FLEET CAPITAL CORPORATION

                                     -with-

                               CFP HOLDINGS, INC.
                           CUSTOM FOOD PRODUCTS, INC.
                              QF ACQUISITION CORP.


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


                           LOAN AND SECURITY AGREEMENT


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



                               Dated: May 5, 1998



                                   $40,000,000




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<TABLE>
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                                                  TABLE OF CONTENTS


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SECTION  1.       GENERAL DEFINITIONS.............................................................................1
         1.1.     Defined Terms...................................................................................1
         1.2.     Accounting Terms...............................................................................18
         1.3.     Other Terms....................................................................................18
         1.4.     Certain Matters of Construction................................................................18


SECTION  2.       CREDIT FACILITY................................................................................18
         2.1.     Revolving Credit Loans.........................................................................19
         2.2.     Term and Equipment Loans.......................................................................20
                  (A)      Term Loan.............................................................................20
                  (B)      Mandatory Prepayments.................................................................21
                  (C)      Optional Prepayments..................................................................21
         2.3.     Manner of Borrowing Revolving Credit Loans.....................................................21
         2.4.     Eurodollar Loans...............................................................................22
         2.5.     All Loans to Constitute One Obligation.........................................................24
         2.6.     Loan Account...................................................................................25
         2.7.     Letters of Credit..............................................................................25
         2.8.     Issuance of Letters of Credit..................................................................25
         2.9.     Disbursements and Reimbursement Obligations....................................................26


SECTION  3.       INTEREST, FEES, TERM AND REPAYMENT.............................................................27
         3.1.     Interest, Fees and Charges.....................................................................27
                  (A)      Interest..............................................................................27
                  (B)  Letter of Credit Fees.....................................................................28
                  (C)      Default Rate Applicable to Interest and Fees..........................................29
                  (D)      Unused Line Fee.......................................................................29
                  (E)      Closing Fee...........................................................................29
                  (F)      Examination and Inspection Fees.......................................................29
                  (G)      No Impact of Usury Laws; Limitation on Interest.......................................30
         3.2.     Term of Agreement..............................................................................30
         3.3.     Termination....................................................................................30
         3.4.     Payments.......................................................................................32
         3.5.     Application of Payments and Collections........................................................32
         3.6.     Statements of Account..........................................................................33
         3.7.     Increased Costs................................................................................33
         3.8.     Basis For Determining Interest Rate Inadequate or Unfair.......................................34
         3.9.     Capital Adequacy...............................................................................34


SECTION  4.       COLLATERAL:  GENERAL TERMS.....................................................................35
         4.1.     Security Interest in Collateral................................................................35
         4.2.     Lien on Realty.................................................................................36


                                                         (i)
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         4.3.     Representations, Warranties and Covenants --Collateral.........................................36
         4.4.     Lien Perfection................................................................................37
         4.5.     Real Property Lien Documentation...............................................................37
         4.6.     Location of Collateral.........................................................................37
         4.7.     Insurance of Collateral........................................................................38
         4.8.     Protection of Collateral.......................................................................39


SECTION  5.       PROVISIONS RELATING TO ACCOUNTS................................................................40
         5.1.     Representations, Warranties and Covenants......................................................40
         5.2.     Assignments, Records and Schedules of Accounts.................................................41
         5.3.     Administration of Accounts.....................................................................41
         5.4.     Collection of Accounts.........................................................................42
         5.5.     Notice Regarding Disputed Accounts.............................................................42


SECTION  6.       PROVISIONS RELATING TO INVENTORY...............................................................42
         6.1.     Representations, Warranties and Covenants......................................................43
         6.2.     Inventory Reports..............................................................................43
         6.3.     Returns of Inventory...........................................................................43


SECTION  7.       PROVISIONS RELATING TO EQUIPMENT...............................................................44
         7.1.     Representations, Warranties and Covenants......................................................44
         7.2.     Evidence of Ownership of Equipment.............................................................44
         7.3.     Records and Schedules of Equipment.............................................................44


SECTION  8.       REPRESENTATIONS AND WARRANTIES.................................................................44
         8.1.     General Representations and Warranties.........................................................44
                  (A)      Organization and Qualification........................................................44
                  (B)      Corporate Names.......................................................................44
                  (C)      Corporate Power and Authority.........................................................45
                  (D)      Legally Enforceable Agreement.........................................................45
                  (E)      Use of Proceeds.......................................................................45
                  (F)      Margin Stock..........................................................................45
                  (G)      Governmental Consents.................................................................45
                  (H)      Patents, Trademarks, Copyrights and Licenses..........................................45
                  (I)      Capital Structure.....................................................................46
                  (J)      Solvent Financial Condition...........................................................46
                  (K)      Restrictions..........................................................................46
                  (L)      Litigation............................................................................46
                  (M)      Title to Properties...................................................................46
                  (N)      Financial Statements; Fiscal Year; Pro Forma Financial Statements.....................47
                  (O)      Full Disclosure.......................................................................47
                  (P)      Pension Plans.........................................................................48
                  (Q)      Taxes.................................................................................48
                  (R)      Labor Relations.......................................................................48


                                                         ii
<PAGE>

                  (S)      Compliance With Laws..................................................................49
                  (T)      Surety Obligations....................................................................49
                  (U)      No Defaults...........................................................................49
                  (V)      Brokers...............................................................................49
                  (W)      Business Locations; Agent for Process.................................................49
                  (X)      Trade Relations.......................................................................49
                  (Y)      Leases................................................................................50
                  (Z)      Investment Company Act................................................................50
                  (AA)     OSHA and Environment Compliance.......................................................50
                  (BB)     Senior Indebtedness...................................................................50
                  (CC)     Indebtedness..........................................................................50
                  (DD)     True Copies of Charter and Other Documents............................................50
                  (EE)     Certain Transactions..................................................................50
         8.2.     Reaffirmation..................................................................................50
         8.3.     Survival of Representations and Warranties.....................................................51


SECTION  9.        COVENANTS AND CONTINUING AGREEMENTS...........................................................51
         9.1.      Affirmative Covenants.........................................................................51
                  (A)      Taxes and Liens.......................................................................51
                  (B)      Tax Returns...........................................................................51
                  (C)      Payment of Bank Charges...............................................................51
                  (D)      Business and Existence................................................................52
                  (E)      Maintain Properties...................................................................52
                  (F)      Compliance with Laws..................................................................52
                  (G)      ERISA Compliance......................................................................52
                  (H)      ERISA Events..........................................................................52
                  (I)      Business Records......................................................................53
                  (J)      Visits and Inspections................................................................53
                  (K)      Financial Statements..................................................................53
                  (L)      Notices to Lender.....................................................................54
                  (M)      Landlord Agreements...................................................................55
                  (N)      Subordinations........................................................................55
                  (O)      Compliance Certificate................................................................55
                  (Q)      Environmental Matters.................................................................55
                  (R)      Further Assurances....................................................................58
                  (S)      Conduct of Business...................................................................58
                  (T)      Notice of Amendments to Certain Documents.............................................58
                  (T)      Payment of Indebtedness for Money Borrowed............................................58
                  (U)      Performance of Certain Obligations....................................................59
         9.2.     Negative Covenants.............................................................................59
                  (A)      Mergers; Consolidations; Acquisitions.................................................59
                  (B)      Loans.................................................................................59
                  (C)      Indebtedness For Money Borrowed.......................................................60
                  (D)      Affiliate Transactions................................................................60
                  (E)      Partnerships or Joint Ventures........................................................60
                  (F)      Adverse Transactions..................................................................60


                                                         iii
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                  (G)      Guaranties............................................................................61
                  (H)      Limitation on Liens...................................................................61
                  (I)      Subordinated Debt.....................................................................61
                  (J)      Distributions.........................................................................62
                  (K)      Subsidiaries..........................................................................62
                  (L)      Capital Expenditures..................................................................62
                  (M)      Business Locations....................................................................62
                  (N)      Change of Business....................................................................63
                  (N)      Disposition of Assets.................................................................63
                  (P)      Name of Borrower......................................................................63
                  (Q)      Use of Lender's Name..................................................................63
                  (R)      Margin Securities.....................................................................63
                  (S)      Restricted Investment.................................................................64
                  (T)      Fiscal Year...........................................................................64
                  (U)      Stock of Subsidiary, Etc..............................................................64
                  (V)      Tax Consolidation.....................................................................64
                  (W)      ERISA.................................................................................64
                  (X)      Other Agreements......................................................................64


SECTION  10.      CONDITIONS PRECEDENT...........................................................................64
         10.1.    Documentation..................................................................................64
         10.2.    Other Conditions...............................................................................66
         10.3.    Conditions to Each Loan........................................................................67
                  (A)      Representations and Warranties........................................................67
                  (B)      No Default............................................................................68


SECTION  11.      EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT..............................................68
         11.1.    Events of Default..............................................................................68
                  (A)      Payment of Loans......................................................................68
                  (B)      Payment of Obligations................................................................68
                  (C)      Misrepresentations....................................................................68
                  (D)      Breach of Covenants...................................................................68
                  (F)      Cancellation of Other Agreements......................................................68
                  (F)      Insolvency, Etc.......................................................................69
                  (G)      Bankruptcy Etc........................................................................69
                  (H)      Other Defaults........................................................................69
                  (I)      Uninsured Losses; Unauthorized Dispositions...........................................69
                  (J)      Adverse Changes.......................................................................69
                  (K)      Solvency..............................................................................69
                  (L)      Business Disruption; Condemnation.....................................................70
                  (M)      Change of Ownership...................................................................70
                  (N)      ERISA.................................................................................70
                  (O)      Litigation............................................................................70
                  (P)      Criminal Forfeiture...................................................................70
                  (Q)      Judgments.............................................................................70


                                                         iv
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         11.2.    Acceleration of the Obligations................................................................70
         11.3.    Remedies.......................................................................................71
         11.4.    Remedies Cumulative; No Waiver.................................................................71


SECTION  12.      MISCELLANEOUS..................................................................................72
         12.1.    Power of Attorney..............................................................................72
         12.2.    Indemnity......................................................................................72
         12.3.    Modification of Agreement; Sale of Interest....................................................73
         12.4.    Reimbursement of Expenses......................................................................73
         12.5.    Indulgences Not Waivers........................................................................74
         12.6.    Severability...................................................................................74
         12.7.    Successors and Assigns.........................................................................74
         12.8.    Cumulative Effect; Conflict of Terms...........................................................74
         12.9.    Execution in Counterparts......................................................................74
         12.10.   Notice.........................................................................................75
         12.11.   Demand Obligations.............................................................................76
         12.12.   Entire Agreement...............................................................................76
         12.13.   Interpretation.................................................................................76
         12.14.   GOVERNING LAW; CONSENT TO FORUM................................................................76
         12.15.   WAIVER OF TRIAL BY JURY AND OTHER WAIVERS BY BORROWER..........................................77


SECTION  13       BORROWING AGENCY PROVISIONS....................................................................78

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                           LOAN AND SECURITY AGREEMENT


         THIS LOAN AND SECURITY  AGREEMENT is made this 5th day of May, 1998, by
and among FLEET CAPITAL CORPORATION  ("Lender"),  a Rhode Island corporation and
CFP HOLDINGS, INC. ("Holdings"),  a Delaware corporation,  CUSTOM FOOD PRODUCTS,
INC.  ("Custom"),  a California  corporation  and QF  ACQUISITION  CORP.  (d/b/a
Quality Foods) ("Quality"), a Delaware corporation.


SECTION 1. GENERAL DEFINITIONS

         1.1.  Defined Terms.  When used herein,  the following terms shall have
the following  meanings  (terms defined in the singular to have the same meaning
when used in the plural and vice versa):

         Accountants  -  Deloitte  &  Touche,  LLP  and/or  any  other  firm  of
independent  certified  public  accountants of recognized  national  standing or
otherwise acceptable to Lender.

         Accounts - with  respect  to  any  Borrower,  all  of  such  Borrower's
accounts, contract rights, chattel paper, instruments and documents, whether now
owned or  hereafter  created  or  acquired  by such  Borrower  or in which  such
Borrower now has or hereafter acquires any interest.

         Account Debtor - any Person who is or may become  obligated under or on
account of an Account.

         Additional  Equipment  Loans - any  Equipment  Loan made by Lender to a
Borrower  pursuant to Section  2.2(B) of this  Agreement  that is secured by all
Collateral.

         Adjusted  Net  Earnings  From  Operations  - with respect to any fiscal
period,  means the net income after  provision  for income taxes for such fiscal
period of Holdings on a Consolidated basis, all as reflected on the Consolidated
financial  statement of Holdings  supplied to Lender  pursuant to Section 7.1(K)
hereof,  but  excluding:  (i) any gain or loss  arising from the sale of capital
assets;  (ii) any gain arising from any write-up of assets;  (iii)  earnings and
losses of any Subsidiary accrued prior to the date it became a Subsidiary;  (iv)
earnings and losses of any  corporation,  substantially  all the assets of which
have been acquired in any manner by any Borrower,  realized by such  corporation
prior to the date of such  acquisition;  (v) earnings and losses of any business
entity (other than a Subsidiary) in which any Borrower has an ownership interest
except to the extent such  earnings  shall have  actually  been  received by any
Borrower in the form of cash distributions; (vi) any portion of the earnings and
losses of any Subsidiary  which is subject to any  restriction as to the payment
of dividends to any Borrower, but only to the extent of earnings subject to such
restrictions; (vii) the earnings and losses of any Person to which any assets of
any Borrower shall have been sold, transferred or disposed of, or into which any
Borrower shall have merged,  or been a party to any  consolidation or other form
of  reorganization,  prior to the date of such  transaction;  (viii) any gain or
loss arising from the  acquisition of any  Securities of any Borrower;  and (ix)
any


<PAGE>

gain or loss  arising  from  extraordinary  or  non-recurring  items  (except if
realized in respect of a  previously  recorded  extraordinary  or  non-recurring
loss).

         Affiliate - a Person (other than a  Subsidiary):  (i) which directly or
indirectly through one or more intermediaries  controls, or is controlled by, or
is under common control with, a Borrower;  (ii) which beneficially owns or holds
10% or more of any class of the Voting Stock of a Borrower; or (iii) 10% or more
of the Voting Stock (or in the case of a Person which is not a corporation,  10%
or more of the  equity  interest)  of which is  beneficially  owned or held by a
Borrower or a Subsidiary of a Borrower. For purposes hereof, "control" means the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction  of the  management  and  policies  of a Person,  whether  through the
ownership of Voting Stock, by contract or otherwise.

         Aggregate  Adjusted  Availability - at any date, an amount equal to (i)
the  Borrowing  Base minus (ii) the sum of (a) the aggregate  unpaid  balance of
Revolving  Credit Loans plus (b) an amount equal to the excess of the  aggregate
face amount of all  outstanding  Standby  Letters of Credit over $6,000,000 plus
(c) an amount  equal to 35% of the  aggregate  face  amount  of all  outstanding
Commercial  Letters of Credit  plus (d) all sums due and owing by  Borrowers  to
their respective trade creditors which remain outstanding beyond normal business
practices.

         Agreement - this Loan and Security Agreement.

         Applicable Margin - with respect to Base Rate Loans and Eurodollar Rate
Loans, the percentages  which, when added to or subtracted from the Base Rate or
Eurodollar  Rate,  as the  case  may be,  comprises  the  Contract  Rate and are
referenced  in and are  subject to  adjustment  as  provided  under  Section 3.1
hereof.

         Applicable  Percentage - with respect to PMSI Equipment  Loans, 80% and
with respect to Additional Equipment Loans, 85%.

         Average  Monthly Loan  Balance - the amount  obtained by adding (i) the
unpaid balance of Revolving  Credit Loans, the Term Loan and the Equipment Loans
owing by Borrowers to Lender and (ii) the aggregate  outstanding  face amount of
Letters  of  Credit as at the end of each day for each day  during  the month in
question and by dividing such sum by the number of days in such month.

         Bank - Fleet National Bank.

         Base Rate - a variable  rate of interest  equal to the higher from time
to time of (A)  the  rate of  interest  announced  publicly  by Bank in  Boston,
Massachusetts  as its  prime  rate and (B) a rate  equal to 1/2 of 1% per  annum
above the weighted average of the rates on overnight federal funds  transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
determined for any day by Bank.

         Base Rate Loans - any Loans bearing  interest  computed by reference to
the Base Rate.

         Borrower - any of Holdings, Custom or Quality, as the context requires;
Borrowers means collectively, Holdings, Custom and Quality.


                                       2
<PAGE>


         Borrowing Agent - Holdings.

         Borrowing  Base - as at any date of  determination  thereof,  an amount
equal to the lesser of:

                  (i)  the Maximum Revolving Amount; and

                  (ii) the aggregate sum of the Borrowers'  Individual Borrowing
Bases.

         Borrowing Base  Certificate - a certificate,  substantially in the form
of Exhibit 5.2 hereto, provided by Borrowers to Lender, showing the calculation,
semi-monthly  (or more  frequently,  if requested by Lender in  accordance  with
Section 5.2 hereof) of each Individual Borrowing Base.

         Business  Day - with  respect  to  Eurodollar  Loans,  any day on which
commercial  banks are open for domestic  and  international  business  including
dealings in Dollar  deposits in London,  England and New York, New York and with
respect to all other Loans, any day excluding Saturday, Sunday and any day which
is a legal  holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are closed.

         Capital  Expenditures - expenditures made and liabilities  incurred for
capital assets in accordance with GAAP but shall  specifically  exclude,  in any
event,  (i) to the extent  otherwise  permitted by the terms of this  Agreement,
expenditures  made  with  the  proceeds  received  from any  casualty  insurance
policies,  which  proceeds  are used to replace  or repair  lost,  destroyed  or
damaged  assets,  (ii) to the extent  otherwise  permitted  by the terms of this
Agreement,  expenditures  made with the net  proceeds  derived  from any sale or
other disposition of assets, which net proceeds are used to replace such assets,
(iii) payments on operating leases of fixed assets and (iv) expenditures made in
connection with Permitted Acquisitions.

         Capitalized   Lease  Obligation  -  any  Indebtedness   represented  by
obligations  under a lease that is  required  to be  capitalized  for  financial
reporting  purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the  capitalized  amount of such  obligations  determined in accordance
with GAAP.

         Cash Collateral Account - as defined in Section 2.9(C).

         Cash Flow - with  respect to Holdings on a  Consolidated  Basis for any
fiscal period,  an amount equal to Adjusted Net Earnings from  Operations,  plus
depreciation  and   amortization,   plus  or  minus  non-cash  losses  or  gains
respectively  from fixed asset sales,  plus non cash charges related to: changes
in GAAP,  plus  expenses  related to  effecting  the  refinancing  of which this
Agreement  is a part  less  the sum of,  without  duplication  (i)  non-financed
Capital  Expenditures  (ii)  amortization of Standby Letters of Credit and (iii)
all scheduled principal payments made on any long term debt or capital leases.

         CFP - CFP Group, Inc., a Delaware corporation.


                                       3
<PAGE>


         Closing  Date - the date on which all of the  conditions  precedent  in
Section 10 are satisfied and the initial Loan or Letter of Credit issued is made
hereunder.

         Closing Reserve - $5,000,000.

         Code - the Uniform Commercial Code as adopted and in force in the State
of New York, as from time to time in effect.

         Collateral - all of the Property described in Section 4 hereof, and all
other Property that now or hereafter  secures the payment and performance of any
of the Obligations.

         Commercial Letters of Credit - Letters of Credit issued for the account
of any  Borrower  which  serve as  security  for the  payment by a  Borrower  of
obligations incurred in connection with the purchase of Inventory or Equipment.

         Consent  Reserve -  $3,664,390  provided,  that such  reserve  shall be
reduced  (i)  $305,973  upon  receipt  by  Lender  of  (a) a  consent  agreement
substantially  in the form  annexed  hereto as  Exhibit  1.1(A)(1)  executed  by
Quality and MELF and (b) an executed  copy of the MELF  Intercreditor  Agreement
and  (ii)  $3,358,417  upon  receipt  by  Lender  of  (a)  a  consent  agreement
substantially  in the form annexed  hereto as Exhibits  1.1(B)(1)  and 1.1(B)(2)
executed  by PIDC,  PIDA  and  Quality,  (b) a first  priority  Mortgage  in the
principal  amount of  $3,989,183  and a fourth  priority  Mortgage to secure all
Obligations  (other than the PMSI  Equipment  Loans),  each on the Real Property
located at 5501 Tabor Road,  Philadelphia,  Pennsylvania  in form and  substance
satisfactory to Lender, (c) the title insurance policies more fully described in
Section  10.2(H)  hereof,  (d) a current survey of the Real Property in form and
substance  satisfactory  to Lender and (e) the opinion of counsel of McCausland,
Keen & Buckman in form and substance satisfactory to Lender.

         Consolidated  - the  consolidation  in  accordance  with  GAAP  of  the
accounts or other items as to which such term applies.

         Contingent  Reserves  - such  sums as  Lender  may,  from time to time,
establish as a reserve in accordance  with the  provisions of Section  2.1(A) of
this Agreement including,  without limitation,  the Closing Reserve, the Consent
Reserve and the Term Loan Reserve.

         Contract  Rate - an interest rate per annum equal to the (i) sum of the
Base Rate plus the  Applicable  Margin with  respect to Base Rate Loans and (ii)
sum of the Eurodollar Rate plus the Applicable Margin with respect to Eurodollar
Rate Loans.

         Contract  Year - the twelve month period  beginning on the Closing Date
and on the anniversary of the Closing Date in any year.

         Controlled  Group - shall  mean all  members of a  controlled  group of
corporations and all trades or businesses  (whether or not  incorporated)  under
common  control  which,  together  with any  Borrower,  are  treated as a single
employer under Sections 414(b) or (c) of the IRC.


                                      4
<PAGE>

         Current Assets - at any date means the aggregate amount at which all of
the current assets of a Person would be properly classified as current assets on
a balance  sheet at such date in  accordance  with GAAP except that  amounts due
from Affiliates and investments in Affiliates shall be excluded therefrom.

         Current  Liabilities - at any date means the amount at which all of the
current  liabilities  of a  Person  would  be  properly  classified  as  current
liabilities on a balance sheet at such date in accordance  with GAAP  (excluding
the Loans and current maturities of long-term Indebtedness),  plus any insurance
claims accruals which are not so classified under GAAP.

         Custom - Custom Food Products, Inc., a California corporation.

         Default - an event or condition the occurrence of which would, with the
lapse of time or the giving of notice, or both, become an Event of Default.

         Default Rate - as defined in Section 3.1(C) of this Agreement.

         Distribution - in respect of any corporation  means: (i) the payment of
any dividends or other distributions on capital stock of the corporation (except
distributions in any class of capital stock), (ii) the redemption or acquisition
of capital stock or Subordinated Debt unless made contemporaneously from the net
proceeds of (x) the sale of capital stock or (y) Subordinated Debt and (iii) any
payment on any Subordinated Repurchase Note.

         Dollars - and the sign "$" shall mean lawful money of the United States
of America.

         Dominion  Account - a special  account  of Lender  established  by each
Borrower  or  any of its  Subsidiaries  pursuant  to  this  Agreement  at a bank
selected  by each  Borrower,  but  acceptable  to  Lender,  in its  commercially
reasonable  discretion,  and over which  Lender  shall  have sole and  exclusive
access and control for withdrawal purposes.

         EBITDA - for any fiscal  period,  the sum of Adjusted Net Earnings from
Operations  before Interest  Expense,  taxes,  depreciation and amortization for
said period with respect to Holdings on a  Consolidated  basis as  determined in
accordance with GAAP.

         Eligible  Account - an  Account  arising  in the  ordinary  course of a
Borrower's  business  from  the sale of goods or  rendition  of  services  which
Lender,  in  its  commercially  reasonable  judgment,  deems  to be an  Eligible
Account.  Without limiting the generality of the foregoing,  no Account shall be
an  Eligible  Account  if: (i) it arises  out of a sale made by a Borrower  to a
Subsidiary  or an  Affiliate  of any  Borrower or to a Person  controlled  by an
Affiliate of any Borrower or any of its Subsidiaries;  or (ii) it is unpaid more
than (a) seventy  five (75) days after the invoice date with respect to Accounts
of Custom or (b) seventy  five (75) days after the invoice  date with respect to
Accounts of Quality  provided,  that such  Accounts  are reported to Lender in a
manner  satisfactory in all respects to Lender;  or (iii) fifty percent (50%) or
more of the  Accounts  from the  Account  Debtor are  deemed not to be  Eligible
Accounts  hereunder because of the provisions of clause (ii) of this definition;
or (iv) the total  unpaid  Accounts of the Account  Debtor  exceeds  twenty five
percent (25%) of the net amount of all  Accounts,  to the extent of such excess;
or (v) any covenant,


                                       5
<PAGE>

representation  or warranty  contained  in this  Agreement  with respect to such
Account has been breached in any material  respect;  or (vi) the Account  Debtor
has disputed liability with respect to such Account,  or has made any claim with
respect to any other Account due from such Account  Debtor to any  Borrower,  or
the Account  otherwise is subject to any right of setoff by the Account  Debtor,
to the extent of any offset,  dispute or claim;  or (vii) the Account Debtor 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 a
decree or order for relief has been  entered by a court having  jurisdiction  in
respect  of  the  Account  Debtor  in an  involuntary  case  under  the  federal
bankruptcy laws, as now constituted or hereafter amended,  or any other petition
or other application for relief under the federal bankruptcy laws has been filed
against the Account Debtor, or if the Account Debtor has terminated its business
as a going  concern,  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 (viii) it arises from a sale
to an Account Debtor outside the United States of America,  Canada or such other
jurisdictions as to which Lender has consented in writing, unless the sale is on
letter of credit,  guaranty or  acceptance  terms,  in each case  acceptable  to
Lender in its commercially  reasonable credit judgment; or (ix) it arises from a
sale to the Account Debtor on a bill-and-hold,  guaranteed sale, sale-or-return,
sale-on-approval,  consignment or any other  repurchase or return basis;  or (x)
Lender  concludes,  upon the  exercise  of its  commercially  reasonable  credit
judgment, that collection of such Account is insecure or that payment thereof is
doubtful or will be delayed  seventy-five  (75) days beyond the invoice  date by
reason of the Account Debtor's financial  condition;  or (xi) the Account Debtor
is the United  States of America or any  department,  agency or  instrumentality
thereof,  unless such  Borrower  assigns its right to payment of such Account to
Lender,  in form and substance  satisfactory to Lender, so as to comply with the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq.
and 41 U.S.C.  Section 15); or (xii) the Account Debtor is located in either the
State of New Jersey, the State of Minnesota or the State of Indiana, unless such
Borrower has qualified as a foreign  corporation in such state or filed a Notice
of Business  Activities Report with the appropriate  officials in such state for
the then current  year;  or (xiii) the Account is subject to a Lien other than a
Permitted  Lien;  or (xiv) the goods  giving rise to such  Account have not been
delivered to and accepted by the Account  Debtor or the services  giving rise to
such Account  have not been  performed by a Borrower and accepted by the Account
Debtor or the Account  otherwise  does not  represent a final sale;  or (xv) the
Account is evidenced by chattel  paper or an  instrument of any kind unless such
chattel paper or instrument shall have been pledged and delivered to Lender,  or
has been reduced to judgment;  or (xvi) any Borrower has made any agreement with
the  Account  Debtor  for any  deduction  therefrom,  except  for  discounts  or
allowances  which are  reflected in the  calculation  of the face amount of each
invoice  related to such  Account;  or (xvii) any Borrower has made an agreement
with the Account Debtor to extend the time of payment  thereof (a)  seventy-five
(75) days  beyond the  invoice  date with  respect to  Accounts of Custom or (b)
sixty (60) days beyond the invoice date with respect to Accounts of Quality;  or
(xviii)  the  Account  arises  from a retail  sale of  goods to a Person  who is
purchasing same primarily for personal, family or household purposes.

         Eligible  Inventory  - such  Inventory  of each  Borrower  (other  than
packaging  materials  and  supplies)  which  Lender,  in  the  exercise  of  its
commercially reasonable credit judgment, deems to be Eligible Inventory. Without
limiting  the  generality  of the  foregoing,  no  Inventory  shall be  Eligible
Inventory unless, in Lender's commercially reasonable credit judgment, it (i) is
raw materials,  work-in-process,  Mold-State  Inventory or finished goods,  (ii)
with respect to Inventory  other than  Mold-


                                       6
<PAGE>

State  Inventory is in good, new and saleable  condition,  (iii) with respect to
Inventory  other than  Mold-State  Inventory is not obsolete or  unmerchantable,
(iv) in all material  respects meets all standards  imposed by any  governmental
agency or authority, (v) conforms in all material respects to the warranties and
representations set forth in Section 6.1 hereof, (vi) is at all times subject to
Lender's duly  perfected,  first  priority  security  interest and no other Lien
except a Permitted  Lien and (vii) is situated at a location in compliance  with
Section  4.6  hereof  and is not in  transit  except  for  Eligible  In  Transit
Inventory.

         Eligible In Transit  Inventory - Eligible  Inventory at any time having
an  aggregate  value not in excess of  $2,500,000  and as to which any  Borrower
shall have  taken  title but not  possession  but shall be  entitled  to receive
possession  thereof  upon  payment of the  purchase  price  attributable  to the
specific goods.

         Environmental  Laws  -  all  federal,  state  and  local  laws,  rules,
regulations,  ordinances,  programs,  permits,  guidances,  orders  and  consent
decrees  relating  to  health,  safety  and  environmental  matters,  as amended
including,  but not limited  to, the  Resource  Conservation  and  Recovery  Act
("RCRA") ; the Comprehensive Environmental Response,  Compensation and Liability
Act of 1980 ("CERCLA");  the Toxic Substances Control Act, as amended; the Clean
Water Act; the River and Harbor Act; the Water Pollution Control Act; the Marine
Protection  Research and  Sanctuaries  Act; the  Deep-Water  Act; the  Superfund
Amendments and Reauthorization Act of 1986; the Federal  Insecticide,  Fungicide
and  Rodenticide  Act; the Mineral  Lands and Leasing  Act;  the Surface  Mining
Control and  Reclamation  Act;  state and federal  superlien  and  environmental
cleanup programs and laws; and U.S. Department of Transportation regulations.

         Equipment  - with  respect  to any  Borrower,  all of  such  Borrower's
machinery,  apparatus,  equipment, fittings, furniture, fixtures, motor vehicles
and other tangible  personal  Property  (other than Inventory) of every kind and
description used in the operations of such Borrower or owned by such Borrower or
in which such Borrower has an interest,  whether now owned or hereafter acquired
by such Borrower and wherever  located,  and all parts,  accessories and special
tools  and  all  increases  and  accessions   thereto  and   substitutions   and
replacements therefor.

         Equipment Loans - as defined in Section 2.2(B) of this Agreement.

         Equipment  Note  - the  secured  promissory  notes  to be  executed  by
Borrowers  on or about the Closing  Date in favor of Lender to evidence the PMSI
Equipment Loans and the Additional  Equipment Loans,  which shall be in the form
of Exhibit 2.2(b) attached hereto.

         Equity  Event  - the  receipt  of  cash  proceeds  by  Holdings  or CFP
resulting  from an initial  public  offering of the capital stock of Holdings or
CFP.

         ERISA  - the  Employee  Retirement  Income  Security  Act of  1974,  as
amended, and all rules and regulations from time to time promulgated thereunder.


                                       7
<PAGE>

         ERISA Affiliate - each trade or business  (whether or not incorporated)
which,  together with any Borrower,  would be treated as a single employer under
Section  4001(a)(14)  of ERISA or IRC Section  414(b),  (c), (m), (n) or (o), as
applicable.

         Eurodollar  Loan - any Loan bearing  interest  computed by reference to
the Eurodollar Rate.

         Eurodollar  Rate - for  any  Eurodollar  Loan,  for  the  then  current
Interest Period relating thereto, the rate per annum (such Eurodollar Rate to be
rounded, if necessary, to the next higher 1/16 of one (1%) percent) equal to the
quotient of (a) LIBOR, divided by (b) a number equal to 1.00 minus the aggregate
of the rates (expressed as a decimal) of reserve requirements current on the day
that  is two  Business  Days  prior  to the  beginning  of the  Interest  Period
(including  without  limitation  basic,  supplemental,  marginal  and  emergency
reserves)  under any  regulation  promulgated  by the Board of  Governors of the
Federal Reserve System (or any other governmental  authority having jurisdiction
over the Bank) as in effect from time to time, dealing with reserve requirements
prescribed for  Eurocurrency  funding  including any reserve  requirements  with
respect  to  "Eurocurrency  liabilities"  under  Regulation  D of the  Board  of
Governors of the Federal Reserve System.

         Event of Default - as defined in Section 11.1 of this Agreement.

         Expiration  Date - the  last  day of the  Original  Term  or,  if  this
Agreement  shall have been renewed  pursuant to Section 3.2, the last day of the
Final Renewal Term.

         Fiscal Year - shall mean a 52 week accounting  period commencing on the
first day after the last Saturday in March in each year.

         Fixed Charge Coverage - for Holdings on a Consolidated  Basis,  for any
period,  the ratio of (x) EBITDA for such period to (y) the sum of (i)  Interest
Expense  actually  paid in cash for such period plus (ii)  non-financed  Capital
Expenditures made during such period plus (iii) scheduled  principal payments on
all  Indebtedness  for Money Borrowed (other than Current  Liabilities) for such
period plus (iv) taxes accrued and/or paid during such period.

         GAAP - generally accepted accounting principles in the United States of
America in effect from time to time.

         General  Intangibles  - with  respect  to  any  Borrower,  all of  such
Borrower's  general  intangibles,  whether  now owned or  hereafter  created  or
acquired by such Borrower,  including, without limitation, all choses in action,
causes  of  action,  corporate  or other  business  records,  deposit  accounts,
inventions,  designs,  patents,  patent applications,  trademarks,  trade names,
trade  secrets,  goodwill,  copyrights,  registrations,   licenses,  franchises,
customer  lists,  tax  refund  claims,   computer  programs,  all  claims  under
guaranties,  security  interests  or other  security  held by or granted to such
Borrower  to secure  payment of any of the  Accounts by an Account  Debtor,  all
rights to  indemnification  and all other intangible  property of every kind and
nature (other than Accounts).


                                       8
<PAGE>

         Guarantors - Any hereafter created Subsidiary or other Affiliate of any
Borrower or other Person who may hereafter  guarantee  payment or performance of
the whole or any part of the Obligations.

         Guaranty Agreement - the continuing Guaranty which is to be executed by
each Guarantor in form and substance satisfactory to Lender.

         Guarantor  Security  Agreement - the  agreement  which is to be entered
into by each Guarantor  pursuant to which Lender is granted a security  interest
in each Guarantor's property as Collateral for the Obligations.

         Hazardous Discharge - as defined in Section 9.1(O) hereof.

         Hazardous  Substance - any  flammable  explosives,  radon,  radioactive
materials,   asbestos,   urea  formaldehyde   foam  insulation,   polychorinated
byphenyls,  petroleum  and petroleum  products,  methane,  hazardous  materials,
hazardous  wastes,  hazardous  or toxic  substances  as defined  in CERCLA,  the
Hazardous Materials Transportation Act, as amended, RCRA or any other applicable
Environmental Law and in the regulations adopted pursuant thereto.

         Hazardous  Wastes  - all  hazardous  waste  materials  regulated  under
Environmental Laws now in force or hereafter enacted relating to hazardous waste
disposal.

         Holdings - CFP Holdings, Inc., a Delaware corporation.

         Indebtedness - as applied to a Person means,  without  duplication  (i)
all items which in accordance  with GAAP would be included in determining  total
liabilities  as shown on the liability side of a balance sheet of such Person as
at the date as of which  Indebtedness  is to be determined,  including,  without
limitation, Capitalized Lease Obligations, (ii) all obligations of other Persons
which such Person has  guaranteed  and (iii) in the case of  Borrowers  (without
duplication), the Obligations.

         Indenture - Indenture dated as of January 28, 1997 among  Holdings,  as
Issuer, Custom, Quality and CFP, as guarantors,  and United States Trust Company
of New York, as Trustee with respect to the Senior Guaranteed Notes.

         Individual  Borrowing Base - as at any date of  determination  thereof,
with respect to each Borrower an amount equal to:

                           (i)       eighty-five percent (85%) of the net amount
                                     of  such   Borrower's   Eligible   Accounts
                                     outstanding at such date;

                                                        PLUS

                           (ii)     sixty  five  percent  (65%) of the  value of
                                    such Borrower's  Eligible  Inventory at such
                                    date calculated on the basis of the lower of
                                    cost  or


                                       9
<PAGE>

                                    market   with  the   cost  of  raw materials
                                    and finished goods calculated on a first-in,
                                    first-out basis

                                                        MINUS

                           (iii)  an  amount   equal  to  the  sum  of  (A)  the
                  difference  between  (x)  the  aggregate  face  amount  of all
                  outstanding Standby Letters of Credit issued on behalf of such
                  Borrower  and (y)  $6,000,000,  plus (B) thirty  five  percent
                  (35%) of the face amount of all  Commercial  Letters of Credit
                  issued on behalf of such  Borrower  plus (C) any amounts which
                  Lender may have paid pursuant to any of the Loan Documents for
                  the account of such Borrower such to the extent not treated as
                  Revolving Credit Loans hereunder plus (D) Contingent Reserves.

         For purposes  hereof,  (a) the net amount of Eligible  Accounts at such
time shall be (i) the face  amount of such  Eligible  Accounts  less (ii) to the
extent  not  otherwise  deducted,  any  and  all  returns,  discounts,  credits,
allowances or excise taxes of any nature at any time issued,  owing,  claimed by
Account  Debtors,  granted,  outstanding  or  payable  in  connection  with such
Accounts at such time,  and the net amount of any  Eligible  Account for which a
check or other payment  instrument  shall have been received but collected funds
shall not have been received by such Borrower shall be included  notwithstanding
that the books of such Borrower shall show such Eligible  Account as having been
paid.

         Interest Expense - for any period, the interest expense of Borrowers on
a  Consolidated  basis during such period  determined  in  accordance  with GAAP
consistently  applied,  and  shall in any  event  include,  without  limitation,
interest on Capitalized  Lease  Obligations and shall exclude (i) original issue
discount  amortization to the extent it is required to be included in accordance
with GAAP, and (ii) amortization of deferred financing costs.

         Interest  Period - the period provided for any Eurodollar Loan pursuant
to Section 2.4.

         Inventory  - with  respect  to any  Borrower,  all of  such  Borrower's
inventory, whether now owned or hereafter acquired by such Borrower,  including,
but not limited to, all goods  intended for sale or lease by such  Borrower,  or
for display or demonstration;  all work in process;  all raw materials and other
materials  and supplies of every nature and  description  used or which might be
used  in  connection  with  the  manufacture,   printing,   packing,   shipping,
advertising,  selling,  leasing or furnishing of such goods or otherwise used or
consumed in such Borrower's  business;  and all documents evidencing and General
Intangibles  relating to any of the  foregoing,  whether now owned or  hereafter
acquired by such Borrower.

         Investment  Property - all of each  Borrower's  now owned or  hereafter
acquired  securities  (whether   certificated  or  uncertificated),   securities
entitlements,   securities   accounts,   commodities  accounts  and  commodities
contracts.

         IRC - shall mean the  Internal  Revenue  Code of 1986,  as amended from
time to time, together with the regulations promulgated thereunder.


                                       10
<PAGE>

         Issuing Bank - as defined in Section 2.7(D) hereof.


         Lending Office - the lending office of Lender.

         Letter of Credit - a Commercial Letter of Credit or a Standby Letter of
Credit.

         LIBOR - for any Eurodollar Loan for the then current  Interest  Period,
the rate of interest equal to the average (rounded upwards, if necessary, to the
nearest  1/16  of 1%) of the  rates  per  annum  at  which  Dollar  deposits  in
immediately  available  funds are  offered to the Bank in the  London  interbank
eurodollar  market as at or about 11:00 a.m. (London time) two (2) Business Days
prior to the beginning of the applicable  Interest  Period,  for delivery on the
first day of such Interest Period, and in an amount  approximately  equal to the
amount of such Eurodollar Loan for a period approximately equal to such Interest
Period.

         Lien - any interest in Property  securing an  obligation  owed to, or a
claim by, a Person other than the owner of the  Property,  whether such interest
is based on the common law, statute or contract, and including,  but not limited
to,  the  security  interest,  security  title or lien  arising  from a security
agreement,  mortgage, deed of trust, deed to secure debt,  encumbrance,  pledge,
conditional  sale or trust receipt or a lease (other than operating leases under
which such Person is the lessee), consignment or bailment for security purposes.
The  term  "Lien"  shall  include   reservations,   exceptions,   encroachments,
easements, rights-of-way,  covenants, conditions, restrictions, leases and other
title exceptions and encumbrances  affecting  Property.  For the purpose of this
Agreement,  each Borrower  shall be deemed to be the owner of any Property which
it has  acquired  or holds  subject to a  conditional  sale  agreement  or other
arrangement  pursuant to which  title to the  Property  has been  retained by or
vested in some other Person for security purposes.

         Loan  Account  - the loan  account  established  on the books of Lender
pursuant to Section 2.6 hereof with respect to each Borrower.

         Loan Documents - this Agreement and the Other Agreements.

         Loans  - all  loans  and  advances  made  by  Lender  pursuant  to this
Agreement,  including,  without limitation, all Revolving Credit Loans, the Term
Loan, the Equipment Loans and the Letters of Credit.

         Management Agreement - The Management  Consulting Agreement dated as of
December 30, 1996, as amended  through the date hereof,  between First  Atlantic
Capital, Ltd. and Holdings.

         Material  Adverse  Effect - (a) with respect to any Person and relative
to any event or occurrence of whatever nature  (including,  without  limitation,
any  adverse  determination  in  any  litigation,  arbitration  or  governmental
proceeding),   a  material  adverse  effect  on  (i)  the  financial  condition,
operations,  business,  revenues,  assets or  Properties  of such Person and its
Subsidiaries  taken as a whole or (ii) the  ability of such Person to timely and
fully  perform  any of its  payment  or other  material  Obligations  under this
Agreement  or any  other  Loan  Document  to which  it is a party,  and (b) with
respect to any  material  Collateral  and  relative to any  condition,  event or
occurrence of


                                       11
<PAGE>

whatever  nature,  a material  adverse effect (in the context of such Person and
its  Subsidiaries  taken  as a  whole)  on (i) the  value  thereof  or (ii)  any
Borrower's rights to or interest therein (for the benefit of the Lender).

         Maximum  Revolving  Credit  Amount - an amount at any time equal to (a)
Forty Million Dollars  ($40,000,000) minus (b) the sum of (i) the aggregate face
amount of all Letters of Credit at such time and (ii) the outstanding  principal
balance of the Term Loan and the Equipment Loans at such time.

         MELF - the Commonwealth of Pennsylvania,  acting through the Department
of Commerce Machinery and Equipment Loan Fund.

         MELF  Intercreditor  Agreement  -  the  Intercreditor  Agreement  to be
executed  and  delivered  by Lender and MELF  substantially  in the form annexed
hereto as Exhibit  1.1(C),  as such  agreement may be amended,  supplemented  or
otherwise modified from time to time.

         MELF  Loans - the  $500,000  loan  made by MELF to  Quality  under  and
pursuant to the terms of a loan  agreement  dated as of March 21,  1996  between
MELF and Quality.

         Mold-State  Inventory - Inventory of Quality consisting of raw uncooked
meat molded and frozen awaiting tempering and slicing.

         Money   Borrowed  -  as  applied  to   Indebtedness,   means   (without
duplication),  with  respect to each  Borrower,  (i)  Indebtedness  for borrowed
money;  (ii)  Indebtedness,  whether  or not in any  such  case the same was for
borrowed  money,  (A) which is represented  by notes payable or drafts  accepted
that evidence  extensions of credit  (other than  accounts  payable),  (B) which
constitutes  obligations  (other  than  accounts  payable)  evidenced  by bonds,
debentures, notes or similar instruments, or (C) upon which interest charges are
customarily  paid or that was issued or assumed as full or partial  payment  for
Property (in each case other than accounts  payable);  (iii)  Indebtedness  that
constitutes a Capitalized  Lease  Obligation;  and (iv)  Indebtedness  under any
guaranty of obligations  that would  constitute  Indebtedness for Money Borrowed
under clauses (i) through (iii) hereof.

         Mortgage  - each  mortgage  or  deed of  trust  to be  executed  by any
Borrower  on or about  the  Closing  Date in favor of Lender  and by which  such
Borrower shall grant and convey to Lender,  as security for the  Obligations,  a
Lien upon the Real Property of the applicable  Borrower located at the locations
set forth on Exhibit 4.2 attached hereto.

         Multiemployer  Plan - a plan  described  in Sections  3(37) and Section
4001(a)(3)  of  ERISA  which  covers  employees  of any  Borrower  or any  ERISA
Affiliate.

         Net Proceeds - with  respect to any sale of Equipment or Real  Property
or any  condemnation  or insurance  recovery  (i) the  aggregate  cash  proceeds
received by any Borrower in respect thereof, less (ii) the direct costs relating
thereto (including without limitation,  legal, accounting and investment banking
fees, and sales  commissions) and any relocation  expenses  incurred as a result
thereof,  taxes paid or payable as a result  thereof  (after taking into account
any available tax credits


                                       12
<PAGE>

or deductions any tax sharing  arrangements),  amounts required to be applied to
the repayment of indebtedness  senior to, or on a parity with, Lender secured by
a lien  on the  asset  or  assets  the  subject  thereof  and  any  reserve  for
indemnification  or  adjustment  in  respect  of the sale price of such asset or
assets.

         Notes - the Revolving Credit Note, the Term Note and the Equipment Note
and all amendments, modifications, substitutions and replacements thereof.

         Obligations  - all Loans and all other  advances,  debts,  liabilities,
obligations,  covenants  and duties  owing,  arising,  due or  payable  from any
Borrower to Lender of any kind or nature, present or future, including,  without
limitation,  liabilities  with  respect to  Letters  of  Credit,  whether or not
evidenced by any note, guaranty or other instrument,  whether arising under this
Agreement  or any of the  Other  Agreements  or  otherwise,  whether  direct  or
indirect  (including  those  acquired by  assignment),  absolute or  contingent,
primary or  secondary,  due or to become due, now existing or hereafter  arising
and however  acquired.  The term  includes,  without  limitation,  all interest,
charges,  expenses,  fees,  attorney's fees and any other sums chargeable to any
Borrower or any Guarantor under any of the Loan Documents.

         Original Term - as defined in Section 3.2 of this Agreement.

         OSHA - the  Occupational  Safety  and  Health  Act,  and all  rules and
regulations from time to time promulgated thereunder.

         Other  Agreements - any and all  agreements,  instruments and documents
(other  than this  Agreement),  heretofore,  now or  hereafter  executed  by any
Borrower or any  Guarantor and delivered to Lender for its benefit in respect to
the transactions with Lender contemplated by this Agreement,  including, without
limitation, the Notes, the Guaranty Agreements, the Guarantor Security Agreement
and the Pledge Agreements.

         Overadvance - as defined in Section 2.1(B).

         PBGC - the  Pension  Benefit  Guaranty  Corporation  or  any  successor
agency.

         Participating  Lender - each  Person who shall be granted  the right by
Lender to  participate  in any of the Loans in  accordance  with Section 12.3 of
this Agreement and who shall have entered into a participation agreement in form
and substance satisfactory to Lender.

         PEDFA - the Pennsylvania  Economic Development  Financing Authority,  a
public  instrumentality  and body corporate and politic of the  Commonwealth  of
Pennsylvania.

         PEDFA   Obligations  -  the  indebtedness   evidenced  by  the  Taxable
Development Revenue Bonds, 1995 Series D issued by PEDFA on December 27, 1995 in
the original aggregate principal sum of $4,400,000.

         Permitted Acquisitions - as defined in Section 9.2(A) hereof.


                                       13
<PAGE>

         Permitted  Liens - any Lien of a kind  specified in  subparagraphs  (i)
through (x) of Section 9.2(H) of this Agreement.

         Permitted  Purchase Money Indebtedness - Purchase Money Indebtedness of
Borrowers (other than PMSI Equipment Loans) incurred in any Fiscal Year which is
secured  by a  Purchase  Money  Lien and the  principal  amount of  which,  when
aggregated  with the principal  amount of all other Purchase Money  Indebtedness
and  Capitalized  Lease  Obligations of Borrowers  incurred in such Fiscal Year,
does  not  exceed  an  amount  equal to  $5,000,000.  For the  purposes  of this
definition,  the principal amount of any Purchase Money Indebtedness  consisting
of capitalized  leases shall be computed as a Capitalized  Lease Obligation only
to the extent  that (a) the leased  property  does not  constitute  accessories,
attachments or additions to Equipment,  (b) the leased  property in identifiable
sufficiently  to  distinguish  it from other  Equipment and (c) any such capital
lease does not impair the then  operational  or  liquidation  value of all other
Equipment.

         Permitted  Purchase  Money Lien - a Purchase  Money Lien upon  tangible
fixed assets  provided  that (a) such  tangible  fixed assets do not  constitute
accessories,  attachments  or additions to other  Collateral,  (b) such tangible
fixed  assets  are  identifiable  sufficiently  to  distinguish  them  from  the
Collateral  and (c) any such Purchase Money Lien on tangible fixed assets do not
impair the then operational or liquidation value of the Collateral.

         Permitted  Refinancing - Refinancing  Indebtedness if (a) the principal
amount of such Refinancing  Indebtedness does not exceed the principal amount of
Indebtedness so extended,  refinanced,  renewed, replaced,  defeased or refunded
(plus the amount of premiums  and  reasonable  expenses  incurred in  connection
therewith);  (b) such  Refinancing  Indebtedness  has a Weighted Average Life to
Maturity  equal to or greater than the Weighted  Average Life to Maturity of the
Indebtedness  being  extended,   refinanced,   renewed,  replaced,  defeased  or
refunded;   (c)  if  such   Indebtedness  is   subordinated,   such  Refinancing
Indebtedness  is subordinated in right of payment to the Obligations on terms at
least as  favorable  to the  Lender  as  those  contained  in the  documentation
governing  the  Indebtedness  being  extended,  refinanced,  renewed,  replaced,
defeased or refunded.

         Person - an individual, partnership,  corporation, joint stock company,
trust or  unincorporated  organization,  or a government  or agency or political
subdivision thereof.

         PIDA - Pennsylvania Industrial Development Authority.

         PIDA Loan - the loans in the  original  aggregate  principal  amount of
$1,750,000  made by PIDA to PIDC on March 27,  1997,  which loans are secured by
the PIDA Mortgage.

         PIDA Mortgage - the mortgage on the Real Property located at 5501 Tabor
Road, Philadelphia, Pennsylvania 19120 dated as of March 27, 1997 issued by PIDC
to PIDA.

         PIDC - Pennsylvania Industrial Development Corporation.

         PIDC  Loan -  loans  in the  original  aggregate  principal  amount  of
$1,750,000  made by PIDC to Quality on May 25, 1995,  which loans are secured by
the PIDC Mortgage.


                                       14
<PAGE>

         PIDC Mortgage - the Open-End  Mortgage and Security  Agreement dated as
of May 25, 1995 made by Quality to PIDC.

         Plan - any employee  benefit plan within the meaning of Section 3(3) of
ERISA,  maintained by any Borrower or any member of the Controlled  Group or any
such employee benefit plan to which any Borrower or any member of the Controlled
Group is required to contribute on behalf of any of its employees.

         Pledge  Agreements  -  collectively,  the Pledge  Agreements  dated the
Closing Date and  executed and  delivered to Lender by (i) Group with respect to
the stock of Holdings and (ii) Holdings with respect to the stock of Quality and
Custom.

         PMSI  Equipment  Loans - any  Equipment Loan made by Lender to Borrower
pursuant  to Section  2.2(B) of this  Agreement  that is  secured  solely by the
Equipment being purchased with such Equipment Loan.

         Prior Lenders - NationsBanc Capital Markets, Inc.,  NationsBank,  N.A.,
NationsBank of Texas, N.A. and Fleet National Bank.

         Pro  Forma  EBITDA  -  pro  forma  earnings  before  interest,   taxes,
depreciation  and  amortization  of  the  business  or  entity  to  be  acquired
determined in accordance with GAAP. For purposes of this definition all expenses
which  could  reasonably  be  expected  not to recur  after the  closing of each
applicable  Acquisition  shall be  excluded  from the  calculation  of Pro Forma
EBITDA.

         Prohibited  Transaction  - shall  mean  any  transaction  described  in
Section 406 of ERISA which is not exempt by reason of Section 408 or ERISA,  and
any  transaction  described in Section 4975(c) of the IRC which is not exempt by
reason of Sections  4975(c)(2)  or (d) of the IRC, and which could result in any
excise tax, fine, penalty or other liability being imposed on any Borrower.

         Projections - Borrowers'  forecasted  Consolidated  (a) balance sheets,
(b) profit and loss statements, (c) cash flow statements, and (d) capitalization
statements,  all  prepared  on a  consistent  basis with  Borrowers'  historical
financial  statements,  together  with  appropriate  supporting  details  and  a
statement of underlying assumptions.

         Property - any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.

         Purchase Money Indebtedness - means (i) Indebtedness for the payment of
all or any part of the purchase price of any fixed assets, (ii) any Indebtedness
(other  than the  Obligations)  incurred  at the time of or within  one  hundred
eighty (180) days prior to or after the  acquisition of any fixed assets for the
purpose of financing all or any part of the purchase  price  thereof,  and (iii)
any   renewals,   replacements,   refundings,   modifications,   extensions   or
refinancings  thereof,  but not any increases in the principal  amounts  thereof
outstanding  at the time  except in the amount of any  premiums  and  reasonable
expenses incurred in connection therewith. Purchase Money Indebtedness shall not
include any obligation or liability of any Borrower under any operating lease.


                                       15
<PAGE>

         Purchase  Money Lien - a Lien upon fixed assets  which secure  Purchase
Money Indebtedness,  but only if such Lien shall at all times be confined solely
to the fixed assets the  purchase  price of which was  financed  (including  any
renewals, replacements,  refundings,  modifications,  extensions or refinancings
thereof)  through the  incurrence  of the Purchase  Money and other fixed assets
provided by the same financing source.

         Quality - QF  Acquisition  Corp.  (d/b/a  Quality  Foods),  a  Delaware
corporation.

         Refinancing  Indebtedness - Indebtedness issued in exchange for, or the
proceeds of which are used for,  extending,  renewing,  replacing,  defeasing or
refunding outstanding Indebtedness of Borrowers.

         Real  Property - all of Quality's  right,  title and interest in and to
the real  property  listed on  Exhibit  4.2  hereto  and any and all other  real
property or leasehold interests which any Borrower may hereafter acquire.

         Renewal Terms - as defined in Section 3.2 of this Agreement.

         Reportable Event - any of the events set forth in Section 4043 of ERISA
or the regulations promulgated thereunder.

         Restricted  Investment  - any  investment  in  cash or by  delivery  of
Property to any Person,  whether by acquisition of stock,  Indebtedness or other
obligation  or  Security,  or by  loan,  advance  or  capital  contribution,  or
otherwise,  or in any Property  except the  following:  (i)  investments  in any
Borrower  by  Holdings  or in one or more  Subsidiaries  of any  Borrower;  (ii)
Property to be used in the conduct of its business; (iii) Current Assets arising
from the sale of goods and  services in the  ordinary  course of business of any
Borrower;  (iv)  investments  in  direct  obligations  of the  United  States of
America, or any agency thereof or obligations guaranteed by the United States of
America,  provided that such obligations mature within one year from the date of
acquisition  thereof; (v) investments in certificates of deposit maturing within
one  year  from  the  date of  acquisition  issued  by a bank or  trust  company
organized  under  the laws of the  United  States or any  state  thereof  having
capital  surplus and undivided  profits  aggregating  at least  $100,000,000  or
liquid  investment  on other  deposit  accounts  with  such  institutions;  (vi)
investments in commercial paper rated A-1/P-1 by a national credit rating agency
and  maturing  not more than two  hundred  seventy  (270)  days from the date of
creation  thereof;  (vii)  investments  incurred in  connection  with  Permitted
Acquisitions or as permitted by Section 9.2(E) of this  Agreement;  (viii) loans
and advances  permitted by Section 9.2(B) hereof;  and (ix) other investments in
an aggregate amount at any time not exceeding $1,000,000.

         Revolving  Credit  Loan - a Loan made by Lender as  provided in Section
2.1 of this Agreement.

         Revolving  Credit Note - the secured  promissory note to be executed by
Borrowers  on or about  the  Closing  Date in favor of Lender  to  evidence  the
Revolving  Credit  Loans,  which  shall be in the form of Exhibit  2.1  attached
hereto.


                                       16
<PAGE>

         Security  - shall  have  the same  meaning  as in  Section  2(l) of the
Securities Act of 1933, as amended.

         Senior Guaranteed Notes - Holdings' 11 5/8% senior guaranteed notes due
2004 in the original  aggregate  principal amount of $115,000,000  dated January
28, 1997 issued pursuant to, and governed by, the Indenture.

         Solvent - as to any Person,  such Person (i) owns  Property  whose fair
saleable value is greater than the amount required to pay the probable liability
of  such  Person  on all of such  Person's  Indebtedness  (including  contingent
debts), (ii) is able to pay all of its Indebtedness as such Indebtedness matures
and (iii) has capital  that is not  unreasonably  small to carry on its business
and  transactions  and all  business  and  transactions  in which it is about to
engage.

         Standby Letters of Credit - Letters of Credit issued for the account of
any  Borrower  which serve as  security  for the  performance  or payment by any
Borrower of its obligations,  except obligations incurred in connection with the
purchase of Inventory or Equipment and shall include,  without  limitation,  the
Letter of Credit in the face amount of $1,610,000  issued on the Closing Date to
MationsBank of Texas, N.A.

         Stockholders  Agreement - the Stockholders Agreement dated December 30,
1996 between CFP and certain of its stockholders.

         Subordinated  Debt -  Indebtedness  of any  Borrower  that is expressly
subordinated to the  Obligations on terms and conditions  satisfactory to Lender
in all respects.

         Subordinated  Repurchase  Notes - any  notes  issued by a  Borrower  to
repurchase  equity held by  management  pursuant to the  Stockholders  Agreement
which notes shall be on terms and conditions  satisfactory to Lender  including,
without  limitation,  having a term not  greater  than three (3) years and shall
provide for the issuance of notes in payment of all interest accruing thereon.

         Subsidiary  - any  corporation  of which a  Person  owns,  directly  or
indirectly through one or more intermediaries, more than 50% of the Voting Stock
at the time of determination.

         Term - the period comprising the Original Term and all Renewal Terms.

         Term Loan - as defined in Section 2.2(A) of this Agreement.

         Term Loan  Reserve  -$1,400,000  for each Fiscal Year (on a  cumulative
basis) that EBITDA on any date below is less than the amount set forth  opposite
the applicable date with respect to the four (4) fiscal quarters then ended:


          Fiscal Quarter Ending                            Minimum EBITDA
          ---------------------                            --------------
          March 31, 1999                                   $16,500,000
          June 30, 1999                                    $16,500,000
          September 30, 1999                               $16,500,000


                                       17
<PAGE>

          Fiscal Quarter Ending                            Minimum EBITDA
          ---------------------                            --------------
          December 31, 2000                                $17,500,000
          March 31, 2000                                   $17,500,000
          June 30, 2000                                    $17,500,000
          September 30, 2000                               $17,500,000
          December 31, 2000                                $17,500,000
          March 31, 2001                                   $18,000,000
          June 30, 2001                                    $18,000,000
          September 30, 2001                               $18,000,000
          December 31, 2001                                $18,000,000
          March 31, 2002 and at the end of                 $19,000,000
          each fiscal quarter thereafter

         Term Note - the secured promissory notes to be executed by Borrowers on
or about the Closing  Date in favor of Lender to evidence  the Term Loan,  which
shall be in the form of Exhibit 2.2(a) attached hereto.

         Termination  Amount - Average  Monthly Loan Balance  determined for the
twelve  month  period  ending on the date of  termination  or, if such period is
shorter  than twelve  months,  for the period from the Closing  Date through the
date of termination.

         Voting Stock - Securities of any class or classes of a corporation  the
holders of which are ordinarily,  in the absence of  contingencies,  entitled to
elect a majority  of the  corporate  directors  (or Persons  performing  similar
functions).

         1.2. Accounting  Terms. All accounting  terms not specifically  defined
herein shall be construed in accordance  with GAAP  consistent with that applied
in preparation of the financial  statements  referred to in Section 9.1(K),  and
all financial  data  pursuant to the  Agreement  shall be prepared in accordance
with such principles.

         1.3. Other Terms.  All other terms  contained in this  Agreement  shall
have,  when the context so indicates,  the meanings  provided for by the Code to
the extent the same are used or defined therein.

         1.4. Certain Matters of Construction.  The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular  section,  paragraph or subdivision.  Any pronoun used
shall be deemed to cover all genders.  The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation  of this  Agreement.  All  references  to  statutes  and  related
regulations shall include any amendments of same and any successor  statutes and
regulations. All references to any instruments or agreements, including, without
limitation,  references to any of the Loan  Documents  shall include any and all
modifications  or  amendments  thereto  and any and all  extensions  or renewals
thereof.


SECTION 2. CREDIT FACILITY


                                       18
<PAGE>

         Subject  to the terms  and  conditions  of,  and in  reliance  upon the
representations  and  warranties  made in,  this  Agreement  and the other  Loan
Documents,  Lender agrees to make a total credit facility of up to FORTY MILLION
DOLLARS  ($40,000,000)  available upon Borrowing  Agent's request  therefor,  as
follows:

         2.1. Revolving Credit Loans.

                  (A)  Subject  to all of  the  terms  and  conditions  of  this
Agreement,  Lender agrees,  to make Revolving Credit Loans to each Borrower from
time to time,  as  requested  by  Borrowing  Agent on behalf of any  Borrower in
accordance  with the terms of  Section  2.3  hereof,  up to a maximum  principal
amount  at any time  outstanding  equal  to the  lesser  of (a) such  Borrower's
Individual  Borrowing Base or (b) the lesser of (i) the Maximum Revolving Credit
Amount or (ii) the Borrowing  Base at such time. It is expressly  understood and
agreed that Lender may use the Borrowing Base as a maximum  ceiling on Revolving
Credit Loans  outstanding to Borrowers at any time and the Individual  Borrowing
Base  as a  maximum  ceiling  on  Revolving  Credit  Loans  outstanding  to  the
applicable Borrower.  If the unpaid balance of the Revolving Credit Loans should
exceed the Borrowing  Base or the Maximum  Revolving  Credit Amount or any other
applicable limitation set forth in this Agreement including, without limitation,
a  Borrower's  Individual  Borrowing  Base,  such  Revolving  Credit Loans shall
nevertheless  constitute  Obligations  that are  secured by the  Collateral  and
entitled  to all the  benefits  thereof.  In no event shall  Borrowing  Agent on
behalf of any  Borrower be  authorized  to request a Loan at any time that there
exists an Event of Default.  Notwithstanding  the  foregoing  provisions of this
Section  2.1(A),  Lender  shall  have the right to  establish  reserves  in such
amounts,  and with respect to such  matters,  as Lender shall deem  necessary or
appropriate in the exercise of its commercially reasonable judgment, against the
amount of Revolving Credit Loans which any Borrower may otherwise  request under
this Section 2.1(A),  including,  without limitation,  with respect to (i) price
adjustments,  damages,  unearned  discounts  or other  matters for which  credit
memoranda are issued in the ordinary  course of any  Borrower's  business;  (ii)
other sums chargeable  against any Borrower's  Loan Account as Revolving  Credit
Loans under any section of this Agreement;  (iii) the Term Loan Reserve, if any,
(iv) the Consent  Reserve,  and (v) such other  matters,  events,  conditions or
contingencies as to which Lender, in the exercise of its commercially reasonable
judgment  determines reserves should be established from time to time hereunder,
including but not limited to the Closing Reserve (collectively,  the "Contingent
Reserves").

                  (B) Insofar as Borrowers may request and Lender may be willing
in its  sole and  absolute  discretion  to make  Revolving  Credit  Loans to any
Borrower at a time when the unpaid balance of Revolving Credit Loans exceeds, or
would  exceed  with the making of any such  Revolving  Credit  Loan,  either the
Borrowing  Base or the  Maximum  Revolving  Credit  Amount  or  such  Borrower's
Individual  Borrowing  Base (any such Loan or Loans  being  herein  referred  to
individually as an  "Overadvance"  and collectively as  "Overadvances"),  Lender
shall enter such  Overadvances  as debits in the  applicable  Loan Account.  All
Overadvances shall be payable on demand,  shall be secured by the Collateral and
shall bear interest as provided in this  Agreement  for  Revolving  Credit Loans
generally.


                                       19
<PAGE>

                  (C) The  Revolving  Credit  Loans  shall  be used  solely  for
Permitted  Acquisitions,  to repay  Indebtedness  on the Closing  Date under the
Borrowers' existing credit facility,  for general corporate purposes and for the
general working capital needs of Borrowers to the extent not  inconsistent  with
the provisions of this Agreement.

                  (D) Borrowers'  obligation to repay the Revolving Credit Loans
shall be evidenced by the Revolving Credit Note.

                  (E) In no event shall the  aggregate  Revolving  Credit  Loans
with respect to Inventory of Borrowers  exceed  $20,000,000  outstanding  at any
time or from time to time.

         2.2. Term and Equipment Loans.

                  (A)  Term  Loan.  Lender  shall,  subject  to  the  terms  and
conditions of this Agreement,  make a Term Loan to Borrowers on the Closing Date
in the  principal  sum of  $10,000,000  ("Term  Loan").  The Term Loan  shall be
advanced on the Closing  Date and shall be, with respect to  principal,  due and
payable upon the last day of the  Original  Term of this  Agreement  (subject to
mandatory prepayments pursuant to Section 2.2(C) hereof or acceleration upon the
occurrence  and  during  the  continuation  of an Event of  Default  under  this
Agreement or termination of this Agreement).  Notwithstanding anything herein to
the  contrary,  the entire  unpaid  principal  balance of the Term Loan shall be
immediately due and payable upon the acceleration of the Obligations pursuant to
Section  11(g) of this  Agreement.  The Term Loan shall be evidenced by the Term
Note. Lender shall, subject to the terms and conditions of this Agreement,  from
time to time,  from and  after  the  Closing  Date  through  the last day of the
Original  Term,  make Loans to Borrowers to finance any  Borrower's  purchase of
Equipment  for use in such  Borrower's  business  (any such loan,  an "Equipment
Loan").  All  Equipment  Loans  shall be in such  amounts  as are  requested  by
Borrowing  Agent on behalf of any Borrower,  but in no event shall any Equipment
Loan (i) be in an amount less than Five Hundred Thousand  Dollars  ($500,000) or
(ii) exceed the  Applicable  Percentage of the cash purchase  price set forth on
the  invoice  therefor  (exclusive  of  fees,   commissions,   freight,   taxes,
installation  charges  and other soft costs  related to such  Equipment)  of the
Equipment  then to be purchased.  In no event shall the aggregate  amount of all
(a) Equipment  Loans made  hereunder  exceed  $8,000,000  and (b) PMSI Equipment
Loans made hereunder exceed $5,000,000.  In addition,  Borrowers may not receive
more than  $3,000,000  in  Equipment  Loans  during any twelve (12)  consecutive
months.  Equipment Loans shall be advanced by Lender to Borrowers upon Borrowing
Agent's  request for either an  Additional  Equipment  Loan or a PMSI  Equipment
Loan,  as the  case  may be,  on  behalf  of any  Borrower  together  with  such
information  as Lender may reasonably  require  verifying that such Borrower has
made, or will make, during its then current Fiscal Year Capital  Expenditures in
each case in amounts not less than the requested Equipment Loan.  Borrowers,  in
the  aggregate,  shall not be permitted to make more than four (4) requests,  in
the  aggregate,  in any Fiscal Year but Borrowers  shall be permitted to combine
two or more  purchases  of  Equipment  in  order to  satisfy  the  minimum  size
requirement  for an Equipment  Loan and to avoid making more than the  permitted
number of requests for Equipment  Loans in any Fiscal Year. All Equipment  Loans
shall  amortize on a seven (7) year basis and shall be payable,  with respect to
principal,  in  consecutive  quarterly  installments,  commencing  on the  first
Business Day of the first fiscal quarter  following the funding by Lender of the
applicable Equipment Loan and the final installment of each Equipment Loan shall
be in the amount of the balance  thereof and


                                       20
<PAGE>

shall be due on the last day of the Original Term,  subject to acceleration upon
the  occurrence  of a  Default  or Event of  Default  under  this  Agreement  or
termination of this Agreement.  Each Equipment Loan shall otherwise be evidenced
by, and repayable in accordance  with the terms and  conditions set forth in the
Equipment Note. All Equipment  Loans shall be secured by all Collateral  except,
notwithstanding  anything to the contrary  herein or in any other Loan Document,
each  PMSI  Equipment  Loan  shall be  secured  solely  by the  Equipment  being
purchased with such PMSI Equipment Loan.

                  (B) Mandatory Prepayments. In addition to any other repayments
of the Term Loan,  Revolving Credit Loan or Equipment Loan required or permitted
under the Term Note,  the Revolving  Credit Note,  the Equipment  Note and under
this Agreement:

                           (i) If (1) any  Borrower  sells  any of the  tangible
                  fixed assets,  (2) any of the Collateral (other than Inventory
                  and   Accounts)  or  any  of  the   Collateral   is  taken  by
                  condemnation  or (3)  any  Borrower  or  Lender  receives  any
                  insurance  recovery  arising out of the theft,  destruction or
                  other  loss  of  any  Collateral  (other  than  Inventory  and
                  Accounts)  at a time  when no Event of  Default  has  occurred
                  which is then  continuing,  then,  to the extent the total Net
                  Proceeds  from (1),  (2), and (3) exceeds in the aggregate the
                  sum of  $500,000  during any Fiscal  Year,  in each such event
                  Borrowers  shall  have the option to either (a) pay to Lender,
                  as and when received by such Borrower,  a sum equal to the Net
                  Proceeds  of such sale,  condemnation  or  insurance  recovery
                  shall be applied  (1) to  Borrowers'  outstanding  Obligations
                  with respect to the Revolving  Credit Loans if such Collateral
                  or asset was purchased  with the proceeds of Revolving  Credit
                  Loans  and (2) in all  other  cases,  to the  installments  of
                  principal  due  under  the  Term  Note,  in the  order  of the
                  maturity thereof until payment thereof in full and then to the
                  Equipment Loans and Revolving  Credit Loans in accordance with
                  Borrowers'  outstanding  Obligations or (b) repair, restore or
                  replace such  Collateral  as  contemplated  by Section  9.2(O)
                  hereof.  If Net Proceeds  would  otherwise be applied to repay
                  Loans at a time when  there are no Loans  outstanding,  Lender
                  shall be entitled to  establish  a  Contingency  Reserve in an
                  amount equal to 50% of the amount of Net  Proceeds  that would
                  otherwise  be applied to repay Loans  pursuant to this Section
                  2.2(B).

                  (C) Optional Prepayments.  Borrowers may prepay the Term Loans
in whole or in part at any time without premium or penalty except as provided in
Section  3.3(B)  hereof,  to be applied in accordance  with  Borrowers'  written
instructions. Equipment Loans, once repaid, may not be reborrowed.

         2.3. Manner of Borrowing  Revolving Credit Loans.  Borrowings under the
credit facility established pursuant to Section 2.1 shall be as follows:

                  (A) A request  for a Revolving  Credit Loan shall be made,  or
shall be deemed to be made, in the  following  manner:  (i)  Borrowing  Agent on
behalf of any Borrower  may give Lender  notice of its  intention to borrow,  in
which notice  Borrowing Agent on behalf of any Borrower shall specify the amount
of the proposed borrowing and the proposed borrowing date; (ii) the becoming due
of any amount  required to be paid under this  Agreement  as  interest  shall be


                                       21
<PAGE>

deemed  irrevocably to be a request for a Revolving  Credit Loan on the due date
in the amount  required to pay such interest;  and (iii) the becoming due of any
other  Obligation  shall be deemed  irrevocably  to be a request for a Revolving
Credit Loan on the due date in the amount then so due;

                  (B) Borrowers hereby irrevocably  authorize Lender to disburse
the proceeds of each Revolving Credit Loan requested, or deemed to be requested,
pursuant  to this  Section 2.3 as follows:  (i) the  proceeds of each  Revolving
Credit Loan requested  under Section  2.3(A)(i)  shall be disbursed by Lender in
lawful money of the United States of America in immediately  available funds, in
the case of any borrowing on the Closing  Date, in accordance  with the terms of
the written  disbursement letter from Borrowing Agent on behalf of any Borrower,
and in the case of each  subsequent  borrowing,  by wire  transfer  to such bank
account as may be agreed upon by each  Borrower and Lender from time to time, if
such  borrowing  request is  received  by 11:00  a.m.  New York time on the same
Business  Day and if  received  later than 11:00 a.m.  New York time on the next
succeeding  Business  Day; and (ii) the proceeds of each  Revolving  Credit Loan
requested under Section  2.3(A)(ii) or (iii) shall be disbursed by Lender by way
of direct payment of the relevant Obligation.

                  (C)  On the  terms  and  subject  to the  conditions  of  this
Agreement,  Revolving  Credit Loans may be repaid without premium or penalty and
may be reborrowed.

         2.4. Eurodollar Loans.

                  (A)  Notwithstanding the provisions of Section 2.3, (a) in the
event any Borrower  desires to obtain a Eurodollar  Loan,  Borrowing Agent shall
give Lender prior written  irrevocable  notice no later than 11:00 a.m. New York
time on the third  (3rd)  Business  Day prior to the  requested  borrowing  date
specifying  (i) its election to obtain a Eurodollar  Loan,  (ii) the date of the
proposed  borrowing  (which shall be a Business  Day) and (iii) the amount to be
borrowed, which amount shall be an integral multiple of $1,000,000.  In no event
shall  Borrowers  be permitted to have  outstanding  at any one time  Eurodollar
Loans with more than five (5)  different  Interest  Periods.  In  addition,  and
notwithstanding  any other provision of this Agreement,  Borrowers shall have no
right to  request  or  obtain  a  Eurodollar  Loan at any time  that an Event of
Default exists.

                  (B) Provided  that no Event of Default has  occurred  which is
then continuing, each interest period of a Eurodollar Loan shall commence on the
date such  Eurodollar  Loan is made and  shall end on the date  which is one (1)
month, two (2) months,  three (3) months or six (6) months later, as may then be
requested by Borrowers ("Interest Period") provided that:

                                            (i) any Interest  Period which would
                      otherwise  end on a day which is not a Business  Day shall
                      end on the next preceding or succeeding Business Day as is
                      the Bank's  custom in the market to which such  Eurodollar
                      Loan relates; and

                                            (ii) there  remains a minimum of one
                      (1) month in the Original  Term (or if this  Agreement has
                      been renewed, in the then applicable Renewal Term);


                                       22
<PAGE>

                                            (iii)  any  Interest   Period  which
                      would  otherwise  end on a day which is not a Business Day
                      shall be the next preceding or succeeding  Business Day as
                      is   Lender's   custom  in  the   market  to  which   such
                      Eurocurrency Loan relates;

                                            (iv)  all  Interest  Periods  of the
                      same duration which commence on the same date shall end on
                      the same date; and

                                            (v)  each   Interest   Period  which
                      commences  before,  and would otherwise end after the last
                      day of the Term shall end on the last day of the Term.

                  Notwithstanding the foregoing, Borrowers may obtain or convert
                  to Eurodollar  Loans with Interest Periods of greater than one
                  (1)  month but less  than  three  (3)  months in order to make
                  principal  payments on the Term Loans,  or as may otherwise be
                  agreeable to Lender.

                  (C) Provided  that no Event of Default has  occurred  which is
then  continuing,  Borrower may, on any Business Day, convert any Base Rate Loan
into a Eurodollar  Loan.  If any  Borrower  desires to convert a Base Rate Loan,
Borrowing Agent on behalf of such Borrower shall give Lender not less than three
(3) Business  Days' prior  written  notice (prior to 11:00 a.m. New York time on
such Business Day),  specifying the date of such conversion and the amount to be
converted.  Each  conversion into or conversion of a Eurodollar Loan shall be an
integral  multiple of $1,000,000.  After giving effect to any conversion of Base
Rate  Loans to  Eurodollar  Loans,  Borrowers,  in the  aggregate,  shall not be
permitted to have  outstanding at any one time  Eurodollar  Loans with more than
five (5) different Interest Periods.

                  (D) Each  Borrower  shall have the right on three (3) Business
Days' prior  irrevocable  written  notice by  Borrowing  Agent on behalf of such
Borrower to Lender to (i) subject to the provisions of Section  2.4(E)  continue
any Eurodollar Loan into a subsequent Interest Period of the same or a different
permitted  duration,  in each case subject to the  satisfaction of the following
conditions:

                                            (i) in the case of a continuation of
                      less than all Loans,  the Loans continued shall each be in
                      a minimum  principal  amount of  $100,000  and in integral
                      multiples thereof;

                                            (ii) accrued  interest on a Loan (or
                      portion   thereof)  being   continued  shall  be  paid  by
                      Borrowers at the time of continuation; and

                                            (iii) no Loan (or  portion  thereof)
                      may be  continued  as a  Eurodollar  Loan if an  Event  of
                      Default has occurred which is then continuing or if, after
                      giving  effect  to such  continuation,  more than five (5)
                      separate  Eurodollar  Loans  in  the  aggregate  would  be
                      outstanding hereunder.


                                       23
<PAGE>

         If Borrowing  Agent on behalf of any Borrower shall fail to give timely
notice of such  Borrower's  election to continue any Eurodollar  Loan or portion
thereof as provided above, or if such continuation shall not be permitted,  such
Eurodollar  Loan or portion  thereof,  unless  such Loan shall be repaid,  shall
automatically  be  converted  into a Base Rate  Loan at the end of the  Interest
Period then in effect with respect to such Eurodollar Loan.

                  (E) Subject to the  provisions  of Section 3.3,  Borrowers may
prepay  any  Loan in whole at any  time or in part  from  time to time,  without
premium or penalty  provided  that a Eurodollar  Loan may only be prepaid on the
last  Business Day of the then  current  Interest  Period with respect  thereto.
Borrowing  Agent on behalf of any Borrower  shall specify the date of prepayment
of Loans which are  Eurodollar  Loans and the amount of Loans to be prepaid.  In
the event that any prepayment of a Eurodollar  Loan is made on a date other than
the last Business Day of the then current  Interest Period with respect thereto,
Borrowers  shall  indemnify  Lender  therefor in accordance  with Section 2.4(F)
hereof.

                  (F) Each  Borrower  shall  indemnify  Lender  and hold  Lender
harmless from and against any and all losses or expenses that Lender may sustain
or incur as a consequence  of any  prepayment or any default by such Borrower in
the payment of the principal of or interest on any Eurodollar Loan or failure by
such Borrower to complete a borrowing of, a prepayment of or conversion of or to
a  Eurodollar  Loan after  notice  thereof  has been given,  including  (but not
limited to) any interest payable by Lender to lenders of funds obtained by it in
order to make or maintain its Eurodollar Loans hereunder,  and any other loss or
expense  incurred  by Lender by reason of the  liquidation  or  reemployment  of
deposits or other funds  acquired by Lender to make,  continue,  convert into or
maintain, a Eurodollar Loan.

                  (G)   Notwithstanding  any  other  provision  hereof,  if  any
applicable law, treaty, regulation or directive, or any change therein or in the
interpretation  or application  thereof,  shall make it unlawful for Lender (for
purposes of this  subsection (G), the term "Lender" shall include Lender and the
office or branch  where Lender or any  corporation  or bank  controlling  Lender
makes or maintains  any  Eurodollar  Loans) to make or maintain  its  Eurodollar
Loans, or if with respect to any Interest Period,  Lender is unable to determine
the Eurodollar  Rate relating  thereto,  or adverse or unusual  conditions in or
changes in applicable  law relating to the London  Eurodollar  interbank  market
make it, in the reasonable good faith judgment of Lender, impracticable, to fund
therein  any of the  Eurodollar  Loans or make  the  projected  Eurodollar  Rate
unreflective of the actual costs of funds therefor to Lender,  the obligation of
Lender to make Eurodollar  Loans  hereunder shall forthwith be suspended  during
the  pendency  of  such  circumstances  and  Borrowers  shall,  if any  affected
Eurodollar  Loans are then  outstanding,  promptly  upon  request  from  Lender,
convert such affected Eurodollar Loans into Base Rate Loans.

         2.5. All Loans to Constitute One  Obligation.  All Loans and Letters of
Credit shall constitute one general obligation of each Borrower, and (except for
PMSI Equipment Loans which are secured by the Equipment  financed thereby) shall
be secured by Lender's security interest in and Lien upon all of the Collateral,
and by all  other  security  interests  and  Liens  now or at any  time or times
hereafter granted by each Borrower to Lender in respect thereof.


                                       24
<PAGE>

         2.6. Loan  Account.  Lender shall enter all Loans as debits to the Loan
Account and shall also record in  Borrowers'  Loan Account all payments  made by
each  Borrower on such Loans and all  proceeds of  Collateral  which are finally
paid to Lender, and may record therein, in accordance with customary  accounting
practice, all charges and expenses properly chargeable to Borrowers hereunder.

         2.7.  Letters of Credit.  Subject to the terms and  conditions  hereof,
Lender  shall issue,  or cause the  issuance by the Issuing Bank of,  Letters of
Credit from time to time during the Term;  provided,  however,  that Lender will
not be  required  to issue or cause to be issued  any  Letters  of Credit to the
extent the sum of the outstanding Revolving Credit Loans plus the face amount of
outstanding  Letters of Credit (with the requested Letter of Credit being deemed
to be outstanding)  to exceed the Maximum  Revolving  Credit Amount  (calculated
without  duplication with respect to the requested Letter of Credit) or to cause
the outstanding  amount of Revolving  Credit Loans to exceed the Borrowing Base.
The maximum principal amount of outstanding  Standby Letters of Credit shall not
exceed Seven Million  Dollars  ($7,000,000)  in the  aggregate at any time.  The
maximum principal amount of Commercial  Letters of Credit shall be determined by
Lender and Borrowers. All disbursements or payments by Lender related to Letters
of Credit shall be deemed to be Revolving  Credit Loans and shall bear  interest
at the rate then applicable to Base Rate Loans.

         2.8. Issuance of Letters of Credit.

                  (A) Borrowing Agent may request Lender to issue or cause to be
issued by Bank (or such other  financial  institution  as may be  acceptable  to
Lender) a Letter of Credit by  delivering  to Lender the  applicable  commercial
letter of credit application (the "Letter of Credit Application"),  completed to
the reasonable satisfaction of Lender and such other certificates, documents and
other papers and information as Lender may reasonably request.

                  (B) Each  Letter of Credit  shall,  among  other  things,  (i)
provide  for the  payment  of sight or time  drafts  when  presented  for  honor
thereunder in  accordance  with the terms  thereof and when  accompanied  by the
documents  described  therein and (ii) have an expiry date  occurring  not later
than the  earlier of (1) the  Expiration  Date or (2) twelve  months  after such
Letter of Credit's date of issuance.  Each Letter of Credit Application and each
Letter of Credit  shall be subject  to the  Uniform  Customs  and  Practice  for
Documentary   Credits  (1993  Revision),   International   Chamber  of  Commerce
Publication  No. 500, and any amendments or revision  thereof and, to the extent
not inconsistent therewith, the laws of the State of New York.

                  (C) In connection  with the issuance or creation of any Letter
of Credit,  each Borrower  hereby  indemnifies,  saves and holds Lender harmless
from any loss,  cost,  expense  or  liability,  including,  without  limitation,
payments made by Lender, and expenses and reasonable attorneys' fees incurred by
Lender  arising out of, or in connection  with any Letter of Credit to be issued
or created  for any  Borrower  except to the extent any loss,  cost,  expense or
liability is attributable to Lender's or the Bank's gross  negligence or willful
misconduct  or that of its  correspondents.  Each  Borrower  shall  be  bound by
Lender's or any Issuing Bank's regulations and good faith interpretations of any
Letter of Credit issued or created for such  Borrower's  account,  although this
interpretation  may be different from such  Borrower's  own, and neither Lender,
nor the  Issuing  Bank,  nor any of its  correspondents  shall be liable for any
error,  negligence  and/or  mistakes,  whether of  omission  or  commission,  in
following any Borrower's instructions or those contained in any Letter of Credit
of any


                                       25
<PAGE>

modifications,  amendments or  supplements  thereto or in creating or paying any
Letter of Credit,  except for Lender's or the Issuing Bank's gross negligence or
willful misconduct or that of its correspondents.

                  (D) Each Borrower shall authorize and direct Bank or any other
bank or  financial  institution  which  issues a Letter of Credit  (an  "Issuing
Bank") to name such  Borrower as the "Account  Party"  therein and to deliver to
Lender,  with a copy to such Borrower,  all  instruments,  documents,  and other
writings  and property  received by the Issuing  Bank  pursuant to the Letter of
Credit or in connection with any acceptance and to accept and rely upon Lender's
instructions  and agreements  with respect to all matters  arising in connection
with the Letter of  Credit,  the Letter of Credit  Application  therefor  or any
acceptance thereof.

         2.9. Disbursements and Reimbursement Obligations.

                  (A)  Lender  will  notify  Borrowing  Agent  promptly  of  the
presentment  for payment  under a Letter of Credit,  following  receipt by it of
notification from the Issuing Bank of such presentment,  together with notice of
the date such payment was made. All disbursements shall be deemed irrevocably to
be a request by the applicable  Borrower for a Revolving Credit Loan on the date
such disbursement was made.

                  (B) Each  Borrower's  obligation  to  reimburse  Lender  under
Section  2.9(A)  shall  be  absolute  and   unconditional   under  any  and  all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which any Borrower may have against, Lender, the Issuing Bank or the beneficiary
of the Letter of Credit, including,  without limitation,  any defense based upon
any draft, demand or certificate or other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient, the failure of
any  disbursement  or  payment  by the  Issuing  Bank under the Letter of Credit
("Bank  Payment")  to conform to the terms of the Letter of Credit  (if,  in the
Issuing  Bank's  good  faith  opinion  such  disbursement  or  Bank  Payment  is
determined to be appropriate  and other than as a consequence of Lender's or the
Bank's  gross  negligence  or  willful  misconduct)  or any  non-application  or
misapplication  by the beneficiary of the proceeds of such  disbursement or Bank
Payment or the legality,  validity,  form,  regularity or  enforceability of the
Letter of Credit.

                  (C) Upon the  occurrence  and during the  continuation  of any
Event of Default, at the option of Lender, Borrowers will pay to Lender, for the
account of Lender,  cash in an amount  equal to the  undrawn  face amount of the
Letters  of  Credit.  Such cash  shall be held by  Lender  in a cash  collateral
account (the "Cash Collateral  Account").  The Cash Collateral  Account shall be
maintained  at a bank  designated  by Lender,  which  shall be (i) any  domestic
commercial  bank having capital and surplus in excess of $100,000,000 or (ii) an
Affiliate of Lender,  if an  Affiliate of Lender then  maintains a presence as a
bank in the United  States of America,  in the name of Lender as secured  party,
and shall be under the sole  dominion  and  control of Lender and subject to the
terms of this  Section  2.9.  Borrowers  hereby  pledge,  and  grant to Lender a
security  interest  in,  all  such  cash  and  other  amounts  held in the  Cash
Collateral  Account  from time to time and all  earnings  thereof  and  proceeds
thereon,  as security for the payment of all Obligations.  Interest and earnings
on the Cash  Collateral  Account shall be the property of Borrowers but shall be
held in the Cash  Collateral  Account as  Collateral,  provided  that the Lender
shall release from the Cash Collateral Account and return to Borrowers any funds
remaining  in the  Cash  Collateral  Account  upon  satisfaction  in full of the
Obligations.  At such time


                                       26
<PAGE>

when all Events of Default shall have been cured or waived,  Lender shall return
any monies then remaining in the Cash  Collateral  Account.  If at any time, and
from time to time, the aggregate  amount of the Cash Collateral  Account exceeds
the  maximum  liability,  fixed or  contingent,  of Lender  with  respect to the
aggregate  face amount of all  Letters of Credit  then  issued and  outstanding,
Lender shall return any excess to Borrowers.

                  (D) Borrowers shall assume all risks of the acts, omissions or
misuse  of any  Letter  of Credit by the  beneficiary  thereof.  Lender  and any
Issuing  Bank  (except  in the  event of its own  gross  negligence  or  willful
misconduct) shall not be responsible for:

                                    (i)   the   form,   validity,   sufficiency,
                  accuracy,  genuineness or legal effect of the Letter of Credit
                  or any document  submitted by any party in connection with the
                  application for and issuance of the Letter of Credit,  even if
                  it should in fact prove to be in any or all respects  invalid,
                  insufficient, inaccurate, fraudulent or forged;

                                    (ii)  the   form,   validity,   sufficiency,
                  accuracy,  genuineness  or  legal  effect  of  any  instrument
                  transferring  or assigning or purporting to transfer or assign
                  the Letter of Credit or the rights or benefits  thereunder  or
                  proceeds  thereof  in whole or in part,  which may prove to be
                  invalid or ineffective for any reason;

                                    (iii) errors,  omissions,  interruptions  or
                  delays in  transmission  or delivery of any  messages by mail,
                  cable, telegraph, telex or otherwise; or

                                    (iv) any  loss or delay in the  transmission
                  or  otherwise  of any  document or draft  required in order to
                  make a disbursement.

None of the foregoing shall affect,  impair or prevent the vesting of any of the
rights or powers granted Lender hereunder. In furtherance, and not in limitation
or derogation of any of the  foregoing,  any action taken or omitted to be taken
by the Issuing Bank and Lender in good faith in the absence of gross  negligence
or willful  misconduct,  shall be binding upon  Borrowers  and shall not put the
Issuing  Bank or  Lender,  as the case may be,  under  any  resulting  liability
therefor.


SECTION 3. INTEREST, FEES, TERM AND REPAYMENT

         3.1. Interest, Fees and Charges.

<TABLE>
                  (A) Interest. Interest shall accrue on the principal amount of
Base Rate Loans  outstanding at the end of each day (computed on the actual days
elapsed  over a year of 360 days) at a  fluctuating  rate per annum equal to the
Base Rate plus the Applicable  Margin.  The Applicable  Margin shall be (a) zero
percent (0%) with respect to Base Rate Loans and (b) two and one-quarter percent
(2.25%) with respect to  Eurodollar  Rate Loans,  provided  that the  Applicable
Margin  shall be  adjusted  as set forth below  (subject  to  imposition  of the
Default Rate as provided  herein) based upon the Fixed Charge Coverage Ratio for
the four quarter period  immediately  preceding the date of determination as set
forth below and as reflected in the most recent financial  statements  delivered
pursuant to Section 9.1(K)(ii) hereof (commencing with the financial  statements
for the fiscal  quarter  ending


                                       27
<PAGE>

September  30, 1998 and for each fiscal  quarter  ended  thereafter).  Each such
adjustment  shall take effect (if at all) as of the first day of the first month
following the date that the  applicable  financial  statements  were received by
Lender and shall remain in effect until the date that delivery of such financial
statement  demonstrates a change in Fixed Charge Coverage whereupon,  subject to
the imposition of the Default Rate as provided  herein,  the  Applicable  Margin
shall  be  decreased  or  increased,  as the  case  may  be,  to the  applicable
percentages set forth below:
<CAPTION>
                                                Applicable Margin With                  Applicable Margin With
  Fixed Charge Coverage                      Respect to Base Rate Loans            Respect to Eurodollar Rate Loans
  ----------------------                     --------------------------            --------------------------------
<S>                                                   <C>                                     <C>
  Less than 1:00 to 1:00                               +0%                                    +2.25%

  1:00 to 1:00 through and including                  -.25%                                   +2.00%
  1:24 to 1:00

  1:25 to 1:00 through and including                  -.50%                                   +1.75%
  1:49 to 1:00

  Greater than or equal to 1:50 to 1:00               -.75%                                   +1.50%
</TABLE>


After the date  hereof,  the  foregoing  rate of interest  shall be increased or
decreased, as the case may be, by an amount equal to any increase or decrease in
the Base  Rate,  with such  adjustments  to be  effective  as of the  opening of
business on the day that any such change in the Base Rate becomes effective. The
Base Rate in effect on the date hereof  shall be the Base Rate  effective  as of
the opening of business on the date hereof, but if this Agreement is executed on
a day that is not a  Business  Day,  the Base Rate in effect on the date  hereof
shall be the Base Rate  effective  as of the  opening  of  business  on the last
Business Day immediately preceding the date hereof.  Eurodollar Loans shall bear
interest on the principal amount thereof owing, at a rate per annum equal to the
Eurodollar Rate plus the Applicable Margin.

                  (B)  Letter of Credit  Fees.  Borrowers  shall pay  Lender for
issuing or causing the issuance of each Letter of Credit, (i) a letter of credit
opening charge of Two Hundred Fifty Dollars ($250.00) ("L/C Opening Charge") and
(ii) a fee computed at a rate per annum of one and one-half  percent  (1.50%) on
the outstanding  amount of each such Letter of Credit from time to time ("Letter
of Credit Fee") and (iii)  Issuing  Bank's other  customary  charges  payable in
connection  with Letters of Credit as in effect from time to time (the amount of
which charges shall be furnished to Borrowing Agent by Lender upon request). The
L/C Opening  Charge shall be payable on the opening of each Letter of Credit and
the  Letter of Credit  Fee shall be  payable  monthly  in  arrears  on the first
Business  Day of each  month,  computed  through  the last  calendar  day of the
preceding  month.  All other  charges in respect of any Letter of Credit  issued
hereunder  shall be  payable  on  demand.  Any charge in effect at the time of a
particular transaction shall be the charge for that transaction, notwithstanding
any  subsequent  change in Issuing  Bank's  prevailing  charges for that type of
transaction.  All fees and charges  payable  hereunder shall be deemed earned in
full on the date when the same are due and  payable  hereunder  and shall not be
subject to rebate or proration  upon the  termination  of this Agreement for any
reason.


                                       28
<PAGE>

                  (C) Default Rate  Applicable  to Interest  and Fees.  Upon and
after the  occurrence of an Event of Default under Section  11.1(A),  and during
the  continuation  thereof,  the  Obligations  shall bear interest and Letter of
Credit Fees shall be calculated  daily (computed on the actual days elapsed over
a year of 360  days),  at (i) a  fluctuating  rate per  annum  with  respect  to
interest equal to two percent (2.0%) above the respective rates of interest then
in effect with respect to outstanding  Base Rate Loans and Eurodollar  Loans, as
the case may be,  and (ii) a per annum fee with  respect  to  Letters  of Credit
equal to two  (2.0%)  percent  above the  applicable  Letter of Credit  Fee (the
"Default Rate").

                  (D)  Unused   Line  Fee.   Borrowers   acknowledge   that  the
administrative  costs  associated  with the  financing  to be extended by Lender
under this Agreement are such that Lender cannot  continue to finance  Borrowers
at a level of  profitability  sufficient  to justify  Lender's  maintaining  the
Maximum Revolving Credit Amount for Borrowers' use in the event that the Average
Monthly Loan Balance  outstanding during each month or portion thereof for which
this  Agreement  shall be  effective is less than the Maximum  Revolving  Credit
Amount.  In order to compensate  Lender for agreeing to make funds  available to
Borrowers,  in the event that Borrowers should fail to fully utilize the Maximum
Revolving Credit Amount,  and to compensate Lender for any loss of profitability
as a result  thereof,  Borrowers  agree that if the Average Monthly Loan Balance
outstanding  for any  month  shall be less  than the  Maximum  Revolving  Credit
Amount, then there shall be a charge for such month, in addition to any interest
due under this Agreement and under the Notes,  in an amount equal to the product
of (a) the excess,  if any of (x) the Maximum  Revolving  Credit Amount over (y)
the actual amount of the Average  Monthly Loan Balance so calculated;  times (b)
one-quarter of one percent  (0.25%);  times (c) that fraction,  the numerator of
which shall be the actual  number of days in such month and the  denominator  of
which shall be 360,  payable monthly,  in arrears,  on the first Business Day of
each month,  computed  through the last calendar day of the preceding  month, or
upon  the  termination  of  this  Agreement,  whichever  first  occurs.  Without
prejudice  to Lender's  obligation  to make  Revolving  Credit  Loans under this
Agreement,  in no event, however,  shall any charge be payable for any month for
which the Average  Monthly  Loan  Balance  was less than the  Maximum  Revolving
Credit Amount by reason of Lender's  declining to extend  Revolving Credit Loans
to Borrowers in amounts  equal to the  Borrowing  Base,  nor shall any charge be
payable for any month during which or after Lender  accelerates  the maturity or
demands  payment of the  Obligations by reason of the occurrence of any Event of
Default.

                  (E) Closing Fee.  Borrowers  shall pay to Lender a closing fee
of $200,000, which shall be deemed fully earned and nonrefundable at the closing
of the transactions  contemplated hereby and shall be paid concurrently with the
initial  Loan  hereunder.  Such  fee  shall  compensate  Lender  for  the  costs
associated with the origination,  structuring, processing, approving and closing
of the transactions  contemplated by this Agreement,  including, but not limited
to, administrative,  out-of-pocket, general overhead and lost opportunity costs,
but not  including  any  expenses for which  Borrowers  have agreed to reimburse
Lender  pursuant to any other  provision  of this  Agreement or any of the other
Loan Documents, such as, by way of example, legal fees and expenses.

                  (F)  Examination and Inspection  Fees.  Borrowers shall pay to
Lender on demand an examination  and inspection fee in connection  with Lender's
examinations  and inspections of Borrowers' books and records in an amount equal
to Lender's  out-of-pocket  expenses for loan  analysts and loan  administrators
conducting such examinations and inspections; provided, however, that so long as
no Default or Event of Default has occurred and is continuing,  Borrowers  shall
only be obligated to


                                       29
<PAGE>

pay  for two  such  examinations  and  inspections  during  any  Contract  Year,
provided, further, that such provision shall not in any way limit Lender's right
to perform  additional  examinations and inspections during any Contract Year at
its own cost and expense.

                  (G) No Impact of Usury Laws; Limitation on Interest.

                                    (i) Notwithstanding anything to the contrary
                  contained  in this  Agreement,  each  Borrower  agrees (to the
                  extent that such Borrower may lawfully do so) that it will not
                  at any time insist upon, or plead, or in any manner whatsoever
                  claim or take the benefit or advantage of, any stay, extension
                  or usury law  wherever  enacted,  now or at any time hereof in
                  force,  which may affect the covenants or the  performance  of
                  this  Agreement;  and each  Borrower  (to the extent that such
                  Borrower  may  lawfully  do so)  hereby  expressly  waives all
                  benefit or advantage of any such law, and covenants  that they
                  will not  hinder,  by resort to any such law,  delay or impede
                  the execution of any power herein granted to Lender,  but will
                  suffer and permit the  execution of every such power as though
                  no such law had been enacted.

                                    (ii) No  provision of this  Agreement  shall
                  require  the payment or permit the  collection  of interest in
                  excess of the rate then permitted by applicable law;  provided
                  that if any  provision is so limited by such  applicable  law,
                  the interest shall be the maximum amount permitted thereunder.
                  In the event that a court of competent jurisdiction determines
                  that  Lender has  charged or received  interest  hereunder  in
                  excess of the maximum  permitted  rate,  Lender shall promptly
                  refund to Borrowers any interest  received by Lender in excess
                  of the maximum permitted rate or, if so requested by Borrower,
                  shall  apply  such  excess  to the  principal  balance  of the
                  Obligations.

         3.2. Term of  Agreement.  Subject to Lender's  right to terminate  this
Agreement  upon or after the  occurrence of an Event of Default,  this Agreement
shall be in effect for a period of four (4) years from the date hereof,  through
and  including  May 4, 2002 (the  "Original  Term"),  and this  Agreement  shall
automatically  renew itself for one (l) year periods  thereafter  (the  "Renewal
Terms"),  unless terminated as provided in Section 3.3 hereof provided, that (i)
the Original Term shall be automatically  extended to five (5) years through and
including May 4, 2003 in the event that the executed consent agreements referred
to on Exhibits  1.1(B)(1) and 1.1(B)2 hereof received by Fleet evidence  consent
of PIDC, PIDA and Quality to this Agreement and the Mortgages each having a term
of five (5) years and (ii) if the  foregoing  shall not  occur,  this  Agreement
shall be automatically  renewed for a Renewal Term for the fifth year if at such
time Borrowers have sufficient Aggregate Adjusted Availability to meet their day
to day operating  expenses  after the imposition of a reserve in an amount equal
to the unpaid balance of all sums due and owing by Quality to PIDA and PIDC.

         3.3. Termination.

                  (A) Upon at least  thirty  (30) days prior  written  notice to
Lender,  Borrowers  may, at their option,  terminate this  Agreement;  provided,
however, no such termination shall be effective until Borrowers have paid all of
the Obligations in immediately  available funds and all Letters of Credit issued
by Lender or Issuing Bank have expired or been terminated or Borrower shall have
deposited an


                                       30
<PAGE>

amount equal to the undrawn face amount of all outstanding  Letters of Credit in
a Cash Collateral Account.

                  (B)  At  the  effective  date  of any  such  termination  (the
"Termination Date") by Borrowers,  Borrowers shall pay to Lender (in addition to
the then outstanding  principal,  accrued interest and other charges owing under
the terms of this Agreement and any of the other Loan Documents),  as liquidated
damages for the loss of the bargain and not as a penalty, an amount equal to (a)
one-half of one percent  (.50%) of the  Termination  Amount if such  Termination
Date occurs during the first or second Contract Year; and (b) one quarter of one
percent (.25%) of the Termination  Amount if the Termination  Date occurs during
the third Contract Year. If the Termination Date occurs any time during or after
the fourth Contract Year, no termination  charge shall be payable.  Further,  no
termination  charge shall be payable if Borrowers shall terminate this Agreement
in connection  with: (a) the sale of all or  substantially  all of the assets of
the Borrowers in a bona fide arms length  transaction;  (b) an Equity Event;  or
(c) the  refinancing of the Loans with another  senior  secured credit  facility
pursuant to a signed commitment letter by such replacement lender, provided that
prior to  termination,  Borrowers  shall have  delivered  a copy of such  signed
commitment  letter to Lender,  and provided  Lender a good faith  opportunity to
match the terms of the proposed  replacement  financing with respect to interest
rate, principal amount, maturity date and borrowing base availability and Lender
shall have determined not to match the aforementioned terms. Notwithstanding the
foregoing,  if Lender shall match the  aforementioned  terms of such replacement
financing  and Borrower  decides not to  terminate  this  Agreement,  Lender and
Borrower shall agree to amend this Agreement to reflect such revised  provisions
and Lender shall have the option of adopting the financial  covenants  contained
in such replacement financing. Thereafter, if Borrowers decide to terminate this
Agreement,  all applicable  termination  charges shall apply to such  subsequent
termination.

                  (C) Lender may terminate this Agreement effective upon written
notice to Borrowing  Agent  provided no later than (a) 365 days prior to the end
of the  Original  Term and (b) 180 days prior to the end of any Renewal  Term or
without  notice  upon the  occurrence  of an Event of  Default  and  during  the
continuance thereof.

                  (D) All of the  Obligations  shall be due and payable upon any
termination of this  Agreement.  Except as otherwise  expressly  provided for in
this  Agreement or the other Loan  Documents,  no  termination  or  cancellation
(regardless  of cause or procedure)  of this  Agreement or any of the other Loan
Documents shall in any way affect or impair the rights, powers, or privileges of
Lender or obligations, duties, rights, and liabilities of Borrowers or Lender in
any way  relating  to (i) any  transaction  or  event  occurring  prior  to such
termination  or  cancellation  or  (ii)  any  of the  undertakings,  agreements,
covenants,   warranties  or  representations  of  Borrowers  contained  in  this
Agreement or any of the other Loan Documents. All such undertakings, agreements,
covenants,  warranties  and  representations  of  Borrowers  shall  survive such
termination or cancellation  and Lender shall retain its Liens in the Collateral
and all of its  rights and  remedies  under  this  Agreement  and the other Loan
Documents  notwithstanding  such termination or  cancellation,  until all of the
Obligations have been paid in full, in immediately available funds.

                  (E) It is  understood  that  Borrowers  may elect to terminate
this  Agreement  in its  entirety  only,  no section or lending  facility may be
terminated singly.


                                       31
<PAGE>

         3.4.  Payments.  All payments of principal,  interest and other amounts
payable  hereunder,  or under any of the  related  agreements,  shall be made to
Lender at its Lending  Office on the due date  therefor not later than 1:00 p.m.
(New York time) in Dollars in Federal or other funds  immediately  available  to
Lender.  Lender  shall  have the  right  to  effectuate  payment  on any and all
Obligations due and owing hereunder by charging Borrowers' accounts or by making
Loans as provided in Section 2.3 hereof and Lender shall  provide the  Borrowing
Agent with  written  notice of such Loans.  Except  where  evidenced by notes or
other instruments issued or made by Borrowers to Lender specifically  containing
payment  provisions  which are in conflict with this Section 3.4 (in which event
the conflicting  provisions of said notes or other  instruments shall govern and
control), that portion of the Obligations consisting of:

                  (A)  Principal,  payable on account of Loans made by Lender to
Borrowers  pursuant to this  Agreement,  shall be payable by Borrowers to Lender
immediately  upon the  earliest of (i) the receipt by Lender or Borrowers of any
proceeds of any of the Collateral  referred to in Section 2.2(B),  to the extent
required in accordance with Section  2.2(B),  (ii) the occurrence of an Event of
Default if Lender elects to  accelerate  the maturity and payment of such Loans,
or (iii) termination of this Agreement pursuant to Section 3.3 hereof; provided,
however,  that if the principal balance of Revolving Credit Loans outstanding at
any time  shall  exceed the  Borrowing  Base at such time,  Borrower  shall,  on
demand,  repay the Revolving Credit Loans in an amount  sufficient to reduce the
aggregate  unpaid  principal  amount of such Revolving Credit Loans by an amount
equal to such excess;

                  (B) Interest accrued on the Loans shall be due on the earliest
of (i) the first  Business  Day of each  month  (for the  immediately  preceding
month),  computed through the last calendar day of the preceding month, (ii) the
occurrence of an Event of Default if Lender  elects to  accelerate  the maturity
and payment of the Obligations or (iii)  termination of this Agreement  pursuant
to Section 3.3 hereof; provided, however, that with respect to Eurodollar Loans,
interest shall only be payable at the end of each Interest  Period,  except that
with respect to Eurodollar Loans having an Interest Period of 180 days, interest
due on each  such  Eurodollar  Loan  shall  be due at the end of 90 days and 180
days;

                  (C)  Costs,   fees  and  expenses  payable  pursuant  to  this
Agreement  shall be payable by Borrowers,  on demand,  to Lender or to any other
Person designated by Lender in writing; and

                  (D) The balance of the  Obligations  requiring  the payment of
money,  if any,  shall be payable by Borrowers to Lender as and when provided in
this Agreement or the Loan Documents.

         3.5. Application of Payments and Collections. Upon the occurrence of an
Event of Default and during the continuation  thereof, each Borrower irrevocably
waives  the  right  to  direct  the  application  of any  and all  payments  and
collections at any time or times hereafter  received by Lender from or on behalf
of any Borrower,  and each Borrower  does hereby  irrevocably  agree that Lender
shall have the continuing  exclusive right to apply and reapply any and all such
payments and  collections  received at any time or times  hereafter by Lender or
its agent against the Obligations,  in such manner as Lender may deem advisable,
notwithstanding any entry by Lender upon any of its books and records. If as the
result of  collections  of Accounts as authorized by Section 5.4 hereof a credit
balance  exists in the Loan  Account,  such  credit  balance  shall  not  accrue
interest in favor of  Borrowers,  but so long as no Event of Default  shall then
exist,  Lender  shall  remit such  credit  balance  (to the extent of the actual
collected portion thereof) to Borrowers in immediately available funds not later
than one


                                       32
<PAGE>

Business Day  following the creation of such credit  balance.  In no event shall
such credit balance be applied or be deemed to have been applied as a prepayment
of the Term Loan or the Equipment Loans unless so requested by Borrowing  Agent,
but Lender may offset such credit balance against the Obligations  upon or after
the occurrence of an Event of Default.

         3.6.  Statements of Account.  Lender will account to Borrowers  monthly
with a statement of Loans, charges and payments made pursuant to this Agreement,
and  such  account  rendered  by  Lender  shall be  deemed  final,  binding  and
conclusive  upon  Borrowers  unless  Lender is  notified by  Borrowing  Agent in
writing to the contrary  within  thirty (30) days after the date each account is
mailed to  Borrowers.  Such notice  shall only be deemed an  objection  to those
items specifically objected to therein.

         3.7.  Increased Costs. In the event that any change,  after the date of
this Agreement,  in any applicable law or treaty,  or in the  interpretation  or
application  thereof,  or  compliance  by Lender with any  request or  directive
(whether  or not  having  the  force  of law)  from  any  central  bank or other
financial, monetary or other regulatory authority, shall:

                  (A)  (i)  subject  Lender  to any  tax  with  respect  to this
Agreement  (other  than  (a) any tax  based  on or  measured  by net  income  or
otherwise in the nature of a net income tax, including,  without limitation, any
franchise tax or any similar tax based on capital, net worth or comparable basis
for measurement and (b) any tax collected by a withholding on payments and which
neither is  computed by  reference  to the net income of the payee nor is in the
nature of an advance  collection of a tax based on or measured by the net income
of the payee) or (ii)  change the basis of  taxation  of  payments  to Lender of
principal,  fees,  interest or any other amount  payable  hereunder or under any
Loan Documents (other than in respect of (a) any tax based on or measured by net
income or  otherwise  in the  nature of a net  income  tax,  including,  without
limitation,  any franchise tax or any similar tax based on capital, net worth or
comparable  basis for  measurement and (b) any tax collected by a withholding on
payments  and which  neither is computed by  reference  to the net income of the
payee  nor is in the  nature  of an  advance  collection  of a tax  based  on or
measured by the net income of the payee);

                  (B) impose,  modify or hold applicable any reserve (except any
reserve taken into account in the  determination  of the  applicable  Eurodollar
Rate),  special deposit,  assessment or similar  requirement against assets held
by, or deposits in or for the account of,  advances or loans by, or other credit
extended by, any office of Lender,  including (without  limitation)  pursuant to
Regulation D of the Board of Governors of the Federal Reserve System; or

                  (C) impose on Lender or the London interbank eurodollar market
any other condition with respect to any Loan Document;

and the  result of any of the  foregoing  is to  increase  the cost to Lender of
making,  renewing or  maintaining  its Loans  hereunder by an amount that Lender
deems to be  material  or to  reduce  the  amount  of any  payment  (whether  of
principal,  interest or  otherwise) in respects of any of the Loans by an amount
that  Lender  deems to be  material,  then,  in any such case,  Borrowers  shall
promptly pay Lender,  upon its demand and certification,  such additional amount
as will compensate  Lender for such  additional  cost or such reduction,  as the
case may be, to the  extent  Lender has not  otherwise  been


                                       33
<PAGE>

compensated,  with respect to a particular  Loan,  for such  increased cost as a
result of an increase in the Base Rate.  An officer of Lender shall  certify the
amount of such  additional  cost or reduced  amount to Borrowers,  and provide a
written  explanation  of such  additional  cost or reduction to Borrowers.  Such
certification  shall be conclusive  absent  manifest error. If Lender claims any
additional  cost or reduced  amount  pursuant to this Section  3.7,  then Lender
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to designate a different  Lending Office or to file any  certificate or document
reasonably  requested by Borrowers if the making of such  designation  or filing
would avoid the need for, or reduce the amount of, any such  additional  cost or
reduced  amount and would not, in the sole  discretion  of Lender,  be otherwise
disadvantageous to Lender.

         3.8. Basis For Determining  Interest Rate Inadequate or Unfair.  In the
event that Lender shall have determined that:

                  (A)  reasonable  means  do  not  exist  for  ascertaining  the
Eurodollar Rate for any Interest Period; or

                  (B)  Dollar  deposits  in the  relevant  amount  and  for  the
relevant  maturity are not available in the London interbank  eurodollar  market
with respect to an outstanding Eurodollar Loan, a proposed Eurodollar Loan, or a
proposed conversion of a Base Rate Loan into a Eurodollar Loan;

Lender shall give Borrowers prompt written,  telephonic or telegraphic notice of
its  determination  of such  effect.  If such  notice  is  given,  (i) any  such
requested  Eurodollar Loan shall be made as a Base Rate Loan,  unless  Borrowers
shall  notify  Lender no later than 10:00  a.m.  (New York City time)  three (3)
Business Days prior to the date of such proposed borrowing, that the request for
such  borrowing  shall be cancelled or made as an unaffected  type of Eurodollar
Loan,  and (ii) any Base  Rate  Loan  which  was to have  been  converted  to an
affected type of Eurodollar  Loan shall be continued as or converted into a Base
Rate Loan, or, if Borrowers  shall notify Lender,  no later than 10:00 a.m. (New
York City time) three (3) Business Days prior to the proposed conversion,  shall
be maintained as an unaffected type of Eurodollar Loan.

         3.9. Capital Adequacy.

                  (A) In the event that Lender  shall have  determined  that any
applicable law or guideline  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 Lender 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, has or would
have the  effect  of  reducing  the rate of  return  on  Lender's  capital  as a
consequence  of its  obligations  hereunder  to a level below that which  Lender
could have achieved but for such  adoption,  change or  compliance  (taking into
consideration  Lender's  policies with respect to capital adequacy) by an amount
deemed by Lender to be material, then, from time to time, upon written demand by
Lender,  Borrowers shall pay to Lender such additional amount or amounts as will
compensate  Lender for such  reduction.  In determining  such amount or amounts,
Lender may use any reasonable  averaging or attribution  methods. The protection
of this  Section 3.9 shall be  available  to Lender  regardless  of any possible
contention of invalidity or  inapplicability  with respect to the applicable law
or condition.


                                      34
<PAGE>

                  (B) A certificate  of an officer of Lender  setting forth such
amount or amounts as shall be necessary to compensate Lender pursuant to Section
3.9 hereof  and the  reasons  therefor  when  delivered  to  Borrowers  shall be
conclusive absent manifest error.


SECTION 4. COLLATERAL: GENERAL TERMS

         4.1. Security Interest in Collateral.  To secure the prompt payment and
performance to Lender of the Obligations (except PMSI Loans which are secured by
the  Equipment  financed  thereby),  each  Borrower  hereby  grants  to Lender a
continuing  security interest in and Lien upon all of the following  Property of
such Borrower,  whether now owned or existing or hereafter created,  acquired or
arising and wheresoever located:

                  (A) Accounts;

                  (B) Inventory;

                  (C) Equipment;

                  (D) General Intangibles;

                  (E) Investment Property;

                  (F) All monies and other  Property of any kind,  now or at any
time or times  hereafter,  in the possession or under the control of Lender or a
bailee of Lender;

                  (G) All accessions to, substitutions for and all replacements,
products  and cash and  non-cash  proceeds of (A),  (B),  (C),  (D), (E) and (F)
above,  including,  without  limitation,  proceeds of and unearned premiums with
respect to insurance policies insuring any of the Collateral; and

                  (H) All  books and  records  (including,  without  limitation,
customer lists, credit files, computer programs,  print-outs, and other computer
materials and records) of such Borrower pertaining to any of (A), (B), (C), (D),
(E), (F) or (G) above.

provided,  however,  that the  foregoing  grant of a security  interest and Lien
shall not include any rights or interests in the Property  listed on Exhibit 4.1
and any other comparable General  Intangibles or contract rights or any Property
of such Borrower that is the subject of a Permitted Purchase Money Lien securing
Permitted Purchase Money Indebtedness if and to the extent that (a) the terms of
the document or documents  creating or evidencing  such General  Intangibles  or
contract  rights or Permitted  Purchase  Money Lien or Permitted  Purchase Money
Indebtedness, as the case may be, prohibit such grant or encumbrance thereof and
(b) the term prohibiting such assignment or encumbrance is effective as a matter
of law and (c) the  term  prohibiting  such  grant or  encumbrance  has not been
waived or the consent of the necessary party to the grant of a security interest
or Lien to Lender has not been obtained following commercially reasonable effort
on the part of such  Borrower  to obtain  such  waiver or consent if the seeking
thereof would be commercially reasonable; provided further, however, that (i)


                                       35
<PAGE>

if any such  prohibition is subsequently  lifted,  terminated or is otherwise no
longer effective as a matter of law or is waived or the consent of the necessary
party is obtained,  the security  interest  granted  hereby shall  automatically
include  such rights or  interests  in General  Intangibles  or contract  rights
formerly subject to such  prohibition  without any further action on the part of
such Borrower or Lender and (ii) the  exclusion in the  foregoing  proviso shall
not limit,  impair or otherwise affect Lender's  security interest in any rights
or  interests  of such  Borrower  in or to monies due or to become due under any
such General Intangibles or contract rights (including,  without limitation, any
Accounts).

         4.2. Lien on Realty.  The due and punctual  payment and  performance of
the  Obligations  shall also be secured by the Lien created by the Mortgage upon
all Real Property of Borrowers  described therein. If any Borrower shall acquire
at any time or times  hereafter any interest in other Real  Property,  then such
Borrower  shall  promptly  notify Lender of such  acquisition  and upon Lender's
request,  which  request  may be made by  Lender  in its sole  discretion,  such
Borrower shall promptly  execute and deliver to Lender,  as additional  security
and Collateral for the Obligations, deeds of trust, security deeds, mortgages or
other  collateral  assignments  satisfactory in form and substance to Lender and
its counsel (herein  collectively  referred to as "New Mortgages") covering such
Real Property. The Mortgage and each New Mortgage shall be duly recorded in each
office where such  recording is required to  constitute a valid Lien on the Real
Property  covered  thereby.  Borrowers  shall  deliver to Lender,  at Borrowers'
expense,  mortgagee title insurance policies issued by a title insurance company
reasonably  satisfactory to Lender  insuring Lender as mortgagee;  such policies
shall be in form and  substance  reasonably  satisfactory  to  Lender  and shall
insure a valid first Lien in favor of Lender on the  Property  covered  thereby,
subject  only to  those  exceptions  reasonably  acceptable  to  Lender  and its
counsel.  Borrowers  shall  deliver to Lender such other  documents,  including,
without limitation,  as-built survey prints of the Real Property,  as Lender and
its counsel may reasonably  request relating to the Real Property subject to the
Mortgages and any such New Mortgages.

         4.3. Representations,  Warranties and Covenants --Collateral. To induce
Lender to enter into this Agreement,  each Borrower  represents,  warrants,  and
covenants to Lender:

                  (A) The Collateral is now and, so long as any  Obligations are
outstanding,  will continue to be owned solely by Borrowers. No other Person has
or will have any right,  title,  interest,  claim,  or Lien therein,  thereon or
thereto other than a Permitted Lien.

                  (B) Except as otherwise  described on Exhibit 4.3(B)  attached
hereto and made a part  hereof,  the Liens  granted to Lender shall be first and
prior on the Collateral and as to the Accounts and proceeds, including insurance
proceeds resulting from the sale, disposition or loss thereof. No further action
need be taken to perfect the Liens  granted to Lender,  other than the filing of
continuation  statements  under  the Code or  other  applicable  law,  continued
possession by Lender of that portion of the Collateral constituting  instruments
or documents,  the filing or recording in the United States Patent and Trademark
Office  of  appropriate  instruments  with  respect  to  Liens  on  patents  and
trademarks  and  the  processing  of  Lien  notations  on  motor  vehicle  title
certificates and the recording of the Mortgages.

                  (C) All goods evidenced by the Collateral constituting chattel
paper,  documents  or  instruments,  the  possession  of which has been given to
Lender,  are owned by each Borrower and the same are free and clear of any prior
Lien.  Borrowers  further  warrant and  guarantee the value,  quantities,  sound
condition,  grades and  qualities of the goods and services  described  therein.


                                       36
<PAGE>

Borrowers shall pay and discharge all taxes,  levies and other charges upon said
Collateral and upon the goods evidenced by any documents constituting Collateral
and shall  defend  Lender  against and save it  harmless  from all claims of any
Person with respect to the Collateral.  This indemnity shall include  reasonable
attorneys' fees and legal expenses.

         4.4. Lien Perfection.  At Lender's request,  Borrower agrees to execute
the  financing  statements  provided for by the Code  together  with any and all
other instruments,  assignments or documents,  and shall take such other action,
in each case,  as may be required to perfect or to continue  the  perfection  of
Lender's security interest in the Collateral, including, without limitation, the
execution at Lender's request for all documents  reasonably  deemed necessary by
Lender  to  cause  Lender's  Lien  to  be  noted  on  any  motor  vehicle  title
certificates  for motor  vehicles  forming a  material  part of the  Collateral.
Unless  prohibited by applicable law, each Borrower hereby  authorizes Lender to
execute  and  file any  such  financing  statement  on such  Borrower's  behalf.
Subsequent  to Lender's  execution  and filing of the  aforementioned  financing
statements,  Lender shall provide  Borrowing  Agent with notice of the same. The
parties  agree  that a  carbon,  photographic  or  other  reproduction  of  this
Agreement  shall be sufficient as a financing  statement and may be filed in any
appropriate office in lieu thereof.

         4.5. Real Property Lien Documentation.  Each Borrower agrees to execute
and cause to be executed for Lender's  benefit the Mortgages and such  leasehold
mortgages,  deeds of trust or other documents evidencing a collateral assignment
of such  Borrower's  interest  in the  Real  Property  and any  additional  Real
Property  owned by such  Borrower  ("Additional  Real  Property")  as Lender may
reasonably request other than Additional Real Property, the purchase of which is
otherwise  permitted hereunder and is subject to a Permitted Purchase Money Lien
and as to which,  if and to the  extent  any  Collateral  is located at any such
Additional  Real  Property,  Lender has received a mortgagee  waiver in form and
substance  reasonably  satisfactory to Lender. Such documents shall be recorded,
at the expense of such Borrower,  with such filing offices as may be required to
evidence  Lender's  Lien upon the Real Property  owned or hereafter  acquired by
such  Borrower.  Notwithstanding  the  foregoing,  to  the  extent  any  of  the
aforementioned  real  property  documentation  is  required  to be  executed  or
consented  to by a Person  other than or in addition to any  Borrower or Lender,
each Borrower  shall use its good faith efforts to cause such Person to execute,
or consent  to, any such  documentation.  Each  Borrower  acknowledges  that its
failure to cause any such  Person to execute  such  documentation  may result in
Lender's  establishment  of  a  Contingency  Reserve  in  the  exercise  of  its
commercially reasonable judgment.

         4.6.  Location of Collateral.  All Collateral,  other than Inventory in
transit and motor  vehicles,  will at all times be kept by  Borrowers  at one or
more of the business  locations set forth in Exhibit 4.6 and shall not,  without
the prior written  approval of Lender,  be moved therefrom  except,  prior to an
Event of Default  and  subsequent  to an Event of  Default  except to the extent
Lender has provided Borrowers with written notice to the contrary, for (A) sales
of Inventory in the ordinary course of business; (B) the storage of Inventory at
locations within the continental United States other than those shown on Exhibit
4.6 if (i) any Borrower gives Lender written notice of the new storage  location
at least  thirty (30) days prior to storing  Inventory  at such  location,  (ii)
Lender's  security  interest in such  Inventory  is and  continues  to be a duly
perfected,  first priority Lien thereon, (iii) neither the applicable Borrower's
nor Lender's right of entry upon the premises where such Inventory is stored, or
its right to remove the Inventory therefrom,  is unreasonably  restricted,  (iv)
the


                                       37
<PAGE>

owner of such premises  agrees with Lender to  subordinate  or not to assert any
landlord's,  bailee's or other Lien in respect of the  Inventory for unpaid rent
or storage  charges and (v) all negotiable  documents and receipts in respect of
any  Collateral  maintained at such  premises are promptly  delivered to Lender;
provided,  however,  if any Borrower fails to meet  requirements  of clauses (i)
through (v) but the amount of Inventory stored at any such location is less than
$500,000 in the aggregate for all such locations,  then the sole  consequence of
such failure shall be the exclusion of such Inventory from the  determination of
the Borrowing  Base; (C) removals in connection  with  dispositions  of tangible
fixed  assets  that are  authorized  by Section  9.2(N)  hereof;  (D) removal of
Equipment  for purposes of repair or  maintenance;  (E) location of Equipment at
sites other than  referred to above in  connection  with the leasing  thereof to
customers,  the use thereof by  subcontractors  in connection with performing of
production  or other  activities  for the  benefit  of  Borrowers  or for  other
purposes related to the conduct of the business of Borrowers,  provided that (i)
the  aggregate  fair market  value  thereof  does not exceed  $250,000  and (ii)
Borrowers  has taken steps  satisfactory  to Lender to maintain the priority and
perfection  of  Lender's  security  interest  therein  and (F) to the extent not
covered  by the  foregoing  subsections  (B),  (C),  (D)  and (E)  Equipment  at
locations other than as set forth in Exhibit 4.6 having an aggregate fair market
value of not more than $250,000.

         4.7. Insurance of Collateral. Borrowers shall bear the full risk of any
loss of any nature  whatsoever  with respect to the  Collateral.  Each  Borrower
agrees  to  maintain  and pay for  insurance  upon all  Collateral  (other  than
Accounts)  wherever  located,  in storage or in transit in  vehicles,  including
goods evidenced by documents,  covering casualty,  hazard,  public liability and
other risks and in such  amounts as are  described  in this Section 4.7 and with
such insurance companies as shall be reasonably satisfactory to Lender to insure
Lender's  interest in the  Collateral.  Borrowers  shall deliver  copies of such
policies with satisfactory Lender's loss payable endorsements naming Lender Loss
Payee to Lender as requested by Lender.  Each policy of insurance or endorsement
shall  contain a clause  requiring the insurer to give not less than thirty (30)
days prior written notice to Lender in the event of  cancellation  of the policy
for any  reason  whatsoever  and a clause  that the  interest  of  Lender in the
Collateral  owned by Borrowers shall not be impaired or invalidated by an act or
neglect of  Borrowers  or owner of the  Property  nor by the  occupation  of the
premises for  purposes  more  hazardous  than are  permitted by said policy.  If
Borrowers fail to provide and pay for such insurance,  Lender may, at Borrowers'
expense,  procure the same, but shall not be required to do so.  Borrowers agree
to deliver to Lender,  promptly as rendered,  true copies of all reports made in
any reporting forms to insurance companies.  Each Borrower shall (a) keep all of
its insurable  properties in which such Borrower has an interest insured against
the  hazards of fire,  sprinkler  leakage,  those  hazards  covered by  extended
coverage insurance and such other hazards, and for such amounts, as is customary
in the case of  companies  engaged  in  businesses  similar  to such  Borrower's
including,  but not limited to, business interruption insurance;  (b) maintain a
bond in such amounts,  if any, as is customary in the case of companies  engaged
in businesses similar to such Borrower's insuring against larceny,  embezzlement
or other criminal  misappropriation  of insured's officers and employees who may
either  singly or jointly  with  others at any time have access to the assets or
funds of such Borrower  either  directly or through  authority to draw upon such
funds or to direct generally the disposition of such assets; (c) maintain public
and product  liability  insurance  against claims for personal injury,  death or
property damage suffered by others; (d) maintain all such workmen's compensation
or similar  insurance as may be required under the laws of any  jurisdiction  in
which such  Borrower is engaged in  business;  and (e)  furnish  Lender with (i)
copies,  as requested by Lender, of all policies and evidence of the maintenance
of such  policies by the renewal  thereof at least  fifteen (15) days before any
expiration


                                       38
<PAGE>

date,  and (ii)  appropriate  loss payable  endorsements  in form and  substance
reasonably  satisfactory to Lender, naming Lender as loss payee (and a mortgagee
with  respect to the Real  Property)  as its interest may appear with respect to
the property coverage described in clause 4.7(a) above and the property coverage
shall  provide  (A) that,  except as provided  below,  all  proceeds  thereunder
otherwise  payable to any  Borrower  shall be  payable  to  Lender,  (B) no such
insurance shall be affected by any act or neglect of the insured or owner of the
property  described  in such policy or by the  occupation  of the  premises  for
purposes  more  hazardous  than are  permitted  by said policy and (C) that such
policy and loss  payable  clauses may not be  cancelled,  amended or  terminated
unless at least  thirty (30) days' prior  written  notice is given to Lender and
(i) a  certificate  of insurance or other  endorsement  indicating,  among other
things, the Lender has been named as an additional or co-insured with respect to
each  Borrower's  liability  insurance  policies.  In  the  event  of  any  loss
thereunder,  except as provided  below,  the property  coverage  carriers  named
therein hereby are directed by Lender and each Borrower to make payment for such
loss  to  Lender  and not to such  Borrower  and  Lender  jointly.  If any  such
insurance  losses are paid by check,  draft or other  instrument  payable to any
Borrower and Lender jointly, Lender may endorse such Borrower's name thereon and
do such other things as Lender may deem advisable to reduce the same to cash. If
an Event of Default shall have occurred and is continuing,  (x) Lender is hereby
authorized to adjust and compromise claims under insurance  coverage referred to
in clauses (a) and (b) above and (y) all insurance recoveries received by Lender
upon any such insurance  shall be applied to the  Obligations,  in such order as
Lender in its sole discretion shall determine.  If an Event of Default shall not
exist,  then any insurance  recovery  arising out of any theft,  destruction  or
other loss of any property of Borrowers  shall be applied in accordance with the
applicable  provisions  in  Section  2.2(B).  If  Borrowers  elect to apply such
insurance  proceeds to the replacement,  restoration or repair of such property,
then,  pending such  application,  such  proceeds  shall be held by Lender in an
interest-bearing  cash  collateral  account until  disbursed as directed by such
Borrower.  At any  Borrower's  option,  any  proceeds  held for  application  to
replacement, restoration or repair of property may be applied to repay Revolving
Credit  Loans  and,  upon  the  terms  and  subject  to the  conditions  of this
Agreement,  such Borrower shall be entitled to reborrow the amount so repaid for
purposes  of such  replacement,  restoration  or  repair.  Insurance  recoveries
received  by Lender  arising  out of  theft,  destruction  or other  loss of any
property of such  Borrower  for which  specific  application  is not provided as
aforesaid  shall be paid by Lender to such  Borrower.  Any surplus in  insurance
recoveries,  in excess  of the then  outstanding  Obligations,  shall be paid by
Lender to  Borrowers  or applied as may be  otherwise  required  by law.  If all
Obligations hereunder are required to be repaid as a result of any casualty, any
deficiency thereon shall be paid by Borrowers to Lender, on demand.

         4.8. Protection of Collateral.  All insurance expenses and all expenses
of  protecting,  storing,  warehousing,   insuring,  handling,  maintaining  and
shipping the  Collateral,  any and all excise,  property,  sales,  and use taxes
imposed by any state, federal, or local authority on any of the Collateral or in
respect of the sale thereof shall be borne and paid by  Borrowers.  If Borrowers
fail to promptly pay any portion  thereof when due (except if being contested as
permitted by Section 9.1(A) hereof), Lender may, at its option, but shall not be
required to, pay the same and charge the Loan Account  therefor.  Each  Borrower
agrees to reimburse  Lender promptly  therefor with interest as provided in this
Agreement.  All sums so paid or incurred by Lender for any of the  foregoing and
all costs and expenses  (including  attorneys'  fees,  legal  expenses and court
costs) which Lender may incur in enforcing or  protecting  its Lien on or rights
and interest in the  Collateral  or any of its rights or remedies  under this or
any other  agreement  between  the  parties  hereto or in  respect of any of the
transactions  to be had  hereunder  until  paid  by  Borrowers  to  Lender  with
interest,   shall  be  considered


                                       39
<PAGE>

Obligations  owing by Borrowers to Lender  hereunder.  Such Obligations shall be
secured by all Collateral and by any and all other collateral, security, assets,
reserves,  or funds of  Borrowers  in or coming into the hands or inuring to the
benefit of Lender.  Lender shall not be liable or responsible in any way for the
safekeeping of any of the  Collateral or for any loss or damage thereto  (except
for reasonable  care in the custody  thereof while any Collateral is in Lender's
actual possession) or for any diminution in the value thereof, or for any act or
default  of any  warehouseman,  carrier,  forwarding  agency,  or  other  person
whomsoever, but the same shall be at Borrowers' sole risk.


SECTION 5. PROVISIONS RELATING TO ACCOUNTS

         5.1.   Representations,   Warranties  and   Covenants.   Each  Borrower
represents  and warrants to Lender that Lender may rely,  in  determining  which
Accounts are Eligible Accounts,  on all statements and  representations  made by
such  Borrower on its own behalf with respect to any Account or  Accounts,  and,
unless  otherwise  indicated  in writing to  Lender,  that with  respect to each
Account included by any Borrower within any calculation of the Borrowing Base:

                  (A) It is genuine and in all respects  what it purports to be,
and it is not evidenced by a judgment;

                  (B) It arises out of a completed,  bona fide sale and delivery
of goods or rendition of services by such Borrower in the ordinary course of its
business  and  in  accordance  in all  material  respects  with  the  terms  and
conditions of all purchase orders, contracts or other documents relating thereto
and forming a part of the contract between such Borrower and the Account Debtor;

                  (C) It is for a  liquidated  amount  maturing as stated in the
duplicate  invoice covering such sale or rendition of services,  a copy of which
has been furnished or is available to Lender;

                  (D) Such Account,  and Lender's security interest therein,  is
not, and will not, to  Borrower's  knowledge,  be in the future,  subject to any
offset, Lien,  deduction,  defense,  dispute,  counterclaim or any other adverse
condition  except for disputes  resulting in returned  goods where the amount in
controversy  is  deemed  by Lender to be  immaterial,  and,  to such  Borrower's
knowledge,  each such Account is  absolutely  owing to such  Borrower and is not
contingent in any respect or for any reason;

                  (E) No Borrower has made any agreement with any Account Debtor
thereunder for any deduction therefrom, except discounts or allowances which are
reflected  in the  calculation  of the net  amount  of each  respective  invoice
related thereto;

                  (F) To each Borrower's  knowledge,  there are no facts, events
or occurrences which in any way impair the validity or enforceability thereof or
tend to reduce the amount payable thereunder from the face amount of the invoice
and statements delivered to Lender with respect thereto;


                                       40
<PAGE>

                  (G)  To  each   Borrower's   knowledge,   the  Account  Debtor
thereunder  (i) had the  capacity to contract at the time any  contract or other
document giving rise to the Account was executed and (ii) such Account Debtor is
Solvent; and

                  (H) No  Borrower  has  knowledge  of any fact or  circumstance
which would impair the validity or  collectability  of the Account,  and to each
Borrower's knowledge there are no proceedings or actions which are threatened or
pending against any Account Debtor thereunder which could reasonably be expected
to result in any  material  adverse  change in such Account  Debtor's  financial
condition or the collectability of such Account.

         5.2. Assignments, Records and Schedules of Accounts. If so requested by
Lender,  each  Borrower  shall  execute and  deliver to Lender a Borrowing  Base
Certificate  and  formal  written  assignments  of all  Accounts  weekly  or, if
requested by Lender,  daily,  which shall  include all  Accounts  that have been
created since the date of the last assignment,  together with copies of invoices
or invoice  registers  related  thereto.  On or before the fifteenth day of each
month  ("Delivery  Date") from and after the date hereof,  each  Borrower  shall
deliver to Lender,  in form  reasonably  acceptable  to Lender,  a detailed aged
trial  balance  of all  Accounts  existing  as of the last day of the  preceding
month,  specifying the names,  addresses,  face value, dates of invoices and due
dates for each Account  Debtor  obligated on an Account so listed  ("Schedule of
Accounts"),  and, upon Lender's reasonable request therefor,  copies of proof of
delivery and the original copy of all documents,  including, without limitation,
repayment  histories  and present  status  reports  relating to the  Accounts so
scheduled and such other matters and information  relating to the status of then
existing  Accounts  as Lender  shall  reasonably  request.  Notwithstanding  the
foregoing, if any Borrower has sent to Lender a Schedule of Accounts on or prior
to the Delivery  Date but Lender has not received  such  Schedule of Accounts by
the Delivery  Date,  then such Borrower  shall have an  additional  five days to
deliver such Schedule of Accounts  following  notice by Lender of its failure to
receive any such  Schedule of Accounts  which notice may be given as provided in
Section 12.10 hereof or by telephone.

         5.3. Administration of Accounts.

                  (A) Upon the granting of any discounts,  allowances or credits
by any  Borrower  that are not shown on the face of the  invoice for the Account
involved,  each Borrower shall  promptly  report such  discounts,  allowances or
credits,  as the case may be, to Lender  and in no event  later than the time of
its submission to Lender of the next Schedule of Accounts as provided in Section
5.2. Upon and after the occurrence of an Event of Default, Lender shall have the
right to settle or adjust all  disputes  and claims  directly  with the  Account
Debtor  and to  compromise  the  amount or extend  the time for  payment  of the
Accounts  upon such terms and  conditions as Lender may deem  advisable,  and to
charge the costs and expenses thereof,  including attorney's fees, to Borrowers.
Borrowers shall remain liable for any deficiency.

                  (B) If an Account includes a charge for any tax payable to any
governmental taxing authority, Lender is authorized, if any Borrower does not do
so in a timely manner,  to pay the amount thereof to the proper taxing authority
for the  account  of such  Borrower  and to charge  the Loan  Account  therefor.
Borrowers  shall  notify  Lender  if any  Account  includes  any  tax due to any
governmental taxing authority and, in the absence of such notice,  Lender except
as  otherwise  provided  herein  shall


                                       41
<PAGE>

not be liable for any taxes to any governmental taxing authority that may be due
by Borrowers by reason of the sale and delivery creating the Account.

                  (C)  Whether  or not a  Default  or an  Event of  Default  has
occurred, any of Lender's officers, employees or agents shall have the right, at
any time or times  hereafter,  in the name of Lender,  any designee of Lender or
Borrowers,  to verify the validity,  amount or any other matter  relating to any
Account  by mail,  telephone,  telegraph  or  otherwise.  At  Borrowing  Agent's
request, Lender will provide Borrowing Agent with reasonable general information
about the manner in which  Lender  intends to conduct its  verifications  during
periods when an Event of Default does not exist. Borrowers shall cooperate fully
with  Lender  in  an  effort  to  facilitate  and  promptly  conclude  any  such
verification process.

         5.4. Collection of Accounts.

                  (A) To expedite  collection,  Borrowers  shall endeavor in the
first instance to make collection of their Accounts for Lender.  All remittances
received by  Borrowers  on account of  Accounts  shall be held by  Borrowers  as
trustee of an express trust for Lender's benefit and Borrowers shall immediately
deposit the same in the Dominion  Account.  Such express  trust shall cease with
respect to any funds  transferred by the Dominion Account Bank to the applicable
Borrower in accordance with the Dominion Account  Agreement.  Lender retains the
right after an Event of Default to notify  Account  Debtors that  Accounts  have
been assigned to Lender and to collect Accounts  directly in its own name and to
charge the  collection  costs and expenses,  including  attorneys'  fees, to the
applicable Borrower.  Lender has no duty to protect,  insure, collect or realize
upon the Accounts or preserve rights in them.

                  (B) Each Borrower  shall deposit all proceeds of Collateral or
cause the same to be  deposited  in kind in a  Dominion  Account  pursuant  to a
lockbox arrangement  reasonably  acceptable to Lender. Each Borrower shall issue
to any such banks an irrevocable  letter of instruction  directing such banks to
deposit  all  payments  or other  remittances  received  in the  lockbox  to the
Dominion  Account for application in accordance  with this Agreement.  All funds
deposited  in the Dominion  Account  shall  immediately  become  Collateral  and
Borrowers  shall obtain the  agreement by such banks to waive any offset  rights
against  the funds so  deposited.  Lender  assumes  no  responsibility  for such
lockbox  arrangement,  including,  without  limitation,  any claim of accord and
satisfaction  or  release  with  respect  to  deposits   accepted  by  any  bank
thereunder.

                  (C) All funds on  deposit  in the  Dominion  Account  shall be
subject to the provisions of the Dominion Account Agreement.

         5.5. Notice Regarding Disputed  Accounts.  In the event any amounts due
and owing in excess of  $100,000  are in dispute  between any  Borrower  and any
Account  Debtor,  such Borrower shall provide Lender with written notice thereof
at the time of submission of the next Schedule of Accounts, explaining in detail
the  reason  for the  dispute,  all  claims  related  thereto  and the amount in
controversy.


SECTION 6. PROVISIONS RELATING TO INVENTORY


                                       42
<PAGE>

         6.1.  Representations,   Warranties  and  Covenants.  With  respect  to
Inventory, each Borrower represents and warrants to Lender that Lender may rely,
in determining which items of Inventory  constitute Eligible  Inventory,  on all
statements  and  representations  made  by such  Borrower  with  respect  to any
Inventory and, unless otherwise indicated in writing to Lender, that:

                  (A) All Inventory is presently and will continue to be located
at Borrowers'  places of business listed on Exhibit 6.1A or at public warehouses
listed thereon and will not be removed therefrom except as authorized by Section
4.6 of this Agreement;

                  (B) Except as referred to in Section 6.1(A) and as provided in
Section 4.6, no  Inventory is now, nor shall any  Inventory at any time or times
hereafter  be,  stored  with a bailee,  warehouseman  or similar  party  without
Lender's prior written consent not to be  unreasonably  withheld or delayed and,
if Lender gives such  consent,  each Borrower will  concurrently  therewith,  at
Lender's request, cause any such bailee, warehouseman, or similar party to issue
and deliver to Lender,  in form and substance  reasonably  acceptable to Lender,
warehouse  receipts  therefor in  Lender's  name,  to the extent such  warehouse
receipts are negotiable;

                  (C) No Inventory is or will be consigned to any Person without
Lender's prior written consent not to be unreasonably  withheld or delayed, and,
if such  consent  is  given,  Borrowers  shall,  prior  to the  delivery  of any
Inventory on consignment,  (i) provide Lender with all consignment agreements to
be used in connection  with such  consignment,  all of which shall be reasonably
acceptable  to Lender,  (ii)  prepare,  execute and file  appropriate  financing
statements with respect to any consigned Inventory,  showing Lender as assignee,
(iii)  conduct  a search  of all  filings  made  against  the  consignee  in all
jurisdictions  in which any consigned  Inventory is to be located and deliver to
Lender copies of the results of all such  searches and (iv) notify,  in writing,
all the creditors of the  consignee  which are or may be holders of Liens in the
Inventory to be  consigned  (as  indicated  by such  search) that such  Borrower
expects to deliver  certain  Inventory to the consignee,  all of which Inventory
shall be described in such notice by item or type; and

                  (D) No  Inventory  is or will be produced in  violation in any
material respect of the Fair Labor Standards Act.

         6.2.  Inventory  Reports.   Borrowers  agree  to  furnish  Lender  with
Inventory reports at such times as Lender may reasonably  request,  but at least
once  each  month.   Such  reports  shall  be  in  form  and  detail  reasonably
satisfactory  to Lender.  Borrowers  shall conduct a physical  inventory no less
frequently than annually and shall provide to Lender a report based on each such
physical   inventory   promptly   thereafter,   together  with  such  supporting
information as Lender shall in its reasonable discretion request.

         6.3.  Returns  of  Inventory.  If at any  time or times  hereafter  any
Account  Debtor  returns any  Inventory  to any  Borrower  the shipment of which
generated  an Account on which such  Account  Debtor is  obligated  in excess of
$500,000 such Borrower shall notify Lender of the same  immediately,  specifying
the reason for such  return  and the  location  and  condition  of the  returned
Inventory. After the occurrence of an Event of Default, each Borrower shall hold
all returned Inventory in trust for Lender, and shall  conspicuously  label such
Inventory as the Property of Lender.


                                       43
<PAGE>

SECTION 7. PROVISIONS RELATING TO EQUIPMENT

         7.1.  Representations,  Warranties and  Covenants.  With respect to the
Equipment,  each Borrower represents,  warrants and covenants to and with Lender
that:

                  (A) The  Equipment  is in  adequate  operating  condition  and
repair,  except for such  Equipment  which is not  materially  necessary  to the
operation of each  Borrower's  business,  and all necessary  replacements of and
repairs thereto shall be made so that the value and operating  efficiency of the
Equipment shall be maintained and preserved,  reasonable wear and tear excepted;
and

                  (B) No  Borrower  will permit any of the  Equipment  to become
affixed to any Real Property  leased to such Borrower so that an interest arises
therein  under the real estate laws of the  applicable  jurisdiction  unless the
landlord  of such Real  Property  has  executed a landlord  waiver or  leasehold
mortgage in favor of Lender, and no Borrower will permit any of the Equipment to
become an accession to any personal  Property  other than  Equipment  subject to
first priority Liens in favor of Lender or subject to Permitted Liens.

         7.2.    Evidence of Ownership of Equipment.  Promptly upon a reasonable
request  therefor by Lender,  each Borrower shall deliver to Lender  evidence of
ownership,  if any,  of any of the  Equipment  (including,  without  limitation,
certificates of title and applications for title).

         7.3.   Records and Schedules of Equipment. Each Borrower shall maintain
accurate records  itemizing and describing the type,  quantity and book value of
the  Equipment  and all  dispositions  made in  accordance  with Section  9.2(N)
hereof,  and shall make  available to Lender a current  schedule  containing the
foregoing  information  on at least an annual basis and more often if reasonably
requested by Lender.


SECTION 8. REPRESENTATIONS AND WARRANTIES

         8.1. General Representations and Warranties.  To induce Lender to enter
into this  Agreement and to make  advances  hereunder,  each Borrower  warrants,
represents and covenants to Lender that:

                  (A)  Organization  and  Qualification.   Each  Borrower  is  a
corporation duly organized, validly existing and in good standing under the laws
of the  jurisdiction  of its  incorporation  listed on Exhibit  8.1(A)  attached
hereto  and  made a  part  hereof.  Each  Borrower  has  duly  qualified  and is
authorized  to do business and is in good standing as a foreign  corporation  in
each state or  jurisdiction  listed on Exhibit  8.1(A) which includes all states
and  jurisdictions  where the  character of its  Properties or the nature of its
activities  make such  qualification  necessary,  except where the failure to so
qualify would not have a Material Adverse Effect.

                  (B) Corporate  Names.  During the preceding five (5) years, no
Borrower  has been known as or used any  corporate,  fictitious  or trade  names
except as disclosed on Exhibit  8.1(B)  attached  hereto and made a part hereof.
Except as set forth on Exhibit  8.1(B),  no Borrower  has,  during


                                       44
<PAGE>

the  preceding  five (5) years,  been the surviving  corporation  of a merger or
consolidation or acquired all or substantially all of the assets of any Person.

                  (C) Corporate Power and Authority. Each Borrower has the right
and power and is duly authorized and empowered to enter into,  execute,  deliver
and perform this Agreement and each of the other Loan Documents to which it is a
party. The execution, delivery and performance of this Agreement and each of the
other Loan Documents have been duly authorized by all necessary corporate action
and do not and will not (i) require any consent or approval of the  shareholders
of  any  Borrower;  (ii)  contravene  any  Borrower's  charter,  certificate  of
incorporation or by-laws;  (iii) violate, or cause any Borrower to be in default
under,  any  provision of any law,  rule,  regulation,  order,  writ,  judgment,
injunction, decree, determination or award in effect having applicability to any
Borrower; (iv) result in a breach of or constitute a default under any indenture
or loan or credit agreement or any other agreement, lease or instrument to which
such  Borrower  is a party  or by  which  it or its  Properties  may be bound or
affected;  or (v) result in, or require,  the creation or imposition of any Lien
(other than  Permitted  Liens) upon or with respect to any of the Properties now
owned or hereafter acquired by any Borrower.

                  (D) Legally Enforceable Agreement. This Agreement is, and each
of the other Loan  Documents  when  delivered  under this  Agreement  will be, a
legal, valid and binding obligation of each Borrower and enforceable  against it
in  accordance  with their  respective  terms,  except to the extent  limited by
applicable  bankruptcy,  insolvency and other similar laws affecting  creditors'
rights generally or by general principles of equity.

                  (E) Use of  Proceeds.  Borrowers'  uses of the proceeds of any
Loans  pursuant to this Agreement are, and will continue to be, legal and proper
corporate uses, duly authorized by its respective  Board of Directors,  and such
uses will not violate in any material  respect any  applicable  laws  including,
without limitation,  the Foreign Assets Control  Regulations,  the Foreign Funds
Control Regulations and the Transaction Control Regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended).

                  (F) Margin Stock.  No Borrower is engaged  principally,  or as
one of its  important  activities,  in the  business of  purchasing  or carrying
"margin  stock"  (within  the  meaning  of  Regulation  G or U of the  Board  of
Governors  of the Federal  Reserve  System),  and no part of the proceeds of any
Loans will be used to purchase or carry any margin stock or to extend  credit to
others for the purpose of purchasing  or carrying any margin  stock,  or be used
for any  purpose  which  violates  or is  inconsistent  with the  provisions  of
Regulation X of said Board of Governors.

                  (G) Governmental  Consents.  Each Borrower has, and is in good
standing with respect to, all governmental consents, approvals,  authorizations,
permits,  certificates,  inspections,  and franchises  necessary in any material
respect to  continue to conduct its  business  as  heretofore  or proposed to be
conducted by it and to own or lease and operate its  Properties  as now owned or
leased by such Borrower.

                  (H)  Patents,   Trademarks,   Copyrights  and  Licenses.  Each
Borrower owns or possesses all the patents,  trademarks,  service  marks,  trade
names, copyrights and licenses necessary for the present conduct of its business
without any conflict  known on the Closing  Date with the rights of


                                       45
<PAGE>

others. All such patents,  trademarks,  service marks,  tradenames,  copyrights,
licenses and other similar rights are listed on Exhibit 8.1(H)  attached  hereto
and made a part hereof.

                  (I) Capital Structure. Exhibit 8.1(I) attached hereto and made
a part hereof  states (a) the correct name of each of the  Subsidiaries  of each
Borrower,  the  jurisdiction of  incorporation  and the percentage of its Voting
Stock owned by such Borrower, (b) the name of each Borrower's Affiliates and the
nature of the affiliation,  (c) the number, nature and holder of all outstanding
Securities of Borrowers,  and (d) the number of authorized,  issued and treasury
shares of each  Borrower.  Holdings has good title to all of the shares of stock
it purports to own of Custom and Quality and each Borrower has good title to all
of the  shares  it  purports  to own of the  stock  of  each  of its  respective
Subsidiaries,  free and  clear in each  case of any Lien  other  than  Permitted
Liens.   All  such  shares  have  been  duly  issued  and  are  fully  paid  and
non-assessable. Except as set forth on Exhibit 8.1(I), there are not outstanding
any options to  purchase,  or any rights or warrants  to  subscribe  for, or any
commitments or agreements to issue or sell, or any capital stock,  Securities or
obligations  convertible  into, or any powers of attorney relating to, shares of
the capital stock of any Borrower.  Except as set forth on Exhibit 8.1(I), there
are not  outstanding  any  agreements  or  instruments  binding  upon any of any
Borrower's  shareholders  relating  to the  ownership  of its  shares of capital
stock.

                  (J) Solvent  Financial  Condition.  (i) Each  Borrower,  on an
individual  basis,  and (ii)  Holdings and its  Subsidiaries  on a  Consolidated
basis,  are now and,  after giving effect to initial  extensions of credit to be
made hereunder, at all times will be, Solvent.

                  (K)  Restrictions.  No  Borrower  is a party or subject to any
contract, agreement, or charter or other corporate restriction, which materially
and  adversely  affects  its  business  or the  use or  ownership  of any of its
Properties. No Borrower is a party or subject to any contract or agreement which
restricts its right or ability to incur Indebtedness, other than as set forth on
Exhibit  8.1(K)  attached  hereto,  none of which  prohibit the  execution of or
compliance  with this  Agreement  by any  Borrower.  No  Borrower  has agreed or
consented to cause or permit in the future (upon the  happening of a contingency
or otherwise) any of its Property,  whether now owned or hereafter acquired,  to
be subject to a Lien that is not a Permitted Lien.

                  (L) Litigation. Except as set forth on Exhibit 8.1(L) attached
hereto and made a part hereof, there are no actions,  suits,  proceedings or, to
the knowledge of each Borrower,  investigations  pending, or to the knowledge of
each  Borrower,  any of the  foregoing  threatened,  against  or  affecting  any
Borrower, or the business,  operations,  Properties, profits or condition of any
Borrower, in any court or before any governmental authority or arbitration board
or tribunal, that could reasonably be expected to have a Material Adverse Effect
on any  Borrower or the ability of any Borrower to perform  this  Agreement.  No
Borrower is in default in any material respect with respect to any order,  writ,
injunction,  judgment,  decree or rule of any court,  governmental  authority or
arbitration board or tribunal.

                  (M) Title to Properties.  Each Borrower has good, indefeasible
and  marketable  title to and fee simple  ownership of, or valid and  subsisting
leasehold  interests in, all of its Real Property,  and good title to all of its
other  Property,  in each  case,  free and clear of all Liens  except  Permitted
Liens.


                                       46
<PAGE>

                  (N) Financial  Statements;  Fiscal Year;  Pro Forma  Financial
Statements.

                                    (i) The audited  Consolidated balance sheets
                  of  Holdings  and  such  other   Persons   described   therein
                  (including the accounts of all Subsidiaries for the respective
                  periods during which a Subsidiary  relationship existed) as at
                  March 31, 1997, and the related statements of income,  changes
                  in stockholder's  equity,  and cash flow for the periods ended
                  on such dates, have been prepared in accordance with GAAP, and
                  present fairly in all material respects the financial position
                  of  Holdings  on a  Consolidated  basis at such  dates and the
                  results  of  Borrowers'  operations  for such  periods.  Since
                  December 31, 1997,  there has been no material  adverse change
                  in the condition,  financial or otherwise, of any Borrower and
                  such other Persons as shown on the Consolidated  balance sheet
                  as of such date.  The Fiscal Year of each Borrower ends on the
                  last Saturday of March of each year.

                                    (ii) The pro forma balance sheet of Holdings
                  on a Consolidated  basis,  copies of which have been delivered
                  to  Lender  ("Pro  Forma  Balance  Sheet"),  is the  unaudited
                  Consolidated  balance  sheet of  Holdings as of March 31, 1998
                  adjusted  to give  effect (as if such  events had  occurred on
                  such date) to (a) the Letters of Credit to be issued and Loans
                  to be advanced  on the  Closing  Date,  (b)  repayment  of all
                  outstanding  loans and other obligations of Borrowers to Prior
                  Lenders,  and (c) the  payment  of all legal,  accounting  and
                  other fees related to the foregoing transactions to the extent
                  known  at such  date.  Such Pro  Forma  Balance  Sheet  fairly
                  reflects  the pro forma  capitalization  of  Holdings  and its
                  Subsidiaries  as of March 31, 1998 after giving  effect to the
                  foregoing  transactions.  The Pro Forma Balance Sheet has been
                  certified by the chief financial officer of Holdings.

                                    (iii)   The   five  (5)   year   cash   flow
                  projections  of Holdings and its  Subsidiaries,  the projected
                  balance  sheets and profit and loss  statements  of each as of
                  the  Closing  Date,  copies of which  have been  delivered  to
                  Lender  (the   "Projections")   were  prepared  by  the  chief
                  financial  officer of  Holdings.  Such  Projections  represent
                  projections of future events that may or may not occur and are
                  based on assumptions  that may or may not prove to be accurate
                  and  should  not be relied  upon as  indicative  of the actual
                  results  that  may be  obtained  by each  Borrower;  provided,
                  however,  such  projections and assumptions  have been made by
                  the  management of Holdings  based on its good faith belief in
                  the  reasonableness  thereof in light of (i) the financial and
                  operating  condition  of Holdings  and each  Borrower and plus
                  their Subsidiaries  existing at the time such projections were
                  prepared  and (ii) the  prospects  for the  industry  in which
                  Holdings and Borrowers and their Subsidiaries compete existing
                  at the time such projections were prepared.

                  (O) Full Disclosure.  The financial  statements referred to in
Section  8.1(N)  above,  do not, nor does this  Agreement  or any other  written
statement  of  any  Borrower  to  Lender  (including,  without  limitation,  any
Borrower's  filings,  if any,  with the  Securities  and  Exchange  Commission),
contain any untrue statement of a material fact or omit a material fact known to
any Borrower  necessary to make the statements  contained  therein or herein not
misleading.  There is no fact  known to any  Borrower  which such  Borrower  has
failed to disclose to Lender in writing which materially


                                       47
<PAGE>

affects adversely or, so far as such Borrower can now reasonably  foresee,  will
materially affect adversely the Properties,  business,  prospects,  profits,  or
condition  (financial  or  otherwise)  of any  Borrower  or the  ability  of any
Borrower to perform this Agreement.

                  (P)  Pension  Plans.   Exhibit  8.1(P)  identifies  each  Plan
maintained,  sponsored or contributed  to by any Borrower.  With respect to each
Plan,  no  Borrower,  nor any ERISA  Affiliate  of Borrower  is, in any material
respect,  in violation of the applicable  provisions of ERISA, the IRC, or other
applicable laws. Except as set forth on Exhibit 8.1(P), within the six (6) years
prior to the date of this Agreement,  (a) no Prohibited Transaction with respect
to which any  Borrower  or any ERISA  Affiliate  of any  Borrower  may incur any
liability or Reportable Event has occurred with respect to any Plan, nor has any
Plan been the subject of a waiver of the minimum funding  standard under Section
412 of the IRC (other than with respect to a  Multiemployer  Plan (of which such
deficiency  such Borrower has no  knowledge));  (b) no Plan has  experienced  an
accumulated  funding  deficiency  under  Section 412 of the IRC; (c) no Lien has
been  imposed upon any  Borrower or any ERISA  Affiliate  of any Borrower  under
Section  412(n) of the IRC;  (d) no Plan has been amended in such a way that the
security  requirements of Section  401(a)(29) of the IRC apply; (e) no notice of
intent to  terminate a Plan has been  distributed  to affected  parties or filed
with the PBGC  under  Section  4041 of ERISA,  nor has any Plan been  terminated
under Section 4041(e) of ERISA;  (f) the PBGC has not instituted  proceedings to
terminate, or appoint a trustee to administer,  a Plan and no event has occurred
or condition exists which might  constitute  grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan;
(g) neither any Borrower nor any ERISA Affiliate of any Borrower would be liable
for any amount  pursuant  to Sections  4062,  4063 or 4064 of ERISA if all Plans
terminated as of the most recent  valuation dates of such Plans; (h) neither any
Borrower nor any ERISA Affiliate of any Borrower  maintains any employee welfare
benefit plan, as defined in Section 3(1) of ERISA,  which  provides any benefits
to an employee or the  employee's  dependents  with  respect to claims  incurred
after the employee  separates  from service other than is required by applicable
law;  (i) neither any  Borrower  nor any ERISA  Affiliate  of any  Borrower  has
incurred any material liability for any excise tax arising under Section 4972 or
4980B of the IRC and no fact or event  exists  which would give rise to any such
material liability;  and (j) except as disclosed on Exhibit 8.1(P),  neither any
Borrower  nor any ERISA  Affiliate  of any  Borrower  has incurred or expects to
incur any withdrawal liability to any Multiemployer Plan.

                  (Q) Taxes.  The  federal tax  identification  numbers for each
Borrower set forth on Exhibit 8.1(Q). Each Borrower has filed all federal, state
and local tax  returns  and other  reports it is required by law to file and has
paid,  or made  provision for the payment of, all taxes,  assessments,  fees and
other governmental, charges that are due and payable, except such taxes, if any,
as are being actively  contested in good faith and as to which adequate reserves
in accordance with GAAP have been provided. The provision for taxes on the books
of each Borrower is adequate in accordance with GAAP for all years not closed by
applicable statutes, and for its current Fiscal Year.

                  (R) Labor  Relations.  Except as described  on Exhibit  8.1(R)
attached hereto and made a part hereof, no Borrower is a party to any collective
bargaining  agreement,  and there are no grievances,  disputes or  controversies
with any union or any other organization of any Borrower's employees, or threats
of strikes,  work  stoppages  or any  asserted  pending  demands for  collective
bargaining by any union or  organization  in any case which could  reasonably be
expected to have a Material Adverse Effect.


                                       48
<PAGE>

                  (S)  Compliance  With  Laws.  Except as set  forth on  Exhibit
8.1(S),  each Borrower has duly complied in all material  respects with, and its
Properties, business operations and leaseholds are in compliance in all material
respects with, the  provisions of all federal,  state and local laws,  rules and
regulations  materially  applicable  to such  Borrower,  its  Properties  or the
conduct of its business, including, without limitation, OSHA, the Securities Act
of 1933,  the  Securities  Exchange Act of 1934,  the Fair Labor  Standards Act,
Environmental  Laws,  laws relating to income,  unemployment,  payroll or social
security taxes and Plans under ERISA, the Flood Disaster Protection Act of 1973,
the Consumer Credit  Protection Act, the Federal Trade Commission Act,  statutes
creating and governing the Bureau of Alcohol,  Tobacco and Firearms, and any and
all similar state  statutes or regulations  addressing,  or related to, the same
subjects as or comparable to those covered by such enumerated  federal statutes,
and there have been no material  citations,  notices or orders of  noncompliance
issued to any Borrower  under any such law,  rule or  regulation  which have not
been duly complied with in all material respects by such Borrower.

                  (T) Surety Obligations. Except as set forth on Exhibit 8.1(T),
no Borrower is  obligated  as surety or  indemnitor  under any surety or similar
bond or other contract  issued or entered into any agreement to assure  payment,
performance or completion of performance of any undertaking or obligation of any
Person.

                  (U) No Defaults. No event has occurred and no condition exists
which would, upon the execution and delivery of this Agreement or any Borrower's
performance hereunder,  constitute a Default or an Event of Default. No Borrower
is in  default,  and no  event  has  occurred  and  no  condition  exists  which
constitutes,  or which with the  passage of time or the giving of notice or both
would constitute, a default in the payment of any Indebtedness to any Person for
Money  Borrowed.  No Borrower is in default in any respect  under any  contract,
agreement  or  instrument  to  which  it is a party or by which it or any of its
property is bound which default could  reasonably be expected to have a Material
Adverse Effect.

                  (V) Brokers.  Except as set forth on Exhibit 8.1(V), there are
no claims for brokerage commissions, finder's fees or investment banking fees in
connection with the transactions contemplated by this Agreement.

                  (W)  Business  Locations;   Agent  for  Process.   During  the
preceding five (5) year period, no Borrower has had no office, place of business
or agent for  service  of process  located in any state or county  other than as
shown on Exhibit 8.1(W).

                  (X) Trade  Relations.  There  exists  no actual or  threatened
termination,  cancellation  or limitation of, or any  modification or change in,
the business  relationship between any Borrower and any customer or any group of
customers whose  purchases  individually or in the aggregate are material to the
business of the Borrowers taken as a whole, or with any material  supplier,  and
there exists no present condition or state of facts or circumstances which would
have a Material  Adverse  Effect on any  Borrower or prevent any Borrower to any
material  extent from  conducting  their business after the  consummation of the
transaction  contemplated by this Agreement in substantially  the same manner in
which it has heretofore been conducted.


                                       49
<PAGE>

                  (Y) Leases.  Exhibit  8.1(Y)(i)  attached hereto is a complete
listing  of all  capitalized  leases of each  Borrower  and  Exhibit  8.1(Y)(ii)
attached hereto is a complete listing of all operating leases of each Borrower.

                  (Z)  Investment  Company  Act. No  Borrower is an  "investment
company"  or a company  "controlled"  by an  "investment  company",  within  the
meaning of the Investment Company Act of 1940, as amended.

                  (AA) OSHA and  Environment  Compliance.  There are no material
outstanding unresolved citations,  notices or orders of non-compliance issued to
any Borrower relating to their respective business, assets, Property, leaseholds
or Equipment under any Environmental  Laws, rules or regulations.  Each Borrower
has been  issued all  material  applicable  federal,  state and local  licenses,
certificates or permits relating to all applicable Environmental Laws.

                  (BB) Senior  Indebtedness.  Each Borrower's  Obligations under
this Agreement and the  obligations of each Borrower under the Other  Agreements
are, and will continue to constitute,  Senior Debt or Senior  Indebtedness under
the terms of any agreement or instrument evidencing Subordinated Debt.

                  (CC)  Indebtedness.  No Borrower  has  Indebtedness  for Money
Borrowed other than Indebtedness expressly permitted by the provisions contained
in Section 9.2(C) hereof,  after giving effect to the transactions  contemplated
by this  Agreement,  the  Indenture,  and the payments being made on the Closing
Date.

                  (DD) True Copies of Charter and Other Documents. Each Borrower
has  furnished or caused to be  furnished to Lender true and complete  copies of
(a) all charter and other incorporation  documents (together with any amendments
thereto),  with  respect  to each  Borrower  and (b)  their  respective  by-laws
(together with any amendments thereto).

                  (EE) Certain  Transactions.  Except as listed and described on
Exhibit 8.1(EE)  hereto,  none of the officers,  directors,  or employees of any
Borrower,  or any of Borrower's  Subsidiaries is, as of the date hereof, a party
to any transaction  with Borrower,  such Subsidiary or Affiliate (other than for
services as employees,  officers and directors),  including, without limitation,
any contract,  agreement or other  arrangement  providing for the  furnishing of
services to or by, providing for rental of real or personal Property to or from,
or  otherwise  requiring  payments  to or from  any  officer,  director  or such
employee or any  corporation,  partnership,  trust or other  entity in which any
officer,  director,  or any such  employee has a  substantial  interest or is an
officer, director, trustee or partner.

                  (FF) No Borrower  maintains,  as of the Closing Date, any bank
accounts except as set forth on Exhibit 8.1(FF).

         8.2.     Reaffirmation. Each request for a Loan made by Borrowing Agent
pursuant to this Agreement or any of the other Loan Documents  shall  constitute
(i) an automatic  representation  and warranty by Borrowers to Lender that there
does not then exist any Default or Event of Default and (ii) a reaffirmation  as
of the date of said request of all of the  representations and warranties in all
material  respects of Borrowers  contained in this  Agreement and the other Loan
Documents.


                                       50
<PAGE>

         8.3.  Survival  of  Representations   and  Warranties.   Each  Borrower
covenants,  warrants  and  represents  to Lender  that all  representations  and
warranties of such Borrower contained in this Agreement or any of the other Loan
Documents shall be true in all material  respects at the time of such Borrower's
execution of this  Agreement and the other Loan  Documents and shall survive the
execution, delivery and acceptance thereof by Lender and the parties thereto and
the closing of the transactions  described therein or related thereto except for
representations  and warranties  which,  by their nature,  speak of a particular
date which  shall be deemed to have been made as of such  particular  date.  Any
Borrower  may,  at any time and from time to time  (and  subject  to  subsection
9.2(M)),  amend any one or more of the  Schedules  referred in this Section 8 or
add a Schedule to this Section 8 and any  representation  or warranty  contained
herein  which refers to any such  Schedule  shall from and after the date of any
such amendment refer to such Schedule as so amended; provided,  however, that in
no event  may any  Borrower  amend any such  Schedule  if the  existence  of the
information  contained in such amendment  would reflect or evidence a Default or
Event of Default.


SECTION 9. COVENANTS AND CONTINUING AGREEMENTS

         9.1. Affirmative Covenants.  During the Term and thereafter for so long
as there are any Obligations to Lender,  each Borrower  covenants  that,  unless
otherwise consented to by Lender in writing, it shall:

                  (A) Taxes and Liens.  Pay and discharge,  all material  taxes,
assessments and governmental charges upon it, its income and Properties and upon
the goods  evidenced by any documents  constituting  Collateral as and when such
taxes,  assessments  and charges are due and  payable,  except and to the extent
only that such taxes,  assessments  and charges are being actively  contested in
good faith and by appropriate  proceedings,  the applicable  Borrower  maintains
adequate  reserves  on its  books  therefor  in  accordance  with  GAAP  and the
nonpayment of such taxes, assessments and charges does not result in a Lien upon
any material  Properties  of such  Borrower  other than a Permitted  Lien.  Each
Borrower  shall also pay and  discharge any material  lawful  claims  which,  if
unpaid,  could  reasonably  be  expected  to become a Lien  against  any of such
Borrower's material Properties except for Permitted Liens.

                  (B) Tax Returns.  File all material  federal,  state and local
tax  returns  and other  reports  each  Borrower  is required by law to file and
maintain adequate reserves in accordance with GAAP for the payment of all taxes,
assessments,  governmental  charges,  and levies imposed upon it, its income, or
its profits, or upon any Property belonging to it.

                  (C) Payment of Bank Charges. Pay to Lender, on demand, any and
all fees, costs or expenses which Lender or any  Participating  Lender pays to a
bank or other similar institution (including,  without limitation, any fees paid
by the Lender to any Participating  Lender) arising out of or in connection with
(i) the  forwarding  to any  Borrower  or any  other  Person  on  behalf  of any
Borrower,  or by Lender or any Participating  Lender,  proceeds of loans made by
Lender to any Borrower  pursuant to this  Agreement and (ii) the  depositing for
collection by Lender or any Participating Lender of any check or item of payment
received or  delivered to Lender or any  Participating  Lender on account of the
Obligations.


                                       51
<PAGE>

                  (D)  Business  and  Existence.  Except as permitted by Section
9.2(A),  preserve and maintain its separate corporate existence and all material
rights,  privileges,  and franchises in connection  therewith,  and maintain its
qualification  and good  standing  in all  states in which the  failure to be so
qualified could  reasonably be expected to have a Material Adverse Effect on any
Borrower.

                  (E) Maintain  Properties.  Maintain its Properties in adequate
condition,  except for such Equipment  which is not materially  necessary to the
operation of such Borrower's  business,  reasonable wear and tear excepted,  and
make all necessary renewals, repairs,  replacements,  additions and improvements
thereto.

                  (F) Compliance with Laws. Comply in all material respects with
all laws, ordinances, governmental rules and regulations to which it is subject,
including,  without  limitation,  all Environmental Laws, and obtain and keep in
force any and all material licenses, permits,  franchises, or other governmental
authorizations from, give all such notices promptly to, register, enroll or file
promptly all such  agreements,  instruments or documents  required by applicable
laws with, and promptly take all such other legally required action with respect
to, any  governmental or regulatory  authority,  agency or official,  including,
without  limitation,  any state or federal agency or subdivision  that regulates
environmental  activities  or is otherwise  involved in  monitoring or enforcing
Environmental  Laws as is required  under any provision of any  applicable  law,
except  where the  failure to do so could not  reasonably  be expected to have a
Material Adverse Effect on any Borrower.

                  (G) ERISA Compliance.  (i) At all times make prompt payment of
contributions  required to meet the minimum funding standards set forth in ERISA
to the extent  applicable  with respect to each Plan;  (ii)  promptly  after the
filing  thereof,  furnish to Lender copies of any annual  report  required to be
filed pursuant to ERISA in connection with each Plan and its  Affiliates;  (iii)
notify  Lender  as  soon  as  practicable  of any  Reportable  Event  and of any
additional  act or  condition  arising  in  connection  with any Plan  which any
Borrower  believes might constitute  grounds for the termination  thereof by the
Pension Benefit  Guaranty  Corporation or for the appointment by the appropriate
United  States  district  court of a trustee to  administer  the Plan;  and (iv)
furnish to Lender,  promptly upon Lender's  request  therefor,  such  additional
information concerning any Plan as may be reasonably requested.

                  (H) ERISA Events.  Furnish to Lender: (a) as soon as possible,
but in no event  later than  thirty  (30) days after any  Borrower  knows or has
reason to know that any Reportable  Event with respect to any Plan has occurred,
a statement of the Chief  Financial  Officer of such Borrower  setting forth the
details  concerning  such  Reportable  Event and the action which such  Borrower
proposes to take with  respect  thereto,  together  with a copy of the notice of
such  Reportable  Event given to the PBGC, if a copy of such notice is available
to such Borrower;  (b) promptly after receipt  thereof,  a copy of any notice of
any  potential  material  liability,  adverse  determination  letter,  ruling or
opinion any Borrower may receive from the PBGC or the Internal  Revenue  Service
with respect to any Plan; (c) when the same is made available to participants in
a Plan, all notices of a significant reduction in the rate of benefit accrual or
plan termination to the participants by the  administrator of such Plan; and (d)
promptly after receipt thereof,  any notice from any Multiemployer Plan to which
any Borrower or any ERISA Affiliate of any Borrower contributes which quantifies
any actual or potential  withdrawal


                                       52
<PAGE>

liability  which will or may be imposed upon the  withdrawal  of Borrower or any
ERISA Affiliate of any Borrower from such Multiemployer Plan.

                  (I)  Business  Records.  Keep  adequate  records  and books of
account with respect to its business activities in which proper entries are made
in accordance with GAAP reflecting all its financial transactions.

                  (J) Visits and Inspections.  Permit representatives of Lender,
from time to time,  as often as may be  reasonably  requested,  but only  during
normal business hours without undue disruption of the normal business operations
of Borrower,  to visit and inspect the Properties or Borrower,  inspect and make
extracts  from its  books  and  records,  and  discuss  with its  officers,  its
employees and the Accountants,  each Borrower's business,  assets,  liabilities,
financial condition, business prospects and results of operations.

                  (K) Financial  Statements.  Cause to be prepared and furnished
to Lender the following (all to be prepared in accordance with GAAP applied on a
consistent basis,  unless the Accountants  concur in any change therein and such
change is disclosed to Lender and is consistent with GAAP):

                           (i) as soon as practicable, but not later than ninety
                  (90) days after the close of each  Fiscal  Year of  Borrowers,
                  unqualified  audited  financial  statements  of  Holdings on a
                  Consolidated  basis as of the end of such year including,  but
                  not limited to, statements of income and stockholders'  equity
                  and cash flow from the  beginning  of the current  year to the
                  end of the current year and the balance sheet as at the end of
                  such year  together  with  consolidating  statements  for each
                  Borrower,  setting forth in comparative form the corresponding
                  figures   for  the   preceding   year,   reported  on  without
                  qualification as to the scope of the audit or as to the "going
                  concern"  status of each Borrower and its  Subsidiaries by the
                  Accountants;

                           (ii) as  soon as  practicable,  but  not  later  than
                  forty-five  (45) days after the end of each  month  hereafter,
                  unaudited  interim   Consolidated   financial   statements  of
                  Holdings  as of the end of such  month and of the  portion  of
                  Holdings Fiscal Year then elapsed, on a Consolidated basis, an
                  unaudited  balance sheet of Holdings and unaudited  statements
                  of income and  stockholders'  equity and cash flow of Holdings
                  reflecting  results of  operations  from the  beginning of the
                  year to the end of such  month  and for  such  month,  setting
                  forth in comparative  form the  corresponding  figures for the
                  comparable   period  in  the  preceding   year  together  with
                  consolidated  statements for each  Borrower,  certified by the
                  chief financial  officer of Holdings as prepared in accordance
                  with GAAP and fairly  presenting in all material  respects the
                  Consolidated  financial  position and results of operations of
                  Holdings  and its  Subsidiaries  for  such  month  and  period
                  subject only to changes  from audit and  year-end  adjustments
                  and except that such statements need not contain notes;

                           (iii) promptly  after the sending or filing  thereof,
                  as the case may be, copies of any proxy statements,  financial
                  statements or reports which any Borrower has made available to
                  its  shareholders,  the  Trustee  under the  Indenture  or the
                  holders  of the  Senior


                                       53
<PAGE>

                  Guaranteed  Notes and  copies  of any  regular,  periodic  and
                  special reports or registration  statements which any Borrower
                  files  with the  Securities  and  Exchange  Commission  or any
                  governmental  authority which may be substituted  therefor, or
                  any national securities exchange; and

                           (iv) promptly  after receipt  thereof,  copies of all
                  management letters and other material reports delivered by the
                  Accountants in connection  with any annual or interim audit of
                  any Borrower;

                           (v) at delivery of each annual financial statement, a
                  computation in reasonable  detail  showing  compliance by each
                  Borrower  with the  covenants  set  forth in  Sections  9.2(L)
                  hereof,  certified  by the  chief  financial  officer  of each
                  Borrower;

                           (vi) as soon as available,  and in any event no later
                  than  forty-five  (45) days after the end of each Fiscal Year,
                  deliver to Lender Consolidated Projections of Holdings for the
                  immediately succeeding Fiscal Year, on a month-by-month basis;
                  and

                           (vii) such other data and information  (financial and
                  otherwise)  as  Lender,  from  time to  time,  may  reasonably
                  request, bearing upon or related to the Collateral, Borrower's
                  financial  condition  or  results  of  operations,  including,
                  without  limitation,  consolidating  financial  statements for
                  Holdings, Borrowers and their Subsidiaries, federal income tax
                  returns  of  Holdings,   Borrowers  and  their   Subsidiaries,
                  accounts payable ledgers, and bank statements.

         Concurrently with the delivery of the financial statements described in
clause (i) of this Section  9.1(K),  Borrowing  Agent shall  forward to Lender a
copy of the  Accountants'  letter to  Holdings'  management  that is prepared in
connection with such financial statements. Concurrently with the delivery of the
financial  statements  described in clauses (i) and (ii) of this Section 9.1(K),
each Borrower  shall cause to be prepared and furnished to Lender a certificate,
in the form of the Compliance  Certificate  referenced in Section 9.1(O) hereof,
from the chief financial officer of each Borrower  certifying to Lender that, to
the  best  of his  knowledge,  Borrowers  have  kept,  observed,  performed  and
fulfilled each and every  covenant,  obligation and agreement  binding upon each
Borrower in this Agreement and the Other Agreements and that no Default or Event
of Default has occurred during the most recently  concluded  fiscal year, or, if
such Default or Event of Default has occurred,  specifying  the nature  thereof.
Notwithstanding the foregoing,  if any Borrower has sent to Lender the financial
statements  described in  subsections  (i) and (ii) of this Section 9.1(K) on or
prior to the date such  Borrower is required to deliver the same to Lender,  but
Lender has not  received  such  financial  statements  by such  date,  then such
Borrower  shall  have an  additional  five (5) days to  deliver  such  financial
statements  following  notice by Lender of its failure to receive the same which
notice may be given as provided in Section 12.1 hereof or by telephone.

                  (L) Notices to Lender.  Notify Lender in writing: (i) promptly
after learning thereof, of the commencement of any material litigation affecting
any Borrower or any of its Properties, whether or not the claim is considered by
such  Borrower  to be  covered  by  insurance,  and  of the  institution  of any
administrative  proceeding which could reasonably be expected to have a Material
Adverse Effect on such Borrower and its  Subsidiaries,  and their  properties or
Lender's Lien upon any


                                       54
<PAGE>

of the  Collateral;  (ii) at least  thirty  (30)  days  prior  thereto,  of such
Borrower's  opening  of any new  material  office  or place of  business  or any
Borrower's  closing of any material existing office or place of business;  (iii)
promptly after any Borrower's  learning  thereof,  of any labor dispute to which
such Borrower may become a party, any strikes or walkouts relating to any of its
plants or other facilities, and the expiration of any labor contract to which it
is a party  or by  which it is bound  if any  such  event  could  reasonably  be
expected to have a Material Adverse Effect on such Borrower; (iv) promptly after
any Borrower's  learning thereof,  of any material default by Borrower under any
note,  indenture,  loan  agreement,  mortgage,  lease,  deed,  guaranty or other
similar agreement relating to any Indebtedness for Money Borrowed of Borrower or
any of its Subsidiaries  exceeding  $500,000;  (v) promptly after any Borrower's
learning  thereof,  of any Default or Event of Default;  (vi) promptly after any
Borrower's  learning  thereof,  of any default by any obligor  under any note or
other  evidence of  Indebtedness  for Money  Borrowed  payable to Borrower in an
amount exceeding  $500,000;  (vii) promptly after the rendition thereof,  of any
judgment  rendered  against  any  Borrower  in an amount in excess of  $500,000;
(viii) at least ten (10) days prior thereto,  of any  Borrower's  opening of any
Dominion  Account not  identified in Exhibit  8.1(AF) and (ix) at least ten (10)
days prior thereto,  of any Borrower's opening of any bank account (other than a
Dominion Account) not identified in Exhibit 8.1(AF).

                  (M)  Landlord  Agreements.  Provide  Lender with copies of all
agreements  between any  Borrower  and any  landlord  which owns any premises at
which any books or records relating to Accounts may, from time to time, be kept.

                  (N)  Subordinations.  Provide  Lender with debt  subordination
agreements, in form and substance satisfactory to Lender, from any Person who is
an officer,  director or Affiliate  of any Borrower to whom such  Borrower is or
hereafter becomes indebted for Money Borrowed, subordinating in right of payment
and claim all of such  Indebtedness  and any future advances thereon to the full
and final payment and performance of the Obligations.

                  (O) Compliance Certificate.  Within ninety (90) days after the
end of each Fiscal Year, or more  frequently  if requested by Lender,  cause the
chief  financial  officer of each  Borrower  to prepare  and deliver to Lender a
Compliance  Certificate  in the form of Exhibit  9.1(O)  attached  hereto,  with
appropriate insertions.

                  (P) Environmental Matters.

                                    (i) Each  Borrower will ensure that the Real
                  Property remains in compliance with all Environmental Laws and
                  it will  not  place  or  permit  to be  placed  any  Hazardous
                  Substances  on any Real Property  except as not  prohibited by
                  applicable Law; except for such non-compliance which would not
                  have a Material Adverse Effect.

                                    (ii)  Each  Borrower   will   establish  and
                  maintain a system to assure and monitor  continued  compliance
                  by  it  in  all   material   respects   with  all   applicable
                  Environmental Laws which system shall include periodic reviews
                  of such  compliance  and shall be appropriate to the nature of
                  such Borrower's and any of its subsidiaries business.


                                       55
<PAGE>

                                    (iii)  Each  Borrower  will  use  reasonable
                  efforts  to (a)  employ  in  connection  with  use of the Real
                  Property   appropriate   technology   necessary   to  maintain
                  compliance  in  all  material  respects  with  any  applicable
                  Environmental  Laws and (b)  dispose of any and all  Hazardous
                  Waste  generated at the Real Property  only at facilities  and
                  with carriers  that maintain  valid permits under RCRA and any
                  other applicable Environmental Laws. To the extent required by
                  applicable  Environmental  Laws, the applicable Borrower shall
                  obtain  certificates  of  disposal,  such as  hazardous  waste
                  manifest receipts, from all treatment,  transport,  storage or
                  disposal  facilities  or  operators  in  connection  with  the
                  transport or disposal of any Hazardous  Waste generated at the
                  Real Property.

                                    (iv)  In the  event  any  Borrower  obtains,
                  gives or receives  written  notice of any Release or threat of
                  Release of a reportable  quantity of any Hazardous  Substances
                  at  the  Real  Property  (any  such  event  being  hereinafter
                  referred  to  as a  "Hazardous  Discharge")  or  receives  any
                  written  notice  of  violation,  request  for  information  or
                  notification   that   it  is   potentially   responsible   for
                  investigation  or cleanup of  environmental  conditions at the
                  Real Property, demand letter or complaint, order, citation, or
                  other written notice with regard to any Hazardous Discharge or
                  violation of Environmental Laws affecting the Real Property or
                  Borrower's  interest therein (any of the foregoing is referred
                  to herein as an "Environmental  Complaint") from any Person or
                  entity,  including any state agency responsible in whole or in
                  part for environmental  matters in the state in which the Real
                  Property  is  located  or  the  United  States   Environmental
                  Protection  Agency (any such person or entity  hereinafter the
                  "Authority"),   which  Hazardous  Discharge  or  Environmental
                  Complaint could  reasonably be expected to (a) have a Material
                  Adverse  Effect,  or (b) result in the imposition of a Lien in
                  excess of $200,000,  then such Borrower shall, within five (5)
                  Business  Days,  give written notice of same to Lender setting
                  forth facts and  circumstances  giving  rise to the  Hazardous
                  Discharge or Environmental  Complaint.  Such information is to
                  be provided to allow Lender to protect its  security  interest
                  in the Real  Property  and is not intended to create nor shall
                  it create any obligation upon Lender with respect thereto.

                                    (v) Each Borrower shall promptly  forward to
                  Lender copies of any request for information,  notification of
                  potential  liability,  demand  letter  relating  to  potential
                  responsibility with respect to the investigation or cleanup of
                  Hazardous Substances at any other site owned, operated or used
                  by such  Borrower  to dispose of  Hazardous  Substances  which
                  notice,  potential liability or potential responsibility could
                  reasonably be expected to (a) have a Material  Adverse Effect,
                  or  (b)  result  in the  imposition  of a Lien  in  excess  of
                  $200,000   and   shall   continue   to   forward   copies   of
                  correspondence   between  such   Borrower  and  the  Authority
                  regarding  such  claims to Lender  until the claim is settled.
                  Each Borrower shall  promptly  forward to Lender copies of all
                  documents and reports concerning a Hazardous  Discharge at the
                  Real Property (which  Hazardous  Discharge could reasonably be
                  expected  to  have  a  Material  Adverse  Effect),  that  such
                  Borrower  is required  to file under any  Environmental  Laws.
                  Such  information is to be provided  solely to allow Lender to
                  protect  Lender's  security  interest in the Real Property and
                  the Collateral.


                                       56
<PAGE>

                                    (vi) Each Borrower shall respond promptly to
                  any Hazardous  Discharge or  Environmental  Complaint and take
                  all  action  required  under  Environmental  Laws in  order to
                  safeguard the health of any Person and to avoid subjecting the
                  Collateral or Real Property to any Lien. If any Borrower shall
                  fail  to  respond  promptly  to  any  Hazardous  Discharge  or
                  Environmental  Complaint or any Borrower  shall fail to comply
                  with any of the requirements of any  Environmental  Laws which
                  failure  would  in  Lender's  reasonable  judgment  after  due
                  inquiry  could  reasonably  be expected to (a) have a Material
                  Adverse  Effect or (b) result in the  imposition  of a Lien in
                  excess of $200,000  Lender may, but without the  obligation to
                  do so, for the sole purpose of protecting Lender's interest in
                  Collateral  and on five (5) Business Days prior written notice
                  to such Borrower  (except in instances when Lender  reasonably
                  determines  after  due  inquiry  that an  emergency  situation
                  exists in which event only one (1) day's  notice  which may be
                  telephonic) shall be required:  (A) give such notices (if such
                  Borrower  has  failed  to do so) or (B)  enter  onto  the Real
                  Property (or  authorize  third  parties to enter onto the Real
                  Property)  and take  such  actions  as Lender  (or such  third
                  parties as directed by Lender)  deem  reasonably  necessary or
                  advisable after due inquiry, to clean up, remove,  mitigate or
                  otherwise   deal  with  any  such   Hazardous   Discharge   or
                  Environmental  Complaint  if such  Borrower has failed to take
                  each of the foregoing  actions prior to the  expiration of the
                  five  (5) day or one  (1)  day  notice  period,  whichever  is
                  applicable.  All  reasonable  costs and  expenses  incurred by
                  Lender (or such third  parties)  in the  exercise  of any such
                  rights,  including  any  sums  paid  in  connection  with  any
                  judicial or administrative investigation or proceedings, fines
                  and  penalties,  together with interest  thereon from the date
                  expended at the Default Rate for Loans  constituting Base Rate
                  Loans shall be paid upon demand by  Borrowers,  and until paid
                  shall be added to and become a part of the Obligations secured
                  by the Liens  created  by the terms of this  Agreement  or any
                  other agreement between Lender and Borrowers.

                                    (vii)  Promptly upon the written  request of
                  Lender,   which   request  shall  be  made  only  when  Lender
                  reasonably   believes  after  due  inquiry  that  a  Hazardous
                  Discharge  which can reasonably be expected to have a Material
                  Adverse  Effect has  occurred,  each  Borrower  shall  provide
                  Lender, at the Borrowers' expense,  with an environmental site
                  assessment  or  environmental  audit  report  prepared  by  an
                  environmental  engineering firm acceptable to Lender to assess
                  with a reasonable  degree of certainty  the  existence of such
                  Hazardous Discharge and the potential costs in connection with
                  abatement,  cleanup and removal of Hazardous  Substances found
                  on,  under,  at or within  the Real  Property.  Any  report or
                  investigation  of  such  Hazardous   Discharge   proposed  and
                  acceptable  to an  appropriate  Authority  that is  charged to
                  oversee the  clean-up  of such  Hazardous  Discharge  shall be
                  acceptable to Lender.

                                    (viii)  Each   Borrower   shall  defend  and
                  indemnify   Lender  and  hold  Lender,   and  its   respective
                  employees,  agents,  directors and officers  harmless from and
                  against all loss, liability, damage, claims, fines, penalties,
                  and  reasonable  costs  and  expenses,   including  reasonable
                  attorney's  fees,  suffered or incurred by Lender  under or on
                  account of the  application of any  Environmental  Laws to any
                  Borrower   or  any  of  its   Property,   including,   without
                  limitation, the assertion of any lien thereunder, with respect


                                       57
<PAGE>

                  to any  Hazardous  Discharge,  the  presence of any  Hazardous
                  Substances  affecting  the Real  Property,  whether or not the
                  same  originates  or  emerges  from the Real  Property  or any
                  contiguous  real  estate  (except  to the  extent  such  loss,
                  liability,  damage  and  expense,  claims,  costs,  fines  and
                  penalties  are caused by the gross  negligence,  (but not mere
                  negligence)  or willful  misconduct of Lender,  its employees,
                  agents, directors or officers), including any material loss of
                  value  of the Real  Property  as a  result  of the  foregoing.
                  Borrowers'  obligations  under this Section 9.1(Q) shall arise
                  upon the discovery of the presence of any Hazardous Substances
                  at the Real Property in violation of any  Environmental  Laws,
                  whether  or not any  federal,  state,  or local  environmental
                  agency has taken or threatened  any action in connection  with
                  the   presence  of  any   Hazardous   Substances.   Borrowers'
                  indemnifications  hereunder  shall survive the  termination of
                  this Agreement.

                                    (ix) For purposes of this Section 9.1(Q) all
                  references to Real Property  shall be deemed to include all of
                  each  Borrower's  right,  title and  interest in and to leased
                  premises.

                  (Q) Further Assurances.  At Lender's request, promptly execute
or cause to be executed and deliver to Lender any and all documents, instruments
and agreements  reasonably deemed necessary by Lender to give effect to or carry
out the  terms or  intent  of this  Agreement  or any of the  Other  Agreements.
Without limiting the generality of the foregoing,  if any of the Accounts arises
out of a contract with the United States of America, or any department,  agency,
subdivision or instrumentality  thereof,  the applicable Borrower shall promptly
notify Lender thereof in writing and execute, or cause its applicable Subsidiary
to execute,  any  instruments and take any other action  reasonably  required or
requested by Lender to comply with the  provisions of the Federal  Assignment of
Claims Act.

                  (R) Conduct of Business. Continue to engage, and cause each of
its Subsidiaries to continue to engage,  primarily in the businesses  engaged in
by it on the day prior to the Closing Date and such other businesses as shall be
reasonably related thereto.

                  (S) Notice of Amendments to Certain Documents. If (and on each
occasion that):  (a) any Borrower's  Certificate of  Incorporation or any of the
charter or other  incorporation  documents of any Borrower  shall at any time be
modified  or  amended  in any  material  respect  or if any new  filings of such
documents shall at any time take place;  or (b) any Borrowers'  by-laws shall at
any time be  modified or amended in any  material  respect;  then such  Borrower
will,  not later than ten (10) Business Days prior to the date on which any such
modification,  amendment,  supplement,  new  agreement or new filing shall first
become  effective,  furnish  to the  Lender  a true  and  complete  copy of such
modification, amendment, supplement or new filing.

                  (T) Payment of Indebtedness for Money Borrowed. Pay all of its
Indebtedness for Money Borrowed  (whether existing on the date hereof or arising
at any time  thereafter)  punctually  when and as the same shall  become due and
payable by it unless  prohibited  from doing so pursuant to the terms  hereof or
the terms of any agreement related to Subordinated Debt.


                                       58
<PAGE>

                  (U)  Performance  of Certain  Obligations.  Duly and  properly
perform,  observe  and  comply  in all  respects  with  all  of its  agreements,
covenants  and  obligations  under  each of the Other  Agreements  to which such
Borrower is or becomes a party or by which such Borrower is bound.

         9.2.  Negative  Covenants.  During  the  term  of this  Agreement,  and
thereafter  for so long as there are any  Obligations  to Lender,  each Borrower
covenants that,  unless Lender has first consented  thereto in writing,  it will
not:

                  (A)   Mergers;   Consolidations;    Acquisitions.   Merge   or
consolidate  with any Person,  nor acquire  all or any  substantial  part of the
Properties of any Person,  except (i) a consolidation or merger solely involving
a Borrower  and one or more of its wholly owned  Subsidiaries  or (ii) if, after
giving effect to any consolidation,  merger, or acquisition ("Acquisition"), (1)
a Borrower is the surviving  entity of any such merger or  consolidation  or (2)
such Borrower has acquired not less than  sixty-six and  two-thirds  percent (66
2/3%) of the issued and outstanding capital stock of such Person and such Person
becomes a Guarantor or a Borrower hereunder and (3) (a) Borrower is Solvent, (b)
no Default or Event of Default has occurred  which is then  continuing  or could
reasonably be  anticipated  to result  therefrom,  (c) the  Acquisition  is of a
Person or assets in the same  business  as such  Borrower  or  another  business
reasonably  related thereto,  (d) Lender has been given no less than thirty (30)
days prior written notice of any such Acquisition and shall be provided with all
information which it may reasonably request in connection with such Acquisition,
(e) such Borrower shall have delivered to Lender no later thirty (30) days prior
to  closing  of  the  Acquisition  a pro  forma  balance  sheet  and  cash  flow
projections  (which shall be based on reasonable  assumptions)  giving effect to
the Acquisition and with respect to such cash flow  projections,  cover the next
succeeding  twelve month period which shall  reflect the  continuing  compliance
with all financial  covenants  over such period,  (f) after giving effect to the
Acquisition,  no more than $10,000,000 of Loans and Letters of Credit shall have
been used in connection  with the financing of the payment of the purchase price
of such  Acquisition  and all other  Acquisitions,  (g) the cash  portion of the
total consideration paid to the sellers in connection with all such Acquisitions
which has been financed through the incurrence of indebtedness  shall not exceed
the  product  of (I)  five (5)  multiplied  by (II) an  amount  equal to (x) the
aggregate amount of Pro Forma EBITDA for the acquired  businesses or entities in
all such Acquisitions, calculated for each acquired business or entity as at the
time of the  Acquisition  thereof  based upon the then most  recently  available
twelve  months'  financial  statements  for such  business or entity,  (h) after
giving effect to any such Acquisition, Aggregate Adjusted Availability shall not
be less than an amount equal to $5,000,000,  (i) the terms and conditions of all
third party  financing  related to such  Acquisitions  must be  satisfactory  to
Lender in its reasonable discretion and (j) Lender shall have received, prior to
or  simultaneously  with the  closing  of each such  Acquisition,  an opinion of
counsel  reasonably  satisfactory  to  Lender  in  all  respects  covering  such
Borrower's  due  incorporation,  valid  existence,  good  standing and power and
authority  to enter into the  documents  contemplated  by the  Acquisition  (the
"Acquisition  Documents"),  the  due  authorization,   execution,  delivery  and
enforceability of the Acquisition Documents,  and such other matters as shall be
covered in any opinion  rendered in favor of such Borrower in  connection  which
such Acquisition ("Permitted Acquisition").

                  (B) Loans.  Make any loans or other  advances of money  (other
than for salary,  bonuses, stock options,  relocation,  travel and entertainment
advances,  advances  against  commissions  and  other  similar  advances  in the
ordinary course of business) to any Person, including,  without limitation,  any
of Borrower's Affiliates,  officers or employees, except that Borrowers may make
loans


                                       59
<PAGE>

or other advances to (i) its employees, suppliers and customers in an amount not
to exceed One Million  Dollars  ($1,000,000)  in the  aggregate  at any one time
outstanding and (ii) the other Borrowers, their Subsidiaries and CFP.

                  (C) Indebtedness For Money Borrowed. Create, incur, assume, or
suffer to exist, or permit any of its Subsidiaries to create, incur or suffer to
exist,  any Indebtedness for Money Borrowed,  except:  (i) Obligations  owing to
Lender;  (ii)  Indebtedness  of any  of  its  Subsidiaries  to  Borrower;  (iii)
Indebtedness  evidenced by the Senior  Guaranteed Notes (which such Indebtedness
may be paid only in  accordance  with the terms of the  Indenture as  originally
executed or  modified  with the prior  written  consent of Lender but may not be
voluntarily prepaid; in whole or in part except as permitted pursuant to Section
9.2(I); (iv) Permitted Purchase Money Indebtedness;  (v) liabilities arising out
of  endorsements  of checks  and other  negotiable  instruments  for  deposit or
collection  in the ordinary  course of  business;  (vi)  Indebtedness  issued in
connection with a Permitted Refinancing; (vii) Indebtedness set forth on Exhibit
9.2(C);  (viii) Indebtedness in connection with sale and leaseback  transactions
otherwise  permitted under Section 9.2(L);  (ix)  Indebtedness  arising from the
issuance of Subordinated Repurchase Notes up to an aggregate principal amount of
$3,000,000;  and (x) other  Indebtedness for Money Borrowed in the aggregate not
to  exceed  the  sum of  Five  Million  Dollars  ($5,000,000)  at any  one  time
outstanding.

                  (D) Affiliate  Transactions.  Enter into, or be a party to any
transaction with any Affiliate or stockholder,  except in the ordinary course of
or pursuant to the reasonable  requirements of, any Borrower's business and upon
fair and reasonable  terms which are fully  disclosed to Lender and which are no
less  favorable to such Borrower than such Borrower would obtain in a comparable
arm's length  transaction  with a Person not an Affiliate or stockholder of such
Borrower.  The  foregoing  provision  shall  not  restrict  (i)  any  employment
agreement  entered into by any  Borrower in the ordinary  course of business and
consistent with the past practices of such Borrower,  (ii) transactions  between
or among any of the Borrowers and the  Borrowers'  Subsidiaries,  (iii) payments
and  transactions  pursuant  to the  Management  Agreement  as in  effect on the
Closing Date and (iv) transactions permitted by Section 9.2(J) hereof.

                  (E) Partnerships or Joint Ventures.  Become or agree to become
a general or limited  partner in any general or limited  partnership  or a joint
venture in any joint venture which would require an aggregate  investment by any
Borrower  of greater  than  $1,000,000  if funded with Loans and  $5,000,000  if
funded from other sources provided that such Borrower provides Lender with prior
written notice of any such investment and such investment is made at a time when
no Event of Default exists.

                  (F) Adverse  Transactions.  (i) Enter into any transaction the
performance  of which would result in a material  violation of this Agreement or
any Other Document,  (ii) enter into any  transaction,  which would, at the time
such  transaction is entered into,  reasonably be anticipated to have a Material
Adverse Effect, or (iii) permit or agree to any material  extension,  compromise
or  settlement  or make any change or  modification  of any kind or nature  with
respect to any Account,  including any of the terms relating thereto, other than
any of the foregoing in the ordinary  course of business,  all of which shall be
reflected in the Schedules of Accounts  submitted to Lender  pursuant to Section
5.2 of this Agreement.


                                       60
<PAGE>

                  (G) Guaranties.  Guarantee,  assume, endorse or otherwise,  in
any way, become directly or contingently liable with respect to the Indebtedness
of any Person except (i) for  endorsement of instruments or items of payment for
deposit  or  collection,  (ii) one or more  guarantees  for the  benefit  of any
Borrower with respect to the Obligations and the Senior Guaranteed Notes,  (iii)
guarantees by Borrower or any of its Subsidiaries in lieu of any loans permitted
by the  provisions  of Section  9.2(B);  (iv)  guarantees  existing  on the date
hereof;  (v) Borrowers and their  Subsidiaries may become and remain liable with
respect to guarantees in respect of obligations to pay purchase price, customary
indemnification and purchase price adjustment  obligations  incurred pursuant to
any Permitted Acquisitions or in connection with sales of assets; (vi) Borrowers
and their  Subsidiaries  may become and remain  liable under  guarantees  in the
ordinary  course of business to or of the  obligations of suppliers,  customers,
franchisees and licensees of Borrowers and their  Subsidiaries;  (vii) Borrowers
and their  Subsidiaries  may  become  and remain  liable  with  respect to other
guarantees that are expressly  subordinated  by their terms to the  Obligations;
provided that the maximum  aggregate  liability,  contingent  or  otherwise,  of
Borrowers and their  Subsidiaries in respect of all such guarantees  shall at no
time exceed $2,000,000.

                  (H)  Limitation  on Liens.  Create or suffer to exist any Lien
upon any of its  property,  income or  profits  whether  now owned or  hereafter
acquired  except:  (i) Liens at any time granted in favor of Lender;  (ii) Liens
for taxes  (excluding  any Lien  imposed  pursuant to any of the  provisions  of
ERISA) not yet due or being contested as permitted by Section 9.1(A) hereof, but
only  if in  Lender's  commercially  reasonable  judgment  such  Lien  does  not
materially affect adversely  Lender's rights or the priority of Lender's Lien in
the  Collateral;  (iii)  Liens  securing  the claims or demands of  materialmen,
mechanics, carriers,  warehousemen,  landlords and other like Persons for labor,
materials, supplies or rentals incurred in the ordinary course of any Borrower's
business,  but only if the payment  thereof is not at the time required and only
if such Liens are junior to the Liens in favor of Lender;  (iv) Liens  resulting
from  deposits  made in the  ordinary  course of  business  in  connection  with
workmen's compensation,  unemployment insurance,  social security and other like
Laws;  (v)  attachment,  judgment and other  similar  non-tax  Liens  arising in
connection with court proceedings,  but only if and for so long as the execution
or other enforcement of such Liens is and continues to be effectively stayed and
bonded on appeal in a manner  satisfactory to Lender for the full amount thereof
the validity  and amount of the claims  secured  thereby are being  contested in
good faith and by appropriate lawful proceedings,  and such Liens do not, in the
aggregate, materially detract from the value of the Property of such Borrower or
materially impair the use thereof in the operation of such Borrower's  business;
(vi) Purchase Money Liens securing Permitted Purchase Money Indebtedness;  (vii)
reservations,   exceptions,   easements,   rights  of  way,  and  other  similar
encumbrances  affecting Real Property,  provided that, in Lender's  commercially
reasonable  judgment,  they do not in the aggregate  materially detract from the
value of said Properties or materially  interfere with their use in the ordinary
conduct of such  Borrower's  business;  (viii) Liens securing  Indebtedness of a
Subsidiary of any Borrower to any  Borrower;  (ix) such other Liens as appear on
Exhibit 9.2(H) attached hereto; and (x) such other Liens as Lender may hereafter
approve in writing.

                  (I)  Subordinated  Debt. Make, or take any action to authorize
or effect, any payment of principal,  interest, fees or charges on or in respect
of any payment of any part or all of any  Subordinated  Debt in violation of the
subordination  provisions  relating  to such  Subordinated  Debt or  voluntarily
prepay any  Subordinated  Debt;  or otherwise  repurchase,  redeem or retire any
instrument  evidencing any such  Subordinated  Debt prior to maturity;  or enter
into any  agreement  (oral or  written)


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<PAGE>

to  amend,  modify,  alter (in any  manner  materially  adverse  to  Lender)  or
terminate any one or more  instruments  or agreements  evidencing or relating to
any Subordinated Debt, except that any Borrower may prepay,  repurchase,  redeem
or retire any  Subordinated  Debt prior to maturity  out of the  proceeds of the
issuance of capital  stock,  any other  equity  contribution  permitted  by this
Agreement  or the issuance of  Indebtedness  in a Permitted  Refinancing  of the
Subordinated Debt so prepaid, repurchased, redeemed or retired.

                  (J)  Distributions.  Declare  or make  any  (i)  Distributions
required  to allow  repurchase  of equity  held by  management  pursuant  to the
Stockholders  Agreement  not to exceed (x) in any Fiscal Year an amount equal to
the Cash Flow for the immediately  preceding Fiscal Year so long as after giving
effect to such  Distribution,  Borrowers  shall have not less than $5,000,000 of
Aggregate Adjusted Availability  (including payments on Subordinated Debt issued
to such  investors  in lieu of cash) or (y) in any twelve  (12) month  period an
amount  not  to  exceed  $500,000  so  long  as  after  giving  effect  to  such
Distribution Borrowers shall have not less than $7,500,000 of Aggregate Adjusted
Availability  (including  payments on Subordinated Debt issued to such investors
in lieu of cash),  (ii)  Distributions to CFP and Holdings required to pay their
franchise  taxes and other fees and  expenses  related to  maintenance  of their
respective corporate  existences,  (iii) Distributions to make interest payments
to the  holders of the Senior  Guaranteed  notes,  (iv)  Distributions  to First
Atlantic Capital,  Ltd. pursuant to the terms of the Management  Agreement,  (v)
Distributions to First Atlantic  Capital,  Ltd. for investment  banking advisory
fees for each Permitted Acquisition and/or any other financing transaction in an
amount  not to exceed,  with  respect to each  Permitted  Acquisition  2% of the
transaction value and, with respect to each other financing  transaction,  2% of
the gross  proceeds of such  transaction  (as determined in good faith by senior
management of the  Borrowers)  and (vi)  Distributions  by Quality and Custom to
Holdings.

                  (K)  Subsidiaries.  Hereafter  create  any  Subsidiary  of any
Borrower without giving Lender advance notice of the name of such Subsidiary and
the nature of its intended  business and such  Subsidiary has become a Guarantor
or  divest  itself of any  material  assets  by  transferring  them to any other
Subsidiary of Borrower  which has not become a Guarantor and to whose  existence
Lender has not consented; provided, however, that (i) subject to Section 9.2(A),
any Borrower may create a Subsidiary  for purposes of effecting the  acquisition
of another  corporation  through a merger,  a stock  purchase  transaction or an
asset purchase  transaction  and may transfer to such  Subsidiary  cash or other
property for purposes of paying the purchase  price in such  acquisition as well
as related fees and expenses,  (ii) subject to Section 9.2(A),  any Borrower may
acquire  another  corporation  that  becomes a  Subsidiary  pursuant  to a stock
purchase  transaction or a merger and (iii) any Borrower may create a Subsidiary
and  transfer  property to such  Subsidiary  to the extent  permitted by Section
9.2(E).

                  (L)   Capital   Expenditures.    Make   Capital   Expenditures
(including,  without limitation, by way of capitalized leases) in the aggregate,
as to all  Borrowers,  in excess of the sum Seven Million  Dollars  ($7,000,000)
("Annual Amounts") for any Fiscal Year, provided, however, the unused portion of
any  Annual  Amount  in any  Fiscal  Year not to  exceed  Five  Million  Dollars
($5,000,000) may be used by Borrowers in the immediately  succeeding Fiscal Year
in addition to the Annual Amount for such succeeding year.

                  (M) Business  Locations.  Transfer their respective  principal
place of business or chief executive  office,  or open new locations or transfer
existing locations,  or maintain warehouses or


                                       62

<PAGE>

records  with respect to Accounts,  to or at any  locations  other than those at
which the same are  presently  kept or  maintained,  except upon at least thirty
(30) days prior  written  notice to Lender and after the  delivery  to Lender of
financing  statements,  if required by Lender, in form satisfactory to Lender to
perfect or continue  the  perfection  of  Lender's  Lien and  security  interest
hereunder.

                  (N) Change of Business.  Enter into any new business unrelated
to the business  conducted as of the Closing Date or make any material change in
any Borrowers business objectives, purposes and operations.

                  (O) Disposition of Assets. Sell, lease or otherwise dispose of
or transfer any of its  respective  Properties,  including  any  disposition  of
Property  as part of a sale  and  leaseback  transaction,  to or in favor of any
Person, except (i) sales of inventory in the ordinary course of business, (ii) a
transfer of Property to a Borrower by a Subsidiary  of such  Borrower or another
Borrower or Guarantor,  (iii) if an Event of Default shall not have occurred and
be continuing,  dispositions of tangible fixed assets ("Disposed  Asset") to the
extent  such  fixed  assets are  replaced  with  fixed  assets of similar  kind,
function  and  value,  provided  the  replacement  asset  shall  be  ordered  or
construction commenced no later than one hundred eighty (180) days following any
disposition  of the asset to be  replaced,  the  replacement  asset (which shall
constitute  Collateral provided that the Disposed Asset constituted  Collateral)
shall  be free and  clear  of Liens  other  than  Permitted  Liens  that are not
Purchase  Money  Liens and  Borrowers  shall give  Lender at least five (5) days
prior written notice of such disposition, (iv) if any Event of Default shall not
have occurred and be continuing, dispositions of tangible fixed assets which, in
the aggregate  during any  consecutive  twelve month period,  have a fair market
value or book value,  whichever  is less,  of  $500,000,  provided  that the Net
Proceeds thereof are applied as provided in Section 2.2(C), and (v) any sale and
leaseback  transaction  where the lease is an operating  lease, and any sale and
leaseback transaction otherwise permitted by Section 9.2(L).

                  (P) Name of Borrower.  Use any corporate  name (other than its
own) or any  fictitious  name,  tradestyle  or  "d/b/a"  other  than  the  names
disclosed on Exhibit  9.2(P)  attached  hereto except after at least thirty (30)
days  prior  written  notice  has been  provided  to Lender  and Lender has been
provided  with a  tradestyle  letter  relating  thereto  in form  and  substance
reasonably satisfactory to Lender.

                  (Q) Use of Lender's Name. Without the prior written consent of
Lender,  use the name of  Lender  or the name of any  Affiliates  of  Lender  in
connection with any Borrower's business or activities, except (i) as required by
law, (ii) in connection with the enforcement of its rights under this Agreement,
(iii) in connection with internal business matters, (iv) as required in dealings
with  governmental  agencies  and  financial  institutions,  (v) in filings with
governmental  agencies under the federal and state  securities laws, (vi) in its
financial  statements,  and (vii) in other  statements  to the extent  that such
statements  include  information  previously  known to the Persons to which such
statements are addressed or generally known to the public and to trade creditors
of Borrowers solely for credit reference purposes.

                  (R) Margin Securities. Own, purchase or acquire (or enter into
any  contract to purchase or acquire)  any "margin  security"  as defined by any
regulation  of the  Federal  Reserve  Board as now in  effect or as the same may
hereafter be in effect  unless,  prior to any such  purchase or  acquisition  or
entering  into any such  contract,  Lender  shall  have  received  an opinion of
counsel


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<PAGE>

satisfactory to Lender to the effect that such purchase or acquisition  will not
cause this  Agreement to violate  Regulations G or U or any other  regulation of
the Federal Reserve Board then in effect.

                  (S)  Restricted  Investment.  Except as otherwise  provided in
Section 9.2(E) hereof,  make or have, or permit any of its  Subsidiaries to make
or have, any Restricted Investment.

                  (T) Fiscal  Year.  Change its Fiscal  Year from a Fiscal  Year
ending on the last Saturday of each March of each year.

                  (U) Stock of Subsidiary, Etc. Sell or otherwise dispose of any
shares of capital stock of any of its Subsidiaries,  except in connection with a
transaction permitted under Section 9.2(A).

                  (V) Tax  Consolidation.  File or  consent to the filing of any
consolidated income tax return with any Person other than its Subsidiaries.

                  (W) ERISA.  Adopt or agree to  contribute to any Plan which is
subject to Title IV of ERISA  except  for any Plan set forth on  Exhibit  9.2(W)
provided  that Lender has been provided with  satisfactory  evidence  indicating
that  Borrower  does not have any  material  withdrawal  liability  in excess of
$500,000 with respect to such Plan.

                  (X)  Other  Agreements.  Enter  into any  material  amendment,
waiver or modification of any material agreements or its respective  Certificate
of Incorporation,  By-Laws or shareholders  agreements the result of which would
have a Material Adverse Effect on any Borrower.


SECTION 10. CONDITIONS PRECEDENT

         Notwithstanding  any other  provision  of this  Agreement or any of the
Other Agreements, and without affecting in any manner the rights of Lender under
the other  Sections of this  Agreement,  it is understood and agreed that Lender
will not make the initial Loans or cause the issuance of the initial  Letters of
Credit under Section 2 of this Agreement  unless and until each of the following
conditions  has  been,  and at the  time of such  initial  extension  of  credit
continues to be, satisfied, all in form and substance reasonably satisfactory to
Lender and its counsel:

         10.1.   Documentation.   Lender  shall  have   received  the  following
documents,  each to be in form and substance  reasonably  satisfactory to Lender
and its counsel:

                  (A) Certified  copies of each  Borrower's  casualty  insurance
policies,  together with loss payable  endorsements on Lender's standard form of
loss payee endorsement naming Lender as loss payee, and certified copies of each
Borrower's  liability  insurance  policies,  together with  endorsements  naming
Lender as a co-insured;

                  (B) Copies of all filing receipts or acknowledgments issued by
any governmental  authority to evidence any filing under the Uniform  Commercial
Code in applicable jurisdictions necessary to perfect the Liens of Lender in the
Collateral, and the Liens of Lender in the collateral granted to Lender pursuant
to each  Subsidiary  Security  Agreement  which Liens are subject to the


                                       64
<PAGE>

Uniform  Commercial  Code, and evidence in a form acceptable to Lender that such
Liens constitute valid and perfected  security  interests and Liens,  having the
Lien priority specified in Section 4.2(B) hereof;

                  (C) A  copy  of  the  Certificate  of  Incorporation  of  each
Borrower  and each  Guarantor,  and all  amendments  thereto,  certified  by the
Secretary  of  State  or  other  appropriate  official  of its  jurisdiction  of
incorporation  and a true and accurate  copy of the By-Laws of each Borrower and
each Guarantor in effect as of the Closing Date, certified by such corporation's
secretary;

                  (D) Good  standing  certificates  for each  Borrower  and each
Guarantor,  issued by the  Secretary of State or other  appropriate  official of
each  Borrower's or such  Guarantor's  jurisdiction  of  incorporation  and each
jurisdiction  where such  Borrower or such  Guarantor  is qualified as a foreign
corporation;

                  (E) A closing  certificate  signed by the  President and Chief
Financial  Officer of each Borrower and each  Guarantor  dated as of the Closing
Date, stating that (i) the representations and warranties set forth in Section 8
hereof are true and  correct in all  material  respects  on and as of such date,
(ii) each Borrower is on such date in  compliance in all material  respects with
all the terms and  provisions set forth in this Agreement and (iii) on such date
no Default or Event of Default has occurred or is continuing;

                  (F)  Landlord  waivers  or access  agreements  duly  executed,
accepted and  acknowledged by or on behalf of each of the landlords with respect
to locations where a material amount of Collateral is located;

                  (G) The Other  Agreements  duly executed and delivered by each
required signatory thereto;

                  (H) the favorable  written  opinion of (i) O'Sullivan  Graev &
Karabell, counsel to Borrowers, substantially in the form of Exhibit 10.1(I)(i),
(ii) Falk & Sharp and (iii) McCausland, Keen & Buckman.

                  (I) Written  instructions  from  Borrowing  Agent on behalf of
Borrowers  directing the application of proceeds of any Loan to be made pursuant
to this Agreement on the Closing Date, and an initial Borrowing Base Certificate
from Borrowers reflecting that Borrowers have Eligible Accounts and Inventory in
amounts  sufficient in value and amount to support Revolving Credit Loans in the
amount requested by Borrowers on the date of such certificate;

                  (J) Duly executed  agreements from each Borrower  establishing
the Dominion Account for the collection or servicing of the Accounts;

                  (K) Copies of any and all  domestic  and foreign  governmental
consents,   authorizations,   orders  or  approvals   necessary  to  permit  the
effectuation  of the  transactions  contemplated by this Agreement and the Other
Agreements  and such  consents  and  waivers of third  parties  that have claims
against  the  Collateral,  as  Lender  and its  counsel  shall  reasonably  deem
necessary;


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<PAGE>

                  (L) Copies of the resolutions in form and substance reasonably
satisfactory  to it, of the Board of Directors of each Borrower  authorizing the
execution, delivery and performance of this Agreement, the Loans, Notes, and the
Other Agreements on behalf of each Borrower which is a party thereto;

                  (M)  Evidence  reasonably  satisfactory  to Lender that (i) no
litigation,   investigation  or  proceeding  before  or  by  any  arbitrator  or
governmental  authority shall be continuing or threatened  against any Guarantor
or any Borrower or against the  officers or  directors  of any  Guarantor or any
Borrower (A) in connection  with the Loan  Documents or any of the  transactions
contemplated  thereby and which, in the reasonable  opinion of Lender, is deemed
material or (B) which could  reasonably  be expected to have a Material  Adverse
Effect on any Borrower; and (ii) no injunction, writ, restraining order or other
order of any nature  materially  adverse to any  Borrower  or the conduct of its
business  or  inconsistent   with  the  due  consummation  of  the  transactions
contemplated hereby shall have been issued by any governmental authority;

                  (N) Any Borrower shall have discharged, or simultaneously with
(or from the proceeds of) the initial  Revolving Credit Loan and Term Loan shall
discharge, all of its obligations under its existing financing arrangements with
Prior  Lender,  including,  without  limitation,  costs,  fees and  expenses  in
connection therewith; and

                  (O) Such other documents, instruments and agreements as Lender
may reasonably request.

         10.2. Other Conditions.  The following conditions have been, and at the
time  of the  initial  extension  of  credit  hereunder  shall  continue  to be,
satisfied, in the sole discretion of Lender:

                  (A) No Default or Event of Default shall exist;

                  (B) Each of the  conditions  precedent  set forth in the Other
Agreements shall have been satisfied;

                  (C) Since  December 31, 1997 there shall not have occurred any
material  adverse  change in the  business,  financial  condition  or results of
operations of any  Guarantor or any  Borrower,  or the existence or value of any
material  Collateral,  or any event,  condition  or state of facts  which  would
reasonably be expected to have a Material  Adverse Effect on any Borrower or any
Guarantor;

                  (D)  No  action,  proceeding,  investigation,   regulation  or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin,  restrain or prohibit,  or to
obtain damages in respect of, or which is related to or arises out of Borrowers'
prior credit facility, this Agreement, the Other Agreements, or the consummation
of the transactions  contemplated  hereby or which would be reasonably likely to
result in a Material Adverse Effect on any Borrower or any Guarantor;

                  (E) Lender shall have received such certificates and documents
reflecting  the Solvency of each  Borrower and each  Guarantor,  as Lender shall
find acceptable,  including, without


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<PAGE>

limitation,   Consolidated   pro-forma  balance  sheets,   forecasted  financial
statements  consisting  of  balance  sheets,  income  statements  and cash  flow
statements for Holdings on a Consolidated basis covering at least the three-year
period commencing on the Closing Date, prepared by Holdings and a fair valuation
balance  sheet for Holdings on a  Consolidated  basis showing that each Borrower
and Guarantor is Solvent;

                  (F) All instruments and documents  required hereby or relating
to each  Borrower's  capacity and authority to execute the Other  Agreements and
such other  agreements,  instruments,  certificates,  opinions and assurances as
Lender may reasonably  request,  and all procedures in connection herewith would
be subject to Lender's  approval and the approval of Lender's counsel as to form
and substance.

                  (G) Each of the  representations  and warranties  made by each
Borrower in or pursuant to this  Agreement and any of the Other  Agreements  and
each  of the  representations  and  warranties  contained  in  any  certificate,
document  or  financial  or  other  statement  furnished  any  time  under or in
connection  with this Agreement or any Other Agreement shall be true and correct
in all  material  respects  on and as of such  date as if made on and as of such
date.

                  (H) Receipt by Lender of fully paid mortgagee  title insurance
policies (or binding  commitments to issue title insurance  policies,  marked to
Lender's  satisfaction  to evidence  the form of such  policies to be  delivered
after the  Closing  Date),  in  standard  ALTA  form,  issued by  Chicago  Title
Insurance  Company or another title  insurance  company  satisfactory to Lender,
containing  such  endorsements as shall be required by Lender in an amount equal
to not less than  $4,000,000  insuring  the  Mortgages  to create a valid  first
priority and fourth  priority  Lien on all Real  Property  located at 5501 Tabor
Road,  Philadelphia,  Pennsylvania  and valid  Liens on the  leasehold  interest
described  therein with no  exceptions  which Lender shall not have  approved in
writing and no survey exceptions.

                  (I) Aggregate Adjusted  Availability on the Closing Date shall
exceed Eight Million Dollars ($8,000,000), calculated after (1) giving effect to
payment of all Indebtedness of Borrower to Prior Lender,  and (2) payment of all
out-of-pocket fees and costs incurred in connection with the Closing.

         10.3. Conditions to Each Loan. The agreement of Lender to make any Loan
requested to be made on any date  (including,  without  limitation,  the initial
Loans), is subject to the satisfaction of the following  conditions precedent as
of the date such Loan is made:

                  (A)    Representations    and   Warranties.    Each   of   the
representations  and  warranties  made by each  Borrower  in or pursuant to this
Agreement and by each  Borrower in any of the Other  Agreements to which it is a
party, and each of the representations and warranties of each Borrower contained
in any certificate, or other written statement furnished at any time pursuant to
this Agreement or any of the Other  Agreements  shall be true and correct in all
material  respects  on and as of such  date  as if made on and as of such  date,
except for  representations  and warranties  which, by their nature,  speak of a
particular  date which shall be true and correct in all material  respects as of
such particular date; and


                                       67
<PAGE>

                  (B) No  Default.  No Event of Default  or  Default  shall have
occurred and be  continuing  on such date, or would exist after giving effect to
the Loans requested to be made, on such date; provided,  however that Lender, in
its sole discretion, may continue to make Loans notwithstanding the existence of
an Event of Default or Default  and that any Loans so made shall not be deemed a
waiver of any such Event of Default or Default.


SECTION 11. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

         11.1.  Events  of  Default.  The  occurrence  of any one or more of the
following events shall constitute,  after giving effect to any applicable notice
or grace period set forth below, an "Event of Default":

                  (A) Payment of Loans.  Any failure to pay any  installment  of
principal,  interest  or  premium,  if any,  owing  on any  Loan on the due date
thereof (whether due at stated maturity, upon acceleration or otherwise).

                  (B)  Payment  of  Obligations.  Any  failure to pay any of the
Obligations  that are not  evidenced by a Note on the due date thereof  (whether
due at stated maturity, on demand, upon acceleration or otherwise).

                  (C) Misrepresentations. Any representation or warranty made by
any Borrower in this Agreement or by any Borrower or any Guarantor in any of the
Other  Agreements to which it is a party, or any  representation  or warranty of
any Borrower or any  Guarantor  contained in any  certificate  or other  written
statement  furnished at any time pursuant to this  Agreement or any of the Other
Agreements  proves to have been false or misleading in any material respect when
made.

                  (D) Breach of  Covenants.  Any  Borrower  shall breach (i) any
covenant  contained in Sections  4.4, 4.5, 4.6,  5.2,  9.1(A),  9.1(F),  9.1(J),
9.1(K),  9.1(L)(viii),  9.2 (other than  subsection  (P) thereof) or 9.3 of this
Agreement,  or (ii) any other covenant  contained in this Agreement or any other
Agreement  (other than a covenant a default in the  performance or observance of
which is dealt with specifically  elsewhere in this Section 11.1) and the breach
of such other covenant is not cured to Lender's  satisfaction within thirty (30)
days  after the  sooner  to occur of any  Borrower's  receipt  of notice of such
breach from Lender or the date on which such breach becomes known to any officer
of such Borrower.

                  (E)  Cancellation  of  Other  Agreements.  Any  of  the  Other
Agreements shall be cancelled,  terminated,  revoked or rescinded otherwise than
in  accordance  with  the  express  terms  thereof  or with  the  prior  written
agreement,  consent or approval of Lender;  or any action at law, suit in equity
or other  legal  proceeding  to  cancel,  revoke  or  rescind  any of the  Other
Agreements shall be commenced by or on behalf of any Borrower,  any Guarantor or
any other Person or Persons bound thereby,  or by any governmental or regulatory
authority  or  agency  of  competent  jurisdiction;  or any  court or any  other
governmental or regulatory  authority or agency of competent  jurisdiction shall
make a determination that, or shall issue a judgment, order, decree or ruling to
the effect that,  any one or more of the Other  Agreements or any one or more of
the obligations of any Borrower, any Guarantor


                                       68
<PAGE>

or of any other Person or Persons under any one or more of the Other  Agreements
are illegal, invalid or unenforceable in accordance with the terms thereof.

                  (F)  Insolvency,  Etc. Any  resolution  shall be passed or any
action  shall be taken by any  Borrower or any  Guarantor  for the  termination,
winding up,  liquidation  or  dissolution  of such  Person or its debts,  or any
Borrower shall make an assignment for the benefit of creditors,  or any Borrower
shall file a petition in voluntary liquidation or bankruptcy, or any Borrower or
any  Guarantor   shall  file  a  petition  or  answer  or  consent  seeking  the
reorganization  of such Person or the readjustment of any of the Indebtedness of
such person under  applicable  insolvency  or  bankruptcy  laws now or hereafter
existing,  or any Borrower or any Guarantor  shall consent to the appointment of
any receiver, administrator, liquidator, custodian or trustee of all or any part
of its property or assets, or corporate action shall be taken by any Borrower or
any  Guarantor or personal  action taken by any  Borrower or any  Guarantor,  in
either case for the purpose of effecting any of the foregoing.

                  (G)  Bankruptcy  Etc.  By  order  or  decree  of any  court of
competent  jurisdiction,  any Borrower or any Guarantor  shall be  adjudicated a
bankrupt  or  insolvent,   or  a  petition  for  proceedings  in  bankruptcy  or
liquidation or for the  reorganization  or the  readjustment of its Indebtedness
under applicable  bankruptcy or insolvency laws now or hereafter  existing shall
be filed  against any Borrower or any  Guarantor,  and any Borrower or Guarantor
shall admit the material allegations  thereof, or any order,  judgment or decree
shall be made approving  such petition and such order,  judgment or decree shall
not be vacated, set aside or stayed within sixty (60) days of their commencement
or any receiver, administrator, liquidator or trustee shall be appointed for any
Borrower or any  Guarantor or for all or any part of the property of such Person
and such receiver, administrator,  liquidator or trustee shall not be discharged
or his jurisdiction  shall not be relinquished,  vacated or stayed, on appeal or
otherwise, within sixty (60) days after his appointment.

                  (H) Other  Defaults.  There shall occur and be continuing  any
event  of  default  on the  part of any  Borrower  or any  Guarantor  (including
specifically,  but without limitation,  due to non-payment) under any agreement,
document or  instrument  to which any Borrower or any Guarantor is a party or by
which any Borrower or any of its Property is bound,  creating or relating to any
Indebtedness  for Money  Borrowed  (including,  but not  limited  to, the Senior
Guaranteed  Notes) in excess of $1,000,000 the occurrence  and  continuation  of
which  event of  default  gives the  holders of such  Indebtedness  the right to
accelerate the same.

                  (I) Uninsured  Losses;  Unauthorized  Dispositions.  Any loss,
theft, damage or destruction not fully covered by insurance (as required by this
Agreement  and  subject to such  deductibles  as Lender  shall have agreed to in
writing),  or sale,  lease or encumbrance of any of the Collateral or the making
of any levy, seizure, or attachment thereof or thereon which could reasonably be
expected to have a Material Adverse Effect on any Borrower and its Subsidiaries,
except in all cases as may be specifically permitted by other provisions of this
Agreement.

                  (J) Adverse Changes.  There shall occur any event or condition
which, in Lender's reasonable  discretion,  would have a Material Adverse Effect
on any Borrower and the Guarantors taken as a whole.

                  (K) Solvency.  Any Borrower or any Guarantor shall cease to be
Solvent.


                                       69
<PAGE>

                  (L)  Business  Disruption;  Condemnation.  There shall occur a
cessation of a substantial part of the business of any Borrower or any Guarantor
for a period which  significantly  affects such  Borrower's or such  Guarantor's
capacity to continue its  business,  on a profitable  basis,  the  occurrence of
which could  reasonably  be expected to have a Material  Adverse  Effect on such
Borrower or such  Guarantor;  or any Borrower or any Guarantor  shall suffer the
loss or  revocation  of any  material  license or permit  now held or  hereafter
acquired by any Borrower or any Guarantor which is necessary to the continued or
lawful  operation of its business,  the occurrence of which could  reasonably be
expected to have a Material Adverse Effect on any Borrower or any Guarantor;  or
any  Borrower  or any  Guarantor  shall be  enjoined,  restrained  or in any way
prevented by court,  governmental or administrative order from conducting all or
any  material  part of its  business  affairs,  the  occurrence  of which  could
reasonably be expected to have a Material  Adverse Effect on any Borrower or any
Guarantor.

                  (M) Change of Ownership.  (1) Any Borrower  shall cease to own
and control, beneficially and of record, at least fifty one percent (51%) of the
issued and  outstanding  capital stock of its  Subsidiaries;  (2) Holdings shall
cease to own and  control,  beneficially  and of  record,  at least one  hundred
percent  (100%) of the  issued  and  outstanding  capital  stock of  Custom  and
Quality;  or (3) any Person  other than CFP Group,  Inc.  shall own and control,
beneficially  and of record one hundred percent (100%) or more of the issued and
outstanding capital stock of Holdings.

                  (N) ERISA. A Reportable Event shall occur which Lender, in its
sole reasonable  discretion,  shall determine in good faith constitutes  grounds
for the  termination  by the  PBGC of any  Plan  or for the  appointment  by the
appropriate  United States  district  court of a trustee for any Plan, or if any
Plan shall be  terminated  by the PBGC or any such trustee shall be requested or
appointed,  or if any Borrower is in "default" (as defined in Section 4219(c)(5)
of ERISA) with respect to payments to a  Multiemployer  Plan resulting from such
Borrower's complete or partial withdrawal from such Plan.

                  (O)  Litigation.   Any  Borrower  or  any  Guarantor,  or  any
Affiliate  of  either,  shall  challenge  or  contest  in any  action,  suit  or
proceeding the validity or  enforceability of this Agreement or any of the Other
Agreements,  the legality or  enforceability  of any of the  Obligations  or the
perfection or priority of any Lien granted to Lender.

                  (P) Criminal  Forfeiture.  Any Borrower or any Guarantor shall
be  criminally  indicted  or  convicted  under  any  law  that  could  lead to a
forfeiture of any material Property of any Borrower or any Guarantor.

                  (Q) Judgments. Any final, unappealable money judgment, writ of
attachment  or similar  process is entered or filed  against any Borrower or any
Guarantor  or any of its  Property  ("Judgment")  and results in the creation or
imposition of any Lien that is not a Permitted Lien if (i) any Judgment  exceeds
$500,000 or the aggregate amount of all outstanding  Judgments for all Borrowers
and the  Guarantors  at such  time is in  excess  of  $1,000,000,  and (ii) such
Judgments are not discharged or stayed within forty (40) days.

         11.2. Acceleration of the Obligations.  Without in any way limiting the
right of Lender to demand payment of any portion of the  Obligations  payable on
demand in accordance with Section 3.4


                                       70
<PAGE>

hereof,  upon or at any time after the  occurrence  of an Event of  Default  and
during the  continuance  thereof as above  provided,  all or any  portion of the
Obligations  due or to become due from  Borrowers to Lender,  whether under this
Agreement, or any of the Other Agreements or otherwise,  shall, at the option of
Lender and  without  notice or demand by Lender,  become at once due and payable
and Borrowers shall forthwith pay to Lender, in addition to any and all sums and
charges due, the entire principal of and interest accrued on the Obligations.

         11.3.  Remedies.  Upon and after the occurrence of an Event of Default,
Lender shall have and may exercise  from time to time the  following  rights and
remedies:

                  (A) All of the rights and  remedies  of a secured  party under
the Code or under other applicable law, and all other legal and equitable rights
to which  Lender may be  entitled,  all of which  rights and  remedies  shall be
cumulative,  and none of which shall be  exclusive,  and shall be in addition to
any other  rights or remedies  contained  in this  Agreement or any of the Other
Agreements.

                  (B) The right to take immediate  possession of the Collateral,
and (i) to require  Borrowers and the Guarantors to assemble the Collateral,  at
Borrower's  expense,  and make it available to Lender at a place  designated  by
Lender which is reasonably  convenient to both parties, and (ii) to enter any of
the  premises  of  any  Borrower  and  the  Guarantors  or  wherever  any of the
Collateral shall be located.

                  (C) The proceeds  realized from the sale of any Collateral may
be applied,  upon collection,  first to the costs,  expenses and attorneys' fees
incurred by Lender in  collecting  the  Obligations,  in enforcing the rights of
Lender  under the Other  Agreements  and in  collecting,  retaking,  completing,
protecting, removing, storing, advertising for sale, selling and delivery any of
the  Collateral;  secondly,  to interest  due upon any of the  Obligations;  and
thirdly,  to the principal of the  Obligations.  If any deficiency  shall arise,
each Borrower and each Guarantor  shall remain  jointly and severally  liable to
Lender therefor.

         11.4.  Remedies  Cumulative;  No  Waiver.  All  covenants,  conditions,
provisions,  warranties,  guaranties,  indemnities,  and other  undertakings  of
Borrowers contained in this Agreement and of Borrowers and each Guarantor in the
Other  Agreements,  or in any  document  referred to herein or  contained in any
agreement  supplementary  hereto or in any  schedule or  contained  in any other
agreement  between  Lender  and  any  Guarantor  or  any  Borrower,  heretofore,
concurrently,  or hereafter entered into, shall be deemed cumulative to and not,
except as expressly  provided  thereby,  in derogation or substitution of any of
the terms, covenants,  conditions,  or agreements of Borrowers herein contained.
The failure or delay of Lender to exercise or enforce any rights, Liens, powers,
or  remedies  hereunder  or  under  any of the  aforesaid  agreements  or  other
documents or security or Collateral shall not operate as a waiver of such Liens,
rights,  powers and remedies,  but all such Liens, rights,  powers, and remedies
shall  continue  in full  force  and  effect  until  all  Loans  and  all  other
Obligations  owing or to become  owing from  Borrowers to Lender shall have been
fully satisfied, and all Liens, rights, powers, and remedies herein provided for
are cumulative and none are exclusive.


                                       71
<PAGE>

SECTION 12. MISCELLANEOUS

         12.1. Power of Attorney.  Borrowers hereby irrevocably designate, make,
constitute  and  appoint  Lender  (and all  Persons  designated  by  Lender)  as
Borrowers' true and lawful agent (and  attorney-in-fact) and Lender, or Lender's
agent,  may,  without  notice to any Borrower and in any  Borrower's or Lender's
name, but at the cost and expense of Borrower:

                  (A) At such time or times  hereafter  as Lender or said agent,
in its sole  discretion,  may  determine,  endorse  any  Borrower's  name on any
checks,  notes,  acceptances,  drafts,  money  orders or any other  evidence  of
payment or proceeds of the  Collateral  which come into the possession of Lender
or under  Lender's  control  pursuant  to the terms of this  Guarantor  Security
Agreement; and

                  (B) At such time or times upon or after the  occurrence  of an
Event of Default  and during the  continuance  thereof as Lender or its agent in
its sole  discretion may determine:  (i) demand payment of the Accounts from the
Account  Debtors,  enforce  payment  of the  Accounts  by legal  proceedings  or
otherwise,  and generally  exercise all of  Borrowers'  rights and remedies with
respect to the  collection of the  Accounts;  (ii) settle,  adjust,  compromise,
discharge  or  release  any of the  Accounts  or other  Collateral  or any legal
proceedings  brought to collect any of the Accounts or other  Collateral;  (iii)
sell or assign any of the Accounts  and other  Collateral  upon such terms,  for
such  amounts  and at such time or times as Lender  deems  advisable;  (iv) take
control,  in any  manner,  of any item of payment or  proceeds  relating  to any
Collateral;  (v) prepare,  file and sign any Borrower's name to a proof of claim
in bankruptcy or similar document against any Account Debtor or to any notice of
lien,  assignment or satisfaction of lien or similar document in connection with
any of the  Collateral;  (vi) receive,  open and,  unless any Borrower  requests
delivery  thereof to such Borrower after opening,  dispose of all mail addressed
to such  Borrower  and to notify  postal  authorities  to change the address for
delivery thereof to such address as Lender may designate; (vii) endorse the name
of any  Borrower  upon any of the items of payment or  proceeds  relating to any
Collateral  and  deposit  the same to the  account  of Lender on  account of the
Obligations;  (viii)  endorse the name of any Borrower  upon any chattel  paper,
document, instrument,  invoice, freight bill, bill of lading or similar document
or agreement  relating to the Accounts  and any other  Collateral;  (ix) use any
Borrower's  stationery and sign the name of any Borrower to verifications of the
Accounts and notices thereof to Account  Debtors;  (x) subject to any applicable
license  agreements,  use the  information  recorded on or contained in any data
processing equipment and computer hardware and software relating to the Accounts
and any other  Collateral  and to which any Borrower  has access;  (xi) make and
adjust  claims  under  policies  of  insurance;  and (xii) do all other acts and
things  necessary,  in  Lender's  reasonable   determination,   to  fulfill  any
Borrower's obligations under this Agreement.

         12.2.  Indemnity.  Each Borrower hereby agrees to indemnify  Lender and
hold Lender harmless from and against any liability,  loss, damage, suit, action
or  proceeding  ever  suffered  or  incurred  by  Lender  as the  result  of any
Borrower's  failure to observe,  perform or  discharge  such  Borrower's  duties
hereunder.  Without  limiting the  generality of the  foregoing,  this indemnity
shall  extend to any claims  asserted  against  Lender by any  Person  under any
Environmental  Laws or  similar  laws by reason of any  Borrower's  or any other
Person's  failure to comply with laws  applicable  to solid or  hazardous  waste
materials or other toxic substances.  Notwithstanding  any contrary provision of
this  Agreement,  the  obligation of any Borrower  under this Section 12.2 shall
survive  the  payment in full of


                                       72
<PAGE>

the  Obligations  and the  termination of this  Agreement.  This indemnity shall
include reasonable attorneys' fees and legal expenses.

         12.3.  Modification of Agreement;  Sale of Interest. This Agreement may
not be modified, altered or amended, except by an agreement in writing signed by
each Borrower and Lender.  No Borrower may sell, assign or transfer any interest
in this  Agreement  or any of the  Other  Agreements,  or any  portion  thereof,
including,   without  limitation,  such  Borrower's  rights,  title,  interests,
remedies,  powers,  and duties hereunder or thereunder.  Lender shall not assign
any of its rights or  interests in any of the Loan  Documents  without the prior
written consent of Borrowers.  Notwithstanding the foregoing, if the transfer is
part of a  transfer  by  Lender to a single  assignee  that is a  reputable  and
financially  responsible  financial  institution  that  is in  the  business  of
providing financing  facilities of the types contemplated by this Agreement of a
significant  portion  of its  portfolio  of  loans,  Borrowers'  consent  is not
required. Lender may sell participations to one or more Participating Lenders in
or to all or any ratable  portion of its rights and  obligations  under the Loan
Documents  (including,  without  limitation,  all or any ratable  portion of the
Loans  or  the  Letters  of  Credit);  provided,   however,  that  (a)  Lender's
obligations  under the Loan Documents shall remain  unchanged,  (b) Lender shall
remain solely  responsible  to the other  parties to the Loan  Documents for the
performance of such obligations, and (c) the other parties to the Loan Documents
shall  continue  to deal solely and  directly  with  Lender in  connection  with
Lender's rights and obligations under this Agreement.

         12.4.  Reimbursement  of  Expenses.  If, at any time or times  prior or
subsequent to the date hereof,  regardless of whether or not an Event of Default
then exists or any of the  transactions  contemplated  hereunder are  concluded,
Lender  employs  counsel  for advice or other  representation,  or incurs  legal
expenses or other costs or  out-of-pocket  expenses in connection  with: (A) the
negotiation  and  preparation of this Agreement or any of the Other  Agreements,
any  amendment  of or  modification  of  this  Agreement  or any  of  the  Other
Agreements  (except in the event such  modification  or  amendment  is  required
solely to correct  any error  contained  in this  Agreement  or any of the Other
Agreements,  which such error existed on the Closing Date);  (B) any litigation,
contest,  dispute, suit, proceeding or action (whether instituted by Lender, any
Borrower  or any other  Person)  in any way  relating  to the  Collateral,  this
Agreement or any of the Other  Agreements  or any  Borrower's  affairs;  (C) any
attempt to enforce any rights of Lender or any Participating  Lender against any
Borrower or any other  Person which may be obligated to Lender by virtue of this
Agreement or any of the Other Agreements,  including,  without  limitation,  the
Account  Debtors;  or (D) any attempt to inspect (subject to the limitations set
forth in Section 3.1(F) hereof), verify, protect,  preserve,  restore,  collect,
sell, liquidate or otherwise dispose of or realize upon the Collateral; then, in
any such event,  the reasonable  attorneys'  fees arising from such services and
all reasonable  out-of-pocket expenses,  costs and charges of Lender relating to
any of the events or actions  described  in this  Section  shall be payable,  on
demand,  by Borrowers to Lender and shall be  additional  Obligations  hereunder
secured by the  Collateral.  Without  limiting the  generality of the foregoing,
such expenses, costs, charges and fees may include reasonable accountants' fees,
costs and  expenses;  court costs and  expenses;  photocopying  and  duplicating
expenses;  court  reporter  fees,  costs and expenses;  long distance  telephone
charges; air express charges;  telegram charges;  secretarial over-time charges;
and  reasonable  expenses  for  travel,  lodging  and food paid or  incurred  in
connection  with the performance of such legal  services.  Additionally,  if any
taxes  (excluding (i) taxes imposed upon or measured by the net income of Lender
or otherwise in the nature of a net income tax,  including,  without limitation,
any franchise  tax or any similar tax based on capital,  net worth or comparable
basis for  measurement and (ii) taxes collected by


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<PAGE>

a withholding on payments and which neither are computed by reference to the net
income of the Payee nor are in the  nature  of an  advance  collection  of a tax
based on or measured by the net income of the payee) shall be payable on account
of the  execution or delivery of this  Agreement,  or the  execution,  delivery,
issuance or recording of any of the Other Agreements,  or the creation of any of
the Obligations  hereunder,  by reason of any existing federal or state statute,
Borrowers will pay all such taxes,  including,  but not limited to, any interest
and penalties  thereon,  and will  indemnify  and hold Lender  harmless from and
against  liability  in  connection  therewith.  Notwithstanding  the  foregoing,
Borrowers  shall not be obligated  to pay or reimburse  Lender to the extent any
amount  otherwise  payable by Borrowers  resulted  from the gross  negligence or
willful misconduct of Lender or Bank.

         12.5.  Indulgences Not Waivers.  Lender's failure, at any time or times
hereafter,  to require  strict  performance  by any Borrower of any provision of
this  Agreement  shall  not  waive,  affect  or  diminish  any  right of  Lender
thereafter to demand strict compliance  therewith and performance  thereof.  Any
suspension or waiver by Lender of an Event of Default by any Borrower under this
Agreement or any of the Other Agreements shall not suspend,  waive or affect any
other Event of Default by any Borrower  under this  Agreement or by any Borrower
or any Guarantor under any of the Other Agreements, whether the same is prior or
subsequent  thereto and whether of the same or of a different  type. None of the
undertakings,  agreements,  warranties,  covenants  and  representations  of any
Borrower contained in this Agreement or any of the Other Agreements and no Event
of Default  by any  Borrower  under this  Agreement  or by any  Borrower  or any
Guarantor  under  any of the  Other  Agreements  shall be  deemed  to have  been
suspended  or  waived  by  Lender,  unless  such  suspension  or waiver is by an
instrument in writing  specifying  such  suspension or waiver and is signed by a
duly authorized representative of Lender and directed to such Borrower.

         12.6. Severability. Wherever possible, each provision of this Agreement
shall  be  interpreted  in  such  manner  as to be  effective  and  valid  under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under  applicable law, such provision  shall be ineffective  only to the
extent of such prohibition or invalidity,  without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

         12.7.  Successors and Assigns.  This Agreement and the Other Agreements
shall be binding upon and inure to the benefit of the  successors  and permitted
assigns of each  Borrower  and Lender.  This  provision,  however,  shall not be
deemed to modify Section 12.3 hereof.

         12.8. Cumulative Effect; Conflict of Terms. The provisions of the Other
Agreements are hereby made  cumulative  with the  provisions of this  Agreement.
Except  as  otherwise  provided  in any  of the  Other  Agreements  by  specific
reference  to the  applicable  provision  of this  Agreement,  if any  provision
contained in this Agreement is in direct  conflict with, or  inconsistent  with,
any provision in any of the Other  Agreements,  the provision  contained in this
Agreement shall govern and control.

         12.9. Execution in Counterparts.  This Agreement 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
and all of which  counterparts  taken together shall  constitute but one and the
same instrument.


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<PAGE>

         12.10.  Notice.  Except as  otherwise  provided  herein,  all  notices,
requests and demands to or upon a party hereto  whether under this  Agreement or
any  Other  Agreement  shall be in  writing  and shall be sent by  certified  or
registered mail, return receipt  requested,  recognized  overnight courier or by
telecopy and, unless otherwise  expressly  provided  herein,  shall be deemed to
have been validly served,  given or delivered when delivered (or, if such day is
not a Business Day, the immediately  succeeding Business Day) against receipt or
five (5) days after  deposit in the mail,  postage  prepaid,  or, in the case of
telecopy  notice,  when receipt has been  confirmed by the telecopy  transmitter
(or, if such day is not a Business  Day,  the  immediately  succeeding  Business
Day), addressed as follows:


                  (A)      If to Lender:    Fleet Capital Corporation
                                            200 Glastonbury Boulevard
                                            Glastonbury, Connecticut 06033
                                            Telephone:        (860) 659-3200
                                            Telecopier:       (860) 657-7759
                                            Attention:    Northeast  Loan 
                                                          Administration Manager

                           and              Fleet Capital Corporation
                                            60 East 42nd Street
                                            New York, New York  10017
                                            Telephone:        (212) 885-8800
                                            Telecopier:       (212) 885-8807
                                            Attention:  Thomas Miale

                           With a copy to:  Hahn & Hessen LLP
                                            350 Fifth Avenue
                                            New York, New York 10118-0075
                                            Telephone:        (212) 736-1000
                                            Telecopier:       (212) 594-7167
                                            Attention:  Daniel J. Krauss, Esq.

                  (B)      If to Borrowers: c/o CFP Holdings, Inc.
                                            1117 West Olympic Blvd.
                                            Montebello, California 90640
                                            Telephone:        (213) 727-0900
                                            Telecopier:       (213) 727-0412
                                            Attention:  Chief Financial Officer

                           With a copy to:  O'Sullivan Graev & Karabell, LLP
                                            30 Rockefeller Plaza
                                            New York, New York 10112
                                            Telephone:        (212) 408-2400
                                            Telecopier:       (212) 408-2420
                                            Attention:  Stewart Kagan, Esq.


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<PAGE>

                           and              First Atlantic Capital
                                            135 East 57th Street
                                            New York, New York 10022
                                            Telephone:        (212) 750-0300
                                            Telecopier:       (212) 750-0954
                                            Attention: James Long

or to such other  address as each party may  designate for itself by like notice
given in accordance with this Section 12.12; provided, however, that any notice,
request or demand to or upon Lender pursuant to Sections 2.3 or 3.3 shall not be
effective  until  received  by Lender.  Any  written  notice that is not sent in
conformity  with the provisions  hereof shall  nevertheless  be effective on the
date such notice is actually received by the noticed party.

         12.11.  Demand  Obligations.  Nothing in this Agreement shall affect or
abrogate  the demand  nature of any portion of the  Obligations  expressly  made
payable on demand by this Agreement or by any instrument  evidencing or securing
same, and the occurrence of an Event of Default shall not be a prerequisite  for
Lender's requiring payment of such Obligations.

         12.12.  Entire  Agreement.  This  Agreement  and the Other  Agreements,
together with all other instruments, agreements and certificates executed by the
parties in connection  therewith or with  reference  thereto,  embody the entire
understanding  and agreement between the parties hereto and thereto with respect
to the subject  matter hereof and thereof and  supersede  all prior  agreements,
understandings and inducements, whether express or implied, oral or written.

         12.13.  Interpretation.  No provision  of this  Agreement or any of the
Other Agreements  shall be construed  against or interpreted to the disadvantage
of any party hereto by any court or other  governmental or judicial authority by
reason of such  party  having or being  deemed to have  structured,  drafted  or
dictated such provision.

         12.14.  GOVERNING  LAW;  CONSENT  TO  FORUM.  THIS  AGREEMENT  HAS BEEN
NEGOTIATED,  EXECUTED AND  DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN
NEW YORK,  NEW YORK WITHOUT  GIVING  EFFECT TO  PRINCIPLES OF CONFLICTS OF LAWS.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE
LOCATED IN ANY JURISDICTION  OTHER THAN NEW YORK, THE LAWS OF SUCH  JURISDICTION
SHALL GOVERN THE METHOD,  MANNER AND PROCEDURE FOR  FORECLOSURE OF LENDER'S LIEN
UPON SUCH  COLLATERAL AND THE  ENFORCEMENT OF LENDER'S OTHER REMEDIES IN RESPECT
OF SUCH  COLLATERAL  TO THE  EXTENT  THAT  THE  LAWS OF  SUCH  JURISDICTION  ARE
DIFFERENT  FROM  OR  INCONSISTENT  WITH  THE  LAWS OF NEW  YORK.  AS PART OF THE
CONSIDERATION FOR NEW VALUE THIS DAY RECEIVED,  AND REGARDLESS OF ANY PRESENT OR
FUTURE DOMICILE OR PRINCIPAL  PLACE OF BUSINESS OF ANY BORROWER OR LENDER,  EACH
BORROWER  HEREBY  CONSENTS AND AGREES THAT THE SUPREME COURT OF NEW YORK COUNTY,
NEW YORK OR, AT  LENDER'S  OPTION,  THE  UNITED  STATES  DISTRICT  COURT FOR THE
SOUTHERN  DISTRICT OF NEW YORK,  SHALL HAVE EXCLUSIVE  JURISDICTION  TO HEAR AND


                                       76
<PAGE>

DETERMINE ANY CLAIMS OR DISPUTES  BETWEEN ANY BORROWER AND LENDER  PERTAINING TO
THIS  AGREEMENT  OR TO ANY MATTER  ARISING OUT OF OR RELATED TO THIS  AGREEMENT.
EACH BORROWER  EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,  AND EACH BORROWER HEREBY WAIVES
ANY  OBJECTION  WHICH  SUCH  BORROWER  MAY  HAVE  BASED  UPON  LACK OF  PERSONAL
JURISDICTION,  IMPROPER  VENUE OR FORUM NON  CONVENIENS.  EACH  BORROWER  HEREBY
WAIVES  PERSONAL  SERVICE OF THE SUMMONS,  COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH  SUMMONS,  COMPLAINT AND
OTHER  PROCESS MAY BE MADE BY  REGISTERED  OR CERTIFIED  MAIL  ADDRESSED TO SUCH
BORROWER  AT THE ADDRESS SET FORTH IN THIS  AGREEMENT  AND THAT  SERVICE SO MADE
SHALL BE DEEMED  COMPLETED  UPON THE EARLIER OF SUCH  BORROWER'S  ACTUAL RECEIPT
THEREOF  OR FIVE (5)  DAYS  AFTER  DEPOSIT  IN THE U.S.  MAILS,  PROPER  POSTAGE
PREPAID.  NOTHING  IN THIS  AGREEMENT  SHALL BE DEEMED OR  OPERATE TO AFFECT THE
RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW, OR
TO PRECLUDE THE  ENFORCEMENT BY LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION  UNDER THIS  AGREEMENT  TO ENFORCE SAME IN ANY
OTHER APPROPRIATE FORUM OR JURISDICTION.

         12.15.  WAIVER OF TRIAL BY JURY AND OTHER  WAIVERS BY  BORROWERS.  EACH
BORROWER WAIVES (i) THE RIGHT TO TRIAL BY JURY (WHICH LENDER HEREBY ALSO WAIVES)
IN ANY ACTION,  SUIT,  PROCEEDING OR  COUNTERCLAIM OF ANY KIND ARISING OUT OF OR
RELATED TO ANY OF THE OTHER AGREEMENTS, THE OBLIGATIONS OR THE COLLATERAL:  (ii)
PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON
PAYMENT, MATURITY, RELEASE, COMPROMISE,  SETTLEMENT, EXTENSION OR RENEWAL OF ANY
OR ALL COMMERCIAL  PAPER,  ACCOUNTS,  CONTRACT RIGHTS,  DOCUMENTS,  INSTRUMENTS,
CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY LENDER ON WHICH BORROWER MAY IN
ANY WAY BE LIABLE;  (iii)  NOTICE PRIOR TO TAKING  POSSESSION  OR CONTROL OF THE
COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO
ALLOWING  LENDER TO EXERCISE ANY OF LENDER'S  REMEDIES;  (iv) THE BENEFIT OF ALL
VALUATION,  APPRAISEMENT AND EXEMPTION LAWS; (v) ANY RIGHT ANY BORROWER MAY HAVE
UPON  PAYMENT IN FULL OF THE  OBLIGATIONS  TO REQUIRE  LENDER TO  TERMINATE  ITS
SECURITY  INTEREST IN THE  COLLATERAL  OR IN ANY OTHER  PROPERTY OF ANY BORROWER
UNTIL  TERMINATION  OF THIS  AGREEMENT  IN  ACCORDANCE  WITH  ITS  TERMS OR WITH
LENDER'S  CONSENT AND THE  EXECUTION  BY ANY  BORROWER,  AND BY ANY PERSON WHOSE
LOANS TO BORROWER IS USED IN WHOLE OR IN PART TO SATISFY THE OBLIGATIONS,  OF AN
AGREEMENT  INDEMNIFYING  LENDER FROM ANY LOSS OR DAMAGE  LENDER MAY INCUR AS THE
RESULT OF  DISHONORED  CHECKS OR OTHER ITEMS OF PAYMENT  RECEIVED BY LENDER FROM
ANY  BORROWER OR ANY ACCOUNT  DEBTOR AND  APPLIED TO THE  OBLIGATIONS;  AND (vi)
NOTICE OF  ACCEPTANCE  HEREOF.  EACH  BORROWER  ACKNOWLEDGES  THAT THE FOREGOING
WAIVERS ARE A MATERIAL  INDUCEMENT TO LENDER'S  ENTERING INTO THIS AGREEMENT AND
THAT LENDER IS RELYING


                                       77

<PAGE>


UPON THE  FOREGOING  WAIVERS  IN ITS FUTURE  DEALINGS  WITH ANY  BORROWER.  EACH
BORROWER  WARRANTS AND REPRESENTS THAT IT HAS KNOWINGLY AND  VOLUNTARILY  WAIVED
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION,  THIS AGREEMENT MAY BE FILED AS A WRITTEN  CONSENT TO A TRIAL BY THE
COURT.

         12.16.  Confidentiality.  Lender shall hold all non-public  information
obtained by Lender pursuant to the  requirements of this Agreement in accordance
with Lender's customary procedures for handling confidential information of this
nature; provided, however, Lender may disclose such confidential information (a)
to its examiners,  affiliates,  outside auditors, counsel and other professional
advisors,  (b)  to  any  Participating  Lenders  and  (c)  as  required  by  any
governmental agency or representative thereof or pursuant to legal process

SECTION 13. BORROWING AGENCY PROVISIONS.

                  13.1. Each Borrower hereby  irrevocably  designates  Borrowing
Agent to be its  attorney  and agent and in such  capacity  to borrow,  sign and
endorse notes, and execute and deliver all instruments,  documents, writings and
further  assurances  now or  hereafter  required  hereunder,  on  behalf of such
Borrower or Borrowers,  and hereby  authorizes  Lender to pay over or credit all
loan proceeds hereunder in accordance with the request of Borrowing Agent.

                  13.2.  The handling of this credit  facility as a co-borrowing
facility  with a borrowing  agent in the manner set forth in this  Agreement  is
solely as an accommodation  to Borrowers and at their request.  Lender shall not
incur any liability to Borrowers as a result thereof.  To induce Lender to do so
and in consideration  thereof, each Borrower hereby indemnifies Lender and holds
Lender  harmless  from and against any and all  Obligations,  expenses,  losses,
damages  and claims of damage or injury  asserted  against  Lender by any Person
arising from or incurred by reason of the handling of the financing arrangements
of  Borrowers  as  provided  herein,  reliance  by  Lender  on  any  request  or
instruction  from  Borrowing  Agent or any other  action  taken by  Lender  with
respect to this Section 13 except due to willful  misconduct or gross (not mere)
negligence by the indemnified party.

                  13.3.  All  Obligations  shall be joint and several,  and each
Borrower  shall  make  payment  upon  the  maturity  of  the   Obligations,   by
acceleration or otherwise, and such obligation and liability on the part of each
Borrower shall in no way be affected by any extensions, renewals and forbearance
granted by Lender to any Borrower, failure of Lender to give any Borrower notice
of  borrowing or any other  notice,  any failure of Lender to pursue or preserve
its rights against any Borrower,  the release by Lender of any Collateral now or
thereafter  acquired from any Borrower,  and such  agreement by each Borrower to
pay upon any notice issued pursuant thereto is  unconditional  and unaffected by
prior  recourse  by Lender  to the other  Borrower  or any  Collateral  for such
Borrower's Obligations or the lack thereof.

                  13.4.  Each  Borrower  expressly  waives any and all rights of
subrogation,  reimbursement,  indemnity, exoneration,  contribution of any other
claim which such Borrower may now or hereafter  have against the other  Borrower
or other Person directly or contingently  liable for the Obligations  hereunder,
or against or with respect to the other Borrower's property (including,  without
limitation, any property which is Collateral for the Obligations),  arising from
the existence 


                                       78

<PAGE>
or performance of this Agreement,  until all Obligations  have been paid in full
and the irrevocable termination of this Agreement.


                                       79
<PAGE>

         IN WITNESS WHEREOF,  this Agreement has been duly executed in New York,
New York on the day and year specified at the beginning hereof.

                                    CFP HOLDINGS, INC.
ATTEST:

????????????                        By:  /s/ Eric Ek
---------------------                  ----------------------------
                                    Name:   Eric Ek
                                    Title:  Vice President and CFO


                                   CUSTOM FOOD PRODUCTS, INC.
ATTEST:

???????????                         By:  /s/ Eric Ek
---------------------                  ----------------------------
                                    Name:   Eric Ek
                                    Title:  Vice President and CFO


                                    QF ACQUISITION CORP.
ATTEST:

???????????                         By:  /s/ Eric Ek
---------------------                  ----------------------------
                                    Name:   Eric Ek
                                    Title:  Vice President and CFO


                                    FLEET CAPITAL CORPORATION
ATTEST:

???????????                         By:  /s/ Thomas Maiale
---------------------                  ----------------------------
                                    Name:   Thomas Maiale
                                    Title:  Vice President