if  it  has
maintained adequate reserves with respect thereto in accordance with GAAP.

            6.05 Corporate Franchises. The Borrower will do, and will cause each
Subsidiary to do, or cause to be done, all things necessary to preserve and keep
in full force and effect its existence,  rights and authority, except where such
failure to keep in full force and effect  such  rights and  authority  would not
have a Materially Adverse Effect.

            6.06  Compliance  with  Statutes,  etc. The Borrower  will, and will
cause each Subsidiary to, comply with all applicable  statutes,  regulations and
orders  of,  and  all  applicable  restrictions  imposed  by,  all  Governmental
Authorities,  in respect of the conduct of its business and the ownership of its
property,  other than  non-compliance  which would not have a Materially Adverse
Effect;  provided that with respect to non-compliance  with  Environmental  Laws
which is disclosed in Annex XII hereto,  the Borrower  will, and will cause each
Subsidiary to, comply with such Environmental Laws as soon as practicable.

            6.07  ERISA.  The Borrower will furnish to the Agent, who
will distribute to each of the Banks:

            (a) promptly upon the Borrower's knowing or having reason to know of
      the  occurrence  of  any  (i)  Termination   Event,  or  (ii)  "prohibited
      transaction,"  within the meaning of Section 406 of ERISA or Section  4975
      of the Code,  in  connection  with any Pension  Plan or any trust  created
      thereunder,  which in the case of all such events  described in clause (i)
      or (ii) results or could  reasonably  be expected to result in a liability
      of a Credit Party or its ERISA  Affiliates  in the  aggregate in excess of
      $200,000, a written notice specifying the nature thereof,  what action the
      Credit Party or its ERISA  Affiliates have taken, are taking or propose to
      take with respect thereto, and, when known, any action taken or threatened
      by  the  Internal   Revenue   Service,   Department  of  Labor,   PBGC  or
      Multiemployer Plan with respect thereto.

            (b)   with reasonable promptness, copies of (i) all
      notices received by a Credit Party or any of its ERISA

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -66-



      Affiliates  of PBGC's  intent to terminate  any Title IV Plan or to have a
      trustee  appointed to  administer  any Title IV Plan,  the notice of which
      event is required  pursuant to the preceding  paragraph (a); (ii) upon the
      request of the Agent each Schedule B (Actuarial Information) to the annual
      report  (Form  5500  Series)  filed by a Credit  Party or any of its ERISA
      Affiliates with the Internal  Revenue Service with respect to each Pension
      Plan for which  Schedule  B is  required;  (iii)  upon the  request of the
      Agent, the most recent actuarial  valuation report for each Title IV Plan;
      and (iv) all notices  received by the Credit Parties or any of their ERISA
      Affiliates from a  Multiemployer  Plan concerning the imposition or amount
      of withdrawal  liability  pursuant to Section 4202 of ERISA, the notice of
      which event is required pursuant to the preceding paragraph (a).

            6.08  Performance of Obligations.  The Borrower will, and will cause
each  of its  Subsidiaries  to,  perform  in all  material  respects  all of its
obligations  under the terms of each mortgage,  indenture,  security  agreement,
other debt instrument and material  contract by which it is bound or to which it
is a party, except where such nonperformance would not have a Materially Adverse
Effect.

            6.09 End of Fiscal Years; Fiscal Quarters.  As of December 31, 1996,
the Borrower will, for financial reporting purposes,  and will cause each of its
Subsidiaries  to, have its (i) fiscal  years end on December 31, and (ii) fiscal
quarters end on or about March 31, June 30, September 30 and December 31.

            6.10 Use of Proceeds.  All proceeds of the Term Loans and  Revolving
Loans shall be used as provided in Section 5.05.

            6.11  Equal  Security  for  Loans and  Notes;  No  Further  Negative
Pledges.  (a) If the Borrower or any of its Subsidiaries  shall create or assume
any Lien upon any of its  property  or assets,  whether  now owned or  hereafter
acquired  and  whether or not such  property or assets  constitutes  Collateral,
other than Permitted  Encumbrances (unless prior written consent to the creation
or  assumption  thereof shall have been obtained from the Agent and the Required
Banks),  it shall  make or cause to be made  effective  provisions  whereby  the
Obligations  will be secured by such Lien  equally and ratably  with any and all
other  Indebtedness  thereby secured as long as any such  Indebtedness  shall be
secured;  provided that this  covenant  shall not be construed as consent by the
Agent and the Required  Banks to any violation by the Borrower of the provisions
of Section 7.03.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -67-



            (b) Except with respect to prohibitions  against other  encumbrances
on specific  property  encumbered to secure  payment of particular  Indebtedness
permitted  hereunder  (which  Indebtedness  relates solely to the acquisition or
improvement  of such  specific  property)  neither the  Borrower  nor any of its
Subsidiaries  shall  enter  into  any  agreement  prohibiting  the  creation  or
assumption  of any Lien upon its  properties  or  assets,  whether  now owned or
hereafter acquired.

            6.12 Lender Meeting.  The Borrower will  participate in a meeting of
the Banks once during each fiscal year  (commencing  with the fiscal year ending
December 31, 1996) to be held at a location and a time  selected by the Borrower
and reasonably  acceptable to the Agent unless the Required  Banks  determine in
their  sole  discretion  that such  meeting  is  unnecessary  and so inform  the
Borrower.

            6.13  Pledge  of  Additional   Collateral.   Concurrently  with  the
execution and delivery by any Subsidiary of a Subsidiary Guarantee, the Borrower
will cause such Subsidiary to take all necessary  action to grant the Collateral
Agent a perfected  first Lien in all of the real and  personal  property of such
Subsidiary (to the extent permitted by applicable law) to secure the payment and
performance of the Obligations and such Subsidiary's obligations and liabilities
under its Subsidiary  Guarantee;  and promptly,  and in any event within 30 days
after  the  acquisition  of assets  of a type  that,  but for the fact that such
assets shall have been acquired after the Closing Date,  would have  constituted
Collateral,  the Borrower will, and will cause each of its Subsidiaries to, take
all necessary  action to grant the  Collateral  Agent a perfected  first Lien in
such newly acquired  assets (such  personal  property and assets of a Subsidiary
executing a Subsidiary  Guarantee and such newly acquired assets are referred to
herein collectively as the "Additional Collateral").  Such action to be taken by
the  Borrower  and the  Subsidiaries  shall  include,  without  limitation,  the
execution and delivery of security  agreements,  and/or supplements thereto, and
other  instruments  and  documents,   all  in  form  and  substance   reasonably
satisfactory  to the  Collateral  Agent,  the  filing of  appropriate  financing
statements under the provisions of the UCC,  applicable  domestic or local laws,
rules or  regulations  in each of the offices  where such filing is necessary or
appropriate,  and the  delivery of such  opinions of counsel with respect to the
foregoing  as the  Collateral  Agent shall  reasonably  require;  provided  this
Section  6.13 shall not apply to any assets  subject  to Liens  permitted  under
Section 7.03(i).  Furthermore,  promptly, and in any event within 30 days, after
the  acquisition  of an interest in Real  Property  within the United States not
held as of the Closing Date (the "Additional Real Property"), the Borrower

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -68-



will,  and will cause such of its  Subsidiaries  acquiring  such an interest to,
take such  actions  and execute  such  documents  as the Agent shall  reasonably
require  to  confirm  the Lien of a  Mortgage  (including,  without  limitation,
satisfaction  of the conditions set forth in Sections  4.01(C)(ii)  and (L)), or
execute a new Mortgage, with respect to such Additional Real Property. All costs
and  expenses  arising  from  any  action  taken  by the  Agent  or any  Bank in
connection with the pledge of Additional  Collateral or Additional Real Property
pursuant to this Section 6.13, including,  without limitation,  reasonable costs
of counsel for the Agent,  shall be payable by the  Borrower to the Agent or the
Bank  incurring  such cost or  expense  within 10  Business  Days  after  demand
therefor.  All  agreements,  instruments  and  documents  executed or  delivered
pursuant  to or in  furtherance  of  this  Section  6.13,  and  all  amendments,
modifications  and  supplements  thereto from time to time entered into, are and
shall be within the definition of "Security Documents."

            6.14 Security  Interests.  The Borrower will, and will cause each of
its  Subsidiaries to, perform any and all acts and execute any and all documents
(including,  without limitation, the execution,  amendment or supplementation of
any  financing   statement  and  continuation   statement)  for  filing  in  any
appropriate  jurisdiction  under  the  provisions  of the UCC,  local law or any
statute,  rule or regulation of any applicable  domestic  jurisdiction which are
necessary in order to maintain or confirm in favor of the  Collateral  Agent for
the benefit of the Banks a valid and perfected  Lien on the  Collateral  and any
Additional  Collateral,  subject to no Liens  except  for Prior  Liens and Liens
permitted by the applicable Security Documents.  The Borrower shall, as promptly
as  practicable  after the filing of any  financing  statements,  deliver to the
Agent acknowledgment  copies of, or copies of lien search reports confirming the
filing of, financing statements duly filed under the UCC of all jurisdictions as
may be  necessary  or, in the  reasonable  judgment of the Agent,  desirable  to
perfect the Lien  created,  or  purported  or  intended  to be created,  by each
Security Document.

            6.15  Environmental  Events.  (i) The Borrower  will, and will cause
each of its Subsidiaries to, comply with any and all  Environmental  Laws, other
than  non-compliance  which  could  not  reasonably  be  expected  to  result in
liability under any Environmental Laws in excess of $250,000  individually or in
the aggregate with any other liability under any  Environmental  Laws;  provided
that with respect to non-compliance  with  Environmental Laws which is disclosed
in Annex XII hereto,  the Borrower will, and will cause each of its Subsidiaries
to, comply with such Environmental Laws as soon as practicable.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -69-



            (ii) The  Borrower  will  promptly  give  notice to the  Agent  upon
determining  the existence of (a) any violation of any  Environmental  Laws, (b)
any Environmental  Notice or (c) any release or threatened  release of Hazardous
Materials at, on, upon, under or from any of the Real Properties or any facility
or equipment thereat in excess of a reportable quantity or allowable standard or
level under any  Environmental  Laws,  or in a manner  and/or amount which could
reasonably be expected to result in liability under any  Environmental  Laws, in
each case in excess of $250,000  individually or in the aggregate with any other
liability under any Environmental  Laws (other than any such events disclosed in
Annex XII).

           (iii) In the event of the presence of  Hazardous  Materials on any of
the Real  Properties  which is in  violation  of, or which could  reasonably  be
expected to result in liability under, any  Environmental  Laws, in each case in
excess of $250,000  individually  or in the aggregate  with any other  liability
under any  Environmental  Laws,  the Borrower or any of its  Subsidiaries,  upon
discovery  thereof,  shall take appropriate  steps to initiate and expeditiously
complete  all  response,   corrective  and  other  action   required  under  any
Environmental Laws to mitigate and eliminate any such violation or liability.

            (iv) Accompanying  each quarterly  Compliance  Certificate  required
under  Section  6.01(f)  hereof,  the Company  shall  include a statement of the
status of each matter  identified  in Annex XII and each matter for which notice
has been given under Section 6.15(ii) hereof indicating the action that has been
taken, additional action required,  and, to the extent practicable,  an estimate
of the  completion  date and future cost for each  matter  until each matter has
been completely addressed.

            6.16 New  Subsidiaries.  In addition to its obligations with respect
to Section 6.13, if, after the date hereof, the Borrower or any Subsidiary shall
create or acquire any  Subsidiary,  the Borrower  shall,  concurrently  with the
creation or acquisition of such Subsidiary, (i) cause such Subsidiary to execute
and deliver to the Agent a Subsidiary  Guarantee,  substantially  in the form of
Exhibit R annexed hereto,  guaranteeing the Borrower's Obligations hereunder and
(ii) take all necessary  actions and execute such  agreements,  instruments  and
documents,  including,  without limitation,  stock powers executed in blank, and
deliver  such  opinions  of  counsel  with  respect  thereto,  as the  Agent may
reasonably require to cause all of the capital stock of such Subsidiary owned or
controlled by the Borrower to be pledged to the  Collateral  Agent to secure the
Borrower's Obligations hereunder

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -70-



such that the Collateral Agent has a valid and perfected first-priority security
interest in such pledged capital stock.

            6.17  Repayment  of Existing  Subordinated  Debt.  Holdings  and the
Borrower  hereby  covenant and agree that  concurrently  with the closing of the
Holdings IPO and the Refinancing,  Holdings and the Borrower shall purchase,  or
cause to be purchased,  each of the Senior  Subordinated Notes, the Subordinated
Notes and the Junior Subordinated Notes. Upon such purchase,  each of such notes
shall be cancelled.

            SECTION 7. Negative  Covenants.  The Borrower  hereby  covenants and
agrees that as of the Closing Date and  thereafter for so long as this Agreement
is in effect and until the  Commitments  have  terminated and the Loans together
with interest,  fees and all other  Obligations  incurred  hereunder are paid in
full (except as otherwise agreed or consented to or waived,  in writing,  by the
Required Banks):

            7.01 Changes in Business.  Other than asset  dispositions  permitted
under  Section  7.13,  the  Borrower  will not,  and will not  permit any of its
Subsidiaries  to,  materially  alter its  businesses  from that conducted by the
Borrower or such  Subsidiary  at the  Closing  Date and the  business  generally
described in the prospectus  relating to the Holdings IPO, and lines of business
reasonably related thereto.

            7.02  Amendments or Waivers of Certain Documents.  The
Borrower will not, and will not permit any of its Subsidiaries to,
amend or otherwise change the terms of any Existing Debt.

            7.03  Liens.  The  Borrower  will  not,  and  will  not  permit  any
Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer
to exist  any Lien upon or with  respect  to any item  constituting  Collateral,
whether now owned or  hereafter  acquired,  except for the Lien of the  Security
Document  relating  thereto,  Prior  Liens  applicable  thereto  and other Liens
expressly  permitted by such Security Document.  The Borrower will not, and will
not permit any of its Subsidiaries to, create,  incur, assume or suffer to exist
any Lien upon or with  respect to any  property or assets of the Borrower or any
Subsidiary which does not constitute  Collateral  whether now owned or hereafter
acquired,  or sell any such property or assets  subject to an  understanding  or
agreement,  contingent  or otherwise,  to repurchase  such property or assets or
assign  any  right to  receive  income,  or file or  permit  the  filing  of any
financing  statement under the UCC or any other similar notice of Lien under any
similar recording or notice statute, except the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -71-



following, which are herein collectively referred to as "Permitted
Encumbrances":

            (a) Liens for taxes,  assessments or governmental  charges or claims
      not yet delinquent or Liens for taxes, assessments or governmental charges
      or claims being contested in good faith and by appropriate proceedings for
      which  adequate   reserves,   as  may  be  required  by  GAAP,  have  been
      established;

            (b) Liens in respect of property or assets of the Borrower or any of
      its  Subsidiaries  imposed by law (i) which were  incurred in the ordinary
      course of business, such as carriers', warehousemen's and mechanics' Liens
      and other similar Liens  arising in the ordinary  course of business,  and
      (x) which do not in the  aggregate  materially  detract  from the value of
      such  property  or assets or  materially  impair  the use  thereof  in the
      operation of the business of the  Borrower or any of its  Subsidiaries  or
      (y) which are being  contested in good faith by  appropriate  proceedings,
      which  proceedings have the effect of preventing the forfeiture or sale of
      the property or asset  subject to such Lien or (ii) which do not relate to
      material  liabilities of the Borrower and its  Subsidiaries  and do not in
      the aggregate materially detract from the value of the property and assets
      of the Borrower and its Subsidiaries taken as a whole;

            (c) Liens in connection  with any attachment or judgment  (including
      judgment or appeal bonds) for amounts of less than  $500,000  individually
      or  less  than  $1,000,000  in the  aggregate  (exclusive  of  any  amount
      adequately  covered by  insurance  as to which the  insurance  company has
      acknowledged  coverage)  unless the judgment it secures  shall,  within 60
      days  after  the entry  thereof,  not have been  discharged  or  execution
      thereof not been stayed pending appeal,  or shall not have been discharged
      within 30 days after the expiration of any such stay;

            (d)  Liens  (other  than any Lien  imposed  by  ERISA)  incurred  or
      deposits  made in the  ordinary  course of  business  in  connection  with
      workers'  compensation,  unemployment  insurance and other types of social
      security, or to secure the performance of tenders,  statutory obligations,
      surety and appeal bonds, bids, leases,  government contracts,  performance
      and return-of-money  bonds and other similar  obligations  incurred in the
      ordinary  course of business  (exclusive of  obligations in respect of the
      payment for borrowed money or the equivalent);


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -72-



            (e) subject to the  provisions  of Section 7.17 and, with respect to
      any Mortgaged Real Property, to the provisions of any applicable Mortgage,
      (i)  Leases  with  respect  to the assets or  properties  of the  Borrower
      entered  into  in the  ordinary  course  of the  Borrower's  business  and
      subordinate  in all  respects to the Liens  granted and  evidenced  by the
      Security Documents,  (ii) foreign Leases and (iii) Existing Leases and any
      extensions, renewals or replacements thereof;

            (f)  easements,  rights  of  way,  restrictions,  minor  defects  or
      irregularities  in title not interfering in any material  respect with the
      business of the Borrower or any of its  respective  Subsidiaries,  in each
      case  incurred  in the  ordinary  course  of  business  and  which  do not
      materially  impair for its intended purposes the Real Property to which it
      relates;

            (g) zoning and building by-laws and ordinances, municipal bylaws and
      regulations,  and restrictive covenants, which do not materially interfere
      with  the  use of the  subject  property  by  the  Borrower  or any of its
      Subsidiaries as such property is used as of the Closing Date;

            (h)   Liens securing Indebtedness of a Subsidiary owing to
      the Borrower or a Wholly Owned Subsidiary of the Borrower;

            (i) Liens upon real or  tangible  or  intangible  personal  property
      acquired or constructed by the Borrower or its Subsidiaries after the date
      hereof or on such  property or equity  securities  of a Person at the time
      such  Person   becomes  a  Subsidiary  of  the  Borrower  or  any  of  its
      Subsidiaries;  provided  that (i) any such Lien is created  solely for the
      purpose of securing Indebtedness representing, or incurred to finance, the
      cost of the item of property  subject thereto or such Liens existed on the
      date such property or securities  were acquired and were not incurred as a
      result  of or in  anticipation  of such  acquisition,  (ii) the  principal
      amount of the  Indebtedness  secured by such Lien does not exceed  100% of
      the fair value (as  determined  in good faith by the board of directors of
      the Borrower) of the respective property at the time it was so acquired or
      constructed,  (iii) the  Indebtedness  secured by the Lien is not  created
      more  than 180 days  after  the later of the  acquisition,  completion  of
      construction,  repair,  improvement,  addition  or  commencement  of  full
      operation  of the  property  subject to the Lien,  (iv) such Lien does not
      extend to or cover any other property other than such item of property and
      (v) the incurrence of such Indebtedness  secured by such Lien is permitted
      by Section 7.04;

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -73-




            (j) Liens on any  property  existing as of the date hereof  securing
      Existing Debt and any  refinancing,  extension,  renewal or  rearrangement
      thereof  provided  that such  Lien  does not  extend to or cover any other
      property  other than items of property  encumbered  as of the date hereof;
      and

            (k)   Liens pursuant to Section 6.13 of this Agreement.

            7.04 Indebtedness. The Borrower will not, and will not permit any of
its  Subsidiaries  to, contract,  create,  incur,  assume or suffer to exist any
Indebtedness, except:

            (a)   Indebtedness incurred pursuant to the Credit
      Documents;

            (b)  Existing  Debt  and  any   refinancing,   extension,   renewal,
      rearrangement or replacement thereof;  provided that any such refinancing,
      extension, renewal, rearrangement or replacement of Existing Debt shall be
      on terms  which,  both  taken as a whole and  specifically  as such  terms
      relate  to  the  identity  of  the  obligors,   repayments  of  principal,
      covenants,  events of default and security in property of the debtor,  are
      in each event no less favorable to the Borrower than the correlative terms
      of the Existing Debt;

            (c)   Interest Rate Agreements, if any;

            (d)  $1,000,000 of  Indebtedness  outstanding at any time to finance
      the cost of the acquisition or  construction of real or personal  tangible
      or intangible  property  (including Capital Leases),  and any refinancing,
      extension,  renewal,  rearrangement or replacement thereof;  provided that
      such  Indebtedness  (or the refinancing  thereof) shall not exceed 100% of
      the  fair  value  of such  property;  and  provided,  further,  that  such
      Indebtedness (or the refinancing thereof) is not secured by any Lien other
      than a Lien referred to in clause (i) of Section 7.03;

            (e)   other unsecured Indebtedness not exceeding
      $1,000,000 in the aggregate at any time outstanding;

            (f)   Indebtedness owed to Morningside under the
      Management Agreement;

            (g)  Indebtedness  of  the  Borrower  to any  of  its  Wholly  Owned
      Subsidiaries  or of any Subsidiary to the Borrower or another Wholly Owned
      Subsidiary of the Borrower (but only so

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -74-



      long as such Indebtedness is held by the Borrower or its
      Wholly Owned Subsidiary);

            (h)  Indebtedness in respect of performance  bonds,  return-of-money
      bonds, surety and appeal bonds and other similar  obligations  incurred by
      the  Borrower  or any of  its  Subsidiaries  in  the  ordinary  course  of
      business,  provided such Indebtedness does not exceed $100,000 at any time
      outstanding; and

            (i) Indebtedness of any Subsidiary incurred pursuant to the issuance
      of a Guarantee  by such  Subsidiary  as  required by Section  6.16 of this
      Agreement.

            7.05  Advances,  Investments  and Loans.  The Borrower will not, and
will not  permit  any of its  Subsidiaries  to,  lend  money or  credit  or make
advances  to any  Person,  or  purchase  or acquire  any stock,  obligations  or
securities of, or any other interest in, or make any capital contribution to any
Person, except:

            (a)   investments in Cash and Cash Equivalents;

            (b)  receivables  owing  to  them  and  advances  to  customers  and
      suppliers,  in each  case if  created,  acquired  or made in the  ordinary
      course of  business  and  payable  or  dischargeable  in  accordance  with
      customary trade terms;

            (c) investments  (including debt obligations) 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;

            (d)   investments in and advances to Credit Parties;

            (e)  investments  in any Wholly Owned  Subsidiary of the Borrower or
      another  Subsidiary,  or any Person which, as a result of such investment,
      becomes a Wholly Owned  Subsidiary of the Borrower or another  Subsidiary;
      provided  that such  Wholly  Owned  Subsidiary  is  engaged  in a business
      related to that of the Borrower and its  Subsidiaries  in compliance  with
      Section 7.01;

            (f)  transactions  between the  Borrower and any of its Wholly Owned
      Subsidiaries  and  between  Wholly  Owned  Subsidiaries   permitted  under
      Sections 7.04(g) and 7.08(i);


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -75-



            (g)  loans  or  advances  made  by the  Borrower  to  its  officers,
      directors and  employees in the ordinary  course of business not to exceed
      $500,000 in the aggregate outstanding at any time;

            (h) investments made as a result of the receipt of non-cash proceeds
      from any Asset Sale made pursuant to and in compliance with Section 7.13;

            (i)   investments in Interest Rate Agreements permitted
      under Section 7.04(c); and

            (j)   other investments, loans or advances not to exceed
      $500,000 in the aggregate outstanding at any time.

            7.06 Prepayments of Indebtedness;  Amendments. (i) The Borrower will
not, and will not permit any of its  Subsidiaries to make (or give any notice in
respect of) any  voluntary or optional  payment or  prepayment  or redemption or
acquisition for value of Indebtedness (including,  without limitation, by way of
depositing with any trustee with respect thereto money or securities before such
Indebtedness  is due for the  purpose of paying such  Indebtedness  when due) or
exchange of any such  Indebtedness  or preferred  stock,  as the case may be, in
each case until all  Obligations  under this  Agreement  have been  satisfied in
full;  provided  that the Borrower and any of its  Subsidiaries  may make such a
payment, prepayment,  redemption,  acquisition or exchange using the proceeds of
Indebtedness  permitted  to be incurred by Section  7.04 to refinance or replace
such Indebtedness.

          (ii)  The  Borrower   will  not,  and  will  not  permit  any  of  its
Subsidiaries  to:  amend,  modify or  change  any of the  Management  Agreement,
Employment  Agreements,  the Certificate of  Incorporation  (including,  without
limitation,  by the filing of any  certificate of designation) or By-laws of the
Borrower (or of Holdings to the extent such amendment, modification or change is
adverse to the Banks as Banks),  or any  agreement  entered into by the Borrower
(or by Holdings to the extent such amendment,  modification or change is adverse
to the Banks as Banks) with respect to its capital stock,  or enter into any new
agreement  with respect to the capital  stock of the Borrower (or of Holdings to
the extent such new  agreement  is adverse to the Banks as Banks),  in each case
without the prior consent of the Agent.

            7.07 Dividends,  etc. The Borrower will not, and will not permit any
of its  Subsidiaries  to, declare or pay any dividends  (other than dividends or
distributions  payable in shares of capital  stock of the Borrower or any of its
Subsidiaries, other than

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -76-



redeemable  stock) or return any capital to, its  stockholders  or  authorize or
make any other  distribution,  payment or  delivery  of  property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire, directly
or  indirectly,  for any  consideration,  any shares of any class of its capital
stock now or  hereafter  outstanding  (or any  warrants  for or options or stock
appreciation  rights in  respect  of any of such  shares),  or make any loans or
advances  to  Affiliates,  or set  aside  any  funds  for  any of the  foregoing
purposes, or permit any of its Subsidiaries to purchase or otherwise acquire for
consideration  any shares of any class of the capital  stock of the  Borrower or
any other Subsidiary,  as the case may be, now or hereafter  outstanding (or any
options or  warrants  or stock  appreciation  rights  issued by such Person with
respect to its capital stock) (all of the foregoing,  "Dividends"),  except that
(i) any direct or indirect  Subsidiary  of the Borrower may pay Dividends to its
parent  corporation if such parent corporation is the Borrower or a Wholly Owned
Subsidiary of the Borrower,  (ii) the Borrower or any Subsidiary of the Borrower
may pay to  Holdings  any  amounts  required  (x) for the  payment  of any taxes
payable (A) by Holdings or (B) by Holdings, the Borrower and/or its Subsidiaries
on a  consolidated,  combined  or  unitary  basis  or (y)  with  respect  to the
Refinancing  and  related  transactions,  (iii)  the  Borrower  or  any  of  its
Subsidiaries may purchase capital stock held by employees of the Borrower or any
of its Subsidiaries  pursuant to any employee stock option or other benefit plan
thereof  upon the  termination,  retirement  or death  of any such  employee  in
accordance  with the  provisions  of any such plan in an amount not greater than
$250,000 in any calendar year;  provided that the Borrower may purchase  capital
stock pursuant to the  Employment  Agreement with Dr. Leroy Keith without regard
to such  limitation;  and (iv) the Borrower or any of its  Subsidiaries may make
payments to Affiliates pursuant to and in compliance with Section 7.08 hereof.

            7.08 Transactions  with Affiliates.  The Borrower will not, and will
not  permit  any  Subsidiary  to,  enter  into  any  transaction  or  series  of
transactions, whether or not in the ordinary course of business, with any holder
of 5% or more of any  class of equity  securities  of the  Borrower  or with any
Affiliate of the Borrower  other than on terms and conditions  substantially  as
favorable  to the  Borrower or such  Subsidiary  as would be  obtainable  by the
Borrower or such Subsidiary at the time in a comparable arm's-length transaction
with a  Person  other  than a  holder  of 5% or  more  of any  class  of  equity
securities  of  the  Borrower  or an  Affiliate;  provided  that  the  foregoing
restrictions shall not apply to (i) transactions between the Borrower and any of
its Wholly  Owned  Subsidiaries  and between  Wholly  Owned  Subsidiaries,  (ii)
transactions between Holdings and the Borrower to the extent

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -77-



otherwise   expressly   permitted  under  this  Agreement,   (iii)  payments  to
Morningside  pursuant to the Management Agreement for management services not to
exceed   $350,000  in  any  fiscal  year,  plus   reimbursement   of  reasonable
out-of-pocket  expenses, (iv) the payment of reasonable fees to Indosuez and its
Affiliates  for  financial  services,  such  fees not to  exceed  the  usual and
customary  fees for similar  services,  (v) loans and other advances made by the
Borrower to its  officers,  directors  and  employees  permitted  under  Section
7.05(g),  (vi) the  payment of  customary  outside  directors'  fees,  customary
indemnification  arrangements  and  customary  director  and  officer  liability
insurance  and (vii) the issuance of capital stock of the Borrower or any of its
Subsidiaries,  pursuant to any pension,  stock option,  profit  sharing or other
employee benefit plan or agreement of the Borrower or any of its Subsidiaries in
the ordinary course of business.

            7.09 Total Interest Coverage Ratio. The Borrower will not permit the
ratio of (i) Consolidated  EBITDA of the Borrower to (ii) Consolidated  Interest
Expense (which,  for purposes of this Section 7.09 only, shall include only Cash
interest  expense) of the  Borrower  for any Test Period  (beginning  January 1,
1997) ending  during any period listed below to be less than the ratio set forth
opposite such period below:

      Period                                                Ratio

      January 1, 1997 through and
      including September 30, 1997.......................   3.50 to 1.00

      October 1, 1997 and thereafter.....................   4.00 to 1.00

            7.10 Fixed Charge Coverage  Ratio.  The Borrower will not permit the
ratio of (i)  Consolidated  EBITDAC of the Borrower minus cash taxes paid by the
Borrower  to (ii)  the sum of (A)  Consolidated  Interest  Expense  (which,  for
purposes of this Section 7.10 only, shall include only Cash interest expense) of
the Borrower and (B) the amount of  scheduled  mandatory  payments on account of
principal of Indebtedness  made by the Borrower for any Test Period ending on or
after the  following  dates (based on results  beginning  January 1, 1997) to be
less than the ratio set forth opposite such dates below:

      June 30, 1997......................................   1.00 to 1.00
      September 30, 1997.................................   1.05 to 1.00
      December 31, 1997..................................   1.10 to 1.00
      December 31, 1998 and thereafter...................   1.25 to 1.00


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -78-



            7.11 Leverage  Ratio.  The Borrower will not permit the ratio of (i)
Indebtedness of the Borrower and its Subsidiaries to (ii) Consolidated EBITDA of
the  Borrower  (for the 12 month  period  ending  at the end of the most  recent
fiscal  quarter of the Borrower) to be more than the ratio set forth below as of
the last day of each of the fiscal  years set forth below and as of the last day
of each of the three fiscal quarters immediately following such fiscal years:

      Fiscal Year                                  Ratio

      1996...............................................   2.50 to 1.00
      1997 and thereafter................................   2.00 to 1.00

            7.12  Issuance of Subsidiary  Stock.  The Borrower will not and will
not  permit any of its  Subsidiaries  directly  or  indirectly  to issue,  sell,
assign,  pledge  or  otherwise  encumber  or  dispose  of  any  shares  of  such
Subsidiaries'  capital stock or other equity securities (or warrants,  rights or
options to acquire  capital  stock or  convertible  securities  or other  equity
securities) of such Subsidiary, except to the Borrower or any other Wholly Owned
Subsidiary  of the  Borrower  (in each case other than  directors'  or nominees'
qualifying  shares or shares of capital  stock  required  to be owned by foreign
nationals under applicable law);  provided,  however,  that nothing contained in
this  Section  7.12 shall  prohibit  the  issuance  of  capital  stock of Carson
Holdings  Limited in accordance  with the terms of the Carson  Holdings  Limited
Share Incentive Trust, as in effect on the date hereof.

            7.13 Disposition of Assets.  (A) The Borrower will not, and will not
permit any of its Subsidiaries to, dispose of all or any part of its interest in
any asset,  except that the Borrower and its  Subsidiaries may sell or otherwise
dispose of assets so long as either (i) such sales are  approved by the Required
Banks (subject to the  provisions of Section 11.12 hereof);  (ii) such sales are
for at least the fair market  value of such assets and the  aggregate  amount of
such asset sales is less than  $500,000 in any 12-month  period and, in any such
case, the Borrower or such Subsidiary complies with the mandatory prepayment and
Commitment reduction  provisions herein and, in the case of Collateral,  so long
as the  conditions  to the  release of  Collateral  described  herein and in the
applicable  Security Documents are met; (iii) such sales are of inventory and in
the ordinary course of business;  (iv) such sales or other  dispositions are (A)
of  equipment  that has  become  worn out,  obsolete  or  damaged  or  otherwise
unsuitable or no longer  needed for use in  connection  with the business of the
Borrower or any of its Subsidiaries or should be replaced, as the case may be,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -79-



in each  case as  determined  in good  faith by the  board of  directors  of the
Borrower or its Subsidiary, as the case may be, (B) for at least the fair market
value of such equipment,  (C) not in excess of $100,000 individually or $250,000
per year in the  aggregate  for sales of such  equipment and (D) the proceeds of
the  sales  of such  equipment  are  used  within  90 days of such  sales to (1)
purchase equipment used in substantially  similar lines of business or (2) repay
Indebtedness  under this Credit  Agreement  pursuant to Section  3.01;  (v) such
sales or other  dispositions do not exceed $50,000  individually  and are for at
least the fair market value of such assets or as to such other dispositions, the
likely  amount of net sales  proceeds that would be realized upon a sale of such
assets is such that a sale of such assets is not, in the reasonable  judgment of
the Borrower,  economically  practicable but such other disposition is otherwise
of  commercial  value to the  Borrower;  provided  that in no case  shall  sales
pursuant to this clause (v) exceed an  aggregate of $100,000 in any fiscal year,
and in the case of  Collateral,  so long as the  conditions  to the  release  of
Collateral  described herein and in the applicable  Security  Documents are met;
(vi) such sales consist of the licensing or  sublicensing  of the  Borrower's or
any  of its  Subsidiaries'  Intellectual  Property  in the  ordinary  course  of
business; or (vii) such sales are of equity securities under any stock option or
other  benefit plan  available to the  employees or directors of the Borrower or
any of its Subsidiaries.

            The consideration received by the Borrower and its Subsidiaries from
each sale of assets permitted by subsections (i) and (ii) above, other than with
respect to such sales involving  consideration  of not more than $100,000 in the
aggregate in any fiscal year,  shall be payable by the purchaser in whole within
15 days of such sale and at least 70% of the consideration  from each sale shall
consist of Cash or Cash  Equivalents.  Any non-cash  proceeds  received from the
sale of assets  constituting  Collateral  shall be  pledged  pursuant  to and in
accordance  with  the  applicable   Security   Documents  and  shall  constitute
Collateral.

            (B) Upon  compliance  with the  conditions  in  subsection A of this
Section 7.13, the Release Conditions and the Partial Release Conditions (each as
hereinafter defined),  the Borrower shall be entitled to receive from Collateral
Agent  an  instrument  in form  and  substance  reasonably  satisfactory  to the
Borrower (each, a "Release"), releasing the Lien of the Mortgage with respect to
all or any  portion  of a  Mortgaged  Real  Property  (each,  a  "Released  Real
Property").  The  Borrower  shall  exercise  its rights  under  this  Section by
delivering to Collateral Agent a notice (each, a "Release Notice"),  which shall
refer to this Section,  describe with  particularity  the proposed Released Real
Property and be

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -80-



accompanied  by  (i)  four  counterparts  of  the  Release  fully  executed  and
acknowledged by all necessary parties other than Collateral Agent, (ii) executed
counterparts  of UCC termination  statements  necessary to terminate the Lien of
the applicable  Mortgage and (iii) an Officer's  Certificate  certifying that no
Default or Event of Default  shall have  occurred and the parties  executing any
and all documents in connection with the Release (other than  Collateral  Agent)
were duly authorized to do so (collectively,  the "Release Conditions").  In the
event the proposed  Released Property consists of less than all of the Mortgaged
Real Property subject to a single Mortgage,  the Partial Release Conditions must
be satisfied in order for the Borrower to receive the Release.

            (C) Collateral Agent's obligation to deliver a Release in respect of
less than all of the Mortgaged Real Property  subject to a single Mortgage shall
be contingent  upon the  satisfaction  of the conditions in subsection A of this
Section  7.13 and the Release  Conditions  as well as the  following  conditions
(collectively, the "Partial Release Conditions"):

             (i)  following  the  sale,  transfer  or other  disposition  of and
      release  of the  Lien  of the  applicable  Mortgage  with  respect  to the
      proposed  Released Real  Property,  the remaining  Mortgaged Real Property
      shall have  utility  services and access to public  roads,  rail spurs and
      other transportation structures sufficient and necessary in the reasonable
      opinion of the  Borrower  for the  continued  use of such  Mortgaged  Real
      Property in the manner utilized prior to the Release;

            (ii)  following  the  sale,  transfer  or other  disposition  of the
      proposed  Released Real  Property,  the remaining  Mortgaged Real Property
      shall  comply  in all  material  respects  with  applicable  laws,  rules,
      regulations and ordinances relating to environmental  protection,  zoning,
      land use, configuration and building and workplace safety (except for such
      non-compliance  which has been  previously  consented to by the Collateral
      Agent);

           (iii)  following  the  sale,  transfer  or other  disposition  of the
      proposed Released Real Property, the value of the remaining Mortgaged Real
      Property shall not be less than the value of such remaining Mortgaged Real
      Property  prior  to the  Release  due to  such  sale,  transfer  or  other
      disposition;

            (iv) the Title Company shall be prepared to issue an  endorsement to
      the Banks' title insurance  policy relating to the Mortgaged Real Property
      confirming  that after the proposed  release,  the Lien of the  applicable
      Mortgage continues

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -81-



      unimpaired  as a first  priority Lien upon the  remaining  Mortgaged  Real
      Property  subject  only to  Prior  Liens,  those  Liens  permitted  by the
      Mortgage or previously consented to by the Collateral Agent;

             (v) the Borrower  shall cause to have been  delivered to Collateral
      Agent a Survey  reasonably  acceptable to the Agent of the Mortgaged  Real
      Property  remaining  after the proposed  Released  Real  Property has been
      released; and

            (vi) the Borrower  shall cause to have been  delivered to Collateral
      Agent an Officer's Certificate certifying that the conditions set forth in
      subsections (i) through (v) have been satisfied.

            (D) Collateral Agent shall execute,  acknowledge (if applicable) and
deliver to the Borrower  counterparts  of the documents  described in subsection
B(i) and (ii) within 10 Business  Days after  receipt by  Collateral  Agent of a
Release  Notice  provided that the Release  Conditions  and the Partial  Release
Conditions (if applicable) have been satisfied.  The Borrower shall (i) execute,
deliver,  obtain and record such  instruments  as Collateral  Agent may require,
including,  without  limitation,  amendments  to the Security  Documents or this
Agreement   and,  (ii)  deliver  to  Collateral   Agent  such  evidence  of  the
satisfaction  of the Release  Conditions and the Partial  Release  Conditions as
Collateral  Agent may  require  and (iii)  cause the Title  Company to issue the
endorsement  referred to in  subsection  C(iv).  The  Borrower  shall  reimburse
Collateral  Agent,  Agent and the Banks upon demand for all reasonable  costs or
expenses  incurred in connection with any actions taken pursuant to this Section
7.13.

            7.14  Contingent Obligations.  The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly,
create or become or be liable with respect to any Contingent
Obligation except:

             (i)  guarantees resulting from endorsement of instruments
      for deposit or collection in the ordinary course of business;

            (ii)  Interest Rate Agreements, if any;

           (iii)  obligations arising as a direct consequence of the
      Refinancing;

            (iv)  obligations with respect to the Indebtedness
      permitted to be incurred under Section 7.04; and


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -82-



             (v)  other Contingent Obligations not to exceed $250,000
      outstanding at any one time.

            7.15  ERISA.  The Credit Parties will not, and will not
permit any of their ERISA Affiliates to:

             (i) engage in any transaction in connection with which the Borrower
      or any of its ERISA Affiliates could be subject to either a tax imposed by
      Section 4975(a) of the Code or the  corresponding  civil penalty  assessed
      pursuant to Section  502(i) of ERISA,  which  penalties  and taxes for all
      such  transactions  could  reasonably  be expected  to be in an  aggregate
      amount in excess of $500,000;

            (ii) permit to exist any accumulated funding deficiency, for which a
      waiver has not been  obtained  from the  Internal  Revenue  Service,  with
      respect to any Pension Plan;

           (iii)  permit  to exist  any  failure  to make  contributions  or any
      unfunded  benefits  liability  which creates,  or with the passage of time
      would create,  a statutory lien or  requirement to provide  security under
      ERISA or the Code in favor of the PBGC or any Pension Plan,  Multiemployer
      Plan or other entity;

            (iv)  permit the sum of the amount of unfunded  benefit  liabilities
      (determined in accordance with Statement of Financial Accounting Standards
      No.  87) under all Title IV Plans  (excluding  each  Title IV Plan with an
      amount  of  unfunded  benefit  liabilities  of zero  or  less)  to  exceed
      $2,500,000 for a period in excess of twelve months; or

             (v) fail to make any payment to any  Multiemployer  Plan that it or
      any  of  its  ERISA   Affiliates  may  be  required  to  make  under  such
      Multiemployer  Plan, any agreement relating to such Multiemployer Plan, or
      any law pertaining thereto.

            As  used  in  this  Section  7.15,  the  term  "accumulated  funding
deficiency" has the meaning specified in Section 302 of ERISA and Section 412 of
the Code, and the term "amount of unfunded benefit  liabilities" has the meaning
specified in Section 4001(a)(18) of ERISA.

            7.16  Merger  and  Consolidations.  No Credit  Party  will  merge or
consolidate  with or into any other entity;  provided that any Subsidiary of the
Borrower may be merged or  consolidated  with or into (i) the  Borrower,  if the
Borrower  is the  continuing  or  surviving  corporation  or (ii) any other such
Subsidiary, if the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -83-



continuing or surviving corporation is a Wholly Owned Subsidiary of
the Borrower.

            7.17 Sale and  Lease-Backs.  The  Borrower  will  not,  and will not
permit any of its Subsidiaries to, directly or indirectly,  become or thereafter
remain  liable as lessee or as  guarantor  or other  surety with  respect to the
lessee's  obligations  under any lease,  whether an Operating Lease or a Capital
Lease, of any property  (whether real or personal or mixed) whether now owned or
hereafter  acquired,  (i) which the Borrower or any of its Subsidiaries has sold
or  transferred  or is to sell or  transfer to any other  Person  (other than in
connection  with  the  Refinancing)  or (ii)  which  the  Borrower  or any  such
Subsidiary  intends  to use for  substantially  the same  purpose  as any  other
property  which has been or is to be sold or  transferred by the Borrower or any
such  Subsidiary to any Person in connection  with such lease, if in the case of
clause  (i) or (ii)  above,  such  sale  and  such  lease  are  part of the same
transaction  or a series of  related  transactions  or such sale and such  lease
occur with one year of each other or are with the same other Person.

            7.18 Sale or Discount of  Receivables.  The  Borrower  will not, nor
will it permit any of its  Subsidiaries to, sell, with or without  recourse,  or
discount  (other  than  in  connection  with  trade  discounts  or  arrangements
necessitated  by the  creditworthiness  of the other party,  in each case in the
ordinary course of business consistent with past practice) or otherwise sell for
less than the face value thereof,  notes receivable or accounts  receivable owed
to it by its third party customers or suppliers.

            7.19 Fine  Products  Company.  The  Borrower  will not, and will not
permit any Subsidiary to,  transfer any cash or other property to Fine Products,
other than  transfers of cash in amounts  needed to enable Fine  Products to pay
amounts not to exceed  $25,000 in the aggregate then required to be paid by Fine
Products to Persons that are not  Affiliates of the Borrower.  The Borrower will
not permit Fine Products to engage in any business activity.

            SECTION 8.  Events of Default.  Upon the occurrence and
during the continuance of any of the following specified events
(each an "Event of Default"):

            8.01  Payments.  The Borrower  shall (i) default in the payment when
due of any  principal  of the  Loans,  (ii) de  fault,  and such  default  shall
continue for two or more Business  Days, in the payment when due of any interest
on the Loans or under any other  Credit  Document or (iii) fail to pay any other
amounts owing hereunder for five Business Days after  receiving  notice thereof;
or

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -84-




            8.02 Representations, etc. Any representation, warranty or statement
made or deemed made by  operation  of Section  4.01,  4.02 or 4.03 by any Credit
Party  herein or in any other  Credit  Document or in any written  statement  or
certificate  delivered  or required to be delivered  pursuant  hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made by operation of Section 4.01, 4.02 or 4.03; or

            8.03  Covenants.  Any  Credit  Party  shall (a)  default  in the due
performance or observance by it of any term,  covenant or agreement contained in
Section  6.11,  6.13,  6.14,  6.16 or  Section  7 hereof or  Section  1.1 of any
Mortgage or (b) default in the due  performance or observance by it of any other
term, covenant or agreement contained in this Agreement or any Security Document
and such default shall continue  unremedied for a period of at least thirty days
(or, in the case of Section  6.15(iii),  five  Business  Days) after the date of
such default; or

            8.04 Default Under Other Agreements.  (a) Any Credit Party shall (i)
default in any payment with respect to any Indebtedness (other than Obligations)
having a principal amount of $500,000 or more individually or $1,000,000 or more
in the  aggregate,  for all Credit  Parties and their  Subsidiaries,  beyond the
period of grace,  if any,  provided in the  instrument or agreement  under which
such  Indebtedness  was created or (ii) default in the observance or performance
of any agreement or condition  relating to any such Indebtedness or contained in
any instrument or agreement  evidencing,  securing or relating  thereto,  or any
other event shall occur or condition exist, the effect of which default or other
event or  condition  is to cause,  or to permit  the  holder or  holders of such
Indebtedness  (or a trustee  or agent on behalf of such  holder or  holders)  to
cause any such  Indebtedness to become due prior to its stated maturity;  or (b)
any such Indebtedness of any Credit Party or any of its respective  Subsidiaries
shall be declared to be due and payable, or required to be prepaid other than by
a regularly scheduled required prepayment, prior to the stated maturity thereof;
or

            8.05  Bankruptcy,  etc. Any Credit Party shall  commence a voluntary
case  concerning  itself  under  Title 11 of the  United  States  Code  entitled
"Bankruptcy,"  as now or  hereafter  in effect,  or any  successor  thereto (the
"Bankruptcy Code"); or an involuntary case is commenced against any Credit Party
or any of its Subsidiaries and the petition is not controverted  within 20 days,
or is not dismissed for a period of 60 consecutive  days, after  commencement of
the case; or a custodian (as defined in the  Bankruptcy  Code) is appointed for,
or takes charge of, all or substantially all of the property of any Credit Party
or any of its

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -85-



Subsidiaries; or any Credit Party or any of its Subsidiaries commences any other
proceeding under any reorganization,  arrangement, adjustment of debt, relief of
debtors,   dissolution,   insolvency  or  liquidation  or  similar  law  of  any
jurisdiction  whether now or hereafter in effect relating to any Credit Party or
any of its  Subsidiaries;  or there is commenced against any Credit Party or any
of its Subsidiaries  any such proceeding which remains  undismissed for a period
of 60  consecutive  days;  or any  Credit  Party or any of its  Subsidiaries  is
adjudicated  insolvent  or  bankrupt;  or any  order of  relief  or other  order
approving any such case or  proceeding  is entered and continues  unstayed for a
period of 60  consecutive  days; or any Credit Party or any of its  Subsidiaries
suffers any  appointment of any custodian or the like for it or any  substantial
part of its  property to continue  undischarged  or unstayed  for a period of 60
consecutive days; or any Credit Party or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is taken by any
Credit Party or any of its  Subsidiaries for the purpose of effecting any of the
foregoing; or

            8.06  ERISA.

             (i) Any "reportable event" as described in Section 4043 of ERISA or
the regulations thereunder (excluding those events for which the requirement for
notice  has been  waived by  regulation  by the  PBGC),  or any  other  event or
condition,  which the Required Banks determine  constitutes  reasonable  grounds
under Section 4042 of ERISA for the termination of any Title IV Plan by the PBGC
or for the  appointment  by the  appropriate  United States  District Court of a
trustee to administer or liquidate any Title IV Plan shall have occurred; or

            (ii)  A trustee shall be appointed by a United States
      District Court to administer any Title IV Plan; or

           (iii) The PBGC shall institute  proceedings to terminate any Title IV
Plan or to appoint a trustee to administer any Title IV Plan; or

            (iv) A Credit  Party or any of its  ERISA  Affiliates  shall  become
liable to the PBGC or any other party under Section 4062,  4063, 4064 or 4069 of
ERISA with respect to any Title IV Plan; or

             (v)  A Credit Party or any of its ERISA Affiliates shall
become liable to any Multiemployer Plan under Section 4201 et seq.
of ERISA;


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -86-



if the sum of each of such  Credit  Party's  and its ERISA  Affiliates'  various
liabilities (such liabilities to include,  without limitation,  any liability to
the PBGC or to any other party under Section 4062,  4063,  4064 or 4069 of ERISA
with respect to any Title IV Plan,  or to any  Multiemployer  Plan under Section
4201 et seq. of ERISA) which the Required Banks  determine  could  reasonably be
expected  to be incurred as a result of such  events  listed in  subclauses  (i)
through (v) above exceeds $1,000,000; or

            8.07 Security Documents.  Any Security Document shall cease to be in
full force and effect,  or shall cease to give the  Collateral  Agent the Liens,
rights,  powers and privileges  purported to be created thereby, in favor of the
Collateral  Agent,  superior to and prior to the rights of all third Persons and
subject to no Liens other than Prior Liens and Liens expressly  permitted by the
applicable  Security Document or any judgment creditor having a Lien against any
item of  Collateral  shall  commence  legal  action  to  foreclose  such Lien or
otherwise exercise its remedies against any item of Collateral; or

            8.08 Guarantees. Any Guarantee or any provisions thereof shall cease
to be in full  force  or  effect  in all  material  respects,  or the  Guarantor
thereunder  or Person  acting by or on behalf of such  Guarantor  shall  deny or
disaffirm  such  Guarantor's  obligations  under such Guarantee or the Guarantor
shall default in the due  performance  or  observance  of any term,  covenant or
agreement on its part to be performed or observed pursuant to such Guarantee; or

            8.09  Judgments.  One or more  judgments or decrees shall be entered
against any Credit  Party or any of its  Subsidiaries  involving a liability  of
$500,000 or more in the case of any one such judgment or decree or $1,000,000 or
more in the aggregate for all such  judgments and decrees for all Credit Parties
and their  Subsidiaries  (in  either  case in excess of the  amount  covered  by
insurance as to which the insurance  company has acknowledged  coverage) and any
such  judgments or decrees  shall not have been vacated,  discharged,  stayed or
bonded  pending  appeal  for a period  of 60  consecutive  days  from the  entry
thereof; or

            8.10  Ownership.

             (i) Holdings shall own less than 100% (on a fully diluted basis) of
the issued and outstanding capital stock of the Borrower,  other than securities
issued in the  ordinary  course  of  business  under  any stock  option or other
benefit plan  available to the  employees or directors of the Borrower or any of
its

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -87-



Subsidiaries (each of clauses (i), (ii) and (iii) of this Section 8.10 a "Change
of Control Event"); or

            (ii)  (x) DNL  Partners,  Limited  Partnership,  together  with  the
DNLAffiliates,  in the aggregate, cease to own or control at least more than 50%
of the Total Voting Power of  Holdings,  or (y) in the event that DNL  Partners,
Limited  Partnership  distributes to its partners  (pursuant to the terms of its
partnership  agreement)  all of the  capital  stock  of  Holdings  owned  by DNL
Partners,  Limited Partnership,  if, following such distribution,  DNL Partners,
Limited Partnership,  together with the DNL Affiliates, in the aggregate,  cease
to own or  control  at least  33-1/3%  of the Total  Voting  Power of  Holdings;
provided that, for purposes of the calculations  made pursuant to this paragraph
(ii)  (I) in the  event  any  shares  of Class B Common  Stock of  Holdings  are
converted  into either shares of Class A Common Stock or Class C Common Stock of
Holdings  (in any  combination),  then all such  shares of Class A Common  Stock
and/or Class C Common Stock  issued upon such  conversion  shall be excluded and
(II) in the event shares of capital  stock of Holdings are issued by Holdings as
consideration in whole or in part for the  acquisition,  directly or indirectly,
of another  entity and the  Aggregate  Market  Value of such  shares of stock so
issued is more than  $25,000,000,  then all shares of capital  stock of Holdings
issued in connection with such  acquisition  shall be excluded.  For purposes of
the foregoing  proviso the term  "Aggregate  Market Value" means (a) the average
closing price per share of the relevant  class of Holdings  capital stock during
the  ten  consecutive  trading  day  period  preceding  the  tenth  trading  day
immediately  preceding  the closing  date of the  acquisition  transaction  with
respect to which such shares are to be issued, times (b) the number of shares of
such class of capital stock issued by Holdings in such acquisition  transaction.
The closing  price for any day shall be the last reported sale price regular way
or, in case no such  reported  sale takes place on such day,  the average of the
closing bid and asked  prices  regular way for such day, in each case (1) on The
New York Stock  Exchange as reported on the NYSE  composite  tape as reported in
The Wall  Street  Journal or another  newspaper  of general  circulation  in the
Borough of Manhattan,  City of New York, New York customarily  published on each
business  day or (2) if the relevant  shares of capital  stock are not listed on
The New York Stock Exchange,  on the principal national  securities  exchange on
which the  relevant  shares of capital  stock of Holdings are listed or to which
such  shares are  admitted to trading or (3) if the  relevant  shares of capital
stock are not listed or admitted to trading on a national  securities  exchange,
in the over-the-counter market as reported by NASDAQ or any comparable system or
(4) if the  relevant  shares  of  capital  stock  are not  listed on NASDAQ or a
comparable system, or if for any other reason the current market price per

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -88-



share  cannot  be  determined  pursuant  to the  foregoing  provisions  of  this
paragraph,  the current  market  price per share shall be the fair market  value
thereof as determined in good faith by the Board of Directors of the Company.

            Then,  and in any such  event,  and at any time  thereafter,  if any
Event of Default  shall then be  continuing,  the Agent shall,  upon the written
request of the Required  Banks,  by written notice to the Borrower,  take any or
all of the following  actions,  without  prejudice to the rights of the Agent or
any Bank to  enforce  its  claims  against  the  Borrower,  except as  otherwise
specifically  provided  for in this  Agreement  (provided  that if an  Event  of
Default specified in Section 8.05 shall occur, with respect to any Credit Party,
the result  which would occur upon the giving of written  notice by the Agent as
specified  in clauses (i) and (ii) below shall occur  automatically  without the
giving  of any such  notice):  (i)  declare  the Total  Commitments  terminated,
whereupon the Commitment of each Bank shall forthwith terminate  immediately and
any accrued and unpaid  Commitment  Commission  shall  forthwith  become due and
payable  without any other notice of any kind; (ii) declare the principal of and
accrued interest in respect of all Loans and all Obligations owing hereunder and
thereunder to be,  whereupon  the same shall  become,  forthwith due and payable
without presentment,  demand,  protest or other notice of any kind, all of which
are hereby  waived by each Credit  Party;  and/or (iii)  enforce,  as Collateral
Agent (or direct the  Collateral  Agent to enforce),  any or all of the remedies
created pursuant to the Security  Documents.  If an Event of Default is cured or
waived in accordance  with the terms of the Agreement,  it ceases (or is waived,
pursuant to the terms, and to the extent, of such waiver).

            SECTION 9.  Definitions.  As used herein,  the following terms shall
have the  meanings  herein  specified  unless the  context  otherwise  requires.
Defined terms in this Agreement  shall include in the singular number the plural
and in the plural the singular:

            "A Term Loan" has the meaning provided in Section
1.01(a).

            "A Term Loan  Commitment"  means,  with  respect to each  Bank,  the
amount set forth opposite such Bank's name on Annex I hereto  directly below the
column entitled "Commitments -- A Term," as the same may be reduced from time to
time pursuant to Sections 2.01, 2.02, 3.02 and/or 8.

            "A Term Loan Facility" means the Loan Facility evidenced
by the Total A Term Loan Commitments.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -89-



            "A Term Note" has the meaning provided in Section
1.05(a).

            "Account"  means  all of the  "accounts"  of the  Borrower  and  its
Subsidiaries (as that term is defined in Section 9-106 of the Uniform Commercial
Code as in effect in the State of New York) whether or not such Account has been
earned  by  performance,  whether  now  existing  or  existing  in  the  future,
including,  without limitation, all (i) accounts receivable,  including, without
limitation,  all accounts  created by or arising from all of the  Borrower's and
its  Subsidiaries'  sales of goods or  rendition  of  services or  licensing  or
subleasing of any of the Borrower's and its Subsidiaries' Intellectual Property;
(ii) unpaid seller's rights  (including  rescission,  replevin,  reclamation and
stopping  in transit)  relating to the  foregoing  or arising  therefrom;  (iii)
rights to any goods represented by any of the foregoing,  including  returned or
repossessed  goods;  (iv) reserves and credit  balances held by the Borrower and
its  Subsidiaries  with respect to any such  accounts  receivable or any account
debtor;  (v)  guarantees  or  collateral  for  any of the  foregoing;  and  (vi)
insurance policies or rights relating to any of the foregoing.

            "Acquisition Corp." means DNL Savannah Acquisition Corp.,
a Delaware corporation and a Wholly Owned Subsidiary of Holdings
(now known as Carson Products Company).

            "Additional Collateral" has the meaning provided in
Section 6.13.

            "Additional Real Property" has the meaning provided in
Section 6.13.

            "Affiliate"  means with  respect  to any  Person,  any other  Person
directly or indirectly  controlling  (including but not limited to all directors
and  executive  officers  of such  Person),  controlled  by, or under  direct or
indirect common control with such Person; provided that neither Indosuez nor any
Affiliate of Indosuez  shall be deemed to be an Affiliate of any Credit Party. A
Person  shall be  deemed to  control  a  corporation  for the  purposes  of this
definition if such Person  possesses,  directly or indirectly,  the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such  corporation,  whether  through the ownership of
voting securities, by contract or otherwise.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -90-



            "Agent"  means  Indosuez,  or any  successor  thereto  appointed  in
accordance  herewith,  in its  capacity  as agent and  collateral  agent for the
Banks.

            "Agent's  Office"  means the  office of the  Agent  located  at 1211
Avenue of the  Americas,  7th Floor,  New York,  New York  10036,  or such other
office in New York as the Agent may  hereafter  designate  in writing as such to
the other parties hereto.

            "Agreement" means this Credit  Agreement,  as the same may after its
execution be amended,  supplemented  or otherwise  modified from time to time in
accordance with the terms hereof.

            "Asset Sale" means the sale,  transfer or other disposition,  to the
extent  consummated after the Closing Date, (x) by Holdings of the Securities of
the Borrower  held by it to any Person or (y) by the Borrower or any  Subsidiary
of the  Borrower  to any Person  other  than the  Borrower  or any Wholly  Owned
Subsidiary  of the  Borrower  of any asset of the  Borrower  or such  Subsidiary
(other than, in each such case, (i)  transactions  included in the definition of
Net Financing  Proceeds,  (ii) the issuance of equity securities under any stock
option or other  benefit  plan  available  to the  employees or directors of the
Borrower  or  any  of  its  Subsidiaries,   (iii)  sales,   transfers  or  other
dispositions of inventory in the ordinary course of business and/or of equipment
that has become worn out,  obsolete  or damaged or  otherwise  unsuitable  or no
longer needed for use in connection  with the business of the Borrower or any of
its  Subsidiaries  or  should be  replaced,  as the case may be, in each case as
determined  in good  faith by the  board of  directors  of the  Borrower  or its
Subsidiary, as the case may be, effected in compliance with Section 7.13A(iv) or
(v), and (iv) sales or other dispositions pursuant to Section 7.13A(v),  (vi) or
(vii).

            "Authorized  Officer"  means any senior  officer of the  Borrower or
Holdings,  as the case may be, designated as such in writing to the Agent by the
Borrower or Holdings, as the case may be, to the extent reasonably acceptable to
the Agent.

            "B Term Loan" has the meaning provided in Section
1.01(a).

            "B Term Loan  Commitment"  means,  with  respect to each  Bank,  the
amount set forth opposite such Bank's name on Annex I hereto  directly below the
column entitled  "Commitments -- B Term" as the same may be reduced from time to
time pursuant to Sections 2.01, 2.02, 3.02 and/or 8.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -91-



            "B Term Loan Facility" means the Loan Facility evidenced
by the Total B Term Loan Commitments.

            "B Term Note" has the meaning provided in Section
1.05(a).

            "Bank" has the meaning provided in the first paragraph of
this Agreement and in Section 11.04.

            "Bankruptcy Code" has the meaning provided in
Section 8.05.

            "Base  Rate" means the higher of (x) 1/2% per annum in excess of the
Federal Funds Rate and (y) the rate which the Agent  announces from time to time
as its prime lending  rate,  as in effect from time to time.  The rate the Agent
announces as its prime lending rate is a reference rate and does not necessarily
represent  the lowest or best rate actually  charged to any customer.  The Agent
may make commercial loans or other loans at rates of interest at, above or below
the rate it announces as its prime lending rate.

            "Base Rate Loan" means each Loan bearing  interest based on the Base
Rate as provided in Section 1.08(a).

            "Borrower" means Carson Products Company, a Delaware
corporation.

            "Borrower  General  Security  Agreement"  means the Borrower General
Security  Agreement  substantially  in the form of Exhibit H hereto,  except for
such changes  therein as shall have been  approved by the Agent and the Required
Banks, as the same may after its execution be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.

            "Borrower   Intellectual  Property  Security  Agreement"  means  the
Borrower Intellectual  Property Security Agreement  substantially in the form of
Exhibit G hereto, except for such changes therein as shall have been approved by
the Agent  and the  Required  Banks,  as the same may  after  its  execution  be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof and hereof.

            "Borrower  Pledge  Agreement" means the Borrower  Securities  Pledge
Agreement  substantially  in the form of  Exhibit  F-1  hereto,  except for such
changes therein as shall have been approved by the Agent and the Required Banks,
as the same may  after its  execution  be  amended,  supplemented  or  otherwise
modified from time to time in accordance with the terms thereof and hereof.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -92-




            "Borrowing"  means the incurrence  pursuant to a Notice of Borrowing
and the Loan Facility of one Type of Loan by a Borrower from all of the Banks on
a pro rata  basis on a given  date (or  resulting  from  conversions  on a given
date), having in the case of Reserve Adjusted Eurodollar Loans the same Interest
Periods.

            "Borrowing  Base" means an amount equal to the sum of (i) 80% of the
Eligible Accounts Receivable and (ii) 50% of the Eligible Inventory.

            "Borrowing Base Certificate" has the meaning assigned to
that term in Section 6.01.

            "Business  Day" means (i) for all purposes  other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in The City of New York or Savannah,  Georgia a legal  holiday or a day on which
banking  institutions  are  authorized by law or other  governmental  actions to
close and (ii) with  respect to all notices  and  determinations  in  connection
with,  and payments of principal and interest on,  Reserve  Adjusted  Eurodollar
Loans, any day which is a Business Day described in clause (i) and which is also
a day for  trading by and  between  banks in Dollar  deposits  in the  interbank
eurodollar market.

            "Capital  Lease"  of any  Person  means  any  lease of any  property
(whether real,  personal or mixed) by that Person as lessee which, in conformity
with GAAP,  is, or is required to be,  accounted  for as a capital  lease on the
balance  sheet of that  Person,  together  with any  renewals of such leases (or
entry into new leases) on substantially similar terms.

            "Capitalized  Lease Obligations" of any Person means all obligations
under  Capital  Leases of such  Person or any of its  Subsidiaries  in each case
taken at the amount  thereof  accounted for as  liabilities  in accordance  with
GAAP.

            "Carson Holdings Limited" means a South African
subsidiary of the Borrower.

            "Carson  Holdings  Limited  Share  Incentive  Trust" means the trust
pursuant to which certain  additional  shares of common stock of Carson Holdings
Limited may be issued from time to time.

            "Cash" means money, currency or a credit balance in a
Deposit Account.

            "Cash Equivalents" means (i) securities issued or
directly and fully guaranteed or insured by the United States of

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -93-



America or any agency or  instrumentality  thereof (provided that the full faith
and credit of the United States of America is pledged in support thereof) having
maturities  of not  more  than  one year  from  the  date of  acquisition,  (ii)
marketable  direct  obligations  issued  by any  State of the  United  States of
America or any local government or other political subdivision thereof rated (at
the time of  acquisition  of such  security)  at least AA by  Standard  & Poor's
Ratings Group ("S&P") or the equivalent  thereof by Moody's  Investors  Service,
Inc.  ("Moody's")  having  maturities of not more than one year from the date of
acquisition,  (iii) U.S.  dollar  denominated  time  deposits,  certificates  of
deposit and bankers'  acceptances of (x) any Bank,  (y) any domestic  commercial
bank of recognized standing having capital and surplus in excess of $250,000,000
or (z) any  bank  whose  short-term  commercial  paper  rating  (at the  time of
acquisition of such  security) by S&P is at least A-1 or the equivalent  thereof
or by  Moody's is at least P-1 or the  equivalent  thereof  (any such  bank,  an
"Approved  Bank"), in each case with maturities of not more than six months from
the date of acquisition,  (iv) commercial paper and variable or fixed rate notes
issued by any Bank or  Approved  Bank or by the  parent  company  of any Bank or
Approved  Bank and  commercial  paper and  variable  rate  notes  issued  by, or
guaranteed by, any industrial or financial company with a short-term  commercial
paper rating (at the time of  acquisition  of such  security) of at least A-1 or
the  equivalent  thereof  by S&P or at least P-1 or the  equivalent  thereof  by
Moody's, or guaranteed by any industrial company with a long-term unsecured debt
rating  (at the  time of  acquisition  of such  security)  of at least AA or the
equivalent  thereof by S&P or the equivalent thereof by Moody's and in each case
maturing  within  one  year  after  the  date  of  acquisition,  (v)  repurchase
agreements  with any Bank or any primary  dealer in U.S.  government  securities
maturing  within  one  year  from  the  date  of  acquisition   that  are  fully
collateralized   by  investment   instruments   that  would  otherwise  be  Cash
Equivalents;  provided that the terms of such repurchase  agreements comply with
the  guidelines  set forth in the  Federal  Financial  Institutions  Examination
Council Supervisory Policy -- Repurchase  Agreements of Depository  Institutions
With  Securities  Dealers  and  Others,  as  adopted by the  Comptroller  of the
Currency on October 31, 1985, and (vi) investments in money market mutual funds,
all of the assets of which are invested in  securities  and  instruments  of the
types set forth in clauses (i) through (iv) above.

            "Certificate of Incorporation" means the respective
certificates of incorporation of Holdings or the Borrower.

            "Change of Control" has the meaning assigned to that term
in Section 8.10.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -94-



            "Closing Date" means the date on or before October 18, 1996 on which
the Initial Loans are made and the consummation of the Holdings IPO occurs.

            "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

            "Collateral" means all of the Pledged Collateral, Pledged Securities
and Mortgaged  Real Property and all Additional  Collateral and Additional  Real
Property to the extent not otherwise included in any of the foregoing.

            "Collateral Agent" means Indosuez in its capacity as
collateral agent for the Banks.

            "Collective Bargaining Agreement" means the Collective
Bargaining Agreement set forth in Annex V.

            "Commercial  Letter of Credit" means any letter of credit or similar
instrument  issued for the account of the  Borrower for the purpose of providing
the primary payment  mechanism in connection with the purchase of any materials,
goods or services by the  Borrower or any of its  Subsidiaries  in the  ordinary
course of business of the Borrower or such Subsidiaries.

            "Commitment" means, with respect to each Bank, such
Bank's A Term  Loan  Commitment,  B Term  Loan  Commitment  and  Revolving  Loan
Commitment.

            "Commitment Commission" has the meaning provided in
Section 2.03.

            "Compliance  Certificate"  means a  certificate  issued  pursuant to
Section  6.01(f)  signed  by  a  chief  financial  officer,   controller,  chief
accounting officer or other Authorized Officer of the Borrower.

            "Consolidated  Amortization  Expense" for any Person means,  for any
period,  the  consolidated  amortization  expense of such Person for such period
(including  amortization of any step-up in value of Inventory or other assets as
may be required by purchase accounting),  determined on a consolidated basis for
such Person and its Subsidiaries in conformity with GAAP.

            "Consolidated  Capital  Expenditures"  of any Person means,  for any
period, the aggregate gross increase during that period, in the property,  plant
or equipment reflected in the consolidated  balance sheet of such Person and its
consolidated Subsidiaries, in

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -95-



conformity  with GAAP, but excluding  expenditures  made in connection  with the
replacement,  substitution  or restoration of assets (i) to the extent  financed
from  insurance  proceeds paid on account of the loss of or damage to the assets
being replaced or restored,  (ii) with awards of  compensation  arising from the
taking by eminent domain or  condemnation  of the assets being replaced or (iii)
with regard to equipment that is purchased  simultaneously  with the trade-in of
existing  equipment,  fixed assets or  improvements,  the credit  granted by the
seller of such  equipment  for the trade-in of such  equipment,  fixed assets or
improvements; provided that Consolidated Capital Expenditures shall in any event
include the purchase price paid in connection  with the acquisition of any other
Person  (including  through the  purchase  of all of the capital  stock or other
ownership  interests of such Person or through merger or  consolidation)  to the
extent allocable to property, plant and equipment.

            "Consolidated  Compensation  Expense" for any Person means,  for any
period,  the  consolidated  compensation  expense incurred by such Person during
such period (x) in connection with long-term incentive compensation arrangements
entered  into  by  such  Person  or any of its  consolidated  Subsidiaries  with
officers and  employees of such Person or any  consolidated  Subsidiary  of such
Person prior to the  consummation of the Holdings IPO and (y) in connection with
issuances  of  shares  of  the  capital  stock  of  such  Person  or  any of its
consolidated Subsidiaries to directors, officers and/or employees of such Person
or  any of its  consolidated  Subsidiaries  prior  to  the  consummation  of the
Holdings  IPO, in each such case  determined  on a  consolidated  basis for such
Person and its consolidated Subsidiaries in conformity with GAAP.

            "Consolidated  Current Assets" means,  with respect to any Person as
at any  date  of  determination,  the  total  assets  of  such  Person  and  its
consolidated  Subsidiaries which may properly be classified as current assets on
a consolidated balance sheet of such Person and its Subsidiaries  (provided that
with respect to the Borrower,  there shall be added to such amount the amount of
LIFO  reserve  as  reflected  in the then  most  recent  consolidated  financial
statements  of the  Borrower  delivered  by the  Borrower  pursuant  to  Section
6.01(a), (b) and (c)), all as determined on a consolidated basis for such Person
and its consolidated Subsidiaries in accordance with GAAP.

            "Consolidated Current Liabilities" means, with respect to any Person
as at any date of  determination,  the total  liabilities of such Person and its
consolidated   Subsidiaries   which  may  properly  be   classified  as  current
liabilities  (other  than the current  portion of any Loans and of any  Existing
Indebtedness) on a

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -96-



consolidated  balance sheet of such Person and its consolidated  Subsidiaries in
accordance with GAAP.

            "Consolidated  Depreciation  Expense" for any Person means,  for any
period,  the consolidated  depreciation  expense of such Person for such period,
determined  on a  consolidated  basis  for  such  Person  and  its  consolidated
Subsidiaries in conformity with GAAP.

            "Consolidated  EBITDA" for any Person  means,  for any  period,  the
difference  between  (A)  the  sum  of  the  amounts  for  such  period  of  (i)
Consolidated Net Income, (ii) Consolidated Interest Expense,  (iii) Consolidated
Tax  Expense,   (iv)  Consolidated   Depreciation   Expense,   (v)  Consolidated
Compensation Expense and (vi) Consolidated Amortization Expense less (B) the sum
of the amounts for such period of (i) interest  income,  (ii) net gains on sales
of assets to the extent  included in  Consolidated  Net  Income,  whether or not
extraordinary  (excluding  sales in the ordinary  course of business)  and other
extraordinary  gains,  as  adjusted  for the  impact of the  application  of the
last-in,  first-out  (LIFO)  method of valuing  inventory  (to the  extent  such
adjustments are non-Cash),  which adjustment is made by (x) adding to the sum in
clause (A) above the amount of LIFO provision for such period, if any, which had
the effect of  decreasing  the  Consolidated  Net Income of the Borrower and its
Subsidiaries  for such  period or (y)  adding to the sum in clause (B) above the
amount  of LIFO  recovery  for such  period,  if any,  which  had the  effect of
increasing the  Consolidated Net Income of the Borrower and its Subsidiaries for
such period,  and (iii) for the Borrower  only,  non-cash  compensation  expense
related  to and in  connection  with the chief  executive  officer's  Employment
Agreement,  all as  determined on a  consolidated  basis for such Person and its
consolidated Subsidiaries in accordance with GAAP.

            "Consolidated  EBITDAC"  for  any  Person  means,  for  any  period,
Consolidated EBITDA for such period minus Consolidated  Capital Expenditures for
such period.

            "Consolidated  Interest  Expense"  for  any  Person  means,  for any
period,  the sum of (x) total interest expense  (including that  attributable to
Capital Leases in accordance with GAAP) and (y) total cash dividends paid on any
preferred  stock,  in each  case  of  such  Person  and  its  Subsidiaries  on a
consolidated  basis with respect to all outstanding  Indebtedness  and preferred
stock of such Person and its Subsidiaries,  including,  without limitation,  all
commissions,  discounts  and other fees and charges owed with respect to letters
of credit  and  bankers'  acceptance  financing,  but  excluding,  however,  any
amortization of deferred  financing  costs,  all as determined on a consolidated
basis for such Person and its

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -97-



consolidated  Subsidiaries  in accordance  with GAAP. For purposes of clause (y)
above,  dividend  requirements shall be increased to an amount  representing the
pretax  earnings  that would be  required to cover such  dividend  requirements;
accordingly,  the increased amount shall be equal to such dividend  requirements
multiplied by a fraction,  the  numerator of which is such dividend  requirement
and the denominator of which is 1 minus the applicable  actual combined Federal,
state,  local and foreign  income tax rate of such  Person and its  subsidiaries
(expressed  as  a  decimal),  on a  consolidated  basis,  for  the  fiscal  year
immediately  preceding  the date of the  transaction  giving rise to the need to
calculate Consolidated Interest Expense.

            "Consolidated Net Income" for any Person means, for any period,  the
net income (or loss) of such Person and its Subsidiaries on a consolidated basis
for such period taken as a single accounting period determined on a consolidated
basis for such Person and its consolidated Subsidiaries in conformity with GAAP;
provided  that  there  shall be  excluded  (i) the income (or loss) of any other
Person (other than consolidated  Subsidiaries of such Person) in which any third
Person (other than such Person or any of its  consolidated  Subsidiaries)  has a
joint  interest,  except to the  extent  of the  amount  of  dividends  or other
distributions  actually paid to such Person or any of its  Subsidiaries  by such
other Person  during such period,  (ii) the income (or loss) of any other Person
accrued prior to the date it becomes a consolidated Subsidiary of such Person or
is  merged  into or  consolidated  with such  Person or any of its  consolidated
Subsidiaries or such other Person's assets are acquired by such Person or any of
its  consolidated  Subsidiaries,  and  (iii)  the  income  of  any  consolidated
Subsidiary  of such  Person to the  extent  that the  declaration  or payment of
dividends  or similar  distributions  by that  consolidated  Subsidiary  of that
income is not at the time  permitted by operation of the terms of its charter or
any  agreement,   instrument,   judgment,   decree,   order,  statute,  rule  or
governmental regulation applicable to that consolidated Subsidiary.

            "Consolidated Tax Expense" for any Person means, for any period, the
consolidated  tax  expense  of such  Person  for such  period,  determined  on a
consolidated  basis  for  such  Person  and  its  consolidated  Subsidiaries  in
conformity with GAAP.

            "Contingent   Obligations"   means,   as  to  any  Person,   without
duplication, any obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary  obligor") in any manner,  whether directly or
indirectly, including, without limitation, any obligation of such Person,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -98-



whether or not  contingent,  (a) to purchase any such primary  obligation or any
property  constituting  direct or indirect security therefor,  (b) to advance or
supply funds (i) for the purchase or payment of any such primary  obligation  or
(ii) to maintain  working  capital or equity  capital of the primary  obligor or
otherwise to maintain the net worth or solvency of the primary  obligor,  (c) to
purchase property,  securities or services primarily for the purpose of assuring
the owner of any such primary  obligation of the ability of the primary  obligor
to make payment of such primary  obligation  or (d)  otherwise to assure or hold
harmless the owner of such primary  obligation  against loss in respect thereof;
provided,  however,  that the  term  Contingent  Obligation  shall  not  include
endorsements  of instruments for deposit or collection in the ordinary course of
business  and amounts  that are  permitted  by Section  7.14.  The amount of any
Contingent  Obligation  shall be  deemed to be an  amount  equal to the  maximum
amount that such Person may be obligated to expend pursuant to the terms of such
Contingent  Obligation or, if such Contingent  Obligation is not so limited, the
stated or determinable amount of the primary obligation in respect of which such
Contingent  Obligation  is made or, if not stated or  determinable,  the maximum
reasonably  anticipated  liability in respect  thereof  (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.

            "Credit  Documents" means (i) this Agreement,  (ii) each Note, (iii)
each Guarantee and (iv) each Security Document.

            "Credit Party" means at all times Holdings and the Borrower and each
Subsidiary of the Borrower that pledges any stock, grants any Lien or issues any
Guarantee pursuant to any Credit Document.

            "Default"  means any event,  act or  condition  which with notice or
lapse of time, or both, would constitute an Event of Default.

            "Destruction" has the meaning assigned to that term in
each Mortgage.

            "Dividends" has the meaning provided in Section 7.07.

            "DNL Affiliates" means Vincent A. Wasik, S. Garrett
Stonehouse, Lawrence E. Bathgate, II and Morningside, in each case
together with Affiliates thereof, any member of the immediate
family of any of the foregoing, or any trust or foundation for the
benefit of any of the foregoing.

            "Dollars" means United States Dollars.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -99-




            "Effective Date" has the meaning provided in
Section 11.10.

            "Eligible  Accounts  Receivable" means, as at any applicable date of
determination, the aggregate face amount of the Borrower's and its Subsidiaries'
Accounts  included  in  clause  (i)  of  the  definition  of  Account  hereunder
(excluding  any  Accounts  set  forth  in  clauses  (ii)  through  (vi)  of such
definition),  without duplication,  in each case less (without  duplication) the
aggregate  amount of all reserves,  limits and  deductions  with respect to such
Accounts  set  forth  below  and  less  the  aggregate  amount  of all  returns,
discounts,  claims, rebates, offsets, credits, charges (including warehouseman's
charges) and  allowances  of any nature with respect to such  Accounts  (whether
issued, owing, granted or outstanding).  Unless otherwise approved in writing by
the Agent in its sole discretion, no individual Account shall be deemed to be an
Eligible Account Receivable if:

            (a)   the Borrower or its Subsidiary does not have legal
      and valid title to the Account; or

            (b) the Account is not the valid,  binding  and legally  enforceable
      obligation of the account debtor subject,  as to  enforceability,  only to
      (i)  applicable  bankruptcy,  insolvency,  reorganization,  moratorium  or
      similar  laws at the  time  in  effect  affecting  the  enforceability  of
      creditors'  rights  generally and (ii)  judicial  discretion in connection
      with the remedy of specific performance and other equitable remedies; or

            (c)   the Account arises out of a sale made by the
      Borrower to an Affiliate of the Borrower; or

            (d) the Account or any  portion  thereof is unpaid more than 90 days
      after the original  invoice date, with respect to Accounts the invoice for
      which  provides  that  payment  is due in 60 days or less from the date of
      such invoice; or

            (e) the  Account  is  unpaid  more than 30 days  after the  original
      payment due date,  with respect to Accounts the invoice for which provides
      that  payment  is due more  than 60 days  from  the date of such  invoice;
      provided, however, that the aggregate amount of all invoices providing for
      payment more than 60 days from the date of the invoice that may constitute
      Eligible Accounts  Receivable shall not exceed 7 1/2% in face value of all
      Accounts of the Borrower and its Subsidiaries  then outstanding at any one
      time; or


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -100-



            (f) such Account,  when  aggregated  with all other  Accounts of the
      same account debtor (or any Affiliate thereof),  exceeds twenty percent in
      face value of all  Accounts  of the  Borrower  and its  Subsidiaries  then
      outstanding, to the extent of such excess; or

            (g) (i) the  account  debtor for such  Account is also a creditor of
      the  Borrower,  to the extent of the amount  owed by the  Borrower  to the
      account  debtor,  (ii) the  Account is subject to any claim on the part of
      the account debtor  disputing  liability under such Account in whole or in
      part,  to the  extent of the amount of such  dispute or (iii) the  Account
      otherwise  is or is  reasonably  likely to become  subject to any right of
      setoff or any counterclaim, claim or defense by the account debtor, to the
      extent of the amount of such setoff or counterclaim, claim or defense; or

            (h) the account  debtor for such  Account has  commenced a voluntary
      case under the federal  bankruptcy  laws, as now  constituted or hereafter
      amended, or made an assignment for the benefit of creditors or if a decree
      or order for relief has been entered by a court having jurisdiction in the
      premises in respect of the account debtor in an involuntary case under the
      federal  bankruptcy laws, as now constituted or hereafter  amended,  or if
      any other  petition  or other  application  for relief  under the  federal
      bankruptcy laws has been filed by or against the account debtor, or if the
      account debtor has failed,  suspended  business,  ceased to be solvent, or
      consented to or suffered a receiver,  trustee,  liquidator or custodian to
      be appointed for it or for all or a  significant  portion of its assets or
      affairs; or

            (i) the Agent  does not have a valid and  perfected  first  priority
      security  interest  in such  Account  (subject  only to a tax  lien  being
      contested in good faith and by  appropriate  proceedings  and permitted by
      Section 7.03(a)); or

            (j)  the  sale  to the  account  debtor  for  such  Account  is on a
      consignment, sale on approval, guaranteed sale or sale-and-return basis or
      pursuant to any written  agreement  requiring  repurchase or return (other
      than return  arrangements  in the ordinary  course of business  consistent
      with the past business practices of the Borrower); or

            (k)  such  Account  is  from an  account  debtor  (or any  Affiliate
      thereof)  and  fifty  percent  (50%) or  more,  in face  amount,  of other
      Accounts from either such account debtor or

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -101-



      any Affiliate thereof are due or unpaid for more than 90 days
      after the original invoice date; or

            (l) fifty percent (50%) or more, in face amount,  of other  Accounts
      from the same  account  debtor for such  Account  are not deemed  Eligible
      Accounts Receivable hereunder; or

            (m)   the account debtor for such Account is a foreign
      Governmental Authority; or

            (n) such Account is an Account a security interest in which would be
      subject to the Federal  Assignment  of Claims Act of 1940,  as amended (31
      U.S.C. ss. 3727 et seq.), unless (i) such Account, together with all other
      Eligible  Accounts a security  interest  in which would be subject to such
      Act, does not exceed 7 1/2% in face value of all Eligible  Accounts of the
      Borrower and its Subsidiaries then  outstanding,  or (ii) the Borrower has
      assigned the Account to the Agent in  compliance  with the  provisions  of
      such Act; or

            (o) the account debtor for such Account is outside the United States
      or  Canada  or  incorporated  in or  conducting  substantially  all of its
      business in any jurisdiction located outside the United States, unless the
      sale is (i) on letter of credit or sight  draft,  guaranty  or  acceptance
      terms,  consistent  with past business  practices of the Borrower,  not to
      exceed 5% in face value of all  Eligible  Accounts of the Borrower and its
      Subsidiaries  then outstanding or (ii) such Account is otherwise  approved
      by and reasonably acceptable to the Agent; or

            (p) the  Agent  determines  in good  faith  in  accordance  with its
      internal  credit  policies  that such Account may not be paid by reason of
      the account debtor's financial inability to pay; provided,  however,  that
      any Account  referred  to in this  clause (p) shall not become  ineligible
      until the Agent shall have given the Borrower five Business  Days' advance
      notice of such determination; or

            (q) the goods  giving rise to such  Account have not been shipped or
      the services  giving rise to such  Account have not been  performed by the
      Borrower or the Account otherwise does not represent a final sale; or

            (r) such Account does not comply in all material  respects  with all
      applicable legal requirements,  including,  where applicable,  the Federal
      Consumer  Credit  Protection  Act,  the  Federal  Truth in Lending Act and
      Regulation Z of the Board

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -102-



      of Governors of the Federal Reserve System, in each case as
      amended.

            In addition to the foregoing,  Eligible Accounts Receivable includes
such Accounts as the Borrower  requests and that the Agent  approves in advance,
in writing and in its sole  discretion  (or if the  aggregate  face amount to be
approved  exceeds  $750,000 at any one time,  the approval of the Required Banks
has been obtained in writing).

            "Eligible  Assignee" means (i) a commercial bank organized under the
laws of the United  States,  or any State  thereof,  and having  total assets in
excess of  $500,000,000;  (ii) a savings and loan  association  or savings  bank
organized under the laws of the United States, or any State thereof,  and having
total  assets in  excess of  $250,000,000;  (iii) a finance  company,  insurance
company or other  financial  institution  organized under the laws of the United
States,  or any State  thereof,  that is  engaged  in  purchasing  or  otherwise
investing in commercial  loans in the ordinary course of business,  having total
assets  in  excess  of  $100,000,000;  or (iv) an  entity  managed  by a Bank or
Affiliate of a Bank;  provided that the  Commitment  held by such entity is less
than  $20,000,000;  and,  in each  such  case,  which  is  otherwise  reasonably
acceptable to the Borrower.

            "Eligible  Inventory" means (A) the gross amount of Inventory of the
Borrower and its Subsidiaries,  valued at the lower of cost (on a FIFO basis) or
market,  which (i) is owned  solely by the Borrower or its  Subsidiary  and with
respect to which the Borrower or its Subsidiary  has good,  valid and marketable
title;  (ii) is stored  on  property  that is either  (a) owned or leased by the
Borrower or its  Subsidiary  or (b) owned or leased by a  warehouseman  that has
contracted  with the  Borrower  or its  Subsidiary  to store  Inventory  on such
warehouseman's  property (provided that, with respect to Inventory contracted to
be stored on property leased by the Borrower or its Subsidiary,  the Borrower or
its Subsidiary shall deliver to the Agent immediately following the execution of
such  storage  contract a  Landlord  Lien  Assurance  and,  with  respect to the
Inventory stored on property owned or leased by a warehouseman,  the Borrower or
its Subsidiary shall deliver to the Agent acknowledgment  agreements executed by
such warehouseman);  (iii) is subject to a valid, enforceable and first priority
Lien in favor of the Agent (subject to a tax lien being  contested in good faith
and by appropriate proceedings and permitted by Section 7.03(a), and except with
respect to Eligible Inventory stored at sites described in clause (ii)(b) above,
for Liens for normal and customary warehouseman charges); (iv) is located in the
United States; and (v) is not, in the reasonable

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -103-



judgment of the Agent, obsolete or slow moving in relation to customary industry
practice,  and which  otherwise  conforms to the  requirements  for  eligibility
contained  in  clauses  (i) - (iv)  hereof;  (B) less the  amount  of any  goods
returned or rejected by the Borrower's or its Subsidiaries'  customers and goods
in transit to third parties (other than to the  Borrower's or its  Subsidiaries'
agents or warehousemen that comply with clause (A)(ii)(b)  above);  and (C) less
the amount of any reserves for special order goods and market value  declines in
accordance  with GAAP. In addition to the foregoing,  Eligible  Inventory  shall
include  such items of the  Borrower's  and its  Subsidiaries'  Inventory as the
Borrower shall request and that the Agent approves in advance, in writing and in
its sole discretion (or if the aggregate  amount to be approved exceeds $500,000
at any one time, the approval of the Required Banks has been obtained).

            "Employment  Agreements" means the employment agreements between the
Borrower and (i) Joyce Roche, dated as of June 7, 1995, as amended,  (ii) Dennis
E. Smith, dated as of June 7, 1995, as amended,  and (iii) Dr. Leroy Keith dated
as of August 23, 1995, as amended.

            "Environment" shall mean any surface water,  ground water,  drinking
water  supply,  land surface or  subsurface  strata or ambient air and includes,
without limitation, any indoor location.

            "Environmental Authorizations" has the meaning provided
in Section 5.22.

            "Environmental  Laws"  shall  mean all  federal,  state,  local  and
foreign laws, codes, regulations, ordinances, requirements,  directives, orders,
common law, and administrative or judicial  interpretations  thereof that may be
enforced by any  Governmental  Authority or court,  relating to  pollution,  the
protection of human health, the protection of the Environment,  or the emission,
discharge,  disposal  or  other  release  or  threatened  release  of  Hazardous
Materials in or into the Environment.

            "Environmental Notice" shall mean any written notice or claim by any
Governmental  Authority  or other third  party  alleging  liability  (including,
without limitation,  potential liability for investigatory costs, cleanup costs,
governmental costs, compliance costs or harm, injuries or damages to any person,
property or natural resources,  or any fines or penalties) arising out of, based
upon, resulting from or relating to any Environmental Law.

            "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time.  Section references to ERISA

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -104-



are to  ERISA,  as in effect at the date of this  Agreement  and any  subsequent
provisions of ERISA,  amendatory  thereof,  supplemental  thereto or substituted
therefor.

            "ERISA  Affiliate"  means any entity,  whether or not  incorporated,
which is under common  control or would be  considered a single  employer with a
Credit  Party within the meaning of Section  414(b),  (c) or (m) of the Code and
regulations  promulgated  under those  sections or within the meaning of section
4001(b) of ERISA and regulations promulgated under that section.

            "Eurodollar  Rate" means with respect to each Interest  Period for a
Reserve  Adjusted  Eurodollar  Loan, (i) the arithmetic  average (rounded to the
nearest 1/100 of 1%) of the offered  quotation to leading banks in the interbank
Eurodollar  market by each of the  Reference  Banks for dollar  deposits in such
Reference  Bank of  amounts  in same day  funds  comparable  to the  outstanding
principal amount of the Reserve  Adjusted  Eurodollar Loan for which an interest
rate is then being determined with maturities  comparable to the Interest Period
to be applicable to such Eurodollar Loan,  determined as of 10:00 A.M. (New York
time) on the date which is two Business Days prior to the  commencement  of such
Interest  Period  divided (and rounded upward to the next whole multiple of 1/16
of 1%) by (ii) a percentage  equal to 100% minus the then stated maximum rate of
all  reserve  requirements   (including,   without  limitation,   any  marginal,
emergency,  supplemental,  special or other  reserves)  applicable to any member
bank of the Federal  Reserve  System in respect of  Eurocurrency  liabilities as
defined  in  Regulation  D (or  any  successor  category  of  liabilities  under
Regulation  D);  provided that if any Reference  Bank fails to provide the Agent
with its aforesaid rate,  then the Eurodollar Rate shall be determined  based on
the rate or rates  provided to the Agent by a bank  designated  by the  Required
Banks and reasonably approved by the Borrower.

            "Event of Default" has the meaning provided in Section 8.

            "Excess Cash Flow" means,  without  duplication,  for any Person for
any period for which  such  amount is being  determined,  (i)  Consolidated  Net
Income,  minus (ii) any amount  which is both (x) included in  Consolidated  Net
Income and (y) required to be applied to the prepayment of the Loans pursuant to
Section  3.02(A),  plus  (minus)  (iii) the amount of  depreciation,  depletion,
amortization  of  intangibles,   deferred  taxes  and  other  non-cash  expenses
(revenues)  which,  pursuant to GAAP, were deducted  (added) in determining such
Consolidated Net Income of such Person minus (plus) (iv) additions  (reductions)
to  working  capital  for  such  period  (i.e.,  the  increase  or  decrease  in
Consolidated Current

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -105-



Assets (excluding Cash or Cash Equivalents which are either Net Cash Proceeds or
Net  Financing  Proceeds  required to be applied to the  prepayment of the Loans
pursuant to Section  3.02(A)(e)  of such Person from the beginning to the end of
such  period) of such Person  minus the  increase  or  decrease in  Consolidated
Current  Liabilities) minus (v) the amount of Consolidated  Capital Expenditures
that are paid other than from the  proceeds of  borrowings  in such period minus
(vi) Scheduled A Term Loans Principal Payments, Scheduled B Term Loans Principal
Payments and  voluntary  prepayments  of Loans not subject to  reborrowing  made
during such  period.  For  purposes of the  foregoing  and without  duplication,
Consolidated  Net Income will  exclude (x) all net losses on the sale of capital
assets or out of the  ordinary  course of business  and (y) all  write-downs  of
capital assets.

            "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

            "Existing Debt" means the Indebtedness of the Borrower
and its Subsidiaries set forth on Annex III.

            "Existing Leases" means the Leases of the Borrower and
its Subsidiaries set forth on Annex XV.

            "Federal  Funds Rate" means on any one day the  weighted  average of
the rate on overnight  Federal  funds  transactions  with members of the Federal
Reserve  System only  arranged by Federal  funds brokers as published as of such
day by the Federal  Reserve Bank of New York, or if not so  published,  the rate
then used by leading banks in extending overnight loans to other leading banks.

            "Final A Term Loan Maturity Date" means the last Business
Day of September, 2002.

            "Final B Term Loan Maturity Date" means the last Business
Day of September, 2003.

            "Final Revolving Loan Maturity Date" means the last
Business Day of September, 2002.

            "Financing Proceeds" means the cash (other than Net Cash Proceeds or
proceeds of any sale,  transfer or other disposition of assets excluded from the
definition of "Asset Sale" by the exceptions  contained therein) received by the
Borrower  and/or  any of its  Subsidiaries,  directly  or  indirectly,  from any
financing  transaction of whatever kind or nature,  including without limitation
from any  incurrence  of  Indebtedness,  any  mortgage  or pledge of an asset or
interest therein (including a transaction

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -106-



which is the substantial  equivalent of a mortgage or pledge),  from the sale of
tax benefits,  from a lease to a third party and a pledge of the lease  payments
due thereunder to secure Indebtedness, from a joint venture arrangement, from an
exchange of assets and a sale of the assets  received in such  exchange,  or any
other  similar  arrangement  or  technique  whereby  the  Borrower or any of its
Subsidiaries obtains Cash in respect of an asset, net of direct costs associated
therewith.  Financing Proceeds shall not include any amounts with respect to (i)
the incurrence or refinancing of the Total Revolving Loan  Commitment,  (ii) the
incurrence or refinancing of Indebtedness  permitted by Sections  7.04(a),  (b),
(c) and (d)  effected  in  accordance  with the  applicable  provisions  of such
Sections,  or (iii) transactions  between any of the Borrower,  Holdings and any
Wholly Owned Subsidiaries of the Borrower.

            "Fine Products" has the meaning set forth in Section 5.24
hereof.

            "FIRREA"  means  the  Financial  Institutions  Reform,   Recovery  &
Enforcement  Act of  1989,  as  amended  from  time to time,  and any  successor
statute.

            "Foreign Bank" has the meaning provided in Section
3.04(c).

            "GAAP" means generally accepted accounting  principles in the United
States of America as in effect on the Effective  Date, it being  understood  and
agreed that  determinations  in accordance with GAAP for purposes of Sections 5,
6, 7 and 8 and all defined terms as used in this Agreement,  are subject (to the
extent provided therein) to Section 11.07(a).

            "General  Security  Agreements"  means  and  includes  the  Borrower
General Security Agreement and any other general security  agreements  delivered
pursuant to Section 6.13 or 6.14.

            "Government Acts" has the meaning provided in Section
1.13(I).

            "Governmental Authority" means any federal, state, local, foreign or
other   governmental  or  administrative   (including   self-regulatory)   body,
instrumentality,  department  or agency or any court,  tribunal,  administrative
hearing body, arbitration panel, commission,  or other similar dispute-resolving
panel or body including,  without limitation, those governing the regulation and
protection of the  Environment,  whether now or hereafter in  existence,  or any
officer or official thereof.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -107-



            "Guarantee" means and includes, once executed and delivered, each of
the Holdings Guarantee and each Subsidiary Guarantee.

            "Guarantor" for purposes of this Agreement means, individually, each
of Holdings and each Subsidiary which executes a Subsidiary Guarantee.

            "Hazardous  Materials"  means  all  pollutants,   contaminants,   or
chemical, industrial, hazardous or toxic materials, substances,  constituents or
wastes,   including,   without  limitation,   asbestos  or   asbestos-containing
materials,  polychlorinated  biphenyls and  petroleum,  oil, or petroleum or oil
products, derivatives or constituents,  including, without limitation, crude oil
or any fraction thereof.

            "Holdings"  means  Carson,  Inc., a Delaware  corporation  (formerly
known as DNL Savannah Holding Corp.).

            "Holdings  Guarantee" means the Holdings Guarantee  substantially in
the form of  Exhibit  E  hereto,  except  for such  changes  as shall  have been
approved  by the  Agent  and the  Required  Banks,  as the  same may  after  its
execution be amended,  supplemented  or otherwise  modified from time to time in
accordance with the terms thereof and hereof.

            "Holdings IPO" has the meaning set forth in the recitals
hereto.

            "Holdings  Pledge  Agreement" means the Holdings  Securities  Pledge
Agreement  substantially  in the form of  Exhibit  F-2  hereto,  except for such
changes therein as shall have been approved by the Agent and the Required Banks,
as the same may  after its  execution  be  amended,  supplemented  or  otherwise
modified from time to time in accordance with the terms thereof and hereof.

            "Indebtedness"  of any Person means,  without  duplication,  (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets  or  services  which in  accordance  with  GAAP  would be shown on the
liability  side  of the  balance  sheet  of  such  Person,  other  than  current
liabilities  in  respect  of  the   foregoing,   liabilities   for   accumulated
postretirement  benefit  obligations and liabilities for deferred  compensation,
(iii) the face  amount of all  letters of credit  issued for the account of such
Person and, without  duplication,  all drafts drawn and unpaid thereunder,  (iv)
all Indebtedness of a second Person secured by any Lien on any property owned by
such first  Person,  whether or not such  Indebtedness  has been assumed by such
first Person, (v) all

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -108-



Capitalized  Lease  Obligations  of such Person,  (vi) all  obligations  of such
Person to pay a specified  purchase  price for goods or services  whether or not
delivered or accepted,  i.e.,  take-or-pay  and similar  obligations,  (vii) all
obligations  of such  Person  under  Interest  Rate  Agreements  and  (viii) all
Contingent  Obligations  of such Person;  provided that  Indebtedness  shall not
include trade payables,  accrued expenses,  accrued dividends and accrued income
taxes, in each case arising in the ordinary course of business.

            "Indosuez" means Banque Indosuez, New York Branch.

            "Initial Bank" means a Bank that was an original
signatory to this Agreement.

            "Initial Loans" means the initial Loans made under this Agreement on
the Closing Date.

            "Intellectual Property" has the meaning provided in
Section 5.16.

            "Intellectual  Property Security  Agreements" means and includes the
Borrower  Intellectual  Property Security  Agreement and any other  intellectual
property security agreements delivered pursuant to Section 6.13 or 6.14.

            "Interest Margin" means, for the Portion and Type of
Loan, the following:

                              Base Rate         Reserve Adjusted
                                Loans           Eurodollar Loans

      A Term Loan                0.50%                  2.00%
      B Term Loan                1.00%                  2.50%
      Revolving Loans            0.50%                  2.00%

            "Interest  Period"  means,  with  respect  to any  Reserve  Adjusted
Eurodollar Loan, the interest period applicable  thereto, as determined pursuant
to Section 1.09.

            "Interest Rate  Agreement"  means any interest rate swap  agreement,
interest  rate cap  agreement,  interest  rate collar  agreement,  interest rate
futures  contract,  interest rate option contract or other similar  agreement or
arrangement  to which the Borrower is a party,  designed to protect the Borrower
or any of its Subsidiaries against fluctuations in interest rates.

            "Interest Rate Determination Date" means each date for
calculating the Eurodollar Rate for purposes of determining the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -109-



interest rate in respect of an Interest Period.  The Interest Rate Determination
Date  shall be the  second  Business  Day prior to the first day of the  related
Interest Period for a Reserve Adjusted Eurodollar Loan.

            "Inventory"  means  all of the  inventory  of the  Borrower  and its
Subsidiaries (on a consolidated basis) including without limitation: (i) all raw
materials,  work  in  process,  parts,  components,   assemblies,  supplies  and
materials used or consumed in the business of the Borrower and its Subsidiaries;
(ii) all goods, wares and merchandise,  finished or unfinished, held for sale or
lease or leased or furnished or to be furnished under contracts of service;  and
(iii)  all  goods  returned  or  repossessed  by  the  Borrower  or  any  of its
Subsidiaries.

            "Issuing Bank" means the Bank that agrees or is otherwise  obligated
to issue a Letter of Credit, determined as provided in Section 1.13(C).

            "Junior  Subordinated  Notes" means,  collectively,  the $11,753,000
aggregate  original  principal  amount of Junior  Subordinated  Promissory Notes
issued by  Acquisition  Corp.  on August  23,  1995 as such  notes may have been
extended pursuant to the terms of the Junior Subordinated Note Agreement.

            "Junior Subordinated Note Agreement" means the Junior
Subordinated Note Agreement by and between Acquisition Corp. and
Abram Minis, Jr., Henry A. Minis, Marguerite M. Trethewey and the
Minis Family Trustees, dated August 23, 1995, as amended.

            "Landlord Lien Assurance"  means,  with respect to any Real Property
leased by the Borrower or any of its  Subsidiaries  for use as a retail facility
or for the  storage  of  Inventory,  either  (i) an  agreement  executed  by the
landlord of such Real Property  substantially in the form of Exhibit O hereto or
(ii) a legal opinion or other evidence, in each case reasonably  satisfactory to
the Agent, that the laws of the jurisdiction or jurisdictions  applicable to the
lease and the retail or storage  facility  do not give rise to any Lien in favor
of the landlord with respect to Inventory located at such facility.

            "Lease" means any lease,  sublease,  franchise  agreement,  license,
occupancy or concession agreement.

            "Letter of Credit" or "Letters of Credit"  means (i) Standby  Letter
or Letters of Credit and (ii)  Commercial  Letter or Letters of Credit,  in each
case,  issued or to be issued by Issuing  Banks for the account of the  Borrower
pursuant to Section 1.13.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -110-




            "Letter of Credit Participation" has the meaning assigned
to that term in Section 1.13(A).

            "Letters of Credit  Usage" means,  as at any date of  determination,
the sum of (i) the maximum  aggregate  amount that is or at any time  thereafter
may become  available  under all Letters of Credit  then issued and  outstanding
plus (ii) the aggregate  amount of all drawings  under Letters of Credit honored
by all Issuing Banks and not theretofore  reimbursed by the Borrower;  provided,
however,  the Letters of Credit  Usage of an Issuing  Bank shall be deemed to be
only such  portion of the  Letters of Credit  Usage of such  Issuing  Bank which
other Banks have not bought by participation pursuant to Section 1.13(A).

            "Lien" means any mortgage,  pledge, security interest,  encumbrance,
lien,  claim,  hypothecation,  assignment  for  security  or  charge of any kind
(including any agreement to give any of the foregoing,  any conditional  sale or
other title retention agreement or any lease in the nature thereof).

            "Loan" means each and every Term Loan or Revolving Loan.

            "Loan Facility" means the credit facility evidenced by
the Total Term Loan Commitments and the Total Revolving Loan
Commitments.

            "Loss Proceeds" has the meaning set forth in Section
3.02(A)(i) hereof.

            "Management  Agreement"  means the management  assistance  agreement
between Morningside and the Borrower dated as of August 23, 1995, as amended.

            "Materially  Adverse Effect" means, (i) with respect to Holdings and
the Borrower and its  Subsidiaries,  any materially  adverse effect (both before
and after giving effect to the  Refinancing  and the  financing  thereof and the
other  transactions   contemplated  hereby)  with  respect  to  the  operations,
business, properties, assets, liabilities (contingent or otherwise) or financial
condition or prospects of Holdings and the Borrower and its Subsidiaries,  taken
as a whole, or (ii) any fact or circumstance  (whether or not the result thereof
would be covered by insurance) as to which singly or in the aggregate there is a
reasonable likelihood of (w) a materially adverse change described in clause (i)
with  respect to Holdings  and the  Borrower  and its  Subsidiaries,  taken as a
whole,  (x) the inability of any Credit Party to perform in any material respect
its  Obligations  hereunder  or the  inability  of the Banks to  enforce  in any
material respect

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -111-



their rights  purported to be granted  hereunder or the  Obligations  (including
realizing on the Collateral),  or (y) a materially adverse effect on the ability
to effect (including hindering or unduly delaying) the Refinancing and the other
transactions contemplated hereby on the terms contemplated hereby and thereby.

            "Minimum Borrowing Amount" means $100,000.

            "Morningside"  means  Morningside  Capital Group, LLC, a Connecticut
limited liability company.

            "Mortgage"  means a term loan and revolving credit mortgage (or deed
of trust or deed to  secure  debt,  as the case may be),  assignment  of  rents,
security  agreement  and fixture  filing  creating  and  evidencing  a Lien on a
Mortgaged Real Property,  which shall be  substantially in the form of Exhibit D
hereto,  containing such schedules and including such additional  provisions and
other  deviations  from such  Exhibit  as shall be  necessary  to  conform  such
document to applicable or local law or as shall be customary under applicable or
local law and which shall be dated the date of delivery  thereof and made by the
owner (fee or  leasehold,  as the case may be) of the  Mortgaged  Real  Property
described  therein for the benefit of the  Collateral  Agent,  as mortgagee  (or
beneficiary,  as the case may be),  assignee and secured party,  as the same may
after its execution be amended,  supplemented or otherwise modified from time to
time in accordance with the terms thereof and hereof.

            "Mortgaged  Real  Property"  means each Real Property  designated on
Annex VIII which shall be subject to a Mortgage.

            "Multiemployer  Plan"  means a  "multiemployer  plan" as  defined in
Section  4001(a)(3)  of ERISA with  respect to which any Credit  Party or any of
their  respective  ERISA  Affiliates  is or has been  required to  contribute or
otherwise may have liability.

            "Net Award" has the meaning assigned to that term in each
Mortgage.

            "Net Cash Proceeds" means:

            (a) with  respect to any Asset Sale,  the  aggregate  cash  payments
      received  by  Holdings,   the  Borrower   and/or  any  of  the  Borrower's
      Subsidiaries,  as the case may be,  from such  Asset  Sale,  net of direct
      expenses of sale, net of taxes (including income taxes and transfer taxes)
      and net of repayment of  Indebtedness  or Capitalized  Leases in each case
      secured by a Lien on the asset subject to such Asset Sale;  provided that,
      with respect to taxes, expenses shall only include taxes to

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -112-



      the extent that taxes are  payable in cash in the  current  year or in the
      next  succeeding year with respect to the current year as a result of such
      Asset Sale; and

            (b) with respect to any Taking or Destruction,  the Net Award or Net
      Proceeds,  as applicable,  resulting therefrom,  to be applied as Net Cash
      Proceeds  under this  Agreement  pursuant  to the  provisions  of Sections
      1.13.3 and 1.13.4 of the Mortgages;

provided, further, that Net Cash Proceeds shall not include any amounts or items
included in the  definition  of  Financing  Proceeds or Net  Financing  Proceeds
(including in any proviso appearing therein).

            "Net Financing  Proceeds"  means Financing  Proceeds,  net of direct
expenses of the transaction and net of taxes (including  income taxes) currently
paid or payable in cash as a result  thereof in the current  year or in the next
succeeding  year with respect to the current year as a result of the transaction
generating Net Financing Proceeds.

            "Net Proceeds" has the meaning assigned to that term in
each Mortgage.

            "Note" means any Revolving Note or Term Note.

            "Notice of Borrowing" has the meaning provided in
Section 1.03.

            "Notice of Conversion/Continuation" has the meaning
provided in Section 1.06.

            "Obligations" means all amounts,  direct or indirect,  contingent or
absolute, of every type or description,  and at any time existing,  owing to the
Agent or any Bank  pursuant to the terms of this  Agreement  or any other Credit
Document or secured by any of the Security Documents.

            "Officers'  Certificate"  means,  as applied to any  corporation,  a
certificate  executed on behalf of such corporation by its Chairman of the Board
(if an officer) or its President or one of its Vice  Presidents and by its Chief
Financial  Officer or its  Treasurer or any Assistant  Treasurer;  provided that
every  Officers'  Certificate  with  respect  to  compliance  with  a  condition
precedent to the making of any Loan hereunder shall include (i) a statement that
the  officers  making  or  giving  such  Officers'  Certificate  have  read such
condition and any definitions or other

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -113-



provisions contained in this Agreement relating thereto,  (ii) a statement that,
in the  opinion of the  signers,  they have made or have  caused to be made such
examination  or  investigation  as is  necessary  to enable  them to  express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether,  in the opinion of the signers,  such condition
has been complied with.

            "Officers'  Solvency   Certificate"  means  the  Officers'  Solvency
Certificate in the form set forth as Exhibit L hereto.

            "Operating  Lease" of any Person,  shall mean any lease  (including,
without limitation, leases which may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) by such Person as Lessee which is
not a Capital Lease.

            "Overallotment  Option" means,  in connection with the Holdings IPO,
the option granted by the Company to the  underwriters  and managers to purchase
additional  shares of the common  stock of  Holdings,  pursuant to the U.S.  and
international purchase agreements, respectively.

            "Partial Release Conditions" has the meaning provided in
Section 7.13(C).

            "PBGC" means the Pension Benefit  Guaranty  Corporation  established
pursuant to Section 4002 of ERISA, or any successor thereto.

            "Pension  Plan" means any pension plan as defined in Section 3(2) of
ERISA (other than a Multiemployer Plan) which is or has been maintained by or to
which  contributions  are or  have  been  made  by any  Credit  Party  or  their
respective  ERISA Affiliates or as to which any Credit Party or their respective
ERISA Affiliates may have liability.

            "Permitted Encumbrances" has the meaning provided in
Section 7.03.

            "Person" means any  individual,  partnership,  joint venture,  firm,
corporation,   association,  trust  or  other  enterprise  or  any  Governmental
Authority.

            "Pledge   Agreements"   means  and  includes  the  Holdings   Pledge
Agreement,  the Borrower Pledge Agreement,  and any securities pledge agreements
(including,  without  limitation,  any  supplements  or amendments to any of the
foregoing) delivered pursuant to Section 6.13, 6.14 or 6.16.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -114-




            "Pledged  Collateral" means all the Pledged Collateral as defined in
each  of the  General  Security  Agreements  and in  the  Intellectual  Property
Security Agreements.

            "Pledged  Securities"  means all the securities and other collateral
in which a security  interest  is  purported  to be granted to the Agent for the
benefit  of the  Banks  by each of the  Pledge  Agreements,  including,  without
limitation, all Pledged Collateral as defined therein.

            "Portion" means the Term Portion or the Revolving
Portion.

            "Prior Liens" means Liens which,  pursuant to the  provisions of any
Security Document, are or may be superior to the Lien of such Security Document.

            "Projected Financial Statements" has the meaning set
forth in Section 5.11(c).

            "Real Property" means all right,  title and interest of the Borrower
or any of its Subsidiaries (including, without limitation, any leasehold estate)
in and to a parcel of real property owned, leased or operated by the Borrower or
any of its  Subsidiaries  together  with, in each case, all of the Borrower's or
such  Subsidiaries'  right,  title and interest in and to all  improvements  and
appurtenant fixtures, equipment, personal property, easements and other property
and rights incidental to the ownership, lease or operation thereof.

            "Release" has the meaning set forth in Section 7.13(B).

            "Release Conditions" has the meaning set forth in Section
7.13(B).

            "Release Notice" has the meaning set forth in Section
7.13(B).

            "Released Real Property" has the meaning set forth in
Section 7.13(B).

            "Reference Banks" means Indosuez, Chase Bank and
Citibank, N.A.

            "Regulation  D" means  Regulation D of the Board of Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -115-




            "Regulation  G" means  Regulation G of the Board of Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.

            "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 to all
or a portion thereof establishing margin requirements.

            "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 to all
or a portion thereof establishing margin requirements.

            "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 to all
or a portion thereof establishing margin requirements.

            "Required Banks" means at any time (i) Banks holding at least 51% of
the Total  Commitments  held by Banks (or, if the Total  Commitments  shall have
been  terminated,  Banks holding at least 51% of the outstanding  Loans) or (ii)
two Banks if there are only two Banks holding 100% of the Total  Commitments and
at least one of such Banks holds an aggregate Commitment of at least $5,000,000;
provided that for the purposes of Section 4, the requirement  that any document,
agreement,  certificate or other writing is to be  satisfactory  to the Required
Banks shall be satisfied if (x) such document,  agreement,  certificate or other
writing was delivered in its final form to the Banks prior to the Effective Date
(or if amended or modified thereafter,  the Agent has reasonably determined such
amendment or  modification  not to be material),  (y) such document,  agreement,
certificate or other writing is  satisfactory to the Agent and (z) Banks holding
more than  33-1/3% of the Total  Commitments  held by Banks have not objected in
writing to such document,  agreement,  certificate or other writing to the Agent
prior to the Closing Date.

            "Reserve Adjusted  Eurodollar Loan" means each Loan bearing interest
based on the Eurodollar Rate as provided in Section 1.08(b).

            "Restoration" has the meaning assigned to that term in
each Mortgage.

            "Revolving Loan  Commitment"  means,  with respect to each Bank, the
amount set opposite such Bank's name on Annex I hereto

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -116-



directly below the column entitled "Commitments -- Revolver," as the same may be
reduced from time to time pursuant to Sections 2.01, 3.02 and/or 8.

            "Revolving Loan Commitment Termination Date" means the
Business Day immediately preceding the Final Revolving Loan
Maturity Date.

            "Revolving Loans" has the meaning provided in Sec-
tion 1.01(b).

            "Revolving Note" has the meaning provided in
Section 1.05(a).

            "Revolving  Portion"  means,  at any time,  the  portion of the Loan
Facility evidenced by the Total Revolving Loan Commitments.

            "Scheduled A Term Loans Principal  Payments" means,  with respect to
the  principal  payments  on the A Term Loans on the last  Business  Day of each
month set forth below, the U.S. dollar amount set forth opposite thereto:

                              Scheduled A Term Loan
                 Date                     Principal Payment

            December 1996                           $625,000
            March 1997                               625,000
            June 1997                                625,000
            September 1997                           625,000
            December 1997                            625,000
            March 1998                               625,000
            June 1998                                625,000
            September 1998                           625,000
            December 1998                            625,000
            March 1999                               625,000
            June 1999                                625,000
            September 1999                           625,000
            December 1999                            625,000
            March 2000                               625,000
            June 2000                                625,000
            September 2000                           625,000
            December 2000                            625,000
            March 2001                               625,000
            June 2001                                625,000
            September 2001                           625,000
            December 2001                            625,000
            March 2002                               625,000

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -117-



            June 2002                                625,000
            September 2002                           625,000

            "Scheduled B Term Loans Principal  Payments" means,  with respect to
the  principal  payments  on the B Term Loans on the last  Business  Day of each
month set forth below, the U.S. dollar amount set forth opposite thereto:

                              Scheduled B Term Loan
                 Date                     Principal Payment

            December 1996                         $   25,000
            March 1997                                25,000
            June 1997                                 25,000
            September 1997                            25,000
            December 1997                             25,000
            March 1998                                25,000
            June 1998                                 25,000
            September 1998                            25,000
            December 1998                                   25,000
            March 1999                                25,000
            June 1999                                 25,000
            September 1999                            25,000
            December 1999                             25,000
            March 2000                                25,000
            June 2000                                 25,000
            September 2000                            25,000
            December 2000                             25,000
            March 2001                                25,000
            June 2001                                 25,000
            September 2001                            25,000
            December 2001                             25,000
            March 2002                                25,000
            June 2002                                 25,000
            September 2002                            25,000
            December 2002                          2,350,000
            March 2003                             2,350,000
            June 2003                              2,350,000
            September 2003                         2,350,000

            "SEC" means the Securities and Exchange Commission or any
successor thereto.

            "SEC  Regulation  D" means  Regulation  D as  promulgated  under the
Securities Act, as the same may be in effect from time to time.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -118-



            "Securities"  means any stock,  shares,  voting trust  certificates,
bonds, debentures, options, warrants, notes, or other evidences of indebtedness,
secured or unsecured, convertible,  subordinated or otherwise, or in general any
instruments  commonly known as  "securities"  or any  certificates  of interest,
shares or participations  in temporary or interim  certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.

            "Securities Act" means the Securities Act of 1933, as
amended.

            "Security  Documents"  means  each  of  the  Mortgage,   the  Pledge
Agreements,  the Borrower General Security Agreement,  the Intellectual Property
Security  Agreement and any other documents utilized to pledge as Collateral for
the Obligations any property or assets of whatever kind or nature.

            "Senior  Officer" means any of the chief  executive  officer,  chief
financial  officer,   controller,  chief  accounting  officer,  chief  operating
officer, treasurer or any executive vice president of the Borrower.

            "Senior Subordinated Notes" means, collectively, the
$18,000,000 aggregate original principal amount of Senior
Subordinated Notes issued by Acquisition Corp. on August 23, 1995.

            "Senior Subordinated Note Purchase Agreement" means the
Note Purchase Agreement, dated as of August 23, 1995, as amended,
between Acquisition Corp. and the Purchasers listed therein.

            "Standby  Letter of Credit"  means any  standby  letter of credit or
similar   instrument   issued  for  the  purpose  of  supporting   (i)  workers'
compensation  liabilities of the Borrower or any of its  Subsidiaries,  (ii) the
obligations of third-party  insurers of the Borrower or any of its  Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third-party insurers
to obtain such  letters of credit,  or (iii)  performance,  payment,  deposit or
surety obligations of the Borrower or any of its Subsidiaries if required by law
or governmental  rule or regulation or in accordance with custom and practice in
the industry.

            "State and Local Real Property  Disclosure  Requirements"  means any
state or local laws requiring  notification  of the buyer of real  property,  or
notification,  registration,  or filing  to or with any  state or local  agency,
prior to, concurrent with or following the sale of any real property or transfer
of control of an establishment, of the actual or threatened presence or release

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -119-



into the environment,  or the use, disposal,  or handling of Hazardous Materials
on, at,  under,  or near the real property to be sold or the  establishment  for
which control is to be transferred.

            "Subordinated Note Purchase Agreement" means the
Subordinated Note Purchase Agreement, dated as of August 23, 1995,
between Acquisition Corp. and the Purchasers listed therein.

            "Subordinated Notes" means, collectively, the $3,000,000
aggregate original principal amount of Subordinated Notes issued by
Acquisition Corp. on August 23, 1995.

            "Subsidiary"  of any Person means and  includes (i) any  corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary  voting power to elect a majority of the directors of such  corporation
(irrespective  of  whether  or not at the time  stock of any class or classes of
such  corporation  shall  have or  might  have  voting  power by  reason  of the
happening of any  contingency)  is at the time owned by such Person  directly or
indirectly  through  Subsidiaries and (ii) any partnership,  association,  joint
venture or other  entity in which such  Person  directly or  indirectly  through
Subsidiaries has more than a 50% equity interest at the time.

            "Subsidiary  Guarantee"  means each guarantee  substantially  in the
form of Exhibit R hereto,  executed and  delivered by a Subsidiary in accordance
with the terms  hereof,  except for such changes as shall have been  approved by
the Agent,  as the same may after its  execution  be  amended,  supplemented  or
otherwise  modified  from time to time in  accordance  with the terms hereof and
thereof;  provided,  however,  that  (subject  to  change if  applicable  law is
modified from that in effect on the Closing Date),  Carson Holdings  Limited and
its subsidiaries shall not be required to execute a Subsidiary Guarantee.

            "Survey"  means a survey of any  Mortgaged  Real  Property  (and all
improvements  thereon):  (i)  prepared  by a surveyor  or  engineer  licensed to
perform surveys in the state where such Mortgaged Real Property is located, (ii)
dated (or  redated)  not earlier  than six months  prior to the date of delivery
thereof unless there shall have occurred within six months prior to such date of
delivery any exterior  construction on the site of such Mortgaged Real Property,
in which event such survey shall be dated (or redated)  after the  completion of
such  construction or if such  construction  shall not have been completed as of
such date of delivery,  not earlier than 20 days prior to such date of delivery,
(iii) certified by the surveyor (in a manner reasonably acceptable to the Agent)
to the Agent and the Title Company and (iv) complying

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -120-



in all respects with the minimum detail  requirements of the American Land Title
Association  as such  requirements  are in effect on the date of  preparation of
such survey.

            "Taking" has the meaning assigned to that term in each
Mortgage.

            "Taxes" has the meaning set forth in Section 3.04.

            "Term Loans" has the meaning set forth in Section
1.01(a).

            "Term Notes" has the meaning set forth in Section
1.05(a).

            "Term Portion"  means, at any time, the portion of the Loan Facility
evidenced by the Total Term Loan Commitments.

            "Termination  Event"  means (i) a  "reportable  event"  described in
Section 4043 of ERISA or in the  regulations  thereunder  (excluding  events for
which the requirement for notice of such reportable event has been waived by the
PBGC) with  respect  to a Title IV Plan,  or (ii) the  withdrawal  of any Credit
Party or any of their  respective ERISA Affiliates from a Title IV Plan during a
plan  year in  which it was a  "substantial  employer"  as  defined  in  Section
4001(a)(2)  of ERISA,  or (iii) the filing of a notice of intent to  terminate a
Title IV Plan or the  treatment of a Title IV Plan  amendment  as a  termination
under Section 4041 of ERISA,  or (iv) the institution of proceedings by the PBGC
to  terminate a Title IV Plan or to appoint a trustee to  administer  a Title IV
Plan,  or (v) any other event or  condition  which might  constitute  reasonable
grounds under Section 4042 of ERISA for the  termination  of, or the appointment
of a trustee to  administer,  any Title IV Plan, or (vi) the complete or partial
withdrawal  (within  the  meaning of Sections  4203 and 4205,  respectively,  of
ERISA) of any Credit Party or any of their  respective  ERISA  Affiliates from a
Multiemployer  Plan,  or (vii) the  insolvency  or  reorganization  (within  the
meaning of Sections 4245 and 4241, respectively, of ERISA) or termination of any
Multiemployer Plan, or (viii) the failure to make any payment or contribution to
any Pension  Plan or  Multiemployer  Plan or the making of any  amendment to any
Pension Plan which could result in the  imposition of a lien or the posting of a
bond or other security.

            "Test Period" means the shorter of (i) the four consecutive complete
fiscal  quarters  of the  Borrower  then  last  ended or (ii) the  period of all
complete fiscal quarters of the Borrower since the Closing Date.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -121-




            "Title  Company"  means  Ticor Title  Insurance  or such other title
insurance  or  abstract  company  as  shall  be  selected  by the  Borrower  and
reasonably acceptable to the Required Banks.

            "Title IV Plan" means any Pension Plan described in Section  4021(a)
of ERISA, and not excluded under Section 4021(b) of ERISA.

            "Total A Term  Loan  Commitments"  means  the sum of the A Term Loan
Commitments of each of the Banks.

            "Total B Term  Loan  Commitments"  means  the sum of the B Term Loan
Commitments of each of the Banks.

            "Total Commitments" means the sum of the Total Term Loan
Commitments and the Total Revolving Loan Commitments.

            "Total  Revolving Loan  Commitments"  means the sum of the Revolving
Loan Commitments of each of the Banks.

            "Total  Term  Loan  Commitments"  means  the sum of the A Term  Loan
Commitments and the B Term Loan Commitments of each of the Banks.

            "Total Utilization of Revolving Loan Commitments" means, at any date
of  determination,  the sum of the aggregate  principal  amount of all Revolving
Loans then outstanding.

            "Total  Voting Power" means the total  combined  voting power in the
election of directors of all shares of capital stock then outstanding.

            "Type" of Loan means either a Base Rate Loan or a Reserve
Adjusted Eurodollar Loan.

            "UCC" means the Uniform Commercial Code as in effect in the State of
New York or any other applicable jurisdiction in the United States.

            "Unutilized Commitment" for any Bank at any time means, on and after
the Closing Date, the unutilized  Revolving Loan Commitment of such Bank,  after
taking into effect the Letters of Credit Usage.

            "Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person to the extent all of the capital  stock or other  ownership  interests in
such Subsidiary,  other than directors' or nominees' qualifying shares or shares
of capital stock required

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -122-



to be owned by foreign  nationals  under  applicable  law, is owned  directly or
indirectly by such Person.

            "Written" or "in writing" means any form of written communication or
a communication by means of telex, telecopier device, telegraph or cable.

            SECTION 10.  The Agent.

            10.01  Appointment.  Each Bank  hereby  irrevocably  designates  and
appoints  Indosuez as Agent (such term to include the Agent acting as Collateral
Agent or in any other  representative  capacity under any other Credit Document)
of such Bank to act as specified  herein and in the other Credit  Documents  and
each such Bank hereby  irrevocably  authorizes  the Agent to take such action on
its behalf under the provisions of this Agreement and the other Credit Documents
and to exercise such powers and perform such duties as are  expressly  delegated
to the Agent by the terms of this  Agreement  and the  other  Credit  Documents,
together with such other powers as are reasonably  incidental thereto. The Agent
agrees to act as such upon the express conditions  contained in this Section 10.
Notwithstanding  any provision to the contrary elsewhere in this Agreement,  the
Agent shall not have any duties or responsibilities,  except those expressly set
forth herein or in the other Credit  Documents,  or any  fiduciary  relationship
with any Bank, and no implied covenants,  functions,  responsibilities,  duties,
obligations or liabilities  shall be read into this Agreement or otherwise exist
against the Agent.  The provisions of this Section 10 are solely for the benefit
of the Agent and the Banks, and no Credit Party shall have any rights as a third
party  beneficiary of any of the provisions  hereof. In performing its functions
and duties  under  this  Agreement,  the Agent  shall act solely as agent of the
Banks and does not assume and shall not be deemed to have assumed any obligation
or relationship of agency or trust with or for any Credit Party.

            10.02 Delegation of Duties.  The Agent may execute any of its duties
under this  Agreement  or any other  Credit  Document  by or  through  agents or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining to such duties.  The Agent shall not be responsible  for the
negligence or misconduct of any agents or attorneys-in-fact  selected by it with
reasonable care except to the extent otherwise required by Section 10.03.

            10.03  Exculpatory Provisions.  Neither the Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action  lawfully taken or
omitted to be taken by it or such Person under or in connection

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -123-



with this  Agreement  (except for its or such  Person's own gross  negligence or
willful  misconduct)  or (ii)  responsible in any manner to any of the Banks for
any recitals,  statements,  representations  or warranties by the Borrower,  any
Subsidiary of the Borrower or any of their respective officers contained in this
Agreement, any other Document or in any certificate,  report, statement or other
document  referred to or  provided  for in, or received by the Agent under or in
connection  with, this Agreement or any other Document or for any failure of the
Borrower or any Subsidiary of the Borrower or any of their  respective  officers
to perform its obligations hereunder or thereunder. The Agent shall not be under
any  obligation  to any Bank to ascertain or to inquire as to the  observance or
performance  of any of the  agreements  contained  in, or  conditions  of,  this
Agreement, or to inspect the properties, books or records of the Borrower or any
Subsidiary of the Borrower.  The Agent shall not be  responsible to any Bank for
the  effectiveness,  genuineness,  validity,  enforceability,  collectibility or
sufficiency of this Agreement or any Credit Document or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates  or  any  other  documents  in  connection  herewith  or  therewith
furnished  or made by the Agent to the Banks or by or on behalf of the  Borrower
to the  Agent or any Bank or be  required  to  ascertain  or  inquire  as to the
performance or observance of any of the terms, conditions, provisions, covenants
or  agreements  contained  herein or therein or as to the use of the proceeds of
the Loans or of the  existence or possible  existence of any Default or Event of
Default.

            10.04  Reliance  by the Agent.  The Agent shall be entitled to rely,
and shall be fully  protected in relying,  upon any note,  writing,  resolution,
notice, consent, certificate,  affidavit, letter, cablegram, telegram, telecopy,
telex or teletype  message,  statement,  order or other document or conversation
believed by it to be genuine and to have been signed, sent or made by the proper
Person or Persons and upon advice and  statements of legal  counsel  (including,
without limitation,  counsel to the Credit Parties), independent accountants and
other  experts  selected  by the Agent.  The Agent shall be fully  justified  in
failing or refusing to take any action under this  Agreement or any other Credit
Document  unless  it shall  first  receive  such  advice or  concurrence  of the
Required  Banks as it deems  appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or  continuing  to take any such action.  The
Agent shall in all cases be fully  protected in acting,  or in  refraining  from
acting, under this Agreement and the other Credit Documents in accordance with a
request of the Required Banks (or to the extent specifically

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -124-



provided in Section 11.12, all the Banks), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Banks.

            10.05  Notice  of  Default.  The  Agent  shall not be deemed to have
knowledge  of the  occurrence  of any Default or Event of Default,  other than a
default in the payment of principal or interest on the Loans hereunder unless it
has  received  notice  from a Bank or the  Borrower  or any other  Credit  Party
referring  to this  Agreement,  describing  such Default or Event of Default and
stating that such notice is a "notice of  default".  In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to the Banks.
The Agent  shall  take such  action  with  respect  to such  Default or Event of
Default as shall be reasonably  directed by the Required  Banks;  provided that,
unless and until the Agent shall have  received such  directions,  the Agent may
(but shall not be obligated  to) take such  action,  or refrain from taking such
action,  with  respect  to such  Default  or Event of  Default  as it shall deem
advisable in the best interests of the Banks.

            10.06  Non-Reliance  on Agent and Other Banks.  Each Bank  expressly
acknowledges  that  neither  the  Agent  nor  any  of its  officers,  directors,
employees, agents, attorneys-in-fact or affiliates have made any representations
or warranties to it and that no act by the Agent  hereinafter  taken,  including
any review of the affairs of the  Borrower or any  Subsidiary  of the  Borrower,
shall be deemed to constitute any representation or warranty by the Agent to any
Bank. Each Bank represents to the Agent that it has,  independently  and without
reliance  upon the Agent or any other  Bank,  and  based on such  documents  and
information  as it  has  deemed  appropriate,  made  its  own  appraisal  of and
investigation into the business,  assets,  operations,  property,  financial and
other  conditions,  prospects  and  creditworthiness  of the  Borrower  and  its
Subsidiaries  and made its own  decision to make its Loans  hereunder  and enter
into this Agreement and the other agreements contemplated hereby. Each Bank also
represents that it will,  independently  and without  reliance upon the Agent or
any other Bank,  and based on such  documents and  information  as it shall deem
appropriate at the time,  continue to make its own credit  analysis,  appraisals
and decisions in taking or not taking action under this  Agreement,  and to make
such  investigation  as it deems  necessary to inform itself as to the business,
assets,  operations,  property,  financial and other  conditions,  prospects and
creditworthiness  of the  Borrower  and its  Subsidiaries.  Except for  notices,
reports and other documents  expressly  required to be furnished to the Banks by
the Agent  hereunder,  the Agent  shall not have any duty or  responsibility  to
provide any Bank with any credit or other  information  concerning the business,
operations, assets, property,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -125-



financial and other conditions, prospects or creditworthiness of the Borrower or
any of its  Subsidiaries  which may come into the possession of the Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

            10.07 Indemnification. The Banks agree to indemnify the Agent in its
capacity as such or in any other representative  capacity under any other Credit
Document ratably according to their aggregate Commitments,  from and against any
and  all  liabilities,   obligations,   losses,  damages,  penalties,   actions,
judgments,  suits,  costs,  reasonable  expenses  or  disbursements  of any kind
whatsoever which may at any time  (including,  without  limitation,  at any time
following the payment of the Obligations) be imposed on, incurred by or asserted
against the Agent in its  capacity as such in any way relating to or arising out
of this Agreement or any other Credit Document, or any documents contemplated by
or  referred  to herein or the  transactions  contemplated  hereby or any action
taken or omitted to be taken by the Agent under or in connection with any of the
foregoing,  but only to the extent that any of the  foregoing is not paid by the
Borrower or any of its  Subsidiaries  or any  Guarantor;  provided  that no Bank
shall be liable to the Agent for the payment of any portion of such liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements  resulting solely from the Agent's gross negligence or
willful  misconduct.  If any  indemnity  furnished  to the Agent for any purpose
shall,  in the opinion of the Agent, be  insufficient  or become  impaired,  the
Agent may call for additional  indemnity and cease,  or not commence,  to do the
acts  indemnified  against until such  additional  indemnity is  furnished.  The
agreements in this Section 10.07 shall survive the payment of all Obligations.

            10.08  The  Agent in Its  Individual  Capacity.  The  Agent  and its
Affiliates may make loans to, accept  deposits from and generally  engage in any
kind of business with the Borrower, its Subsidiaries and other Affiliates of the
Borrower as though the Agent were not the Agent  hereunder.  With respect to the
Loans made by it and all Obligations  owing to it, the Agent shall have the same
rights and powers under this  Agreement as any Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" shall include the
Agent in its individual capacity.

            10.09  Successor  Agent.  Upon the acceptance of any  appointment as
Agent  hereunder  by a successor  Agent,  the term  "Agent"  shall  include such
successor  agent  effective  upon its  appointment,  and the  resigning  Agent's
rights,  powers and duties as Agent  shall be  terminated,  without any other or
further  act or deed on the part of such  former  Agent or any of the parties to
this

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -126-



Agreement.  After the  retiring  Agent's  resignation  hereunder  as Agent,  the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.

            10.10  Resignation  by  Agent.  (A) The Agent  may  resign  from the
performance  of all its functions and duties  hereunder at any time by giving 30
Business  Days'  prior  written  notice  to the  Borrower  and the  Banks.  Such
resignation  shall take  effect  upon the  acceptance  by a  successor  Agent of
appointment  pursuant  to  subsections  B and C below or as  otherwise  provided
below.

            (B) Upon any such notice of resignation  of the Agent,  the Required
Banks shall appoint a successor Agent acceptable to the Borrower and which shall
be  an  incorporated  bank  or  trust  company  or  other  qualified   financial
institution with operations in the United States and total assets of at least $1
billion.

            (C) If a  successor  Agent shall not have been so  appointed  within
said 30  Business  Day  period,  the  resigning  Agent  with the  consent of the
Borrower  shall then appoint a successor  Agent (which shall be an  incorporated
bank or trust company or other qualified  financial  institution with operations
in the United States and total assets of at least $1 billion) who shall serve as
Agent until such time, if any, as the Required  Banks appoint a successor  Agent
as provided above.

            (D) If no successor Agent has been appointed  pursuant to subsection
B or C by the 30th  Business Day after the date such notice of  resignation  was
given by the resigning Agent,  such Agent's  resignation  shall become effective
and the  Required  Banks  shall  thereafter  perform  all the  duties  of  Agent
hereunder  until such time,  if any, as the Required  Banks  appoint a successor
Agent as provided above.

            SECTION 11.  Miscellaneous.

            11.01 Payment of Expenses,  etc. The Borrower agrees to: (i) whether
or not the transactions herein contemplated are consummated,  pay all reasonable
out-of-pocket   costs  and  expenses  of  the  Agent  in  connection   with  the
negotiation, preparation, execution and delivery of the Credit Documents and the
documents  and  instruments  referred  to therein  (subject  to the terms of the
letter  agreement  dated August 12, 1996) and any  amendment,  waiver or consent
relating  thereto  (including,  without  limitation,  the  reasonable  fees  and
disbursements  of Cahill  Gordon & Reindel and local  counsel  issuing  opinions
pursuant to Section 4.01(C)) with prior notice to the Borrower of the engagement
of any counsel and

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -127-



of each of the Banks in connection with the enforcement of the Credit  Documents
and the  documents  and  instruments  referred  to therein  (including,  without
limitation,  the reasonable  fees and  disbursements  of counsel for each of the
Banks) with prior notice to the Borrower of the engagement of any counsel;  (ii)
pay and hold each of the Banks harmless from and against any and all present and
future stamp and other similar  taxes with respect to the foregoing  matters and
save each of the Banks  harmless from and against any and all  liabilities  with
respect to or  resulting  from any delay or  omission  (other than to the extent
attributable  to such  Bank) to pay  such  taxes;  and  (iii)  indemnify  Agent,
Collateral   Agent  and  each  Bank,   its   officers,   directors,   employees,
representatives  and agents from and hold each of them harmless  against any and
all  losses,  liabilities,  claims,  damages  or  expenses  (including,  without
limitation, any and all losses, liabilities, claims, damages or expenses arising
under  Environmental  Laws except with regard to any losses,  costs,  damages or
expenses under  Environmental Laws arising from or relating to acts or omissions
occurring  after the Agent or any Bank  takes  possession  of,  uses,  operates,
manages,  controls or sells the Mortgaged Property provided,  however, that such
exception shall apply only to the extent such losses, costs, damages or expenses
arise solely from the gross negligence,  bad faith or willful  misconduct of the
Agent or any Bank or of the agents of the Agent or any Bank)  incurred by any of
them as a result of, or arising  out of, or in any way  related to, or by reason
of, any investigation,  litigation or other proceeding  (whether or not any Bank
is a party  thereto)  related to the  entering  into and/or  performance  of any
Credit  Document  or the  use of the  proceeds  of any  Loans  hereunder  or the
Refinancing or the  consummation of any other  transactions  contemplated in any
Credit  Document,   including,  without  limitation,  the  reasonable  fees  and
disbursements  of counsel  incurred in connection  with any such  investigation,
litigation or other  proceeding  (but  excluding  any such losses,  liabilities,
claims,  damages  or  expenses  to the  extent  incurred  by reason of the gross
negligence, bad faith or willful misconduct of the Person to be indemnified).

            11.02 Right of Setoff.  In  addition to any rights now or  hereafter
granted under  applicable law or otherwise,  and not by way of limitation of any
such  rights,  upon the  occurrence  and during the  continuance  of an Event of
Default,  each  Bank is  hereby  authorized  at any  time or from  time to time,
without presentment,  demand,  protest or other notice of any kind to any Credit
Party or to any other Person,  any such notice being hereby expressly waived, to
set off and to appropriate  and apply any and all deposits  (general or special)
and any other  Indebtedness  at any time held or owing by such Bank  (including,
without  limitation,  by branches and agencies of such Bank wherever located) to
or for the credit or the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -128-



account of any Credit  Party  against  and on  account  of the  Obligations  and
liabilities  of such Credit Party to such Bank under this Agreement or under any
of the other Credit Documents,  including,  without limitation, all interests in
Obligations  of such Credit  Party  purchased  by such Bank  pursuant to Section
11.06(b),  and all other claims of any nature or  description  arising out of or
connected  with this  Agreement or any other Credit  Document,  irrespective  of
whether or not such Bank shall have made any demand hereunder.

            11.03 Notices.  Except as otherwise  expressly  provided herein, all
notices and other  communications  provided  for  hereunder  shall be in writing
(including  telegraphic,  telex,  telecopier or cable communication) and mailed,
telegraphed,  telexed,  telecopied,  cabled or  delivered,  if to the  Borrower,
Carson Products Company,  64 Ross Road,  Savannah,  GA 31405,  Attention:  Chief
Financial Officer,  with a copy to Morningside Capital Group, LLC, 1 Morningside
Drive,  North, Suite 200, Westport,  CT 06880,  Attention:  President,  or if to
another  Credit Party,  to its address  specified in the other  relevant  Credit
Documents,  as the case may be;  if to the  Agent or any  Bank,  at its  address
specified  for the Agent or such  Bank on Annex II  hereto;  or,  at such  other
address  as shall be  designated  by any party in a written  notice to the other
parties  hereto.  All  such  notices  and  communications  shall,  when  mailed,
telegraphed,  telexed,  telecopied,  or cabled or sent by overnight courier,  be
effective  two days after being  deposited in the mails,  when  delivered to the
telegraph company,  cable company or overnight  courier,  as the case may be, or
when sent by telex or telecopier,  except that notices and communications to the
Agent shall not be effective until received by the Agent.

            11.04 Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto, all future
holders of the Notes, and their respective successors and assigns; provided that
no Credit Party may assign or transfer any of its  interests  hereunder  without
the prior written consent of the Banks; and provided,  further,  that the rights
of each Bank to transfer,  assign or grant  participations  in its rights and/or
obligations hereunder shall be limited as set forth below in this Section 11.04;
provided  that nothing in this Section  11.04 shall prevent or prohibit any Bank
from (i)  pledging its Loans  hereunder to a Federal  Reserve Bank in support of
borrowings  made by such Bank from such Federal  Reserve Bank and (ii)  granting
participations in or assignments of such Bank's Loans,  Notes and/or Commitments
hereunder to its parent  company and/or to any Affiliate of such Bank that is at
least 50% owned by such Bank or its parent company; provided,  however, that any
such assignment or participation shall not result in the Borrower paying

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -129-



additional  amounts  as of the  time  of such  assignment  pursuant  to  Section
1.10(e), 1.11, 1.13 or 3.04.

            (b) Each  Bank  shall  have the right to  transfer,  assign or grant
participations  in  all  or  any  part  of its  remaining  Loans,  Notes  and/or
Commitments  hereunder on the basis set forth below in this clause (b).  Subject
to Section 11.04(c) hereof, each Bank may furnish any information concerning the
Borrower  in the  possession  of such Bank from  time to time to  assignees  and
participants (including prospective assignees and participants).

            (A)  Assignments.  Each Bank,  with the written consent of the Agent
      and the Borrower,  which consent shall not be unreasonably withheld, which
      shall be  evidenced  on the notice in the form of Exhibit I-1 hereto,  may
      assign pursuant to an Assignment  Agreement  substantially  in the form of
      Exhibit I-2 hereto all or a portion of its Loans, Notes and/or Commitments
      hereunder  pursuant  to  this  clause  (b)(A)  to  one  or  more  Eligible
      Assignees;  provided  that any such  assignment  pursuant  to this  clause
      (b)(A) shall not result in the Borrower  paying  additional  amounts as of
      the time of such  assignment  pursuant to Section  1.10(e),  1.11, 1.13 or
      3.04. Any assignment  pursuant to this clause (b)(A) will become effective
      five  Business Days after the Agent's  receipt of (i) a written  notice in
      the form of Exhibit I-1 hereto from the  assigning  Bank and the  Eligible
      Assignee  and (ii) a  processing  and  recordation  fee of $2,500 from the
      assigning  Bank in  connection  with the Agent's  recording  of such sale,
      assignment, transfer or negotiation;  provided that such fee shall only be
      payable if the assignment is between a Bank and an Eligible  Assignee that
      is not a Bank prior to the assignment.  The Borrower shall issue new Notes
      to the Eligible  Assignee in conformity with Section 1.05 and the assignor
      shall return the old Notes to the Borrower.  Upon the effectiveness of any
      assignment in accordance  with this clause (b)(A),  the Eligible  Assignee
      will  become a "Bank" for all  purposes  of this  Agreement  and the other
      Credit Documents and, to the extent of such assignment, the assigning Bank
      shall  be  relieved  of its  obligations  hereunder  with  respect  to the
      Commitments  being  assigned.  The Agent  shall  maintain  at its  address
      specified in Annex II hereto a copy of each Assignment Agreement delivered
      to and  accepted by it and a register  in which it shall  record the names
      and addresses of the Banks and the Commitment of, and principal  amount of
      the Loans  owning to,  each Bank from time to time (the  "Register").  The
      entries in the Register  shall be conclusive and binding for all purposes,
      absent demonstrable  error, and the Borrower,  the Agent and the Banks may
      treat each Person whose name is

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -130-



      recorded in the  Register  as a Bank  hereunder  for all  purposes of this
      Agreement. The Register shall be available for inspection by the Borrower,
      the  Agent or any Bank at any  reasonable  time and from time to time upon
      reasonable prior notice.

            (B)  Participations.   Each  Bank  may  transfer,  grant  or  assign
      participations  in all or any  part of such  Bank's  Loans,  Notes  and/or
      Commitments  hereunder  pursuant  to this  clause  (b)(B)  to any  Person;
      provided that (i) such Bank shall remain a "Bank" for all purposes of this
      Agreement and the transferee of such participation  shall not constitute a
      Bank hereunder and (ii) no participant under any such participation  shall
      have rights to approve any amendment to or waiver of this Agreement or any
      other Credit  Document except to the extent such amendment or waiver would
      (x) change the scheduled final maturity date of any of the Loans, Notes or
      Commitments in which such  participant is  participating or (y) reduce the
      principal  amount,  interest rate or fees  applicable to any of the Loans,
      Notes or  Commitments  in  which  such  participant  is  participating  or
      postpone  the  payment  of any  interest  or  fees or (z)  release  all or
      substantially  all of the  Collateral;  and  provided,  further  that  any
      participation pursuant to this Section 11.04(b)(B) shall not result in the
      Borrower paying  additional  amounts as of the time of such  participation
      pursuant to Section  1.10(e),  1.11, 1.13 or 3.04. In the case of any such
      participation,  the  participant  shall  not have any  rights  under  this
      Agreement or any of the other Credit Documents (the  participant's  rights
      against the granting Bank in respect of such participation to be those set
      forth in the agreement with such Bank creating such participation) and all
      amounts  payable by the Borrower  hereunder shall be determined as if such
      Bank had not sold such participation; provided that such participant shall
      be considered to be a "Bank" for purposes of Sections 11.02 and 11.06(b).

            (c) The Agent and the Banks agree to keep confidential (and to cause
their respective officers,  directors,  employees, agents and representatives to
keep  confidential)  all information,  materials and documents  furnished to the
Agent or any Bank (the "Information").  Notwithstanding the foregoing, the Agent
and each Bank shall be  permitted  to  disclose  Information  (i) to such of its
officers, directors,  employees, agents and representatives as need to know such
Information  in connection  with its  participation  in any of the  transactions
contemplated hereby or the administration of this Agreement;  (ii) to the extent
required by applicable  laws and regulations or by any subpoena or similar legal
process, or

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -131-



requested  by any  governmental  agency or  authority;  (iii) to the extent such
Information (A) becomes publicly available other than as a result of a breach of
this Agreement or any other confidentiality  agreement with respect thereto, (B)
becomes available to the Agent or such Bank on a  non-confidential  basis from a
source  other  than  Holdings,   the  Borrower,   or  any  of  their  respective
subsidiaries,  officers, directors,  employees, agents or representatives or (C)
was available to the Agent or such Bank on a non-confidential basis prior to its
disclosure to the Agent or such Bank by the  Borrower,  Holdings or any of their
respective  subsidiaries;  (iv) to the extent the  Borrower,  Holdings or any of
their  respective  subsidiaries  shall  have  consented  to such  disclosure  in
writing;  (v) in  connection  with the sale of any  Collateral  pursuant  to the
provisions  of any of the  Security  Documents;  or  (vi)  pursuant  to  Section
11.04(b)  hereof;  provided  that  prior to any such  disclosure  under  Section
11.04(b),  each prospective  Eligible Assignee or participant shall enter into a
written   agreement   with  the  assigning  or  selling  Bank  to  preserve  the
confidentiality  of any  Information  to the  extent  set forth in this  Section
11.04(c).

            11.05 No  Waiver;  Remedies  Cumulative.  No failure or delay on the
part of the  Agent or any  Bank in  exercising  any  right,  power or  privilege
hereunder  or under any other Credit  Document and no course of dealing  between
any Credit  Party and the Agent or any Bank shall  operate as a waiver  thereof;
nor shall any  single or partial  exercise  of any right,  power,  or  privilege
hereunder  or under any other  Credit  Document  preclude  any other or  further
exercise  thereof  or the  exercise  of any  other  right,  power  or  privilege
hereunder or thereunder.  The rights and remedies herein expressly  provided are
cumulative  and not  exclusive of any rights or remedies  which the Agent or any
Bank would  otherwise  have.  No notice to or demand on any Credit  Party in any
case shall entitle any Credit Party to any other or further  notice or demand in
similar or other circumstances or constitute a waiver of the rights of the Agent
or the Banks to any other or further action in any circumstances  without notice
or demand.

            11.06  Payments Pro Rata.  (a) The Agent agrees that promptly  after
its receipt of each  payment from or on behalf of any Credit Party in respect of
any  Obligations of such Credit Party,  it shall  distribute such payment to the
Banks pro rata based upon their  respective  shares,  if any, of the Obligations
with respect to which such payment was received.

            (b) Each of the Banks agrees that,  if it should  receive any amount
hereunder  (whether by voluntary payment,  by realization upon security,  by the
exercise of the right of setoff or banker's

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -132-



lien, by counterclaim or cross action, by the enforcement of any right under the
Credit  Documents,  or  otherwise)  which is  applicable  to the  payment of the
principal  of, or  interest  on, the Loans,  of a sum which with  respect to the
related sum or sums received by other Banks is in a greater  proportion than the
total of such  Obligations  then owed and due to such Bank bears to the total of
such Obligations then owed and due to all of the Banks immediately prior to such
receipt,  then such Bank  receiving  such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional  participation by all of the Banks in such amount; provided that if
all or any portion of such excess amount is thereafter recovered from such Bank,
such purchase  shall be rescinded and the purchase  price restored to the extent
of such recovery, but without interest.

            11.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant  hereto shall be made and prepared in accordance
with GAAP  consistently  applied  throughout the periods involved (except as set
forth in the notes thereto or as otherwise  disclosed in writing by the Borrower
to the Banks);  provided that, except as otherwise specifically provided herein,
all  computations  determining  compliance  with  Sections 5, 6, 7 and 8 and all
definitions  used in this  Agreement for any purpose  shall  utilize  accounting
principles  and  policies  in effect at the time of the  preparation  of, and in
conformity  with those used to  prepare,  the  historical  financial  statements
delivered to the Banks pursuant to Section 4.01(M).

            (b) All computations of interest and fees hereunder shall be made on
the actual  number of days elapsed over a year of 365 days;  provided,  however,
that all  computations  of interest  on Reserve  Adjusted  Eurodollar  Loans and
Commitment  Commission shall be made on the actual number of days elapsed over a
year of 360 days.

            11.08  Governing Law;  Submission to  Jurisdiction;  Venue.  (a)This
Agreement  and the rights and  obligations  of the  parties  hereunder  shall be
construed  and  enforced in  accordance  with and be governed by the laws of the
State of New York  applicable  to  contracts  made  and to be  performed  wholly
therein.  Any legal action or proceeding  with respect to this  Agreement or any
other  Credit  Document may be brought in the courts of the State of New York or
of the United  States for the Southern  District of New York,  and, by execution
and delivery of this Agreement, each Credit Party hereby irrevocably accepts for
itself  and in respect  of its  property,  generally  and  unconditionally,  the
non-exclusive

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -133-



jurisdiction  of the aforesaid  courts.  Each Credit Party  further  irrevocably
consents to the service of process  out of any of the  aforementioned  courts in
any such action or proceeding by the mailing of copies  thereof by registered or
certified mail,  postage prepaid,  to the respective Credit Party at its address
for notices pursuant to Section 11.03,  such service to become effective 15 days
after such mailing.  Each Credit Party hereby irrevocably  appoints the Borrower
and such other persons as may hereafter be selected by the Borrower  irrevocably
agreeing  in writing to serve as its agent for  service of process in respect of
any such action or  proceeding.  Nothing  herein  shall  affect the right of the
Agent or any Bank to serve  process in any other  manner  permitted by law or to
commence legal  proceedings or otherwise proceed against any Credit Party in any
other jurisdiction.

            (b) Each Credit Party hereby  irrevocably waives any objection which
it may now or  hereafter  have to the  laying  of venue of any of the  aforesaid
actions or  proceedings  arising out of or in connection  with this Agreement or
any other Credit Document  brought in the courts referred to in clause (a) above
and hereby  further  irrevocably  waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.

            11.09 Counterparts.  This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,  each
of which when so executed and delivered  shall be an original,  but all of which
shall together  constitute one and the same  instrument.  A set of  counterparts
executed by all the parties  hereto  shall be lodged with the  Borrower  and the
Agent.

            11.10  Effectiveness.  This Agreement shall become  effective on the
date (the  "Effective  Date") on which the  Borrower and each of the Banks shall
have signed a copy hereof (whether the same or different  copies) and shall have
delivered  the same to the Agent at the  Agent's  Office  or, in the case of the
Banks, shall have given to the Agent telephonic (confirmed in writing), written,
telex or telecopy  notice  (actually  received) at such office that the same has
been  signed and mailed to it.  The Agent will give the  Borrower  and each Bank
prompt written notice of the occurrence of the Effective Date.

            11.11  Headings Descriptive.  The headings of the several
sections and subsections of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -134-



            11.12  Amendment  or Waiver.  Neither this  Agreement  nor any other
Credit  Document  nor any  terms  hereof  or  thereof  may be  changed,  waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrower and the Required Banks;  provided that no such
change,  waiver,  discharge or  termination  shall,  without the consent of each
affected Bank and the Agent, (i) extend the scheduled final maturity date of any
Loan, or any portion  thereof,  or reduce the rate or extend the time of payment
of interest thereon or fees or reduce the principal amount thereof,  or increase
the  Commitments  of any Bank over the amount  thereof  then in effect (it being
understood  that a waiver of any  Default or Event of Default or of a  mandatory
reduction in the Total  Commitment shall not constitute a change in the terms of
any  Commitment of any Bank),  (ii) release all or a substantial  portion of the
Collateral  or  Guarantees   (except  as  expressly   permitted  by  the  Credit
Documents),  (iii)  amend,  modify or waive any  provision of this  Section,  or
Section 1.10, 1.11, 3.04, Section 8, 10.07, 11.01, 11.02, 11.04, 11.06, 11.07(b)
or 11.12,  (iv) reduce any  percentage  specified in, or otherwise  modify,  the
definition of Required Banks or (v) consent to the assignment or transfer by any
Credit  Party of any of its rights and  obligations  under  this  Agreement.  No
provision of Section 10 may be amended without the consent of the Agent.

            11.13 Survival. All indemnities set forth herein including,  without
limitation,  in Section 1.11,  3.04,  10.07 or 11.01 shall survive the execution
and delivery of this Agreement and the making of the Loans, the repayment of the
Obligations and the termination of the Total Commitments.

            11.14 Domicile of Loans.  Each Bank may transfer and carry its Loans
at, to or for the account of any branch office,  subsidiary or affiliate of such
Bank; provided, however, that any such transfer shall not result in the Borrower
paying  additional  amounts as of the time of such transfer  pursuant to Section
1.10(e), 1.11, 1.13 or 3.04.

            11.15  Waiver of Jury Trial.  Each of the parties to this  Agreement
hereby irrevocably waives all right to a trial by jury in any action, proceeding
or  counterclaim  arising  out of or  relating  to this  Agreement,  the  Credit
Documents or the transactions contemplated hereby or thereby.

            11.16  Independence of Covenants.  All covenants  hereunder shall be
given  independent  effect so that if a  particular  action or  condition is not
permitted  by any of such  covenants,  the fact that it would be permitted by an
exception to, or be otherwise

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                    -135-



within the limitation  of, another  covenant shall not avoid the occurrence of a
Default or an Event of Default if such action is taken or condition exists.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



            IN  WITNESS  WHEREOF,  each  of the  parties  hereto  has  caused  a
counterpart  of this  Agreement to be duly executed and delivered as of the date
first above written.

                                    CARSON PRODUCTS COMPANY


                                    By:
                                        Name:
                                        Title:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                Credit Agreement among Carson Products Company,  Banque Indosuez
                 and the Banks listed herein.



                        BANQUE INDOSUEZ, NEW YORK BRANCH
                             as Agent and Collateral
                                      Agent


                                    By:
                                        Name:
                                        Title:


                                    By:
                                        Name:
                                        Title:


                                    THE PROVIDENT BANK


                                    By:
                                        Name:
                                        Title:


                                    CREDITANSTALT-BANKVEREIN


                                    By:
                                        Name:
                                        Title:


                                    By:
                                        Name:
                                        Title:


                      FIRST UNION NATIONAL BANK OF GEORGIA


                                    By:
                                        Name:
                                        Title:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                           ANNEX I


List of Banks                                          Commitments

                                      Revolver        A Term          B Term

Banque Indosuez, New York Branch     $4,375,000      $4,375,000     $3,750,000

Creditanstalt - Bankverein           $3,750,000      $3,750,000     $5,000,000

The Provident Bank                   $1,875,000      $1,875,000     $1,250,000

First Union National Bank            $5,000,000      $5,000,000        -----




Assignment Banks                                       Commitments

                                          Revolver        A Term          B Term






DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                      ANNEX II


                           Agent and Bank Addresses


Banque Indosuez, New York Branch
1211 Avenue of the Americas
7th Floor
New York, New York  10036

The Provident Bank
One East Fourth Street
Cincinnatti, Ohio  45202

Creditanstalt Corporate Finance, Inc.
2 Greenwich Plaza
Greenwich, Connecticut  06830

First Union National Bank of Georgia
999 Peachtree Road, NE
6th Floor
Atlanta, Georgia  30309



                               Assignment Banks




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                     ANNEX III


                                 Existing Debt




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                      ANNEX IV


                                 Subsidiaries




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                       ANNEX V


                       Collective Bargaining Agreements




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                      ANNEX VI


                                   INSURANCE




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                     ANNEX VII


                                     Liens




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                    ANNEX VIII


                            Mortgaged Real Property




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                      ANNEX IX


                                  Litigation




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                       ANNEX X


                                   Consents




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                      ANNEX XI


                                 Restrictions




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                     ANNEX XII


                             Environmental Matters




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>



                                                                    ANNEX XIII


                                     Taxes




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>


                                                                     ANNEX XIV


                       Schedule of Intellectual Property




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141151

<PAGE>





                                                              Exhibit A to the
                                                              Credit Agreement


                                REVOLVING NOTE

                            CARSON PRODUCTS COMPANY


U.S. $                                                      New York, New York
                                                                       , 1996


            FOR VALUE RECEIVED,  CARSON PRODUCTS COMPANY, a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of (the "Bank"), in lawful
money of the United States of America in  immediately  available  funds,  at the
office  of Banque  Indosuez,  New York  Branch,  located  at 1211  Avenue of the
Americas,  7th  Floor,  New  York,  New York  10036 or as  otherwise  designated
pursuant to the Credit  Agreement (which is hereinafter  defined),  on the Final
Revolving Loan Maturity Date (as defined in the Credit Agreement), the principal
sum of
                                           AND   /100 U.S. DOLLARS
($ ) or, if less, the unpaid principal amount of the Revolving Loans (as defined
in the Credit Agreement) made by the Bank pursuant to the Credit Agreement.

            The Borrower also  promises to pay interest on the unpaid  principal
amount  hereof in like money at said office  from the date hereof  until paid at
the rates and at the times provided in the Credit Agreement.

            This Note is one of the  Revolving  Notes  referred to in the Credit
Agreement,  dated as of October 18, 1996,  among the Borrower,  the Bank and the
other lending  institutions party thereto and Banque Indosuez,  New York Branch,
as Agent (as amended,  amended and restated,  supplemented or otherwise modified
in accordance with the terms thereof in effect,  the "Credit  Agreement") and is
entitled to the benefits thereof and shall be subject to the provisions thereof.
This Note is also entitled to the benefits of the Security Documents (as defined
in the Credit  Agreement).  As  provided in the Credit  Agreement,  this Note is
subject to mandatory and voluntary prepayment, in whole or in part.

            In case an Event of Default  (as  defined  in the Credit  Agreement)
shall occur and be  continuing,  the  principal of and accrued  interest on this
Note may be  declared  to be due and  payable  in the manner and with the effect
provided in the Credit Agreement.

            The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141431

<PAGE>


                                    -2-



            All  borrowings   evidenced  by  this  Note  and  all  payments  and
prepayments of the principal hereof and interest hereon and the respective dates
thereof shall be endorsed by the holder hereof on the schedule  attached  hereto
and made a part hereof,  or on a  continuation  thereof  which shall be attached
hereto and made a part  hereof,  or  otherwise  recorded  by such  holder in its
internal records;  provided,  however,  that the failure of the holder hereof to
make such an  endorsement  or recordation or any error in such an endorsement or
recordation  shall not affect the  obligations  of the Borrower to make payments
when due of any amounts owing under the Credit Agreement or under this Note.

            THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW.

                                    CARSON PRODUCTS COMPANY


                                    By
                                       Name:
                                       Title:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141431

<PAGE>


                                 TRANSACTIONS
                                      ON
                                REVOLVING NOTE



                 Principal                          Amount of      Outstanding
      Type of    Amount of            Duration      Principal or   Principal
      Loan Made  Loan Made  Interest  of Interest   Interest Paid
Date  This Date  This Date  Rate      Period        This Date

Balance  Notation
This Date      Made By


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141431

<PAGE>



                                                            Exhibit B-1 to the
                                                              Credit Agreement


                                  A TERM NOTE

                            CARSON PRODUCTS COMPANY


                                                            New York, New York
U.S. $                                                                 , 1996


            FOR VALUE RECEIVED,  CARSON PRODUCTS COMPANY, a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of (the "Bank"), in lawful
money of the United States of America in  immediately  available  funds,  at the
office  of Banque  Indosuez,  New York  Branch,  located  at 1211  Avenue of the
Americas,  7th  Floor,  New  York,  New York  10036 or as  otherwise  designated
pursuant to the Credit Agreement (which is hereinafter  defined), on the Final A
Term Loan Maturity Date (as defined in the Credit Agreement),  the principal sum
of
                                    AND   /100 U.S. DOLLARS
($ ) or, if less, the unpaid principal amount of the A Term Loans (as defined in
the Credit Agreement) made by the Bank pursuant to the Credit Agreement.

            The Borrower also  promises to pay interest on the unpaid  principal
amount  hereof in like money at said office  from the date hereof  until paid at
the rates and at the times provided in the Credit Agreement.

            This  Note  is one of the A Term  Notes  referred  to in the  Credit
Agreement,  dated as of October 18, 1996,  among the Borrower,  the Bank and the
other lending  institutions party thereto and Banque Indosuez,  New York Branch,
as Agent (as amended,  amended and restated,  supplemented or otherwise modified
in accordance with the terms thereof in effect,  the "Credit  Agreement") and is
entitled to the benefits thereof and shall be subject to the provisions thereof.
This Note is also entitled to the benefits of the Security Documents (as defined
in the Credit  Agreement).  As  provided in the Credit  Agreement,  this Note is
subject to mandatory and voluntary prepayment, in whole or in part.

            In case an Event of Default  (as  defined  in the Credit  Agreement)
shall occur and be  continuing,  the  principal of and accrued  interest on this
Note may be  declared  to be due and  payable  in the manner and with the effect
provided in the Credit Agreement.

            The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141441

<PAGE>


                                    -2-


            All  borrowings   evidenced  by  this  Note  and  all  payments  and
prepayments of the principal hereof and interest hereon and the respective dates
thereof shall be endorsed by the holder hereof on the schedule  attached  hereto
and made a part hereof,  or on a  continuation  thereof  which shall be attached
hereto and made a part  hereof,  or  otherwise  recorded  by such  holder in its
internal records;  provided,  however,  that the failure of the holder hereof to
make such an  endorsement  or recordation or any error in such an endorsement or
recordation  shall not affect the  obligations  of the Borrower to make payments
when due of any amounts owing under the Credit Agreement or under this Note.

            THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW.

                                    CARSON PRODUCTS COMPANY


                                    By
                                       Name:
                                       Title:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141441

<PAGE>


                                 TRANSACTIONS
                                      ON
                                 A TERM NOTE



                   Principal                           Amount of    Outstanding
        Type of    Amount of            Duration       Principal or   Principal
        Loan Made  Loan Made  Interest  of Interest    Interest Paid
Date    This Date  This Date  Rate      Period         This Date



Balance      Notation
This Date    Made By
DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141441

<PAGE>




                                                            Exhibit B-2 to the
                                                              Credit Agreement


                                  B TERM NOTE

                            CARSON PRODUCTS COMPANY


                                                            New York, New York
U.S. $                                                                 , 1996


            FOR VALUE RECEIVED,  CARSON PRODUCTS COMPANY, a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of (the "Bank"), in lawful
money of the United States of America in  immediately  available  funds,  at the
office  of Banque  Indosuez,  New York  Branch,  located  at 1211  Avenue of the
Americas,  7th  Floor,  New  York,  New York  10036 or as  otherwise  designated
pursuant to the Credit Agreement (which is hereinafter  defined), on the Final B
Term Loan Maturity Date (as defined in the Credit Agreement),  the principal sum
of
                                    AND   /100 U.S. DOLLARS
($ ) or, if less, the unpaid principal amount of the B Term Loans (as defined in
the Credit Agreement) made by the Bank pursuant to the Credit Agreement.

            The Borrower also  promises to pay interest on the unpaid  principal
amount  hereof in like money at said office  from the date hereof  until paid at
the rates and at the times provided in the Credit Agreement.

            This  Note  is one of the B Term  Notes  referred  to in the  Credit
Agreement,  dated as of October 18, 1996,  among the Borrower,  the Bank and the
other lending  institutions party thereto and Banque Indosuez,  New York Branch,
as Agent (as amended,  amended and restated,  supplemented or otherwise modified
in accordance with the terms thereof in effect,  the "Credit  Agreement") and is
entitled to the benefits thereof and shall be subject to the provisions thereof.
This Note is also entitled to the benefits of the Security Documents (as defined
in the Credit  Agreement).  As  provided in the Credit  Agreement,  this Note is
subject to mandatory and voluntary prepayment, in whole or in part.

            In case an Event of Default  (as  defined  in the Credit  Agreement)
shall occur and be  continuing,  the  principal of and accrued  interest on this
Note may be  declared  to be due and  payable  in the manner and with the effect
provided in the Credit Agreement.

            The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141451

<PAGE>


                                    -2-


            All  borrowings   evidenced  by  this  Note  and  all  payments  and
prepayments of the principal hereof and interest hereon and the respective dates
thereof shall be endorsed by the holder hereof on the schedule  attached  hereto
and made a part hereof,  or on a  continuation  thereof  which shall be attached
hereto and made a part  hereof,  or  otherwise  recorded  by such  holder in its
internal records;  provided,  however,  that the failure of the holder hereof to
make such an  endorsement  or recordation or any error in such an endorsement or
recordation  shall not affect the  obligations  of the Borrower to make payments
when due of any amounts owing under the Credit Agreement or under this Note.

            THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW.

                                    CARSON PRODUCTS COMPANY


                                    By
                                       Name:
                                       Title:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141451

<PAGE>


                                 TRANSACTIONS
                                      ON
                                 B TERM NOTE



                   Principal                            Amount of
       Type of     Amount of              Duration      Principal or
       Loan Made   Loan Made   Interest   of Interest   Interest Paid   n
Date   This Date   This Date   Rate       Period        This Date


Outstanding
Principal
Balance        Notatio
This Date      Made By

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141451
<PAGE>



                                                              Exhibit D to the
                                                              Credit Agreement


                       This instrument prepared by and, after recording,  please
                      return to:

                            Jonathan I. Mark, Esq.
                           Cahill Gordon & Reindel
                                80 Pine Street
                           New York, New York 10005







             TERM LOAN AND REVOLVING CREDIT DEED TO SECURE DEBT,
                 ASSIGNMENT OF LEASES AND SECURITY AGREEMENT

                                      BY

                           CARSON PRODUCTS COMPANY
                      (formerly known as Aminco, Inc.),
                                   Grantor,

                                      TO

                      BANQUE INDOSUEZ, NEW YORK BRANCH,
                             as Collateral Agent,

                                 Beneficiary

                           Relating to Premises in:

                      Savannah, Chatham County, Georgia

                                 $40,000,000

                        Dated as of: October 18, 1996








DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>



                               TABLE OF CONTENTS


Section    Heading                                                        Page


INTRODUCTION............................................................     1

RECITALS................................................................     1

GRANTING CLAUSES........................................................     2

COVENANTS...............................................................     5

ARTICLE I  WARRANTIES, REPRESENTATIONS AND
           COVENANTS OF GRANTOR

1.1      Payment........................................................     5
1.2      Authority and Validity.........................................     5
1.3      Good Title.....................................................     6
1.4      Recording Documentation To Assure
           Security Interest; Fees and Expenses.........................     7
1.5      Payment of Taxes, Insurance Premiums,
           Assessments; Compliance with Law and
           Insurance Requirements.......................................     8
1.6      Certain Tax Law Changes........................................    11
1.7      Required Insurance Policies....................................    12
1.8      Failure To Make Certain Payments...............................    15
1.9      Inspection.....................................................    16
1.10     Grantor To Maintain Improvements...............................    16
1.11     Grantor's Obligations with Respect to Leases...................    17
1.12     Transfer Restrictions and Liens................................    20
1.13     Destruction; Condemnation......................................    20
1.14     Alterations....................................................    25
1.15     Hazardous Material.............................................    25
1.16     Asbestos.......................................................    27
1.17     Books and Records; Other Information...........................    27
1.18     No Claims Against Beneficiary..................................    28
1.19     Utility Services...............................................    28


ARTICLE II  ASSIGNMENT OF LEASES; SECURITY
            AGREEMENT; ASSIGNMENT AGREEMENT

2.1      Assignment of Leases, Rents, Issues
           and Profits..................................................    29
2.2      Security Interest in Fixtures..................................    31

ARTICLE III  EVENTS OF DEFAULT AND REMEDIES

3.1      Events of Default..............................................    32
3.2      Remedies in Case of an Event of Default........................    32

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461
                                     -i-

<PAGE>


Section    Heading                                                        Page


3.3      Sale of Mortgaged Property if Event of
           Default Occurs; Proceeds of Sale.............................    34
3.4      Additional Remedies in Case of an Event of Default.............    37
3.5      Legal Proceedings After an Event of Default....................    38
3.6      Remedies Not Exclusive.........................................    39

ARTICLE IV  CERTAIN DEFINITIONS.........................................    40

ARTICLE V   MISCELLANEOUS

5.1      Severability of Provisions.....................................    41
5.2      Notices........................................................    41
5.3      Covenants To Run with the Land.................................    41
5.4      Headings.......................................................    41
5.5      Limitation on Interest Payable.................................    41
5.6      Governing Law; Submission to Jurisdiction;
           Venue........................................................    42
5.7      No Merger......................................................    43
5.8      Modification in Writing........................................    43
5.9      No Credit for Payment of Taxes or Impositions..................    43
5.10     Stamp and Other Taxes..........................................    43
5.11     Estoppel Certificates..........................................    43
5.12     Additional Security............................................    44
5.13     Release........................................................    44
5.14     Certain Expenses of Beneficiary................................    44
5.15     Expenses of Collection.........................................    45
5.16     Business Days..................................................    45
5.17     Relationship...................................................    45
5.18     Reconveyance Upon Payment of Secured Obligations...............    46
5.19     Concerning Beneficiary.........................................    46
5.20     Future Advances................................................    47
5.21     Waiver of Stay.................................................    47
5.22     Continuing Security Interest; Assignment.......................    48
5.23     Obligations Absolute...........................................    48
5.24     Beneficiary's Right to Sever Indebtedness......................    49

SIGNATURES

SCHEDULE A LEGAL DESCRIPTION

SCHEDULE B PRIOR LIENS


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461
                                     -ii-

<PAGE>





              TERM LOAN AND REVOLVING CREDIT DEED TO SECURE DEBT,
                  ASSIGNMENT OF LEASES AND SECURITY AGREEMENT


            TERM LOAN AND  REVOLVING  CREDIT DEED TO SECURE DEBT,  ASSIGNMENT OF
LEASES AND SECURITY  AGREEMENT ("Deed to Secure Debt"),  dated as of October 18,
1996,  made by CARSON  PRODUCTS  COMPANY  (formerly  known as Aminco,  Inc.,  as
successor by merger to DNL Savannah Acquisition Corp.), a Delaware  corporation,
having an office at 64 Ross Road, Savannah,  Georgia 31405, as grantor, assignor
and  debtor  (in  such  capacities  and  together  with any  successors  in such
capacities, "Grantor"), to BANQUE INDOSUEZ, NEW YORK BRANCH, having an office at
1211  Avenue  of  the  Americas,  7th  Floor,  New  York,  New  York  10036,  as
beneficiary,  assignee and secured party (in such  capacities  and together with
any successors in such  capacities,  "Beneficiary")  as collateral agent for the
lending  institutions  (the  "Banks")  from  time to time  party  to the  Credit
Agreement (as hereinafter defined).


                               R E C I T A L S :

            A.  Pursuant  to a certain  credit  agreement,  dated as of the date
hereof (as amended,  amended and restated,  supplemented,  or otherwise modified
from time to time, the "Credit Agreement"; capitalized terms used herein and not
defined shall have the meanings assigned to them in the Credit Agreement), among
Grantor, the Banks and Banque Indosuez, New York Branch, as Agent for the Banks,
the Banks  have  agreed (i) to make to or for the  account of Grantor  certain A
Term Loans up to an aggregate principal amount of $15,000,000 that mature on the
last  Business Day of September,  2002,  certain B Term Loans up to an aggregate
principal  amount  of  $10,000,000  that  mature  on the  last  Business  Day of
September,  2003 and certain Revolving Loans up to an aggregate principal amount
of $15,000,000 that mature on the last Business Day of September,  2002 and (ii)
to issue certain Letters of Credit for the account of Grantor.

            B. It is  contemplated  that  Grantor  may  enter  into  one or more
agreements with one or more of the Banks ("Interest Rate Agreements") fixing the
interest rates with respect to Loans under the Credit Agreement (all obligations
of  Grantor  now  existing  or  hereafter   arising  under  such  Interest  Rate
Agreements, collectively, the "Interest Rate Obligations").

            C.    Grantor is the owner of the Mortgaged Property (as
hereinafter defined).

            D.    It is a condition to the obligations of the Banks to
make the Loans under the Credit Agreement and a condition to any

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -2-



Bank issuing  Letters of Credit under the Credit  Agreement or entering into the
Interest Rate Agreements that Grantor execute and deliver the applicable  Credit
Documents, including this Deed to Secure Debt.

            E.  This  Deed to  Secure  Debt is  given  by  Grantor  in  favor of
Beneficiary  for its  benefit  and  the  benefit  of the  Banks  and  the  Agent
(collectively,  the "Secured  Parties") to secure the payment and performance in
full  when due,  whether  at  stated  maturity,  by  acceleration  or  otherwise
(including,  without limitation, the payment of interest and other amounts which
would  accrue and become due but for the filing of a petition in  bankruptcy  or
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C.  ss.  362(a)),  of (i) all  Obligations  of Grantor  now  existing  or
hereafter  arising under the Credit  Agreement and all Interest Rate Obligations
of Grantor now existing or hereafter  arising under any Interest Rate  Agreement
(including, without limitation, Grantor's obligation provided for therein to pay
principal,  interest  and  all  other  charges,  fees,  expenses,   commissions,
reimbursements,  premiums,  indemnities  and  other  payments  related  to or in
respect of the Obligations contained in the Credit Agreement and the obligations
contained in any Interest Rate Agreement),  and (ii) without  duplication of the
amounts  described  in clause (i),  all  Obligations  of Grantor now existing or
hereafter arising under this Deed to Secure Debt or any other Security Document,
including,  without  limitation,  with respect to all charges,  fees,  expenses,
commissions,  reimbursements,  premiums,  indemnities  and other  payments  that
Grantor is obligated to pay under this Deed to Secure Debt or any other Security
Document (the obligations described in clauses (i) and (ii),  collectively,  the
"Secured Obligations").


                       G R A N T I N G C L A U S E S :

            For and in  consideration  of the sum of Ten  Dollars  ($10.00)  and
other valuable  consideration,  the receipt and  sufficiency of which are hereby
acknowledged, Grantor does hereby pledge, give, grant, sell, convey and transfer
to Beneficiary, its successors and assigns, with powers of sale, for the use and
benefit of Beneficiary,  all Grantor's  right,  title and interest in and to the
following   property,   whether  now  owned  or  held  or   hereafter   acquired
(collectively, the "Mortgaged Property"):

            A.    Any and all present estates or interest of Grantor
in the land described in Schedule A, together with all Grantor's
reversionary rights in and to any and all easements, rights-of-way,
sidewalks, strips and gores of land, drives, roads, curbs, streets,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -3-



ways, alleys, passages,  passageways, sewer rights, waters, water courses, water
rights, and all power, air, light and other rights, estates, titles,  interests,
privileges,  liberties,  servitudes,  licenses,  tenements,   hereditaments  and
appurtenances  whatsoever,  in  any  way  belonging,  relating  or  appertaining
thereto, or any part thereof, or which hereafter shall in any way belong, relate
or be appurtenant thereto (collectively, the "Land");

            B. Any and all  estates or  interests  of Grantor in the  buildings,
structures and other  improvements  and any and all  Alterations (as hereinafter
defined) now or  hereafter  located or erected on the Land,  including,  without
limitation,  attachments,  walks  and ways  (collectively,  the  "Improvements";
together with the Land, the "Premises");

            C. Any and all permits, certificates,  approvals and authorizations,
however  characterized,  issued or in any way furnished in  connection  with the
Premises to the extent  assignable,  whether  necessary or not for the operation
and  use of the  Premises,  including,  without  limitation,  building  permits,
certificates of occupancy,  environmental  certificates,  industrial  permits or
licenses and certificates of operation;

            D. Any and all  interest  of  Grantor in all  machinery,  apparatus,
equipment, fittings, fixtures, improvements and articles of personal property of
every kind and nature  whatsoever  now or  hereafter  attached or affixed to the
Premises or used in connection with the use and enjoyment of the Premises or the
maintenance or preservation thereof, including,  without limitation, all utility
systems, fire sprinkler and alarm systems, HVAC equipment,  boilers,  electronic
data  processing,   telecommunications  or  computer  equipment,  refrigeration,
electronic  monitoring,  water or lighting  systems,  power,  sanitation,  waste
removal,  elevators,  maintenance  or other systems or equipment,  and all other
articles used or useful in  connection  with the use or operation of any part of
the Premises,  all to the extent the same constitute  "fixtures" as such term is
defined  in the UCC as in  effect  in the State of  Georgia  (collectively,  the
"Equipment");

            E. All Grantor's right, title and interest as landlord,  licensor or
grantor, in all leases and subleases of space, licenses, occupancy or concession
agreements now existing or hereafter  entered into relating in any manner to the
Premises or the Equipment and any and all amendments, modifications, supplements
and renewals of any thereof  (each such lease,  license or  agreement,  together
with any such  amendment,  modification,  supplement  or  renewal,  a  "Lease"),
whether  now in effect or  hereafter  coming  into  effect,  including,  without
limitation, all

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -4-



rents, additional rents, cash, guaranties, letters of credit, bonds, sureties or
securities   deposited   thereunder  to  secure  performance  of  the  lessee's,
licensee's or obligee's obligations thereunder,  revenues, earnings, profits and
income,  advance rental payments,  payments incident to assignment,  sublease or
surrender of a Lease, claims for forfeited deposits and claims for damages,  now
due or hereafter to become due, with respect to any Lease,  any  indemnification
against,  or  reimbursement  for,  sums paid and costs and expenses  incurred by
Grantor  under  any  Lease  or  otherwise,  and any  award  in the  event of the
bankruptcy  of any  tenant  under or  guarantor  of a Lease  (collectively,  the
"Rents");

            F.    All general intangibles and contract rights relating
to the Premises and the Equipment and all reserves, deferred
payments, deposits, refunds and claims of every kind or character
relating thereto (collectively, the "Contract Rights");

            G. All drawings, plans,  specifications,  file materials,  operating
and maintenance records, catalogues,  tenant lists, correspondence,  advertising
materials,  operating manuals, warranties,  guaranties,  appraisals, studies and
data  relating  to the  Premises or the  Equipment  or the  construction  of any
Alteration or the maintenance of any Permit (as hereinafter defined); and

            H. All proceeds of the conversion,  voluntary or involuntary, of any
of the foregoing into cash or liquidated claims, including,  without limitation,
proceeds of insurance and  condemnation  or other awards or payments and refunds
of real estate taxes and assessments,  including interest thereon (collectively,
"Proceeds");

            TO HAVE AND TO HOLD the Mortgaged Property together with the rights,
privileges and appurtenances thereto belonging unto Beneficiary, for the benefit
of Beneficiary and Beneficiary's successors and assigns forever, for the purpose
of securing payment and performance by Grantor of the Secured  Obligations,  and
Grantor  hereby  binds  itself and its  successors  and  assigns to warrant  and
forever  defend  the  Mortgaged  Property  unto  Beneficiary,  its  substitutes,
successors  and assigns,  as the case may be, against the claim or claims of all
persons  claiming or to claim the same or any part thereof.  This Deed to Secure
Debt is a deed passing legal title  pursuant to the laws of the State of Georgia
governing loan or security  deeds and security  agreements and is not a mortgage
as such term is defined under such laws.


                              C O V E N A N T S :


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -5-



            Grantor warrants, represents and covenants to and for the benefit of
Beneficiary as follows:


                                  ARTICLE I.

                        WARRANTIES, REPRESENTATIONS AND
                             COVENANTS OF GRANTOR

            SECTION 1.1  Payment.  Grantor  shall pay as and when the same shall
become due, whether at its stated maturity,  by acceleration or otherwise,  each
and every amount payable by Grantor under the Credit  Documents and the Interest
Rate Agreements.

            SECTION 1.2 Authority and Validity. Grantor represents, warrants and
covenants  that (i) Grantor is duly  authorized to execute and deliver this Deed
to Secure Debt, and all corporate and governmental consents,  authorizations and
approvals necessary or required therefor have been duly and effectively taken or
obtained,  (ii)  this  Deed  to  Secure  Debt is a  legal,  valid,  binding  and
enforceable  obligation  of  Grantor,  except as may be limited  by  bankruptcy,
insolvency, reorganization,  moratorium or similar laws relating to or affecting
creditors' rights generally and except as such  enforceability may be limited by
the  application  of general  principles of equity  (regardless  of whether such
enforceability  is  considered  in a  proceeding  in equity or at law) and (iii)
Grantor has full  corporate  power and lawful  authority  to execute and deliver
this Deed to Secure  Debt and to convey  and grant a  security  interest  in the
Mortgaged Property as contemplated herein.

            SECTION 1.3 Good Title.

            1.3.1 Grantor  represents,  warrants and covenants  that (i) Grantor
has good and  marketable  fee simple title to the  Premises  and the  landlord's
interest  and  estate  under or in  respect  of the Leases and good title to the
interest it purports to own in and to each of the Permits, the Equipment and the
Contract  Rights,  in each case subject to no deed of trust,  mortgage,  deed to
secure debt,  pledge,  security  interest,  encumbrance,  lien, lease,  license,
easement,  assignment,  collateral  assignment or charge of any kind, including,
without  limitation,  any conditional sale or other title retention agreement or
lease in the  nature  thereof,  any  filing  or  agreement  to file a  financing
statement as debtor under the Uniform  Commercial Code or any similar statute or
any  subordination  arrangement  in  favor  of  any  party  other  than  Grantor
(collectively,  "Liens";  each, a "Lien"),  except for those Liens identified on
Schedule B hereto  (collectively,  the "Prior Liens"), (ii) Grantor will keep in
effect all rights and appurtenances to or that

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -6-



constitute a part of the Mortgaged  Property the failure to maintain which would
have a material adverse effect upon the interests of Beneficiary under this Deed
to Secure Debt or upon the value of the Mortgaged  Property (a "Material Adverse
Effect"),  (iii) Grantor will  protect,  preserve and defend its interest in the
Mortgaged Property and title thereto, provided that the failure to preserve such
interest  would have a Material  Adverse  Effect,  (iv) Grantor will comply with
each of the terms,  conditions and provisions of any obligation of Grantor which
is  secured by the  Mortgaged  Property,  the  noncompliance  with  which  might
reasonably  be expected to result in the  imposition  of a Lien on the Mortgaged
Property,  which Lien is not permitted pursuant to the terms hereof, (v) Grantor
will appear and defend the Lien and  security  interests  created and  evidenced
hereby and the  validity  and  priority of this Deed to Secure Debt  (subject to
Prior Liens) in any action or  proceeding  affecting or purporting to affect the
Mortgaged Property or any of the rights of Beneficiary hereunder, (vi) this Deed
to Secure Debt creates and constitutes a valid and enforceable first Lien on the
Mortgaged  Property,  which first Lien is and will be subject  only to (a) Prior
Liens (but not to extensions,  amendments,  supplements or replacements of Prior
Liens unless  consented to by Beneficiary)  and (b) Liens hereafter  created and
which,  pursuant to the provisions of Section 1.12, are superior to the Lien and
security  interests created and evidenced hereby,  and Grantor does now and will
forever  warrant and defend to  Beneficiary  and all its  successors and assigns
such title and the  validity  and  priority of the Lien and  security  interests
created  and  evidenced  hereby  against  the claims of all  persons and parties
whomsoever  and (vii) there has been issued and there  remain in effect each and
every certificate of occupancy or use or other Permit currently required for the
existing use and occupancy by Grantor which if not obtained or maintained  would
have a Material Adverse Effect.

            1.3.2 Grantor,  immediately  upon obtaining  actual knowledge of the
pendency  of any  proceedings  for the  eviction of Grantor  from the  Mortgaged
Property  or any  part  thereof  by  paramount  title or  otherwise  questioning
Grantor's  title to the  Mortgaged  Property as warranted in this Deed to Secure
Debt, or of any condition that might  reasonably be expected to give rise to any
such proceedings,  shall notify Beneficiary thereof. Beneficiary may participate
in such  proceedings,  and  Grantor  will  deliver or cause to be  delivered  to
Beneficiary all instruments  reasonably  requested by Beneficiary to permit such
participation. In any such proceedings Beneficiary may be represented by counsel
reasonably satisfactory to Beneficiary at the reasonable expense of Grantor. If,
upon the  resolution  of such  proceedings,  Grantor  shall suffer a loss of the
Mortgaged  Property or any part thereof or interest  therein and title insurance
proceeds shall be payable in connection

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -7-



therewith, such proceeds are hereby assigned to and shall be paid to Beneficiary
to be applied to the payment of the Secured  Obligations in accordance  with the
provisions of Section 3.02(B)(a) of the Credit Agreement.

            SECTION 1.4  Recording Documentation To Assure Security
Interest; Fees and Expenses.

            1.4.1 Grantor shall,  forthwith  after the execution and delivery of
this Deed to Secure Debt and thereafter,  from time to time,  cause this Deed to
Secure  Debt and any  financing  statement,  continuation  statement  or similar
instrument  relating to any thereof or to any property intended to be subject to
the Lien of this Deed to Secure  Debt to be filed,  registered  and  recorded in
such  manner and in such  places as may be required by any present or future law
in order to publish  notice of and fully to protect the  validity  and  priority
thereof or the Lien hereof  purported to be created upon the Mortgaged  Property
and the interest and rights of Beneficiary  therein.  Grantor shall pay or cause
to be paid  all  taxes  and  fees  incident  to such  filing,  registration  and
recording,  and all reasonable  expenses incident to the preparation,  execution
and acknowledgment thereof, and of any instrument of further assurance,  and all
Federal or state stamp taxes or other taxes,  duties and charges  arising out of
or in connection with the execution and delivery of such instruments.

            1.4.2 Grantor  shall,  at the sole cost and expense of Grantor,  do,
execute,  acknowledge  and  deliver  all and every  such  further  acts,  deeds,
conveyances, mortgages, assignments, notices of assignment, transfers, financing
statements,  continuation  statements and  assurances as Beneficiary  shall from
time to time  reasonably  request,  which  may be  necessary  in the  reasonable
judgment of Beneficiary from time to time to assure,  perfect,  convey,  assign,
mortgage, transfer and confirm unto Beneficiary,  the property and rights hereby
conveyed or assigned or which  Grantor may be or may  hereafter  become bound to
convey  or  assign  to   Beneficiary  or  for  carrying  out  the  intention  or
facilitating  the  performance  of the terms of this Deed to Secure  Debt or the
filing,  registering  or  recording  of this Deed to Secure  Debt.  In the event
Grantor shall fail after demand to execute any instrument  reasonably  requested
to be executed by Grantor under this subsection  1.4.2,  Beneficiary may execute
the same as the  attorney-in-fact  for  Grantor,  such power of  attorney  being
coupled with an interest and irrevocable.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -8-




            SECTION  1.5  Payment  of Taxes,  Insurance  Premiums,  Assessments;
Compliance with Law and Insurance Requirements.

            1.5.1 Unless and to the extent  contested  by Grantor in  accordance
with the provisions of subsection 1.5.5 hereof, Grantor shall pay and discharge,
or cause to be paid and discharged, from time to time prior to the date on which
material  penalties  attach  thereto,  all real estate and other material taxes,
special assessments,  levies, permits, inspection and license fees, all premiums
for  insurance,  all water and sewer  rents  and  charges  and all other  public
charges imposed upon or assessed against or in respect of the Mortgaged Property
or any part  thereof  or upon  the  Rents.  Grantor  shall,  upon  Beneficiary's
reasonable request,  deliver to Beneficiary,  receipts evidencing the payment of
all such  taxes,  assessments,  levies,  fees,  rents and other  public  charges
imposed upon or assessed  against the Mortgaged  Property or any part thereof or
the Rents.

            1.5.2 From and after the occurrence and during the continuance of an
Event of Default (as hereinafter defined), at the option and upon the request of
Beneficiary,  Grantor shall deposit with  Beneficiary,  on the first day of each
month,  an amount  estimated by  Beneficiary  to be equal to  one-twelfth of the
annual taxes,  assessments  and other items required to be discharged by Grantor
under  subsection  1.5.1.  Such  amounts  shall be held by  Beneficiary  without
interest to Grantor and applied to the payment of the  obligations in respect of
which such  amounts  were  deposited,  in such  priority  as  Beneficiary  shall
determine,  on or before the respective  dates on which such  obligations or any
part thereof  would  become  delinquent.  Nothing  contained in this Section 1.5
shall (i) affect any right or remedy of Beneficiary  under any provision of this
Deed to  Secure  Debt or of any  statute  or rule of law  following  an Event of
Default to pay any such amount as  provided  above from its own funds and to add
the amount so paid,  together  with  interest at a rate per annum (the  "Default
Rate") equal to the highest rate then payable under the Credit  Agreement during
such time that any amount  remains  outstanding,  to the Secured  Obligations or
(ii) relieve  Grantor of its  obligations  to make or provide for the payment of
the annual taxes,  assessments  and other  charges  required to be discharged by
Grantor under subsection 1.5.1.  Grantor hereby grants to Beneficiary a security
interest in all sums held pursuant to this  subsection  1.5.2 to secure  payment
and performance of the Secured Obligations.  During the continuance of any Event
of Default,  Beneficiary  may, at its option,  apply all or any part of the sums
held pursuant to this subsection 1.5.2 to payment and performance of the Secured
Obligations.  Grantor shall  redeposit  with  Beneficiary an amount equal to all
amounts so applied as a condition to the cure, if any,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -9-



of such Event of Default in addition to fulfillment of any other
required conditions.

            1.5.3 Unless and to the extent  contested  by Grantor in  accordance
with the provisions of subsection  1.5.5,  Grantor shall timely pay, or cause to
be paid,  all lawful  claims and demands of  mechanics,  materialmen,  laborers,
government  agencies  administering  worker's  compensation  insurance,  old age
pensions and social security benefits and all other claims,  judgments,  demands
or amounts of any nature  which,  if unpaid,  might  reasonably  be  expected to
result in, or permit the  creation of, a Lien on the  Mortgaged  Property or any
part thereof,  or on the Rents (other than Liens permitted pursuant to the terms
hereof) or which might  reasonably be expected to result in forfeiture of all or
any part of the Mortgaged Property.

            1.5.4 Grantor shall  maintain,  or cause to be  maintained,  in full
force and effect all permits, certificates, authorizations, consents, approvals,
licenses,  franchises  or other  instruments  now or  hereafter  required by any
Governmental  Authority  to  operate  or use and  occupy  the  Premises  and the
Equipment  in the manner and for the  purposes  operated  by  Grantor,  or which
Grantor otherwise deems necessary or appropriate in its commercially  reasonable
judgment (collectively,  "Permits"; each, a "Permit"),  except where the failure
to maintain  such  Permit  would not  reasonably  be expected to have a Material
Adverse Effect. Unless and to the extent contested by Grantor in accordance with
the  provisions  of  subsection  1.5.5  hereof,  Grantor  shall  comply with all
material  requirements set forth in the Permits and all requirements of any law,
ordinance,  rule,  regulation  or  similar  statute  or case law  (collectively,
"Requirements  of Law") of any Governmental  Authority  applicable to all or any
part of the Mortgaged Property or the condition,  use or occupancy of all or any
part thereof or any recorded deed of restriction,  declaration, covenant running
with the land or otherwise,  now or hereafter in force, except where the failure
to comply with such Requirements of Law would not reasonably be expected to have
a Material  Adverse Effect.  Grantor shall not initiate,  join in, or consent to
any  change in the  zoning  or any other  permitted  use  classification  of the
Premises  without the prior written consent of  Beneficiary,  which consent will
not be unreasonably withheld or delayed.

            1.5.5  Grantor  may  at  its  own  expense  contest  the  amount  or
applicability of any of the obligations described in subsections 1.5.1, 1.5.3 or
1.5.4 by appropriate legal proceedings, prosecution of which operates to prevent
the  collection  or  enforcement  thereof  and  the  sale or  forfeiture  of the
Mortgaged  Property or any part thereof to satisfy such  obligations;  provided,
however, that in

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -10-



connection with such contest,  Grantor shall have made provision for the payment
or  performance of such  contested  obligation on Grantor's  books if and to the
extent  required  by GAAP.  Notwithstanding  the  foregoing  provisions  of this
subsection  1.5.5,  (i) no  contest  of any such  obligations  may be pursued by
Grantor if such  contest  would expose  Beneficiary  or any Bank to any possible
criminal  liability  or,  unless  Grantor  shall have  furnished a bond or other
security  therefor  reasonably  satisfactory to Beneficiary or such Bank, as the
case may be, any  additional  civil  liability  for  failure to comply with such
obligations  and (ii) if at any time payment or  performance  of any  obligation
contested by Grantor pursuant to this subsection 1.5.5 shall become necessary to
prevent the delivery of a tax or similar deed  conveying the Mortgaged  Property
or any portion  thereof because of nonpayment or  nonperformance,  Grantor shall
pay or perform the same, in sufficient  time to prevent the delivery of such tax
or similar deed or such termination or forfeiture.

            1.5.6  Grantor shall not take any action that could be the basis for
termination,  revocation  or denial of any  insurance  coverage  required  to be
maintained  under  this  Deed to  Secure  Debt or that  could be the basis for a
defense to any claim under any  insurance  policy  maintained  in respect of the
Premises or the  Equipment and Grantor  shall  otherwise  comply in all respects
with the  requirements  of any  insurer  that  issues a policy of  insurance  in
respect of the Premises or the Equipment;  provided,  however, that Grantor may,
at  its  own  expense  and  after  notice  to   Beneficiary,   (i)  contest  the
applicability or  enforceability  of any such  requirements by appropriate legal
proceedings,  prosecution of which does not constitute a basis for  cancellation
or  revocation of any insurance  coverage  required  under Section 1.7 hereof or
(ii) cause the insurance  policy  containing any such requirement to be replaced
by a new policy complying with the provisions of Section 1.7.

            1.5.7 Grantor  shall,  promptly  upon receipt of any written  notice
regarding  any  failure by Grantor to pay or  discharge  any of the  obligations
described in subsection  1.5.1,  1.5.3,  1.5.4 or 1.5.6,  furnish a copy of such
notice to Beneficiary.

            1.5.8 In the event that the proceeds of any tax claim are paid after
Beneficiary has exercised its right to foreclose the Lien of this Deed to Secure
Debt,  such  proceeds  shall be paid to  Beneficiary  to satisfy any  deficiency
remaining after such  foreclosure.  Beneficiary shall retain its interest in the
proceeds of any tax claim during any redemption  period.  The amount of any such
proceeds  in excess of any  deficiency  claim of  Beneficiary  shall  reasonably
promptly be released to Grantor.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -11-




            SECTION  1.6 Certain  Tax Law  Changes.  In the event of the passage
after the date of this Deed to Secure Debt of any law  deducting  from the value
of real  property,  for the purpose of taxation,  amounts in respect of any Lien
thereon or changing in any way the laws for the  taxation of  mortgages or debts
secured by mortgages for state or local purposes or the manner of the collection
of any such taxes  (excluding  therefrom  taxes on income),  and imposing a tax,
either  directly or  indirectly,  on this Deed to Secure Debt, any Interest Rate
Agreement or any other Credit Document that is payable by  Beneficiary,  Grantor
shall  promptly  pay to  Beneficiary  such amount or amounts as may be necessary
from time to time to pay such tax.

            SECTION 1.7  Required Insurance Policies.

            1.7.1  Grantor  shall  maintain in respect of the  Premises  and the
Equipment the following insurance coverages:

             (i)  Physical  hazard  insurance  on an "all risk" basis  covering,
      without  limitation,   hazards  commonly  covered  by  fire  and  extended
      coverage, lightning, windstorm, civil commotion, hail, riot, strike, water
      damage,  sprinkler leakage,  collapse and malicious mischief, in an amount
      equal to the full  replacement cost of the Improvements and all Equipment,
      with such  deductibles  as  Beneficiary  may from time to time  reasonably
      require, and, if Beneficiary shall not have imposed any such requirements,
      with such  deductibles  as would be  maintained  by a prudent  operator of
      property  similar in use and  configuration to the Premises and located in
      the locality where the Premises are located. "Full replacement cost" means
      the  Cost  of  Construction  (as  hereinafter   defined)  to  replace  the
      Improvements  and the Equipment,  exclusive of  depreciation,  excavation,
      foundation  and footings,  as  determined  from time to time (but not less
      frequently  than once every  twelve (12)  months) by a Person  selected by
      Grantor and reasonably acceptable to Beneficiary, such determination to be
      based upon the  appraisals  delivered to  Beneficiary  pursuant to Section
      4.01(L)(iii)  of  the  Credit  Agreement,  with  appropriate  updates  for
      capitalized additions, deletions, industry trends and other factors;

            (ii)  Comprehensive  general liability  insurance against claims for
      bodily  injury,  death or property  damage  occurring  on, in or about the
      Premises  and  any  adjoining  streets,  sidewalks  and  passageways,  and
      covering  any and all claims,  including,  without  limitation,  all legal
      liability to the extent  insurable  imposed upon Beneficiary and all court
      costs and attorneys' fees, arising out of or connected with the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -12-



      possession,  use,  leasing,  operation or  condition of the Premises  with
      policy limits and deductibles in such amounts as Beneficiary may from time
      to time reasonably require, and, if Beneficiary shall not have imposed any
      such  requirements,  in such  amounts  as  from  time  to  time  would  be
      maintained  by  a  prudent   operator  of  property  similar  in  use  and
      configuration  to the  Premises  and  located  in the  locality  where the
      Premises are located;

           (iii) Worker's compensation  insurance as required by the laws of the
      state where the Premises are located to protect Grantor against claims for
      injuries sustained in the course of employment at the Premises;

            (iv)  Explosion  insurance  in respect of any  boilers  and  similar
      apparatus located on the Premises or comprising any Equipment, with policy
      limits and  deductibles  in such amounts as  Beneficiary  may from time to
      time reasonably  require,  and, if Beneficiary  shall not have imposed any
      such  requirements,  in such amounts as would be  maintained  by a prudent
      operator of property similar in use and  configuration to the Premises and
      the Equipment and located in the locality where the Premises and Equipment
      are located;

             (v)  Business   interruption   insurance  and/or  "loss  of  rents"
      insurance  covering one year of loss, the term "loss of rents" to mean the
      total  estimated  gross  rental  income  from  tenant  occupation  of  the
      Improvements as furnished and equipped under Leases;

            (vi)  If the  Premises  are  located  in an area  identified  by the
      Federal  Emergency  Management  Agency  as an area  having  special  flood
      hazards  pursuant to the National Flood Insurance Act of 1968 or the Flood
      Disaster  Protection Act of 1973, each as amended,  or any successor laws,
      flood  insurance  with policy  limits and  deductibles  in such amounts as
      Beneficiary may from time to time reasonably require,  and, if Beneficiary
      shall not have imposed any such requirements,  in such amounts as would be
      maintained  by  a  prudent   operator  of  property  similar  in  use  and
      configuration  to the  Premises  and  located  in the  locality  where the
      Premises are located; and

           (vii) Such other insurance, against such risks and with policy limits
      and  deductibles  in such  amounts  as  Beneficiary  may from time to time
      reasonably require,  and, if no such requirements shall have been imposed,
      in such amounts as would be maintained  by a prudent  operator of property
      similar in use

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -13-



      and configuration to the Premises and located in the locality
      where the Premises are located.

            1.7.2 All insurance  policies  required by this Section 1.7 shall be
in form  reasonably  satisfactory  to  Beneficiary.  All  insurance  policies in
respect of the coverages required by subsections 1.7.1(i), 1.7.1(iv),  1.7.1(v),
1.7.1(vi)  and,  if  applicable,  1.7.1(vii),  shall  be  in  amounts  at  least
sufficient to prevent coinsurance liability,  and all losses thereunder shall be
payable to Beneficiary,  as loss payee, pursuant to a standard  non-contributory
New York  mortgagee  endorsement.  All  insurance  policies  in  respect  of the
coverages required by subsections 1.7.1(ii) and, if applicable, 1.7.1(vii) shall
name  Beneficiary as an additional  insured.  Each policy of insurance  required
under this  Section  1.7 shall  provide  that it may not be  modified,  reduced,
cancelled  or  otherwise  terminated  without at least  thirty  (30) days' prior
written  notice to Beneficiary  and shall permit  Beneficiary to pay any premium
therefor  within thirty (30) days after receipt of any notice  stating that such
premium has not been paid when due. All insurance  policies  required  hereunder
shall provide that all losses  thereunder shall be payable  notwithstanding  any
act or negligence of Grantor or its agents or employees  which  otherwise  might
have resulted in a forfeiture of all or a part of such insurance  payments.  The
policy or policies of such insurance or certificates of insurance evidencing the
required coverages,  and all renewals or extensions thereof,  shall be delivered
to  Beneficiary  on the Closing  Date.  Settlement of any claim under any of the
insurance  policies  referred to in this Section 1.7, if such claim involves (in
the  reasonable  judgment  of  Beneficiary)  loss in excess of $500,000 or more,
shall require the prior written  approval of  Beneficiary,  which approval shall
not be  unreasonably  withheld or  delayed,  and  Grantor  shall use  reasonable
efforts to cause each such policy to contain a provision to such effect.

            1.7.3  At  least  ten  (10)  days  prior  to the  expiration  of any
insurance policy required by this Section 1.7, a policy or policies  renewing or
extending  such expiring  policy or renewal or extension  certificates  or other
reasonable  evidence of renewal or extension  and  reasonable  evidence that the
applicable  policies  are in  full  force  and  effect  shall  be  delivered  to
Beneficiary.

            1.7.4  Grantor  shall  not  purchase  separate   insurance  policies
concurrent  in form or  contributing  in the event of loss with  those  policies
required to be  maintained  under this Section  1.7,  unless (to the extent such
coverage may be obtained under  applicable law)  Beneficiary is included thereon
as a named insured and, if applicable, with loss payable to Beneficiary under an
endorsement containing the provisions described in subsection

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -14-



1.7.2.  Grantor shall immediately notify Beneficiary  whenever any such separate
insurance  policy is obtained  and shall  promptly  deliver to  Beneficiary  the
policy or certificate evidencing such insurance.

            1.7.5 Grantor shall,  immediately upon receipt of any written notice
of any  failure  by  Grantor  to pay any  insurance  premium  in  respect of any
insurance  policy  required to be maintained  under this Section 1.7,  furnish a
copy of such notice to Beneficiary.

            1.7.6 In the event that the proceeds of any insurance claim are paid
after  Beneficiary has exercised its right to foreclose the Lien of this Deed to
Secure  Debt,  such  proceeds  shall  be  paid to  Beneficiary  to  satisfy  any
deficiency  remaining  after  such  foreclosure.  Beneficiary  shall  retain its
interest in the policies of insurance required to be maintained pursuant to this
Deed to  Secure  Debt  during  any  redemption  period.  The  amount of any such
proceeds  in excess of any  deficiency  claim of  Beneficiary  shall  reasonably
promptly be released to Grantor.

            SECTION 1.8 Failure To Make Certain Payments.  If Grantor shall fail
to  perform  any of the  covenants  contained  in  this  Deed  to  Secure  Debt,
including,  without  limitation,  Grantor's covenants to (i) pay the premiums in
respect of all required  insurance  coverages,  (ii) pay taxes and  assessments,
(iii) make repairs,  (iv) discharge liens and encumbrances or (v) pay or perform
any obligations of Grantor under the Leases, Beneficiary may, following five (5)
Business  Days' prior written  notice by Beneficiary to Grantor of its intent to
do so during which time Grantor shall not have remedied such failure,  but shall
not be obligated to, make advances to perform such covenant on Grantor's behalf,
and all sums so advanced  shall be included in the Secured  Obligations  and, to
the extent  permitted by applicable law, shall be secured hereby.  Grantor shall
repay on demand all sums so advanced by Beneficiary  on behalf of Grantor,  with
interest at the Default Rate from the date of payment by Beneficiary to the date
of  reimbursement.  Neither the  provisions  of this  Section 1.8 nor any action
taken by  Beneficiary  pursuant  to the  provisions  of this  Section  1.8 shall
prevent  any such  failure to observe  any  covenant  contained  in this Deed to
Secure  Debt from  constituting  an Event of Default.  Beneficiary  shall not be
bound to inquire into the validity of any tax, lien or imposition  which Grantor
fails to pay as and when  required  hereby and which Grantor does not contest in
accordance with the terms hereof.

            SECTION 1.9  Inspection.  Grantor shall, upon reasonable
prior notice by Beneficiary to the chief financial officer,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -15-



controller or any other Authorized Officer of Grantor,  permit  Beneficiary,  by
its agents, accountants and attorneys, to visit and inspect the Premises at such
reasonable  times  during  regular  business  hours  and  intervals  and to such
reasonable extent as may be reasonably requested by Beneficiary.

            SECTION 1.10  Grantor To Maintain  Improvements.  Grantor  shall not
commit or suffer any waste on the  Premises  or with  respect to any  Equipment.
Grantor  represents  and  warrants  that  (i) the  Premises  are  served  by all
utilities required or necessary for the current use thereof and (ii) Grantor has
access to the Premises  from public roads  sufficient  to allow  Grantor and its
tenants  and  invitees to conduct its and their  businesses  at the  Premises in
accordance  with  sound  commercial  practices.  Grantor  shall,  at all  times,
exercise commercially  reasonable efforts to maintain the Premises and Equipment
in good repair,  working order and insurable  condition  (subject to normal wear
and tear) and shall make all repairs, structural or nonstructural, which Grantor
deems  appropriate in its  commercially  reasonable  judgment,  when  necessary.
Grantor  shall  (a) not  alter  the  occupancy  or use of all or any part of the
Premises on which Grantor is conducting  its business  without the prior written
consent of  Beneficiary,  which  consent shall not be  unreasonably  withheld or
delayed, and (b) do all other reasonable acts which from the character or use of
the  Premises  and  Equipment  may, in the  commercially  reasonable  opinion of
Grantor,  be necessary  or  appropriate  to maintain  and preserve  their value.
Grantor  shall not remove,  demolish or alter the  structural  character  of any
Improvement  now or hereafter  erected upon all or any part of the Premises,  or
permit any such  removal,  demolition or  alteration,  without the prior written
consent of  Beneficiary,  which  consent shall not be  unreasonably  withheld or
delayed, except that items constituting Equipment may be removed if such removal
is temporary and for the purpose of making repairs or such items are immediately
replaced  with similar  items of Equipment  having a value and utility for their
intended  purposes  that is not less  than the  value  and such  utility  of the
Equipment  so removed or if in the  commercially  reasonable  opinion of Grantor
such  Equipment is not necessary  for the use or operation of the Premises,  and
except as permitted pursuant to Section 7.13 of the Credit Agreement.

            SECTION 1.11 Grantor's Obligations with Respect to Leases.

            1.11.1  Subject  to the  provisions  of  subsection  1.11.2  herein,
Grantor will manage and operate the Mortgaged  Property in a reasonably  prudent
manner and will not  without the prior  written  consent of  Beneficiary,  which
consent shall not be unreasonably

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -16-



withheld  or delayed,  enter into any Lease of all or any part of the  Premises,
other  than a Lease to an  Affiliate  of Grantor  (which  will not  require  the
consent of  Beneficiary),  which (i) interferes  with the operation of Grantor's
business on the Premises,  (ii) might  reasonably be expected to have a Material
Adverse  Effect on the value of the  Premises or (iii) is for space in excess of
10,000 square feet (each, a "Material Lease").

            1.11.2  Grantor shall not:

             (i) receive or collect, or permit the receipt or collection of, any
      rental or other  payments  under any Material Lease more than one month in
      advance of the  respective  period in respect of which they are to accrue,
      except that (a) in connection with the execution and delivery of any Lease
      or of any  amendment  to any  Lease,  rental  payments  thereunder  may be
      collected  and  received  in  advance  in an  amount  not in excess of one
      month's  rent  and/or  a  reasonable  security  deposit  may  be  required
      thereunder  and (b) Grantor may receive and collect  escalation  and other
      charges in accordance with the terms of each Lease;

            (ii)  assign,  transfer or  hypothecate  (other than to  Beneficiary
      hereunder) any rental or other payment under any Lease whether then due or
      to accrue in the future, the interest of Grantor as lessor under any Lease
      or the rents, issues,  revenues,  profits or other income of the Mortgaged
      Property;

           (iii)  enter  into any  Lease  after  the date  hereof  that does not
      contain terms to the effect as follows:

                  (a)  such  Lease  and  the  rights  of the  tenant  thereunder
            (including, without limitation, any options to purchase or rights of
            first offer or  refusal)  shall be subject  and  subordinate  to the
            rights  of  Beneficiary  under  and the Lien of this  Deed to Secure
            Debt;

                  (b) such Lease has been  assigned  as  collateral  security by
            Grantor as landlord  thereunder  to  Beneficiary  under this Deed to
            Secure Debt;

                  (c) in the case of any foreclosure  hereunder,  the rights and
            remedies  of  the  tenant  in  respect  of  any  obligations  of any
            successor  landlord  thereunder  shall  be  limited  to  the  equity
            interest  of  such  successor  landlord  in  the  Premises  and  any
            successor  landlord shall not (1) be liable for any act, omission or
            default of any

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -17-



            prior landlord under the Lease,  (2) be required to make or complete
            any tenant improvements or capital improvements or repair,  restore,
            rebuild or replace the demised  premises or any part  thereof in the
            event of damage,  casualty or condemnation or (3) be required to pay
            any  amounts  to  tenant  arising  under  the  Lease  prior  to such
            successor landlord taking possession;

                  (d) the  tenant's  obligation  to pay rent and any  additional
            rent shall not be subject to any abatement, deduction,  counterclaim
            or setoff as against any mortgagee or purchaser upon the foreclosure
            of any of the  Premises  or the giving or granting of a deed in lieu
            thereof  by reason of a  landlord  default  occurring  prior to such
            foreclosure and such mortgagee or purchaser will not be bound by any
            advance  payments  of rent in excess  of one  month or any  security
            deposits unless such security was actually  received (or in the case
            of a letter of credit, was properly transferred in negotiable form);

                  (e) the tenant agrees to attorn,  at the option of Beneficiary
            or any purchaser of the Premises, upon a foreclosure of the Premises
            or the giving or granting of a deed in lieu thereof; and

                  (f) the tenant  agrees to give  notice to  Beneficiary  of any
            default by  landlord  under the Lease and  Beneficiary  shall have a
            reasonable time to cure, should Beneficiary so elect, any default of
            landlord  prior  to  tenant  exercising  any  rights  of  tenant  to
            terminate or cancel such Lease.

            (iv) enter into any amendment or  modification of any Material Lease
      which would  change the  unexpired  term thereof or decrease the amount of
      the rents or other amounts  payable  thereunder  or materially  impair the
      value or utility of the Mortgaged Property or impair the security provided
      by this Deed to Secure Debt;

             (v)  enter  into any  further  lease or  sublease  of the  property
      subject  to any  Material  Lease  without  the prior  written  consent  of
      Beneficiary,  which consent shall not be unreasonably withheld or delayed,
      unless such Material Lease is not amended in any material  respect and the
      primary  obligor under such Material Lease is not released in any material
      respect  from its material  responsibilities  and  liabilities  under such
      Material Lease as a result of such lease or sublease;

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -18-




            (vi)  terminate  (whether by  exercising  any  contractual  right of
      Grantor to recapture  leased space or otherwise) or permit the termination
      of any  Material  Lease or accept  surrender  of all or any portion of the
      space  demised  under  any  Material  Lease  prior  to the end of the term
      thereof or accept assignment of any Material Lease to Grantor unless:

                  (a) the tenant under such Lease has not paid the equivalent of
            two (2)  months'  rent and Grantor  has made  reasonable  efforts to
            collect such rent; or

                  (b)  Grantor  shall  deliver  to   Beneficiary   an  Officer's
            Certificate  to the effect that Grantor has entered into a new Lease
            (or  Leases)  for the space  covered by the  terminated  or assigned
            Lease with a term (or terms)  which  expire(s)  no earlier  than the
            date on  which  the  terminated  or  assigned  Lease  was to  expire
            (excluding renewal options), and with a tenant (or tenants) having a
            creditworthiness (as reasonably determined by Grantor) sufficient to
            pay the rent and other  charges due under the new Lease (or Leases),
            and the tenant(s)  shall have commenced  paying rent,  including all
            operating expenses and other amounts payable under the new Lease (or
            Leases) without any abatement or concession; or

           (vii) waive,  excuse,  condone or in any manner  discharge or release
      any tenants of or from the  material  obligations  of such  tenants  under
      their respective Leases or guarantors of tenants from material obligations
      under any  guarantees  of the Leases  except in the  ordinary  and prudent
      course of business with due regard for the security  afforded  Beneficiary
      thereby.

            1.11.3  Grantor  shall  timely  perform and observe all the material
terms, covenants and conditions required to be performed and observed by Grantor
under each Lease and shall at all times do all things  reasonably  necessary  to
require  performance by the lessee,  franchisee,  licensee or grantee under each
Lease of all obligations, covenants and agreements by such party to be performed
thereunder.  Grantor shall  promptly  notify  Beneficiary  of the receipt of any
notice from any lessee  under any Lease  claiming  that Grantor is in default in
the  performance  or  observance  of any of the terms,  covenants or  conditions
thereof to be  performed  or  observed  by Grantor and will cause a copy of each
such notice to be promptly delivered to Beneficiary.

            SECTION 1.12  Transfer Restrictions and Liens.  Except as
provided in Section 1.11 and as permitted pursuant to Section 7.13

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -19-



of the Credit  Agreement,  Grantor may not, without the prior written consent of
Beneficiary, further mortgage, encumber, hypothecate, sell, convey or assign all
or any part of the Mortgaged Property or suffer any of the foregoing to occur by
operation of law or otherwise.  Notwithstanding  the provisions of the foregoing
sentence,  so long as no Event of Default shall have occurred and be continuing,
Grantor shall have the right to suffer,  in respect of the  Mortgaged  Property,
(i) the Liens in respect of amounts  payable or  obligations  to be performed by
Grantor pursuant to subsections 1.5.1, 1.5.3 and 1.5.4, provided,  however, that
such amounts are not yet  delinquent or are being  contested in accordance  with
the  provisions  of  subsection  1.5.5 and (ii) Liens of the type  described  in
paragraphs   (c),  (e),  (f),  (g)  and  (i)  of  the  definition  of  Permitted
Encumbrances.  Each of the Liens and other  transfers  permitted by this Section
1.12 shall in all  respects be subject and  subordinate  in priority to the Lien
and security interests created and evidenced hereby except to the extent the law
or regulation  creating or authorizing such Lien provides that such Lien must be
superior to the Lien and security interest created and evidenced hereby.

            SECTION 1.13 Destruction; Condemnation.

            1.13.1  Destruction;  Insurance  Proceeds.  If there shall occur any
damage to, or loss or destruction of, the Improvements,  Equipment,  or any part
of  any  thereof  (each,  a  "Destruction"),  Grantor  shall  promptly  send  to
Beneficiary a notice  setting  forth the nature and extent of such  Destruction.
The proceeds of any insurance  payable in respect of such Destruction are hereby
assigned  and  shall be paid to  Beneficiary,  provided  that  Grantor  shall be
entitled  to retain  the  proceeds  of any  insurance  payable  in  respect of a
Destruction  to the  extent  that the  aggregate  amount  of any such  insurance
proceeds  received by Grantor in such fiscal year when added to the aggregate of
any award or payment in respect of any Taking (as hereinafter  defined) received
by Grantor in such  fiscal  year does not exceed  $500,000.  All such  proceeds,
together  with any  interest  earned  thereon,  less the amount of any  expenses
incurred in litigating, arbitrating,  compromising or settling any claim arising
out of such  Destruction  (the "Net  Proceeds"),  shall be applied in accordance
with the provisions of subsections 1.13.3, 1.13.4 and 1.13.5.

            1.13.2  Condemnation;  Assignment of Award. If there shall occur any
taking of the Mortgaged  Property or any part thereof,  in or by condemnation or
other eminent domain proceedings  pursuant to any law, general or special, or by
reason of the  temporary  requisition  of the use or occupancy of the  Mortgaged
Property or any part thereof, by any Governmental Authority, civil

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -20-



or military (each, a "Taking"),  Grantor shall promptly notify  Beneficiary upon
receiving  notice  of such  Taking  or  commencement  of  proceedings  therefor.
Beneficiary  may  participate  in any  proceedings or  negotiations  which might
result in any Taking,  and Grantor  shall  deliver or cause to be  delivered  to
Beneficiary  all  instruments  requested  by it to  permit  such  participation.
Beneficiary may be represented by counsel  reasonably  satisfactory to it at the
reasonable expense of Grantor in connection with any such participation. Grantor
shall pay all  reasonable  fees,  costs and expenses  incurred by Beneficiary in
connection  with any Taking and in seeking and obtaining any award or payment on
account  thereof.  Any  proceeds,  award or payment in respect of any Taking are
hereby assigned and shall be paid to Beneficiary, provided that Grantor shall be
entitled  to the award or  payment  payable in respect of a Taking to the extent
that the aggregate  amount of any such award  received by Grantor in such fiscal
year when added to the  aggregate  of any  insurance  proceeds in respect of any
Destruction  received by Grantor in such  fiscal year does not exceed  $500,000.
Grantor  shall take all steps  necessary to notify the  condemning  authority of
such  assignment.  Such proceeds,  award or payment,  together with any interest
earned  thereon,  less  the  amount  of any  expenses  incurred  in  litigating,
arbitrating,  compromising or settling any claim arising out of such Taking (the
"Net Award"),  shall be applied in accordance with the provisions of subsections
1.13.3, 1.13.4 and 1.13.5.

            1.13.3  Restoration.  So long as no  Event  of  Default  shall  have
occurred  and be  continuing,  in the  event  there  shall be a Net Award or Net
Proceeds in an amount less than or equal to  $1,000,000,  Grantor shall have the
right, at Grantor's  option, to apply such Net Award or Net Proceeds as Net Cash
Proceeds in accordance  with the provisions of Section  3.02(B)(a) of the Credit
Agreement or to perform a restoration  (each, a  "Restoration")  of the Premises
and  Equipment.   In  the  event  Grantor  elects  to  perform  any  Restoration
contemplated by this subsection 1.13.3, Beneficiary shall release such Net Award
or Net  Proceeds  to  Grantor as soon as  practicable.  Grantor  shall  promptly
following the date of its receipt of any proceeds in respect of a Destruction or
Taking,  as the case may be,  commence  and  diligently  continue to perform the
Restoration  in  accordance  with  Section  3.02(A)(i)  of the Credit  Agreement
(subject to  extensions  for delays  caused by reason of force  majeure) of that
portion  or  portions  of  the  Improvements  and  Equipment   subject  to  such
Destruction  or  affected  by such Taking so that,  upon the  completion  of the
Restoration,  the  Premises  and  Equipment  will be in  substantially  the same
condition  and shall be as near as  practicable  to the value and utility as the
Premises and  Equipment was  immediately  prior to such  Destruction  or Taking.
Grantor shall so complete such Restoration with its own funds to

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -21-



the extent that the amount of any Net Award or Net Proceeds is insufficient  for
such purpose.

            1.13.4 Major Restoration. In the event there shall be a Net Award or
Net Proceeds  other than as described in subsection  1.13.3,  Grantor shall have
the option to apply such Net Award or Net  Proceeds,  as the case may be, as Net
Cash Proceeds in  accordance  with the  provisions of Section  3.02(B)(a) of the
Credit Agreement or to require a Restoration of the Mortgaged  Property.  In the
event a Restoration is to be performed under this subsection 1.13.4, Beneficiary
shall  not  release  any part of the Net  Award or the Net  Proceeds  except  in
accordance with the provisions of subsection 1.13.5, and Grantor shall, prior to
commencing  any work to effect a  Restoration  of the  Premises  and  Equipment,
promptly (but in no event later than ninety (90) days following any  Destruction
or Taking) furnish to Beneficiary:

             (i)  complete plans and specifications (the "Plans and
      Specifications") for the Restoration;

            (ii) a certificate (an "Architect's Certificate") of an independent,
      reputable architect or engineer  reasonably  acceptable to Beneficiary and
      licensed  in the state  where the  Premises  is located  (a)  listing  all
      permits and approvals  required by law in connection with the Restoration,
      (b) stating  that all permits  and  approvals  required by law to commence
      work in connection  with the Restoration  have been obtained,  (c) stating
      that the Plans and  Specifications  have been reviewed and approved by the
      signatory thereto,  (d) stating such signatory's  estimate (an "Estimate")
      of the costs of  completing  the  Restoration  and (e)  stating  that upon
      completion  of  such   Restoration  in  accordance   with  the  Plans  and
      Specifications,  the value and utility of the Premises  and the  Equipment
      will be  approximately  equal to or  greater  than the value  and  utility
      thereof  immediately  prior to the  Destruction or Taking relating to such
      Restoration; and

           (iii) if the Estimate  exceeds the Net Proceeds or Net Award,  as the
      case may be, a surety bond for,  guarantee  of, or  irrevocable  letter of
      credit (a "Letter  of  Credit")  or other  irrevocable  and  unconditional
      commitment to provide funds (each, a "Commitment")  for the payment of the
      excess cost of such Restoration, payable to or in favor of Beneficiary, as
      Collateral Agent, which bond, guaranty, Letter of Credit or Commitment (A)
      shall be signed by a surety or sureties or  guarantor(s),  as the case may
      be,  reasonably  acceptable to Beneficiary and, in the case of a Letter of
      Credit or Commitment, shall be provided by a bank or other financial

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -22-



      institution  having capital and surplus in excess of $250 million as shown
      in its most recent  available  statement  of financial  condition  and (B)
      shall be in an  amount  not less  than the  excess  of the  amount  of the
      Estimate over the amount of the Net Award or Net Proceeds, as the case may
      be,  then held by  Beneficiary  for  application  toward  the cost of such
      Restoration.

            Beneficiary shall have the right to review and approve the Plans and
Specifications as to structural matters only, such review and approval not to be
unreasonably  withheld or delayed.  Promptly  upon any approval of the Plans and
Specifications by Beneficiary, Grantor shall commence and diligently continue to
perform  the   Restoration   in  accordance   with  such   approved   Plans  and
Specifications. Grantor shall so complete such Restoration with its own funds to
the extent that the amount of any Net Award or Net Proceeds is insufficient  for
such purpose.

            1.13.5  Restoration  Advances  Following  Destruction  or  Taking of
Mortgaged Property. In the event Grantor shall elect to perform a Restoration of
the Premises and Equipment as provided in subsection  1.13.4,  Beneficiary shall
apply any Net  Proceeds or the Net Award held by  Beneficiary  on account of the
applicable  Destruction or Taking to the payment of the cost of performing  such
Restoration  and shall pay portions of the same,  from time to time,  to Grantor
or,  at  Beneficiary's  option,  exercised  from time to time,  directly  to the
contractors,  subcontractors,  materialmen, laborers, engineers, architects, and
other persons rendering  services or material for such  Restoration,  subject to
the following conditions:

             (i) Each  request  for  payment  shall be made on at least ten (10)
      days'  prior  notice  to  Beneficiary  and  shall  be  accompanied  by  an
      Architect's  Certificate  stating (a) that all the  Restoration  work then
      completed has been done in compliance  with the Plans and  Specifications,
      as approved by Beneficiary,  and in accordance with all provisions of law,
      (b) the sums  requested are required to reimburse  Grantor for payments by
      Grantor to, or are due to, the contractors,  subcontractors,  materialmen,
      laborers,  engineers,  architects,  or other persons rendering services or
      materials for the  Restoration,  and that, when added to the sums, if any,
      previously  paid out by  Beneficiary,  such sums do not exceed the cost of
      the Restoration to the date of such Architect's  Certificate,  (c) whether
      or not the Estimate continues to be accurate,  and if not, what the entire
      cost of such  Restoration  is then estimated to be and (d) that the amount
      of the Net Proceeds or Net Award, as the case may be, remaining after

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -23-



      giving  effect to such payment will be  sufficient  on  completion  of the
      Restoration to pay for the same in full (including, in detail, an estimate
      by trade of the remaining costs of completion);

            (ii) Each request for payment shall be  accompanied by an opinion of
      counsel to Grantor  (which  counsel shall be  independent  and  reasonably
      acceptable  to  Beneficiary)  or  a  title  insurance  policy,  binder  or
      endorsement in form and substance  reasonably  satisfactory to Beneficiary
      confirming  that (a) all Liens (other than Prior Liens and Liens otherwise
      permitted hereunder) covering that part of the Restoration previously paid
      for,  if any,  have been  waived  and (b) there  has not been  filed  with
      respect  to all or any part of the  Premises  any Lien  (other  than Prior
      Liens and Liens otherwise permitted  hereunder) which is not discharged of
      record and which could have  priority over the Lien of this Deed to Secure
      Debt in respect of any part of the Secured Obligations; and

           (iii) The final  request for any payment  after the  Restoration  has
      been completed shall be accompanied by an Architect's  Certificate listing
      all certificates,  permits,  licenses,  waivers,  other documents,  or any
      combination  of the foregoing  required by law in connection  with or as a
      result  of such  Restoration  and  stating  that all of the same have been
      obtained,  or if not  obtained,  the failure to obtain  such  certificate,
      permit, license or waiver will not have a Material Adverse Effect.

            In the event that there shall be any surplus  after  application  of
the Net Award or the Net Proceeds to  Restoration  of the  Improvements  and the
Equipment, such surplus shall be applied as Net Cash Proceeds in accordance with
Section  3.02(B)(a) of the Credit  Agreement  or, at the option of  Beneficiary,
shall be held by Beneficiary as additional  collateral to secure the performance
by Grantor of the Secured Obligations.

            SECTION  1.14  Alterations.  Grantor  shall not,  without  the prior
written consent of Beneficiary, which consent shall not be unreasonably withheld
or delayed,  make any  addition,  modification  or change which is structural in
nature (each,  an  "Alteration")  to the Premises that costs more to effect than
$250,000.  Whether  or  not  Beneficiary  has  consented  to the  making  of any
Alteration,  Grantor shall (i) complete each Alteration promptly,  in a good and
workmanlike  manner and in compliance  with all applicable  material local laws,
ordinances and  requirements  (subject to extensions for delays caused by reason
of force

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -24-



majeure)  and (ii) pay when due all claims  for labor  performed  and  materials
furnished in connection  with such  Alteration,  unless  contested in accordance
with the provisions of subsection 1.5.5.

            SECTION 1.15 Hazardous Material.

            1.15.1  Each  of the  provisions  of  Section  5.27  of  the  Credit
Agreement  is restated  herein in its  entirety  (including  all  defined  terms
referenced  therein) mutatis mutandis.  Grantor shall comply with the provisions
of such section as if such grantor were the "Borrower and its  Subsidiaries"  as
referenced therein.

            1.15.2  Each  of the  provisions  of  Sections  6.15  of the  Credit
Agreement  is restated  herein in its  entirety  (including  all  defined  terms
referenced  therein) mutatis mutandis.  Grantor shall comply with the provisions
of such section as if such Grantor were the "Borrower and its  Subsidiaries"  as
referenced  therein.  In the event Grantor  fails to comply with the  referenced
covenants,  Beneficiary may, in addition to any other remedies set forth herein,
as agent  for and at  Grantor's  sole  cost and  expense,  cause  any  necessary
remediation,  removal or response action required by Environmental Laws relating
to Hazardous  Materials to be taken and Grantor shall provide to Beneficiary and
its agents and employees  reasonable  access to the Mortgaged  Property for such
purpose.  Any  reasonable  costs or expenses  incurred by  Beneficiary  for such
purpose shall be payable by Grantor  immediately  upon demand therefor and shall
bear interest at the Default Rate.  Beneficiary shall have the right at any time
that the Secured  Obligations are  outstanding,  at the sole cost and expense of
Grantor,  to conduct an  environmental  audit of the  Mortgaged  Property  where
Beneficiary believes that cause exists, including in the event any change in any
applicable   Environmental   Law  would   either   require  the  conduct  of  an
environmental  audit or make such an audit  prudent,  by such  persons  or firms
appointed by Beneficiary, and Grantor shall cooperate in all reasonable respects
in the conduct of such environmental audit,  including,  without limitation,  by
providing  reasonable  access  to the  Mortgaged  Property  and to all  relevant
records  relating  thereto.  To the  extent  that any such  environmental  audit
identifies  conditions  which  violate,  or could be  expected  to give  rise to
material  liability or obligations under  Environmental  Laws, Grantor agrees to
expeditiously correct any such violation or respond to conditions giving rise to
such  liability or  obligations  in a manner which  complies with  Environmental
Laws.  Grantor shall indemnify and hold  Beneficiary and each Bank harmless from
and against all loss, cost, damage (including, without limitation, consequential
damages) and expense (including, without limitation, attorneys' and consultants'
fees and disbursements and the allocated costs of staff counsel) that

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -25-



Beneficiary  or such  Bank  may  sustain  by  reason  of the  assertion  against
Beneficiary  or such Bank by any party of any claim  relating to such  Hazardous
Materials on, under or from the Mortgaged Property or actions taken with respect
thereto as authorized  hereunder.  The foregoing  indemnification  shall survive
repayment of all Secured  Obligations and any release or assignment of this Deed
to Secure Debt except with regard to any loss,  cost,  damage or expense arising
from or relating to acts or omissions  occurring  after  Beneficiary or any Bank
takes possession of, uses,  operates,  manages,  controls or sells the Mortgaged
Property provided,  however,  that such exception shall apply only to the extent
such loss, cost, damage or expense arises solely from the gross negligence,  bad
faith or  willful  misconduct  of  Beneficiary  or any Bank or of the  agents of
Beneficiary or any Bank.

            SECTION 1.16  Asbestos.  Grantor  shall not install nor permit to be
installed  in  or  removed  from  the  Mortgaged   Property,   asbestos  or  any
asbestos-containing material (collectively, "ACM") except in compliance with all
applicable  Environmental Laws, and with respect to any ACM currently present in
the Mortgaged Property,  Grantor shall promptly either (i) remove or encapsulate
any ACM which such  Environmental  Laws require to be removed or (ii)  otherwise
comply with such  Environmental  Laws with respect to such ACM, all at Grantor's
sole cost and expense. If Grantor shall fail to so remove or encapsulate any ACM
or otherwise comply with such Environmental  Laws,  Beneficiary may, in addition
to any other remedies set forth herein,  take whatever steps it deems  necessary
or appropriate to remove or encapsulate  any ACM from the Mortgaged  Property or
otherwise comply with applicable  Environmental  Laws, and Grantor shall provide
to Beneficiary and its agents and employees  reasonable  access to the Mortgaged
Property  for such  purpose.  Any  reasonable  costs  or  expenses  incurred  by
Beneficiary for such purpose shall be payable by Grantor immediately upon demand
therefor and shall bear  interest at the Default Rate.  Grantor shall  indemnify
and hold  Beneficiary  and each Bank harmless  from and against all loss,  cost,
damage  (including,  without  limitation,  consequential  damages)  and  expense
(including,   without   limitation,   attorneys'  and   consultants'   fees  and
disbursements and the allocated costs of staff counsel) that Beneficiary or such
Bank may sustain as a result of the presence of any ACM and any removal  thereof
or compliance  with  Environmental  Laws.  The foregoing  indemnification  shall
survive  repayment of all Secured  Obligations  and any release or assignment of
this Deed to Secure Debt except with regard to any loss, cost, damage or expense
arising from or relating to acts or omissions occurring after Beneficiary or any
Bank  takes  possession  of,  uses,  operates,  manages,  controls  or sells the
Mortgaged  Property provided,  however,  that such exception shall apply only to
the extent such loss, cost, damage or

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -26-



expense arises solely from the gross negligence, bad faith or willful misconduct
of Beneficiary or any Bank or of the agents of Beneficiary or any Bank.

            SECTION 1.17  Books and Records; Other Information.

            1.17.1  Grantor  shall keep  proper  books of record and  account in
which  full,  true  and  correct  entries  shall  be  made  of all  dealings  or
transactions  of or in relation to the  Mortgaged  Property and the business and
affairs of Grantor relating to the Mortgaged Property. Upon reasonable notice by
Beneficiary to the chief financial  officer,  controller or any other Authorized
Officer of Grantor,  Beneficiary and its authorized  representatives  shall have
the right at reasonable times during regular business hours and intervals and to
such reasonable extent as may be reasonably  requested by Beneficiary to examine
the books and records of Grantor  relating  to the  operation  of the  Mortgaged
Property.

            1.17.2 Grantor shall, at any and all times, within a reasonable time
after  written  request  by  Beneficiary,  furnish or cause to be  furnished  to
Beneficiary, in such manner and in such detail as may be reasonably requested by
Beneficiary, additional information with respect to the Mortgaged Property.

            SECTION 1.18 No Claims  Against  Beneficiary.  Nothing  contained in
this Deed to Secure Debt shall constitute any consent or request by Beneficiary,
express  or  implied,  for the  performance  of any  labor  or  services  or the
furnishing of any materials or other  property in respect of the Premises or any
part thereof,  nor as giving  Grantor any right,  power or authority to contract
for or permit the  performance of any labor or services or the furnishing of any
materials  or other  property in such  fashion as would permit the making of any
claim against Beneficiary in respect thereof or any claim that any Lien based on
the  performance  of such  labor  or  services  or the  furnishing  of any  such
materials or other property is prior to the Lien of this Deed to Secure Debt.

            SECTION 1.19  Utility  Services.  Grantor  shall pay, or cause to be
paid,  when due all  charges  for all public or private  utility  services,  all
public or private rail and highway services, all public or private communication
services,  all  sprinkler  systems,  and all  protective  services and any other
services of  whatever  kind or nature at any time  rendered to or in  connection
with the Premises or any part thereof,  shall comply with all contracts relating
to any such services, and shall do all other things required for the maintenance
and  continuance  of all such  services  to the extent  required  to fulfill the
obligations set forth in Section 1.10.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -27-





                                  ARTICLE II.

                   ASSIGNMENT OF LEASES; SECURITY AGREEMENT;
                             ASSIGNMENT AGREEMENT

            SECTION 2.1  Assignment of Leases, Rents, Issues and
Profits.

            2.1.1  Grantor  absolutely,   presently  and  irrevocably   assigns,
transfers and sets over to Beneficiary, and grants to Beneficiary subject to the
terms and conditions hereof, all Grantor's estate, right, title, interest, claim
and demand as  landlord  to collect  rent and other sums due under all  existing
Leases and any other Leases,  including,  without limitation,  all extensions of
the  terms of the  Leases  (such  assigned  rights,  "Grantor's  Interest"),  as
follows:

             (i)  the immediate and continuing right to receive and
      collect Rents payable by all tenants or other parties pursuant
      to the Leases;

            (ii) all claims, rights, powers, privileges and remedies of Grantor,
      whether  provided  for in any Lease or  arising by statute or at law or in
      equity or  otherwise,  consequent on any failure on the part of any tenant
      to perform or comply with any term of any Lease;

           (iii) all rights to take all actions upon the  happening of a default
      under any Lease as shall be permitted by such Lease or by law,  including,
      without  limitation,   the  commencement,   conduct  and  consummation  of
      proceedings at law or in equity; and

            (iv)  the full  power  and  authority,  in the  name of  Grantor  or
      otherwise, to enforce, collect, receive and receipt for any and all of the
      foregoing  and to do any and all other  acts and things  whatsoever  which
      Grantor or any landlord is or may be entitled to do under the Leases.

            2.1.2 Any Rents receivable by Beneficiary  hereunder,  after payment
of all proper costs and  charges,  shall be applied to all amounts due and owing
under and as  provided  in this Deed to Secure  Debt and the  Credit  Agreement.
Beneficiary  shall be accountable to Grantor only for Rents actually received by
Beneficiary  pursuant to this  assignment.  The collection of such Rents and the
application thereof shall not cure or waive any Event

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -28-



or Default or waive,  modify or affect  notice of Event of Default or invalidate
any act done pursuant to such notice.

            2.1.3 So long as no Event of  Default  shall  have  occurred  and be
continuing,  Grantor  shall have a license to collect and apply the Rents and to
enforce  the  obligations  of tenants  under the  Leases.  Immediately  upon the
occurrence  and during the  continuance  of any Event of  Default,  the  license
granted in the immediately preceding sentence shall cease and terminate, with or
without any  notice,  action or  proceeding  or the  intervention  of a receiver
appointed  by a court.  Upon such  Event of Default  and during the  continuance
thereof,  Beneficiary  may, to the fullest extent  permitted by the Leases,  (i)
exercise  any of  Grantor's  rights  under the Leases,  (ii) enforce the Leases,
(iii) demand, collect, sue for, attach, levy, recover,  receive,  compromise and
adjust,  and make,  execute and deliver  receipts  and releases for all Rents or
other payments that may then be or may  thereafter  become due, owing or payable
with respect to the Leases and (iv) generally, do, execute and perform any other
act,  deed,  matter or thing  whatsoever  that  ought to be done,  executed  and
performed  in and about or with  respect to the  Leases,  as fully as allowed or
authorized by Grantor's Interest.

            2.1.4 Upon the occurrence and during the  continuance of an Event of
Default,  Grantor shall, at the direction of Beneficiary,  further authorize and
direct  the  tenant  under each Lease to pay  directly  to, or as  directed  by,
Beneficiary  all Rents  accruing  or due under  its Lease  without  proof to the
tenant of the  occurrence  and  continuance  of such Event of  Default.  Grantor
hereby  authorizes  the tenant under each Lease to rely upon and comply with any
notice or demand  from  Beneficiary  for  payment  of Rents to  Beneficiary  and
Grantor  shall have no claim against any tenant for Rents paid by such tenant to
Beneficiary pursuant to such notice or demand.

            2.1.5  Grantor at its sole cost and expense  shall use  commercially
reasonable  efforts to enforce the  material  terms of the Leases in  accordance
with their terms. Neither this Deed to Secure Debt nor any action or inaction on
the part of Beneficiary  shall release any tenant under any Lease, any guarantor
of any  Lease or  Grantor  from any of their  respective  obligations  under the
Leases  or  constitute  an  assumption  of any  such  obligation  on the part of
Beneficiary.  No action or failure to act on the part of Grantor shall adversely
affect or limit the rights of  Beneficiary  under  this Deed to Secure  Debt or,
through this Deed to Secure Debt, under the Leases.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -29-



            2.1.6 All rights,  powers and privileges of  Beneficiary  herein set
forth are coupled with an interest and are irrevocable, subject to the terms and
conditions  hereof,  and Grantor  shall not take any action  under the Leases or
otherwise  which is  inconsistent  with this  Deed to Secure  Debt or any of the
terms hereof and any such action  inconsistent  herewith or  therewith  shall be
void.  Grantor shall, from time to time, upon reasonable request of Beneficiary,
execute all instruments and further assurances and all supplemental  instruments
and take all such action as Beneficiary from time to time may reasonably request
in order to perfect,  preserve and protect the interests intended to be assigned
to Beneficiary hereby.

            2.1.7 Grantor shall not, unilaterally or by agreement,  subordinate,
amend,  modify,  extend,  discharge,  terminate,  surrender,  waive or otherwise
change any material term of any of the Material Leases in any manner which would
violate  this Deed to Secure  Debt.  If the Leases shall be amended as permitted
hereby,  they shall continue to be subject to the provisions  hereof without the
necessity of any further act by any of the parties hereto.

            2.1.8 Nothing  contained herein shall operate or be construed to (i)
obligate  Beneficiary  to perform  any of the  terms,  covenants  or  conditions
contained in the Leases or otherwise to impose any obligation  upon  Beneficiary
with  respect to the  Leases  (including,  without  limitation,  any  obligation
arising out of any  covenant of quiet  enjoyment  contained in the Leases in the
event that any tenant under a Lease shall have been joined as a party  defendant
in any action by which the estate of such tenant  shall be  terminated)  or (ii)
place upon  Beneficiary any  responsibility  for the operation,  control,  care,
management or repair of the Premises.

            SECTION 2.2 Security Interest in Fixtures.

            2.2.1 This Deed to Secure Debt shall constitute a security agreement
and shall create and evidence a security  interest in all the  Equipment  and in
all the other  items of  Mortgaged  Property  to the extent the same  constitute
"fixtures"  under the UCC as in effect in Georgia  in which a security  interest
may be  granted  pursuant  to the  UCC as in  effect  in the  State  of  Georgia
(collectively, "Fixtures").

            2.2.2 Upon the  occurrence  of any Event of Default,  in addition to
the remedies set forth in Article III,  Beneficiary shall have the power to sell
the Fixtures in accordance  with the Uniform  Commercial  Code as enacted in the
state in which the Premises are located or under other  applicable law. It shall
not be necessary that any Fixtures offered be physically present at any

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -30-



such sale or constructively in the possession of Beneficiary or the
person conducting the sale.

            2.2.3 Upon the occurrence and during the continuance of any Event of
Default,  Beneficiary  may sell the  Fixtures  or any part  thereof at public or
private sale with notice to Grantor as hereinafter provided. The proceeds of any
such sale,  after  deducting  all expenses of  Beneficiary  in taking,  storing,
repairing and selling the Fixtures  (including,  without limitation,  attorneys'
fees and legal  expenses) shall be applied in the manner set forth in subsection
3.3.3.  At any sale,  public or private,  of the  Fixtures or any part  thereof,
Beneficiary may purchase any or all of the Fixtures offered at such sale.

            2.2.4 Beneficiary  shall give Grantor  reasonable notice of any sale
of any  of  the  Fixtures  pursuant  to the  provisions  of  this  Section  2.2.
Notwithstanding   the   provisions   of  Section  5.2,  any  such  notice  shall
conclusively  be deemed to be reasonable  and effective if such notice is mailed
at least  five (5) days prior to any sale,  by first  class or  certified  mail,
postage  prepaid,  to Grantor at its address  determined in accordance  with the
provisions of Section 5.2.


                                 ARTICLE III.

                        EVENTS OF DEFAULT AND REMEDIES

            SECTION  3.1  Events  of  Default.  It shall be an Event of  Default
hereunder  if there shall have  occurred and be  continuing  an Event of Default
under the Credit Agreement.

            SECTION 3.2 Remedies in Case of an Event of Default. If any Event of
Default shall have occurred and be continuing,  Beneficiary may at Beneficiary's
option, in addition to any other action permitted under this Deed to Secure Debt
or the Credit Agreement or by law, statute or in equity, take one or more of the
following actions:

            3.2.1 by written notice to Grantor,  declare in accordance  with and
pursuant to the terms of the Credit  Agreement  the entire  unpaid amount of the
Secured Obligations to be due and payable immediately;

            3.2.2 personally,  or by its agents or attorneys, (i) enter into and
upon and take  possession  of all or any part of the Premises  together with the
books,  records and accounts of Grantor  relating  thereto and, exclude Grantor,
its agents and

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -31-



servants wholly therefrom,  (ii) use,  operate,  manage and control the Premises
and the Equipment and conduct the business  thereof,  (iii) maintain and restore
the  Premises and the  Equipment,  (iv) make all  necessary  or proper  repairs,
renewals and  replacements  and such useful  Alterations  thereto and thereon as
Beneficiary may deem advisable,  (v) manage,  lease and operate the Premises and
carry on the business thereof and exercise all rights and powers of Grantor with
respect  thereto  either in the name of Grantor or otherwise or (vi) collect and
receive  all  earnings,  revenues,  rents,  issues,  profits  and  income of the
Mortgaged  Property  and  every  part  thereof.  Beneficiary  shall  be under no
liability for or by reason of any such taking of possession,  entry,  removal or
holding,  operation  or  management  except  that any  amounts  so  received  by
Beneficiary shall be applied as follows:

            FIRST:  to pay costs and expenses  (including,  without  limitation,
      attorneys' fees and expenses) of so entering upon,  taking  possession of,
      holding,  operating  and  managing  the  Mortgaged  Property  or any  part
      thereof, and any taxes, assessments or other charges which Beneficiary may
      consider  necessary  or  desirable  to pay,  and any other  amounts due to
      Beneficiary;

            SECOND:  to the  payment  in full in  cash  of  Secured  Obligations
      consisting  of interest  and all amounts  other than  principal  under the
      Credit  Agreement at any time and from time to time owing by Grantor under
      or in  connection  with the Credit  Agreement,  ratably  according  to the
      unpaid amounts thereof, in the manner and priority set forth in the Credit
      Agreement, together with interest on each such amount in the manner and to
      the extent set forth in the Credit  Agreement from and after the date such
      amount is due, owing or unpaid until paid in full;

            THIRD:  to  the  pro  rata  payment  in  full  in  cash  of  Secured
      Obligations  consisting of (i) principal at any time and from time to time
      owing by Grantor under or in connection with the Credit Agreement, ratably
      according to the unpaid  amounts  thereof,  in the manner and priority set
      forth in the Credit Agreement and (ii) the amount of Grantor's obligations
      then due and payable  under any Interest  Rate  Agreement,  including  any
      early  termination  payments  then due  (exclusive  of expenses or similar
      liabilities to any Bank under the applicable  Interest Rate Agreement(s)),
      together with interest on each such amount in the manner and to the extent
      set forth in the Credit  Agreement  from and after the date such amount is
      due, owing or unpaid until paid in full; and


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -32-



            FOURTH: the balance, if any, to the Person lawfully entitled thereto
      (including Grantor or its successors or assigns), if all conditions to the
      release of this Deed to Secure Debt shall have been fulfilled,  but if any
      such condition  shall not have been  fulfilled,  to be held by Beneficiary
      and  thereafter  applied to any  future  payments  required  to be made in
      accordance with clauses FIRST, SECOND and THIRD above.

            3.2.3  with  or  without  entry,  personally  or by  its  agents  or
attorneys,  (i) sell the  Mortgaged  Property and all estate,  right,  title and
interest,  claim and demand therein at one or more sales in one or more parcels,
in accordance with the provisions of Section 3.3 or (ii) institute and prosecute
proceedings  for the  complete or partial  foreclosure  of the Lien and security
interests created and evidenced hereby; or

            3.2.4 take such steps to protect and  enforce its rights  whether by
action,  suit or proceeding at law or in equity for the specific  performance of
any  covenant,  condition  or agreement  in the Credit  Agreement  and the other
Credit  Documents,  or in aid of the execution of any power granted in this Deed
to Secure Debt, or for any foreclosure hereunder,  or for the enforcement of any
other  appropriate  legal or equitable remedy or otherwise as Beneficiary  shall
elect.

            SECTION 3.3 Sale of Mortgaged  Property if Event of Default  Occurs;
Proceeds of Sale.

            3.3.1 Upon acceleration of the Loans and all Obligations owing under
the Credit  Agreement as provided in subsection  3.2.1 hereof,  Beneficiary  may
institute  an action to  foreclose  this Deed to Secure  Debt or take such other
action as may be permitted and available to  Beneficiary at law or in equity for
the  enforcement  of the  Credit  Agreement  and  realization  on the  Mortgaged
Property and proceeds  thereon  through  power of sale or to final  judgment and
execution  thereof  for the  Secured  Obligations,  and in  furtherance  thereof
Beneficiary may sell the Mortgaged Property at one or more sales, as an entirety
or in  parcels,  at such time and place,  upon such terms and after such  notice
thereof  as may be  required  or  permitted  by law  or  statute  or in  equity.
Beneficiary  may execute and deliver to the  purchaser at such sale a conveyance
of the  Mortgaged  Property in fee simple and an assignment or conveyance of all
Grantor's  Interest  in the Leases  and the  Mortgaged  Property,  each of which
conveyances  and assignments  shall contain  recitals as to the Event of Default
upon  which the  execution  of the power of sale  herein  granted  depends,  and
Grantor hereby constitutes and appoints Beneficiary the true and lawful attorney
in fact of

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -33-



Grantor to make any such recitals,  sale, assignment and conveyance,  and all of
the acts of  Beneficiary  as such  attorney  in fact  are  hereby  ratified  and
confirmed.  Grantor  agrees that such recitals  shall be binding and  conclusive
upon Grantor and that any  assignment or  conveyance  to be made by  Beneficiary
shall  divest  Grantor  of all  right,  title,  interest,  equity  and  right of
redemption,  including  any  statutory  redemption,  in  and  to  the  Mortgaged
Property.  The power and agency hereby  granted are coupled with an interest and
are  irrevocable by death or dissolution,  or otherwise,  and are in addition to
any and all other remedies which  Beneficiary may have  hereunder,  at law or in
equity. So long as the Secured Obligations,  or any part thereof, remain unpaid,
Grantor  agrees that  possession  of the Mortgaged  Property by Grantor,  or any
person claiming under Grantor,  shall be as tenant, and, in case of a sale under
power or upon  foreclosure as provided in this Deed to Secure Debt,  Grantor and
any person in possession  under Grantor,  as to whose interest such sale was not
made subject,  shall,  at the option of the purchaser at such sale,  then become
and be tenants  holding over,  and shall  forthwith  deliver  possession to such
purchaser,  or be summarily  dispossessed in accordance with the laws applicable
to tenants  holding  over. In case of any sale under this Deed to Secure Debt by
virtue of the exercise of the powers herein granted, or pursuant to any order in
any judicial  proceeding or otherwise,  the Mortgaged Property may be sold as an
entirety or in separate  parcels in such manner or order as  Beneficiary  in its
discretion  may elect.  One or more exercises of powers herein granted shall not
extinguish or exhaust such powers,  until the entire Mortgaged  Property is sold
or all amounts secured hereby are paid in full.

            3.3.2 In the  event  of any sale  made  under or by  virtue  of this
Article  III,  the entire  principal  of, and interest in respect of the Secured
Obligations,  if not  previously  due  and  payable,  shall,  at the  option  of
Beneficiary, immediately become due and payable, anything in this Deed to Secure
Debt to the contrary notwithstanding.

            3.3.3  The  proceeds  of any sale  made  under or by  virtue of this
Article III,  together with any other sums which then may be held by Beneficiary
under this Deed to Secure Debt, whether under the provisions of this Article III
or otherwise, shall be applied as follows:

            FIRST:  to pay the costs and expenses incurred by
      Beneficiary in enforcing its remedies under this Deed to
      Secure Debt;


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -34-



            SECOND:  to pay the costs and expenses of the sale and of
      any receiver of the Mortgaged Property or any part thereof
      appointed pursuant to subsection 3.5.2;

            THIRD:  to the  payment  in  full in  cash  of  Secured  Obligations
      consisting  of interest  and all amounts  other than  principal  under the
      Credit  Agreement at any time and from time to time owing by Grantor under
      or in  connection  with the Credit  Agreement,  ratably  according  to the
      unpaid amounts thereof, in the manner and priority set forth in the Credit
      Agreement, together with interest on each such amount in the manner and to
      the extent set forth in the Credit  Agreement from and after the date such
      amount is due, owing or unpaid until paid in full;

            FOURTH:  to the  pro  rata  payment  in  full  in  cash  of  Secured
      Obligations  consisting of (i) principal at any time and from time to time
      owing by Grantor under or in connection with the Credit Agreement, ratably
      according to the unpaid  amounts  thereof,  in the manner and priority set
      forth in the Credit Agreement and (ii) the amount of Grantor's obligations
      then due and payable  under any Interest  Rate  Agreement,  including  any
      early  termination  payments  then due  (exclusive  of expenses or similar
      liabilities to any Bank under the applicable  Interest Rate Agreement(s)),
      together with interest on each such amount in the manner and to the extent
      set forth in the Credit  Agreement  from and after the date such amount is
      due, owing or unpaid until paid in full; and

            FIFTH:  the balance, if any, to the Person lawfully
      entitled thereto (including Grantor or its successors or
      assigns).

            3.3.4  Beneficiary  (on behalf of any Bank or on its own  behalf) or
any Bank or any of  their  respective  Affiliates  may bid for and  acquire  the
Mortgaged  Property  or any part  thereof at any sale made under or by virtue of
this Article III and, in lieu of paying cash therefor,  may make  settlement for
the purchase  price by crediting  against the purchase  price the unpaid amounts
(whether or not then due) owing to  Beneficiary,  or such Bank in respect of the
Secured  Obligations,  after  deducting  from the sales price the expense of the
sale and the reasonable  costs of the action or  proceedings  and any other sums
that  Beneficiary or such Bank is authorized to deduct under this Deed to Secure
Debt.

            3.3.5 Beneficiary may adjourn from time to time any sale by it to be
made under or by virtue of this Deed to Secure Debt by  announcement at the time
and place appointed for such sale or for

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -35-



such  adjourned  sale or sales,  and,  Beneficiary,  without  further  notice or
publication, may make such sale at the time and place to which the same shall be
so adjourned.

            3.3.6 If the  Premises is comprised of more than one parcel of land,
Beneficiary  may take  any of the  actions  authorized  by this  Section  3.3 in
respect of any or a number of individual parcels.

            SECTION 3.4 Additional Remedies in Case of an Event of Default.

            3.4.1 Beneficiary shall be entitled to recover judgment as aforesaid
either  before,  after  or  during  the  pendency  of any  proceedings  for  the
enforcement  of the  provisions  of this Deed to Secure  Debt,  and the right of
Beneficiary  to recover such judgment shall not be affected by any entry or sale
hereunder,  or by the  exercise  of any other  right,  power or  remedy  for the
enforcement  of the  provisions of this Deed to Secure Debt, or the  foreclosure
of, or absolute  conveyance  pursuant to, this Deed to Secure  Debt.  In case of
proceedings  against  Grantor in insolvency or bankruptcy or any proceedings for
its reorganization or involving the liquidation of its assets, Beneficiary shall
be  entitled  to prove the whole  amount of  principal  and  interest  and other
payments,  charges  and costs due in respect of the Secured  Obligations  to the
full amount thereof without  deducting  therefrom any proceeds obtained from the
sale of the whole or any part of the Mortgaged Property; provided, however, that
in no case shall Beneficiary receive a greater amount than the aggregate of such
principal, interest and such other payments, charges and costs (with interest at
the Default  Rate) from the proceeds of the sale of the  Mortgaged  Property and
the distribution from the estate of Grantor.

            3.4.2 Any  recovery of any judgment by  Beneficiary  and any levy of
any execution under any judgment upon the Mortgaged Property shall not affect in
any  manner  or to any  extent  the  Lien and  security  interests  created  and
evidenced  hereby  upon  the  Mortgaged  Property  or any part  thereof,  or any
conveyances,  powers,  rights and remedies of  Beneficiary  hereunder,  but such
conveyances, powers, rights and remedies shall continue unimpaired as before.

            3.4.3 Any moneys  collected  by  Beneficiary  under this Section 3.4
shall be applied in accordance with the provisions of subsection 3.3.3.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -36-




            SECTION 3.5  Legal Proceedings After an Event of Default.

            3.5.1 After the  occurrence of any Event of Default and  immediately
upon the  commencement  of any  action,  suit or  legal  proceedings  to  obtain
judgment for the Secured  Obligations or any part thereof, or of any proceedings
to foreclose  the Lien and security  interest  created and  evidenced  hereby or
otherwise  enforce  the  provisions  of this Deed to Secure Debt or of any other
proceedings in aid of the enforcement of this Deed to Secure Debt, Grantor shall
enter its voluntary appearance in such action, suit or proceeding.

            3.5.2 Upon the occurrence and during the  continuance of an Event of
Default,  Beneficiary  shall  be  entitled  forthwith  as  a  matter  of  right,
concurrently  or  independently  of any other right or remedy  hereunder  either
before or after declaring the Secured  Obligations or any part thereof to be due
and payable, to the appointment of a receiver without giving notice to any party
and without regard to the adequacy or inadequacy of any security for the Secured
Obligations  or the solvency or  insolvency of any person or entity then legally
or equitably liable for the Secured Obligations or any portion thereof.  Grantor
hereby  consents  to the  appointment  of  such  receiver.  Notwithstanding  the
appointment  of any  receiver,  Beneficiary  shall be entitled as pledgee to the
possession and control of any cash,  deposits or instruments at the time held by
or  payable  or  deliverable   under  the  terms  of  the  Credit  Agreement  to
Beneficiary.

            3.5.3 Grantor shall not (i) at any time insist upon, or plead, or in
any manner  whatsoever  claim or take any  benefit or  advantage  of any stay or
extension  or  moratorium  law,  any  exemption  from  execution  or sale of the
Mortgaged  Property or any part thereof,  wherever  enacted,  now or at any time
hereafter in force,  which may affect the covenants and terms of  performance of
this Deed to Secure Debt, (ii) claim, take or insist on any benefit or advantage
of any law now or hereafter in force providing for the valuation or appraisal of
the Mortgaged Property,  or any part thereof,  prior to any sale or sales of the
Mortgaged  Property  which may be made  pursuant to this Deed to Secure Debt, or
pursuant to any decree, judgment or order of any court of competent jurisdiction
or (iii)  after any such sale or sales,  claim or  exercise  any right under any
statute  heretofore  or hereafter  enacted to redeem the property so sold or any
part  thereof.  To the  extent  permitted  by  applicable  law,  Grantor  hereby
expressly  (i)  waives  all  benefit  or  advantage  of any  such  law or  laws,
including,  without  limitation,  any statute of limitations  applicable to this
Deed to Secure  Debt,  (ii)  waives  any and all  rights to trial by jury in any
action or proceeding relating to the enforcement of

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -37-



this  Deed to  Secure  Debt,  (iii)  waives  any  objection  which it may now or
hereafter have to the laying of venue of any action,  suit or proceeding brought
in connection with this Deed to Secure Debt and further waives and agrees not to
plead that any such  action,  suit or  proceeding  brought in any such court has
been brought in an inconvenient forum and (iv) covenants not to hinder, delay or
impede the  execution of any power granted or delegated to  Beneficiary  by this
Deed to Secure Debt but to suffer and permit the  execution  of every such power
as though no such law or laws had been made or enacted. Beneficiary shall not be
liable for any  incorrect or improper  payment made pursuant to this Article III
in the absence of gross negligence or willful misconduct.

            SECTION 3.6  Remedies Not  Exclusive.  No remedy  conferred  upon or
reserved to  Beneficiary by this Deed to Secure Debt is intended to be exclusive
of any  other  remedy  or  remedies,  and each and every  such  remedy  shall be
cumulative  and shall be in addition to every other remedy given under this Deed
to Secure Debt or now or  hereafter  existing at law or in equity.  Any delay or
omission of  Beneficiary to exercise any right or power accruing on any Event of
Default  shall not impair any such right or power and shall not be  construed to
be a waiver of or  acquiescence  in any such Event of  Default.  Every power and
remedy  given by this Deed to  Secure  Debt may be  exercised  from time to time
concurrently or  independently,  when and as often as may be deemed expedient by
Beneficiary in such order and manner as Beneficiary, in its sole discretion, may
elect.  If Beneficiary  accepts any moneys  required to be paid by Grantor under
this Deed to Secure Debt after the same become due,  such  acceptance  shall not
constitute a waiver of the right either to require prompt payment,  when due, of
all other  sums  secured  by this Deed to Secure  Debt or to declare an Event of
Default with regard to subsequent  defaults.  If Beneficiary  accepts any moneys
required to be paid by Grantor  under this Deed to Secure Debt in an amount less
than the sum then due, such acceptance  shall be deemed an acceptance on account
only  and on the  condition  that  it  shall  not  constitute  a  waiver  of the
obligation of Grantor to pay the entire sum then due, and  Grantor's  failure to
pay the  entire  sum then due shall be and  continue  to be a default  hereunder
notwithstanding acceptance of such amount on account.


                                  ARTICLE IV.

                              CERTAIN DEFINITIONS

            The following terms shall have the following respective meanings:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -38-



            "Cost of  Construction"  means the sum,  so far as it relates to the
reconstructing,  renewing,  restoring or replacing of the  Improvements,  of (i)
obligations  incurred or assumed by Grantor or undertaken by tenants pursuant to
the  terms  of the  Leases  for  labor,  materials  and  other  expenses  and to
contractors,  builders and  materialmen;  (ii) the cost of contract bonds and of
insurance of all kinds that may  reasonably be deemed by Grantor to be desirable
or necessary during the course of construction;  (iii) the expenses  incurred or
assumed  by  Grantor  for  test  borings,  surveys,  estimates,  any  Plans  and
Specifications  and  preliminary  investigations  therefor,  and for supervising
construction,  as well as for the performance of all other duties required by or
reasonably  necessary for proper  construction;  (iv) ad valorem  property taxes
levied upon the Premises  during  performance  of any  Restoration;  and (v) any
costs or other charges in connection  with obtaining title insurance and counsel
opinions that may be required or necessary in connection with a Restoration.

            "Governmental  Authority"  shall mean any federal,  state,  local or
foreign court, agency, authority, board, bureau, commission,  department, office
or   instrumentality   of  any  nature   whatsoever  or  any   governmental   or
quasi-governmental  unit, whether now or hereafter in existence,  or any officer
or official thereof, having jurisdiction over Grantor or the Mortgaged Property.


                                  ARTICLE V.

                                 MISCELLANEOUS

            SECTION 5.1  Severability of Provisions.  Any provision of this Deed
to Secure Debt which is prohibited or unenforceable  in any jurisdiction  shall,
as to such  jurisdiction,  be ineffective  to the extent of such  prohibition or
unenforceability   without  invalidating  the  remaining  provisions  hereof  or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.

            SECTION 5.2  Notices.  Unless  otherwise  provided  herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner set forth in the Credit  Agreement,  if
to Grantor  or  Beneficiary,  addressed  to it at the  address  set forth in the
Credit  Agreement,  or as to  either  party at such  other  address  as shall be
designated by such party in a written  notice to the other parties  complying as
to delivery with the terms of this Section 5.2; provided,  however, that notices
to Beneficiary shall not be effective until received by Beneficiary.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -39-




            SECTION  5.3  Covenants  To Run with the  Land.  All of the  grants,
covenants,  terms,  provisions  and conditions in this Deed to Secure Debt shall
run with the Land and shall  apply to, and bind the  successors  and assigns of,
Grantor.  If there shall be more than one grantor,  the covenants and warranties
hereof shall be joint and several.

            SECTION  5.4  Headings.  The Section  headings  used in this Deed to
Secure  Debt are for  convenience  of  reference  only and shall not  affect the
construction of this Deed to Secure Debt.

            SECTION 5.5 Limitation on Interest  Payable.  It is the intention of
the parties to conform  strictly to the usury  laws,  whether  state or federal,
that are  applicable to the  transaction  of which this Deed to Secure Debt is a
part. All agreements  between  Grantor and  Beneficiary  whether now existing or
hereafter  arising and whether oral or written,  are hereby expressly limited so
that in no contingency or event whatsoever shall the amount paid or agreed to be
paid by Grantor for the use,  forbearance or detention of the money to be loaned
under the  Credit  Agreement  or any  related  document,  or for the  payment or
performance  of any  covenant or  obligation  contained  herein or in the Credit
Agreement or any related document,  exceed the maximum amount  permissible under
applicable  federal or state usury laws. If under any  circumstances  whatsoever
fulfillment  of any such  provision,  at the time  performance of such provision
shall be due, shall involve  exceeding the limit of validity  prescribed by law,
then the  obligation  to be  fulfilled  shall be  reduced  to the  limit of such
validity.  If under any  circumstances  Grantor shall have paid an amount deemed
interest by applicable  law,  which would exceed the highest  lawful rate,  such
amount that would be excessive  interest  under  applicable  usury laws shall be
applied to the reduction of the principal amount owing in respect of the Secured
Obligations  and not to the payment of interest,  or if such excessive  interest
exceeds the unpaid balance of principal and any other amounts due hereunder, the
excess shall be refunded to Grantor.  All sums paid or agreed to be paid for the
use,  forbearance or detention of the principal under any extension of credit by
Beneficiary  shall, to the extent permitted by applicable law, and to the extent
necessary  to preclude  exceeding  the limit of validity  prescribed  by law, be
amortized,  prorated,  allocated and spread from the date of this Deed to Secure
Debt until payment in full of the Secured Obligations so that the actual rate of
interest on account of such  principal  amounts is uniform  throughout  the term
hereof.

            SECTION 5.6  Governing Law; Submission to Jurisdiction;
Venue.  (a)  This Deed to Secure Debt and the rights and
obligations of the parties hereunder shall be  construed and

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -40-



enforced  in  accordance  with and be governed by the laws of the State in which
the Premises are located.  Grantor  hereby  irrevocably  appoints CT Corporation
System,  having an address at 1633  Broadway,  New York, New York 10019 and such
other  persons as may hereafter be selected by Grantor  irrevocably  agreeing in
writing  to serve as its agent for  service  of  process  in respect of any such
action or  proceeding.  Nothing  herein shall affect the right of Beneficiary to
serve  process  in any  other  manner  permitted  by law  or to  commence  legal
proceedings or otherwise proceed against Grantor in any other jurisdiction.

            (b) Grantor hereby irrevocably waives any objection which it may now
or  hereafter  have to the  laying of venue of any of the  aforesaid  actions or
proceedings  arising out of or in  connection  with this Deed to Secure Debt and
hereby further  irrevocably waives and agrees not to plead or claim in any court
that any such action or  proceeding  brought in any court has been brought in an
inconvenient forum.

            SECTION 5.7 No Merger. The rights and estate created by this Deed to
Secure Debt shall not, under any circumstances,  be held to have merged into any
other estate or interest now owned or hereafter  acquired by Beneficiary  unless
Beneficiary shall have consented to such merger in writing.

            SECTION 5.8  Modification  in Writing.  No amendment,  modification,
supplement,  termination or waiver of or to any provision of this Deed to Secure
Debt,  nor consent to any  departure  by Grantor  therefrom  shall be  effective
unless  the  same  shall be done in  accordance  with  the  terms of the  Credit
Agreement  and  unless in  writing  and signed by  Beneficiary.  Any  amendment,
modification  or  supplement of or to any provision of this Deed to Secure Debt,
any waiver of any provision of this Deed to Secure Debt,  and any consent to any
departure by Grantor from the terms of any provision of this Deed to Secure Debt
shall be effective  only in the specific  instance and for the specific  purpose
for which made or given.  Except where notice is  specifically  required by this
Deed to Secure  Debt or any  other  Credit  Document,  no notice to or demand on
Grantor in any case  shall  entitle  Grantor  to any other or further  notice or
demand in similar or other circumstances.

            SECTION 5.9 No Credit for Payment of Taxes or  Impositions.  Grantor
shall not be entitled to any credit against the principal,  premium,  if any, or
interest payable under the Credit  Agreement,  and Grantor shall not be entitled
to any credit  against any other sums which may become  payable  under the terms
thereof or hereof,  by reason of the payment of any tax or other  impositions on
the Mortgaged Property or any part thereof.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -41-




            SECTION 5.10 Stamp and Other  Taxes.  Subject to the  provisions  of
subsection 1.5.5 relating to permitted contests,  Grantor shall pay any mortgage
recording  taxes,  with interest and fines and penalties,  that may hereafter be
levied,  imposed or  assessed  under or upon or by reason of this Deed to Secure
Debt or the Secured  Obligations or any  instrument or transaction  affecting or
relating to either thereof and in default  thereof  Beneficiary  may advance the
same and the amount so  advanced  shall be  payable  by  Grantor to  Beneficiary
within ten (10) days after demand  therefor,  together with interest  thereon at
the Default Rate.

            SECTION 5.11 Estoppel  Certificates.  Grantor and Beneficiary shall,
from time to time,  upon thirty (30) days'  prior  written  request of the other
party, execute,  acknowledge and deliver to the other party a certificate signed
by an authorized  officer or officers stating that this Deed to Secure Debt, the
Credit Agreement and the other Credit Documents are unmodified and in full force
and effect (or, if there have been modifications, that this Deed to Secure Debt,
the Credit  Agreement or such Credit Document,  as applicable,  is in full force
and effect as modified  and setting  forth such  modifications)  and stating the
date to which principal and interest have been paid on the Loans.

            SECTION 5.12  Additional  Security.  Without notice to or consent of
Grantor and without  impairment  of the Lien and rights  created by this Deed to
Secure  Beneficiary  may accept (but Grantor  shall not be obligated to furnish)
from  Grantor or from any other Person or Persons,  additional  security for the
Secured  Obligations.  Neither  the  giving of this Deed to Secure  Debt nor the
acceptance  of any such  additional  security  shall  prevent  Beneficiary  from
resorting,  first, to such additional  security,  and,  second,  to the security
created by this Deed to Secure Debt  without  affecting  Beneficiary's  Lien and
rights under this Deed to Secure Debt.

            SECTION 5.13 Release.  The Mortgaged Property shall be released from
the Lien of this Deed to Secure Debt in  accordance  with the  provisions of the
Credit  Agreement or at such time as all Secured  Obligations  have been paid in
full and the  Commitments  of the Banks to make any Loan or issue any  Letter of
Credit under the Credit Agreement shall have expired or been sooner  terminated.
Beneficiary,  on the written request and at the expense of Grantor, will execute
and deliver such proper instruments of release and satisfaction or assignment as
may reasonably be requested to evidence such release or assignment, and any such
instrument,  when duly executed by  Beneficiary  and duly recorded by Grantor in
the  places  where  this Deed to Secure  Debt is  recorded,  shall  conclusively
evidence the release or assignment of this Deed to Secure Debt.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -42-




            SECTION 5.14 Certain Expenses of Beneficiary. If any action, suit or
other  proceeding  affecting  the  Mortgaged  Property  or any part  thereof  be
commenced,  in which action,  suit or proceeding  Beneficiary is made a party or
participates  or in which the right to use the  Mortgaged  Property  or any part
thereof is  threatened,  or in which it becomes  necessary  in the  judgment  of
Beneficiary to defend or uphold the Lien of this Deed to Secure Debt (including,
without  limitation,  any action,  suit or proceeding to establish or uphold the
compliance of the  Improvements  with any Requirements of Law), then all amounts
reasonably  paid or incurred by Beneficiary  for the expense of any such action,
suit or other  proceeding or to protect its rights therein (whether or not it is
made or becomes a party  thereto) or  otherwise  to enforce or defend the rights
and Lien  created by this Deed to Secure  Debt,  shall be paid by  Grantor  upon
demand  together  with interest at the Default Rate from the date of the payment
or  incurring  thereof  to the date of  repayment,  and any such  amount and the
interest thereon shall be a Lien on the Mortgaged Property,  prior to any right,
or right to,  interest  in, or claim upon the  Mortgaged  Property  attaching or
accruing  subsequent  to or  otherwise  subordinate  to the Lien of this Deed to
Secure  Debt,  and the same  shall be deemed  to be  secured  hereby.  All other
amounts reasonably paid,  advanced or incurred by Beneficiary in order to secure
and  protect  the Lien of this Deed to Secure  Debt or other  security  provided
hereunder  shall be a like Lien on the  Mortgaged  Property  and be deemed to be
secured hereby.

            SECTION 5.15 Expenses of Collection. Grantor will upon demand pay to
Beneficiary  the  amount  of any  and all  reasonable  expenses,  including  the
reasonable fees and expenses of its counsel and the reasonable fees and expenses
of any experts and agents,  which  Beneficiary  may incur in connection with (i)
the  collection  of  the  Secured   Obligations,   (ii)  the   enforcement   and
administration  of this Deed to Secure Debt,  (iii) the custody or  preservation
of, or the sale of,  collection  from,  or other  realization  upon,  any of the
Mortgaged  Property,  (iv) the exercise or  enforcement  of any of the rights of
Beneficiary  or any  Secured  Party  hereunder  or (v) the failure by Grantor to
perform or observe any of the provisions  hereof. All amounts payable by Grantor
under  this  Section  5.16  shall be due upon  demand  and  shall be part of the
Secured Obligations.  Grantor's obligations under this Section shall survive the
termination  of this Deed to Secure Debt and the  discharge of  Grantor's  other
obligations hereunder.

            SECTION 5.16 Business Days. In the event any time period or any date
provided  in this  Deed to  Secure  Debt  ends or  falls on a day  other  than a
Business  Day,  then such time period shall be deemed to end and such date shall
be deemed to fall on the next succeeding  Business Day, and  performance  herein
may be made on

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -43-



such Business Day, with the same force and effect as if made on such other day.

            SECTION  5.17  Relationship.  The  relationship  of  Beneficiary  to
Grantor hereunder is strictly and solely that of lender and borrower and grantor
and  beneficiary  and nothing  contained in the Credit  Agreement,  this Deed to
Secure Debt or any other  document or  instrument  now existing and delivered in
connection  therewith or otherwise in connection with the Secured Obligations is
intended to create, or shall in any event or under any circumstance be construed
as creating a partnership,  joint venture,  tenancy-in-common,  joint tenancy or
other  relationship  of any nature  whatsoever  between  Beneficiary and Grantor
other than as lender and borrower and grantor and beneficiary.

            SECTION 5.18  Reconveyance Upon Payment of Secured  Obligations.  In
the event that Grantor  shall cause to be paid and  performed in full all of the
Secured  Obligations,  Beneficiary shall release the Mortgaged Property from the
Lien of this  Deed to  Secure  Debt  and to  reconvey  (without  warranty  by or
recourse against Beneficiary or any Bank) the Mortgaged Property to Grantor.

            SECTION 5.19 Concerning Beneficiary.

            5.19.1  Beneficiary  shall be  entitled  to rely  upon  any  written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been  signed,  sent or made
by the proper person,  and, with respect to all matters  pertaining to this Deed
to Secure Debt and its duties hereunder, upon advice of counsel selected by it.

            5.19.2 With respect to any of its rights and  obligations as a Bank,
Beneficiary  shall have and may exercise  the same rights and powers  hereunder.
The term "Banks," "Bank" or any similar terms shall,  unless the context clearly
otherwise  indicates,  include Beneficiary in its individual capacity as a Bank.
Beneficiary may accept deposits from, lend money to, and generally engage in any
kind of banking,  trust or other  business with Grantor or any entity related to
or affiliated with Grantor to the same extent as if Beneficiary  were not acting
as collateral agent.

            5.19.3 If any item of Mortgaged Property also constitutes collateral
granted to Beneficiary under any other deed of trust,  mortgage,  deed to secure
debt, security agreement,  pledge or instrument of any type, in the event of any
conflict  between the  provisions of this Deed to Secure Debt and the provisions
of such other deed of trust, mortgage,  security agreement, pledge or instrument
of any type in respect of such collateral, Beneficiary,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -44-



in its sole discretion, shall select which provision or provisions
shall control.

            5.19.4  Beneficiary has been appointed as collateral  agent pursuant
to the Credit Agreement. The actions of Beneficiary hereunder are subject to the
provisions of the Credit  Agreement.  Beneficiary shall have the right hereunder
to make demands,  to give notices,  to exercise or refrain from  exercising  any
rights,  and  to  take  or  refrain  from  taking  action  (including,   without
limitation,  the release or substitution of Mortgaged  Property),  in accordance
with this Deed to Secure Debt and the Credit  Agreement.  Beneficiary may resign
and a  successor  Beneficiary  may be  appointed  in the manner  provided in the
Credit  Agreement.  Upon the  acceptance of any  appointment as Beneficiary by a
successor Beneficiary, that successor Beneficiary shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Beneficiary  under this Deed to Secure Debt, and the retiring  Beneficiary shall
thereupon  be  discharged  from its  duties and  obligations  under this Deed to
Secure Debt.  After any retiring  Beneficiary's  resignation,  the provisions of
this Deed to Secure Debt shall  inure to its benefit as to any actions  taken or
omitted  to be  taken  by it  under  this  Deed  to  Secure  Debt  while  it was
Beneficiary.

            SECTION  5.20 Future  Advances.  This Deed to Secure Debt may secure
future advances. The maximum aggregate amount of all advances of principal under
the  Credit  Agreement  that  may  be  outstanding  hereunder  at  any  time  is
$40,000,000.

            SECTION 5.21 Waiver of Stay.

            5.21.1 Grantor agrees that in the event that Grantor or any property
or assets of Grantor  shall  hereafter  become the  subject  of a  voluntary  or
involuntary proceeding under the Bankruptcy Code or Grantor shall otherwise be a
party to any  federal or state  bankruptcy,  insolvency,  moratorium  or similar
proceeding to which the provisions  relating to the automatic stay under Section
362 of the  Bankruptcy  Code  or  any  similar  provision  in  any  such  law is
applicable,  then, in any such case,  whether or not  Beneficiary  has commenced
foreclosure  proceedings  under this Deed to Secure Debt,  Beneficiary  shall be
entitled to relief from any such automatic stay as it relates to the exercise of
any of the rights and remedies (including,  without limitation,  any foreclosure
proceedings) available to Beneficiary as provided in this Deed to Secure Debt or
in any other Security Document.

            5.21.2  Beneficiary shall have the right to petition or
move any court having jurisdiction over any proceeding described in

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -45-



subsection 5.21.1 for the purposes provided therein,  and Grantor agrees (i) not
to oppose  any such  petition  or  motion  and (ii) at  Grantor's  sole cost and
expense,  to assist and  cooperate  with  Beneficiary,  as may be  requested  by
Beneficiary from time to time, in obtaining any relief requested by Beneficiary,
including,  without  limitation,  by  filing  any such  petitions,  supplemental
petitions, requests for relief, documents,  instruments or other items from time
to time requested by Beneficiary or any such court.

            SECTION 5.22 Continuing Security Interest;  Assignment. This Deed to
Secure  Debt  shall  create a  continuing  security  interest  in the  Mortgaged
Property and shall (i) be binding upon Grantor,  its  successors and assigns and
(ii) inure, together with the rights and remedies of Beneficiary  hereunder,  to
the  benefit of  Beneficiary  and the other  Secured  Parties  and each of their
respective  successors,  transferees and assigns;  no other Persons  (including,
without  limitation,  any other  creditor  of Grantor)  shall have any  interest
herein or any  right or  benefit  with  respect  hereto.  Without  limiting  the
generality  of the  foregoing  clause  (ii),  any Bank may  assign or  otherwise
transfer any indebtedness  held by it secured by this Deed to Secure Debt to any
other Person,  and such other Person shall thereupon  become vested with all the
benefits in respect thereof granted to such Bank,  herein or otherwise,  subject
however,  to the provisions of the Credit Agreement and any applicable  Interest
Rate Agreement.

            SECTION  5.23  Obligations  Absolute.  All  obligations  of  Grantor
hereunder shall be absolute and unconditional irrespective of:

             (i)  any bankruptcy, insolvency, reorganization,
      arrangement, readjustment, composition, liquidation or the
      like of Grantor or any other Credit Party;

            (ii) any lack of validity or enforceability of the Credit Agreement,
      any  Interest  Rate  Agreement,  any  Letter of Credit,  any other  Credit
      Document, or any other agreement or instrument relating thereto;

           (iii) any change in the time,  manner or place of  payment  of, or in
      any other term of,  all or any of the  Secured  Obligations,  or any other
      amendment  or waiver of or any  consent to any  departure  from the Credit
      Agreement,  any Interest Rate Agreement,  any Letter of Credit,  any other
      Credit Document, or any other agreement or instrument relating thereto;


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -46-



            (iv)  any  exchange,   release  or   non-perfection   of  any  other
      collateral,  or any  release or  amendment  or waiver of or consent to any
      departure from any guarantee, for all or any of the Secured Obligations;

             (v) any  exercise  or  non-exercise,  or any  waiver of any  right,
      remedy,  power or  privilege  under or in  respect  of this Deed to Secure
      Debt, any Interest Rate Agreement or any other Credit  Document  except as
      specifically  set forth in a waiver granted  pursuant to the provisions of
      Section 5.8 hereof; or

            (vi)  any other circumstance or happening whatsoever that
      is similar to any of the foregoing.

            SECTION 5.24  Beneficiary's Right to Sever Indebtedness.

            5.24.1 Grantor acknowledges that (a) the Mortgaged Property does not
constitute  the sole source of security for the payment and  performance  of the
Secured  Obligations  and that the  Secured  Obligations  are  also  secured  by
property of Grantor in other jurisdictions (all such property, collectively, the
"Collateral"),  (b) the  number  of such  jurisdictions  and the  nature  of the
transaction of which this  instrument is a part are such that it would have been
impracticable  for the parties to allocate to each item of Collateral a specific
loan amount and to execute in respect of such item a separate  credit  agreement
or interest rate  agreement and (c) Grantor  intends that  Beneficiary  have the
same rights with respect to the Mortgaged Property, in foreclosure or otherwise,
that  Beneficiary  would have had if each item of  Collateral  had been secured,
mortgaged or pledged  pursuant to a separate  credit  agreement or interest rate
agreement, mortgage or security document. In furtherance of such intent, Grantor
agrees that  Beneficiary may at any time by notice (an  "Allocation  Notice") to
Grantor  allocate  a  portion  (the  "Allocated  Indebtedness")  of the  Secured
Obligations  to the  Mortgaged  Property  and sever from the  remaining  Secured
Obligations  the  Allocated  Indebtedness.  From  and  after  the  giving  of an
Allocation  Notice  with  respect  to  the  Mortgaged   Property,   the  Secured
Obligations hereunder shall be limited to the extent set forth in the Allocation
Notice and (as so limited) shall,  for all purposes,  be construed as a separate
loan obligation of Grantor unrelated to the other  transactions  contemplated by
the Credit Agreement,  any Interest Rate Agreement, any other Credit Document or
any  document  related to any  thereof.  To the extent that the  proceeds on any
foreclosure of the Mortgaged  Property shall exceed the Allocated  Indebtedness,
such  proceeds  shall belong to Grantor and shall not be available  hereunder to
satisfy  any  Secured   Obligations   of  Grantor   other  than  the   Allocated
Indebtedness. In any action or proceeding to foreclose the Lien of

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                    -47-



this Deed to Secure Debt or in connection with any power of sale  foreclosure or
other remedy exercised under this Deed to Secure Debt commenced after the giving
by  Beneficiary  of  an  Allocation  Notice,  the  Allocation  Notice  shall  be
conclusive proof of the limits of the Secured  Obligations  hereby secured,  and
Grantor may introduce,  by way of defense or  counterclaim,  evidence thereof in
any such action or  proceeding.  Notwithstanding  any  provision of this Section
5.24, the proceeds received by Beneficiary  pursuant to this Deed to Secure Debt
shall be applied by Beneficiary in accordance  with the provisions of subsection
3.3.3 hereof.

            5.24.2 Grantor hereby waives to the greatest extent  permitted under
law the right to a discharge of any of the Secured Obligations under any statute
or rule of law now or hereafter in effect which provides that foreclosure of the
Lien of this Deed to Secure Debt or other  remedy  exercised  under this Deed to
Secure Debt  constitutes  the exclusive  means for  satisfaction  of the Secured
Obligations or which makes  unavailable a deficiency  judgment or any subsequent
remedy because  Beneficiary  elected to proceed with a power of sale foreclosure
or such other  remedy or because of any  failure by  Beneficiary  to comply with
laws that prescribe conditions to the entitlement to a deficiency  judgment.  In
the event that,  notwithstanding  the foregoing waiver,  any court shall for any
reason hold that Beneficiary is not entitled to a deficiency  judgment,  Grantor
shall not (a) introduce in any other  jurisdiction such judgment as a defense to
enforcement against Grantor of any remedy in the Credit Agreement,  any Interest
Rate  Agreement or any other Credit  Document or (b) seek to have such  judgment
recognized or entered in any other jurisdiction,  and any such judgment shall in
all events be limited in  application  only to the state or  jurisdiction  where
rendered.

            5.24.3 In the event any  instrument  in addition  to the  Allocation
Notice  is  necessary  to  effectuate  the  provisions  of  this  Section  5.24,
including,  without  limitation,  any amendment to this Deed to Secure Debt, any
substitute promissory note or affidavit or certificate of any kind,  Beneficiary
may  execute,  deliver or record  such  instrument  as the  attorney-in-fact  of
Grantor. Such power of attorney is coupled with an interest and is irrevocable.

            5.24.4  Notwithstanding  anything set forth herein to the  contrary,
the  provisions  of this  Section  5.24 shall be  effective  only to the maximum
extent permitted by law.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>



            IN WITNESS  WHEREOF,  Grantor has caused this Deed to Secure Debt to
be duly executed and delivered under seal the day and year first above written.


                                    CARSON PRODUCTS COMPANY
                        (formerly known as Aminco, Inc.),
                                        Grantor



                         By:___________________________
                                      Name:
                                       Title:



                         Attest:_______________________
                                      Name:
                                       Title:


Signed, sealed and delivered in the presence of:

Witness



------------------------------
Name:



-----------------------------
         Notary Public
         [Notary Seal]


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>



                                  Schedule A

                             [Legal Description]







                         [To come from Title Policy]


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>


                                  Schedule B


                                [Prior Liens]


                         [To come from Title Policy]


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141461

<PAGE>




                                                             Exhibit E to the
                                                            Credit Agreement


                              HOLDINGS GUARANTEE


            This  GUARANTEE (the  "Guarantee")  dated as of October [ ], 1996 by
Carson, Inc., a Delaware corporation (the "Guarantor"),  in favor of and for the
benefit of the Banks under the Credit Agreement (each as hereinafter defined).

                               R E C I T A L S :

            A. Pursuant to a certain  Credit  Agreement  dated as of October 18,
1996 (as amended,  amended and restated,  supplemented or otherwise  modified in
accordance with its terms, the "Credit Agreement"; capitalized terms not defined
herein have the meanings  ascribed to them in the Credit Agreement) among Carson
Products Company (the "Borrower") the lending  institutions  identified  therein
(collectively,  the "Banks") and Banque Indosuez,  New York Branch as Agent (the
"Agent"),  the Banks have agreed to make  certain  Loans to the  Borrower and to
issue Letters of Credit for the accounts of the Borrower.

            B. It is a condition  precedent to the Banks obligations to make the
Loans and to issue the Letters of Credit under to the Credit  Agreement that the
Guarantor  shall  have  executed  and  delivered  this  Guarantee  and that this
Guarantee shall be in full force and effect.

            C. This Guarantee is given by the Guarantor in favor of the Banks to
guarantee all of the  Obligations of the Borrower,  to the extent of the Pledged
Securities as defined in the Holdings Pledge  Agreement,  in accordance with the
terms of the Credit Agreement.

            D.    All of the Guarantor's obligations hereunder shall
be secured pursuant to the Holdings Pledge Agreement to which the
Guarantor is a party.

            NOW,  THEREFORE,  in consideration of the foregoing premises and for
other good and valuable  consideration,  the receipt and sufficiency of which is
hereby acknowledged, the Guarantor hereby agrees as follows:

            SECTION 1.  Guarantee.  (i)  To induce the Banks to
execute and deliver the Credit Agreement and to make the Loans and
issue the Letters of Credit upon the terms and conditions set forth
in the Credit Agreement, and in consideration thereof, the
Guarantor hereby unconditionally and irrevocably (a) guarantees to

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


                                    -2-


the Banks and their respective  successors,  transferees and assigns, the prompt
and complete  payment and performance  when due (whether at the stated maturity,
by acceleration or otherwise) and at all times  thereafter of the Obligations of
the Borrower  (including amounts which would become due but for the operation of
the  automatic  stay under  Section  362(a) of the  Bankruptcy  Code, or similar
provisions under the bankruptcy laws of foreign  jurisdictions);  and (b) agrees
to pay any and all reasonable expenses (including reasonable attorneys' fees and
disbursements)  which may be paid or  incurred  by the  Banks,  the Agent or the
Collateral Agent in enforcing any rights with respect to, or collecting,  any or
all of  the  Obligations  and/or  enforcing  any  rights  with  respect  to,  or
collecting  against,  the Guarantor  under this Guarantee;  provided,  that this
Guarantee  is  limited  as set  forth  in  Section  6  hereof  (as  so  limited,
collectively, the "Guaranteed Obligations").

          (ii) The Guarantor agrees that this Guarantee  constitutes a guarantee
of payment when due and not of  collection  and waives any right to require that
any resort be held by the Collateral  Agent, the Agent or any Bank to any of the
security held for payment of any of the Guaranteed Obligations or to any balance
of any deposit account or credit on the books of the Agent, the Collateral Agent
or any Bank in favor of the Borrower or any other Person.

         (iii) No payment or  payments  made by any other  Person or received or
collected by the Banks (or the Collateral Agent or Agent on behalf of the Banks)
from any other  Person by virtue of any action or  proceeding  or any set-off or
appropriation  or  application  at any time in reduction of or in payment of the
Guaranteed  Obligations shall be deemed to modify,  reduce, release or otherwise
affect the  liability or  obligations  of the Guarantor  hereunder  which shall,
notwithstanding  any such payment or payments  other than  payments  made to the
Banks (or the  Collateral  Agent or the  Agent on  behalf  of the  Banks) by the
Guarantor  or payments  received or  collected  by the Banks (or the  Collateral
Agent or Agent on behalf of the Banks) from the Guarantor, remain liable for the
Guaranteed Obligations until the Guaranteed Obligations are indefeasibly paid in
full in Cash or Cash  Equivalents,  subject to the  provisions  of Section 1(iv)
hereof.

            (iv) The Guarantor  understands,  agrees and confirms that this is a
guarantee of payment when due and not of collection and that each Bank may, from
time to time,  enforce this  Guarantee  up to the full amount of the  Guaranteed
Obligations owed to such Bank without proceeding against any other Credit Party,
against any security for the Guaranteed Obligations, against any other

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


                                    -3-


guarantor or under any other guarantee covering the Guaranteed
Obligations.

            SECTION 2. Waiver by Guarantor.  Until the payment and  satisfaction
in full of all Guaranteed  Obligations  and the expiration or termination of the
Commitments  and all  Letters  of  Credit  Usage of the Banks  under the  Credit
Agreement,  the Guarantor  hereby waives  absolutely and  irrevocably  any claim
which it may have against the Borrower or any of its Affiliates by reason of any
payment to the Agent,  Collateral  Agent,  or any Bank,  or to any other  Person
pursuant  to or in respect  of this  Guarantee,  including  any claims by way of
subrogation, contribution, reimbursement, indemnity or otherwise.

            SECTION 3. Consent by Guarantor.  The Guarantor  hereby consents and
agrees that,  without the  necessity of any  reservation  of rights  against the
Guarantor and without notice to or further  assent by the Guarantor,  any demand
for  payment  of  any of the  Guaranteed  Obligations  made  by the  Agent,  the
Collateral  Agent or any Bank may be  rescinded  by the  Banks  (or the Agent or
Collateral  Agent on behalf of the Banks) and any of the Guaranteed  Obligations
continued,  and the Guaranteed Obligations,  or the liability of any other party
upon or for any part thereof,  or any collateral  security or guarantee therefor
or right of offset with respect thereto,  may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Banks (or the Agent or Collateral Agent on behalf
of the Banks); and the Credit Agreement or any of the Credit Document,  or other
guarantee or documents in connection therewith,  or any of them, may be amended,
modified,  supplemented or terminated, in whole or in part, as the Banks (or the
Agent or Collateral  Agent on behalf of the Banks) may deem  advisable from time
to time; and any Guarantee (subject to Section 11.04 of the Credit Agreement) or
right of offset or any Collateral may be sold, exchanged, waived, surrendered or
released,  all without the necessity of any  reservation  of rights  against the
Guarantor and without notice to or further  assent by the Guarantor,  which will
remain  bound   hereunder,   notwithstanding   any  such   renewal,   extension,
modification,  acceleration,  compromise,  amendment,  supplement,  termination,
sale, exchange, waiver, surrender or release. Neither the Banks nor the Agent or
the Collateral  Agent shall have any obligation to protect,  secure,  perfect or
insure  any  Collateral  or  property  at any  time  held  as  security  for the
guaranteed  Obligations or this Guarantee (other than the exercise of reasonable
care in the custody and  preservation of the Pledged  Collateral  referred to in
the Holdings Pledge  Agreement).  When making any demand  hereunder  against the
Guarantor,  the Agent, the Collateral Agent or the Banks may, but shall be under
no obligation to, make a similar demand on any other Credit Party or any such

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


                                    -4-


other  guarantor,  and any failure by the the Agent, the Collateral Agent or the
Banks to make any such  demand or to collect  any  payments  from any such other
Credit  Party or any such other  guarantor  or any release of such other  Credit
Party  or  any  such  other  guarantor  or of  the  Guarantor's  obligations  or
liabilities  hereunder  shall not  impair or affect  the  rights  and  remedies,
express or implied,  or as a matter of law, of the Banks  against the  Guarantor
hereunder.  For the purposes hereof "demand" shall include the  commencement and
continuance of any legal proceedings.

            SECTION 4. Waivers; Successors and Assigns. The Guarantor waives any
and all  notice of the  creation,  renewal,  extension  or accrual of any of the
Guaranteed Obligations and notice of or proof of reliance by the Banks upon this
Guarantee or acceptance of this Guarantee,  and the Guaranteed Obligations shall
conclusively be deemed to have been created,  contracted or incurred in reliance
upon this Guarantee, and all dealings between the Guarantor and any other Credit
Party,  on the one hand,  and the Banks,  on the other hand,  shall  likewise be
conclusively  presumed to have been had or  consummated  in  reliance  upon this
Guarantee.  The Guarantor waives  diligence,  presentment,  protest,  demand for
payment and notice of default or  nonpayment  to or upon any Credit Party or the
Guarantor with respect to the Guaranteed  Obligations.  This Guarantee  shall be
construed  as a  continuing,  absolute  and  unconditional  guarantee of payment
without  regard to the  validity,  regularity  or  enforceability  of the Credit
Agreement,  the other Credit Documents, any of the Guaranteed Obligations or any
guarantee  therefor or right of offset with respect  thereto at any time or from
time to time held by the Banks and without regard to any defense (other than the
defense of payment),  set-off or counterclaim which may at any time be available
to or be  asserted  by any  Credit  Party  against  the  Banks,  or by any other
circumstance  whatsoever  (with  or  without  notice  to  or  knowledge  of  the
Guarantor) which constitutes,  or might be construed to constitute, an equitable
or legal discharge of the Guaranteed Obligations, or of the Guarantor under this
Guarantee,  in  bankruptcy or in any other  instance,  and the  obligations  and
liabilities  of the Guarantor  hereunder  shall not be conditioned or contingent
upon the  pursuit  by the Banks or any other  Person at any time of any right or
remedy  against  any Credit  Party or against any other  Person  which may be or
become  liable or  obligated  in  respect  of all or any part of the  Guaranteed
Obligations or against any collateral security or guarantee therefor or right of
offset with  respect  thereto.  This  Guarantee  shall  remain in full force and
effect and be binding in accordance with and to the extent of its terms upon the
Guarantor and the successors and assigns thereof, and shall inure to the benefit
of  the  Banks,  and  their  respective  successors,   transferees  and  assigns
(including each holder from time to time of Guaranteed Obligations) until all of
the Guaranteed Obligations and

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


                                    -5-


the  obligations of the Guarantor under this Guarantee shall have been satisfied
by  indefeasible  payment in full in cash or cash  equivalents,  notwithstanding
that from time to time during the term of the Credit  Agreement any Credit Party
may be released from all of its Guaranteed Obligations thereunder.

            SECTION  5.  Guarantee  Secured.  Payment  under this  Guarantee  is
secured by a pledge of Securities  pursuant to the Holdings Pledge  Agreement in
accordance  with the Credit  Agreement.  Reference  is hereby made to the Credit
Agreement and the Holdings Pledge  Agreement for a description of the Securities
pledged and the right of the respective parties to such property,  to secure all
the obligations of the Guarantor hereunder.

            SECTION 6. Limited Liability. Notwithstanding any contrary provision
of this Agreement,  the Holdings Pledge Agreement or the Credit Agreement, it is
hereby expressly agreed that no partner, officer, employee, servant, controlling
Person,  executive,  director,  agent,  authorized  representative  or affiliate
(herein referred to as "operatives") of any of the Guarantor,  DNL Group, L.L.C.
or DNL Partners,  Limited Partnership  (collectively,  the "Guarantor and Equity
Entities") shall be personally  liable for payments due under this Agreement for
the performance of any obligation hereunder.  Except for the representations and
warranties  made by the  Guarantor  in  Section 10 of this  Agreement,  the sole
recourse of the Banks, or the Agent or Collateral  Agent on behalf of the Banks,
for  satisfaction of the obligations of the Guarantor under this Agreement,  the
Holdings Pledge  Agreement or the Credit  Agreement shall be against the Pledged
Securities  (as such term is defined in the Holdings  Pledge  Agreement)  and no
against any other assets or property of any of the Guarantor and Equity Entities
or any of the operatives of any of the Guarantor and Equity  Entities other than
the remedies provided hereunder and under the Holdings Pledge Agreement.  In the
event that a default occurs in connection with such obligations, no action shall
be  brought  against  any of he  Guarantor  and  Equity  Entities  or any of the
operatives of any of the  Guarantor and Equity  Entities by virtue solely of its
direct or indirect ownership interest in the Borrower, except in accordance with
the Holdings  Pledge  Agreement.  In the event of  foreclosure  or other sale or
disposition  of Mortgaged Real Property or Pledged  Collateral,  no judgment for
any  deficiency  upon  the  obligations  of the  obligors  thereunder  shall  be
obtainable  by the  Banks,  or the  Agent or  Collateral  Agent on behalf of the
Banks, against any of the Guarantor and Equity Entities or any of the operatives
of any of the  Guarantor  and Equity  Entities by virtue solely of its direct or
indirect  ownership  interest  in  the  Borrower  or its  Subsidiaries.  Nothing
contained in this Section  shall  prevent the Banks,  or the Agent or Collateral
Agent on behalf of the Banks, from exercising any rights or remedies

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


                                    -6-


against the Borrower or its  Subsidiaries,  the  Mortgaged  Real Property or the
Pledged Collateral  pursuant to the Credit Agreement,  the Security Documents or
this Agreement.

            SECTION  7.  Effectiveness;   Reinstatement.  This  Guarantee  shall
continue to be effective,  or be reinstated,  as the case may be, if at any time
payment, or any part thereof, of any of the Guaranteed  Obligations is rescinded
or must  otherwise  be restored  or  returned by the Banks upon the  insolvency,
bankruptcy,  dissolution,  liquidation or reorganization of any Credit Party, or
upon or as a result of the appointment of a receiver,  intervenor or conservator
of, or trustee or similar officer for, any Credit Party or any substantial  part
of its property, or otherwise, all as though such payments had not been made.

            SECTION 8. Payment of Guaranteed  Obligations.  The Guarantor hereby
guarantees that the Guaranteed  Obligations will be paid for the ratable benefit
of the Banks without  set-off or  counterclaim  in lawful currency of the United
States of America at the office of the  Collateral  Agent located at 1211 Avenue
of the Americas, New York, New York 10036. The Guarantor shall make any payments
required  hereunder  upon  receipt of written  notice  thereof from the Agent or
Collateral Agent or any Bank; provided,  however,  that the failure of the Agent
or  Collateral  Agent or any Bank to give  such  notice  shall  not  affect  the
Guarantor's obligations hereunder.

            SECTION 9. Default. If (a) the Borrower has failed to pay or perform
when due its Obligations guaranteed hereby or (b) there is an event with respect
to the  Guarantor  that would  require or permit the  acceleration  pursuant  to
Section 8.05 of the Credit  Agreement of any outstanding  Loan, then in the case
of clause (a) all of the  obligations  with respect to the  Borrower  guaranteed
hereby and in the case of clause (b) all of the Guaranteed  Obligations shall be
immediately due and payable by the Guarantor,  regardless of whether in the case
of  clause  (a) the  payment  of the  Obligations  guaranteed  hereby  has  been
accelerated or in the case of clause (b) the Borrower is in default with respect
to the Obligations guaranteed hereby.

            SECTION 10.  Representations and Warranties.  To induce the Banks to
enter into the Credit  Agreement and to make Loans  thereunder  and to issue the
Letters of Credit,  the Guarantor  represents and warrants to each Bank that the
following  statements  are true,  correct and  complete on and as of the Closing
Date:

            A.    Organization and Powers.  The Guarantor is a duly
organized and validly existing corporation in good standing under
the laws of the jurisdiction of its organization and has the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


                                    -7-


corporate power and authority to own its property and assets and to transact the
business in which it is engaged and currently  proposes to engage. The Guarantor
has duly  qualified  and is authorized to do business and is in good standing in
all  jurisdictions  in which the conduct of its business or the ownership of its
properties  requires  such  qualification,  except  where the  failure  to be so
qualified  would not have a Materially  Adverse  Effect.  The  Guarantor has all
requisite governmental licenses,  authorizations,  consents and approvals to own
and carry on its business as now conducted and as presently  contemplated  to be
conducted by the Guarantor, other than such licenses,  authorizations,  consents
and  approvals  the  failure  to  obtain  which  has not had and will not have a
Materially  Adverse Effect.  The Guarantor has all corporate  authority to enter
into each of the Security  Documents to which it is a party and to carry out the
transactions contemplated therby and to execute and deliver this Guarantee.

            B. No Violations.  Neither the execution, delivery or performance by
the  Guarantor  of any of the  Credit  Documents  to which  it is a  party,  nor
compliance with any of the terms and provisions thereof, nor the consummation of
any of the transactions  contemplated  therein,  nor the grant and perfection of
the security  interests  pursuant to the Security  Documents (a) will contravene
any applicable  provision of any law, statute,  rule,  regulation,  order, writ,
injunction  or decree of any  Governmental  Authority,  (b) will  conflict or be
inconsistent  with or result in any  breach  of,  any of the  terms,  covenants,
conditions  or  provisions  of, or  constitute  (with notice or lapse of time or
both) a default  under any material  contractual  obligation of the Guarantor or
any  of its  Subsidiaries,  or  (other  than  as  contemplated  by the  Security
Documents)  result in the creation or imposition of (or the obligation to create
or impose),  any Lien upon any of the property or assets of the Guarantor or any
of its  Subsidiaries  pursuant to any  material  contractual  obligation  of the
Guarantor or (c) will violate any provision of the  organizational  documents of
the  Guarantor or any of its  Subsidiaries,  except in each such case where such
contravention,  conflict,  inconsistancy,  breach, default, creation, impostion,
obligation or violation would not have a Materially Adverse Effect.

            C.    Approvals.  The execution, delivery and performance
by the Guarantor of the Credit Documents to which it is a party do
not and will not require any registration with, consent or waiver
or approval of, or notice to, or other action to, with or by, any
Governmental Authority or other Person (other than those
registrations, consents, waivers, approvals, notices or other
actions which if not obtained or made, would not have a Materially
Adverse Effect) except filings required for the perfection of
security intersts granted pursuant to the Security documents.  All

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


                                    -8-


consents  and  approvals  from or notices to or  filings  with any  Governmental
Authority  or other  Person  required  to be  obtained  by  Guarantor  have been
obtained and are in full force and effect (other than those  consents,  waivers,
approvals,  notices or filings which, if not obtained or made,  would not have a
Materially Adverse Effect).

            D. Binding Obligation.  This Guarantee  constitutes the legal, valid
and binding  obligation of the Guarantor,  enforceable  against the Guarantor in
accordance with its terms,  except as may be limited by bankruptcy,  insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as such  enforceability  may be limited  by the  application  general
principles of equity,  (regardless of whether such  enforceability is considered
in a proceeding in equity or at law).

            E. Investment Company.  The Guarantor is not an "investment company"
or a company  "controlled"  by an  "investment  company" (as each of such quoted
terms is defined or used in the  Investment  Company Act of 1940, as amended) or
subject to regulation  under the Public Utility Holding Company Act of 1935, the
Federal  Power  Act or any  foreign,  federal  or local  statute  or  regulation
limiting its ability to incur  Indebtedness for money borrowed or guarantee such
Indebtedness as contemplated hereby or by any other Credit Document.

            SECTION  11.  Ratable  Sharing.  The  Banks  by  acceptance  of this
Guarantee agree among  themselves  that with respect to all amounts  received by
them which are applicable to the payment of  obligations of the Guarantor  under
this Guarantee,  if the Banks, or the Agent or Collateral Agent on behalf of the
Banks,   exercise  their  rights  hereunder,   including,   without  limitation,
acceleration of the obligations of the Guarantor hereunder, equitable adjustment
will be made so that, in effect, all such amounts will be shared among the Banks
pro rata based on the relative outstanding Guaranteed Obligations.

            SECTION 12. Merger. If the Guarantor shall merge into or consolidate
with  another  corporation,  or  liquidate,  wind  up or  dissolve  itself  in a
transaction  not prohibited by the Credit  Agreement,  or if all of the stock of
the Guarantor shall be sold or otherwise  disposed of in a manner not prohibited
by the Credit  Agreement,  the Guarantor hereby covenants and agrees,  that upon
any such merger, consolidation, liquidation, or dissolution, the guarantee given
in this Guarantee and the due and punctual  performance and observance of all of
the  covenants  and  conditions  of the Credit  Agreement to be performed by the
Guarantor,  shall be expressly  assumed (in the event that the  Guarantor is not
the surviving corporation in the merger) by supplemental agreements

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


                                    -9-


satisfactory in form to the Agent or Collateral Agent on behalf of the Banks, by
the corporation or corporations formed by such consolidation,  or into which the
Guarantor shall have been merged,  or by the  corporation or corporations  which
shall have acquired such property.  In addition,  the Guarantor shall deliver to
the Agent or Collateral  Agent on behalf of the Banks, an Officers'  Certificate
and an opinion of counsel,  each  stating  that such  merger,  consolidation  or
transfer and such  supplemental  agreements  comply with this Guarantee and that
all conditions  precedent herein provided relating to such transaction have been
complied with. In case of any such consolidation, merger, sale or conveyance and
upon  the  assumption  by  the  successor   corporation  or   corporations,   by
supplemental  agreements executed and delivered to the Agent or Collateral Agent
on behalf of the  Banks,  and  reasonably  satisfactory  in form to the Agent or
Collateral  Agent  on  behalf  of the  Banks,  of the  guarantee  given  in this
Guarantee  and the due and  punctual  performance  of all of the  covenants  and
conditions  of the Credit  Agreement  to be  performed  by the  Guarantor,  such
successor  corporation or  corporations  shall succeed to and be substituted for
the Guarantor,  with the same effect as if it or they had been named herein as a
guarantor.

            SECTION  13. No  Waiver.  No  failure  to  exercise  and no delay in
exercising, on the part of the Banks, or the Agent or Collateral Agent on behalf
of the Banks, any right, power or privilege  hereunder shall operate as a waiver
thereof,  nor shall any  single  or  partial  exercise  of any  right,  power or
privilege preclude any other or further exercise thereof, or the exercise of any
other power of right. The rights and remedies herein provided are cumulative and
are not exclusive of any rights and remedies provided by law.

            SECTION 14.  Notices.  All notices,  demands,  instructions or other
communications  required  or  permitted  to be given to or made  upon any  party
hereto shall be given in accordance with the provisions of the Credit  Agreement
and at the  address  set forth  therein or as  provided  on the  signature  page
hereof.

            SECTION 15. Amendments, Waivers, etc. No provision of this Guarantee
shall be  waived,  amended,  terminated  or  supplemented  except  by a  written
instrument  executed by the  Guarantor  and the Agent or  Collateral  Agent,  on
behalf of the Banks.

            SECTION  16.  Notice  of  Exercise.  Upon  exercise  of  its  rights
hereunder,  each Bank, or the Agent or Collateral  Agent on behalf of the Banks,
as the case may be, shall provide written notice on the date of such exercise to
the Banks, or the Agent or Collateral  Agent on behalf of the Banks, as the case
may be, of such exercise.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


                                    -10-



            SECTION 17.  GOVERNING LAW.  THIS GUARANTEE SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.

            SECTION 18.  CONSENT TO  JURISDICTION  AND  SERVICE OF PROCESS.  ALL
JUDICIAL  PROCEEDINGS  BROUGHT  AGAINST  THE  GUARANTOR  WITH  RESPECT  TO  THIS
GUARANTEE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETANT JURISDICTION
IN THE STATE OF NEW YORK AND BY  EXECUTION  AND DELIVERY OF THIS  GUARANTEE  THE
GUARANTOR  ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS  PROPERTIES,  GENERALLY
AND UNCONDITIONALLY,  THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE
PARTIES HERETO HEREBY  IRREVOCABLY  WAIVE TO THE EXTENT  PERMITTED BY APPLICABLE
LAW ANY RIGHT TO TRIAL BY JURY, AND THE GUARANTOR HEREBY  IRREVOCABLY WAIVES ANY
OBJECTION  TO 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 IN SUCH RESPECTIVE JURISDICTIONS.  THE GUARANTOR DESIGNATES
AND APPOINTS CT  CORPORATION,  SYSTEM,  HAVING AN ADDRESS AT 1633 BROADWAY,  NEW
YORK, NEW YORK 10019, AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY THE
GUARANTOR  IRREVOCABLY  AGREEING IN WRITING TO SERVE, AS ITS AGENT TO RECEIVE ON
ITS BEHALF,  SERVICE OF ALL PROCESS IN ANY SUCH  PROCEEDINGS  IN ANY SUCH COURT,
SUCH SERVICE  BEING HEREBY  ACKNOWLEDGED  BY THE  GUARANTOR TO BE EFFECTIVE  AND
BINDING  SERVICE IN EVERY  RESPECT.  A COPY OF SUCH  PROCESS SO SERVED  SHALL BE
MAILED BY REGISTERED MAIL TO THE GUARANTOR AS PROVIDED IN SECTION 14 HEREOF.  IF
ANY AGENT APPOINTED BY THE GUARANTOR  REFUSES TO ACCEPT  SERVICE,  THE GUARANTOR
HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE  SUFFICIENT  NOTICE.
NOTHING  HEREIN  SHALL  AFFECT THE RIGHT TO SERVE  PROCESS  IN ANY OTHER  MANNER
PERMITTED  BY LAW OR SHALL  LIMIT  THE  RIGHT  OF ANY BANK TO BRING  PROCEEDINGS
AGAINST THE GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

            SECTION  19.  Counterparts.   This  Guarantee  and  any  amendments,
waivers,  consents or supplements  may be executed in any number of counterparts
and by different parties hereto in separate counterparts,  each of which when so
executed and delivered  shall be deemed an original,  but all such  counterparts
together shall constitute but one and the same instrument.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>


            IN WITNESS WHEREOF,  the undersigned has caused this Guarantee to be
duly executed and delivered by its duly  authorized  officer on the day and year
first above written.


CARSON, INC.


By: _______________________________
    Name:
    Title:


Notice Address:

CARSON, INC.
64 Ross Road
Savannah, GA  31405
Attn: President


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141471

<PAGE>




                                                            Exhibit F-1 to the
                                                             Credit Agreement


                     BORROWER SECURITIES PLEDGE AGREEMENT


            BORROWER SECURITIES PLEDGE AGREEMENT (the "Agreement"),  dated as of
October 18, 1996,  made by CARSON  PRODUCTS  COMPANY  (formerly known as Aminco,
Inc.,  as  successor by merger to DNL Savannah  Acquisition  Corp.),  a Delaware
corporation  having  an  office  at  64  Ross  Road,  Savannah,   Georgia  31405
("Pledgor"),  in favor of BANQUE INDOSUEZ,  NEW YORK BRANCH, having an office at
1211 Avenue of the Americas,  7th Floor,  New York, New York 10036,  as pledgee,
assignee  and  secured  party,  in its  capacity  as  collateral  agent (in such
capacities  and together  with any  successors in such  capacities,  "Collateral
Agent") for the lending  institutions  (the  "Banks") from time to time party to
the Credit Agreement (as hereinafter defined).


                               R E C I T A L S :

            A.  Pursuant  to a certain  credit  agreement,  dated as of the date
hereof (as amended,  amended and restated,  supplemented  or otherwise  modified
from time to time, the "Credit Agreement"; capitalized terms used herein and not
defined shall have the meanings assigned to them in the Credit Agreement), among
Pledgor, the Banks and Banque Indosuez, New York Branch, as Agent and Collateral
Agent for the Banks,  the Banks have agreed (i) to make to or for the account of
Pledgor certain A Term Loans up to an aggregate principal amount of $15,000,000,
certain B Term Loans up to an  aggregate  principal  amount of  $10,000,000  and
certain  Revolving Loans up to an aggregate  principal amount of $15,000,000 and
(ii) to issue certain Letters of Credit for the account of Pledgor.

            B. It is  contemplated  that  Pledgor  may  enter  into  one or more
agreements with one or more of the Banks ("Interest Rate Agreements") fixing the
interest rates with respect to Loans under the Credit Agreement (all obligations
of  Pledgor  now  existing  or  hereafter   arising  under  such  Interest  Rate
Agreements, collectively, the "Interest Rate Obligations").

            C.    Pledgor is the legal and beneficial owner of the
Pledged Collateral (as hereinafter defined).

            D.    It is a condition to the obligations of the Banks to
make the Loans under the Credit Agreement and a  condition to any
Bank issuing Letters of Credit under the Credit Agreement or

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -2-


entering into the Interest Rate  Agreements that Pledgor execute and deliver the
applicable Credit Documents, including this Agreement.

            E. This  Agreement is given by Pledgor in favor of Collateral  Agent
for its benefit and the  benefit of the Banks and the Agent  (collectively,  the
"Secured  Parties") to secure the payment and  performance of all of the Secured
Obligations (as defined in Section 2).

                              A G R E E M E N T :

            NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Collateral Agent hereby agree as follows:

            Section 1.  Pledge.  As  collateral  security  for the  payment  and
performance  when due of all the Secured  Obligations,  Pledgor hereby  pledges,
assigns,  transfers  and  grants to  Collateral  Agent for its  benefit  and the
benefit of the Secured Parties, a continuing first priority security interest in
and to all of the right,  title and  interest  of  Pledgor  in, to and under the
following  property,  whether now existing or hereafter acquired  (collectively,
the "Pledged Collateral"):

            (a) issued and  outstanding  shares of capital  stock of each Person
      described in Schedule I hereto (the "Pledged Shares") (which are and shall
      remain at all times until this Agreement terminates, certificated shares),
      including  the  certificates  representing  the  Pledged  Shares  and  any
      interest  of  Pledgor  in the  entries  on  the  books  of  any  financial
      intermediary pertaining to the Pledged Shares;

            (b) all  additional  shares of  capital  stock of any  issuer of the
      Pledged  Shares from time to time acquired by Pledgor in any manner (which
      are and  shall  remain  at all  times  until  this  Agreement  terminates,
      certificated  shares)  (which  shares  shall be  deemed  to be part of the
      Pledged Shares),  including the certificates  representing such additional
      shares and any  interest  of  Pledgor  in the  entries on the books of any
      financial intermediary pertaining to such additional shares;

            (c) all  intercompany  notes  described  on  Schedule II hereto (the
      "Intercompany  Notes")  now owned or held by Pledgor and from time to time
      acquired  by  Pledgor  in any way,  and all  certificates  or  instruments
      evidencing  such  Intercompany   Notes  and  all  proceeds  thereof,   all
      accessions thereto and substitutions therefor;


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -3-


            (d) all dividends,  cash, options,  warrants,  rights,  instruments,
      distributions,  returns of capital,  income,  profits and other  property,
      interests or proceeds from time to time received,  receivable or otherwise
      distributed  to Pledgor in respect of or in exchange for any or all of the
      Pledged Shares or Intercompany Notes (collectively, "Distributions"); and

            (e) all  "proceeds"  (as such  term is  defined  in the UCC or under
      other relevant law) of any of the foregoing.

            Section 2. Secured  Obligations.  This  Agreement  secures,  and the
Pledged  Collateral is collateral  security for, the payment and  performance in
full  when due,  whether  at  stated  maturity,  by  acceleration  or  otherwise
(including,  without limitation, the payment of interest and other amounts which
would  accrue and become due but for the filing of a petition in  bankruptcy  or
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C.  ss.  362(a))  of (i) all  Obligations  of  Pledgor  now  existing  or
hereafter  arising under the Credit  Agreement and all Interest Rate Obligations
of Pledgor now existing or hereafter  arising under any Interest Rate  Agreement
(including, without limitation, Pledgor's obligation provided for therein to pay
principal,  interest  and  all  other  charges,  fees,  expenses,   commissions,
reimbursements,  premiums,  indemnities  and  other  payments  related  to or in
respect of the Obligations contained in the Credit Agreement and the obligations
contained in any Interest Rate Agreement),  and (ii) without  duplication of the
amounts  described  in clause (i),  all  obligations  of Pledgor now existing or
hereafter  arising  under  this  Agreement  or  any  other  Security   Document,
including,  without  limitation,  with respect to all charges,  fees,  expenses,
commissions,  reimbursements,  premiums,  indemnities  and other  payments  that
Pledgor is obligated to pay under this Agreement or any other Security  Document
(the obligations described in clauses (i) and (ii),  collectively,  the "Secured
Obligations").

            Section 3. No  Release.  Nothing set forth in this  Agreement  shall
relieve  Pledgor  from the  performance  of any  term,  covenant,  condition  or
agreement on Pledgor's  part to be performed or observed  under or in respect of
any of the Pledged  Collateral  or from any  liability to any Person under or in
respect of any of the  Pledged  Collateral  or shall  impose any  obligation  on
Collateral  Agent or any  Secured  Party to perform  or  observe  any such term,
covenant,  condition  or  agreement  on  Pledgor's  part to be so  performed  or
observed or shall impose any liability on Collateral  Agent or any Secured Party
for any act or  omission  on the part of  Pledgor  relating  thereto  or for any
breach of any  representation  or warranty on the part of Pledgor  contained  in
this  Agreement,  any Interest  Rate  Agreement or any other Credit  Document or
under or in

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -4-


respect of the Pledged  Collateral or made in connection  herewith or therewith.
The  obligations  of  Pledgor  contained  in this  Section 3 shall  survive  the
termination of this Agreement and the discharge of Pledgor's  other  obligations
under  this  Agreement,  any  Interest  Rate  Agreement  and  the  other  Credit
Documents.

            Section 4.  Delivery of Pledged Collateral.

            (a) All  certificates,  agreements or  instruments  representing  or
evidencing the Pledged  Collateral,  to the extent not  previously  delivered to
Collateral Agent, shall immediately upon receipt thereof by Pledgor be delivered
to and held by or on behalf of Collateral  Agent  pursuant  hereto.  All Pledged
Collateral  shall be in  suitable  form for  transfer  by  delivery  or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance  reasonably  satisfactory to Collateral Agent.  Collateral
Agent  shall  have the  right,  at any time upon the  occurrence  of an Event of
Default and without notice to Pledgor, to endorse,  assign or otherwise transfer
to or to register in the name of Collateral  Agent or any of its nominees any or
all of the Pledged  Collateral.  In  addition,  Collateral  Agent shall have the
right at any time to exchange  certificates  representing or evidencing  Pledged
Collateral for certificates of smaller or larger denominations.

            (b)  If  the  issuer  of  Pledged  Shares  is   incorporated   in  a
jurisdiction  which does not permit the use of  certificates  to evidence equity
ownership, then Pledgor shall, to the extent permitted by applicable law, record
such pledge on the stock  register of the issuer,  execute any  customary  stock
pledge forms or other documents  necessary or appropriate to complete the pledge
and give  Collateral  Agent the right to transfer such Pledged  Shares under the
terms hereof and provide to Collateral Agent an opinion of counsel,  in form and
substance reasonably satisfactory to Collateral Agent, confirming such pledge.

            Section 5.  Supplements, Further Assurances.

            (a) Pledgor  agrees  that at any time and from time to time,  at the
sole cost and expense of Pledgor, Pledgor shall promptly execute and deliver all
further instruments and documents,  including, without limitation,  supplemental
or additional UCC-1 financing  statements,  and take all further action that may
be  necessary  or that  Collateral  Agent may  reasonably  request,  in order to
perfect and protect the pledge,  security interest and Lien granted or purported
to be granted hereby or to enable  Collateral  Agent to exercise and enforce its
rights and remedies hereunder with respect to any Pledged Collateral.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -5-


            (b) Pledgor shall, upon obtaining any Pledged Shares or Intercompany
Notes of any  Person,  promptly  (and in any event  within five  Business  Days)
deliver to Collateral  Agent a pledge  amendment,  duly executed by Pledgor,  in
substantially  the form of Exhibit 1 hereto  (each,  a "Pledge  Amendment"),  in
respect of the additional  Pledged Shares or Intercompany  Notes which are to be
pledged  pursuant to this  Agreement,  and confirming the attachment of the Lien
hereby  created on and in  respect of such  additional  shares.  Pledgor  hereby
authorizes  Collateral  Agent to attach each Pledge  Amendment to this Agreement
and agrees that all Pledged  Shares or  Intercompany  Notes listed on any Pledge
Amendment  delivered to  Collateral  Agent shall for all  purposes  hereunder be
considered Pledged Collateral.

            Section 6.  Representations, Warranties and Covenants.
Pledgor represents, warrants and covenants as follows:

            (a) No Liens.  Pledgor is as of the date hereof,  and at the time of
      any delivery of any Pledged  Collateral  to Collateral  Agent  pursuant to
      Section  4 of  this  Agreement,  Pledgor  will  be,  the  sole  legal  and
      beneficial owner of the Pledged  Collateral.  All Pledged Collateral is on
      the date  hereof,  and will be, so owned by Pledgor  free and clear of any
      Lien except for the Lien created by this  Agreement  and Liens of the type
      described in paragraph (a) of the definition of Permitted Encumbrances.

            (b)  Authorization,   Enforceability.   Pledgor  has  the  requisite
      corporate power,  authority and legal right to pledge and grant a security
      interest in all the Pledged  Collateral  pursuant to this  Agreement,  and
      this  Agreement  constitutes  the legal,  valid and binding  obligation of
      Pledgor,  enforceable against Pledgor in accordance with its terms, except
      as may be limited by bankruptcy, insolvency, reorganization, moratorium or
      similar laws  relating to or affecting  creditors'  rights  generally  and
      except as such enforceability may be limited by the application of general
      principles  of  equity  (regardless  of  whether  such  enforceability  is
      considered in a proceeding in equity or at law).

            (c) No Consents,  etc. No consent of any party  (including,  without
      limitation,   stockholders  or  creditors  of  Pledgor)  and  no  consent,
      authorization,  approval,  license or other action by, and no notice to or
      filing with, any Governmental Authority or regulatory body or other Person
      is  required  for (x) the  pledge by  Pledgor  of the  Pledged  Collateral
      pursuant to this Agreement or for the  execution,  delivery or performance
      of this Agreement by Pledgor, (y) the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -6-


      exercise by Collateral Agent of the voting or other rights provided for in
      this Agreement, or (z) the exercise by Collateral Agent of the remedies in
      respect of the Pledged  Collateral  pursuant to this Agreement (other than
      those consents,  authorizations,  approvals,  actions,  notices or filings
      which, if not obtained or made,  would not have a material  adverse effect
      upon the interests of Collateral Agent under this Agreement).

            (d) Due Authorization  and Issuance.  All of the Pledged Shares have
      been, and to the extent  hereafter  issued will be upon such pledge,  duly
      authorized and validly issued and fully paid and nonassessable.

            (e) Chief Executive  Office.  Pledgor's  chief  executive  office is
      located at 64 Ross Road,  Savannah,  Georgia 31405. Pledgor shall not move
      its chief  executive  office  except to such new  location  as Pledgor may
      establish  in  accordance  with the last  sentence of this  Section  6(e).
      Pledgor shall not establish a new location for its chief executive  office
      nor shall it change  its name  until (i) it shall  have  given  Collateral
      Agent not less than 45 days' prior  written  notice of its intention so to
      do, clearly  describing such new location or name and providing such other
      information  in connection  therewith as  Collateral  Agent or any Secured
      Party may  request,  and (ii) with  respect to such new  location or name,
      Pledgor shall have taken all action  satisfactory to Collateral  Agent and
      the  Secured  Parties to  maintain  the  perfection  and  priority  of the
      security  interest  of  Collateral  Agent for the  benefit of the  Secured
      Parties in the Pledged Collateral intended to be granted hereby.

            (f) Delivery of Pledged Collateral;  Filings.  Pledgor has delivered
      to Collateral Agent all  certificates  representing the Pledged Shares and
      Intercompany Notes and has delivered to Collateral Agent appropriate UCC-1
      financing statements to be filed with the Secretary of State of the States
      of New York and Georgia,  the State in which the chief executive office of
      Pledgor is located,  evidencing  the Lien created by this  Agreement,  and
      such  delivery,  filing and pledge of the Pledged  Collateral  pursuant to
      this Agreement will create a valid and perfected  first priority  security
      interest in the  Pledged  Collateral  securing  the payment of the Secured
      Obligations pursuant to the UCC in effect in each applicable jurisdiction,
      including, without limitation, the States of New York and Georgia.

            (g)   Pledged Collateral.  All information set forth
      herein, including the Schedules annexed hereto, and all

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -7-


      information  contained in any  documents,  schedules and lists  heretofore
      delivered to any Secured Party in connection with this Agreement,  in each
      case,  relating to the Pledged  Collateral is accurate and complete in all
      material respects.

            (h)  No  Violations,  etc.  The  pledge  of the  Pledged  Collateral
      pursuant to this Agreement does not violate Regulation G, T, U or X of the
      Federal Reserve Board.

            (i)   Ownership of Pledged Collateral.  Except as
      otherwise permitted by the Credit Agreement, Pledgor at all
      times will be the sole beneficial owner of the Pledged
      Collateral.

            (j) No  Options,  Warrants,  etc.  There are no  options,  warrants,
      calls, rights, commitments or agreements of any character to which Pledgor
      is a party or by which it is bound  obligating  Pledgor to deliver or sell
      or cause to be issued,  delivered or sold,  additional  Pledged  Shares or
      obligating  Pledgor  to  grant,  extend  or enter  into  any such  option,
      warrant, call, right, commitment or agreement.  There are no voting trusts
      or other  agreements  or  understandings  to which Pledgor is a party with
      respect to the voting of the  capital  stock of any issuer of the  Pledged
      Shares.

            Section 7.  Voting Rights; Distributions; etc.

            (a)   So long as no Event of Default shall have occurred
and be continuing:

             (i) Pledgor  shall be  entitled to exercise  any and all voting and
      other  consensual  rights  pertaining  to the  Pledged  Shares or any part
      thereof for any purpose not inconsistent with the terms or purpose of this
      Agreement or any other Credit Document;  provided,  however,  that Pledgor
      shall not in any event exercise such rights in any manner which may have a
      material  adverse  effect on the value of the  Pledged  Collateral  or the
      security intended to be provided by this Agreement.

            (ii) Subject to the terms of the Credit Agreement,  Pledgor shall be
      entitled to receive and retain,  and to utilize free and clear of the Lien
      of  this  Agreement,  any and all  Distributions,  but  only if and to the
      extent made in accordance  with the  provisions  of the Credit  Agreement;
      provided,  however,  that any and all  such  Distributions  consisting  of
      rights or  interests  in the form of  securities  shall  be,  and shall be
      forthwith  delivered to Collateral Agent to hold as Pledged Collateral and
      shall,  if received  by  Pledgor,  be received in trust for the benefit of
      Collateral

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -8-


      Agent, be segregated  from the other property or funds of Pledgor,  and be
      forthwith  delivered to Collateral Agent as Pledged Collateral in the same
      form as so received (with any necessary endorsement).

           (iii)  Collateral  Agent shall be deemed  without  further  action or
      formality to have granted to Pledgor all  necessary  consents  relating to
      voting rights and shall, if necessary, upon written request of Pledgor and
      at Pledgor's sole cost and expense,  from time to time execute and deliver
      (or cause to be executed and delivered) to Pledgor all such instruments as
      Pledgor may reasonably  request in order to permit Pledgor to exercise the
      voting and other  rights  which it is  entitled  to  exercise  pursuant to
      Section  7(a)(i)  hereof  and to  receive  the  Distributions  which it is
      authorized to receive and retain pursuant to Section 7(a)(ii) hereof.

            (b)   Upon the occurrence and during the continuance of an
Event of Default:

             (i) All  rights  of  Pledgor  to  exercise  the  voting  and  other
      consensual  rights it would otherwise be entitled to exercise  pursuant to
      Section  7(a)(i)  hereof  without  any  action or the giving of any notice
      shall  cease,  and all  such  rights  shall  thereupon  become  vested  in
      Collateral  Agent,  which shall  thereupon have the sole right to exercise
      such voting and other consensual rights.

            (ii) All rights of Pledgor to receive  Distributions  which it would
      otherwise be authorized to receive and retain pursuant to Section 7(a)(ii)
      hereof shall cease and all such rights shall  thereupon  become  vested in
      Collateral Agent, which shall thereupon have the sole right to receive and
      hold as Pledged  Collateral  such  Distributions;  provided,  that if such
      Event of  Default is cured,  any such  Distributions  theretofore  paid to
      Collateral Agent shall,  upon the request of Pledgor (except to the extent
      theretofore applied to the Secured Obligations), be returned by Collateral
      Agent to Pledgor.

            (c) Pledgor shall,  at its sole cost and expense,  from time to time
execute and deliver to Collateral  Agent  appropriate  instruments as Collateral
Agent may reasonably request in order to permit Collateral Agent to exercise the
voting and other rights which it may be entitled to exercise pursuant to Section
7(b)(i)  hereof and to receive  all  Distributions  which it may be  entitled to
receive under Section 7(b)(ii) hereof.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -9-


            (d) All Distributions  which are received by Pledgor contrary to the
provisions of Section 7(b)(ii) hereof shall be received in trust for the benefit
of Collateral  Agent,  shall be segregated from other funds of Pledgor and shall
immediately be paid over to Collateral  Agent as Pledged  Collateral in the same
form as so received (with any necessary endorsement).

            Section 8.  Transfers and Other Liens; Additional Shares;
Principal Office.

            (a) Pledgor shall not (i) sell, convey,  assign or otherwise dispose
of, or grant any option,  right or warrant  with  respect to, any of the Pledged
Collateral except as permitted by the Credit Agreement, (ii) create or permit to
exist any Lien upon or with  respect to any  Pledged  Collateral  other than the
Lien  and  security  interest  granted  to  Collateral  Agent  pursuant  to this
Agreement and Liens of the type  described in paragraph (a) of the definition of
Permitted  Encumbrances,  or (iii)  permit any issuer of the  Pledged  Shares to
merge,  consolidate or change its legal form,  except as permitted by the Credit
Agreement  unless  all of the  outstanding  capital  stock of the  surviving  or
resulting  corporation is, upon such merger or consolidation,  pledged hereunder
and no cash,  securities  or other  property  is  distributed  in respect of the
outstanding shares of any other constituent corporation.  The preceding sentence
shall  not  apply to any sale or other  disposition  of all of the  stock of the
issuer of Pledged  Shares which is in compliance  with the Credit  Agreement and
the  proceeds  of which sale or other  disposition  are used to make a mandatory
prepayment  of the Loans  pursuant to Section  3.02(A) of the Credit  Agreement.
Upon such sale or other disposition,  such Pledged Shares shall be released from
the Lien of this Agreement in accordance with Section 17 of this Agreement.

            (b) Pledgor shall (i) cause each issuer of the Pledged Shares not to
issue any stock or other  securities in addition to or in  substitution  for the
Pledged  Shares  issued by such issuer,  except to Pledgor,  unless  required by
applicable  law, and (ii) pledge  hereunder,  immediately  upon its  acquisition
(directly or indirectly) thereof, any and all additional shares of capital stock
or other  equity  securities  of the  issuer  of the  Pledged  Shares  which are
required to be pledged hereunder.

            Section 9. Reasonable Care. Collateral Agent shall be deemed to have
exercised  reasonable  care  in the  custody  and  preservation  of the  Pledged
Collateral in its  possession if such Pledged  Collateral is accorded  treatment
substantially  equivalent  to that which  Collateral  Agent,  in its  individual
capacity,  accords  its  own  property  consisting  of  similar  instruments  or
interests, it being understood that neither Collateral Agent nor any of the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -10-


Secured Parties shall have  responsibility for (i) ascertaining or taking action
with  respect to calls,  conversions,  exchanges,  maturities,  tenders or other
matters relating to any Pledged  Collateral,  whether or not Collateral Agent or
any other Secured Party has or is deemed to have  knowledge of such matters,  or
(ii)  taking any  necessary  steps to  preserve  rights  against any Person with
respect to any Pledged Collateral.

            Section 10.  Remedies Upon Default; Decisions Relating to
Exercise of Remedies.

            (a) If an Event of Default  shall have  occurred and be  continuing,
and the Secured  Obligations  have been  declared due and payable in  accordance
with the Credit Agreement, Collateral Agent shall have the right, in addition to
other rights and remedies provided for herein or otherwise available to it to be
exercised  from time to time, (i) to retain and apply the  Distributions  to the
Secured  Obligations as provided in Section 11 hereof,  and (ii) to exercise all
the rights and remedies of a secured party on default under the UCC in effect in
the State of New York at that time,  and  Collateral  Agent may also in its sole
discretion,   without  notice  except  as  specified  below,  sell  the  Pledged
Collateral  or any part  thereof  (including,  without  limitation,  any partial
interest  in the  Pledged  Shares)  in one or more  parcels at public or private
sale, at any exchange, broker's board or at any of Collateral Agent's offices or
elsewhere,  for cash,  on credit or for  future  delivery,  and at such price or
prices  and upon such  other  terms as  Collateral  Agent may deem  commercially
reasonable,  irrespective of the impact of any such sales on the market price of
the Pledged  Collateral.  Collateral  Agent or any other Secured Party or any of
their  respective  Affiliates  may be the purchaser of any or all of the Pledged
Collateral  at any such sale and shall be  entitled,  for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged  Collateral  sold at such sale,  to use and apply any of the Secured
Obligations  owed to such Person as a credit on account of the purchase price of
any Pledged  Collateral  payable by such Person at such sale.  Each purchaser at
any such sale shall acquire the property sold  absolutely free from any claim or
right on the part of Pledgor,  and Pledgor hereby waives,  to the fullest extent
permitted by law, all rights of redemption,  stay and/or  appraisal which it now
has or may at any time in the future  have under any rule of law or statute  now
existing or hereafter  enacted.  Pledgor  acknowledges  and agrees that,  to the
extent  notice of sale shall be required  by law,  ten days notice to Pledgor of
the time and place of any public sale or the time after  which any private  sale
or other  intended  disposition  is to take place  shall  constitute  reasonable
notification of such matters. No notification need be given to Pledgor if it has
signed, after the occurrence of an Event of Default, a statement

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -11-


renouncing  or modifying  any right to  notification  of sale or other  intended
disposition. Collateral Agent shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given.  Collateral Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor,  and such sale may, without further notice, be made at
the time and place to which it was so adjourned.  Pledgor hereby waives,  to the
fullest extent permitted by law, any claims against  Collateral Agent arising by
reason of the fact that the price at which any Pledged  Collateral may have been
sold at such a  private  sale was less  than the  price  which  might  have been
obtained at a public  sale,  even if  Collateral  Agent  accepts the first offer
received  and does not offer such Pledged  Collateral  to more than one offeree.
Collateral  Agent shall not be liable for any incorrect or improper payment made
pursuant  to this  Section  10 in the  absence  of gross  negligence  or willful
misconduct.

            (b)  Pledgor  recognizes  that,  by reason of  certain  prohibitions
contained in the Securities Act of 1933, as amended (the "Securities  Act"), and
applicable  state  securities  laws,  Collateral  Agent may be  compelled,  with
respect  to any  sale of all or any  part of the  Pledged  Collateral,  to limit
purchasers to Persons who will agree, among other things, to acquire the Pledged
Collateral  for their own  account,  for  investment  and not with a view to the
distribution or resale thereof. Pledgor acknowledges that any such private sales
may be at prices  and on terms less  favorable  to  Collateral  Agent than those
obtainable through a public sale without such restrictions  (including,  without
limitation,  a public  offering made pursuant to a registration  statement under
the Securities Act), and,  notwithstanding  such circumstances,  agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner and that  Collateral  Agent shall have no  obligation to engage in public
sales and no  obligation  to delay the sale of any  Pledged  Collateral  for the
period of time  necessary to permit the issuer thereof to register it for a form
of  public  sale  requiring  registration  under  the  Securities  Act or  under
applicable state securities laws, even if such issuer would agree to do so.

            (c) If Collateral Agent determines to exercise its right to sell any
or all of the Pledged Collateral,  upon written request, Pledgor shall from time
to time furnish to Collateral Agent all such information as Collateral Agent may
request in order to determine the number of  securities  included in the Pledged
Collateral  which may be sold by Collateral Agent as exempt  transactions  under
the  Securities  Act and the rules of the  Securities  and  Exchange  Commission
thereunder, as the same are from time to time in effect.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -12-


            (d)  Pledgor  recognizes  that,  by reason of  certain  prohibitions
contained  in laws,  rules,  regulations  or orders of any foreign  Governmental
Authority, Collateral Agent may be compelled, with respect to any sale of all or
any part of the Pledged  Collateral,  to limit  purchasers to those who meet the
requirements of such foreign Governmental  Authority.  Pledgor acknowledges that
any such sales may be at prices and on terms less favorable to Collateral  Agent
than those  obtainable  through a public sale  without such  restrictions,  and,
notwithstanding  such circumstances,  agrees that any such restricted sale shall
be deemed to have been made in a commercially reasonable manner and that, except
as may be required by applicable law,  Collateral Agent shall have no obligation
to engage in public sales.

            (e) In addition to any of the other rights and  remedies  hereunder,
Collateral Agent shall have the right to institute a proceeding seeking specific
performance in connection with any of the agreements or obligations hereunder.

            Section 11.  Application of Proceeds.  All  Distributions  held from
time to time by Collateral  Agent and all proceeds  received by Collateral Agent
in respect of any sale of, collection from, or other realization upon all or any
part of the Pledged  Collateral  pursuant to the exercise by Collateral Agent of
its  remedies as a secured  creditor  as provided in Section 10 hereof  shall be
applied,  together with any other sums then held by Collateral Agent pursuant to
this Agreement, promptly by Collateral Agent as follows:

            First, to the payment of all costs and expenses,  fees,  commissions
      and  taxes  of such  sale,  collection  or other  realization,  including,
      without  limitation,   reasonable  out-of-pocket  costs  and  expenses  of
      Collateral Agent and its agents and counsel, and all expenses, liabilities
      and advances made or incurred by Collateral Agent in connection therewith;

            Second, to the payment of all other costs and expenses of such sale,
      collection or other realization,  including reasonable out-of-pocket costs
      and  expenses  of the Banks and their  agents and  counsel  and all costs,
      liabilities  and  advances  made or  incurred  by the Banks in  connection
      therewith;

            Third,  to the  payment  in  full in  cash  of  Secured  Obligations
      consisting  of interest  and all amounts  other than  principal  under the
      Credit  Agreement at any time and from time to time owing by Pledgor under
      or in  connection  with the Credit  Agreement,  ratably  according  to the
      unpaid amounts thereof, in the manner and priority set forth in the Credit

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -13-


      Agreement, together with interest on each such amount in the manner and to
      the extent set forth in the Credit  Agreement from and after the date such
      amount is due, owing or unpaid until paid in full;

            Fourth,  to the  pro  rata  payment  in  full  in  cash  of  Secured
      Obligations  consisting of (i) principal at any time and from time to time
      owing by Pledgor under or in connection with the Credit Agreement, ratably
      according to the unpaid  amounts  thereof,  in the manner and priority set
      forth in the Credit Agreement and (ii) the amount of Pledgor's obligations
      then due and payable  under any Interest  Rate  Agreement,  including  any
      early  termination  payments  then due  (exclusive  of expenses or similar
      liabilities to any Bank under the applicable  Interest Rate Agreement(s)),
      together with interest on each such amount in the manner and to the extent
      set forth in the Credit  Agreement  from and after the date such amount is
      due, owing or unpaid until paid in full; and

            Fifth, the balance,  if any, to the Person lawfully entitled thereto
      (including Pledgor or its successors or assigns).

            Section 12.  Expenses.  Pledgor  will upon demand pay to  Collateral
Agent the amount of any and all  reasonable  expenses,  including the reasonable
fees and  expenses of its counsel and the  reasonable  fees and  expenses of any
experts and agents,  which Collateral Agent may incur in connection with (i) the
collection of the Secured  Obligations,  (ii) the enforcement and administration
of this  Agreement,  (iii)  the  custody  or  preservation  of,  or the sale of,
collection from, or other realization upon, any of the Pledged Collateral,  (iv)
the  exercise or  enforcement  of any of the rights of  Collateral  Agent or any
Secured Party  hereunder or (v) the failure by Pledgor to perform or observe any
of the provisions  hereof.  All amounts payable by Pledgor under this Section 12
shall be due within  ten  Business  Days  after  demand and shall be part of the
Secured Obligations.  Pledgor's  obligations under this Section 12 shall survive
the  termination  of  this  Agreement  and  the  discharge  of  Pledgor's  other
obligations hereunder.

            Section 13. No Waiver;  Cumulative  Remedies.  (a) No failure on the
part of Collateral Agent to exercise,  no course of dealing with respect to, and
no delay on the part of  Collateral  Agent in  exercising,  any right,  power or
remedy  hereunder  shall  operate as a waiver  thereof;  nor shall any single or
partial exercise of any such right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The  remedies  herein  provided  are  cumulative  and are not  exclusive  of any
remedies provided by law.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -14-



            (b)  In  the  event  Collateral  Agent  shall  have  instituted  any
proceeding  to  enforce  any right,  power or remedy  under  this  Agreement  by
foreclosure,  sale,  entry or  otherwise,  and such  proceeding  shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Collateral Agent, then and in every such case, Pledgor,  Collateral Agent and
each Secured Party shall be restored to their  respective  former  positions and
rights  hereunder  with  respect  to the  Pledged  Collateral,  and all  rights,
remedies and powers of Collateral  Agent and the Secured  Parties shall continue
as if no such proceeding had been instituted.

            Section 14. Collateral Agent. Collateral Agent has been appointed as
collateral  agent  pursuant to the Credit  Agreement.  The actions of Collateral
Agent  hereunder  are  subject  to  the  provisions  of  the  Credit  Agreement.
Collateral  Agent  shall  have the  right  hereunder  to make  demands,  to give
notices,  to  exercise or refrain  from  exercising  any rights,  and to take or
refrain  from  taking  action  (including,  without  limitation,  the release or
substitution of Pledged  Collateral),  in accordance with this Agreement and the
Credit Agreement.  Collateral Agent may resign and a successor  Collateral Agent
may be  appointed  in the  manner  provided  in the Credit  Agreement.  Upon the
acceptance  of any  appointment  as Collateral  Agent by a successor  Collateral
Agent,  that successor  Collateral  Agent shall thereupon  succeed to and become
vested  with all the  rights,  powers,  privileges  and  duties of the  retiring
Collateral Agent under this Agreement,  and the retiring  Collateral Agent shall
thereupon be discharged  from its duties and  obligations  under this Agreement.
After any  retiring  Collateral  Agent's  resignation,  the  provisions  of this
Agreement  shall inure to its  benefit as to any actions  taken or omitted to be
taken by it under this Agreement while it was Collateral Agent.

            Section 15. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact.  If  Pledgor  shall  fail to do any act or  thing  that it has
covenanted  to do  hereunder  or any  warranty on the part of Pledgor  contained
herein shall be breached,  Collateral  Agent or any Secured Party may (but shall
not be  obligated  to) do the  same or cause  it to be done or  remedy  any such
breach,  and may,  following five Business Days' prior written notice to Pledgor
of its intention to do so, expend funds for such purpose. Any and all amounts so
expended  by  Collateral  Agent or such  Secured  Party shall be paid by Pledgor
within ten Business  Days after demand  therefor,  with  interest at the highest
rate then in effect  under the  Credit  Agreement  during  the  period  from and
including  the  date on  which  such  funds  were  so  expended  to the  date of
repayment.  Pledgor's  obligations  under  this  Section  15 shall  survive  the
termination of this Agreement and the discharge of Pledgor's  other  obligations
under this Agreement, the Credit

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -15-


Agreement,  any Interest Rate Agreement and the other Credit Documents.  Pledgor
hereby appoints  Collateral Agent its  attorney-in-fact,  with full authority in
the place and stead of Pledgor and in the name of Pledgor,  or  otherwise,  from
time to time in Collateral Agent's reasonable  discretion to take any action and
to execute any  instrument  consistent  with the terms of this Agreement and the
other Credit Documents which  Collateral Agent may deem reasonably  necessary or
advisable to accomplish the purposes of this  Agreement.  The foregoing grant of
authority is a power of attorney  coupled with an interest and such  appointment
shall be irrevocable for the term of this Agreement. Pledgor hereby ratifies all
that such attorney shall lawfully do or cause to be done by virtue hereof.

            Section 16.  Modification  in Writing.  No amendment,  modification,
supplement,  termination or waiver of or to any provision of this Agreement, nor
consent to any  departure by Pledgor  therefrom,  shall be effective  unless the
same  shall be done in  accordance  with the terms of the Credit  Agreement  and
unless in writing and signed by Collateral Agent. Any amendment, modification or
supplement of or to any provision of this Agreement, any waiver of any provision
of this  Agreement and any consent to any departure by Pledgor from the terms of
any provision of this Agreement shall be effective only in the specific instance
and for the  specific  purpose for which made or given.  Except  where notice is
specifically  required by this Agreement or any other Credit Document, no notice
to or  demand on  Pledgor  in any case  shall  entitle  Pledgor  to any other or
further notice or demand in similar or other circumstances.

            Section 17. Termination;  Release.  When all the Secured Obligations
have been paid in full and the  Commitments  of the Banks to make any Loan or to
issue any Letter of Credit under the Credit Agreement shall have expired or been
sooner  terminated,  this Agreement shall  terminate.  Upon  termination of this
Agreement or any release of Pledged Collateral in accordance with the provisions
of the Credit  Agreement,  Collateral  Agent shall,  upon the request and at the
sole cost and  expense of Pledgor,  forthwith  assign,  transfer  and deliver to
Pledgor,  against  receipt  and without  recourse  to or warranty by  Collateral
Agent, such of the Pledged  Collateral to be released (in the case of a release)
as may be in the possession of Collateral  Agent and as shall not have been sold
or otherwise  applied  pursuant to the terms  hereof,  and,  with respect to any
other  Pledged  Collateral,   proper  instruments   (including  UCC  termination
statements on Form UCC-3) acknowledging the termination of this Agreement or the
release of such Pledged Collateral, as the case may be.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -16-


            Section 18.  Notices.  Unless  otherwise  provided  herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner set forth in the Credit  Agreement,  as
to either party addressed to it at the address set forth in the Credit Agreement
or at such  other  address  as shall be  designated  by such  party in a written
notice  to the  other  party  complying  as to  delivery  with the terms of this
Section 18;  provided  that notices to  Collateral  Agent shall not be effective
until received by Collateral Agent.

            Section 19. Continuing Security Interest; Assignment. This Agreement
shall create a continuing  security interest in the Pledged Collateral and shall
(i) be binding upon Pledgor, its successors and assigns and (ii) inure, together
with the rights and remedies of Collateral  Agent  hereunder,  to the benefit of
Collateral  Agent and the other  Secured  Parties  and each of their  respective
successors,  transferees  and  assigns;  no other  Persons  (including,  without
limitation, any other creditor of Pledgor) shall have any interest herein or any
right or benefit with respect  hereto.  Without  limiting the  generality of the
foregoing   clause  (ii),  any  Bank  may  assign  or  otherwise   transfer  any
indebtedness held by it secured by this Agreement to any other Person,  and such
other  Person  shall  thereupon  become  vested with all the benefits in respect
thereof  granted to such Bank,  herein or  otherwise,  subject  however,  to the
provisions of the Credit Agreement and any applicable Interest Rate Agreement.

            Section 20. GOVERNING LAW; TERMS.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS  OF THE  PARTIES  HEREUNDER  SHALL  BE  CONSTRUED  AND  ENFORCED  IN
ACCORDANCE  WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN,  EXCEPT TO THE EXTENT THAT
THE VALIDITY OR  PERFECTION  OF THE  SECURITY  INTEREST  HEREUNDER,  OR REMEDIES
HEREUNDER,  IN RESPECT OF ANY PARTICULAR  PROPERTY ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.

            Section 21. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  (a) Any
legal action or proceeding  with respect to this Agreement may be brought in the
courts  of the  State  of New  York or of the  United  States  for the  Southern
District of New York, and, by execution and delivery of this Agreement,  Pledgor
hereby irrevocably accepts for itself and in respect of its property,  generally
and  unconditionally,  the  non-exclusive  jurisdiction of the aforesaid courts.
Pledgor further irrevocably consents to the service of process out of any of the
aforementioned  courts in any such action or proceeding by the mailing of copies
thereof by  registered or certified  mail,  postage  prepaid,  to Pledgor at its
address for notices  pursuant to the Credit  Agreement,  such  service to become
effective 30 days after such mailing. Pledgor hereby

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -17-


irrevocably  appoints CT Corporation  System having an address at 1633 Broadway,
New York,  New York 10019 and such other persons as may hereafter be selected by
Borrower  irrevocably  agreeing  in writing to serve as its agent for service of
process in respect of any such action or proceeding. Nothing herein shall affect
the right of Collateral  Agent to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against Pledgor in any
other jurisdiction.

            (b) Pledgor hereby irrevocably waives any objection which it may now
or  hereafter  have to the  laying of venue of any of the  aforesaid  actions or
proceedings  arising out of or in connection with this Agreement  brought in the
courts referred to in clause (a) above and hereby further irrevocably waives and
agrees  not to  plead  or claim in any  such  court  that  any  such  action  or
proceeding brought in any such court has been brought in an inconvenient forum.

            Section  22.  Severability  of  Provisions.  Any  provision  of this
Agreement which is prohibited or unenforceable in any jurisdiction  shall, as to
such  jurisdiction,  be  ineffective  to  the  extent  of  such  prohibition  or
unenforceability   without  invalidating  the  remaining  provisions  hereof  or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.

            Section  23.  Execution  in  Counterparts.  This  Agreement  and any
amendments,  waivers,  consents  or  supplements  hereto may be  executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered  shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.

            Section 24.  Headings.  The Section headings used in this
Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.

            Section 25.  Obligations Absolute.  All obligations of
Pledgor hereunder shall be absolute and unconditional irrespective
of:

             (i)  any bankruptcy, insolvency, reorganization,
      arrangement, readjustment, composition, liquidation or the
      like of Pledgor or any other Credit Party;

            (ii) any lack of validity or enforceability of the Credit Agreement,
      any  Interest  Rate  Agreement,  any  Letter of Credit,  any other  Credit
      Document, or any other agreement or instrument relating thereto;


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -18-


           (iii) any change in the time,  manner or place of  payment  of, or in
      any other term of,  all or any of the  Secured  Obligations,  or any other
      amendment  or waiver of or any  consent to any  departure  from the Credit
      Agreement,  any Interest Rate Agreement,  any Letter of Credit,  any other
      Credit Document, or any other agreement or instrument relating thereto;

            (iv)  any  exchange,   release  or   non-perfection   of  any  other
      collateral,  or any  release or  amendment  or waiver of or consent to any
      departure from any guarantee, for all or any of the Secured Obligations;

             (v) any  exercise  or  non-exercise,  or any  waiver of any  right,
      remedy,  power or  privilege  under or in  respect of this  Agreement  any
      Interest  Rate   Agreement,   or  any  other  Credit  Document  except  as
      specifically  set forth in a waiver granted  pursuant to the provisions of
      Section 17 hereof; or

            (vi)  any other circumstance or happening whatsoever that
      is similar to any of the foregoing.

            Section 26.  Collateral  Agent's  Right to Sever  Indebtedness.  (a)
Pledgor  acknowledges  that (i) the Pledged  Collateral  does not constitute the
sole  source  of  security  for  the  payment  and  performance  of the  Secured
Obligations and that the Secured  Obligations are also secured by other types of
property  of  Pledgor  and its  Affiliates  in  other  jurisdictions  (all  such
property, collectively, the "Collateral"), (ii) the number of such jurisdictions
and the nature of the  transaction  of which this  instrument is a part are such
that it would have been  impracticable  for the parties to allocate to each item
of  Collateral  a specific  loan amount and to execute in respect of such item a
separate credit agreement,  and (iii) Pledgor intends that Collateral Agent have
the  same  rights  with  respect  to the  Pledged  Collateral,  in any  judicial
proceeding  relating  to the  exercise  of any  right  or  remedy  hereunder  or
otherwise,  that Collateral  Agent would have had if each item of Collateral had
been pledged or encumbered  pursuant to a separate credit agreement and security
instrument. In furtherance of such intent, Pledgor agrees to the greatest extent
permitted by law that Collateral Agent may at any time by notice (an "Allocation
Notice")  to  Pledgor  allocate  a  portion  of  the  Secured  Obligations  (the
"Allocated Indebtedness") to the Pledged Collateral and sever from the remaining
Secured Obligations the Allocated Indebtedness.  From and after the giving of an
Allocation  Notice  with  respect  to  the  Pledged   Collateral,   the  Secured
Obligations hereunder shall be limited to the extent set forth in the Allocation
Notice and (as so limited) shall,  for all purposes,  be construed as a separate
credit obligation of Pledgor unrelated

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -19-


to the other  transactions  contemplated by the Credit  Agreement,  any Interest
Rate  Agreement,  any other  Credit  Document  or any  document  related  to any
thereof.  To the extent that the proceeds of any judicial proceeding relating to
the exercise of any right or remedy  hereunder of the Pledged  Collateral  shall
exceed the Allocated  Indebtedness,  such  proceeds  shall belong to Pledgor and
shall not be available  hereunder to satisfy any Secured  Obligations of Pledgor
other than the Allocated  Indebtedness.  In any action or proceeding to exercise
any right or remedy under this Agreement  which is commenced after the giving by
Collateral  Agent  of an  Allocation  Notice,  the  Allocation  Notice  shall be
conclusive proof of the limits of the Secured  Obligations  hereby secured,  and
Pledgor may introduce,  by way of defense or  counterclaim,  evidence thereof in
any such action or proceeding. Notwithstanding any provision of this Section 26,
the proceeds  received by Collateral  Agent pursuant to this Agreement  shall be
applied by  Collateral  Agent in  accordance  with the  provisions of Section 11
hereof.

            (b) Pledgor hereby waives to the greatest extent permitted under law
the right to a discharge of any of the Secured  Obligations under any statute or
rule of law now or hereafter in effect which  provides  that the exercise of any
particular  right or remedy as provided for herein (by judicial  proceedings  or
otherwise)  constitutes  the  exclusive  means for  satisfaction  of the Secured
Obligations or which makes  unavailable any further  judgment or any other right
or remedy provided for herein because  Collateral  Agent elected to proceed with
the  exercise  of such  initial  right or remedy or  because  of any  failure by
Collateral  Agent  to  comply  with  laws  that  prescribe   conditions  to  the
entitlement to such subsequent  judgment or the  availability of such subsequent
right or remedy. In the event that,  notwithstanding  the foregoing waiver,  any
court shall for any reason hold that such  subsequent  judgment or action is not
available to  Collateral  Agent,  Pledgor  shall not (i)  introduce in any other
jurisdiction any judgment so holding as a defense to enforcement against Pledgor
of any remedy in the Credit Agreement,  any Interest Rate Agreement or any other
Credit Document or (ii) seek to have such judgment  recognized or entered in any
other  jurisdiction,  and any such  judgment  shall in all  events be limited in
application  only to the  state or  jurisdiction  where  rendered  and only with
respect to the collateral referred to in such judgment.

            (c) In the event any instrument in addition to the Allocation Notice
is necessary to effectuate the provisions of this Section 26, including, without
limitation,  any amendment to this Agreement,  any substitute promissory note or
affidavit or certificate of any kind,  Collateral  Agent may execute and deliver
such instrument as the  attorney-in-fact  of Pledgor.  Such power of attorney is
coupled with an interest and is irrevocable.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                    -20-



            (d) Notwithstanding  anything set forth herein to the contrary,  the
provisions  of this  Section 26 shall be  effective  only to the maximum  extent
permitted by law.

            Section 27.  Future Advances.  This Agreement shall
secure the payment of any amounts advanced from time to time
pursuant to the Credit Agreement.



DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>



            IN WITNESS  WHEREOF,  Pledgor and Collateral  Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.


                                    CARSON PRODUCTS COMPANY,
                                      as Pledgor


                                    By:
                                        Name:
                                        Title:


                        BANQUE INDOSUEZ, NEW YORK BRANCH,
                                      as Collateral Agent


                                    By:
                                        Name:
                                        Title:


                                    By:
                                        Name:
                                        Title:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>



                                  SCHEDULE I


                                Pledged Shares


                                                                  PERCENTAGE OF
                                                                  ALL CAPITAL OR
                                             CERTIFI-    NUMBER   OTHER EQUITY
                           CLASS      PAR    CATE        OF       INTERESTS OF
ISSUER                     OF STOCK   VALUE  NO(S).      SHARES   ISSUER

Fine Products Company      Capital    None       4        2,000,000    100%

Carson Holdings            Common     R.01   1,611       29,450,000     73.125%
  Limited                             (one
                                      cent)

Carson Botswana            Common     P1         3           99         99%
(Proprietary) Limited





DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>



                                     SCHEDULE II


                                 Intercompany Notes


                           PRINCIPAL         DATE OF     INTEREST      MATURITY
ISSUER                     AMOUNT            ISSUANCE    RATE          DATE

NONE



DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>



                                      EXHIBIT 1

                                  PLEDGE AMENDMENT


            This Pledge Amendment,  dated ______________,  is delivered pursuant
to Section 5 of the Agreement  referred to below. The undersigned  hereby agrees
that this Pledge  Amendment  may be attached to the Borrower  Securities  Pledge
Agreement,  dated as of October __,  1996,  between the  undersigned  and Banque
Indosuez,  New York Branch,  as Collateral Agent (the  "Agreement";  capitalized
terms used herein and not defined  shall have the  meanings  assigned to them in
the Agreement) and that the Pledged Shares and/or  Intercompany  Notes listed on
this Pledge Amendment shall be deemed to be and shall become part of the Pledged
Collateral and shall secure all Secured Obligations.


                                    CARSON PRODUCTS COMPANY,
                                      as Pledgor


                                    By:
                                          Name:
                                          Title:



DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>



                                   Pledged Shares


                                                                 PERCENTAGE OF
                                                                 ALL CAPITAL OR
                                                                 OTHER EQUITY
          CLASS OF    PAR       CERTIFICATE        NUMBER        INTERESTS OF
ISSUER    STOCK       VALUE        NO(S).          OF SHARES     ISSUER




DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>


                                 Intercompany Notes


               PRINCIPAL      DATE OF        INTEREST     MATURITY
ISSUER         AMOUNT         ISSUANCE       RATE         DATE


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141481

<PAGE>



                                                            Exhibit F-2 to the
                                                             Credit Agreement


                     HOLDINGS SECURITIES PLEDGE AGREEMENT


            HOLDINGS SECURITIES PLEDGE AGREEMENT (the "Agreement"),  dated as of
October 18, 1996, made by CARSON,  INC. (formerly DNL Savannah Holding Corp.), a
Delaware corporation having an office at 64 Ross Road,  Savannah,  Georgia 31405
("Pledgor"),  in favor of BANQUE INDOSUEZ,  NEW YORK BRANCH, having an office at
1211 Avenue of the Americas,  7th Floor,  New York, New York 10036,  as pledgee,
assignee  and  secured  party,  in its  capacity  as  collateral  agent (in such
capacities  and together  with any  successors in such  capacities,  "Collateral
Agent") for the lending  institutions  (the  "Banks") from time to time party to
the Credit Agreement (as hereinafter defined).

                               R E C I T A L S :

            A.  Pursuant  to a certain  credit  agreement,  dated as of the date
hereof (as amended,  amended and restated,  supplemented  or otherwise  modified
from time to time, the "Credit Agreement"; capitalized terms used herein and not
defined shall have the meanings assigned to them in the Credit Agreement), among
Carson Products Company (the  "Borrower"),  the Banks and Banque  Indosuez,  New
York Branch,  as Agent and Collateral Agent for the Banks, the Banks have agreed
(i) to make to or for the account of the Borrower  certain A Term Loans up to an
aggregate  principal  amount  of  $15,000,000,  certain  B Term  Loans  up to an
aggregate  principal amount of $10,000,000 and certain  Revolving Loans up to an
aggregate  principal  amount of $15,000,000 and (ii) to issue certain Letters of
Credit for the account of the Borrower.

            B. It is  contemplated  that the Borrower may enter into one or more
agreements with one or more of the Banks ("Interest Rate Agreements") fixing the
interest rates with respect to Loans under the Credit Agreement (all obligations
of the  Borrower  now existing or hereafter  arising  under such  Interest  Rate
Agreements, collectively, the "Interest Rate Obligations").

            C.    Pledgor is the legal and beneficial owner of the
Pledged Collateral (as hereinafter defined).

            D. Pledgor has executed and delivered to Collateral  Agent a certain
guarantee  instrument (the "Guarantee")  pursuant to which,  among other things,
Pledgor  has  guaranteed  the  obligations  of the  Borrower  under  the  Credit
Agreement and under any Interest Rate Agreements,  and Pledgor desires that such
Guarantee be secured hereunder.


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -2-



            E. It is a  condition  to the  obligations  of the Banks to make the
Loans under the Credit  Agreement and a condition to any Bank issuing Letters of
Credit under the Credit  Agreement or entering into the Interest Rate Agreements
that Pledgor execute and deliver the applicable Credit Documents, including this
Agreement.

            F. This  Agreement is given by Pledgor in favor of Collateral  Agent
for its benefit and the  benefit of the Banks and the Agent  (collectively,  the
"Secured  Parties") to secure the payment and  performance of all of the Secured
Obligations (as defined in Section 2).

                              A G R E E M E N T :

            NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Collateral Agent hereby agree as follows:

            Section 1.  Pledge.  As  collateral  security  for the  payment  and
performance  when due of all the Secured  Obligations,  Pledgor hereby  pledges,
assigns,  transfers  and  grants to  Collateral  Agent for its  benefit  and the
benefit of the Secured Parties, a continuing first priority security interest in
and to all of the right,  title and  interest  of  Pledgor  in, to and under the
following  property,  whether now existing or hereafter acquired  (collectively,
the "Pledged Collateral"):

            (a) issued and  outstanding  shares of capital  stock of each Person
      described in Schedule I hereto (the "Pledged Shares") (which are and shall
      remain at all times until this Agreement terminates, certificated shares),
      including  the  certificates  representing  the  Pledged  Shares  and  any
      interest  of  Pledgor  in the  entries  on  the  books  of  any  financial
      intermediary pertaining to the Pledged Shares;

            (b) all  additional  shares of  capital  stock of any  issuer of the
      Pledged  Shares from time to time acquired by Pledgor in any manner (which
      are and  shall  remain  at all  times  until  this  Agreement  terminates,
      certificated  shares)  (which  shares  shall be  deemed  to be part of the
      Pledged Shares),  including the certificates  representing such additional
      shares and any  interest  of  Pledgor  in the  entries on the books of any
      financial intermediary pertaining to such additional shares;

            (c) all dividends,  cash, options,  warrants,  rights,  instruments,
      distributions,  returns of capital,  income,  profits and other  property,
      interests or proceeds from time to

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -3-



      time received, receivable or otherwise distributed to Pledgor
      in respect of or in exchange for any or all of the Pledged
      Shares (collectively, "Distributions"); and

            (d) all  "proceeds"  (as such  term is  defined  in the UCC or under
      other relevant law) of any of the foregoing.

            Section 2. Secured  Obligations.  This  Agreement  secures,  and the
Pledged  Collateral is collateral  security for, the payment and  performance in
full  when due,  whether  at  stated  maturity,  by  acceleration  or  otherwise
(including,  without limitation, the payment of interest and other amounts which
would  accrue and become due but for the filing of a petition in  bankruptcy  or
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C.  ss.  362(a)) of (i) all  Obligations  of Pledgor  under the Guarantee
(including, without limitation, Pledgor's obligation provided for therein to pay
principal,  interest  and  all  other  charges,  fees,  expenses,   commissions,
reimbursements,  premiums,  indemnities  and  other  payments  related  to or in
respect of the Obligations  contained in the Guarantee,  (ii) all Obligations of
the Borrower now existing or hereafter  arising  under the Credit  Agreement and
all Interest Rate Obligations of the Borrower now existing or hereafter  arising
under any Interest Rate  Agreement  (including,  without  limitation,  Pledgor's
obligation  provided  for  therein  to pay  principal,  interest  and all  other
charges, fees, expenses, commissions,  reimbursements, premiums, indemnities and
other  payments  related to or in respect of the  Obligations  contained  in the
Credit Agreement and the obligations  contained in any Interest Rate Agreement),
and (iii) without  duplication of the amounts described in clauses (i) and (ii),
all  obligations  of  Pledgor  now  existing  or  hereafter  arising  under this
Agreement or any other Security Document,  including,  without limitation,  with
respect to all charges, fees, expenses, commissions,  reimbursements,  premiums,
indemnities  and other  payments  that  Pledgor is  obligated  to pay under this
Agreement or any other Security  Document (the obligations  described in clauses
(i), (ii) and (iii), collectively, the "Secured Obligations").

            Section 3. No  Release.  Nothing set forth in this  Agreement  shall
relieve  Pledgor  from the  performance  of any  term,  covenant,  condition  or
agreement on Pledgor's  part to be performed or observed  under or in respect of
any of the Pledged  Collateral  or from any  liability to any Person under or in
respect of any of the  Pledged  Collateral  or shall  impose any  obligation  on
Collateral  Agent or any  Secured  Party to perform  or  observe  any such term,
covenant,  condition  or  agreement  on  Pledgor's  part to be so  performed  or
observed or shall impose any liability on Collateral  Agent or any Secured Party
for any act or omission on the part of

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -4-



Pledgor relating thereto or for any breach of any  representation or warranty on
the part of Pledgor contained in this Agreement,  any Interest Rate Agreement or
any other Credit  Document or under or in respect of the Pledged  Collateral  or
made in connection  herewith or therewith.  The obligations of Pledgor contained
in this  Section 3 shall  survive  the  termination  of this  Agreement  and the
discharge of Pledgor's other obligations under this Agreement, any Interest Rate
Agreement and the other Credit Documents.

            Section 4.  Delivery of Pledged Collateral.

            (a) All  certificates,  agreements or  instruments  representing  or
evidencing the Pledged  Collateral,  to the extent not  previously  delivered to
Collateral Agent, shall immediately upon receipt thereof by Pledgor be delivered
to and held by or on behalf of Collateral  Agent  pursuant  hereto.  All Pledged
Collateral  shall be in  suitable  form for  transfer  by  delivery  or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance  reasonably  satisfactory to Collateral Agent.  Collateral
Agent  shall  have the  right,  at any time upon the  occurrence  of an Event of
Default and without notice to Pledgor, to endorse,  assign or otherwise transfer
to or to register in the name of Collateral  Agent or any of its nominees any or
all of the Pledged  Collateral.  In  addition,  Collateral  Agent shall have the
right at any time to exchange  certificates  representing or evidencing  Pledged
Collateral for certificates of smaller or larger denominations.

            (b)  If  the  issuer  of  Pledged  Shares  is   incorporated   in  a
jurisdiction  which does not permit the use of  certificates  to evidence equity
ownership, then Pledgor shall, to the extent permitted by applicable law, record
such pledge on the stock  register of the issuer,  execute any  customary  stock
pledge forms or other documents  necessary or appropriate to complete the pledge
and give  Collateral  Agent the right to transfer such Pledged  Shares under the
terms hereof and provide to Collateral Agent an opinion of counsel,  in form and
substance reasonably satisfactory to Collateral Agent, confirming such pledge.

            Section 5.  Supplements, Further Assurances.

            (a) Pledgor  agrees  that at any time and from time to time,  at the
sole cost and expense of Pledgor, Pledgor shall promptly execute and deliver all
further instruments and documents,  including, without limitation,  supplemental
or additional UCC-1 financing  statements,  and take all further action that may
be  necessary  or that  Collateral  Agent may  reasonably  request,  in order to
perfect and protect the pledge, security interest and Lien

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -5-



granted or  purported  to be  granted  hereby or to enable  Collateral  Agent to
exercise  and  enforce its rights and  remedies  hereunder  with  respect to any
Pledged Collateral.

            (b) Pledgor shall,  upon obtaining any Pledged Shares of any Person,
promptly  (and in any event within five  Business  Days)  deliver to  Collateral
Agent a pledge amendment, duly executed by Pledgor, in substantially the form of
Exhibit 1 hereto  (each,  a "Pledge  Amendment"),  in respect of the  additional
Pledged  Shares  which  are  to be  pledged  pursuant  to  this  Agreement,  and
confirming  the  attachment of the Lien hereby created on and in respect of such
additional  shares.  Pledgor hereby  authorizes  Collateral Agent to attach each
Pledge  Amendment to this Agreement and agrees that all Pledged Shares listed on
any Pledge  Amendment  delivered  to  Collateral  Agent  shall for all  purposes
hereunder be considered Pledged Collateral.

            Section 6.  Representations, Warranties and Covenants.
Pledgor represents, warrants and covenants as follows:

            (a) No Liens.  Pledgor is as of the date hereof,  and at the time of
      any delivery of any Pledged  Collateral  to Collateral  Agent  pursuant to
      Section  4 of  this  Agreement,  Pledgor  will  be,  the  sole  legal  and
      beneficial owner of the Pledged  Collateral.  All Pledged Collateral is on
      the date  hereof,  and will be, so owned by Pledgor  free and clear of any
      Lien except for the Lien created by this  Agreement  and Liens of the type
      described in paragraph (a) of the definition of Permitted Encumbrances.

            (b)  Authorization,   Enforceability.   Pledgor  has  the  requisite
      corporate power,  authority and legal right to pledge and grant a security
      interest in all the Pledged  Collateral  pursuant to this  Agreement,  and
      this  Agreement  constitutes  the legal,  valid and binding  obligation of
      Pledgor,  enforceable against Pledgor in accordance with its terms, except
      as may be limited by bankruptcy, insolvency, reorganization, moratorium or
      similar laws  relating to or affecting  creditors'  rights  generally  and
      except as such enforceability may be limited by the application of general
      principles  of  equity  (regardless  of  whether  such  enforceability  is
      considered in a proceeding in equity or at law).

            (c) No Consents,  etc. No consent of any party  (including,  without
      limitation,   stockholders  or  creditors  of  Pledgor)  and  no  consent,
      authorization,  approval,  license or other action by, and no notice to or
      filing with, any Governmental Authority or regulatory body or other Person
      is

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -6-



      required for (x) the pledge by Pledgor of the Pledged Collateral  pursuant
      to this  Agreement or for the  execution,  delivery or performance of this
      Agreement by Pledgor,  (y) the exercise by Collateral  Agent of the voting
      or other  rights  provided for in this  Agreement,  or (z) the exercise by
      Collateral  Agent of the  remedies  in respect of the  Pledged  Collateral
      pursuant to this  Agreement  (other than those  consents,  authorizations,
      approvals,  actions,  notices or filings  which,  if not obtained or made,
      would not have a material  adverse effect upon the interests of Collateral
      Agent under this Agreement).

            (d) Due Authorization  and Issuance.  All of the Pledged Shares have
      been, and to the extent  hereafter  issued will be upon such pledge,  duly
      authorized and validly issued and fully paid and nonassessable.

            (e) Chief Executive  Office.  Pledgor's  chief  executive  office is
      located at 64 Ross Road,  Savannah,  Georgia 31405. Pledgor shall not move
      its chief  executive  office  except to such new  location  as Pledgor may
      establish  in  accordance  with the last  sentence of this  Section  6(e).
      Pledgor shall not establish a new location for its chief executive  office
      nor shall it change  its name  until (i) it shall  have  given  Collateral
      Agent not less than 45 days' prior  written  notice of its intention so to
      do, clearly  describing such new location or name and providing such other
      information  in connection  therewith as  Collateral  Agent or any Secured
      Party may  request,  and (ii) with  respect to such new  location or name,
      Pledgor shall have taken all action  satisfactory to Collateral  Agent and
      the  Secured  Parties to  maintain  the  perfection  and  priority  of the
      security  interest  of  Collateral  Agent for the  benefit of the  Secured
      Parties in the Pledged Collateral intended to be granted hereby.

            (f) Delivery of Pledged Collateral;  Filings.  Pledgor has delivered
      to Collateral Agent all  certificates  representing the Pledged Shares and
      has delivered to Collateral Agent appropriate  UCC-1 financing  statements
      to be filed  with the  Secretary  of State of the  States  of New York and
      Georgia,  the State in which  the chief  executive  office of  Pledgor  is
      located, evidencing the Lien created by this Agreement, and such delivery,
      filing and pledge of the Pledged  Collateral  pursuant  to this  Agreement
      will create a valid and perfected first priority  security interest in the
      Pledged  Collateral  securing  the  payment  of  the  Secured  Obligations
      pursuant to the UCC in effect in each applicable jurisdiction,  including,
      without limitation, the States of New York and Georgia.

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -7-



            (g) Pledged Collateral.  All information set forth herein, including
      the  Schedules  annexed  hereto,  and  all  information  contained  in any
      documents,  schedules and lists heretofore  delivered to any Secured Party
      in connection with this Agreement,  in each case,  relating to the Pledged
      Collateral is accurate and complete in all material respects.

            (h)  No  Violations,  etc.  The  pledge  of the  Pledged  Collateral
      pursuant to this Agreement does not violate Regulation G, T, U or X of the
      Federal Reserve Board.

            (i)   Ownership of Pledged Collateral.  Except as
      otherwise permitted by the Credit Agreement, Pledgor at all
      times will be the sole beneficial owner of the Pledged
      Collateral.

            (j) No  Options,  Warrants,  etc.  There are no  options,  warrants,
      calls, rights, commitments or agreements of any character to which Pledgor
      is a party or by which it is bound  obligating  Pledgor to deliver or sell
      or cause to be issued,  delivered or sold,  additional  Pledged  Shares or
      obligating  Pledgor  to  grant,  extend  or enter  into  any such  option,
      warrant, call, right, commitment or agreement.  There are no voting trusts
      or other  agreements  or  understandings  to which Pledgor is a party with
      respect to the voting of the  capital  stock of any issuer of the  Pledged
      Shares.

            Section 7.  Voting Rights; Distributions; etc.

            (a)   So long as no Event of Default shall have occurred
and be continuing:

            (i) Pledgor  shall be  entitled  to exercise  any and all voting and
      other  consensual  rights  pertaining  to the  Pledged  Shares or any part
      thereof for any purpose not inconsistent with the terms or purpose of this
      Agreement or any other Credit Document;  provided,  however,  that Pledgor
      shall not in any event exercise such rights in any manner which may have a
      material  adverse  effect on the value of the  Pledged  Collateral  or the
      security intended to be provided by this Agreement.

          (ii) Subject to the terms of the Credit  Agreement,  Pledgor  shall be
      entitled to receive and retain,  and to utilize free and clear of the Lien
      of  this  Agreement,  any and all  Distributions,  but  only if and to the
      extent made in accordance  with the  provisions  of the Credit  Agreement;
      provided,  however,  that any and all  such  Distributions  consisting  of
      rights or interests in the form of securities

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -8-



      shall be, and shall be forthwith  delivered to Collateral Agent to hold as
      Pledged Collateral and shall, if received by Pledgor, be received in trust
      for the benefit of Collateral Agent, be segregated from the other property
      or funds of Pledgor,  and be forthwith  delivered to  Collateral  Agent as
      Pledged  Collateral  in the same form as so received  (with any  necessary
      endorsement).

         (iii)  Collateral  Agent  shall be  deemed  without  further  action or
      formality to have granted to Pledgor all  necessary  consents  relating to
      voting rights and shall, if necessary, upon written request of Pledgor and
      at Pledgor's sole cost and expense,  from time to time execute and deliver
      (or cause to be executed and delivered) to Pledgor all such instruments as
      Pledgor may reasonably  request in order to permit Pledgor to exercise the
      voting and other  rights  which it is  entitled  to  exercise  pursuant to
      Section  7(a)(i)  hereof  and to  receive  the  Distributions  which it is
      authorized to receive and retain pursuant to Section 7(a)(ii) hereof.

            (b)   Upon the occurrence and during the continuance of an
Event of Default:

            (i)  All  rights  of  Pledgor  to  exercise  the  voting  and  other
      consensual  rights it would otherwise be entitled to exercise  pursuant to
      Section  7(a)(i)  hereof  without  any  action or the giving of any notice
      shall  cease,  and all  such  rights  shall  thereupon  become  vested  in
      Collateral  Agent,  which shall  thereupon have the sole right to exercise
      such voting and other consensual rights.

          (ii) All rights of Pledgor  to  receive  Distributions  which it would
      otherwise be authorized to receive and retain pursuant to Section 7(a)(ii)
      hereof shall cease and all such rights shall  thereupon  become  vested in
      Collateral Agent, which shall thereupon have the sole right to receive and
      hold as Pledged  Collateral  such  Distributions;  provided,  that if such
      Event of  Default is cured,  any such  Distributions  theretofore  paid to
      Collateral Agent shall,  upon the request of Pledgor (except to the extent
      theretofore applied to the Secured Obligations), be returned by Collateral
      Agent to Pledgor.

            (c) Pledgor shall,  at its sole cost and expense,  from time to time
execute and deliver to Collateral  Agent  appropriate  instruments as Collateral
Agent may reasonably request in order to permit Collateral Agent to exercise the
voting and other rights which it may be entitled to exercise pursuant to Section
7(b)(i)

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -9-



hereof and to receive  all  Distributions  which it may be  entitled  to receive
under Section 7(b)(ii) hereof.

            (d) All Distributions  which are received by Pledgor contrary to the
provisions of Section 7(b)(ii) hereof shall be received in trust for the benefit
of Collateral  Agent,  shall be segregated from other funds of Pledgor and shall
immediately be paid over to Collateral  Agent as Pledged  Collateral in the same
form as so received (with any necessary endorsement).

            Section 8.  Transfers and Other Liens; Additional Shares;
Principal Office.

            (a) Pledgor shall not (i) sell, convey,  assign or otherwise dispose
of, or grant any option,  right or warrant  with  respect to, any of the Pledged
Collateral except as permitted by the Credit Agreement, (ii) create or permit to
exist any Lien upon or with  respect to any  Pledged  Collateral  other than the
Lien  and  security  interest  granted  to  Collateral  Agent  pursuant  to this
Agreement and Liens of the type  described in paragraph (a) of the definition of
Permitted  Encumbrances,  or (iii)  permit any issuer of the  Pledged  Shares to
merge,  consolidate or change its legal form,  except as permitted by the Credit
Agreement  unless  all of the  outstanding  capital  stock of the  surviving  or
resulting  corporation is, upon such merger or consolidation,  pledged hereunder
and no cash,  securities  or other  property  is  distributed  in respect of the
outstanding shares of any other constituent corporation.  The preceding sentence
shall  not  apply to any sale or other  disposition  of all of the  stock of the
issuer of Pledged  Shares which is in compliance  with the Credit  Agreement and
the  proceeds  of which sale or other  disposition  are used to make a mandatory
prepayment  of the Loans  pursuant to Section  3.02(A) of the Credit  Agreement.
Upon such sale or other disposition,  such Pledged Shares shall be released from
the Lien of this Agreement in accordance with Section 17 of this Agreement.

            (b) Pledgor shall (i) cause each issuer of the Pledged Shares not to
issue any stock or other  securities in addition to or in  substitution  for the
Pledged  Shares  issued by such issuer,  except to Pledgor,  unless  required by
applicable  law, and (ii) pledge  hereunder,  immediately  upon its  acquisition
(directly or indirectly) thereof, any and all additional shares of capital stock
or other  equity  securities  of the  issuer  of the  Pledged  Shares  which are
required to be pledged hereunder.


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -10-



            Section 9. Reasonable Care. Collateral Agent shall be deemed to have
exercised  reasonable  care  in the  custody  and  preservation  of the  Pledged
Collateral in its  possession if such Pledged  Collateral is accorded  treatment
substantially  equivalent  to that which  Collateral  Agent,  in its  individual
capacity,  accords  its  own  property  consisting  of  similar  instruments  or
interests,  it being  understood  that neither  Collateral  Agent nor any of the
Secured Parties shall have  responsibility for (i) ascertaining or taking action
with  respect to calls,  conversions,  exchanges,  maturities,  tenders or other
matters relating to any Pledged  Collateral,  whether or not Collateral Agent or
any other Secured Party has or is deemed to have  knowledge of such matters,  or
(ii)  taking any  necessary  steps to  preserve  rights  against any Person with
respect to any Pledged Collateral.

            Section 10.  Remedies Upon Default; Decisions Relating to
Exercise of Remedies.

            (a) If an Event of Default  shall have  occurred and be  continuing,
and the Secured  Obligations  have been  declared due and payable in  accordance
with the Credit Agreement, Collateral Agent shall have the right, in addition to
other rights and remedies provided for herein or otherwise available to it to be
exercised  from time to time, (i) to retain and apply the  Distributions  to the
Secured  Obligations as provided in Section 11 hereof,  and (ii) to exercise all
the rights and remedies of a secured party on default under the UCC in effect in
the State of New York at that time,  and  Collateral  Agent may also in its sole
discretion,   without  notice  except  as  specified  below,  sell  the  Pledged
Collateral  or any part  thereof  (including,  without  limitation,  any partial
interest  in the  Pledged  Shares)  in one or more  parcels at public or private
sale, at any exchange, broker's board or at any of Collateral Agent's offices or
elsewhere,  for cash,  on credit or for  future  delivery,  and at such price or
prices  and upon such  other  terms as  Collateral  Agent may deem  commercially
reasonable,  irrespective of the impact of any such sales on the market price of
the Pledged  Collateral.  Collateral  Agent or any other Secured Party or any of
their  respective  Affiliates  may be the purchaser of any or all of the Pledged
Collateral  at any such sale and shall be  entitled,  for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged  Collateral  sold at such sale,  to use and apply any of the Secured
Obligations  owed to such Person as a credit on account of the purchase price of
any Pledged  Collateral  payable by such Person at such sale.  Each purchaser at
any such sale shall acquire the property sold  absolutely free from any claim or
right on the part of Pledgor,  and Pledgor hereby waives,  to the fullest extent
permitted by law, all rights of redemption,  stay and/or  appraisal which it now
has or may at any

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -11-



time in the  future  have  under  any rule of law or  statute  now  existing  or
hereafter enacted. Pledgor acknowledges and agrees that, to the extent notice of
sale shall be required by law,  ten days notice to Pledgor of the time and place
of any public sale or the time after which any  private  sale or other  intended
disposition is to take place shall  constitute  reasonable  notification of such
matters.  No notification  need be given to Pledgor if it has signed,  after the
occurrence of an Event of Default, a statement renouncing or modifying any right
to notification of sale or other intended  disposition.  Collateral  Agent shall
not be obligated to make any sale of Pledged Collateral  regardless of notice of
sale having been given.  Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice,  be made at the time and place to which it was
so adjourned. Pledgor hereby waives, to the fullest extent permitted by law, any
claims against  Collateral Agent arising by reason of the fact that the price at
which any Pledged  Collateral may have been sold at such a private sale was less
than the  price  which  might  have  been  obtained  at a public  sale,  even if
Collateral  Agent  accepts  the first  offer  received  and does not offer  such
Pledged  Collateral  to more than one  offeree.  Collateral  Agent  shall not be
liable for any incorrect or improper payment made pursuant to this Section 10 in
the absence of gross negligence or willful misconduct.

            (b)  Pledgor  recognizes  that,  by reason of  certain  prohibitions
contained in the Securities Act of 1933, as amended (the "Securities  Act"), and
applicable  state  securities  laws,  Collateral  Agent may be  compelled,  with
respect  to any  sale of all or any  part of the  Pledged  Collateral,  to limit
purchasers to Persons who will agree, among other things, to acquire the Pledged
Collateral  for their own  account,  for  investment  and not with a view to the
distribution or resale thereof. Pledgor acknowledges that any such private sales
may be at prices  and on terms less  favorable  to  Collateral  Agent than those
obtainable through a public sale without such restrictions  (including,  without
limitation,  a public  offering made pursuant to a registration  statement under
the Securities Act), and,  notwithstanding  such circumstances,  agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner and that  Collateral  Agent shall have no  obligation to engage in public
sales and no  obligation  to delay the sale of any  Pledged  Collateral  for the
period of time  necessary to permit the issuer thereof to register it for a form
of  public  sale  requiring  registration  under  the  Securities  Act or  under
applicable state securities laws, even if such issuer would agree to do so.


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -12-



            (c) If Collateral Agent determines to exercise its right to sell any
or all of the Pledged Collateral,  upon written request, Pledgor shall from time
to time furnish to Collateral Agent all such information as Collateral Agent may
request in order to determine the number of  securities  included in the Pledged
Collateral  which may be sold by Collateral Agent as exempt  transactions  under
the  Securities  Act and the rules of the  Securities  and  Exchange  Commission
thereunder, as the same are from time to time in effect.

            (d)  Pledgor  recognizes  that,  by reason of  certain  prohibitions
contained  in laws,  rules,  regulations  or orders of any foreign  Governmental
Authority, Collateral Agent may be compelled, with respect to any sale of all or
any part of the Pledged  Collateral,  to limit  purchasers to those who meet the
requirements of such foreign Governmental  Authority.  Pledgor acknowledges that
any such sales may be at prices and on terms less favorable to Collateral  Agent
than those  obtainable  through a public sale  without such  restrictions,  and,
notwithstanding  such circumstances,  agrees that any such restricted sale shall
be deemed to have been made in a commercially reasonable manner and that, except
as may be required by applicable law,  Collateral Agent shall have no obligation
to engage in public sales.

            (e) In addition to any of the other rights and  remedies  hereunder,
Collateral Agent shall have the right to institute a proceeding seeking specific
performance in connection with any of the agreements or obligations hereunder.

            Section 11.  Application of Proceeds.  All  Distributions  held from
time to time by Collateral  Agent and all proceeds  received by Collateral Agent
in respect of any sale of, collection from, or other realization upon all or any
part of the Pledged  Collateral  pursuant to the exercise by Collateral Agent of
its  remedies as a secured  creditor  as provided in Section 10 hereof  shall be
applied,  together with any other sums then held by Collateral Agent pursuant to
this Agreement, promptly by Collateral Agent as follows:

            First, to the payment of all costs and expenses,  fees,  commissions
      and  taxes  of such  sale,  collection  or other  realization,  including,
      without  limitation,   reasonable  out-of-pocket  costs  and  expenses  of
      Collateral Agent and its agents and counsel, and all expenses, liabilities
      and advances made or incurred by Collateral Agent in connection therewith;


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -13-



            Second, to the payment of all other costs and expenses of such sale,
      collection or other realization,  including reasonable out-of-pocket costs
      and  expenses  of the Banks and their  agents and  counsel  and all costs,
      liabilities  and  advances  made or  incurred  by the Banks in  connection
      therewith;

            Third,  to the  payment  in  full in  cash  of  Secured  Obligations
      consisting  of interest  and all amounts  other than  principal  under the
      Credit Agreement at any time and from time to time owing by Pledgor or the
      Borrower  under  or in  connection  with  the  Credit  Agreement,  ratably
      according to the unpaid  amounts  thereof,  in the manner and priority set
      forth in the Credit Agreement,  together with interest on each such amount
      in the manner and to the extent set forth in the Credit Agreement from and
      after the date such amount is due, owing or unpaid until paid in full;

            Fourth,  to the  pro  rata  payment  in  full  in  cash  of  Secured
      Obligations  consisting of (i) principal at any time and from time to time
      owing by Pledgor or the Borrower  under or in  connection  with the Credit
      Agreement,  ratably according to the unpaid amounts thereof, in the manner
      and priority set forth in the Credit  Agreement and (ii) the amount of the
      Borrower's  obligations  then due and  payable  under  any  Interest  Rate
      Agreement, including any early termination payments then due (exclusive of
      expenses or similar  liabilities to any Bank under the applicable Interest
      Rate  Agreement(s)),  together  with  interest  on each such amount in the
      manner and to the extent set forth in the Credit  Agreement from and after
      the date such amount is due, owing or unpaid until paid in full; and

            Fifth, the balance,  if any, to the Person lawfully entitled thereto
      (including Pledgor or its successors or assigns).

            Section 12.  Expenses.  Pledgor  will upon demand pay to  Collateral
Agent the amount of any and all  reasonable  expenses,  including the reasonable
fees and  expenses of its counsel and the  reasonable  fees and  expenses of any
experts and agents,  which Collateral Agent may incur in connection with (i) the
collection of the Secured  Obligations,  (ii) the enforcement and administration
of this  Agreement,  (iii)  the  custody  or  preservation  of,  or the sale of,
collection from, or other realization upon, any of the Pledged Collateral,  (iv)
the  exercise or  enforcement  of any of the rights of  Collateral  Agent or any
Secured Party  hereunder or (v) the failure by Pledgor to perform or observe any
of the provisions

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -14-



hereof. All amounts payable by Pledgor under this Section 12 shall be due within
ten  Business  Days after  demand and shall be part of the Secured  Obligations.
Pledgor's  obligations  under this Section 12 shall survive the  termination  of
this Agreement and the discharge of Pledgor's other obligations hereunder.

            Section 13. No Waiver;  Cumulative  Remedies.  (a) No failure on the
part of Collateral Agent to exercise,  no course of dealing with respect to, and
no delay on the part of  Collateral  Agent in  exercising,  any right,  power or
remedy  hereunder  shall  operate as a waiver  thereof;  nor shall any single or
partial exercise of any such right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The  remedies  herein  provided  are  cumulative  and are not  exclusive  of any
remedies provided by law.

            (b)  In  the  event  Collateral  Agent  shall  have  instituted  any
proceeding  to  enforce  any right,  power or remedy  under  this  Agreement  by
foreclosure,  sale,  entry or  otherwise,  and such  proceeding  shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Collateral Agent, then and in every such case, Pledgor,  Collateral Agent and
each Secured Party shall be restored to their  respective  former  positions and
rights  hereunder  with  respect  to the  Pledged  Collateral,  and all  rights,
remedies and powers of Collateral  Agent and the Secured  Parties shall continue
as if no such proceeding had been instituted.

            Section 14. Collateral Agent. Collateral Agent has been appointed as
collateral  agent  pursuant to the Credit  Agreement.  The actions of Collateral
Agent  hereunder  are  subject  to  the  provisions  of  the  Credit  Agreement.
Collateral  Agent  shall  have the  right  hereunder  to make  demands,  to give
notices,  to  exercise or refrain  from  exercising  any rights,  and to take or
refrain  from  taking  action  (including,  without  limitation,  the release or
substitution of Pledged  Collateral),  in accordance with this Agreement and the
Credit Agreement.  Collateral Agent may resign and a successor  Collateral Agent
may be  appointed  in the  manner  provided  in the Credit  Agreement.  Upon the
acceptance  of any  appointment  as Collateral  Agent by a successor  Collateral
Agent,  that successor  Collateral  Agent shall thereupon  succeed to and become
vested  with all the  rights,  powers,  privileges  and  duties of the  retiring
Collateral Agent under this Agreement,  and the retiring  Collateral Agent shall
thereupon be discharged  from its duties and  obligations  under this Agreement.
After any  retiring  Collateral  Agent's  resignation,  the  provisions  of this
Agreement  shall inure to its  benefit as to any actions  taken or omitted to be
taken by it under this Agreement while it was Collateral Agent.

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -15-





            Section 15. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact.  If  Pledgor  shall  fail to do any act or  thing  that it has
covenanted  to do  hereunder  or any  warranty on the part of Pledgor  contained
herein shall be breached,  Collateral  Agent or any Secured Party may (but shall
not be  obligated  to) do the  same or cause  it to be done or  remedy  any such
breach,  and may,  following five Business Days' prior written notice to Pledgor
of its intention to do so, expend funds for such purpose. Any and all amounts so
expended  by  Collateral  Agent or such  Secured  Party shall be paid by Pledgor
within ten Business  Days after demand  therefor,  with  interest at the highest
rate then in effect  under the  Credit  Agreement  during  the  period  from and
including  the  date on  which  such  funds  were  so  expended  to the  date of
repayment.  Pledgor's  obligations  under  this  Section  15 shall  survive  the
termination of this Agreement and the discharge of Pledgor's  other  obligations
under this Agreement,  the Credit Agreement, any Interest Rate Agreement and the
other  Credit   Documents.   Pledgor  hereby  appoints   Collateral   Agent  its
attorney-in-fact,  with full  authority in the place and stead of Pledgor and in
the name of  Pledgor,  or  otherwise,  from time to time in  Collateral  Agent's
reasonable  discretion  to  take  any  action  and  to  execute  any  instrument
consistent with the terms of this Agreement and the other Credit Documents which
Collateral  Agent may deem  reasonably  necessary or advisable to accomplish the
purposes of this  Agreement.  The  foregoing  grant of  authority  is a power of
attorney coupled with an interest and such appointment  shall be irrevocable for
the term of this Agreement. Pledgor hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof.

            Section 16.  Modification  in Writing.  No amendment,  modification,
supplement,  termination or waiver of or to any provision of this Agreement, nor
consent to any  departure by Pledgor  therefrom,  shall be effective  unless the
same  shall be done in  accordance  with the terms of the Credit  Agreement  and
unless in writing and signed by Collateral Agent. Any amendment, modification or
supplement of or to any provision of this Agreement, any waiver of any provision
of this  Agreement and any consent to any departure by Pledgor from the terms of
any provision of this Agreement shall be effective only in the specific instance
and for the  specific  purpose for which made or given.  Except  where notice is
specifically  required by this Agreement or any other Credit Document, no notice
to or  demand on  Pledgor  in any case  shall  entitle  Pledgor  to any other or
further notice or demand in similar or other circumstances.


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -16-



            Section 17. Termination;  Release.  When all the Secured Obligations
have been paid in full and the  Commitments  of the Banks to make any Loan or to
issue any Letter of Credit under the Credit Agreement shall have expired or been
sooner  terminated,  this Agreement shall  terminate.  Upon  termination of this
Agreement or any release of Pledged Collateral in accordance with the provisions
of the Credit  Agreement,  Collateral  Agent shall,  upon the request and at the
sole cost and  expense of Pledgor,  forthwith  assign,  transfer  and deliver to
Pledgor,  against  receipt  and without  recourse  to or warranty by  Collateral
Agent, such of the Pledged  Collateral to be released (in the case of a release)
as may be in the possession of Collateral  Agent and as shall not have been sold
or otherwise  applied  pursuant to the terms  hereof,  and,  with respect to any
other  Pledged  Collateral,   proper  instruments   (including  UCC  termination
statements on Form UCC-3) acknowledging the termination of this Agreement or the
release of such Pledged Collateral, as the case may be.

            Section 18.  Notices.  Unless  otherwise  provided  herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner set forth in the Credit  Agreement,  as
to either party addressed to it at the address set forth in the Credit Agreement
or at such  other  address  as shall be  designated  by such  party in a written
notice  to the  other  party  complying  as to  delivery  with the terms of this
Section 18;  provided  that notices to  Collateral  Agent shall not be effective
until received by Collateral Agent.

            Section 19. Continuing Security Interest; Assignment. This Agreement
shall create a continuing  security interest in the Pledged Collateral and shall
(i) be binding upon Pledgor, its successors and assigns and (ii) inure, together
with the rights and remedies of Collateral  Agent  hereunder,  to the benefit of
Collateral  Agent and the other  Secured  Parties  and each of their  respective
successors,  transferees  and  assigns;  no other  Persons  (including,  without
limitation, any other creditor of Pledgor) shall have any interest herein or any
right or benefit with respect  hereto.  Without  limiting the  generality of the
foregoing   clause  (ii),  any  Bank  may  assign  or  otherwise   transfer  any
indebtedness held by it secured by this Agreement to any other Person,  and such
other  Person  shall  thereupon  become  vested with all the benefits in respect
thereof  granted to such Bank,  herein or  otherwise,  subject  however,  to the
provisions of the Credit Agreement and any applicable Interest Rate Agreement.


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -17-



            Section 20. GOVERNING LAW; TERMS.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS  OF THE  PARTIES  HEREUNDER  SHALL  BE  CONSTRUED  AND  ENFORCED  IN
ACCORDANCE  WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN,  EXCEPT TO THE EXTENT THAT
THE VALIDITY OR  PERFECTION  OF THE  SECURITY  INTEREST  HEREUNDER,  OR REMEDIES
HEREUNDER,  IN RESPECT OF ANY PARTICULAR  PROPERTY ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.

            Section 21. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  (a) Any
legal action or proceeding  with respect to this Agreement may be brought in the
courts  of the  State  of New  York or of the  United  States  for the  Southern
District of New York, and, by execution and delivery of this Agreement,  Pledgor
hereby irrevocably accepts for itself and in respect of its property,  generally
and  unconditionally,  the  non-exclusive  jurisdiction of the aforesaid courts.
Pledgor further irrevocably consents to the service of process out of any of the
aforementioned  courts in any such action or proceeding by the mailing of copies
thereof by  registered or certified  mail,  postage  prepaid,  to Pledgor at its
address for notices  pursuant to the Credit  Agreement,  such  service to become
effective 30 days after such mailing.  Pledgor  hereby  irrevocably  appoints CT
Corporation System having an address at 1633 Broadway,  New York, New York 10019
and such other  persons as may  hereafter  be selected  by Borrower  irrevocably
agreeing  in writing to serve as its agent for  service of process in respect of
any such  action  or  proceeding.  Nothing  herein  shall  affect  the  right of
Collateral  Agent to serve  process in any other  manner  permitted by law or to
commence legal  proceedings or otherwise  proceed  against  Pledgor in any other
jurisdiction.

            (b) Pledgor hereby irrevocably waives any objection which it may now
or  hereafter  have to the  laying of venue of any of the  aforesaid  actions or
proceedings  arising out of or in connection with this Agreement  brought in the
courts referred to in clause (a) above and hereby further irrevocably waives and
agrees  not to  plead  or claim in any  such  court  that  any  such  action  or
proceeding brought in any such court has been brought in an inconvenient forum.

            Section  22.  Severability  of  Provisions.  Any  provision  of this
Agreement which is prohibited or unenforceable in any jurisdiction  shall, as to
such  jurisdiction,  be  ineffective  to  the  extent  of  such  prohibition  or
unenforceability   without  invalidating  the  remaining  provisions  hereof  or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -18-



            Section  23.  Execution  in  Counterparts.  This  Agreement  and any
amendments,  waivers,  consents  or  supplements  hereto may be  executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered  shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.

            Section 24.  Headings.  The Section  headings used in this Agreement
are for  convenience of reference only and shall not affect the  construction of
this Agreement.

            Section 25.  Obligations Absolute.  All obligations of
Pledgor hereunder shall be absolute and unconditional irrespective
of:

             (i)  any bankruptcy, insolvency, reorganization,
      arrangement, readjustment, composition, liquidation or the
      like of Pledgor or any other Credit Party;

            (ii) any lack of validity or enforceability of the Credit Agreement,
      any  Interest  Rate  Agreement,  any  Letter of Credit,  any other  Credit
      Document, or any other agreement or instrument relating thereto;

           (iii) any change in the time,  manner or place of  payment  of, or in
      any other term of,  all or any of the  Secured  Obligations,  or any other
      amendment  or waiver of or any  consent to any  departure  from the Credit
      Agreement,  any Interest Rate Agreement,  any Letter of Credit,  any other
      Credit Document, or any other agreement or instrument relating thereto;

            (iv)  any  exchange,   release  or   non-perfection   of  any  other
      collateral,  or any  release or  amendment  or waiver of or consent to any
      departure from any guarantee, for all or any of the Secured Obligations;

             (v) any  exercise  or  non-exercise,  or any  waiver of any  right,
      remedy,  power or  privilege  under or in  respect of this  Agreement  any
      Interest  Rate   Agreement,   or  any  other  Credit  Document  except  as
      specifically  set forth in a waiver granted  pursuant to the provisions of
      Section 17 hereof; or

            (vi)  any other circumstance or happening whatsoever that
      is similar to any of the foregoing.


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -19-



            Section 26.  Collateral  Agent's  Right to Sever  Indebtedness.  (a)
Pledgor  acknowledges  that (i) the Pledged  Collateral  does not constitute the
sole  source  of  security  for  the  payment  and  performance  of the  Secured
Obligations and that the Secured  Obligations are also secured by other types of
property  of  Pledgor  and its  Affiliates  in  other  jurisdictions  (all  such
property, collectively, the "Collateral"), (ii) the number of such jurisdictions
and the nature of the  transaction  of which this  instrument is a part are such
that it would have been  impracticable  for the parties to allocate to each item
of  Collateral  a specific  loan amount and to execute in respect of such item a
separate credit agreement,  and (iii) Pledgor intends that Collateral Agent have
the  same  rights  with  respect  to the  Pledged  Collateral,  in any  judicial
proceeding  relating  to the  exercise  of any  right  or  remedy  hereunder  or
otherwise,  that Collateral  Agent would have had if each item of Collateral had
been pledged or encumbered  pursuant to a separate credit agreement and security
instrument. In furtherance of such intent, Pledgor agrees to the greatest extent
permitted by law that Collateral Agent may at any time by notice (an "Allocation
Notice")  to  Pledgor  allocate  a  portion  of  the  Secured  Obligations  (the
"Allocated Indebtedness") to the Pledged Collateral and sever from the remaining
Secured Obligations the Allocated Indebtedness.  From and after the giving of an
Allocation  Notice  with  respect  to  the  Pledged   Collateral,   the  Secured
Obligations hereunder shall be limited to the extent set forth in the Allocation
Notice and (as so limited) shall,  for all purposes,  be construed as a separate
credit obligation of Pledgor unrelated to the other transactions contemplated by
the Credit Agreement,  any Interest Rate Agreement, any other Credit Document or
any  document  related to any  thereof.  To the extent that the  proceeds of any
judicial proceeding relating to the exercise of any right or remedy hereunder of
the Pledged  Collateral shall exceed the Allocated  Indebtedness,  such proceeds
shall  belong to Pledgor  and shall not be  available  hereunder  to satisfy any
Secured  Obligations  of Pledgor other than the Allocated  Indebtedness.  In any
action or proceeding to exercise any right or remedy under this Agreement  which
is commenced after the giving by Collateral Agent of an Allocation  Notice,  the
Allocation  Notice  shall be  conclusive  proof  of the  limits  of the  Secured
Obligations  hereby  secured,  and Pledgor may  introduce,  by way of defense or
counterclaim, evidence thereof in any such action or proceeding. Notwithstanding
any  provision  of this Section 26, the proceeds  received by  Collateral  Agent
pursuant to this  Agreement  shall be applied by Collateral  Agent in accordance
with the provisions of Section 11 hereof.

            (b) Pledgor hereby waives to the greatest extent permitted under law
the right to a discharge of any of the Secured  Obligations under any statute or
rule of law now or hereafter in

DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -20-



effect which  provides  that the exercise of any  particular  right or remedy as
provided for herein (by  judicial  proceedings  or  otherwise)  constitutes  the
exclusive  means for  satisfaction  of the  Secured  Obligations  or which makes
unavailable  any  further  judgment or any other  right or remedy  provided  for
herein  because  Collateral  Agent  elected to proceed with the exercise of such
initial right or remedy or because of any failure by Collateral  Agent to comply
with  laws that  prescribe  conditions  to the  entitlement  to such  subsequent
judgment or the  availability of such subsequent  right or remedy.  In the event
that,  notwithstanding the foregoing waiver, any court shall for any reason hold
that such  subsequent  judgment or action is not available to Collateral  Agent,
Pledgor  shall not (i)  introduce  in any other  jurisdiction  any  judgment  so
holding as a defense to enforcement  against Pledgor of any remedy in the Credit
Agreement, any Interest Rate Agreement or any other Credit Document or (ii) seek
to have such judgment recognized or entered in any other  jurisdiction,  and any
such judgment shall in all events be limited in application only to the state or
jurisdiction where rendered and only with respect to the collateral  referred to
in such judgment.

            (c) In the event any instrument in addition to the Allocation Notice
is necessary to effectuate the provisions of this Section 26, including, without
limitation,  any amendment to this Agreement,  any substitute promissory note or
affidavit or certificate of any kind,  Collateral  Agent may execute and deliver
such instrument as the  attorney-in-fact  of Pledgor.  Such power of attorney is
coupled with an interest and is irrevocable.

            (d) Notwithstanding  anything set forth herein to the contrary,  the
provisions  of this  Section 26 shall be  effective  only to the maximum  extent
permitted by law.

            Section 27. Future Advances. This Agreement shall secure the payment
of any amounts advanced from time to time pursuant to the Credit Agreement.


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                    -21-



            IN WITNESS  WHEREOF,  Pledgor and Collateral  Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.

CARSON, INC.,
  as Pledgor


By:
    Name:
    Title:


BANQUE INDOSUEZ, NEW YORK BRANCH,
  as Collateral Agent


By:
    Name:
    Title:


By:
    Name:
    Title:


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>



                                  SCHEDULE I

                                Pledged Shares


                                                                  PERCENTAGE OF
                                                                 ALL CAPITAL OR
                                                                 OTHER EQUITY
                                                                INTERESTS OF
                 CLASS         PAR       CERTIFICATE       NUMBER         ISSUER
ISSUER           OF STOCK      VALUE        NO(S).         OF SHARES

Carson Products  Common        $.01              1               1        100%
Company






DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>



                                   EXHIBIT 1

                               PLEDGE AMENDMENT

            This Pledge Amendment,  dated ______________,  is delivered pursuant
to Section 5 of the Agreement  referred to below. The undersigned  hereby agrees
that this Pledge  Amendment  may be attached to the Holdings  Securities  Pledge
Agreement,  dated as of October __,  1996,  between the  undersigned  and Banque
Indosuez,  New York Branch,  as Collateral Agent (the  "Agreement";  capitalized
terms used herein and not defined  shall have the  meanings  assigned to them in
the Agreement) and that the Pledged Shares and/or  Intercompany  Notes listed on
this Pledge Amendment shall be deemed to be and shall become part of the Pledged
Collateral and shall secure all Secured Obligations.


CARSON, INC.,
  as Pledgor


By:
      Name:
      Title:


DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>


                                Pledged Shares



                                                                  PERCENTAGE OF
                                                                  ALL CAPITAL OR
                                                                  OTHER EQUITY
             CLASS         PAR       CERTIFICATE        NUMBER    INTERESTS OF
ISSUER       OF STOCK      VALUE        NO(S).          OF SHARES ISSUER









DRAFT:  March 21, 1997 8:47AM                           H:\WPCDOCS\1186\141491

<PAGE>



                                                              Exhibit G to the
                                                              Credit Agreement


               BORROWER INTELLECTUAL PROPERTY SECURITY AGREEMENT


            BORROWER INTELLECTUAL PROPERTY SECURITY AGREEMENT (the "Agreement"),
dated as of October 18, 1996, made by CARSON PRODUCTS COMPANY (formerly known as
Aminco,  Inc.,  as  successor by merger to DNL Savannah  Acquisition  Corp.),  a
Delaware corporation having an office at 64 Ross Road,  Savannah,  Georgia 31405
("Pledgor"),  in favor of BANQUE INDOSUEZ,  NEW YORK BRANCH, having an office at
1211 Avenue of the Americas,  7th Floor,  New York, New York 10036,  as pledgee,
assignee  and  secured  party,  in its  capacity  as  collateral  agent (in such
capacities  and together  with any  successors in such  capacities,  "Collateral
Agent") for the lending  institutions  (the  "Banks") from time to time party to
the Credit Agreement (as hereinafter defined).

                               R E C I T A L S :

            A.  Pursuant  to a certain  credit  agreement,  dated as of the date
hereof (as amended,  amended and restated,  supplemented  or otherwise  modified
from time to time, the "Credit Agreement"; capitalized terms used herein and not
defined shall have the meanings assigned to them in the Credit Agreement) by and
among  Pledgor,  the Banks and Banque  Indosuez,  New York Branch,  as Agent and
Collateral  Agent for the Banks, the Banks have agreed (i) to make to or for the
account of Pledgor certain A Term Loans up to an aggregate  principal  amount of
$15,000,000,  certain  B Term  Loans  up to an  aggregate  principal  amount  of
$10,000,000 and certain  Revolving Loans up to an aggregate  principal amount of
$15,000,000  and (ii) to issue  certain  Letters  of Credit  for the  account of
Pledgor.

            B. It is  contemplated  that  Pledgor  may  enter  into  one or more
agreements with one or more of the Banks ("Interest Rate Agreements") fixing the
interest rates with respect to Loans under the Credit Agreement (all obligations
of  Pledgor  now  existing  or  hereafter   arising  under  such  Interest  Rate
Agreements, collectively, the "Interest Rate Obligations").

            C.    Pledgor is the owner of the Pledged Collateral (as
hereinafter defined).

            D. It is a  condition  to the  obligations  of the Banks to make the
Loans under the Credit  Agreement and a condition to any Bank issuing Letters of
Credit under the Credit  Agreement or entering into the Interest Rate Agreements
that Pledgor execute and deliver the applicable Credit Documents, including this
Agreement.


DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -2-



            E. This  Agreement is given by Pledgor in favor of Collateral  Agent
for its benefit and the  benefit of the Banks and the Agent  (collectively,  the
"Secured  Parties") to secure the payment and  performance of all of the Secured
Obligations (as defined in Section 2).

                              A G R E E M E N T :

            NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Collateral Agent hereby agree as follows:

            Section 1.  Pledge.  As  collateral  security  for the  payment  and
performance  when due of all the Secured  Obligations,  Pledgor hereby  pledges,
assigns,  transfers  and  grants to  Collateral  Agent for its  benefit  and the
benefit of the Secured Parties, a continuing first priority security interest in
and to all of the right,  title and  interest  of  Pledgor  in, to and under the
following  property,  whether now existing or hereafter acquired  (collectively,
the "Pledged Collateral"):

            (a) Patents issued or assigned to and all patent  applications  made
      by  Pledgor,  including,   without  limitation,  the  patents  and  patent
      applications  listed  on  Schedule  A hereto,  along  with any and all (i)
      inventions and improvements  described and claimed therein, (ii) reissues,
      divisions,  continuations,  extensions and continuations-in-part  thereof,
      (iii) income,  royalties,  damages,  claims and payments now and hereafter
      due and/or  payable  under and with respect  thereto,  including,  without
      limitation, damages and payments for past or future infringements thereof,
      and (iv) rights to sue for past, present and future infringements  thereof
      (collectively, the "Patents");

            (b)  Trademarks   (including  service  marks),   federal  and  state
      trademark  registrations  and  applications  made by  Pledgor,  common law
      trademarks  and  trade  names  owned by or  assigned  to  Pledgor  and all
      registrations  and  applications  for the  foregoing,  including,  without
      limitation,  the  registrations  and  applications  listed on  Schedule  B
      hereto,  along  with  any and  all  (i)  renewals  thereof,  (ii)  income,
      royalties,  damages and payments now and hereafter due and/or payable with
      respect  thereto,  including,  without  limitation,  damages,  claims  and
      payments for past or future infringements thereof, and (iii) rights to sue
      for past,  present and future  infringements  thereof  (collectively,  the
      "Trademarks");


DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -3-



            (c) Copyrights owned by or assigned to Pledgor,  including,  without
      limitation,  the  registrations  and  applications  listed on  Schedule  C
      hereto,  along with any and all (i) renewals and extensions thereof,  (ii)
      income,  royalties,  damages,  claims and payments now and  hereafter  due
      and/or  payable  with  respect  thereto,  including,  without  limitation,
      damages and payments for past,  present or future  infringements  thereof,
      and (iii) rights to sue for past, present and future infringements thereof
      (collectively, the "Copyrights");

            (d) License agreements and covenants not to sue with any other party
      with respect to any Patent,  Trademark,  or Copyright listed on Schedule D
      hereto, along with any and all (i) renewals,  extensions,  supplements and
      continuations  thereof,  (ii)  income,  royalties,   damages,  claims  and
      payments  now and  hereafter  due and/or  payable to Pledgor  with respect
      thereto,  including,  without  limitation,  damages and payments for past,
      present or future breaches thereof,  (iii) rights to sue for past, present
      and future breaches thereof,  and (iv) any other rights to use, exploit or
      practice   any  or  all  of  the   Patents,   Trademarks   or   Copyrights
      (collectively, the "Licenses");

            (e) the entire  goodwill of  Pledgor's  business  and other  general
      intangibles,  including,  without  limitation,  know-how,  trade  secrets,
      customer lists, proprietary information,  inventions,  methods, procedures
      and formulae connected with the use of and symbolized by the Trademarks of
      Pledgor; and

            (f) all  "proceeds"  (as such  term is  defined  in the UCC or under
      other relevant law) of any of the foregoing.

            Section 2. Secured  Obligations.  This  Agreement  secures,  and the
Pledged  Collateral is collateral  security for, the payment and  performance in
full  when due,  whether  at  stated  maturity,  by  acceleration  or  otherwise
(including,  without limitation, the payment of interest and other amounts which
would  accrue and become due but for the filing of a petition in  bankruptcy  or
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C.  ss.  362(a)),  of (i) all  Obligations  of Pledgor  now  existing  or
hereafter  arising under the Credit  Agreement and all Interest Rate Obligations
of Pledgor now existing or hereafter  arising under any Interest Rate  Agreement
(including, without limitation, Pledgor's obligation provided for therein to pay
principal,  interest  and  all  other  charges,  fees,  expenses,   commissions,
reimbursements,  premiums,  indemnities  and  other  payments  related  to or in
respect of the Obligations contained in the Credit Agreement

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -4-



and the  obligations  contained in any Interest Rate  Agreement and (ii) without
duplication of the amounts  described in clause (i), all  Obligations of Pledgor
now existing or hereafter  arising  under this  Agreement or any other  Security
Document,   including,   without  limitation,   all  charges,   fees,  expenses,
commissions,  reimbursements,  premiums,  indemnities  and other  payments  that
Pledgor  is  obligated  to pay under  this  Agreement  or in any other  Security
Document (the obligations described in clauses (i) and (ii),  collectively,  the
"Secured Obligations").

            Section 3. No  Release.  Nothing set forth in this  Agreement  shall
relieve  Pledgor  from the  performance  of any  term,  covenant,  condition  or
agreement on Pledgor's  part to be performed or observed  under or in respect of
any of the Pledged  Collateral  or from any  liability to any Person under or in
respect of any of the  Pledged  Collateral  or shall  impose any  obligation  on
Collateral  Agent or any  Secured  Party to perform  or  observe  any such term,
covenant,  condition  or  agreement  on  Pledgor's  part to be so  performed  or
observed or shall impose any liability on Collateral  Agent or any Secured Party
for any act or  omission  on the part of  Pledgor  relating  thereto  or for any
breach of any  representation  or warranty on the part of Pledgor  contained  in
this  Agreement,  any Interest Rate Agreement or any other Credit  Document,  or
under or in respect of the Pledged Collateral or made in connection  herewith or
therewith.  The obligations of Pledgor contained in this Section 3 shall survive
the  termination  of  this  Agreement  and  the  discharge  of  Pledgor's  other
obligations  under this  Agreement,  any Interest  Rate  Agreement and the other
Credit Documents.

            Section 4. Use and Pledge of Pledged Collateral.  Unless an Event of
Default shall have occurred and be continuing,  Collateral Agent shall from time
to time  execute and deliver,  upon written  request of Pledgor and at Pledgor's
sole cost and expense, any and all instruments, certificates or other documents,
in the form so requested, necessary or appropriate in the reasonable judgment of
Pledgor to enable  Pledgor to  continue  to  exploit,  license,  use,  enjoy and
protect the Pledged  Collateral  throughout  the world.  Pledgor and  Collateral
Agent  acknowledge  that this Agreement is intended to grant to Collateral Agent
for the benefit of the Secured Parties a security  interest in and Lien upon the
Pledged  Collateral and shall not  constitute or create a present  assignment of
the Pledged Collateral.

            Section 5.  Supplements; Further Assurances.

            (a) Pledgor  agrees that at any time and from time to time,  it will
execute and, at its sole cost and expense, file and refile, or permit Collateral
Agent to file and refile, such

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -5-



financing  statements,  continuation  statements and other documents (including,
without  limitation,  this  Agreement),  in  such  offices  (including,  without
limitation,  the United States Patent and Trademark Office and the United States
Copyright   Office)  as  Collateral  Agent  may  reasonably  deem  necessary  or
appropriate,  wherever  required  or  permitted  by law in order to perfect  and
preserve the rights and interests granted to Collateral Agent hereunder.

            (b) Pledgor hereby authorizes  Collateral  Agent,  without relieving
Pledgor of any obligations hereunder, to file financing statements, continuation
statements,  amendments thereto and other documents, relative to all or any part
thereof,  without the signature of Pledgor  where  permitted by law, and Pledgor
agrees to do such  further  acts and  things,  and to  execute  and  deliver  to
Collateral   Agent  such   additional   assignments,   agreements,   powers  and
instruments,  as Collateral  Agent may reasonably deem necessary or appropriate,
wherever  required  or  permitted  by law in order to perfect and  preserve  the
rights and  interests  granted to  Collateral  Agent  hereunder or to carry into
effect the  purposes  of this  Agreement  or better to assure and  confirm  unto
Collateral Agent its respective rights,  powers and remedies  hereunder.  All of
the foregoing shall be at the sole cost and expense of Pledgor.

            Section 6.  Representations, Warranties and Covenants.
Pledgor hereby represents, warrants and covenants as follows:

            (a) Necessary Filings.  Upon the filing of financing  statements and
the acceptance  thereof in the appropriate  offices under the UCC and the filing
of this  Agreement  and the  acceptance  thereof in the United States Patent and
Trademark Office and the United States Copyright  Office,  the security interest
granted to Collateral  Agent for the benefit of the Secured Parties  pursuant to
this Agreement in and to the Pledged  Collateral  constitutes and hereafter will
constitute a valid and duly perfected  first priority  security  interest in the
Pledged Collateral superior and prior to the rights of all other Persons therein
and subject to no other Liens.

            (b) No Liens.  Pledgor is as of the date  hereof,  and as to Pledged
Collateral acquired by it from time to time after the date hereof,  Pledgor will
be, the sole and  exclusive  owner or, as  applicable,  licensee  of the Pledged
Collateral  free from any Lien or other  right,  title or interest of any Person
other than the Lien and security interest created by this Agreement and Liens of
the type described in paragraph (a) of the definition of Permitted Encumbrances.
Pledgor shall take all reasonable steps to defend the Pledged Collateral against
all claims and demands of all

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -6-



Persons at any time claiming any interest therein adverse to Collateral Agent or
any Secured Party.

            (c) Other Financing Statements.  There is no financing statement (or
similar   statement  or  instrument  of  registration   under  the  law  of  any
jurisdiction)  covering or  purporting  to cover any interest of any kind in the
Pledged Collateral and, so long as the Secured  Obligations remain unpaid or the
Commitments of the Banks to make any Loan or to issue any Letter of Credit shall
not have  expired  or been  sooner  terminated,  Pledgor  shall not  execute  or
authorize to be filed in any public office any  financing  statement (or similar
statement or instrument of registration  under the law of any  jurisdiction)  or
statements relating to the Pledged Collateral,  except, in each case,  financing
statements  filed  or to be  filed  in  respect  of and  covering  the  security
interests granted by Pledgor pursuant to this Agreement.

            (d)  Authorization;   Enforceability.   Pledgor  has  the  requisite
corporate  power,  authority  and  legal  right to pledge  and grant a  security
interest in all the Pledged  Collateral  pursuant  to this  Agreement,  and this
Agreement  constitutes  the legal,  valid and  binding  obligation  of  Pledgor,
enforceable  against  Pledgor in  accordance  with its  terms,  except as may be
limited by bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
relating  to or  affecting  creditors'  rights  generally  and  except  as  such
enforceability may be limited by the application of general principles of equity
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at law).

            (e) No Consents,  etc. No consent of any party  (including,  without
limitation, stockholders or creditors of Pledgor) and no consent, authorization,
approval,  license,  or other  action by, and no notice to or filing  with,  any
Governmental  Authority or  regulatory  body or other Person is required for (x)
the execution,  delivery or  performance  of this Agreement by Pledgor,  (y) the
assignment of, and the grant of a Lien  (including the priority  thereof) on and
security  interest in, the Pledged  Collateral  by Pledgor in the manner and for
the purpose  contemplated  by this  Agreement or (z) the exercise by  Collateral
Agent of the  remedies  in respect of the  Pledged  Collateral  pursuant to this
Agreement  (other  than those  consents,  authorizations,  approvals,  licenses,
actions,  notices or filings  which,  if not obtained or made,  would not have a
material  adverse  effect  upon the  interests  of  Collateral  Agent under this
Agreement).

            (f)   No Claims.  Pledgor owns or has rights to use all
the Pledged Collateral and all rights with respect to any of the
foregoing used in, necessary for or material to Pledgor's business

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -7-



as currently  conducted  and as  contemplated  to be  conducted  pursuant to the
Credit Documents. To the best of Pledgor's knowledge, the use by Pledgor of such
Pledged  Collateral  and all such rights with respect to the foregoing  does not
infringe on the rights of any Person.  To the best of  Pledgor's  knowledge,  no
claim has been made and remains  outstanding  that  Pledgor's use of the Pledged
Collateral does or may violate the rights of any third person.

            (g)   Pledged   Collateral.   Schedules   A,  B,  C  and  D  hereto,
respectively, are true, accurate and complete lists as of the date hereof of all
issued, registered or applied for Patents,  Trademarks,  Copyrights and Licenses
owned by Pledgor.

            Section 7.  Covenants Concerning Pledged Collateral.

            (a)  Protection  of  Collateral  Agent's  Security.  On a continuing
basis, Pledgor shall, at its sole cost and expense,  make, execute,  acknowledge
and deliver, and file and record in the proper filing and recording offices, all
such  instruments  or  documents,  including,  without  limitation,  appropriate
financing and continuation  statements and collateral  agreements,  and take all
such action as may reasonably be deemed  necessary by Collateral  Agent to carry
out the  intent  and  purposes  of this  Agreement,  to assure  and  confirm  to
Collateral Agent the grant or perfection of a first priority  security  interest
in the Pledged Collateral for the benefit of the Secured Parties,  and to enable
Collateral Agent to exercise and enforce its rights and remedies  hereunder with
respect to any  Pledged  Collateral.  Without  limiting  the  generality  of the
foregoing,  Pledgor (i) will not enter into any  agreement  that would impair or
conflict with Pledgor's  obligations  hereunder;  (ii) will,  from time to time,
upon Collateral  Agent's reasonable  request,  cause its books and records to be
marked with such legends or segregated  in such manner as  Collateral  Agent may
reasonably  specify  and take or cause to be taken such  other  action and adopt
such procedures as Collateral Agent may reasonably  specify to give notice to or
to perfect  the  security  interest  in the  Pledged  Collateral  intended to be
conveyed  hereby;  (iii) will,  promptly  following its becoming  aware thereof,
notify  Collateral  Agent of (A) any adverse  determination in any proceeding in
the United  States Patent and  Trademark  Office or the United States  Copyright
Office  with  respect  to  any  Patent,  Trademark  or  Copyright,  or  (B)  the
institution of any proceeding or any adverse determination in any Federal, state
or local court or administrative  body regarding Pledgor's claim of ownership in
or right to use any of the Pledged Collateral, its right to register the Pledged
Collateral,  or its right to keep and maintain such  registration  in full force
and effect; (iv) will maintain and protect the Pledged Collateral  necessary for
the operation of Pledgor's business;

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -8-



(v) will  not  permit  to  lapse or  become  abandoned  any  Pledged  Collateral
necessary  for the  operation  of  Pledgor's  business,  and will not  settle or
compromise any pending or future  litigation or  administrative  proceeding with
respect to the Pledged  Collateral  necessary  for the  operation  of  Pledgor's
business,  in each case,  without the consent of Collateral  Agent (such consent
not to be  unreasonably  withheld  or  delayed);  (vi)  upon  Pledgor  obtaining
knowledge thereof, will promptly notify Collateral Agent in writing of any event
which may reasonably be expected to adversely affect the value or utility of the
Pledged  Collateral  or any  portion  thereof  necessary  for the  operation  of
Pledgor's business, the ability of Pledgor or Collateral Agent to dispose of the
Pledged  Collateral  or any  portion  thereof  or the  rights  and  remedies  of
Collateral Agent in relation thereto,  including,  without limitation, a levy or
threat  of levy or any legal  process  against  the  Pledged  Collateral  or any
portion  thereof;  (vii) will not  license  the  Pledged  Collateral  other than
licenses  entered into by Pledgor in, or incidental  to, the ordinary  course of
business,  or amend or permit the  amendment  of any of the licenses in a manner
that materially adversely affects the right to receive payments  thereunder,  in
any manner that would materially  impair the value of the Pledged  Collateral or
the Lien on the Pledged  Collateral  intended to be granted to Collateral  Agent
for the benefit of Secured  Parties  without the  consent of  Collateral  Agent;
(viii) until  Collateral  Agent  exercises its rights to make  collection,  will
diligently keep adequate records  respecting the Pledged  Collateral;  (ix) will
furnish to Collateral  Agent from time to time statements and amended  schedules
further  identifying  and  describing  the  Pledged  Collateral  and such  other
materials  evidencing  or  reports  pertaining  to  the  Pledged  Collateral  as
Collateral  Agent may from time to time  reasonably  request,  all in reasonable
detail;  (x) will pay when due any and all material taxes,  levies,  maintenance
fees,  charges,  assessments,  license  fees and  similar  taxes or  impositions
payable in respect of each item of Pledged Collateral; and (xi) will comply with
all material laws,  rules and regulations  applicable to the Pledged  Collateral
the  failure to comply with which  would have a material  adverse  effect on the
value or use of the Pledged  Collateral or a material adverse effect on the Lien
on the Pledged Collateral granted to the Collateral Agent hereunder.

            (b)  After-Acquired  Property.  If Pledgor shall, at any time before
the Secured  Obligations  have been paid or the Commitments of the Banks to make
any Loan or to issue any Letter of Credit have expired or been sooner terminated
(i)  obtain any  rights to any  additional  Pledged  Collateral  or (ii)  become
entitled to the benefit of any additional  Pledged  Collateral or any renewal or
extension thereof, including any reissue, division, continuation,

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -9-



or  continuation-in-part  of any Patent,  or any improvement on any Patent,  the
provisions of this Agreement shall automatically apply thereto and any such item
enumerated  in clause (i) or (ii) with  respect to Pledgor  shall  automatically
constitute Pledged Collateral if such would have constituted  Pledged Collateral
at the time of execution of this  Agreement,  and be subject to the Lien created
by this  Agreement  without  further  action by any  party  other  than  actions
required to perfect such Lien.  Pledgor  shall  promptly  provide to  Collateral
Agent written notice of any of the foregoing. Pledgor agrees, promptly following
a request by Collateral  Agent, to confirm the attachment of the Lien created by
this  Agreement  to any rights  described  in clauses (i) and (ii) above if such
would have  constituted  Pledged  Collateral  at the time of  execution  of this
Agreement  by  execution  of an  instrument  in form  reasonably  acceptable  to
Collateral Agent.

            (c)  Modifications.  Pledgor  agrees to  modify  this  Agreement  by
amending Schedules A, B, C and D hereto to include any future Pledged Collateral
of Pledgor,  including,  without limitation,  any of the items listed in Section
7(b).

            (d)  Applications.  Pledgor shall file and prosecute  diligently all
applications for the Patents,  the Trademarks or the Copyrights now or hereafter
pending  that would be  necessary  to the  business of Pledgor to which any such
applications  pertain,  and shall do all acts necessary to preserve and maintain
all rights in the Pledged  Collateral  necessary  for the operation of Pledgor's
business.  Any and all costs and expenses  incurred in connection  with any such
actions shall be borne by Pledgor. Pledgor shall not abandon any right to file a
Patent, Trademark or Copyright application,  or any pending Patent, Trademark or
Copyright  application or any Patent,  Trademark or Copyright  necessary for the
operation of Pledgor's  business  without the consent of Collateral  Agent (such
consent not to be unreasonably withheld or delayed).

            Section 8.  Transfers  and Other Liens.  Pledgor shall not (i) sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Pledged  Collateral  other than  licenses  entered into by Pledgor in, or
incidental to, the ordinary  course of business or with any Affiliate of Pledgor
or (ii)  create or permit to exist any Lien upon or with  respect  to any of the
Pledged Collateral,  other than the Lien granted to Collateral Agent pursuant to
this  Agreement  and  Liens  of  the  type  described  in  paragraph  (a) of the
definition of Permitted Encumbrances.


DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -10-



            Section 9. Reasonable Care. Collateral Agent shall be deemed to have
exercised  reasonable  care  in the  custody  and  preservation  of the  Pledged
Collateral in its  possession if such Pledged  Collateral is accorded  treatment
substantially  equivalent  to that which  Collateral  Agent,  in its  individual
capacity,  accords its own property, it being understood that neither Collateral
Agent nor any of the Secured  Parties shall have  responsibility  for taking any
necessary  steps to  preserve  rights  against  any Person  with  respect to any
Pledged Collateral.

            Section 10.  Remedies Upon Default.

            (a) Remedies;  Disposition  of  Collateral.  If any Event of Default
shall have occurred and be  continuing,  and the Secured  Obligations  have been
declared due and payable in accordance  with the Credit  Agreement,  then and in
every such case,  Collateral Agent may, (i) to the full extent permitted by law,
and without  advertisement,  hearing or process of law of any kind, (A) exercise
any and all rights as  beneficial  and legal  owner of the  Pledged  Collateral,
including,  without limitation,  perfecting assignment of any and all consensual
rights and powers with respect to the Pledged  Collateral and (B) sell or assign
or grant a license to use, or cause to be sold or assigned or a license  granted
to use any or all of the Pledged  Collateral (in the case of  Trademarks,  along
with the goodwill associated  therewith) or any part thereof, in each case, free
of all rights and claims of Pledgor  therein and  thereto.  In that  connection,
Collateral  Agent  shall  have  the  right to  cause  any or all of the  Pledged
Collateral to be transferred of record into the name of Collateral  Agent or its
nominee and the right to impose (1) such  limitations  and  restrictions  on the
sale or assignment of the Pledged  Collateral as Collateral Agent may deem to be
necessary or  appropriate  to comply with any law, rule or regulation  (federal,
state or local)  having  applicability  to the sale or  assignment,  and (2) any
necessary or appropriate requirements for any required governmental approvals or
consents;

          (ii)  Exercise  in respect of the Pledged  Collateral,  in addition to
other rights and remedies provided for herein or otherwise  available to it, all
the  rights and  remedies  of a secured  party on  default  under the UCC to the
extent  permitted  by  applicable  law and whether or not the UCC is  applicable
thereto.  Pledgor  acknowledges  and agrees that,  to the extent  notice of sale
shall be required by law,  ten days'  notice to Pledgor of the time and place of
any public sale or of the time after which any  private  sale or other  intended
disposition  is  to  take  place  shall   constitute   commercially   reasonable
notification of such matters. No notification need be given to Pledgor if it has
signed, after the occurrence of an Event of Default, a statement renouncing or

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -11-



modifying any right to notification of sale or other intended
disposition;

         (iii)  Collateral  Agent  or any  other  Secured  Party or any of their
respective  Affiliates  may be  the  purchaser  of  any  or  all of the  Pledged
Collateral at any public or private sale and shall be entitled,  for the purpose
of bidding and making settlement or payment of the purchase price for all or any
portion of the Pledged Collateral sold at such sale, to use and apply any of the
Secured  Obligations  owed to such Person as a credit on account of the purchase
price of such item of  Collateral  payable  by such  Person at such  sale.  Each
purchaser at any such sale shall acquire the property sold  absolutely free from
any claim or right on the part of Pledgor,  and Pledgor  hereby  waives,  to the
fullest extent permitted by law, all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future  have under any rule of law or
statute  now  existing  or  hereafter  enacted.  Collateral  Agent  shall not be
obligated to make any sale of Pledged  Collateral  regardless  of notice of sale
having been given.  Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may,  without further  notice,  be made at the time and place to which it was so
adjourned.  Pledgor hereby waives, to the fullest extent permitted by applicable
law, any claims against  Collateral Agent arising by reason of the fact that the
price at which any Pledged  Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale, even if
Collateral  Agent  accepts  the first  offer  received  and does not offer  such
Pledged Collateral to more than one offeree.

            (b) (i) Waiver of Notice and Claims.  Pledgor hereby waives,  to the
fullest extent permitted by applicable law, any and all notices, advertisements,
hearings or process of law in connection  with the exercise by Collateral  Agent
of any of its rights  and  remedies  hereunder.  Collateral  Agent  shall not be
liable to any Person for any incorrect or improper payment made pursuant to this
Section 10 in the absence of gross negligence or willful misconduct.

          (ii)  Pledgor  hereby  waives,  to the  fullest  extent  permitted  by
applicable law, notice or judicial hearing in connection with Collateral Agent's
taking  possession  or  Collateral  Agent's  disposition  of any of the  Pledged
Collateral,  including, without limitation, any and all prior notice and hearing
for any  prejudgment  remedy or remedies and any such right which  Pledgor would
otherwise  have under  law,  and  Pledgor  hereby  further  waives to the extent
permitted by applicable law: (A) all damages

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -12-



occasioned by such taking of possession;  (B) all other  requirements  as to the
time,  place  and  terms  of sale or  other  requirements  with  respect  to the
enforcement  of  Collateral  Agent's  rights  hereunder;  and (C) all  rights of
redemption, appraisal, valuation, stay, extension or moratorium now or hereafter
in force  under any  applicable  law.  Any sale of, or the grant of  options  to
purchase, or any other realization upon, any Pledged Collateral shall operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of Pledgor therein and thereto,  and shall be a perpetual bar both at law and in
equity against Pledgor and against any and all Persons claiming or attempting to
claim the Pledged  Collateral  so sold,  optioned or realized  upon, or any part
thereof, from, through or under Pledgor.

            Section  11.  Application  of  Proceeds.  The  proceeds  received by
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the  Pledged  Collateral  pursuant  to the  exercise  by
Collateral Agent of its remedies as a secured creditor as provided in Section 10
hereof shall be applied,  together  with any other sums then held by  Collateral
Agent pursuant to this Agreement, promptly by Collateral Agent as follows:

            First, to the payment of all costs and expenses,  fees,  commissions
and taxes of such sale,  collection  or other  realization,  including,  without
limitation,  reasonable out-of-pocket costs and expenses of Collateral Agent and
its agents and counsel,  and all  expenses,  liabilities  and  advances  made or
incurred by Collateral Agent in connection therewith;

            Second, to the payment of all other costs and expenses of such sale,
collection  or other  realization,  including,  without  limitation,  reasonable
out-of-pocket  costs and  expenses of the Banks and their agents and counsel and
all costs,  liabilities and advances made or incurred by the Banks in connection
therewith;

            Third,  to the  payment  in  full in  cash  of  Secured  Obligations
consisting  of interest and all amounts  other than  principal  under the Credit
Agreement  at any time  and  from  time to time  owing  by  Pledgor  under or in
connection with the Credit  Agreement,  ratably  according to the unpaid amounts
thereof, in the manner and priority set forth in the Credit Agreement,  together
with  interest  on each such amount in the manner and to the extent set forth in
the Credit Agreement from and after the date such amount is due, owing or unpaid
until paid in full;

            Fourth, to the pro rata payment in full in cash of
Secured Obligations consisting of (i) principal at any time and

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -13-



from  time to time  owing by  Pledgor  under or in  connection  with the  Credit
Agreement,  ratably  according to the unpaid amounts thereof,  in the manner and
priority  set forth in the Credit  Agreement  and (ii) the  amount of  Pledgor's
obligations  then due and payable under any Interest Rate  Agreement,  including
any early  termination  payments  then due  (exclusive  of  expenses  or similar
liabilities  to any Bank  under  the  applicable  Interest  Rate  Agreement(s)),
together  with  interest on each such amount in the manner and to the extent set
forth in the Credit  Agreement from and after the date such amount is due, owing
or unpaid until paid in full; and

            Fifth, the balance,  if any, to the Person lawfully entitled thereto
(including Pledgor or its successors or assigns).

            Section 12.  Expenses.  Pledgor  will upon demand pay to  Collateral
Agent the amount of any and all  reasonable  expenses,  including the reasonable
fees and  expenses of its counsel and the  reasonable  fees and  expenses of any
experts and agents,  which Collateral Agent may incur in connection with (i) the
collection of the Secured  Obligations,  (ii) the enforcement and administration
of this  Agreement,  (iii)  the  custody  or  preservation  of,  or the sale of,
collection from, or other realization upon, any of the Pledged Collateral,  (iv)
the  exercise or  enforcement  of any of the rights of  Collateral  Agent or any
Secured Party  hereunder or (v) the failure by Pledgor to perform or observe any
of the provisions  hereof.  All amounts payable by Pledgor under this Section 12
shall be due within  ten  Business  Days  after  demand and shall be part of the
Secured Obligations.  Pledgor's  obligations under this Section 12 shall survive
the  termination  of  this  Agreement  and  the  discharge  of  Pledgor's  other
obligations hereunder.

            Section 13.  No Waiver; Cumulative Remedies.

            (a) No  failure  on the part of  Collateral  Agent to  exercise,  no
course of dealing with respect to, and no delay on the part of Collateral  Agent
in exercising,  any right,  power or remedy  hereunder shall operate as a waiver
thereof;  nor shall any single or partial  exercise of any such right,  power or
remedy hereunder  preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein provided are cumulative
and are not exclusive of any remedies provided by law.

            (b)  In  the  event  Collateral  Agent  shall  have  instituted  any
proceeding  to enforce  any right,  power or remedy  under  this  instrument  by
foreclosure, sale or otherwise, and such proceeding shall have been discontinued
or  abandoned  for any  reason  or  shall  have  been  determined  adversely  to
Collateral  Agent,  then and in every such case,  Pledgor,  Collateral Agent and
each Secured Party

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -14-



shall be restored to their respective former positions and rights hereunder with
respect  to the  Pledged  Collateral,  and all  rights,  remedies  and powers of
Collateral Agent and the Secured Parties shall continue as if no such proceeding
had been instituted.

            Section 14. Collateral Agent. Collateral Agent has been appointed as
collateral  agent  pursuant to the Credit  Agreement.  The actions of Collateral
Agent  hereunder  are  subject  to  the  provisions  of  the  Credit  Agreement.
Collateral  Agent  shall  have the  right  hereunder  to make  demands,  to give
notices,  to  exercise or refrain  from  exercising  any rights,  and to take or
refrain  from  taking  action  (including,  without  limitation,  the release or
substitution of Pledged  Collateral),  in accordance with this Agreement and the
Credit Agreement.  Collateral Agent may resign and a successor  Collateral Agent
may be  appointed  in the  manner  provided  in the Credit  Agreement.  Upon the
acceptance  of any  appointment  as Collateral  Agent by a successor  Collateral
Agent,  that successor  Collateral  Agent shall thereupon  succeed to and become
vested  with all the  rights,  powers,  privileges  and  duties of the  retiring
Collateral Agent under this Agreement,  and the retiring  Collateral Agent shall
thereupon be discharged  from its duties and  obligations  under this Agreement.
After any  retiring  Collateral  Agent's  resignation,  the  provisions  of this
Agreement  shall inure to its  benefit as to any actions  taken or omitted to be
taken by it under this Agreement while it was Collateral Agent.

            Section 15. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact.  If  Pledgor  shall  fail to do any act or  thing  that it has
covenanted  to do  hereunder  or any  warranty on the part of Pledgor  contained
herein shall be breached,  Collateral  Agent or any Secured Party may (but shall
not be  obligated  to) do the  same or cause  it to be done or  remedy  any such
breach,  and may, following five Business Days' written notice to Pledgor of its
intention  to do so,  expend  funds for such  purpose.  Any and all  amounts  so
expended  by  Collateral  Agent or such  Secured  Party shall be paid by Pledgor
within ten Business  Days after demand  therefor,  with  interest at the highest
rate then in effect  under the  Credit  Agreement  during  the  period  from and
including  the  date on  which  such  funds  were  so  expended  to the  date of
repayment.  Pledgor's  obligations  under  this  Section  15 shall  survive  the
termination of this Agreement and the discharge of Pledgor's  other  obligations
under this Agreement,  the Credit Agreement, any Interest Rate Agreement and the
other  Credit   Documents.   Pledgor  hereby  appoints   Collateral   Agent  its
attorney-in-fact with an interest, with full authority in the place and stead of
Pledgor  and in the  name  of  Pledgor,  or  otherwise,  from  time  to  time in
Collateral Agent's  reasonable  discretion to take any action and to execute any
instrument consistent with the terms of this Agreement

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -15-



and the other  Credit  Documents  which  Collateral  Agent  may deem  reasonably
necessary  or  advisable  to  accomplish  the  purposes of this  Agreement.  The
foregoing grant of authority is a power of attorney coupled with an interest and
such  appointment  shall be irrevocable for the term of this Agreement.  Pledgor
hereby  ratifies all that such attorney shall lawfully do or cause to be done by
virtue hereof.

            Section 16.  Litigation.

            (a) Unless there shall occur an Event of Default, Pledgor shall have
the right to commence and  prosecute in its own name, as real party in interest,
for its own  benefit and at its sole cost and  expense,  such  applications  for
protection of the Pledged  Collateral,  suits,  proceedings or other actions for
infringement,  counterfeiting,  unfair competition,  dilution or other damage as
are in its  reasonable  business  judgment  necessary  to  protect  the  Pledged
Collateral.  Pledgor shall promptly notify Collateral Agent in writing as to the
commencement and prosecution of any such actions,  or threat thereof relating to
the Pledged  Collateral and shall provide to Collateral  Agent such  information
with respect thereto as may be reasonably requested by Collateral Agent. Pledgor
shall   indemnify  and  hold  harmless  each  Secured  Party  for  any  and  all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
expenses or disbursements (including reasonable attorneys' fees and expenses) of
any kind  whatsoever  which may be imposed on,  incurred by or asserted  against
such Secured Party in  connection  with or in any way arising out of such suits,
proceedings or other actions.

            (b) Upon the  occurrence  and during the  continuance of an Event of
Default,  Collateral Agent shall have the right but shall in no way be obligated
to file applications for protection of the Pledged  Collateral and/or bring suit
in the name of Pledgor,  Collateral  Agent or the Secured Parties to enforce the
Pledged  Collateral  and any  license  thereunder;  in the  event of such  suit,
Pledgor shall,  at the request of Collateral  Agent,  do any and all lawful acts
and execute any and all documents  requested by Collateral  Agent in aid of such
enforcement  and Pledgor shall  promptly,  upon demand,  reimburse and indemnify
Collateral  Agent,  as the case may be,  for all costs and  expenses  (including
reasonable  fees and expenses of counsel)  incurred by  Collateral  Agent in the
exercise of its rights under this Section 16. In the event that Collateral Agent
shall elect not to bring suit to enforce the Pledged Collateral, Pledgor agrees,
at the request of Collateral Agent, to use all reasonable  measures,  whether by
action,   suit,   proceeding   or  otherwise,   to  prevent  the   infringement,
counterfeiting or other diminution in value of any of the Pledged

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -16-



Collateral  by others and for that  purpose  agrees to  diligently  maintain any
action, suit or proceeding against any person so infringing necessary to prevent
such infringement unless Pledgor has determined that the Pledged Collateral that
is the subject of any pending or contemplated infringement or enforcement action
or proceeding  does not contain or represent any value or utility (other than of
an immaterial nature), consistent with prudent business practice.

            Section 17.  Modification  in Writing.  No amendment,  modification,
supplement,  termination or waiver of or to any provision of this Agreement, nor
consent to any  departure by Pledgor  therefrom,  shall be effective  unless the
same  shall be done in  accordance  with the terms of the Credit  Agreement  and
unless in writing and signed by Collateral Agent. Any amendment, modification or
supplement of or to any provision of this Agreement, any waiver of any provision
of this  Agreement and any consent to any departure by Pledgor from the terms of
any provision of this Agreement shall be effective only in the specific instance
and for the  specific  purpose for which made or given.  Except  where notice is
specifically  required by this Agreement or any other Credit Document, no notice
to or  demand on  Pledgor  in any case  shall  entitle  Pledgor  to any other or
further notice or demand in similar or other circumstances.

            Section 18. Termination;  Release.  When all the Secured Obligations
have been paid in full and the  Commitments  of the Banks to make any Loan or to
issue any Letter of Credit under the Credit Agreement shall have expired or been
sooner  terminated,  this Agreement shall  terminate.  Upon  termination of this
Agreement or any release of Pledged Collateral in accordance with the provisions
of the Credit  Agreement,  Collateral  Agent shall,  upon the request and at the
sole cost and  expense of Pledgor,  forthwith  assign,  transfer  and deliver to
Pledgor,  against  receipt  and without  recourse  to or warranty by  Collateral
Agent, such of the Pledged  Collateral to be released (in the case of a release)
as shall not have been sold or otherwise  applied  pursuant to the terms hereof,
and with respect to any other Pledged Collateral,  proper instruments (including
UCC termination  statements on Form UCC-3 and documents suitable for recordation
in the United States Patent and Trademark  Office,  the United States  Copyright
Office or similar domestic or foreign  authority)  acknowledging the termination
of this Agreement or the release of such Pledged Collateral, as the case may be.


DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -17-



            Section 19.  Notices.  Unless  otherwise  provided  herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner set forth in the Credit  Agreement,  as
to  either  party,  addressed  to it at the  address  set  forth  in the  Credit
Agreement  or at such other  address as shall be  designated  by such party in a
written  notice to the other party  complying  as to delivery  with the terms of
this  Section  19;  provided  that  notices  to  Collateral  Agent  shall not be
effective until received by Collateral Agent.

            Section 20. Continuing Security Interest; Assignment. This Agreement
shall create a continuing  security interest in the Pledged Collateral and shall
(i) be binding upon Pledgor, its successors and assigns and (ii) inure, together
with the rights and remedies of Collateral  Agent  hereunder,  to the benefit of
Collateral  Agent and the other  Secured  Parties  and each of their  respective
successors,  transferees  and  assigns;  no other  Persons  (including,  without
limitation, any other creditor of Pledgor) shall have any interest herein or any
right or benefit with respect  hereto.  Without  limiting the  generality of the
foregoing   clause  (ii),  any  Bank  may  assign  or  otherwise   transfer  any
indebtedness held by it secured by this Agreement to any other Person,  and such
other  Person  shall  thereupon  become  vested with all the benefits in respect
thereof  granted to such Bank,  herein or  otherwise,  subject  however,  to the
provisions of the Credit Agreement and any applicable Interest Rate Agreement.

            Section 21. GOVERNING LAW; TERMS.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS  OF THE  PARTIES  HEREUNDER  SHALL  BE  CONSTRUED  AND  ENFORCED  IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN,  EXCEPT TO THE EXTENT THAT
THE VALIDITY OR  PERFECTION  OF THE  SECURITY  INTEREST  HEREUNDER,  OR REMEDIES
HEREUNDER,  IN RESPECT OF ANY PARTICULAR  PROPERTY ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.

            Section 22.  CONSENT TO JURISDICTION AND SERVICE OF
PROCESS.

            (a) ANY LEGAL ACTION OR  PROCEEDING  WITH RESPECT TO THIS  AGREEMENT
MAY BE BROUGHT  IN THE  COURTS OF THE STATE OF NEW YORK OR OF THE UNITED  STATES
FOR THE SOUTHERN  DISTRICT OF NEW YORK,  AND, BY EXECUTION  AND DELIVERY OF THIS
AGREEMENT,  PLEDGOR HEREBY IRREVOCABLY  ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY,  GENERALLY AND UNCONDITIONALLY,  THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS. PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED  COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -18-



REGISTERED OR CERTIFIED  MAIL,  POSTAGE  PREPAID,  TO PLEDGOR AT ITS ADDRESS FOR
NOTICES  PURSUANT TO THE CREDIT  AGREEMENT,  SUCH SERVICE TO BECOME EFFECTIVE 30
DAYS AFTER SUCH MAILING.  PLEDGOR  HEREBY  IRREVOCABLY  APPOINTS CT  CORPORATION
SYSTEM  HAVING AN ADDRESS AT 1633  BROADWAY,  NEW YORK,  NEW YORK 10019 AND SUCH
OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY BORROWER  IRREVOCABLY  AGREEING IN
WRITING  TO SERVE AS ITS AGENT FOR  SERVICE  OF  PROCESS  IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF COLLATERAL AGENT
TO SERVE  PROCESS IN ANY OTHER  MANNER  PERMITTED  BY LAW OR TO  COMMENCE  LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST PLEDGOR IN ANY OTHER JURISDICTION.

            (b) PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW
OR  HEREAFTER  HAVE TO THE  LAYING OF VENUE OF ANY OF THE  AFORESAID  ACTIONS OR
PROCEEDINGS  ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT  BROUGHT IN THE
COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES  NOT TO  PLEAD  OR CLAIM IN ANY  SUCH  COURT  THAT  ANY  SUCH  ACTION  OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

            Section  23.  Severability  of  Provisions.  Any  provision  of this
Agreement which is prohibited or unenforceable in any jurisdiction  shall, as to
such  jurisdiction,  be  ineffective  to  the  extent  of  such  prohibition  or
unenforceability   without  invalidating  the  remaining  provisions  hereof  or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.

            Section  24.  Execution  in  Counterparts.  This  Agreement  and any
amendments,  waivers,  consents  or  supplements  hereto may be  executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered  shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.

            Section 25.  Headings.  The Section  headings used in this Agreement
are for  convenience of reference only and shall not affect the  construction of
this Agreement.

            Section 26.  Obligations Absolute.  All obligations of
Pledgor hereunder shall be absolute and unconditional irrespective
of:

            (i)   any bankruptcy, insolvency, reorganization,
      arrangement, readjustment, composition, liquidation or the
      like of either Pledgor or any other Credit Party;


DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -19-



          (ii) any lack of validity or  enforceability  of the Credit Agreement,
      any  Interest  Rate  Agreement,  any Letter of Credit or any other  Credit
      Document, or any other agreement or instrument relating thereto;

         (iii) any change in the time,  manner or place of payment of, or in any
      other  term  of,  all  or any of the  Secured  Obligations,  or any  other
      amendment  or waiver of or any  consent to any  departure  from the Credit
      Agreement,  any Interest Rate Agreement, any Letter of Credit or any other
      Credit Document, or any other agreement or instrument relating thereto;

          (iv) any exchange,  release or non-perfection of any other collateral,
      or any release or amendment or waiver of or consent to any departure  from
      any guarantee, for all or any of the Secured Obligations;

            (v) any  exercise  or  non-exercise,  or any  waiver  of any  right,
      remedy,  power or  privilege  under or in  respect of this  Agreement  any
      Interest  Rate   Agreement,   or  any  other  Credit  Document  except  as
      specifically  set forth in a waiver granted  pursuant to the provisions of
      Section 18 hereof; or

          (vi)    any other circumstance or happening whatsoever that
      is similar to any of the foregoing.

            Section 27.  Collateral Agent's Right to Sever
Indebtedness.

            (a) Pledgor  acknowledges  that (i) the Pledged  Collateral does not
constitute  the sole source of security for the payment and  performance  of the
Secured  Obligations and that the Secured  Obligations are also secured by other
types of property of Pledgor and its Affiliates in other jurisdictions (all such
property, collectively, the "Collateral"), (ii) the number of such jurisdictions
and the nature of the  transaction  of which this  instrument is a part are such
that it would have been  impracticable  for the parties to allocate to each item
of  Collateral  a specific  loan amount and to execute in respect of such item a
separate credit agreement,  and (iii) Pledgor intends that Collateral Agent have
the  same  rights  with  respect  to the  Pledged  Collateral,  in any  judicial
proceeding  relating  to the  exercise  of any  right  or  remedy  hereunder  or
otherwise,  that Collateral  Agent would have had if each item of Collateral had
been pledged or encumbered  pursuant to a separate credit agreement and security
instrument. In furtherance of such intent, Pledgor agrees to the greatest extent
permitted by law that Collateral Agent may at any time by notice

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -20-



(an  "Allocation   Notice")  to  Pledgor  allocate  a  portion  of  the  Secured
Obligations (the "Allocated  Indebtedness") to all or a specified portion of the
Pledged  Collateral  and  sever  from  the  remaining  Secured  Obligations  the
Allocated  Indebtedness.  From and after the giving of an Allocation Notice with
respect to any of the  Pledged  Collateral,  the Secured  Obligations  hereunder
shall be limited to the  extent  set forth in the  Allocation  Notice and (as so
limited) shall, for all purposes,  be construed as a separate credit  obligation
of  Pledgor  unrelated  to the other  transactions  contemplated  by the  Credit
Agreement,  any  Interest  Rate  Agreement,  any other  Credit  Document  or any
document related to any thereof. To the extent that the proceeds of any judicial
proceeding  relating  to the  exercise of any right or remedy  hereunder  of the
Pledged Collateral shall exceed the Allocated Indebtedness,  such proceeds shall
belong to Pledgor and shall not be  available  hereunder  to satisfy any Secured
Obligations of Pledgor other than the Allocated  Indebtedness.  In any action or
proceeding  to  exercise  any  right or remedy  under  this  Agreement  which is
commenced  after the giving by  Collateral  Agent of an Allocation  Notice,  the
Allocation  Notice  shall be  conclusive  proof  of the  limits  of the  Secured
Obligations  hereby  secured,  and Pledgor may  introduce,  by way of defense or
counterclaim, evidence thereof in any such action or proceeding. Notwithstanding
any  provision  of this Section 27, the proceeds  received by  Collateral  Agent
pursuant to this  Agreement  shall be applied by Collateral  Agent in accordance
with the provisions of Section 11 hereof.

            (b) Pledgor hereby waives to the greatest extent permitted under law
the right to a discharge of any of the Secured  Obligations under any statute or
rule of law now or hereafter in effect which  provides  that the exercise of any
particular  right or remedy as provided for herein (by judicial  proceedings  or
otherwise)  constitutes  the  exclusive  means for  satisfaction  of the Secured
Obligations or which makes  unavailable any further  judgment or any other right
or remedy provided for herein because  Collateral  Agent elected to proceed with
the  exercise  of such  initial  right or remedy or  because  of any  failure by
Collateral  Agent  to  comply  with  laws  that  prescribe   conditions  to  the
entitlement to such subsequent  judgment or the  availability of such subsequent
right or remedy. In the event that,  notwithstanding  the foregoing waiver,  any
court shall for any reason hold that such  subsequent  judgment or action is not
available to  Collateral  Agent,  Pledgor  shall not (i)  introduce in any other
jurisdiction any judgment so holding as a defense to enforcement against Pledgor
of any remedy in the Credit Agreement,  any Interest Rate Agreement or any other
Credit Document or (ii) seek to have such judgment  recognized or entered in any
other  jurisdiction,  and any such  judgment  shall in all  events be limited in
application only to the state or jurisdiction

DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -21-



where rendered and only with respect to the collateral referred to
in such judgment.

            (c) In the event any instrument in addition to the Allocation Notice
is necessary to effectuate the provisions of this Section 27, including, without
limitation,  any amendment to this Agreement,  any substitute promissory note or
affidavit or certificate of any kind,  Collateral  Agent may execute and deliver
such instrument as the  attorney-in-fact  of Pledgor.  Such power of attorney is
coupled with an interest and is irrevocable.

            (d) Notwithstanding  anything set forth herein to the contrary,  the
provisions  of this  Section 27 shall be  effective  only to the maximum  extent
permitted by law.

            Section 28. Future Advances. This Agreement shall secure the payment
of any amounts advanced from time to time pursuant to the Credit Agreement.


DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                    -22-



            IN WITNESS  WHEREOF,  Pledgor and Collateral  Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.

                                    CARSON PRODUCTS COMPANY,
                                      as Pledgor


                                    By:
                                        Name:
                                        Title:


                        BANQUE INDOSUEZ, NEW YORK BRANCH,
                                      as Collateral Agent


                                    By:
                                        Name:
                                        Title:


                                    By:
                                        Name:
                                        Title:


DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>



                                  Schedule A


1.    U.S. Patent Registrations:


2.    Pending Applications for U.S. Patents:


3.    Pending Applications for U.S. Patents in which Pledgor has a
      partial legal interest:



DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>



                                  Schedule B


1.    U.S. Trademark Registrations:


      Trademark         U.S. Registration No.         Registration Date




DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>



                                  Schedule C


U.S. Copyright Registrations:




DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>


                                  Schedule D


Proprietary Rights for which Pledgor has a license from a third party:



DRAFT:  March 21, 1997 8:48AM                           H:\WPCDOCS\1186\141501

<PAGE>



                                                              Exhibit H to the
                                                              Credit Agreement



                      BORROWER GENERAL SECURITY AGREEMENT


            BORROWER GENERAL SECURITY AGREEMENT (the  "Agreement"),  dated as of
October 18, 1996,  made by CARSON  PRODUCTS  COMPANY  (formerly known as Aminco,
Inc.,  as  successor by merger to DNL Savannah  Acquisition  Corp.),  a Delaware
corporation  having  an  office  at  64  Ross  Road,  Savannah,   Georgia  31405
("Pledgor"),  in favor of BANQUE INDOSUEZ,  NEW YORK BRANCH, having an office at
1211 Avenue of the Americas,  7th Floor,  New York, New York 10036,  as pledgee,
assignee  and  secured  party,  in its  capacity  as  collateral  agent (in such
capacities  and together  with any  successors in such  capacities,  "Collateral
Agent") for the lending  institutions  (the  "Banks") from time to time party to
the Credit Agreement (as hereinafter defined).


                               R E C I T A L S :

            A.    Pursuant to a certain credit agreement, dated as  of
the date hereof (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement";
capitalized terms used herein and not defined shall have the
meanings assigned to them in the Credit Agreement), among Pledgor,
the Banks and Banque Indosuez, New York Branch, as Agent and
Collateral Agent for the Banks, the Banks have agreed (i) to make
to or for the account of Pledgor certain A Term Loans up to an
aggregate principal amount of $15,000,000, certain B Term Loans up
to an aggregate principal amount of $10,000,000 and certain
Revolving Loans up to an aggregate principal amount of $15,000,000
and (ii) to issue certain Letters of Credit for the account of
Pledgor.

            B. It is  contemplated  that  Pledgor  may  enter  into  one or more
agreements with one or more of the Banks ("Interest Rate Agreements") fixing the
interest rates with respect to Loans under the Credit Agreement (all obligations
of  Pledgor  now  existing  or  hereafter   arising  under  such  Interest  Rate
Agreements, collectively, the "Interest Rate Obligations").

            C.    Pledgor is the legal and beneficial owner of the
Pledged Collateral (as hereinafter defined).

            D.    It is a condition to the obligations of the Banks to
make the Loans under the Credit Agreement and a condition to any
Bank issuing Letters of Credit under the Credit Agreement or

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -2-



entering into the Interest Rate  Agreements that Pledgor execute and deliver the
applicable Credit Documents, including this Agreement.

            E. This  Agreement is given by Pledgor in favor of Collateral  Agent
for its benefit and the  benefit of the Banks and the Agent  (collectively,  the
"Secured  Parties") to secure the payment and  performance of all of the Secured
Obligations (as defined in Section 2).


                              A G R E E M E N T :

            NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Pledgor and Collateral Agent hereby agree as follows:

            Section 1.  Pledge.  As  collateral  security  for the  payment  and
performance  when due of all the Secured  Obligations,  Pledgor hereby  pledges,
assigns,  transfers  and  grants to  Collateral  Agent for its  benefit  and the
benefit of the Secured Parties,  a continuing first priority  security  interest
(except as set forth on Schedule A hereto) in and to all of the right, title and
interest of Pledgor in, to and under the following property whether now existing
or hereafter acquired (collectively, the "Pledged Collateral"):

            (a)   each and every Receivable (as hereinafter
      defined);

            (b)   all Inventory (as hereinafter defined);

            (c) all books,  records,  ledgers,  print-outs,  file  materials and
      other  papers  containing  information  relating  to  Receivables  and any
      account  debtors in  respect  thereof,  together  with all  Contracts  (as
      hereinafter  defined) (except where such pledge,  assignment,  transfer or
      grant would violate the provisions of any such Contracts);

            (d)   all Equipment (as hereinafter defined);

            (e)   all Intangibles (as hereinafter defined);

            (f)   all Insurance Policies (as hereinafter
      defined);

            (g)   all Pension Plan Reversions (as hereinafter defined);

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -3-




            (h) any and all  property  of every name and nature  (excluding  any
      property  constituting Pledged Collateral under the Borrower  Intellectual
      Property  Security  Agreement)  which  from  time to time  after  the date
      hereof,  by  delivery or by writing of any kind for the  purposes  hereof,
      shall have been conveyed,  mortgaged,  pledged, assigned or transferred by
      Pledgor or by anyone on Pledgor's behalf or with its consent to Collateral
      Agent for the benefit of the Secured Parties,  which is hereby  authorized
      to receive at any and all times any such  property,  as and for additional
      security for the payment of the Secured  Obligations and to hold and apply
      such property subject to and in accordance with this Agreement; including,
      without  limitation,  all  monies  due and to  become  due to  Pledgor  in
      connection  with any of the  foregoing and all rights,  remedies,  powers,
      privileges and claims of Pledgor under or in connection therewith;

            (i)   all Documents (as hereinafter defined);

            (j)   all Instruments (as hereinafter defined); and

            (k)   all Proceeds (as hereinafter defined) of any
      and all of the foregoing.

            Section 2. Secured  Obligations.  This  Agreement  secures,  and the
Pledged  Collateral is collateral  security for, the payment and  performance in
full  when due,  whether  at  stated  maturity,  by  acceleration  or  otherwise
(including,  without limitation, the payment of interest and other amounts which
would  accrue and become due but for the filing of a petition in  bankruptcy  or
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C.  ss.  362(a)),  of (i) all  Obligations  of Pledgor  now  existing  or
hereafter  arising under the Credit  Agreement and all Interest Rate Obligations
of Pledgor now existing or hereafter  arising under any Interest Rate  Agreement
(including,  without limitation, the obligations of Pledgor provided for therein
to pay principal,  interest and all other charges, fees, expenses,  commissions,
reimbursements,  premiums,  indemnities  and  other  payments  related  to or in
respect of the Obligations contained in the Credit Agreement and the obligations
contained in any Interest Rate  Agreement)  and (ii) without  duplication of the
amounts  described  in clause (i),  all  obligations  of Pledgor now existing or
hereafter  arising  under  this  Agreement  or  any  other  Security   Document,
including,  without  limitation,  all  charges,  fees,  expenses,   commissions,
reimbursements,  premiums,  indemnities  and  other  payments  that  Pledgor  is
obligated to pay under this Agreement or any other

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -4-



Security Document (the obligations described clauses (i) and (ii), collectively,
the "Secured Obligations").

            Section 3. No  Release.  Nothing set forth in this  Agreement  shall
relieve  Pledgor  from the  performance  of any  term,  covenant,  condition  or
agreement on Pledgor's  part to be performed or observed  under or in respect of
any of the Pledged  Collateral  or from any  liability to any Person under or in
respect of any of the  Pledged  Collateral  or shall  impose any  obligation  on
Collateral  Agent or any  Secured  Party to perform  or  observe  any such term,
covenant,  condition  or  agreement  on  Pledgor's  part to be so  performed  or
observed or shall impose any liability on Collateral  Agent or any Secured Party
for any act or  omission  on the part of  Pledgor  relating  thereto  or for any
breach of any  representation  or warranty on the part of Pledgor  contained  in
this  Agreement,  any Interest Rate Agreement or any other Credit  Document,  or
under or in respect of the Pledged Collateral or made in connection  herewith or
therewith.  The obligations of Pledgor contained in this Section 3 shall survive
the  termination  of  this  Agreement  and  the  discharge  of  Pledgor's  other
obligations  under this  Agreement,  any Interest  Rate  Agreement and the other
Credit Documents.

            Section  4.   Supplements  by  Collateral   Agent.   Pledgor  hereby
authorizes  Collateral  Agent,  without  relieving  Pledgor  of any  obligations
hereunder,  to file financing statements,  continuation  statements,  amendments
thereto and other  documents  relative to all or any part  thereof,  without the
signature  of Pledgor  where  permitted  by law,  and Pledgor  agrees to do such
further  acts and things,  and to execute and deliver to  Collateral  Agent such
additional assignments,  agreements, powers and instruments, as Collateral Agent
may reasonably deem necessary or appropriate,  wherever required or permitted by
law in order to  perfect  and  preserve  the  rights  and  interests  granted to
Collateral  Agent  hereunder  or to  carry  into  effect  the  purposes  of this
Agreement or better to assure and confirm unto  Collateral  Agent its respective
rights, powers and remedies hereunder. All of the foregoing shall be at the sole
cost and expense of Pledgor.

            Section 5.  Representations, Warranties and Covenants.
Pledgor represents, warrants and covenants as follows:

            (a) Necessary Filings.  Upon the filing of financing  statements and
      acceptance thereof in the appropriate  offices under the UCC, the security
      interest  granted  to  Collateral  Agent for the  benefit  of the  Secured
      Parties  pursuant to this Agreement in and to the Pledged  Collateral will
      constitute a perfected  security interest  therein,  superior and prior to
      the rights of all other Persons therein and subject to no Liens

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -5-



      other than the Liens identified on Schedule A hereto relating to the items
      of Pledged Collateral  identified on such schedule  (collectively,  "Prior
      Liens").

            (b) No Liens.  Pledgor is as of the date hereof,  and, as to Pledged
      Collateral acquired by it from time to time after the date hereof, Pledgor
      will be, the owner of all Pledged  Collateral  free from any Lien or other
      right,  title or interest of any Person other than (i) Prior  Liens,  (ii)
      the Lien and security interest created by this Agreement,  and (iii) Liens
      of the type described in paragraphs  (a), (b), (c), (d), (e), (h), (i) and
      (j) of the definition of Permitted Encumbrances (collectively,  "Permitted
      Liens"), and Pledgor shall take all reasonable steps to defend the Pledged
      Collateral  against  all  claims and  demands  of all  Persons at any time
      claiming any interest  therein adverse to Collateral  Agent or any Secured
      Party.

            (c) Other Financing Statements.  There is no financing statement (or
      similar  statement  or  instrument  of  registration  under the law of any
      jurisdiction)  covering or purporting to cover any interest of any kind in
      the Pledged  Collateral  other than financing  statements  relating to (i)
      Prior Liens, (ii) this Agreement and (iii) Permitted Liens, and so long as
      any of the Secured  Obligations  remain unpaid or the  Commitments  of the
      Banks to make any Loan or to issue any  Letter  of  Credit  shall not have
      expired or been sooner terminated, Pledgor shall not execute, authorize or
      permit  to be filed in any  public  office  any  financing  statement  (or
      similar  statement  or  instrument  of  registration  under the law of any
      jurisdiction) or statements relating to the Pledged Collateral, except, in
      each  case,  financing  statements  filed or to be filed in respect of and
      covering  the  security  interests  granted  by Pledgor  pursuant  to this
      Agreement and financing  statements  relating to Prior Liens and Permitted
      Liens.

            (d) Chief Executive Office;  Records.  The chief executive office of
      Pledgor is located at 64 Ross Road, Savannah, Georgia 31405. Pledgor shall
      not move its chief executive office except to such new location as Pledgor
      may establish in  accordance  with the last sentence of this Section 5(d).
      All  tangible  evidence  of  all  Receivables,  Pension  Plan  Reversions,
      Contracts,  Intangibles  and  Insurance  Policies  of Pledgor and the only
      original books of account and records of Pledgor relating thereto are, and
      will continue to be, kept at such chief executive  office,  or at such new
      location  for such chief  executive  office as Pledgor  may  establish  in
      accordance

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -6-



      with the last sentence of this Section 5(d). All Receivables, Pension Plan
      Reversions,  Contracts, Intangibles and Insurance Policies of Pledgor are,
      and will  continue to be,  controlled  and monitored  (including,  without
      limitation,  for general  accounting  purposes) from such chief  executive
      office location shown above, or such new location as Pledgor may establish
      in accordance  with the last sentence of this Section 5(d).  Pledgor shall
      not establish a new location for its chief  executive  office nor shall it
      change its name until (i) it shall  have given  Collateral  Agent not less
      than 30 days' prior  written  notice of its  intention  so to do,  clearly
      describing such new location or name and providing such other  information
      in  connection  therewith  as  Collateral  Agent or any Secured  Party may
      request, and (ii) with respect to such new location or name, Pledgor shall
      have taken all  action  reasonably  satisfactory  to  Collateral  Agent to
      maintain  the  perfection  and  priority  of  the  security   interest  of
      Collateral  Agent for the  benefit of the  Secured  Parties in the Pledged
      Collateral intended to be granted hereby,  including,  without limitation,
      obtaining  waivers of landlord's or  warehouseman's  liens with respect to
      such new location, if applicable.

            (e) Location of Inventory.  All Inventory held on the date hereof by
      Pledgor  is located at one of the  locations  shown on  Schedule B hereto,
      except for  Inventory in transit in the ordinary  course of business to or
      from one or more of such locations. All Inventory now held or subsequently
      acquired shall be kept at one of the locations shown on Schedule B hereto,
      except for  Inventory in transit in the ordinary  course of business to or
      from one or more of such locations, or at such new location as Pledgor may
      establish if (i) it shall have given to Collateral Agent at least 30 days'
      prior written  notice of its intention so to do, clearly  describing  such
      new location and providing such other information in connection  therewith
      as  Collateral  Agent or any  Secured  Party  may  request,  and (ii) with
      respect  to such  new  location,  Pledgor  shall  have  taken  all  action
      reasonably satisfactory to Collateral Agent to maintain the perfection and
      priority of the security interest in the Pledged Collateral intended to be
      granted  hereby,  including,  without  limitation,  obtaining  waivers  of
      landlord's or warehouseman's  liens with respect to such new location,  if
      applicable.

            (f) Location of Equipment.  All Equipment held on the date hereof by
      Pledgor is located at one of the locations shown on Schedule C hereto. All
      Equipment  now held or  subsequently  acquired by Pledgor shall be kept at
      one of the locations shown on Schedule C hereto, or such new location as

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -7-



      Pledgor may  establish if (i) it shall have given to  Collateral  Agent at
      least 30 days' prior  written  notice of its  intention so to do,  clearly
      describing  such new  location and  providing  such other  information  in
      connection therewith as Collateral Agent or any Secured Party may request,
      and (ii) with respect to such new  location,  Pledgor shall have taken all
      action  reasonably  satisfactory  to  Collateral  Agent  to  maintain  the
      perfection and priority of the security  interest of Collateral  Agent for
      the benefit of the Secured Parties in the Pledged  Collateral  intended to
      be granted hereby,  including,  without  limitation,  obtaining waivers of
      landlord's or warehouseman's  liens with respect to such new location,  if
      applicable.

            (g)  Authorization,   Enforceability.   Pledgor  has  the  requisite
      corporate power,  authority and legal right to pledge and grant a security
      interest in all the Pledged  Collateral  pursuant to this  Agreement,  and
      this  Agreement  constitutes  the legal,  valid and binding  obligation of
      Pledgor,  enforceable against Pledgor in accordance with its terms, except
      as may be limited by bankruptcy, insolvency, reorganization, moratorium or
      similar laws  relating to or affecting  creditors'  rights  generally  and
      except as such enforceability may be limited by the application of general
      principles  of  equity  (regardless  of  whether  such  enforceability  is
      considered in a proceeding in equity or at law).

            (h) No Consents,  etc. No consent of any party  (including,  without
      limitation,  stockholders  or creditors  of Pledgor or any account  debtor
      under a Receivable) and no consent,  authorization,  approval,  license or
      other  action  by,  and no  notice  to or filing  with,  any  Governmental
      Authority  or  regulatory  body or other  Person is  required  for (x) the
      pledge by Pledgor of the Pledged Collateral  pursuant to this Agreement or
      for the  execution,  delivery or performance of this Agreement by Pledgor,
      or (y) the exercise by Collateral Agent of the rights provided for in this
      Agreement,  or (z) the  exercise by  Collateral  Agent of the  remedies in
      respect of the Pledged  Collateral  pursuant to this Agreement (other than
      those consents,  authorizations,  approvals, licenses, actions, notices or
      filings which, if not obtained or made,  would not have a material adverse
      effect upon the interests of Collateral Agent under this Agreement).

            (i)   Pledged Collateral.  All information set forth
      herein, including the Schedules annexed hereto, and all
      information contained in any documents, schedules and lists
      heretofore delivered to any Secured Party in connection with

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -8-



      this  Agreement,  in each case,  relating  to the  Pledged  Collateral  is
      accurate and complete in all material respects.

            Section 6.  Special Provisions Concerning Receivables.

            (a) Special Representations and Warranties. As of the time when each
of its  Receivables  arises,  Pledgor  shall be deemed to have  represented  and
warranted that such  Receivable and all records,  papers and documents  relating
thereto  (i) are genuine and  correct  and in all  material  respects  what they
purport to be, (ii)  represent  the legal,  valid and binding  obligation of the
account debtor,  evidencing indebtedness unpaid and owed by such account debtor,
arising  out of the  performance  of labor or  services or the sale or lease and
delivery of the merchandise listed therein or out of an advance or a loan, (iii)
will, in the case of a Receivable, except for the original or duplicate original
invoice sent to a purchaser  evidencing such  purchaser's  account,  be the only
original writings evidencing and embodying such obligation of the account debtor
named  therein,  (iv)  constitute  and  evidence  true  and  valid  obligations,
enforceable  in  accordance  with their  respective  terms,  not  subject to the
fulfillment of any contract or condition whatsoever or to any defenses, set-offs
or counterclaims  except with respect to refunds,  returns and allowances in the
ordinary course of business,  or stamp or other taxes, and (v) are in compliance
and conform in all material  respects  with all  applicable  Federal,  state and
local laws and applicable laws of any relevant foreign jurisdiction.

            (b)  Maintenance of Records.  Pledgor shall keep and maintain at its
own cost and expense complete records of each Receivable, in a manner consistent
with prudent business practice,  including,  without limitation,  records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation  relating thereto, and Pledgor shall make the same available
to Collateral  Agent or any Secured Party for inspection upon  reasonable  prior
notice to any Authorized  Officer of Pledgor,  at such  reasonable  times during
regular business hours and intervals and to such reasonable extent as Collateral
Agent or any Secured Party may reasonably  request.  Pledgor shall, at Pledgor's
sole cost and expense, upon Collateral Agent's demand made at any time after the
occurrence of an Event of Default, deliver all tangible evidence of Receivables,
including,  without  limitation,  all documents  evidencing  Receivables and any
books and records relating thereto to Collateral Agent or to its representatives
(copies of which  evidence  and books and records  may be retained by  Pledgor).
Upon  the  occurrence  and  during  the  continuance  of an  Event  of  Default,
Collateral  Agent may  transfer a full and  complete  copy of  Pledgor's  books,
records, credit information, reports,

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -9-



memoranda and all other writings  relating to the Receivables to and for the use
by any Person that has acquired or is  contemplating  acquisition of an interest
in the Receivables or Collateral  Agent's security  interest therein without the
consent of Pledgor.

            (c) Legend. Pledgor shall legend, at the request of Collateral Agent
made at any time after the  occurrence  of an Event of  Default  and in form and
manner  reasonably  satisfactory to Collateral  Agent, the Receivables and other
books,  records  and  documents  of  Pledgor  evidencing  or  pertaining  to the
Receivables with an appropriate  reference to the fact that the Receivables have
been  assigned to  Collateral  Agent for the benefit of the Secured  Parties and
that Collateral Agent has a security interest therein.

            (d) Modification of Terms,  etc. Pledgor shall not rescind or cancel
any indebtedness evidenced by any Receivable or modify any material term thereof
or make any  material  adjustment  with respect  thereto  except in the ordinary
course of business consistent with prudent business practice, or extend or renew
any such indebtedness  except in the ordinary course of business consistent with
prudent business  practice or compromise or settle any dispute,  claim,  suit or
legal  proceeding  relating  thereto  except in the ordinary  course of business
consistent  with prudent  business  practice or sell any  Receivable or interest
therein without the prior written consent of Collateral  Agent (such consent not
to be  unreasonably  withheld or  delayed).  Pledgor  shall  timely  fulfill all
obligations  on its  part  to be  fulfilled  under  or in  connection  with  the
Receivables  (except for such obligations the failure to fulfill which would not
have  in the  aggregate,  a  material  adverse  effect  upon  the  interests  of
Collateral Agent under this Agreement).

            (e) Collection.  Pledgor shall use reasonable efforts to cause to be
collected  from the account debtor of each of the  Receivables,  as and when due
(including,   without   limitation,   Receivables  that  are  delinquent,   such
Receivables  to be collected in accordance  with generally  accepted  commercial
collection  procedures),  any and all amounts  owing under or on account of such
Receivable,  and apply forthwith upon receipt thereof all such amounts as are so
collected to the  outstanding  balance of such  Receivable,  except that Pledgor
may, with respect to a Receivable,  allow in the ordinary course of business (i)
a  refund  or  credit  due as a result  of  returned  or  damaged  or  defective
merchandise  and (ii) such  extensions  of time to pay amounts due in respect of
Receivables  and such other  modifications  of payment terms or  settlements  in
respect of Receivables as shall be commercially reasonable in the circumstances,
all in accordance with Pledgor's ordinary course of business consistent with its
collection

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -10-



practices  as in effect from time to time.  The  reasonable  costs and  expenses
(including,  without  limitation,  attorneys' fees) of collection,  in any case,
whether  incurred by Pledgor,  Collateral  Agent or any Secured Party,  shall be
paid by Pledgor.

            (f) Instruments.  Pledgor shall deliver to Collateral Agent,  within
five  days  after  receipt  thereof  by  Pledgor,   any  Instrument   evidencing
Receivables which is in the principal amount of $500,000 or more. Any Instrument
delivered  to  Collateral   Agent   pursuant  to  this  Section  6(f)  shall  be
appropriately  endorsed (if  applicable)  to the order of Collateral  Agent,  as
agent for the Secured Parties,  and shall be held by Collateral Agent as further
security  hereunder;  provided,  that, so long as no Default or Event of Default
shall have occurred and be continuing,  Pledgor may retain for collection in the
ordinary  course any  Instruments  received by Pledgor in the ordinary course of
business and  Collateral  Agent shall,  promptly  upon request of Pledgor,  make
appropriate  arrangements for making any Instrument pledged by Pledgor available
to Pledgor  for  purposes  of  presentation,  collection  or  renewal  (any such
arrangement  to be effected,  to the extent  deemed  appropriate  by  Collateral
Agent, against trust receipt or like document).

            (g) Cash Collateral.  Upon the occurrence and during the continuance
of an Event of Default, if Collateral Agent so directs,  Pledgor shall cause all
payments on account of the  Receivables  to be held by Collateral  Agent as cash
collateral,  upon  acceleration  or  otherwise.  Without  notice to or assent by
Pledgor,  Collateral  Agent may apply any or all amounts then or thereafter held
as cash  collateral in the manner  provided in Section 11. The reasonable  costs
and expenses  (including,  without  limitation,  reasonable  attorneys' fees) of
collection,  whether incurred by Collateral Agent or any Secured Party, shall be
paid by Pledgor.

            Section 7.  Provisions Concerning All Pledged Collateral.

            (a)  Protection of Collateral  Agent's  Security.  Pledgor shall not
take any action that impairs the rights of Collateral Agent or any Secured Party
in the Pledged  Collateral.  Pledgor  shall at all times keep the  Inventory and
Equipment  insured,  at Pledgor's own expense,  to Collateral Agent's reasonable
satisfaction  against  fire,  theft and all other risks of the kind  customarily
insured against,  in such amounts and with such deductibles as would customarily
be maintained under similar  circumstances by operators of businesses similar to
the  business  of Pledgor to the extent  available  at  commercially  reasonable
rates.  Each  policy or  certificate  with  respect to such  insurance  shall be
endorsed to Collateral Agent's reasonable satisfaction for the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -11-



benefit of Collateral Agent (including, without limitation, by naming Collateral
Agent as an additional named insured and sole loss payee as Collateral Agent may
request) and such policy or certificate  shall be delivered to Collateral Agent.
Each such policy shall state that it cannot be cancelled  without 30 days' prior
written notice to Collateral  Agent. At least 30 days prior to the expiration of
any such policy of  insurance,  Pledgor  shall  deliver to  Collateral  Agent an
extension or renewal policy or an insurance  certificate  evidencing  renewal or
extension  of such  policy.  If  Pledgor  shall  fail  to  insure  such  Pledged
Collateral to Collateral Agent's reasonable satisfaction, Collateral Agent shall
have the right (but shall be under no  obligation),  following five (5) Business
Days'  prior  written  notice to Pledgor of its  intention  to do so, to advance
funds to  procure  or renew or  extend  such  insurance  and  Pledgor  agrees to
reimburse  Collateral Agent for all reasonable costs and expenses thereof,  with
interest  on all such  funds  from the date  advanced  until paid in full at the
highest rate then in effect under the Credit Agreement.

            (b)  Insurance  Proceeds.  So long as no Event of Default shall have
occurred and be continuing, Pledgor shall have the option as provided in Section
3.02(A)(h)  of the  Credit  Agreement  (i) to apply  any  proceeds  of  property
insurance (less any portion of such proceeds not in excess of $500,000) received
by it as Net Cash Proceeds in accordance  with Section  3.02(B)(a) of the Credit
Agreement  or (ii) to apply the  proceeds  of such  insurance  to the  repair or
replacement of the item or items of Pledged  Collateral in respect of which such
proceeds were received.  In the event that Pledgor elects to apply such proceeds
to the repair or  replacement  of any item of  Pledged  Collateral  pursuant  to
clause (ii) of the  preceding  sentence,  Pledgor shall upon its receipt of such
proceeds  from  Collateral  Agent  as  promptly  as  practicable   commence  and
diligently  continue to perform such repair or as promptly as practicable effect
such replacement.  Upon the occurrence and during the continuance of an Event of
Default,  Collateral  Agent  shall  have the  option  to apply any  proceeds  of
insurance  received by Pledgor in respect of the Pledged  Collateral  toward the
payment of the Secured  Obligations  in accordance  with Section 11 hereof or to
continue  to  hold  such  proceeds  as  additional   collateral  to  secure  the
performance by Pledgor of the Secured Obligations.

            (c)  Maintenance of Equipment.  Pledgor shall exercise  commercially
reasonable efforts to cause the Equipment to be maintained and preserved in good
repair, working order and condition, ordinary wear and tear excepted, and to the
extent  consistent  with  current  business  practice  in  accordance  with  any
manufacturer's  manual,  and  shall,  in the  case of any loss or  damage  which
(individually or in the aggregate) exceeds $100,000 to any of

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -12-



the Equipment  (of which prompt  notice shall be given to  Collateral  Agent) as
quickly as commercially  practicable after the occurrence thereof, make or cause
to be made all  repairs,  replacements  and  other  improvements  in  connection
therewith which are necessary or desirable in the conduct of Pledgor's  business
in Pledgor's commercially reasonable judgment.

            (d) Payment of Taxes;  Claims.  Pledgor shall pay, prior to the date
on which  material  penalties  attach  thereto,  all property and other material
taxes,  assessments  and  governmental  charges or levies  imposed upon, and all
lawful claims (including claims for labor,  materials and supplies) against, the
Pledged  Collateral  which,  if  unpaid  might  become a Lien  upon the  Pledged
Collateral.  Notwithstanding  the  foregoing,  Pledgor  may at its  own  expense
contest the amount or applicability  of any of the obligations  described in the
preceding sentence as permitted under the Credit Agreement.

            (e) Further  Actions.  Pledgor shall,  at its sole cost and expense,
make, execute, endorse, acknowledge, file or refile and/or deliver to Collateral
Agent from time to time such lists, descriptions and designations of the Pledged
Collateral,  copies of warehouse  receipts,  receipts in the nature of warehouse
receipts,  bills of lading, documents of title, vouchers,  invoices,  schedules,
confirmatory   assignments,   supplements,   additional   security   agreements,
conveyances,  financing statements,  transfer endorsements,  powers of attorney,
certificates,  reports and other assurances or instruments and take such further
steps relating to the Pledged Collateral and other property or rights covered by
the security  interest hereby granted,  which  Collateral Agent reasonably deems
appropriate  or  advisable  to  exercise  and  enforce  its rights and  remedies
hereunder  with respect to any Pledged  Collateral  and to perfect,  preserve or
protect the security interest in the Pledged  Collateral  created and granted by
this Agreement.

            (f)  Financing  Statements.   Pledgor  shall  sign  and  deliver  to
Collateral Agent such financing and continuation statements,  in form reasonably
acceptable to Collateral Agent, as may from time to time be required to continue
and  maintain a valid,  enforceable,  first  priority  security  interest in the
Pledged  Collateral as provided  herein and the other  rights,  as against third
parties,  provided hereby,  all in accordance with the UCC or any other relevant
law. Pledgor shall pay any applicable  filing fees and other expenses related to
the filing of such financing and  continuation  statements.  Pledgor  authorizes
Collateral Agent to file any such financing or continuation  statements  without
the signature of Pledgor where permitted by law.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -13-



            (g) Warehouse Receipts  Non-Negotiable.  If any warehouse receipt or
receipt in the nature of a warehouse  receipt is issued  with  respect to any of
the Inventory, Pledgor shall not permit such warehouse receipt or receipt in the
nature thereof to be "negotiable"  (as such term is used in Section 7-104 of the
UCC or under other relevant law).

            Section 8.  Transfers  and Other Liens.  Pledgor shall not (a) sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Pledged  Collateral  except as permitted  by the Credit  Agreement or (b)
create or permit to exist any Lien upon or with  respect  to any of the  Pledged
Collateral  other  than (i) Prior  Liens,  (ii) the Lien and  security  interest
granted to Collateral  Agent  pursuant to this  Agreement,  and (iii)  Permitted
Liens.

            Upon any sale or other disposition of any assets of Pledgor which is
in compliance with the Credit  Agreement and the proceeds of which sale or other
disposition  are used to make a mandatory  prepayment  of the Loans  pursuant to
Section  3.02(A) of the  Credit  Agreement,  such  assets  constituting  Pledged
Collateral  shall be released from the Lien of this Agreement in accordance with
Section 17 of this Agreement.

            Section 9. Reasonable Care. Collateral Agent shall be deemed to have
exercised  reasonable  care  in the  custody  and  preservation  of the  Pledged
Collateral in its  possession if such Pledged  Collateral is accorded  treatment
substantially  equivalent  to that which  Collateral  Agent,  in its  individual
capacity,  accords its own property,  it being  understood that Collateral Agent
shall not have  responsibility for taking any necessary steps to preserve rights
against any Person with respect to any Pledged Collateral.

            Section 10. Remedies Upon Default;  Obtaining the Pledged Collateral
Upon Event of  Default.  (a)If an Event of Default  shall have  occurred  and be
continuing,  and the Secured  Obligations  have been declared due and payable in
accordance with the Credit  Agreement,  then and in every such case,  Collateral
Agent may:

             (i)  Personally,  or  by  agents  or  attorneys,  immediately  take
      possession of the Pledged Collateral or any part thereof,  from Pledgor or
      any other  Person  who then has  possession  of any part  thereof  with or
      without  notice or process  of law,  and for that  purpose  may enter upon
      Pledgor's  premises  where any of the  Pledged  Collateral  is located and
      remove such Pledged Collateral and use in connection with such removal any
      and all services, supplies, aids and other facilities of Pledgor.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -14-



            (ii) Instruct the obligor or obligors on any  agreement,  instrument
      or other obligation  (including,  without limitation,  the Receivables and
      Contracts)  constituting  the  Pledged  Collateral  to  make  any  payment
      required  by the  terms  of  such  instrument  or  agreement  directly  to
      Collateral  Agent;  provided,  however,  that in the  event  that any such
      payments  are made  directly  to  Pledgor,  prior to  receipt  by any such
      obligor of such instruction,  Pledgor shall segregate all amounts received
      pursuant  thereto in a separate  account  and pay the same as  promptly as
      practicable to Collateral Agent.

           (iii) Sell, assign or otherwise liquidate, or direct Pledgor to sell,
      assign or otherwise liquidate,  any or all investments made in whole or in
      part with the Pledged Collateral or any part thereof,  and take possession
      of the proceeds of any such sale, assignment or liquidation.

            (iv) Take possession of the Pledged  Collateral or any part thereof,
      by directing Pledgor in writing to deliver the same to Collateral Agent at
      any place or places so  designated  by  Collateral  Agent,  in which event
      Pledgor shall at its own expense: (A) forthwith cause the same to be moved
      to the place or places  designated by Collateral Agent and there delivered
      to  Collateral  Agent;  (B)  store  and keep  any  Pledged  Collateral  so
      delivered  to  Collateral  Agent at such place or places  pending  further
      action by Collateral Agent; and (C) while the Pledged  Collateral shall be
      so stored and kept,  provide  such  security and  maintenance  services as
      shall be  reasonably  necessary  to protect the same and to  preserve  and
      maintain  them in good  condition.  Pledgor's  obligation  to deliver  the
      Pledged  Collateral is of the essence of this Agreement.  Upon application
      to a court  of  equity  having  jurisdiction,  Collateral  Agent  shall be
      entitled to a decree  requiring  specific  performance  by Pledgor of such
      obligation.

             (b)  Remedies; Disposition of the Pledged Collateral.

             (i) Upon the occurrence  and during the  continuance of an Event of
      Default, Collateral Agent may from time to time exercise in respect of the
      Pledged Collateral,  in addition to other rights and remedies provided for
      herein or  otherwise  available  to it, all the rights and  remedies  of a
      secured party on default under the UCC, and  Collateral  Agent may also in
      its sole discretion,  without notice except as specified  below,  sell the
      Pledged Collateral or any part thereof in one or more parcels at public or
      private  sale,  at any  exchange,  broker's  board or at any of Collateral
      Agent's offices or elsewhere,  for cash, on credit or for future delivery,
      and at

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -15-



      such  price or prices and upon such other  terms as  Collateral  Agent may
      deem commercially reasonable.  Collateral Agent or any other Secured Party
      or any of their  respective  Affiliates may be the purchaser of any or all
      of the Pledged Collateral at any such sale and shall be entitled,  for the
      purpose of bidding and making  settlement or payment of the purchase price
      for all or any portion of the Pledged Collateral sold at such sale, to use
      and apply any of the Secured  Obligations  owed to such Person as a credit
      on account of the purchase price of any Pledged Collateral payable by such
      Person at such sale.  Each  purchaser  at any such sale shall  acquire the
      property  sold  absolutely  free  from  any  claim or right on the part of
      Pledgor.  Collateral  Agent  shall  not be  obligated  to make any sale of
      Pledged  Collateral  regardless  of  notice  of sale  having  been  given.
      Collateral  Agent may adjourn any public or private sale from time to time
      by announcement  at the time and place fixed therefor,  and such sale may,
      without further  notice,  be made at the time and place to which it was so
      adjourned.  Pledgor hereby waives, to the fullest extent permitted by law,
      any claims against Collateral Agent arising by reason of the fact that the
      price at which any Pledged Collateral may have been sold at such a private
      sale was less than the price  which  might have been  obtained at a public
      sale,  even if Collateral  Agent accepts the first offer received and does
      not offer such Pledged Collateral to more than one offeree.

            (ii) Pledgor  acknowledges  and agrees that, to the extent notice of
      sale shall be required by law, ten days' notice to Pledgor of the time and
      place of any public sale or of the time after  which any  private  sale or
      other  intended  disposition  is  to  take  place  shall  be  commercially
      reasonable  notification of such matters. No notification need be given to
      Pledgor if it has signed,  after the occurrence of an Event of Default,  a
      statement  renouncing  or modifying any right to  notification  of sale or
      other intended disposition.

            (c) Waiver of Notice  and  Claims.  Pledgor  hereby  waives,  to the
fullest  extent  permitted  by  applicable  law,  notice or judicial  hearing in
connection  with  Collateral  Agent's  taking  possession or Collateral  Agent's
disposition of any of the Pledged Collateral, including, without limitation, any
and all prior notice and hearing for any prejudgment  remedy or remedies and any
such right which  Pledgor  would  otherwise  have under law, and Pledgor  hereby
further  waives,  to the fullest  extent  permitted by  applicable  law: (i) all
damages occasioned by such taking of possession;  (ii) all other requirements as
to the time, place and terms of sale or other  requirements  with respect to the
enforcement

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -16-



of Collateral  Agent's  rights  hereunder;  and (iii) all rights of  redemption,
appraisal,  valuation,  stay,  extension or moratorium now or hereafter in force
under any applicable law. Collateral Agent shall not be liable for any incorrect
or improper  payment  made  pursuant to this  Section 10 in the absence of gross
negligence  or  willful  misconduct.  Any sale of,  or the grant of  options  to
purchase, or any other realization upon, any Pledged Collateral shall operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of Pledgor therein and thereto,  and shall be a perpetual bar both at law and in
equity against Pledgor and against any and all Persons claiming or attempting to
claim the Pledged  Collateral  so sold,  optioned or realized  upon, or any part
thereof, from, through or under Pledgor.

            (d) Certain Sales of Pledged Collateral. Pledgor recognizes that, by
reason of certain prohibitions contained in law, rules, regulations or orders of
any foreign  Governmental  Authority,  Collateral  Agent may be compelled,  with
respect  to any  sale of all or any  part of the  Pledged  Collateral,  to limit
purchasers  to those  who meet the  requirements  of such  foreign  Governmental
Authority.  Pledgor  acknowledges  that any such  sales may be at prices  and on
terms less favorable to Collateral Agent than those obtainable  through a public
sale without such restrictions, and, notwithstanding such circumstances,  agrees
that  any  such  restricted  sale  shall  be  deemed  to  have  been  made  in a
commercially reasonable manner.

            Section  11.  Application  of  Proceeds.  The  proceeds  received by
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the  Pledged  Collateral  pursuant  to the  exercise  by
Collateral Agent of its remedies as a secured creditor as provided in Section 10
hereof shall be applied,  together  with any other sums then held by  Collateral
Agent pursuant to this Agreement, promptly by Collateral Agent as follows:

            First, to the payment of all costs and expenses,  fees,  commissions
      and  taxes  of such  sale,  collection  or other  realization,  including,
      without  limitation,  reasonable  out of  pocket  costs  and  expenses  of
      Collateral Agent and its agents and counsel, and all expenses, liabilities
      and advances made or incurred by Collateral Agent in connection therewith;

            Second, to the payment of all other costs and expenses of such sale,
      collection   or  other   realization,   including,   without   limitation,
      compensation  to the Banks and their  agents  and  counsel  and all costs,
      liabilities  and  advances  made or  incurred  by the Banks in  connection
      therewith;

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -17-




            Third,  to the  payment  in  full in  cash  of  Secured  Obligations
      consisting  of interest  and all amounts  other than  principal  under the
      Credit  Agreement at any time and from time to time owing by Pledgor under
      or in  connection  with the Credit  Agreement,  ratably  according  to the
      unpaid amounts thereof, in the manner and priority set forth in the Credit
      Agreement, together with interest on each such amount in the manner and to
      the extent set forth in the Credit  Agreement from and after the date such
      amount is due, owing or unpaid until paid in full;

            Fourth,  to the  pro  rata  payment  in  full  in  cash  of  Secured
      Obligations  consisting of (i) principal at any time and from time to time
      owing by Pledgor under or in connection with the Credit Agreement, ratably
      according to the unpaid  amounts  thereof,  in the manner and priority set
      forth in the Credit Agreement and (ii) the amount of Pledgor's obligations
      then due and payable  under any Interest  Rate  Agreement,  including  any
      early  termination  payments  then due  (exclusive  of expenses or similar
      liabilities to any Bank under the applicable  Interest Rate Agreement(s)),
      together with interest on each such amount in the manner and to the extent
      set forth in the Credit  Agreement  from and after the date such amount is
      due, owing or unpaid until paid in full; and

            Fifth, the balance,  if any, to the Person lawfully entitled thereto
      (including Pledgor or its successors or assigns).

            Section 12.  Expenses.  Pledgor  will upon demand pay to  Collateral
Agent the amount of any and all  reasonable  expenses,  including the reasonable
fees and  expenses of its counsel and the  reasonable  fees and  expenses of any
experts and agents which  Collateral  Agent may incur in connection with (i) the
collection of the Secured  Obligations,  (ii) the enforcement and administration
of this  Agreement,  (iii)  the  custody  or  preservation  of,  or the sale of,
collection from, or other realization upon, any of the Pledged Collateral,  (iv)
the  exercise or  enforcement  of any of the rights of  Collateral  Agent or any
Secured Party  hereunder or (v) the failure by Pledgor to perform or observe any
of the provisions  hereof.  All amounts payable by Pledgor under this Section 12
shall be due within  ten  Business  Days  after  demand and shall be part of the
Secured Obligations.  Pledgor's  obligations under this Section 12 shall survive
the  termination  of  this  Agreement  and  the  discharge  of  Pledgor's  other
obligations hereunder.

            Section 13.  No Waiver; Cumulative Remedies.  (a)  No
failure on the part of Collateral Agent to exercise, no course of

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -18-



dealing  with  respect  to,  and no  delay on the  part of  Collateral  Agent in
exercising,  any  right,  power or remedy  hereunder  shall  operate as a waiver
thereof;  nor shall any single or partial  exercise of any such right,  power or
remedy hereunder  preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein provided are cumulative
and are not exclusive of any remedies provided by law.

            (b)  In  the  event  Collateral  Agent  shall  have  instituted  any
proceeding  to  enforce  any right,  power or remedy  under  this  Agreement  by
foreclosure,  sale,  entry or  otherwise,  and such  proceeding  shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Collateral Agent, then and in every such case, Pledgor,  Collateral Agent and
each Secured Party shall be restored to their  respective  former  positions and
rights  hereunder  with  respect  to the  Pledged  Collateral,  and all  rights,
remedies and powers of Collateral  Agent and the Secured  Parties shall continue
as if no such proceeding had been instituted.

            Section 14. Collateral Agent. Collateral Agent has been appointed as
collateral  agent  pursuant to the Credit  Agreement.  The actions of Collateral
Agent  hereunder  are  subject  to  the  provisions  of  the  Credit  Agreement.
Collateral  Agent  shall  have the  right  hereunder  to make  demands,  to give
notices,  to  exercise or refrain  from  exercising  any rights,  and to take or
refrain  from  taking  action  (including,  without  limitation,  the release or
substitution of Pledged  Collateral),  in accordance with this Agreement and the
Credit Agreement.  Collateral Agent may resign and a successor  Collateral Agent
may be  appointed  in the  manner  provided  in the Credit  Agreement.  Upon the
acceptance  of any  appointment  as Collateral  Agent by a successor  Collateral
Agent,  that successor  Collateral  Agent shall thereupon  succeed to and become
vested  with all the  rights,  powers,  privileges  and  duties of the  retiring
Collateral Agent under this Agreement,  and the retiring  Collateral Agent shall
thereupon be discharged  from its duties and  obligations  under this Agreement.
After any  retiring  Collateral  Agent's  resignation,  the  provisions  of this
Agreement  shall inure to its  benefit as to any actions  taken or omitted to be
taken by it under this Agreement while it was Collateral Agent.

            Section 15. Collateral Agent May Perform; Collateral Agent Appointed
Attorney-in-Fact.  If  Pledgor  shall  fail to do any act or  thing  that it has
covenanted  to do hereunder or if any warranty on the part of Pledgor  contained
herein shall be breached,  Collateral  Agent or any Secured Party may (but shall
not be  obligated  to) do the  same or cause  it to be done or  remedy  any such
breach, and may, following five Business Days' prior written notice

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -19-



to Pledgor of its intention to do so, expend funds for such purpose. Any and all
amounts so expended by  Collateral  Agent or such Secured Party shall be paid by
Pledgor  within ten Business  Days after demand  therefor,  with interest at the
highest  rate then in effect under the Credit  Agreement  during the period from
and  including  the date on which  such funds  were so  expended  to the date of
repayment.  Pledgor's  obligations  under  this  Section  15 shall  survive  the
termination of this Agreement and the discharge of Pledgor's  other  obligations
under this Agreement,  the Credit Agreement, any Interest Rate Agreement and the
other  Credit   Documents.   Pledgor  hereby  appoints   Collateral   Agent  its
attorney-in-fact,  with full  authority in the place and stead of Pledgor and in
the name of  Pledgor,  or  otherwise,  from time to time in  Collateral  Agent's
reasonable  discretion  to  take  any  action  and  to  execute  any  instrument
consistent with the terms of this Agreement and the other Credit Documents which
Collateral  Agent may deem  reasonably  necessary or advisable to accomplish the
purposes of this  Agreement.  The  foregoing  grant of  authority  is a power of
attorney coupled with an interest and such appointment  shall be irrevocable for
the term of this Agreement. Pledgor hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof.

            Section 16.  Modification  in Writing.  No amendment,  modification,
supplement,  termination or waiver of or to any provision of this Agreement, nor
consent to any  departure by Pledgor  therefrom,  shall be effective  unless the
same  shall be made in  accordance  with the terms of the Credit  Agreement  and
unless in writing and signed by Collateral Agent. Any amendment, modification or
supplement of or to any provision of this Agreement, any waiver of any provision
of this  Agreement and any consent to any departure by Pledgor from the terms of
any provision of this Agreement shall be effective only in the specific instance
and for the  specific  purpose for which made or given.  Except  where notice is
specifically  required by this Agreement or any other Credit Document, no notice
to or  demand on  Pledgor  in any case  shall  entitle  Pledgor  to any other or
further notice or demand in similar or other circumstances.

            Section 17. Termination;  Release.  When all the Secured Obligations
have been paid in full and the  Commitments  of the Banks to make any Loan or to
issue any Letter of Credit under the Credit Agreement shall have expired or been
sooner  terminated,  this Agreement shall  terminate.  Upon  termination of this
Agreement or any release of Pledged Collateral in accordance with the provisions
of the Credit  Agreement,  Collateral  Agent shall,  upon the request and at the
sole cost and  expense of Pledgor,  forthwith  assign,  transfer  and deliver to
Pledgor, against receipt and without

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -20-



recourse to or warranty by Collateral Agent,  such of the Pledged  Collateral to
be released  (in the case of a release) as may be in  possession  of  Collateral
Agent and as shall not have been sold or otherwise applied pursuant to the terms
hereof,  and, with respect to any other Pledged  Collateral,  proper instruments
(including  UCC  termination   statements  on  Form  UCC-3)   acknowledging  the
termination of this Agreement or the release of such Pledged Collateral,  as the
case may be.

            Section 18.  Definitions.  The following terms shall have
the following meanings.  All such definitions shall be equally
applicable to the singular and plural forms of the terms defined.

            "Contracts" shall mean all right,  title and interest of Pledgor in,
to and under,  or  derived  from,  any and all sale,  service,  performance  and
equipment lease contracts,  agreements and grants (whether written or oral), and
any other contract (whether written or oral) between Pledgor and third parties.

            "Documents" shall have the meaning assigned to that term
under the UCC.

            "Equipment" shall mean "equipment", as such term is
defined in the UCC.

            "Instrument" shall have the meaning assigned that term
under the UCC.

            "Intangibles" shall mean "general intangibles", as such
term is defined in the UCC.

            "Insurance  Policies"  shall  mean all  insurance  policies  held by
Pledgor  or  naming  Pledgor  as  insured,  additional  insured  or  loss  payee
(including,   without  limitation,   casualty  insurance,  liability  insurance,
property insurance and business  interruption  insurance) and all such insurance
policies  entered into after the date hereof other than  insurance  policies (or
certificates of insurance evidencing such insurance policies) relating to health
and welfare insurance and life insurance  policies in which Pledgor is not named
as  beneficiary  (i.e.,  insurance  policies  that are not "Key  Man"  insurance
policies).

            "Inventory" shall mean, all "inventory", as such term is
defined in the UCC.

            "Pension Plan Reversions"  shall mean Pledgor's right to receive the
surplus funds, if any, which are payable to Pledgor following the termination of
any employee pension plan and the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -21-



satisfaction  of all liabilities of participants  and  beneficiaries  under such
plan in accordance with applicable law.

            "Proceeds" shall mean all "proceeds", as such term is defined in the
UCC or under other relevant law.

            "Receivables"  shall mean all of  Pledgor's  rights to  payment  for
goods  sold or leased or  services  performed  by  Pledgor  or any other  party,
whether now in existence or arising from time to time  hereafter,  including any
"account",  as such term is defined in the UCC,  and all rights  evidenced by an
account,  contract,  security  agreement,  chattel  paper,  or other evidence of
indebtedness  or security  together  with (i) all  security  pledged,  assigned,
hypothecated  or granted to or held by  Pledgor  to secure the  foregoing,  (ii)
general  intangibles  arising out of Pledgor's  rights in any goods, the sale of
which gave rise thereto, (iii) all guarantees, endorsements and indemnifications
on, or of, any of the  foregoing,  (iv) all powers of attorney for the execution
of any  evidence of  indebtedness  or security  or other  writing in  connection
therewith, and (v) all evidences of the filing of financing statements and other
statements and the registration of other instruments in connection therewith and
amendments  thereto,   notices  to  other  creditors  or  secured  parties,  and
certificates from filing or other registration officers.

            Section 19.  Notices.  Unless  otherwise  provided  herein or in the
Credit Agreement, any notice or other communication herein required or permitted
to be given shall be given in the manner set forth in the Credit  Agreement,  as
to  either  party,  addressed  to it at the  address  set  forth  in the  Credit
Agreement  or at such other  address as shall be  designated  by such party in a
written  notice to the other party  complying  as to delivery  with the terms of
this  Section  19;  provided  that  notices  to  Collateral  Agent  shall not be
effective until received by Collateral Agent.

            Section 20. Continuing Security Interest; Assignment. This Agreement
shall create a continuing  security interest in the Pledged Collateral and shall
(i) be binding upon Pledgor, its successors and assigns and (ii) inure, together
with the rights and remedies of Collateral  Agent  hereunder,  to the benefit of
Collateral  Agent and the other  Secured  Parties  and each of their  respective
successors,  transferees  and  assigns;  no other  Persons  (including,  without
limitation, any other creditor of Pledgor) shall have any interest herein or any
right or benefit with respect  hereto.  Without  limiting the  generality of the
foregoing   clause  (ii),  any  Bank  may  assign  or  otherwise   transfer  any
indebtedness held by it secured by this Agreement to any other Person,  and such
other Person shall thereupon become vested with

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -22-



all the benefits in respect thereof  granted to such Bank,  herein or otherwise,
subject  however,  to the provisions of the Credit  Agreement and any applicable
Interest Rate Agreement.

            Section 21. GOVERNING LAW; TERMS.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS  OF THE  PARTIES  HEREUNDER  SHALL  BE  CONSTRUED  AND  ENFORCED  IN
ACCORDANCE  WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN,  EXCEPT TO THE EXTENT THAT
THE VALIDITY OR  PERFECTION  OF THE  SECURITY  INTEREST  HEREUNDER,  OR REMEDIES
HEREUNDER,  IN RESPECT OF ANY PARTICULAR  PROPERTY ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.

            Section  22.CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  (a) Any
legal action or proceeding  with respect to this Agreement may be brought in the
courts  of the  State  of New  York or of the  United  States  for the  Southern
District of New York, and, by execution and delivery of this Agreement,  Pledgor
hereby irrevocably accepts for itself and in respect of its property,  generally
and  unconditionally,  the  non-exclusive  jurisdiction of the aforesaid courts.
Pledgor further irrevocably consents to the service of process out of any of the
aforementioned  courts in any such action or proceeding by the mailing of copies
thereof by  registered or certified  mail,  postage  prepaid,  to Pledgor at its
address for notices  pursuant to the Credit  Agreement,  such  service to become
effective 30 days after such mailing.  Pledgor  hereby  irrevocably  appoints CT
Corporation System having an address at 1633 Broadway,  New York, New York 10019
and such other  persons as may  hereafter  be selected  by Borrower  irrevocably
agreeing  in writing to serve as its agent for  service of process in respect of
any such  action  or  proceeding.  Nothing  herein  shall  affect  the  right of
Collateral  Agent to serve  process in any other  manner  permitted by law or to
commence legal  proceedings or otherwise  proceed  against  Pledgor in any other
jurisdiction.

            (b) Pledgor hereby irrevocably waives any objection which it may now
or  hereafter  have to the  laying of venue of any of the  aforesaid  actions or
proceedings  arising out of or in connection with this Agreement  brought in the
courts referred to in clause (a) above and hereby further irrevocably waives and
agrees  not to  plead  or claim in any  such  court  that  any  such  action  or
proceeding brought in any such court has been brought in an inconvenient forum.

            Section 23.  Severability of Provisions.  Any provision
of this Agreement which is prohibited or  unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -23-



the remaining  provisions  hereof or affecting the validity or enforceability of
such provision in any other jurisdiction.

            Section  24.  Execution  in  Counterparts.  This  Agreement  and any
amendments,  waivers,  consents  or  supplements  hereto may be  executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered  shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.

            Section 25.  Headings.  The Section headings used in this
Agreement are for convenience of reference only and shall not
affect the construction of this Agreement.

            Section 26.  Obligations Absolute.  All obligations of
Pledgor hereunder shall be absolute and unconditional irrespective
of:

             (i)  any bankruptcy, insolvency, reorganization,
      arrangement, readjustment, composition, liquidation or the
      like of either of Pledgor or any other Credit Party;

            (ii) any lack of validity or enforceability of the Credit Agreement,
      any  Interest  Rate  Agreement,  any Letter of Credit or any other  Credit
      Document, or any other agreement or instrument relating thereto;

           (iii) any change in the time,  manner or place of  payment  of, or in
      any other term of,  all or any of the  Secured  Obligations,  or any other
      amendment  or waiver of or any  consent to any  departure  from the Credit
      Agreement,  any Interest Rate Agreement, any Letter of Credit or any other
      Credit Document, or any other agreement or instrument relating thereto;

            (iv)  any  exchange,   release  or   non-perfection   of  any  other
      collateral,  or any  release or  amendment  or waiver of or consent to any
      departure from any guarantee, for all or any of the Secured Obligations;

             (v) any  exercise  or  non-exercise,  or any  waiver of any  right,
      remedy,  power or  privilege  under or in respect of this  Agreement,  any
      Interest  Rate   Agreement  or  any  other  Credit   Document   except  as
      specifically  set forth in a waiver granted  pursuant to the provisions of
      Section 16 hereof; or

            (vi)  any other circumstance or happening whatsoever that
      is similar to any of the foregoing.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -24-




            Section 27.  Collateral  Agent's  Right to Sever  Indebtedness.  (a)
Pledgor  acknowledges  that (i) the Pledged  Collateral  does not constitute the
sole  source  of  security  for  the  payment  and  performance  of the  Secured
Obligations and that the Secured  Obligations are also secured by other types of
property  of  Pledgor  and its  Affiliates  in  other  jurisdictions  (all  such
property, collectively, the "Collateral"), (ii) the number of such jurisdictions
and the nature of the  transaction  of which this  instrument is a part are such
that it would have been  impracticable  for the parties to allocate to each item
of  Collateral  a specific  loan amount and to execute in respect of such item a
separate credit agreement,  and (iii) Pledgor intends that Collateral Agent have
the  same  rights  with  respect  to the  Pledged  Collateral,  in any  judicial
proceeding  relating  to the  exercise  of any  right  or  remedy  hereunder  or
otherwise,  that Collateral  Agent would have had if each item of Collateral had
been pledged or encumbered  pursuant to a separate credit agreement and security
instrument. In furtherance of such intent, Pledgor agrees to the greatest extent
permitted by law that Collateral Agent may at any time by notice (an "Allocation
Notice")  to  Pledgor  allocate  a  portion  of  the  Secured  Obligations  (the
"Allocated  Indebtedness")  to  all  or  a  specified  portion  of  the  Pledged
Collateral  and sever  from the  remaining  Secured  Obligations  the  Allocated
Indebtedness.  From and after the giving of an Allocation Notice with respect to
any of the  Pledged  Collateral,  the  Secured  Obligations  hereunder  shall be
limited  to the extent set forth in the  Allocation  Notice and (as so  limited)
shall, for all purposes, be construed as a separate credit obligation of Pledgor
unrelated to the other  transactions  contemplated by the Credit Agreement,  any
Interest Rate Agreement,  any other Credit  Document or any document  related to
any thereof. To the extent that the proceeds of any judicial proceeding relating
to the exercise of any right or remedy hereunder of the Pledged Collateral shall
exceed the Allocated  Indebtedness,  such  proceeds  shall belong to Pledgor and
shall not be available  hereunder to satisfy any Secured  Obligations of Pledgor
other than the Allocated  Indebtedness.  In any action or proceeding to exercise
any right or remedy under this Agreement  which is commenced after the giving by
Collateral  Agent  of an  Allocation  Notice,  the  Allocation  Notice  shall be
conclusive proof of the limits of the Secured  Obligations  hereby secured,  and
Pledgor may introduce,  by way of defense or  counterclaim,  evidence thereof in
any such action or proceeding. Notwithstanding any provision of this Section 27,
the proceeds  received by Collateral  Agent pursuant to this Agreement  shall be
applied by  Collateral  Agent in  accordance  with the  provisions of Section 11
hereof.

            (b)   Pledgor hereby waives to the greatest extent
permitted under law the right to a discharge of any of the Secured

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                    -25-



Obligations  under any statute or rule of law now or  hereafter  in effect which
provides  that the  exercise of any  particular  right or remedy as provided for
herein (by judicial  proceedings or otherwise)  constitutes  the exclusive means
for  satisfaction  of the Secured  Obligations  or which makes  unavailable  any
further  judgment  or any other  right or remedy  provided  for  herein  because
Collateral  Agent  elected to proceed with the exercise of such initial right or
remedy or because of any  failure by  Collateral  Agent to comply with laws that
prescribe  conditions  to the  entitlement  to such  subsequent  judgment or the
availability   of  such  subsequent   right  or  remedy.   In  the  event  that,
notwithstanding  the foregoing waiver,  any court shall for any reason hold that
such subsequent judgment or action is not available to Collateral Agent, Pledgor
shall not (i) introduce in any other  jurisdiction  any judgment so holding as a
defense to enforcement  against  Pledgor of any remedy in the Credit  Agreement,
any Interest  Rate  Agreement or any other Credit  Document or (ii) seek to have
such  judgment  recognized  or entered in any other  jurisdiction,  and any such
judgment  shall in all  events be limited  in  application  only to the state or
jurisdiction where rendered and only with respect to the collateral  referred to
in such judgment.

            (c) In the event any instrument in addition to the Allocation Notice
is necessary to effectuate the provisions of this Section 27, including, without
limitation,  any amendment to this Agreement,  any substitute promissory note or
affidavit or certificate of any kind,  Collateral  Agent may execute and deliver
such instrument as the  attorney-in-fact  of Pledgor.  Such power of attorney is
coupled with an interest and is irrevocable.

            (d) Notwithstanding  anything set forth herein to the contrary,  the
provisions  of this  Section 27 shall be  effective  only to the maximum  extent
permitted by law.

            Section 28.  Future Advances.  This Agreement shall
secure the payment of any amounts advanced from time to time
pursuant to the Credit Agreement.

            Section 29. Borrower  Intellectual  Property Security Agreement.  To
the extent that the terms and  provisions  of this  Agreement  conflict with the
terms and provisions of the Borrower  Intellectual  Property Security  Agreement
with respect to any Pledged  Collateral (as such term is defined in the Borrower
Intellectual  Property  Security  Agreement),  the terms and  provisions  of the
Borrower Intellectual Property Security Agreement shall govern.



DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>






            IN WITNESS  WHEREOF,  Pledgor and Collateral  Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.

                              CARSON PRODUCTS COMPANY,
                                as Pledgor


                              By:
                                  Name:
                                  Title:


                              BANQUE INDOSUEZ, NEW YORK BRANCH,
                                as Collateral Agent



                              By:
                                  Name:
                                  Title:


                              By:
                                  Name:
                                  Title:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>



                                  Schedule A


                                  PRIOR LIENS


Secured Party          Location          Date         Number           Comment

NONE


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>



                                  Schedule B


                             LOCATION OF INVENTORY


64 Ross Road
Savannah, Georgia 31405


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>


                                  Schedule C


                             LOCATION OF EQUIPMENT


64 Ross Road
Savannah, Georgia 31405



DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141511

<PAGE>



                                                              Exhibit J to the
                                                              Credit Agreement


                          FORM OF NOTICE OF BORROWING


            Pursuant to that certain  Credit  Agreement  dated as of October 18,
1996 (as amended, amended and restated,  supplemented or otherwise modified from
time to time in  accordance  with the terms  thereof  in  effect)  (the  "Credit
Agreement") among Carson Products Company,  the Banks named therein,  and Banque
Indosuez,  New York Branch,  as Agent ("Agent"),  this represents the Borrower's
request  to  borrow  on , 19 from  the  Banks  on a pro  rata  basis $ as  [Base
Rate/Reserve Adjusted Eurodollar [A Term/B Term/Revolving Loans]]. [The Interest
Period for such Reserve  Adjusted  Eurodollar Loan is requested to be a period.]
The proceeds of such Loans are to be deposited  in the  Borrower's  account with
Banque Indosuez, New York Branch, as Agent.

            The  undersigned  officer on behalf of the Borrower,  to the best of
his  knowledge,  after  due  inquiry,  and the  Borrower  certify  that  (i) the
representations  and warranties  contained in the Credit Agreement and the other
Credit Documents are true,  correct and complete in all material respects on and
as of the date  hereof to the same  extent as though  made on and as of the date
hereof,  except  to the  extent  that the same  expressly  are made only as of a
different  date;  and (ii) no Default or Event of Default  has  occurred  and is
continuing  under  the  Credit  Agreement  or  will  result  from  the  proposed
borrowing.  Capitalized  terms used  herein  without  definition  shall have the
meanings set forth in the Credit Agreement.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


DRAFT:  March 21, 1997 8:49AM                           H:\WPCDOCS\1186\141521

<PAGE>


                                    -2-



            IN WITNESS  WHEREOF,  the  undersigned  has executed  this Notice of
Borrowing as of the date below written.


                                    CARSON PRODUCTS COMPANY


                                    By:
                                       Name:
                                       Title:


DATED: __________________



DRAFT:  March 21, 1997 8:49AM                           H:\WPCDOCS\1186\141521

<PAGE>


                                                              Exhibit K to the
                                                              Credit Agreement


                       NOTICE OF CONVERSION/CONTINUATION


            Pursuant to that certain Credit Agreement dated as of
                                     October 18, 1996 (as
amended,  amended and restated,  supplemented or otherwise modified from time to
time in accordance  with the terms  thereof in effect) (the "Credit  Agreement")
among Carson Products  Company (the  "Borrower"),  the Banks named therein,  and
Banque  Indosuez,  New York Branch,  as Agent,  this  represents [the Borrower's
request [A: to convert $ in  principal  amount of  presently  outstanding  [Base
Rate/Reserve  Adjusted  Eurodollar  [A  Term/B  Term/Revolving]]  Loans to [Base
Rate/Reserve  Adjusted  Eurodollar]  Loans on , 19 .] [B: to continue as Reserve
Adjusted  Eurodollar [A Term/B  Term/Revolving]  Loans $ in principal  amount of
presently  outstanding  Reserve Adjusted Eurodollar Loans.] [The Interest Period
for such Reserve  Adjusted  Eurodollar Loans commencing on such Interest Payment
Date is requested to be a period.]

            The  undersigned  officer,  to the best of his knowledge,  after due
inquiry,  and the  Borrower  certify  that no Default  or Event of  Default  has
occurred and is continuing under the Credit  Agreement.  Capitalized  terms used
herein  without  definition  shall  have the  meanings  set forth in the  Credit
Agreement.


DATED: __________________

                                    CARSON PRODUCTS COMPANY


                                    By:
                                       Name:
                                       Title:


DRAFT:  March 21, 1997 8:50AM                           H:\WPCDOCS\1186\141531

<PAGE>



                                                              Exhibit L to the
                                                              Credit Agreement



                    FORM OF OFFICER'S SOLVENCY CERTIFICATE


                                                                         , 19


Banque Indosuez, New York Branch
1211 Avenue of the Americas, 7th Floor
New York, New York  10036
  and
The Banks Party to the Credit
  Agreement Referenced Below

Ladies and Gentlemen:

            Pursuant  to Section  4.01(H) of the  Credit  Agreement  dated as of
October 18, 1996 (the "Credit  Agreement")  among  Carson  Products  Company,  a
Delaware  corporation  (the  "Borrower"),  the banks listed therein,  and Banque
Indosuez, New York Branch, as Agent (the "Agent"), I, , hereby certify on behalf
of the Borrower as follows (unless otherwise  defined herein,  capitalized terms
used herein have the meanings assigned to them in the Credit Agreement):

            1. I have  reviewed  and  participated  in  the  preparation  of the
financial  projections  prepared by  management of the Borrower and delivered to
the Agent (the "Projected Financial  Statements").  All assumptions with respect
to the Projected  Financial  Statements  are set forth therein and the Projected
Financial  Statements  provide,  in  my  judgment,  a  reasonable,   good  faith
estimation of future  performance of the Borrower.  The assumptions on which the
Projected  Financial  Statements  are based are  reasonable and are based on the
best  information  available,  although  any  assumption  and  any  forecast  by
necessity involve uncertainty and approximation.

            2.    For purposes of delivering this certificate, I
have:

            (a) consulted  with other officers of the Borrower  responsible  for
financial and accounting functions concerning contingent  liabilities other than
those related to litigation; and

            (b)   made such other investigation and inquiries as I
have deemed appropriate.


DRAFT:  March 21, 1997 8:51AM                           H:\WPCDOCS\1186\141541

<PAGE>


                                    -2-



            3. Based  upon the  foregoing  (including  the  Projected  Financial
Statements),  I have concluded that, as of the date hereof,  after giving effect
to the  Refinancing and the incurrence of the Loans by the Borrower in an amount
equal to the sum of the Total Term Loan  Commitments  and Total  Revolving  Loan
Commitments  and the grant of the  security  interests  in the  Collateral  (the
"Transaction"):

            (a) each of the Fair Value and Present  Fair  Saleable  Value of the
assets of the Borrower exceeds its stated liabilities and identified  contingent
liabilities;

            (b) each of the Fair Value and Present  Fair  Saleable  Value of the
assets of the Borrower  exceeds the probable  liability on its debts  (including
identified contingent liabilities) as such debts become absolute and mature;

            (c)   the Borrower will be able to pay its debts as they
mature; and

            (d) the Borrower  will not have  unreasonably  small capital for the
business  in which it is engaged and is  proposed  to be engaged  following  the
consummation of the Refinancing.

            4. For  purposes  of this  letter,  the terms below have been agreed
upon by you to have the following definitions:

            (a)   "Fair Value"

            The amount at which an entity's  aggregate assets would change hands
between a willing buyer and a willing seller,  each having reasonable  knowledge
of the relevant  facts,  with neither  being under any  compulsion  to act, with
equity to both.

            (b)   "Present Fair Saleable Value"

            The amount that may be realized if an entity's  aggregate assets are
sold with reasonable  promptness in an arm's- length  transaction  under present
conditions for the sale of comparable business enterprises.

            (c)   "will be able to pay its debts as they mature"

            That,  as of the date  hereof,  both  immediately  before  and after
giving effect to the Refinancing, the Fair Value and Present Fair Saleable Value
of such  entity's  aggregate  assets  would  exceed its stated  liabilities  and
identified  contingent  liabilities,  the Fair Value and Present  Fair  Saleable
Value of

DRAFT:  March 21, 1997 8:51AM                           H:\WPCDOCS\1186\141541

<PAGE>


                                    -3-



its current  assets  would  exceed its current  stated  liabilities  and current
identified  contingent  liabilities,  and such entity would have a positive cash
flow for the  period  from the date  hereof to , 20 ,  including  (after  giving
effect to) the  payment of  installments  due under  loans made  pursuant to the
indebtedness  incurred in the Refinancing as such  installments are scheduled at
the close of the Refinancing,  and including funds available under the entities'
revolving credit facilities.

            5. To the best of my knowledge, no Credit Party is entering into the
arrangements  contemplated by the Credit Agreement or the other Credit Documents
or intends to make any transfer or incur any obligations thereunder, with actual
intent to hinder, delay or defraud either present or future creditors.

            6. To the best of my knowledge, no Credit Party intends to incur, or
believes,  that such Credit Party will incur,  debts beyond such Credit  Party's
ability to pay as they become due.



DRAFT:  March 21, 1997 8:51AM                           H:\WPCDOCS\1186\141541

<PAGE>


                                    -4-


            This  Certificate is being delivered by the undersigned  only in his
capacity as an officer of the Borrower  and not  individually.  The  undersigned
shall have no liability in connection  herewith so long as this  Certificate  is
true and correct to the best of his knowledge, after due inquiry, as of the date
hereof.

                                    CARSON PRODUCTS COMPANY


                                    By:
                                       Name:
                                       Title:



DRAFT:  March 21, 1997 8:51AM                           H:\WPCDOCS\1186\141541

<PAGE>



                                                      Exhibit M to the
                                                      Credit Agreement



                       FORM OF CARSON PRODUCTS COMPANY
                          BORROWING BASE CERTIFICATE
                  Computation of Availability as of [date]


ACCOUNTS RECEIVABLE

Gross accounts receivable per aging
  (as of last month-end)

Credits, returns,  discounts,  claims, credits,  charges,  rebates,  offsets and
  allowances not yet booked Other adjustments

Sub-total

Ineligibles and Deductions:

Borrower  does not have  legal  and valid  title  Unenforceable  obligations  of
account  debtor  Intercompany  Invoices 61 day or less invoices past due over 91
days $ value of all invoices providing for payment more than
    60 days from  invoice,  other than those which are not past due over 30 days
    and which, in the aggregate,  do not exceed 7 1/2% of all Eligible  Accounts
    of Borrower and its Subsidiaries then outstanding
Accounts from same account debtor exceeding 20% in face value of all Accounts of
    Borrower and its Subsidiaries then outstanding
Accounts  payable to account debtors Accounts from account debtors in bankruptcy
No first priority lien Contingent sales Accounts from account debtors for whom
    more than 50% of accounts are ineligible
Foreign Government invoices
U.S. Government invoices, other than those which
    (i) together with all other U.S. Government invoices,
    do not exceed 7 1/2% of all other Eligible Accounts of
    the Borrower or its Subsidiaries then outstanding or
    (ii) are assigned to the  Agent
Foreign invoices,  unless on letter of credit,  guaranty or acceptance terms and
    not exceeding $500,000 at any time outstanding
Insecure Accounts
Accounts for undelivered goods
Non-complying Accounts

DRAFT:  March 21, 1997 8:51AM                           H:\WPCDOCS\1186\141551

<PAGE>


                                    -2-


    Other reserves and deductions

Total Ineligibles/Deductions

Eligible Accounts Receivable

Accounts Receivable Advance Rate                               80%

Available Accounts Receivable

INVENTORY

Finished Goods (as of last month-end)
Work-in-Process (as of last month-end)
Raw Materials (as of last month-end)

Total Inventory before Ineligibles
    and Deductions

Ineligibles and Deductions:

  Returns and Rejections
  Obsolete and slow moving goods
  Reserve for special order goods and market
  value declines
  Other reserves and deductions

Total Ineligibles/Deductions

Eligible Inventory

Inventory Advance Rate                                         50%

Available Inventory

Borrowing Base
  (Available Inventory
  plus Available Accounts Receivable)
Total Availability
  Less:  Outstanding Revolving Loans


NET AVAILABILITY


DRAFT:  March 21, 1997 8:51AM                           H:\WPCDOCS\1186\141551

<PAGE>



                                                              Exhibit N to the
                                                              Credit Agreement



                         FORM OF OFFICERS' CERTIFICATE
                        REGARDING ENVIRONMENTAL REVIEW


            This  Certificate  is delivered  pursuant to Section  4.01(B) of the
Credit  Agreement  dated as of October 18, 1996 (the "Credit  Agreement")  among
Carson Products Company,  a Delaware  corporation (the "Borrower"),  the lenders
listed  therein and Banque  Indosuez,  New York Branch,  as Agent (the "Agent").
Unless otherwise defined herein, capitalized terms used herein have the meanings
assigned to them in the Credit Agreement.

            We, the undersigned, hereby certify that
is the                         of the Borrower, and
              is the           of the Borrower, and that to the
best of our knowledge:

            1.    After giving effect to the Refinancing, the Borrower
is in compliance with all Environmental Laws to the extent
contemplated by Sections 5.22 and 5.23 of the Credit Agreement; and

            2. All  information  including  any and all  memoranda  and  reports
furnished to the Agent through its attorneys  Cahill Gordon & Reindel,  by or on
behalf of the Borrower is true and accurate in all material respects nor did the
Borrower withhold any material information from the Agent.

            We have read all  relevant  environmental  materials  including  the
information  referenced  above and have read the Credit  Agreement  and made all
other  investigations  and  examinations  that we  deem  necessary  to make  the
foregoing certifications.

            This Certificate is being delivered by the undersigned only in their
capacities  as  officers  of the  Borrower  and the  undersigned  shall  have no
personal liability in connection herewith,  it being understood that none of the
undersigned has any greater knowledge with respect to the statements made herein
in his personal capacity than in his capacity as an officer.



DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141561

<PAGE>


                                    -2-


            IN  WITNESS  WHEREOF,  each  of  the  undersigned  has  caused  this
Certificate to be duly executed and delivered on this 18th day of October, 1996.



                                    Name:
                                    Title:                      of
                                            Carson Products Company



                                    Name:
                                    Title:                      of
                                            Carson Products Company


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141561

<PAGE>



                                                              Exhibit O to the
                                                              Credit Agreement



                  [FORM OF LANDLORD LIEN ASSURANCE AGREEMENT]

                             [TENANT'S LETTERHEAD]



[Landlord]


Re:   Lease, dated ______________ [and amended
      by a certain amendment thereto dated __________]
      ([collectively,] the "Lease"), by and between
      _______________ and ____________ ("Tenant"), relating
      to premises located in                (the "Premises")*


Ladies and Gentlemen:

            Tenant is entering  into a certain  credit  agreement  (the  "Credit
Agreement")  with certain banks (the "Banks"),  pursuant to which the Banks have
agreed to make certain loans to Tenant.  As security for repayment of the loans,
the Banks have requested that Tenant grant to Banque Indosuez,  New York Branch,
in its  capacities  as agent and  collateral  agent  for the Banks  ("Collateral
Agent"), a first priority lien on Tenant's personal property,  inventory,  trade
fixtures and equipment located at the Premises (collectively, the "Collateral").

            Your  signature  below  will  acknowledge  (i)  the  first  priority
security  interest of  Collateral  Agent in the  Collateral  and the  Collateral
Agent's right to possess the Collateral,  file Uniform Commercial Code financing
statements  against the Collateral  and remove the Collateral  from the Premises
upon the occurrence of an event of default under the Credit Agreement or related
documents  and (ii) that you waive any claim on or  interest  in the  Collateral
(including,  without  limitation,  any right to include  the  Collateral  in any
secured financing obtained by you). In addition, your signature will acknowledge
that (i) you are current  record owner of the Premises and the current  owner of
the  lessor's  interest  under the Lease,  (ii) the Lease has not been  amended,
supplemented  or modified in any  respect,  (iii) the Lease is in full force and
effect,  (iv) you have no notice or  knowledge  of any  default  or any facts or
circumstances which, with notice or lapse of time or both,
--------
*     Delete bracketed language if the Lease has not been amended.

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141571

<PAGE>


                                    -2-



would  constitute  a default  under the Lease and (v) Tenant has paid all rental
obligations owed under the Lease to date.

            You hereby further agree that (i) you will simultaneously deliver to
Collateral  Agent at  Banque  Indosuez,  New York  Branch,  1211  Avenue  of the
Americas,  New York,  New York 10036,  Attn:  R.  Haynes  Chidsey (or such other
address as  Collateral  Agent may  designate  to you in  writing)  in the manner
provided  for in the Lease  for the  giving  of  notices,  a copy of any and all
notices  given by you to Tenant,  (ii) upon the  occurrence of any default under
the Lease,  Collateral  Agent shall have the right,  but not the obligation,  to
cure such default within the  applicable  cure period in respect of such default
that is given Tenant in the Lease for  remedying any such default or causing the
same to be remedied and (iii) in the event of  performance  by Collateral  Agent
within the period  provided for in the foregoing  clause (ii),  you shall accept
such  performance  by  Collateral  Agent as  though  the  same had been  done or
performed by Tenant within the period allowed Tenant by the terms of the Lease.

            It would be most appreciated if you would execute the acknowledgment
below and return this letter to us as soon as possible so as to  facilitate  the
closing of the proposed  transaction.  Please call me with any questions you may
have.



DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141571

<PAGE>


                                    -3-


            We appreciate your cooperation in this matter.

                                          Sincerely,




LANDLORD ACKNOWLEDGMENT

As of this ___ day of
           , the undersigned
hereby acknowledges and agrees
to the contents of this letter
and to the matters set forth herein.


By:____________________________
   Name:
   Title:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141571

<PAGE>


                                                              Exhibit Q to the
                                                              Credit Agreement



                      FORM OF NON-U.S. LENDER CERTIFICATE


            Reference  is  hereby  made to the  Credit  Agreement  (the  "Credit
Agreement"),  dated as of October 18, 1996,  among Carson  Products  Company,  a
Delaware corporation  ("Borrower"),  Banque Indosuez, New York Branch, as Agent,
and the lenders listed therein. Pursuant to the provisions of Section 3.04(c) of
the Credit Agreement, the undersigned hereby certifies (i) that it is not a bank
described  in Section  881(c)(3)(A)  of the Internal  Revenue  Code of 1986,  as
amended (the "Code"); (ii) that it is not a 10-percent shareholder, as described
in Section  881(c)(3)(B)  of the Code, of the  Borrower;  (iii) that it is not a
controlled foreign  corporation  described in Section  881(c)(3)(C) of the Code;
and (iv) that it is entitled to receive payments of interest  without  deduction
or  withholding  of any United  States  federal  income tax  pursuant to Section
881(c)(1) of the Code.

                                    [NAME OF FOREIGN BANK]


                                    By:
                                        Name:
                                        Title:

                                    Date:


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141581

<PAGE>



                                                              Exhibit R to the
                                                              Credit Agreement



                         FORM OF SUBSIDIARY GUARANTEE


            GUARANTEE,   dated  as  of  ,  199_   ("Guarantee"),   by  [NAME  OF
SUBSIDIARY],  a [ ] corporation  ("Guarantor"),  in favor and for the benefit of
the Banks under the Credit Agreement (each as hereinafter defined).


                               R E C I T A L S:

            A. Pursuant to a certain  credit  agreement  dated as of October 18,
1996 (as amended, amended and restated,  supplemented or otherwise modified from
time to time in  accordance  with the  terms  thereof  in  effect,  the  "Credit
Agreement";  capitalized  terms not defined herein have the meanings ascribed to
them  in the  Credit  Agreement)  by and  among  Carson  Products  Company  (the
"Borrower"),  the lending  institutions  identified therein  (collectively,  the
"Banks") and Banque Indosuez, New York Branch, as agent (the "Agent"), the Banks
have agreed to make certain Loans to the Borrower and to issue Letters of Credit
for the accounts of the Borrower.

            B. It is a requirement  under  Section 6.16 of the Credit  Agreement
that the  Guarantor  shall  execute and  deliver  this  Guarantee  and that this
Guarantee shall be in full force and effect.

            C.    This Guarantee is given by the Guarantor in favor of
the Banks to guarantee all of the Obligations of the Borrower in
accordance with the terms of the Credit Agreement.

            NOW, THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration,  the receipt and sufficiency of which is hereby
acknowledged, the Guarantor hereby agrees as follows:

            1. Guarantee. (a) To induce the Banks to make the Loans and to issue
the  Letters  of Credit  upon the terms and  conditions  set forth in the Credit
Agreement,  and in consideration  thereof, the Guarantor hereby  unconditionally
and  irrevocably  (i) guarantees to the Banks and their  respective  successors,
transferees and assigns,  the prompt and complete  payment and performance  when
due (whether at the stated  maturity,  by  acceleration or otherwise) and at all
times  thereafter of the  Obligations of the Borrower  (including  amounts which
would become due but for the operation of the automatic stay under Section

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>


                                    -2-



362(a) of the Bankruptcy  Code, or similar  provisions under the bankruptcy laws
of  foreign  jurisdictions);  and  (ii)  agrees  to pay any  and all  reasonable
expenses (including  reasonable  attorneys' fees and disbursements) which may be
paid or incurred by the Banks,  the Agent or  Collateral  Agent in enforcing any
rights with  respect to, or  collecting,  any or all of the  Obligations  and/or
enforcing any rights with respect to, or collecting against, the Guarantor under
this Guarantee provided,  that this Guarantee is limited as set forth in Section
5 hereof (as so limited, collectively, the "Guaranteed Obligations").

            (b) The Guarantor agrees that this Guarantee constitutes a guarantee
of payment when due and not of  collection  and waives any right to require that
any resort be had by the Collateral  Agent,  the Agent or any Bank to any of the
security held for payment of any of the Guaranteed Obligations or to any balance
of any deposit account or credit on the books of the Agent, the Collateral Agent
or any Bank in favor of the Borrower or any other Person.

            (c) No payment or payments  made by the Borrower or any other Person
or  received  or  collected  by the Banks (or the  Collateral  Agent or Agent on
behalf of the Banks) from any other Person by virtue of any action or proceeding
or any set-off or  appropriation or application at any time or from time to time
in reduction of or in payment of the Guaranteed  Obligations  shall be deemed to
modify,  reduce,  release or otherwise  affect the  liability  of the  Guarantor
hereunder which shall,  notwithstanding  any such payment or payments other than
payments  made to the Banks (or the  Collateral  Agent or Agent on behalf of the
Banks) by the  Guarantor or payments  received or collected by the Banks (or the
Collateral  Agent or Agent on behalf of the Banks)  from the  Guarantor,  remain
liable for the  Guaranteed  Obligations  until the  Guaranteed  Obligations  are
indefeasibly paid in full in Cash or Cash Equivalents, subject to the provisions
of Section 1(d) hereof.

            (d) The  Guarantor  understands,  agrees and confirms that this is a
guarantee of payment when due and not of collection and that each Bank may, from
time to time,  enforce this  Guarantee  up to the full amount of the  Guaranteed
Obligations owed to such Bank without proceeding against any other Credit Party,
against any security for the Guaranteed Obligations, against any other guarantor
or under any other guarantee covering the Guaranteed Obligations.

            2.    Waiver by Guarantor.  Until the payment and
satisfaction in full of all Guaranteed Obligations and the
expiration or termination of the Commitments and all Letters of

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>


                                    -3-



Credit  Usage of the Banks  under the Credit  Agreement,  the  Guarantor  hereby
waives  absolutely  and  irrevocably  any claim  which it may have  against  the
Borrower or any of their  respective  Affiliates by reason of any payment to the
Agent,  Collateral  Agent or any Bank, or to any other Person  pursuant to or in
respect  of  this  Guarantee,  including  any  claims  by  way  of  subrogation,
contribution, reimbursement, indemnity or otherwise.

            3. Consent by Guarantor.  The Guarantor  hereby  consents and agrees
that,  without the necessity of any  reservation of rights against the Guarantor
and without notice to or further assent by the Guarantor, any demand for payment
of any of the Guaranteed  Obligations made by the Agent, the Collateral Agent or
any Bank may be  rescinded  by the Banks (or the  Agent or  Collateral  Agent on
behalf of the Banks) and any of the Guaranteed  Obligations  continued,  and the
Guaranteed Obligations, or the liability of any other party upon or for any part
thereof,  or any  collateral  security or guarantee  therefor or right of offset
with respect  thereto,  may, from time to time, in whole or in part, be renewed,
extended, amended, modified,  accelerated,  compromised,  waived, surrendered or
released  by the Banks (or the  Agent or the  Collateral  Agent on behalf of the
Banks);  and the  Credit  Agreement  or any  other  Credit  Document,  or  other
guarantee or documents in connection therewith,  or any of them, may be amended,
modified,  supplemented or terminated, in whole or in part, as the Banks (or the
Agent or Collateral  Agent on behalf of the Banks) may deem  advisable from time
to time; and any Guarantee (subject to Section 11.04 of the Credit Agreement) or
right of offset or any Collateral may be sold, exchanged, waived, surrendered or
released,  all without the necessity of any  reservation  of rights  against the
Guarantor and without notice to or further  assent by the Guarantor,  which will
remain  bound   hereunder,   notwithstanding   any  such   renewal,   extension,
modification,  acceleration,  compromise,  amendment,  supplement,  termination,
sale, exchange, waiver, surrender or release. Neither the Banks nor the Agent or
the Collateral  Agent shall have any obligation to protect,  secure,  perfect or
insure  any  Collateral  or  property  at any  time  held  as  security  for the
Guaranteed  Obligations  (other  than the  exercise  of  reasonable  care in the
custody  and  preservation  of  collateral  as  provided  in any  of the  Credit
Documents).  When making any demand hereunder against the Guarantor,  the Agent,
the Collateral Agent or the Banks may, but shall be under no obligation to, make
a similar demand on any other Credit Party or any such other guarantor,  and any
failure by the Agent,  the Collateral Agent or the Banks to make any such demand
or to  collect  any  payments  from such  other  Credit  Party or any such other
guarantor or any release of such other Credit Party or any such other  guarantor
or of the Guarantor's obligations or liabilities hereunder shall not impair

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>


                                    -4-



or affect the rights and remedies, express or implied, or as a matter of law, of
the Banks  against the Guarantor  hereunder.  For the purposes  hereof  "demand"
shall include the commencement and continuance of any legal proceedings.

            4. Waivers; Successors and Assigns. The Guarantor waives any and all
notice of the creation,  renewal,  extension or accrual of any of the Guaranteed
Obligations  and notice of or proof of reliance by the Banks upon this Guarantee
or  acceptance  of  this  Guarantee,   and  the  Guaranteed   Obligations  shall
conclusively be deemed to have been created,  contracted or incurred in reliance
upon this Guarantee, and all dealings between the Guarantor and any other Credit
Party,  on the one hand,  and the Banks,  on the other hand,  shall  likewise be
conclusively  presumed to have been had or  consummated  in  reliance  upon this
Guarantee.  The Guarantor waives  diligence,  presentment,  protest,  demand for
payment and notice of default or  non-payment to or upon any Credit Party or the
Guarantor with respect to the Guaranteed  Obligations.  This Guarantee  shall be
construed  as a  continuing,  absolute  and  unconditional  guarantee of payment
without  regard to the  validity,  regularity  or  enforceability  of the Credit
Agreement,  the other Credit Documents, any of the Guaranteed Obligations or any
guarantee  therefor or right of offset with respect  thereto at any time or from
time to time held by the Banks and without regard to any defense (other than the
defense of payment),  set-off or counterclaim which may at any time be available
to or be  asserted  by any  Credit  Party  against  the  Banks,  or by any other
circumstance  whatsoever  (with  or  without  notice  to  or  knowledge  of  the
Guarantor) which constitutes,  or might be construed to constitute, an equitable
or legal discharge of the Guaranteed Obligations, or of the Guarantor under this
Guarantee,  in  bankruptcy or in any other  instance,  and the  obligations  and
liabilities  of the Guarantor  hereunder  shall not be conditioned or contingent
upon the  pursuit  by the Banks or any other  Person at any time of any right or
remedy  against  any Credit  Party or against any other  Person  which may be or
become  liable in respect of all or any part of the  Guaranteed  Obligations  or
against any  collateral  security or guarantee  therefor or right of offset with
respect  thereto.  This  Guarantee  shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon the Guarantor and
the successors and assigns thereof, and shall inure to the benefit of the Banks,
and their respective successors,  transferees and assigns (including each holder
from  time to time  of  Guaranteed  Obligations),  until  all of the  Guaranteed
Obligations and the obligations of the Guarantor under this Guarantee shall have
been  satisfied  by  indefeasible  payment in full in cash or cash  equivalents,
notwithstanding  that from time to time during the term of the Credit  Agreement
any

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>


                                    -5-



Credit Party may be released from all of its Guaranteed Obligations thereunder.

            5. Limited Liability. Notwithstanding any contrary provision of this
Agreement  or the  Credit  Agreement,  it is  hereby  expressly  agreed  that no
partner, officer, employee,  servant,  controlling Person, executive,  director,
agent,   authorized   representative   of  affiliate   (herein  referred  to  as
"operatives")  of any of the  Guarantor,  DNL  Group,  L.L.C.  or DNL  Partners,
Limited Partnership (collectively, the "Guarantor and Equity Entities") shall be
personally  liable for payments due under this Agreement for the  performance of
any obligation  hereunder.  Nothing  contained in this Section shall prevent the
Banks,  or the  Agent or the  Collateral  Agent on  behalf  of the  Banks,  from
exercising any rights or remedies against the Borrower or its Subsidiaries,  the
Mortgaged  Real  Property  or the  Pledged  Collateral  pursuant  to the  Credit
Agreement, the Security Documents or this Agreement.

            6. Effectiveness; Reinstatement. This Guarantee shall continue to be
effective, or be reinstated,  as the case may be, if at any time payment, or any
part  thereof,  of  any of the  Guaranteed  Obligations  is  rescinded  or  must
otherwise be restored or returned by the Banks upon the insolvency,  bankruptcy,
dissolution,  liquidation or reorganization of any Credit Party, or upon or as a
result of the  appointment  of a  receiver,  intervenor  or  conservator  of, or
trustee or similar officer for, any Credit Party or any substantial  part of its
property, or otherwise, all as though such payments had not been made.

            7.  Payments  of  Guaranteed   Obligations.   The  Guarantor  hereby
guarantees that the Guaranteed  Obligations will be paid for the ratable benefit
of the Banks without  set-off or  counterclaim  in lawful currency of the United
States of America at the office of Agent located at 1211 Avenue of the Americas,
7th Floor,  New York,  New York 10036.  The  Guarantor  shall make any  payments
required  hereunder  upon  receipt of written  notice  thereof from the Agent or
Collateral Agent or any Bank; provided,  however,  that the failure of the Agent
or  Collateral  Agent or any Bank to give  such  notice  shall  not  affect  the
Guarantor's obligations hereunder.

            8. Representations and Warranties. To induce the Banks to enter into
the Credit  Agreement and to make the Loans  thereunder and to issue the Letters
of Credit, the Guarantor represents and warrants to each Bank that the following
statements are true, correct and complete on and as of the date hereof:

            A.    Organization and Powers.  The Guarantor is a duly
organized, validly existing corporation in good standing under the

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>


                                    -6-



laws of the  jurisdiction  of its  organization  and has the corporate power and
authority  to own its  property and assets and to transact the business in which
it is engaged and currently proposes to engage. The Guarantor has duly qualified
and is authorized to do business and is in good standing in all jurisdictions in
which the conduct of its business or the  ownership of its  properties  requires
such qualification, except where the failure to be so qualified would not have a
Materially  Adverse  Effect.  The  Guarantor  has  all  requisite   governmental
licenses,  authorizations,  consents  and  approvals  to own  and  carry  on its
business as now conducted and as presently  contemplated  to be conducted by the
Guarantor, other than such licenses, authorizations,  consents and approvals the
failure  to  obtain  which  has not had and will not have a  Materially  Adverse
Effect.  The  Guarantor  has all  corporate  authority to enter into each of the
Credit  Documents  to  which  it is or is to be a  party  and to  carry  out the
transactions contemplated thereby and to execute and deliver this Guarantee.

            B. No Violations.  Neither the execution, delivery or performance by
the  Guarantor  of any of the  Credit  Documents  to which  it is a  party,  nor
compliance with any of the terms and provisions thereof, nor the consummation of
any of the transactions  contemplated  therein,  nor the grant and perfection of
the security  interests  pursuant to the Security  Documents will (a) contravene
any applicable  provision of any law, statute,  rule,  regulation,  order, writ,
injunction  or  decree  of  any  Governmental  Authority,  (b)  conflict  or  be
inconsistent  with or  result  in a  breach  of,  any of the  terms,  covenants,
conditions  or  provisions  of, or  constitute  (with notice or lapse of time or
both) a default  under any material  contractual  obligation of the Guarantor or
any  of its  Subsidiaries,  or  (other  than  as  contemplated  by the  Security
Documents)  result in the creation or imposition of (or the obligation to create
or impose),  any Lien upon any of the property or assets of the Guarantor or any
of its  Subsidiaries  pursuant to any  material  contractual  obligation  of the
Guarantor or (c) violate any  provision of the  organizational  documents of the
Guarantor  or any of its  Subsidiaries,  except  in each such  case  where  such
contravention,  conflict, breach, default, creation,  imposition,  obligation or
violation would not have a Materially Adverse Effect.

            C.    Approvals.  The execution, delivery and performance
by the Guarantor of the Credit Documents to which it 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 or other Person (other than those registrations,
consents, waivers, approvals, notices or other actions which, if
not obtained or made, would not have a Materially Adverse Effect).
All consents and approvals from or notices to or filings with any

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>


                                    -7-



Governmental  Authority or other Person required to be obtained by the Guarantor
have been obtained and are in full force and effect (other than those  consents,
waivers, approvals, notices or filings which, if not obtained or made, would not
have a Materially Adverse Effect).

            D. Binding Obligation.  This Guarantee  constitutes the legal, valid
and binding  obligation of the Guarantor,  enforceable  against the Guarantor in
accordance with its terms,  except as may be limited by bankruptcy,  insolvency,
reorganization,  moratorium or similar laws relating to or affecting  creditors'
rights  generally  and  except  as such  enforceability  may be  limited  by the
application  of  general  principles  of  equity  (regardless  of  whether  such
enforceability is considered in a proceeding in equity or at law).

            E. Investment Company.  The Guarantor is not an "investment company"
or a company  "controlled"  by an  "investment  company" (as each of such quoted
terms is defined or used in the Investment  Company Act of 1940, as amended (the
"1940 Act")) or subject to regulation  under the Public Utility  Holding Company
Act of 1935,  the Federal Power Act or any foreign,  federal or local statute or
regulation  limiting  its ability to incur  Indebtedness  for money  borrowed or
guarantee  such  Indebtedness  as  contemplated  hereby or by any  other  Credit
Document.

            9. Ratable Sharing.  The Banks by acceptance of this Guarantee agree
among  themselves  that with  respect to all amounts  received by them which are
applicable to the payment of obligations of the Guarantor  under this Guarantee,
if the Banks, or the Agent or Collateral Agent on behalf of the Banks,  exercise
their rights  hereunder,  including,  without  limitation,  acceleration  of the
obligations of the Guarantor  hereunder,  equitable  adjustment  will be made so
that, in effect,  all such amounts will be shared among the Banks pro rata based
on the relative outstanding Guaranteed Obligations.

            10. Merger.  If the Guarantor  shall merge into or consolidate  with
another corporation,  or liquidate,  wind up or dissolve itself in a transaction
not prohibited by the Credit Agreement,  or if all of the stock of the Guarantor
shall be sold or otherwise  disposed of in a manner not prohibited by the Credit
Agreement, the Guarantor hereby covenants and agrees, that upon any such merger,
consolidation,   liquidation,  or  dissolution,  the  guarantee  given  in  this
Guarantee  and the due and punctual  performance  and  observance  of all of the
covenants  and  conditions  of  the  Credit  Agreement  to be  performed  by the
Guarantor,  shall be expressly  assumed (in the event that the  Guarantor is not
the surviving corporation in the merger) by supplemental agreements

DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>


                                    -8-



reasonably  satisfactory  in form to the  Agent on  behalf  of the  Banks by the
corporation  or  corporations  formed by such  consolidation,  or into which the
Guarantor shall have been merged,  or by the  corporation or corporations  which
shall have acquired such property.  In addition,  the Guarantor shall deliver to
the Agent an Officer's  Certificate and an opinion of counsel, each stating that
such merger,  consolidation or transfer and such supplemental  agreements comply
with this Guarantee and that all conditions  precedent herein provided  relating
to such transaction have been complied with. In case of any such  consolidation,
merger, sale or conveyance and upon the assumption by the successor  corporation
or corporations, by supplemental agreements executed and delivered to the Agent,
and reasonably  satisfactory in form to the Agent on behalf of the Banks, of the
guarantee given in this Guarantee and the due and punctual performance of all of
the  covenants  and  conditions  of the Credit  Agreement to be performed by the
Guarantor,  such successor  corporation or corporations  shall succeed to and be
substituted  for the  Guarantor,  with the same effect as if it or they had been
named herein as a Guarantor.

            11. No Waiver. No failure to exercise and no delay in exercising, on
the part of the Banks, or the Agent or Collateral  Agent on behalf of the Banks,
any right, power or privilege  hereunder shall operate as a waiver thereof,  nor
shall any single or partial exercise of any right,  power or privilege  preclude
any other or further  exercise  thereof,  or the  exercise of any other power or
right.  The rights and remedies herein provided are cumulative and not exclusive
of any rights or remedies provided by law.

            12.   Notices.   All  notices,   demands,   instructions   or  other
communications  required  or  permitted  to be given to or made  upon any  party
hereto shall be given in accordance with the provisions of the Credit  Agreement
and at the  address  set forth  therein or as  provided  on the  signature  page
hereof.

            13.   Amendments, Waivers, etc.  No provision of this
Guarantee shall be waived, amended, terminated or supplemented
except by a written instrument executed by the Guarantor and the
Agent or Collateral Agent, on behalf of the Banks.

            14. Notice of Exercise. Upon exercise of its rights hereunder,  each
Bank, or the Agent or Collateral  Agent on behalf of the Banks,  as the case may
be, shall provide  written notice on the date of such exercise to the Banks,  or
the Agent or Collateral Agent, as the case may be, of such exercise.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>


                                    -9-



            15.   GOVERNING LAW.  THIS GUARANTEE SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.

            16.  CONSENT TO  JURISDICTION  AND SERVICE OF PROCESS.  ALL JUDICIAL
PROCEEDINGS  BROUGHT  AGAINST  THE  GUARANTOR  WITH  RESPECT  TO THIS  GUARANTEE
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE  STATE OF NEW YORK,  AND BY  EXECUTION  AND  DELIVERY  OF THIS  GUARANTEE
AGREEMENT  THE  GUARANTOR   ACCEPTS  FOR  ITSELF  AND  IN  CONNECTION  WITH  ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY,  THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID  COURTS.  THE PARTIES HERETO HEREBY  IRREVOCABLY  WAIVE, TO THE EXTENT
PERMITTED  BY  APPLICABLE  LAW,  ANY RIGHT TO TRIAL BY JURY,  AND THE  GUARANTOR
HEREBY  IRREVOCABLY  WAIVES ANY OBJECTION TO 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 IN SUCH RESPECTIVE JURISDICTIONS.  THE
GUARANTOR DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, WITH AN ADDRESS AT 1633
BROADWAY,  NEW YORK, NEW YORK 10019,  AND SUCH OTHER PERSONS AS MAY HEREAFTER BE
SELECTED BY THE GUARANTOR IRREVOCABLY AGREEING IN WRITING TO SERVE, AS ITS AGENT
TO RECEIVE ON ITS BEHALF,  SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY
SUCH COURT,  SUCH  SERVICE  BEING  HEREBY  ACKNOWLEDGED  BY THE  GUARANTOR TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH PROCESS SO SERVED
SHALL BE MAILED BY  REGISTERED  MAIL TO THE  GUARANTOR AS PROVIDED IN SECTION 12
HEREOF. IF ANY AGENT APPOINTED BY THE GUARANTOR  REFUSES TO ACCEPT SERVICE,  THE
GUARANTOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT
NOTICE.  NOTHING  HEREIN  SHALL  AFFECT THE RIGHT TO SERVE  PROCESS IN ANY OTHER
MANNER  PERMITTED  BY LAW  OR  SHALL  LIMIT  THE  RIGHT  OF ANY  BANK  TO  BRING
PROCEEDINGS AGAINST THE GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

            17.  Counterparts.  This  Guarantee  and  any  amendments,  waivers,
consents or  supplements  may be executed in any number of  counterparts  and by
different  parties  hereto  in  separate  counterparts,  each of  which  when so
executed and delivered  shall be deemed an original,  but all such  counterparts
together shall constitute but one and the same instrument.


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>


                                    -10-


            IN WITNESS WHEREOF,  the undersigned has caused this Guarantee to be
duly executed and delivered by its duly  authorized  officer on the day and year
first above written.


                                    [SUBSIDIARY]


                                    By:
                                          Name:
                                          Title:


                                    Notice Address:

                                    [SUBSIDIARY]
                                    [                                        ]
                                    [                                        ]
                                    Attn:  [                                 ]


DRAFT:  March 21, 1997                                  H:\WPCDOCS\1186\141591

<PAGE>