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                                                        Exhibit 10.42


                                CREDIT AGREEMENT



                                  by and among



                             LINCARE HOLDINGS INC.
                                  as Borrower,


                      NATIONSBANK, NATIONAL ASSOCIATION,
                             as Agent and as Lender

                                      and

                   THE LENDERS PARTY HERETO FROM TIME TO TIME




                               November 25, 1997



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<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                     Page
<S>         <C>                                                                                                      <C>
                                                            ARTICLE I

                                                      Definitions and Terms


1.1.        Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
1.2.        Rules of Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23

                                                            ARTICLE II

                                                      The Credit Facilities


2.1.        Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
2.2.        Payment of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
2.3.        Payment of Principal  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
2.4.        Non-Conforming Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  29
2.5.        Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
2.6.        Pro Rata Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
2.7.        Reductions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
2.8.        Conversions and Elections of Subsequent Interest Periods  . . . . . . . . . . . . . . . . . . . . . . . .  31
2.9.        Increase and Decrease in Amounts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
2.10.       Facility Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
2.11.       Deficiency Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
2.12.       Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
2.13.       Line of Credit Extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
2.14.       Swing Line  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33

                                                           ARTICLE III

                                                        Letters of Credit


3.1.        Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
3.2.        Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
3.3.        Letter of Credit Facility Fees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38

                                                            ARTICLE IV

                                                             Security


4.1.        Facility Guaranty.    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
4.2.        Stock Pledge.     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39


</TABLE>

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<TABLE>

<S>         <C>                                                                                                      <C>
4.3.        Pledge of Partnership Interests.    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
4.4.        Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40

                                                            ARTICLE V

                                                     Change in Circumstances


5.1.        Increased Cost and Reduced Return.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41
5.2.        Limitation on Types of Loans.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
5.3.        Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
5.4.        Treatment of Affected Loans.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43
5.5.        Compensation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43
5.6.        Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44
5.7.        Replacement Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45

                                                            ARTICLE VI

                                     Conditions to Making Loans and Issuing Letters of Credit


6.1.        Conditions of Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  47
6.2.        Conditions of Revolving Loans, Line of Credit Loans and Letter of Credit  . . . . . . . . . . . . . . . .  49

                                                           ARTICLE VII

                                                  Representations and Warranties


7.1.        Organization and Authority  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
7.2.        Loan Documents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
7.3.        Solvency  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
7.4.        Subsidiaries and Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
7.5.        Ownership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
7.6.        Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
7.7.        Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
7.8.        Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
7.9.        Other Agreements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
7.10.       Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  53
7.11.       Margin Stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
7.12.       Investment Company  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
7.13.       Patents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
7.14.       No Untrue Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
7.15.       No Consents, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54
7.16.       Employee Benefit Plans  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
7.17.       No Default  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
7.18.       Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
7.19.       Employment Matters  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56


</TABLE>

                                      ii
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<TABLE>

<S>         <C>                                                                                                      <C>
7.20.       RICO  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  56
7.21.       Security Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57

                                                           ARTICLE VIII

                                                      Affirmative Covenants

8.1.        Financial Reports, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58
8.2.        Maintain Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  59
8.3.        Existence, Qualification, Etc.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  59
8.4.        Regulations and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  59
8.5.        Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
8.6.        True Books  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
8.7.        Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
8.8.        Observe all Laws  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
8.9.        Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
8.10.       Covenants Extending to Other Persons  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
8.11.       Officer's Knowledge of Default  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
8.12.       Suits or Other Proceedings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  61
8.13.       Notice of Discharge of Hazardous Material or Environmental Complaint  . . . . . . . . . . . . . . . . . .  61
8.14.       Environmental Compliance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  61
8.15.       Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  61
8.16.       Further Assurances  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  61
8.17.       Employee Benefit Plans  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  62
8.18.       Continued Operations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  62
8.19.       New Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  62

                                                            ARTICLE IX

                                                        Negative Covenants


9.1.        Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  65
9.2.        Acquisitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  65
9.3.        Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  65
9.4.        Indebtedness  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  67
9.5.        Transfer of Assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  67
9.6.        Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  68
9.7.        Merger or Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  68
9.8.        Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  68
9.9.        Transactions with Affiliates  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  68
9.10.       Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  69
9.11.       Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  69
9.12.       Prepayments, Etc. of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  70
9.13.       Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  70
9.14.       Rate Hedging Obligations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  70

</TABLE>


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<TABLE>

<S>         <C>                                                                                                      <C>
9.15.       Negative Pledge Clauses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  70

                                                            ARTICLE X

                                                Events of Default and Acceleration


10.1.       Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  71
10.2.       Agent to Act  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  74
10.3.       Cumulative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  74
10.4.       No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  74
10.5.       Allocation of Proceeds  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  74

                                                            ARTICLE XI

                                                            The Agent


11.1.       Appointment, Powers, and Immunities.    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  76
11.2.       Reliance by Agent.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  76
11.3.       Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  77
11.4.       Rights as Lender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  77
11.5.       Indemnification.    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  77
11.6.       Non-Reliance on Agent and Other Lenders.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  78
11.7.       Resignation of Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  78
11.8.       Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  78

                                                           ARTICLE XII

                                                          Miscellaneous


12.1.       Assignments and Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  79
12.2.       Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  80
12.3.       Right of Set-off; Adjustments.    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
12.4.       Survival  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  82
12.5.       Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  82
12.6.       Amendments and Waivers.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  82
12.7.       Counterparts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  83
12.8.       Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  83
12.9.       Indemnification; Limitation of Liability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  84
12.10.      Severability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  84
12.11.      Entire Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  84
12.12.      Agreement Controls  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  84
12.13.      Usury Savings Clause  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  84
12.14.      Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  85
12.15.      GOVERNING LAW; WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  85


</TABLE>

                                      iv


<PAGE>   6

<TABLE>

<S>              <C>                                                                                                  <C>
EXHIBIT A        Applicable Commitment Percentages  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B        Form of Assignment and Acceptance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C        Notice of Appointment (or Revocation) of Authorized
                      Representative  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D-1      Form of Borrowing Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
EXHIBIT D-2      Form of Borrowing Notice--Swing Line Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-3
EXHIBIT E        Form of Interest Rate Selection Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
EXHIBIT F-1      Form of Revolving Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
EXHIBIT F-2      Form of Line of Credit Note  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
EXHIBIT F-3      Form of Swing Line Note  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7
EXHIBIT G        Form of Opinion of Borrower's Counsel  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
EXHIBIT H        Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-1
EXHIBIT I        Form of Facility Guaranty  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
EXHIBIT J        Form of Pledge Agreement   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-1
EXHIBIT K        Form of LC Account Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-1
EXHIBIT L        Form of Collateral Assignment of Partnership Interests . . . . . . . . . . . . . . . . . . . . . . . . L-1

Schedule 1.1(a)  Non-cash Non-recurring Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1.1(a)
Schedule 1.1(b)  Existing Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1.1(b)
Schedule 4.1     Excluded Subsidiaries  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2
Schedule 7.4     Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Schedule 7.6     Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-4
Schedule 7.7     Liens  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-5
Schedule 7.10    Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
Schedule 8.5     Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-7
Schedule 9.6     Investments in Other Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-8
</TABLE>





                                      v

<PAGE>   7



                               CREDIT AGREEMENT


         THIS CREDIT AGREEMENT, dated as of November 25, 1997 (the
"Agreement"), is made by and among LINCARE HOLDINGS INC., a Delaware
corporation having its principal place of business in Clearwater, Florida (the
"Borrower"), NATIONSBANK, NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States, in its capacity as
a Lender ("NationsBank"), and each other financial institution executing and
delivering a signature page hereto and each other financial institution which
may hereafter execute and deliver an instrument of assignment with respect to
this Agreement pursuant to Section 12.1 (hereinafter such financial
institutions may be referred to individually as a "Lender" or collectively as
the "Lenders"), and NATIONSBANK, NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States, in its
capacity as agent for the Lenders (in such capacity, and together with any
successor agent appointed in accordance with the terms of Section 11.7, the
"Agent");

                              W I T N E S S E T H:

         WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower certain credit facilities in the maximum aggregate principal
amount at any time outstanding of $100,000,000, which shall include a line of
credit facility of up to $25,000,000  and  a revolving credit facility of up to
$75,000,000, which shall include a letter of credit facility of up to
$5,000,000 for the issuance of standby letters of credit and a swing line
facility of up to $5,000,000, which swing line facility shall be available
according to the conditions under Section 2.14 hereof; and

         WHEREAS, the Borrower desires to use a portion of the proceeds of the
Revolving Credit Facility and Line of Credit Facility to refinance outstanding
indebtedness under the existing Restated Loan Agreement by and between the
Borrower and NationsBank dated as of February 10, 1995; and

         WHEREAS, the Lenders are willing to make such revolving credit, line
of credit, letter of credit and swing line facilities available to the Borrower
upon the terms and conditions set forth herein;

         NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree
as follows:





<PAGE>   8

                                   ARTICLE I

                             Definitions and Terms

         1.1.    Definitions.  For the purposes of this Agreement, in addition
to the definitions set forth above, the following terms shall have the
respective meanings set forth below:

                 "Acquisition" means the acquisition of (i) a controlling
         equity interest in another Person, whether by purchase of such equity
         interest or upon exercise of an option or warrant for, or conversion
         of securities into, such equity interest, or (ii) assets of another
         Person which constitute all or substantially all of the assets of such
         Person or of a line or lines of business conducted by such Person.

                 "Advance" means a borrowing under the Revolving Credit
         Facility or Line of Credit Facility consisting of a Base Rate Loan or
         a Eurodollar Rate Loan.

                 "Affiliate" means any Person (i) which directly or indirectly
         through one or more intermediaries controls, or is controlled by, or
         is under common control with the Borrower; or (ii) which beneficially
         owns or holds 5% or more of any class of the outstanding voting stock
         (or in the case of a Person which is not a corporation, 5% or more of
         the equity interest) of the Borrower; or 5% or more of any class of
         the outstanding voting stock (or in the case of a Person which is not
         a corporation, 5% or more of the equity interest) of which is
         beneficially owned or held by the Borrower.   The term "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 ownership of voting stock, by contract or otherwise.

                 "Applicable Commitment Percentage" means, with respect to each
         Lender that portion of the Total Credit Commitment (including its
         Participations and its obligations hereunder to the Issuing Bank to
         acquire Participations) allocable to such Lender (i) with respect to
         Lenders as of the Closing Date, as set forth in Exhibit A and (ii)
         with respect to any Person who becomes a Lender hereafter, as
         reflected in each Assignment and Acceptance to which such Lender is a
         party Assignee; provided that the Applicable Commitment Percentage of
         each Lender shall be increased or decreased to reflect any assignments
         to or by such Lender effected in accordance with Section 12.1.

                 "Applicable Lending Office" means, for each Lender and for
         each Type of Loan, the "Lending Office" of such Lender (or of an
         affiliate of such Lender) designated for such Type of Loan on the
         signature pages hereof or such other office of such Lender (or an
         affiliate of such Lender) as such Lender may from time to time specify
         to the Agent and the Borrower by written notice in accordance with the
         terms hereof as the office by which its Loans of such Type are to be
         made and maintained.





                                      2
<PAGE>   9

                 "Applicable Margin" means for each Eurodollar Rate Loan that
         percent per annum set forth below, which shall be based upon the
         Consolidated Leverage Ratio for the Four-Quarter Period most recently
         ended as specified below:


<TABLE>
<CAPTION>

                                                                Applicable Margin             Applicable Margin 
                                                                  for Revolving                  for Line of
              Tier          Consolidated Leverage Ratio          Credit Facility                Credit Facility
              ----          ---------------------------          ---------------               ----------------
              <S>           <C>                                 <C>                           <C>  
               IV             Equal to or Greater than                .525%                          .575%
                              2.00 to 1.00

               III            Less than 2.00 to 1.00                  .425%                          .475%
                              and equal to or Greater than 
                              1.50 to 1.00

               II             Less than 1.50 to 1.00                  .325%                          .375%
                              and equal to or Greater than 
                              1.00 to 1.00

               I              Less than 1.00 to 1.00                  .275%                          .325%


</TABLE>

         The Applicable Margin shall be established at the end of each fiscal
         quarter of the Borrower (each, a "Determination Date".  Any change in
         the Applicable Margin following each Determination Date shall be
         determined based upon the computations set forth in the certificate
         furnished to the Agent pursuant to Section 8.1(a)(ii) and Section
         8.1(b)(ii), subject to review and approval of such computations by the
         Agent, and shall be effective commencing on the date following the
         date such certificate is received (or, if earlier, the date such
         certificate was required to be delivered) until the date following the
         date on which a new certificate is delivered or is required to be
         delivered, whichever shall first occur; provided however, if the
         Borrower shall fail to deliver any such certificate within the time
         period required by Section 8.1, then the Applicable Margin shall be
         Tier IV until the appropriate certificate is so delivered.  From the
         Closing Date to the first Determination Date, the Applicable Margin
         shall be Tier I.





                                      3
<PAGE>   10

                 "Applicable Unused Fee" means, with respect to the Line of
         Credit Facility and the Revolving Credit Facility, that percent per
         annum set forth below, which shall be based upon the Consolidated
         Leverage Ratio for the Four-Quarter Period most recently ended as
         specified below:

<TABLE>
<CAPTION>

                                                                Applicable Unused             Applicable Unused 
                                                                  Fee Revolving                 Fee for Line of 
              Tier          Consolidated Leverage Ratio              Credit                         Credit 
              ----          ---------------------------          ---------------               ----------------
              <S>           <C>                                 <C>                           <C>  
              IV             Equal to or Greater than                .225%                           .175%
                             2.00 to 1.00

              III            Less than 2.00 to 1.00                  .200%                           .150%
                             and equal to or Greater than 
                             1.50 to 1.00

              II             Less than 1.50 to 1.00                  .175%                           .125%
                             and equal to or Greater than 
                             1.00 to 1.00

              I              Less than 1.00 to 1.00                  .175%                           .125%

</TABLE>

         The Applicable Unused Fee shall be established at the end of each
         fiscal quarter of the Borrower (the "Determination Date").  Any change
         in the Applicable Unused Fee following each Determination Date shall
         be determined based upon the computations set forth in the certificate
         furnished to the Agent pursuant to Section 8.1(a)(ii) and Section
         8.1(b)(ii), subject to review and approval of such computations by the
         Agent and shall be effective commencing on the date following the date
         such certificate is received (or, if earlier, the date such
         certificate was required to be delivered) until the date following the
         date on which a new certificate is delivered or is required to be
         delivered, whichever shall first occur; provided however, if the
         Borrower shall fail to deliver any such certificate within the time
         period required by Section 8.1, then the Applicable Unused Fee
         shall be Tier IV until the appropriate certificate is so delivered. 
         From the Closing Date to the first Determination Date, the Applicable
         Unused Fee shall be Tier I.

                 "Applications and Agreements for Letters of Credit" means,
         collectively, the Applications and Agreements for Letters of Credit,
         or similar documentation, executed by the Borrower from time to time
         and delivered to the Issuing Bank to support the issuance of Letters
         of Credit.

                 "Assigned Interests" has the meaning given to such term in the
         Collateral Assignment of Partnership Interests.





                                      4

<PAGE>   11

                 "Assignment and Acceptance" shall mean an Assignment and
         Acceptance in the form of Exhibit B (with blanks appropriately filled
         in) delivered to the Agent in connection with an assignment of a
         Lender's interest under this Agreement pursuant to Section 12.1.

                 "Authorized Representative" means any of the Chief Executive
         Officer, the President, the Chief Financial Officer, the Treasurer or
         the Corporate Controller of the Borrower or, with respect to financial
         matters, the Chief Financial Officer or Corporate Controller of the
         Borrower, or any other Person expressly designated by the Board of
         Directors of the Borrower (or the appropriate committee thereof) as an
         Authorized Representative of the Borrower, as set forth from time to
         time in a certificate in the form of Exhibit C.

                 "Base Rate" means, for any day, the rate per annum equal to
         the higher of (a) the Federal Funds Rate for such day plus one-half of
         one percent (0.5%) and (b) the Prime Rate for such day; provided,
         however, that at any time there shall be outstanding under Section 5.4
         an Affected Loan, the "Base Rate" with respect to such Affected Loan
         shall mean the lesser of (a) or (b).  Any change in the Base Rate due
         to a change in the Prime Rate or the Federal Funds Rate shall be
         effective on the effective date of such change in the Prime Rate or
         Federal Funds Rate.

                 "Base Rate Loan" means a Loan for which the rate of interest
         is determined by reference to the Base Rate.

                 "Base Rate Refunding Loan" means a Base Rate Loan or Swing
         Line Loan made either to (i) satisfy Reimbursement Obligations arising
         from a drawing under a Letter of Credit or (ii) pay NationsBank in
         respect of Swing Line Outstandings.

                 "Board" means the Board of Governors of the Federal Reserve
         System (or any successor body).

                 "Borrower's Account" means a demand deposit account number
         0095020624 or any successor account with the Agent, which may be
         maintained at one or more offices of the Agent or an agent of the
         Agent.

                 "Borrowing Notice" means the notice delivered by an Authorized
         Representative in connection with an Advance under (i) the Revolving
         Credit Facility or the Line of Credit Facility or, (ii) a Swing Line
         Loan, in the forms of Exhibits D-1 and D-2 respectively.

                 "Business Day" means, (i) with respect to any Base Rate Loan, 
         any day which is not a Saturday, Sunday or a day on which banks
         in the States of New York and North Carolina are authorized or
         obligated by law, executive order or governmental decree to be closed
         and, (ii) with respect to any Eurodollar Rate Loan, any day which is a
         Business Day, as described above, and on which the relevant
         international financial markets are open for the transaction of
         business contemplated by this Agreement in London, England, New York,
         New York and Charlotte, North Carolina.







                                      5

<PAGE>   12

                 "Capital Expenditures" means, with respect to the Borrower 
         and its Subsidiaries, for any period the sum of (without duplication)
         (i) all expenditures (whether paid in cash or accrued as liabilities)
         by the Borrower or any Subsidiary during such period for items that
         would be classified as "property, plant or equipment" or
         comparable items on the consolidated balance sheet of the Borrower and
         its Subsidiaries, including without limitation all transactional costs
         incurred in connection with such expenditures provided the same have
         been capitalized, excluding, however, the amount of any Capital
         Expenditures paid for with proceeds of casualty insurance as evidenced
         in writing and submitted to the Agent together with any compliance
         certificate delivered pursuant to Section 8.1(a) or (b), and (ii) with
         respect to any Capital Lease entered into by the Borrower or its
         Subsidiaries during such period, the present value of the lease
         payments due under such Capital Lease over the term of such Capital
         Lease applying a discount rate equal to the interest rate provided in
         such lease (or in the absence of a stated interest rate, that rate used
         in the preparation of the financial statements described in Section
         8.1(a)), all the foregoing in accordance with GAAP applied on a
         Consistent Basis.

                 "Capital Leases" means all leases which have been or should be
         capitalized in accordance with GAAP as in effect from time to time
         including Statement No. 13 of the Financial Accounting Standards Board
         and any successor thereof.

                 "Certificate and Receipt of Registrar" means, collectively or
         individually as the context may indicate (i) that certain Certificate  
         and Receipt of Registrar dated as of the Closing Date between certain
         Subsidiaries and the Agent in the form attached to the Collateral
         Assignment of Partnership Interests as Exhibit A and (ii) any
         additional Certificate and Receipt of Registrar delivered to the Agent
         pursuant to Section 8.19, as any of the foregoing may be hereafter
         amended, supplemented or restated from time to time.

                 "Change of Control" means, at any time:

                          (i)     any "person" or "group" (each as used in
                 Sections 13(d)(3) and 14(d)(2) of the Exchange Act), other
                 than Persons owning thirty percent (30%) or more of the Voting
                 Stock of the Borrower on the Closing Date, either (A) becomes
                 the "beneficial owner" (as defined in Rule 13d-3 of the
                 Exchange Act), directly or indirectly, of Voting Stock of the
                 Borrower (or securities convertible into or exchangeable for
                 such Voting Stock) representing thirty percent (30%) or more
                 of the combined voting power of all Voting Stock of the
                 Borrower (on a fully diluted basis) or (B) otherwise has the
                 ability, directly or indirectly, to elect a majority of the
                 board of directors of the Borrower; or

                         (ii)     during any period of up to 12 consecutive
                 months, commencing on the Closing Date, individuals who at 
                 the beginning of such 12-month period were directors of the
                 Borrower shall cease for any reason (other than the death,
                 disability or retirement of an officer of the Borrower that is
                 serving as a director at such time so long as another officer
                 of the Borrower replaces such Person as a director) to
                 constitute a majority of the board of directors of the
                 Borrower; provided, however, 





                                      6

<PAGE>   13

                 to the extent there exist vacancies on the Board of Directors
                 as of the Closing Date, the individuals named to fill such
                 vacancies, if selected by a majority of directors sitting as of
                 the Closing Date, shall be deemed for purposes of this clause
                 (ii) to have been appointed prior to the Closing Date.

                 "Closing Date" means the date as of which this Agreement is
         executed by the Borrower, the Lenders and the Agent and on which the
         conditions set forth in Section 6.1 have been satisfied.

                 "Code" means the Internal Revenue Code of 1986, as amended,
         and any regulations promulgated thereunder.

                 "Collateral" means, collectively, all property of the
         Borrower, any Subsidiary or any other Person in which the Agent or any
         Lender is granted a Lien as security for all or any portion of the
         Obligations under any Security Instrument.

                 "Collateral Assignment of Partnership Interests" means,
         collectively (i) the Collateral Assignment of Partnership Interests    
         dated as of the Closing Date between the Borrower, Lincare Inc. and
         the Agent and (ii) each Collateral Assignment of Partnership Interests
         substantially in the form of Exhibit L delivered to the Agent pursuant
         to Section 8.19 hereof as any of the foregoing may be amended,
         supplemented or restated from time to time.

                 "Consistent Basis" in reference to the application of GAAP
         means the accounting principles observed in the period referred to are
         comparable in all material respects to those applied in the
         preparation of the audited financial statements of the Borrower and
         its Subsidiaries referred to in Section 7.6(a).

                 "Consolidated EBITDA" means, with respect to the Borrower and
         its Subsidiaries for any Four-Quarter Period ending on the date of
         computation thereof, the sum of, without duplication, (i)      
         Consolidated Net Income, (ii) Consolidated Interest Expense, (iii)
         taxes on income, (iv) amortization and (v) depreciation and (vi) the
         non-cash non-recurring expenses described in Schedule 1.1(a), all
         determined on a consolidated basis in accordance with GAAP applied on
         a Consistent Basis.

                 "Consolidated Fixed Charge Coverage Ratio" means, with respect
         to the Borrower and its Subsidiaries for any Four-Quarter Period       
         ending on the date of computation thereof, the ratio of (i)
         Consolidated EBITDA for such period less (without duplication) Capital
         Expenditures for such period, to (ii) Consolidated Fixed Charges for
         such period.

                 "Consolidated Fixed Charges" means, with respect to the
         Borrower and its Subsidiaries for any Four-Quarter Period ending
         on the date of computation thereof, the sum of, without duplication
         (i) Consolidated Interest Expense, (ii) current maturities of
         Consolidated Funded Indebtedness having an original term (including
         rights of renewal) of greater than one year, excluding in all events
         Outstandings and (iii) all Restricted Payments,





                                      7

<PAGE>   14

         all determined on a consolidated basis in accordance with GAAP
         applied on a Consistent Basis.

                 "Consolidated Funded Indebtedness" means, without duplication,
         all Indebtedness for Money Borrowed and all Guaranties of the Borrower
         and its Subsidiaries, all determined on a consolidated basis.

                 "Consolidated Interest Expense" means, with respect to any
         period of computation thereof, the gross interest expense of the
         Borrower and its Subsidiaries, including without limitation (i) the
         current amortized portion of debt discounts to the extent included in
         gross interest expense, (ii) the current amortized portion of all fees
         (including fees payable in respect of any Swap Agreement) payable in
         connection with the incurrence of Indebtedness to the extent included
         in gross interest expense and (iii) the portion of any payments made
         in connection with Capital Leases allocable to interest expense, all
         determined on a consolidated basis in accordance with GAAP applied on
         a Consistent Basis.

                 "Consolidated Leverage Ratio" means, as of the date of
         computation thereof, the ratio of (i) the sum of (without duplication)
         Consolidated Funded Indebtedness (determined as at such date) to (ii)
         Consolidated EBITDA (for the Four-Quarter Period ending on (or most
         recently ended prior to) such date).

                 "Consolidated Net Income" means, for any period of computation
         thereof, the gross revenues from operations of the Borrower and its
         Subsidiaries (excluding payments received by the Borrower and its
         Subsidiaries of (a) interest income, and (b) dividends and
         distributions made in the ordinary course of their businesses by
         Persons in which investment is permitted pursuant to this Agreement
         and not related to an extraordinary event), less all operating and
         non-operating expenses of the Borrower and its Subsidiaries including
         taxes on income, all determined on a consolidated basis in accordance
         with GAAP applied on a Consistent Basis; but excluding as income: (i)
         net gains or losses on the sale, conversion or other disposition of
         capital assets, (ii) net gains or losses on the acquisition,
         retirement, sale or other disposition of capital stock and other
         securities of the Borrower or its Subsidiaries, (iii) net gains or
         losses on the collection of proceeds of life insurance policies, (iv)
         any write-up of any asset, and (v) any other net gain or loss or
         credit of an extraordinary nature as determined in accordance with
         GAAP applied on a Consistent Basis.

                 "Consolidated Shareholders' Equity" means, as of any date on
         which the amount thereof is to be determined, the sum of the following
         in respect of the Borrower and its Subsidiaries (determined on a
         consolidated basis and excluding any upward adjustment after the
         Closing Date due to revaluation of assets): (i) the amount of issued
         and outstanding share capital, plus (ii) the amount of additional
         paid-in capital and retained earnings (or, in the case of a deficit,
         minus the amount of such deficit), plus (iii) the amount of any
         foreign currency translation adjustments (if positive, or, if
         negative, minus the amount of such translation adjustment), minus (iv)
         the amount of any treasury stock, all as determined in accordance with
         GAAP applied on a Consistent Basis.







                                      8
<PAGE>   15

                 "Contingent Obligation" of any Person means all contingent
         liabilities required (or which, upon the creation or incurring
         thereof, would be required) to be included in the financial statements
         (including footnotes) of such Person in accordance with GAAP applied
         on a Consistent Basis, including Statement No. 5 of the Financial
         Accounting Standards Board, all Letters of Credit, Rate Hedging
         Obligations and any obligation of such Person guaranteeing or in
         effect guaranteeing any Indebtedness, dividend or other obligation of
         any other Person (the "primary obligor") in any manner, whether
         directly or indirectly, including obligations of such Person however
         incurred:

                          (1)     to purchase such Indebtedness or other
                 obligation or any property or assets constituting security
                 therefor;

                          (2)     to advance or supply funds in any manner (i)
                 for the purchase or payment of such Indebtedness or other
                 obligation, or (ii) to maintain a minimum working capital, net
                 worth or other balance sheet condition or any income statement
                 condition of the primary obligor;

                          (3)     to grant or convey any lien, security
                 interest, pledge, charge or other encumbrance on any property
                 or assets of such Person to secure payment of such
                 Indebtedness or other obligation;

                          (4)     to lease property or to purchase securities
                 or other property or services primarily for the purpose of
                 assuring the owner or holder of such Indebtedness or
                 obligation of the ability of the primary obligor to make
                 payment of such Indebtedness or other obligation; or

                          (5)     otherwise to assure the owner of the
                 Indebtedness or such obligation of the primary obligor against
                 loss in respect thereof.

                 "Continue", "Continuation", and "Continued" shall refer to the
         continuation pursuant to Section 2.8 hereof of a Eurodollar Rate Loan
         of one Type as a Eurodollar Rate Loan of the same Type from one
         Interest Period to the next Interest Period.

                 "Convert", "Conversion", and "Converted" shall refer to a
         conversion pursuant to Section 2.8 of one Type of Loan into another
         Type of Loan.

                 "Cost of Acquisition" means, with respect to any Acquisition,
         as at the date of entering into any agreement therefor for the
         purpose of determining whether approval of the Required Lenders is
         necessary prior to the Acquisition, or as at the date of closing of an
         Acquisition for the purpose of determining whether the Cost of
         Acquisition exceeds the limitations set forth in Section 9.2 hereof,
         the sum of the following (without duplication):  (i) the value of the
         capital stock, warrants or options to acquire capital stock of Borrower
         or any Subsidiary to be transferred in connection therewith, (ii) the
         amount of any cash and fair market value of other property (excluding
         property described in clause (i) and the unpaid principal amount of any
         debt instrument) given as consideration, (iii) the amount (determined





                                      9

<PAGE>   16

         by using the face amount or the amount payable at maturity, whichever
         is greater) of any Indebtedness incurred, assumed or acquired by the
         Borrower or any Subsidiary in connection with such Acquisition, (iv)
         all additional purchase price amounts in the form of earnouts and other
         contingent obligations that should be recorded on the financial
         statements of the Borrower and its Subsidiaries in accordance with
         GAAP, (v) all amounts paid in respect of covenants not to compete,
         consulting agreements that should be recorded on financial statements
         of the Borrower and its Subsidiaries in accordance with GAAP, and other
         affiliated contracts in connection with such Acquisition, (vi) the
         aggregate fair market value of all other consideration given by the
         Borrower or any Subsidiary in connection with such Acquisition, and
         (vii) out of pocket transaction costs for the services and expenses of
         attorneys, accountants and other consultants incurred in effecting such
         transaction, and other similar transaction costs so incurred.  For
         purposes of determining the Cost of Acquisition for any transaction,
         (A) the capital stock of the Borrower shall be valued (I) in the case
         of capital stock that is then designated as a national market system
         security by the National Association of Securities Dealers, Inc.
         ("NASDAQ") or is listed on a national securities exchange, the average
         of the last reported bid and ask quotations or the last prices reported
         thereon, and (II) with respect to shares that are not freely tradeable,
         as determined by the Board of Directors of the Borrower and, if
         requested by the Agent, determined to be a reasonable valuation by the
         independent public accountants referred to in Section 8.1(a), (B) the
         capital stock of any Subsidiary shall be valued as determined by the
         Board of Directors of such Subsidiary and, if requested by the Agent,
         determined to be a reasonable valuation by the independent public
         accountants referred to in Section 8.1(a), and (C) with respect to any
         Acquisition accomplished pursuant to the exercise of options or
         warrants or the conversion of securities, the Cost of Acquisition shall
         include both the cost of acquiring such option, warrant or convertible
         security as well as the cost of exercise or conversion.

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

                 "Default Rate" means (i) with respect to each Eurodollar Rate
         Loan, until the end of the Interest Period applicable thereto, a rate
         of two percent (2%) above the Eurodollar Rate applicable to such Loan,
         and thereafter at a rate of interest per annum which shall be two
         percent (2%) above the Base Rate, (ii) with respect to Base Rate
         Loans, at a rate of interest per annum which shall be two percent (2%)
         above the Base Rate and (iii) in any case, the maximum rate permitted
         by applicable law, if lower.

                 "Dollars" and the symbol "$" means dollars constituting legal
         tender for the payment of public and private debts in the United
         States of America.

                 "Eligible Assignee" means (i) a Lender, (ii) an affiliate of
         a Lender, and (iii) any other Person approved by the Agent and,
         unless an Event of Default has occurred and is continuing at the time
         any assignment is effected in accordance with Section 12.1, the
         Borrower, each such approval not to be unreasonably withheld or
         delayed by the Borrower, as the case may be, and such approval to be
         deemed given by the Borrower if no objection is received by the
         assigning Lender and the Agent from the Borrower within two
         Business Days after notice of 





                                      10

<PAGE>   17

         such proposed assignment has been provided by the assigning Lender to
         the Borrower; provided, however, that neither the Borrower nor an
         affiliate of the Borrower shall qualify as an Eligible Assignee.

                 "Eligible Securities" means the following obligations and any
         other obligations previously approved in writing by the Agent:

                          (a)     Government Securities;

                          (b)     obligations of any corporation organized
                 under the laws of any state of the United States of America or
                 under the laws of any other nation, payable in the United
                 States of America, expressed to mature not later than 92 days
                 following the date of issuance thereof and rated in an
                 investment grade rating category of A-1 or better by S&P and
                 P-1 or better by Moody's;

                          (c)     interest bearing demand or time deposits
                 issued by any Lender or certificates of deposit maturing
                 within one year from the date of issuance thereof and issued
                 by a bank or trust company organized under the laws of the
                 United States or of any state thereof having capital surplus
                 and undivided profits aggregating at least $400,000,000 and
                 being rated "A-1" or better by S&P or "P-1" or better by
                 Moody's;

                          (d)     Repurchase Agreements;

                          (e)     Municipal Obligations;

                          (f)     Pre-Refunded Municipal Obligations;

                          (g)     shares of mutual funds which invest in
                 obligations described in paragraphs (a) through (f) above, the
                 shares of which mutual funds are at all times rated "AAA" by
                 S&P;

                          (h)     tax-exempt or taxable adjustable rate
                 preferred stock issued by a Person having a rating of its long
                 term unsecured debt of "A" or better by S&P or "A-1" or better
                 by Moody's; and

                          (i)     asset-backed remarketed certificates of
                 participation representing a fractional undivided interest in
                 the assets of a trust, which certificates are rated at least
                 "A-1" by S&P and "P-1" by Moody's.  

                 "Employee Benefit Plan" means any employee benefit plan 
         within the meaning of Section 3(3) of ERISA which (i) is maintained for
         employees of the Borrower or any of its ERISA Affiliates or is assumed
         by the Borrower or any of its ERISA Affiliates in connection
         with any Acquisition or (ii) has at any time been maintained for the
         employees of the Borrower or any current or former ERISA Affiliate.







                                      11

<PAGE>   18

                 "Environmental Laws" means any federal, state or local
         statute, law, ordinance, code, rule, regulation, order, decree, permit
         or license regulating, relating to, or imposing liability or standards
         of conduct concerning, any environmental matters or conditions,
         environmental protection or conservation, including without
         limitation, the Comprehensive Environmental Response, Compensation and
         Liability Act of 1980, as amended; the Superfund Amendments and
         Reauthorization Act of 1986, as amended; the Resource Conservation and
         Recovery Act, as amended; the Toxic Substances Control Act, as
         amended; the Clean Air Act, as amended; the Clean Water Act, as
         amended; together with all regulations promulgated thereunder, and any
         other "Superfund" or "Superlien" law.

                 "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended from time to time, and any successor statute and all
         rules and regulations promulgated thereunder.

                 "ERISA Affiliate", as applied to the Borrower, means any
         Person or trade or business which is a member of a group which is
         under common control with the Borrower, who together with the
         Borrower, is treated as a single employer within the meaning of
         Section 414(b) and (c) of the Code.

                 "Eurodollar Rate Loan" means a Loan for which the rate of
         interest is determined by reference to the Eurodollar Rate.

                 "Eurodollar Rate" means the interest rate per annum calculated
         according to the following formula:

                Eurodollar    =   Interbank Offered Rate   +   Applicable
                                 ------------------------- 
                Rate              1- Reserve Requirement          Margin

                 "Event of Default" means any of the occurrences set forth as 
         such in Section 10.1.

                 "Exchange Act" means the Securities Exchange Act of 1934, as
         amended, and the regulations promulgated thereunder.

                 "Existing Credit Facility" means that certain Restated Loan
         Agreement dated as of February 10, 1995, as amended, by and between
         the Borrower and the Agent providing for loans of up to a maximum
         principal amount of $50,000,000.

                 "Existing Letters of Credit" means those certain letters of
         credit issued by NationsBank for the benefit of the Borrower including
         those listed on Schedule 1.1(b) hereto.

                 "Facility Guaranty" means each Guaranty and Suretyship
         Agreement between one or more Guarantors and the Agent for the benefit 
         of the Lenders substantially in the form of Exhibit I, delivered as of
         the Closing Date and otherwise pursuant to Section 8.19, as the same
         may be amended, modified or supplemented.







                                      12

<PAGE>   19

                 "Facility Termination Date" means the date on which both the
         Revolving Credit Termination Date and Line of Credit Termination Date
         shall have occurred, no Letters of Credit shall remain outstanding and
         the Borrower shall have fully, finally and irrevocably paid and
         satisfied all Obligations.

                 "Federal Funds Rate" means, for any day, the rate per annum
         (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
         the weighted average of the rates on overnight Federal funds
         transactions with members of the Federal Reserve System arranged by
         Federal funds brokers on such day, as published by the Federal Reserve
         Bank of New York on the Business Day next succeeding such day;
         provided that (a) if such day is not a Business Day, the Federal Funds
         Rate for such day shall be such rate on such transactions on the next
         preceding Business Day as so published on the next succeeding Business
         Day, and (b) if no such rate is so published on such next succeeding
         Business Day, the Federal Funds Rate for such day shall be the
         average rate charged to the Agent (in its individual capacity) on such
         day on such transactions as determined by the Agent.

                 "Fiscal Year" means the twelve month fiscal period of the
         Borrower commencing on January 1 of each calendar year and ending on
         December 31 of the following calendar year.

                 "Foreign Benefit Law" means any applicable statute, law,
         ordinance, code, rule, regulation, order or decree of any foreign
         nation or any province, state, territory, protectorate or other
         political subdivision thereof regulating, relating to, or imposing
         liability or standards of conduct concerning, any Employee Benefit
         Plan.

                 "Four-Quarter Period" means a period of four full consecutive
         fiscal quarters of the Borrower and its Subsidiaries, taken together
         as one accounting period.

                 "GAAP" or "Generally Accepted Accounting Principles" means
         generally accepted accounting principles, being those principles of
         accounting set forth in pronouncements of the Financial Accounting
         Standards Board, the American Institute of Certified Public
         Accountants or which have other substantial authoritative support and
         are applicable in the circumstances as of the date of a report.

                 "Government Securities" means direct obligations of, or
         obligations the timely payment of principal and interest on which are
         fully and unconditionally guaranteed by, the United States of America.

                 "Governmental Authority" shall mean any Federal, state,
         municipal, national or other governmental department, commission,
         board, bureau, court, agency or instrumentality or political
         subdivision thereof or any entity or officer exercising executive,
         legislative, judicial, regulatory or administrative functions of or
         pertaining to any government or any court, in each case whether
         associated with a state of the United States, the United States, or a
         foreign entity or government.




                                      13

<PAGE>   20

                 "Guaranties" means all obligations of the Borrower or any
         Subsidiary directly or indirectly, or in effect, guaranteeing, any
         Indebtedness or other obligation to pay money of any other Person.

                 "Guarantors" means, at any date, the Subsidiaries who are
         parties to a Facility Guaranty at such date.

                 "Hazardous Material" means and includes any pollutant,
         contaminant, or hazardous, toxic waste, substance or material
         (including without limitation petroleum products, asbestos-containing
         materials and lead), the generation, handling, storage,
         transportation, disposal, treatment, release, discharge or emission of
         which is subject to any Environmental Law.

                 "Indebtedness" means with respect to any Person, without
         duplication, all Indebtedness for Money Borrowed, all indebtedness of
         such Person for the acquisition of property or arising under Rate
         Hedging Obligations, all indebtedness secured by any Lien on the       
         property of such Person whether or not such indebtedness is assumed,
         all liability of such Person by way of endorsements (other than for
         collection or deposit in the ordinary course of business), all
         Contingent Obligations, all Guaranties, that portion of obligations
         with respect to Capital Leases and other items which in accordance
         with GAAP is required to be classified as a liability on a balance
         sheet; but excluding all accounts payable in the ordinary course of
         business so long as payment therefor is due within one year; provided
         that in no event shall the term Indebtedness include surplus and
         retained earnings, lease obligations (other than pursuant to Capital
         Leases), reserves for deferred income taxes and investment credits,
         other deferred credits or reserves.

                 "Indebtedness for Money Borrowed" means with respect to any
         Person, without duplication, all indebtedness in respect of money
         borrowed, including without limitation all Capital Leases and the
         deferred purchase price of any property or asset, evidenced by a
         promissory note, bond, debenture or similar written obligation for the
         payment of money (including conditional sales or similar title
         retention agreements), other than accounts payable incurred in the
         ordinary course of business.

                 "Interbank Offered Rate" means, with respect to any Eurodollar
         Rate Loan for the Interest Period applicable thereto, the rate per
         annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
         appearing on Telerate Page 3750 (or any successor page) as the London
         interbank offered rate for deposits in Dollars at approximately 11:00
         A.M. (London time) two Business Days prior to the first day of such
         Interest Period for a term comparable to such Interest Period.  If for
         any reason such rate is unavailable, the term "Interbank Offered Rate"
         shall mean, with respect to any Eurodollar Rate Loan for the Interest
         Period applicable thereto, the rate per annum (rounded upwards, if
         necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
         LIBO Page as the London interbank offered rate for deposits in Dollars
         at approximately 11:00 A.M. (London time) two Business Days prior to
         the first day of such Interest Period for a term comparable to such
         Interest Period, provided, however; if more than one rate is specified
         on Reuters Screen LIBO Page, the applicable rate shall be the
         arithmetic mean of all such rates.






                                      14
<PAGE>   21

                 "Interest Period" means, for each Eurodollar Rate Loan, a
         period commencing on the date such Eurodollar Rate Loan is made or
         Converted and ending, at the Borrower's option, on the date one, two,
         three or six months thereafter as notified to the Agent by the
         Authorized Representative three (3) Business Days prior to the
         beginning of such Interest Period; provided, that,

                          (i)     if the Authorized Representative fails to
                 notify the Agent of the length of an Interest Period three (3)
                 Business Days prior to the first day of such Interest Period,
                 the Loan for which such Interest Period was to be determined
                 shall be deemed to be a Base Rate Loan as of the first day
                 thereof;

                         (ii)     if an Interest Period for a Eurodollar Rate
                 Loan would end on a day which is not a Business Day, such
                 Interest Period shall be extended to the next Business Day
                 (unless such extension would cause the applicable Interest
                 Period to end in the succeeding calendar month, in which case
                 such Interest Period shall end on the next preceding Business
                 Day);

                        (iii)     any Interest Period which begins on the last
                 Business Day of a calendar month (or on a day for which there
                 is no numerically corresponding day in the calendar month at
                 the end of such Interest Period) shall end on the last
                 Business Day of a calendar month;

                         (iv)     no Interest Period shall extend past the
                 Revolving Credit Termination Date in the case of Revolving
                 Loans and the Line of Credit Termination Date in the case of
                 Line of Credit Loans; and

                          (v)     there shall not be more than ten (10) 
                 Interest Periods in effect on any day.

                 "Interest Rate Selection Notice" means the written notice
         delivered by an Authorized Representative in connection with the
         election of a subsequent Interest Period for any Eurodollar Rate Loan  
         or the Conversion of any Eurodollar Rate Loan into a Base Rate Loan or
         the Conversion of any Base Rate Loan into a Eurodollar Rate Loan, in
         the form of Exhibit E.

                 "Issuing Bank" means initially NationsBank and thereafter any
         Lender which is successor to NationsBank as issuer of Letters of 
         Credit under Article III.

                 "LC Account Agreement" means the LC Account Agreement
         substantially in the form of Exhibit K attached hereto and dated as of
         the date hereof between the Borrower and the Agent, as amended,
         modified or supplemented from time to time.

                 "Letter of Credit" means a standby letter of credit issued by
         the Issuing Bank for the account of the Borrower in favor of a Person
         advancing credit or securing an obligation on behalf of the Borrower,
         including without limitation the Existing Letters of Credit.






                                      15

<PAGE>   22

                 "Letter of Credit Commitment" means, with respect to each
         Lender, the obligation of such Lender to acquire Participations in
         respect of Letters of Credit and Reimbursement Obligations up to an
         aggregate amount at any one time outstanding equal to such Lender's
         Applicable Commitment Percentage of the Total Letter of Credit
         Commitment as the same may be increased or decreased from time to time
         pursuant to this Agreement.

                 "Letter of Credit Facility" means the facility described in
         Article III hereof providing for the issuance by the Issuing Bank for
         the account of the Borrower of Letters of Credit in an aggregate
         stated amount at any time outstanding not exceeding the Total Letter
         of Credit Commitment.

                 "Letter of Credit Outstandings" means, as of any date of
         determination, the aggregate amount remaining undrawn under all
         Letters of Credit plus Reimbursement Obligations then outstanding.

                 "Lien" means any interest in property securing any 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 lien or security
         interest arising from a mortgage, encumbrance, pledge, security
         agreement, conditional sale or trust receipt or a lease, consignment
         or bailment for security purposes.  For the purposes of this
         Agreement, the Borrower and any Subsidiary shall be deemed to be the
         owner of any property which it has acquired or holds subject to a
         conditional sale agreement, financing lease, or other arrangement
         pursuant to which title to the property has been retained by or vested
         in some other Person for security purposes.

                 "Line of Credit Commitment" means, with respect to each
         Lender, the obligation of such Lender to make Line of Credit Loans
         to the Borrower in a principal amount equal to such Lender's
         Applicable Commitment Percentage of the Total Line of Credit
         Commitment.

                 "Line of Credit Facility" means the facility described in
         Section 2.1(b) providing for Line of Credit Loans to the
         Borrower by the Lenders in the original principal amount of the Total
         Line of Credit Commitment.

                 "Line of Credit Loan" means a loan made pursuant to the Line
         of Credit Facility in accordance with Section 2.1(b).

                 "Line of Credit Notes" means, collectively, the promissory
         notes of the Borrower evidencing Line of Credit Loans executed and
         delivered to the Lenders as provided in Section 2.5(b) substantially 
         in the form of Exhibit F-2.

                 "Line of Credit Outstandings" means, as of any date of
         determination, the aggregate principal amount of Line of
         Credit Loans then outstanding and all interest accrued thereon.

                 "Line of Credit Termination Date" means (i) the Stated
         Termination Date or (ii) such earlier date of termination of
         Lenders' obligations pursuant to Section 10.1 upon the 






                                      16

<PAGE>   23

         occurrence of an Event of Default, or (iii) such date as the Borrower
         may voluntarily and permanently terminate the Line of Credit
         Facility by written notice to Agent together with payment in full of
         all Line of Credit Outstandings.

                 "Loan" or "Loans" means any borrowing pursuant to an Advance
         under the Revolving Credit Facility, including Swing Line Loans, or
         the Line of Credit Facility.

                 "Loan Documents" means this Agreement, the Notes, the Security
         Instruments, the Facility Guaranties, the LC Account Agreement, the
         Applications and Agreements for Letter of Credit, and all other
         instruments and documents heretofore or hereafter executed or
         delivered to or in favor of any Lender or the Agent in connection with
         the Loans made and transactions contemplated under this Agreement, as
         the same may be amended, supplemented or replaced from the time to
         time.

                 "Loan Parties" means the Borrower and the Guarantors.

                 "Material Adverse Effect" means a material adverse effect on
         (i) the business, properties, prospects, operations or condition,
         financial or otherwise, of the Borrower and its Subsidiaries, taken as
         a whole, (ii) the ability of any Loan Party to pay or perform its
         respective obligations, liabilities and indebtedness under the Loan
         Documents as such payment or performance becomes due in accordance
         with the terms thereof, or (iii) the rights, powers and remedies of
         the Agent or any Lender under any Loan Document or the validity,
         legality or enforceability thereof.

                 "Moody's" means Moody's Investors Service, Inc.

                 "Multiemployer Plan" means a "multiemployer plan" as defined
         in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
         Affiliate is making, or is accruing an obligation to make,
         contributions or has made, or been obligated to make, contributions
         within the preceding six (6) Fiscal Years.

                 "Municipal Obligations" means general obligations issued by,
         and supported by the full taxing authority of, any state of the United
         States of America or of any municipal corporation or other public body
         organized under the laws of any such state which are rated in the
         highest investment rating category by both S&P and Moody's.

                 "NationsBank" means NationsBank, National Association.

                 "Notes" means, collectively, the Line of Credit Notes,  the
         Revolving Notes, and the Swing Line Note.

                 "Obligations" means the obligations, liabilities and
         Indebtedness of the Borrower with respect to (i) the principal and
         interest on the Loans as evidenced by the Notes, (ii) the
         Reimbursement Obligations and otherwise in respect of the Letters of
         Credit, (iii) all liabilities of Borrower to any Lender which arise
         under a Swap Agreement, and (iv) the payment and 





                                      17

<PAGE>   24

         performance of all other obligations, liabilities and Indebtedness of
         the Borrower to the Lenders or the Agent hereunder, under any one or
         more of the other Loan Documents or with respect to the Loans.

                 "Outstandings" means, collectively, at any date, the Letter of
         Credit Outstandings, Swing Line Outstandings, Line of Credit
         Outstandings and Revolving Credit Outstandings on such date.

                 "Participation" means, (i) with respect to any Lender (other
         than the Issuing Bank) and a Letter of Credit, the extension of credit
         represented by the participation of such Lender hereunder in the
         rights and obligations of the Issuing Bank in respect of a Letter of
         Credit issued by the Issuing Bank in accordance with the terms hereof
         and (ii) with respect to any Lender (other than NationsBank) and a
         Swing Line Loan, the extension of credit represented by the
         participation of such Lender hereunder in the rights and obligations
         of NationsBank in respect of a Swing Line Loan made by NationsBank in
         accordance with the terms hereof.

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

                 "Pension Plan" means any employee pension benefit plan within
         the meaning of Section 3(2) of ERISA, other than a Multiemployer Plan,
         which is subject to the provisions of Title IV of ERISA or Section 412
         of the Code and which (i) is maintained for employees of the Borrower
         or any of its ERISA Affiliates or is assumed by the Borrower or any of
         its ERISA Affiliates in connection with any Acquisition or (ii) has at
         any time been maintained for the employees of the Borrower or any
         current or former ERISA Affiliate.

                 "Permitted Acquisition" means an Acquisition of a Person or
         the assets of a Person (i) effected with the consent and approval of
         the executive officers, Board of Directors or other applicable
         governing body of such Person and the duly obtained approval of such
         shareholders or other holders of equity interests in such Person as may
         be required to be obtained under applicable law, the charter documents
         of or any shareholder agreements or similar agreements pertaining to
         such Person, (ii) the line or lines of business of the Person to be
         acquired are substantially the same or similar as one or more line or
         lines of business conducted by the Borrower and its Subsidiaries, and
         (iii) the Person acquired shall be a Subsidiary, or be merged into the
         Borrower or a wholly-owned Subsidiary, upon consummation of the
         Acquisition (or if assets are being acquired, the acquiror shall be the
         Borrower or a wholly-owned Subsidiary).

                 "Person" means an individual, partnership, corporation, trust,
         limited liability company, unincorporated organization, association,
         joint venture or a government or agency or political subdivision
         thereof.

                 "Pledge Agreement" means, collectively (or individually as the
         context may indicate), (i) the pledge agreements dated as of the date
         hereof between the Borrower, certain Guarantors and the Agent for the
         benefit of the Agent and the Lenders, and (ii) any additional Pledge
         Agreement delivered to the Agent pursuant to Section 8.19 hereof, in
         each case, 





                                      18

<PAGE>   25

         substantially in the form of Exhibit J attached hereto, as such
         Pledge Agreement may be amended, supplemented or replaced from time to
         time.

                 "Pledged Stock" has the meaning given to such term in the 
         Pledge Agreement.

                 "Pledgor" means, at any date, the Borrower and the Guarantors
         who are parties to a Pledge Agreement at such date.

                 "Pre-Refunded Municipal Obligations" means obligations of any
         state of the United States of America or of any municipal corporation
         or other public body organized under the laws of any such state which
         are rated, based on the escrow, in the highest investment rating
         category by both S&P and Moody's and which have been irrevocably
         called for redemption and advance refunded through the deposit in
         escrow of Government Securities or other debt securities which are (i)
         not callable at the option of the issuer thereof prior to maturity,
         (ii) irrevocably pledged solely to the payment of all principal and
         interest on such obligations as the same becomes due and (iii) in a
         principal amount and bear such rate or rates of interest as shall be
         sufficient to pay in full all principal of, interest, and premium, if
         any, on such obligations as the same becomes due as verified by a
         nationally recognized firm of certified public accountants.

                 "Prime Rate" means the per annum rate of interest established
         from time to time by NationsBank as its prime rate, which rate may not
         be the lowest rate of interest charged by NationsBank to its
         customers.

                 "Principal Office" means the office of NationsBank, presently
         located at Independence Center, 15th Floor, NC1 001-15-04, Charlotte,
         North Carolina 28255, Attention: Agency Services, or such other office
         and address as the Agent may from time to time designate.

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

                 "Regulation D" means Regulation D of the Board as the same may
         be amended or supplemented from time to time.

                 "Regulatory Change" means any change effective after the
         Closing Date in United States federal or state laws or regulations
         (including Regulation D and capital adequacy 





                                      19


<PAGE>   26



         regulations) or foreign laws or regulations or the adoption or making
         after such date of any interpretations, directives or requests applying
         to a class of banks, which includes any of the Lenders, under any
         United States federal or state or foreign laws or regulations (whether
         or not having the force of law) by any court or governmental or
         monetary authority charged with the interpretation or administration
         thereof or compliance by any Lender with any request or directive
         regarding capital adequacy, including those relating to "highly
         leveraged transactions," whether or not having the force of law, and
         whether or not failure to comply therewith would be unlawful and
         whether or not published or proposed prior to the date hereof.

                 "Reimbursement Obligation" shall mean at any time, the
         obligation of the Borrower with respect to any Letter of Credit to
         reimburse the Issuing Bank and the Lenders to the extent of their
         respective Participations (including by the receipt by the Issuing
         Bank of proceeds of Loans pursuant to Section 3.2) for amounts
         theretofore paid by the Issuing Bank pursuant to a drawing under such
         Letter of Credit.

                 "Repurchase Agreement" means a repurchase agreement entered
         into with any financial institution whose debt obligations or
         commercial paper are rated "A" by either of S&P or Moody's or "A-1" by
         S&P or "P-1" by Moody's.

                 "Required Lenders" means, as of any date, Lenders on such date
         having Credit Exposures (as defined below) aggregating more than 50%
         of the aggregate Credit Exposures of all the Lenders on such date. For
         purposes of the preceding sentence, the amount of the "Credit
         Exposure" of each Lender shall be equal to the aggregate principal
         amount of the Loans owing to such Lender plus the aggregate unutilized
         amounts of such Lender's Revolving Credit Commitment (without regard
         to any Swing Line Outstandings) plus the aggregate unutilized amounts
         of such Lender's Line of Credit Commitment plus the amount of such
         Lender's Applicable Commitment Percentage of Letter of Credit
         Outstandings; provided that, (i) if any Lender shall have failed to
         pay to the Issuing Bank its Applicable Commitment Percentage of any
         drawing under any Letter of Credit resulting in an outstanding
         Reimbursement Obligation, such Lender's Credit Exposure attributable
         to Letters of Credit and Reimbursement Obligations shall be deemed to
         be held by the Issuing Bank for purposes of this definition and (ii)
         if any Lender shall have failed to pay to NationsBank its Applicable
         Commitment Percentage of any Swing Line Loan, such Lender's Credit
         Exposure attributable to all Swing Line Outstandings shall be deemed
         to be held by NationsBank for purposes of this definition.

                 "Reserve Requirement" means, at any time, the maximum rate at
         which reserves (including, without limitation, any marginal, special,
         supplemental, or emergency reserves) are required to be maintained
         under regulations issued from time to time by the Board of Governors
         of the Federal Reserve System (or any successor) by member banks of
         the Federal Reserve System against "Eurocurrency liabilities" (as such
         term is used in Regulation D).  Without limiting the effect of the
         foregoing, the Reserve Requirement shall reflect any other reserves
         required to be maintained by such member banks with respect to (i) any
         category of liabilities which includes deposits by reference to which
         the Eurodollar Rate is to be 





                                      20

<PAGE>   27


         determined, or (ii) any category of extensions of credit or
         other assets which include Eurodollar Rate Loans.  The Eurodollar Rate
         shall be adjusted automatically on and as of the effective date of any
         change in the Reserve Requirement.

                 "Restricted Payment" means (a) any dividend or other
         distribution, direct or indirect, on account of any shares of any
         class of stock of Borrower or any of its Subsidiaries (other than
         those payable or distributable solely to the Borrower or a Guarantor)
         now or hereafter outstanding, except a dividend payable solely in
         shares of a class of stock to the holders of that class; (b) any
         redemption, conversion, exchange, retirement or similar payment,
         purchase or other acquisition for value, direct or indirect, of any
         shares of any class of stock of the Borrower or any of its
         Subsidiaries (other than those payable or distributable solely to the
         Borrower or a Guarantor) now or hereafter outstanding; (c) any
         payment made to retire, or to obtain the surrender of, any outstanding
         warrants, options or other rights to acquire shares of any class of
         stock of the Borrower or any of its Subsidiaries now or hereafter
         outstanding; and (d) any issuance and sale of capital stock of any
         Subsidiary of the Borrower (or any option, warrant or right to acquire
         such stock) other than to the Borrower or a Subsidiary.

                 "Revolving Credit Commitment" means, with respect to each
         Lender, the obligation of such Lender to make Revolving Loans to the
         Borrower up to an aggregate principal amount at any one time
         outstanding equal to such Lender's Applicable Commitment Percentage of
         the Total Revolving Credit Commitment.

                 "Revolving Credit Facility" means the facility described in
         Section 2.1(a) hereof providing for Loans to the Borrower by the
         Lenders in the aggregate principal amount of the Total Revolving
         Credit Commitment.

                 "Revolving Credit Outstandings" means, as of any date of
         determination, the aggregate principal amount of all Revolving Loans 
         then outstanding and all interest accrued thereon.

                 "Revolving Credit Termination Date" means (i) November ___,
         2000 or (ii) such earlier date of termination of Lenders' obligations
         pursuant to Section 10.1 upon the occurrence of an Event of Default,
         or (iii) such date as the Borrower may voluntarily and permanently
         terminate the Revolving Credit Facility by written notice to Agent
         together with payment in full of all Revolving Credit Outstandings,
         Swing Line Outstandings and Letter of Credit Outstandings and
         cancellation of all Letters of Credit.

                 "Revolving Loan" means any borrowing pursuant to an Advance
         under the Revolving Credit Facility in accordance with Section 2.1(a).

                 "Revolving Notes" means, collectively, the promissory notes of
         the Borrower evidencing Revolving Loans executed and delivered to the  
         Lenders as provided in Section 2.5(a) substantially in the form of
         Exhibit F-1, with appropriate insertions as to amounts, dates and
         names of Lenders.





                                      21

<PAGE>   28

                 "S&P" means Standard & Poor's Ratings Group, a division of The
         McGraw-Hill Companies, Inc.

                 "Security Instruments" means, collectively, the Pledge
         Agreement, the Collateral Assignment of Partnership Interests, and all
         other agreements, instruments and other documents, whether now
         existing or hereafter in effect, pursuant to which the Borrower or any
         Subsidiary shall grant or convey to the Agent or the Lenders a Lien in
         property as security for all or any portion of the Obligations, as any
         of them may be amended, modified or supplemented from time to time.

                 "Single Employer Plan" means any employee pension benefit plan
         covered by Title IV of ERISA in respect of which the Borrower or any
         Subsidiary is an "employer" as described in Section 4001(b) of ERISA
         and which is not a Multiemployer Plan.

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

                          (i)     the fair value of its assets (both at fair
                 valuation and at present fair saleable value on an orderly
                 basis) is in excess of the total amount of its liabilities,
                 including Contingent Obligations; and

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

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

                 "Stated Termination Date" means November 24, 1998 or such
         later date as the parties may agree pursuant to Section 2.13(a).

                 "Subsidiary" means any corporation or other entity in which
         more than 50% of its outstanding voting stock or more than 50% of
         all equity interests is owned directly or indirectly by the Borrower
         and/or by one or more of the Borrower's Subsidiaries.

                 "Swap Agreement" means one or more agreements between the
         Borrower and any Lender with respect to Indebtedness evidenced by any
         or all of the Notes, on terms mutually acceptable to the Borrower and
         such Lender, which agreements create Rate Hedging Obligations.

                 "Swing Line" means the revolving line of credit established by
         NationsBank in favor of the Borrower pursuant to Section 2.14.

                 "Swing Line Loans" means loans made by NationsBank to the
         Borrower pursuant to Section 2.14.







                                      22

<PAGE>   29

                 "Swing Line Note" means the promissory note of the Borrower
         evidencing Swing Line Loans executed and delivered to NationsBank
         as provided in Section 2.5(c).

                 "Swing Line Outstandings" means, as of any date of
         determination, the aggregate principal amount of all Swing Line Loans
         then outstanding.

                 "Termination Event" means: (i) a "Reportable Event" described
         in Section 4043 of ERISA and the regulations issued thereunder (unless
         the notice requirement has been waived by applicable regulation); or
         (ii) the withdrawal of the Borrower or any ERISA Affiliate from a
         Pension Plan during a plan year in which it was a "substantial
         employer" as defined in Section 4001(a)(2) of ERISA or was deemed such
         under Section 4068(f) of ERISA; or (iii) the termination of a Pension
         Plan, the filing of a notice of intent to terminate a Pension Plan or
         the treatment of a Pension Plan amendment as a termination under
         Section 4041 of ERISA; or (iv) the institution of proceedings to
         terminate a Pension Plan by the PBGC; or (v) any other event or
         condition which would constitute grounds under Section 4042(a) of
         ERISA for the termination of, or the appointment of a trustee to
         administer, any Pension Plan; or (vi) the partial or complete
         withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
         Plan; or (vii) the imposition of a Lien pursuant to Section 412 of the
         Code or Section 302 of ERISA; or (viii) any event or condition which
         results in the reorganization or insolvency of a Multiemployer Plan
         under Section 4241 or Section 4245 of ERISA, respectively; or (ix) any
         event or condition which results in the termination of a Multiemployer
         Plan under Section 4041A of ERISA or the institution by the PBGC of
         proceedings to terminate a Multiemployer Plan under Section 4042 of
         ERISA.

                 "Total Credit Commitment" means the sum of the Total Revolving
         Credit Commitment and the Total Line of Credit Commitment.

                 "Total Letter of Credit Commitment" means an amount not to 
         exceed $5,000,000.

                 "Total Line of Credit Commitment" means a principal amount
         equal to $25,000,000, as reduced from time to time in accordance
         with Section 2.7.

                 "Total Revolving Credit Commitment" means a principal amount
         equal to $75,000,000, as reduced from time to time in accordance with
         Section 2.7.,

                 "Type" shall mean any type of Loan (i.e., a Base Rate Loan or
         a Eurodollar Rate Loan).

                 "Voting Stock" means shares of capital stock issued by a
         corporation, or equivalent interests in any other Person, the holders
         of which are ordinarily, in the absence of contingencies, entitled to
         vote for the election of directors (or persons performing similar
         functions) of such Person, even if the right so to vote has been
         suspended by the happening of such a contingency.

         1.2.    Rules of Interpretation.





                                      23

<PAGE>   30

                 (a)      All accounting terms not specifically defined herein
         shall have the meanings assigned to such terms and shall be
         interpreted in accordance with GAAP applied on a Consistent Basis.

                 (b)      Each term defined in Article 1 or 9 of the Florida
         Uniform Commercial Code shall have the meaning given therein unless
         otherwise defined herein, except to the extent that the Uniform
         Commercial Code of another jurisdiction is controlling, in which case
         such terms shall have the meaning given in the Uniform Commercial Code
         of the applicable jurisdiction.

                 (c)      The headings, subheadings and table of contents used
         herein or in any other Loan Document are solely for convenience of
         reference and shall not constitute a part of any such document or
         affect the meaning, construction or effect of any provision thereof.

                 (d)      Except as otherwise expressly provided, references
         herein to articles, sections, paragraphs, clauses, annexes,
         appendices, exhibits and schedules are references to articles,
         sections, paragraphs, clauses, annexes, appendices, exhibits and
         schedules in or to this Agreement.

                 (e)      All definitions set forth herein or in any other Loan
         Document shall apply to the singular as well as the plural form of
         such defined term, and all references to the masculine gender shall
         include reference to the feminine or neuter gender, and vice versa, as
         the context may require.

                 (f)      When used herein or in any other Loan Document, words
         such as "hereunder", "hereto", "hereof" and "herein" and other words of
         like import shall, unless the context clearly indicates to the
         contrary, refer to the whole of the applicable document and not to any
         particular article, section, subsection, paragraph or clause thereof.

                 (g)      References to "including" means including without
         limiting the generality of any description preceding such term, and
         for purposes hereof the rule of ejusdem generis shall not be
         applicable to limit a general statement, followed by or referable to
         an enumeration of specific matters, to matters similar to those
         specifically mentioned.

                 (h)      All dates and times of day specified herein shall
         refer to such dates and times at Charlotte, North Carolina.

                 (i)      Each of the parties to the Loan Documents and their
         counsel have reviewed and revised, or requested (or had the
         opportunity to request) revisions to, the Loan Documents, and any rule
         of construction that ambiguities are to be resolved against the
         drafting party shall be inapplicable in the construing and
         interpretation of the Loan Documents and all exhibits, schedules and
         appendices thereto.

                 (j)      Any reference to an officer of the Borrower or any
         other Person by reference to the title of such officer shall be deemed
         to refer to each other officer of such Person, however titled,
         exercising the same or substantially similar functions.








                                      24

<PAGE>   31

                 (k)       All references to any agreement or document as
         amended, modified or supplemented, or words of similar effect, shall
         mean such document or agreement, as the case may be, as amended,
         modified or supplemented from time to time only as and to the extent
         permitted therein and in the Loan Documents.





                                      25
<PAGE>   32

                                   ARTICLE II

                             The Credit Facilities

         2.1.   Loans.

                 (a)       Revolving Credit Facility.  Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Advances to
the Borrower under the Revolving Credit Facility from time to time from the
Closing Date until the Revolving Credit Termination Date on a pro rata basis as
to the total borrowing requested by the Borrower on any day determined by such
Lender=s Applicable Commitment Percentage up to but not exceeding the Revolving
Credit Commitment of such Lender, provided, however, that the Lenders will not
be required and shall have no obligation to make any such Advance (i) so long
as a Default or an Event of Default has occurred and is continuing or (ii) if
the Agent has accelerated the maturity of any of the Notes as a result of an
Event of Default; provided further, however, that immediately after giving
effect to each such Advance, the principal amount of Revolving Credit
Outstandings plus Letter of Credit Outstandings plus Swing Line Outstandings
shall not exceed the Total Revolving Credit Commitment.  Within such limits,
the Borrower may borrow, repay and reborrow under the Revolving Credit Facility
on a Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolving Credit Termination Date; provided,
however, that (y) no Revolving Loan that is a Eurodollar Rate Loan shall be
made which has an Interest Period that extends beyond the Revolving Credit
Termination Date and (z) each Revolving Loan that is a Eurodollar Rate Loan
may, subject to the provisions of Section 2.8, be repaid only on the last day
of the Interest Period with respect thereto unless such payment is accompanied
by the additional payment, if any, required by Section 5.5.

                 (b)       Line of Credit Facility.    Subject to the terms and
conditions of this Agreement, each Lender severally agrees to make Advances to
the Borrower under the Line of Credit Facility from time to time from the
Closing Date until the Line of Credit Termination Date on a pro rata basis as
to the total borrowing requested by the Borrower on any day determined by such
Lender's Applicable Commitment Percentage up to but not exceeding the Line of
Credit Commitment of such Lender, provided, however, that the Lenders will not
be required and shall have no obligation to make any such Advance (i) so long
as a Default or an Event of Default has occurred and is continuing or (ii) if
the Agent has accelerated the maturity of any of the Notes as a result of an
Event of Default; provided further, however, that immediately after giving
effect to each such Advance, the principal amount of Line of Credit
Outstandings shall not exceed the Total Line of Credit Commitment.  Within such
limits, the Borrower may borrow, repay and reborrow under the Line of Credit
Facility on a Business Day from the Closing Date until, but (as to borrowings
and reborrowings) not including, the Line of Credit Termination Date; provided,
however, that (y) no Line of Credit Loan that is a Eurodollar Rate Loan shall
be made which has an Interest Period that extends beyond the Line of Credit
Termination Date and (z) each Line of Credit Loan that is a Eurodollar Rate
Loan may, subject to the provisions of Section 2.8, be repaid only on the last
day of the Interest Period with respect thereto unless such payment is
accompanied by the additional payment, if any, required by Section 5.5.





                                     26

<PAGE>   33

                 (c)       Amounts.  Except as otherwise permitted by the
Lenders from time to time, the aggregate unpaid principal amount of the
Revolving Credit Outstandings plus Letter of Credit Outstandings plus Swing
Line Outstandings shall not exceed at any time the Total Revolving Credit
Commitment, and the aggregate unpaid principal amount of the Line of Credit
Outstandings shall not exceed the Total Line of Credit Commitment and, in the
event there shall be outstanding any such excess, the Borrower shall
immediately make such payments and prepayments as shall be necessary to comply
with this restriction.  Each Revolving Loan and Line of Credit Loan hereunder,
other than Base Rate Refunding Loans, and each Conversion under Section 2.8,
shall be in an amount of at least $1,000,000, and, if greater than $1,000,000,
an integral multiple of $500,000.

                 (d)       Advances.  (i)  An Authorized Representative shall
give the Agent (1) at least three (3) Business Days' irrevocable written notice
by telefacsimile transmission of a Borrowing Notice or Interest Rate Selection
Notice (as applicable) with appropriate insertions, effective upon receipt, of
each Loan that is a Eurodollar Rate Loan (whether representing an additional
borrowing hereunder or the Conversion of a borrowing hereunder from Base Rate
Loans to Eurodollar Rate Loans) prior to 10:30 A.M. and (2) irrevocable written
notice by telefacsimile transmission of a Borrowing Notice or Interest Rate
Selection Notice (as applicable) with appropriate insertions, effective upon
receipt, of each Loan (other than Base Rate Refunding Loans to the extent the
same are effected without notice pursuant to Section 2.1(d)(iv)) that is a Base
Rate Loan (whether representing an additional borrowing hereunder or the
Conversion of borrowing hereunder from Eurodollar Rate Loans to Base Rate
Loans) prior to 10:30 A.M. on the day of such proposed Loan.  Each such notice
shall specify the amount of the borrowing, whether the Loan is a Revolving Loan
or a Line of Credit Loan, the Type of Loan (Base Rate or Eurodollar Rate), the
date of borrowing and, if a Eurodollar Rate Loan, the Interest Period to be
used in the computation of interest.   Notice of receipt of such Borrowing
Notice or Interest Rate Selection Notice, as the case may be, together with the
amount of each Lender's portion of an Advance requested thereunder, shall be
provided by the Agent to each Lender by telefacsimile transmission with
reasonable promptness, but (provided the Agent shall have received such notice
by 10:30 A.M.) not later than 1:00 P.M. on the same day as the Agent's receipt
of such notice.

         (ii)    Not later than 2:00 P.M. on the date specified for each
borrowing under this Section 2.1, each Lender shall, pursuant to the terms and
subject to the conditions of this Agreement, make the amount of the Advance or
Advances to be made by it on such day available by wire transfer to the Agent
in the amount of its pro rata share, determined according to such Lender's
Applicable Commitment Percentage of the  Loan or Loans to be made on such day.
Such wire transfer shall be directed to the Agent at the Principal Office and
shall be in the form of Dollars constituting immediately available funds.  The
amount so received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Borrower by delivery of the proceeds
thereof to the Borrower's Account or otherwise as shall be directed in the
applicable Borrowing Notice by the Authorized Representative and reasonably
acceptable to the Agent.

         (iii)   The Borrower shall have the option to elect the duration of
the initial and any subsequent Interest Periods and to Convert the Loans in
accordance with Section 2.8. Eurodollar Rate Loans and Base Rate Loans may be
outstanding at the same time, provided, however, there shall not be outstanding
at any one time Eurodollar Rate Loans having more than ten (10) different
Interest 







                                     27

<PAGE>   34
Periods.  If the Agent does not receive a Borrowing Notice or an Interest Rate
Selection Notice giving notice of election of the duration of an Interest
Period or of Conversion of any Loan to or Continuation of a Loan as a
Eurodollar Rate Loan by the time prescribed by Section 2.1(d) or 2.8, the
Borrower shall be deemed to have elected to Convert such Loan to (or Continue
such Loan as) a Base Rate Loan until the Borrower notifies the Agent in
accordance with Section 2.8.

         (iv)    Notwithstanding the foregoing, if a drawing is made under any
Letter of Credit, such drawing is honored by the Issuing Bank prior to the
Revolving Credit Termination Date, and the Borrower shall not immediately,
after receipt of notice of such drawing, fully reimburse the Issuing Bank in
respect of such drawing, (A) provided that the conditions to making a Revolving
Loan as herein provided shall then be satisfied, the Reimbursement Obligation
arising from such drawing shall be paid to the Issuing Bank by the Agent
without the requirement of notice to or from the Borrower from immediately
available funds which shall be advanced as a Base Rate Refunding Loan by each
Lender under the Revolving Credit Facility in an amount equal to such Lender's
Applicable Commitment Percentage of such Reimbursement Obligation, and (B) if
the conditions to making a Revolving Loan as herein provided shall not then be
satisfied, each of the Lenders shall fund by payment to the Agent (for the
benefit of the Issuing Bank) in immediately available funds for the purchase
from the Issuing Bank of their respective Participations in the related
Reimbursement Obligation based on their respective Applicable Commitment
Percentages of the Total Letter of Credit Commitment.  If a drawing is
presented under any Letter of Credit in accordance with the terms thereof and
the Borrower shall not immediately reimburse the Issuing Bank in respect
thereof, then notice of such drawing or payment shall be provided promptly by
the Issuing Bank to the Agent and the Agent shall provide notice to each Lender
by telephone or telefacsimile transmission.  If notice to the Lenders of a
drawing under any Letter of Credit is given by the Agent at or before 12:00
noon on any Business Day, each Lender shall, pursuant to the conditions
specified in this Section 2.1(d)(iv), either make a Base Rate Refunding Loan or
fund the purchase of its Participation in the amount of such Lender's
Applicable Commitment Percentage of such drawing or payment and shall pay such
amount to the Agent for the account of the Issuing Bank at the Principal Office
in Dollars and in immediately available funds before 2:30 P.M. on the same
Business Day.  If notice to the Lenders of a drawing under a Letter of Credit
is given by the Agent after 12:00 noon on any Business Day, each Lender shall,
pursuant to the conditions specified in this Section 2.1(d)(iv), either make a
Base Rate Refunding Loan or fund the purchase of its Participation in the
amount of such Lender's Applicable Commitment Percentage of such drawing or
payment and shall pay such amount to the Agent for the account of the Issuing
Bank at the Principal Office in Dollars and in immediately available funds
before 12:00 noon on the next following Business Day.  Any such Base Rate
Refunding Loan shall be advanced as, and shall Continue as, a Base Rate Loan
unless and until the Borrower Converts such Base Rate Loan in accordance with
the terms of Section 2.8.

         2.2.   Payment of Interest.  (a)  The Borrower shall pay interest to
the Agent for the account of each Lender on the outstanding and unpaid
principal amount of each Loan made by such Lender for the period commencing on
the date of such Loan until such Loan shall be due at the then applicable Base
Rate for Base Rate Loans or applicable Eurodollar Rate for Eurodollar Rate
Loans, as designated by the Authorized Representative pursuant to Section 2.1;
provided, however, that if any amount shall not be paid when due (at maturity,
by acceleration or otherwise), all amounts outstanding hereunder shall bear
interest thereafter, until paid, at the Default Rate.


                                     28

<PAGE>   35

                 (b)       Interest on each Loan shall be computed on the basis
of a year of 360 days and calculated in each case for the actual number of days
elapsed.  Interest on each Loan shall be paid (i) quarterly in arrears on the
last Business Day of each March, June, September and December, commencing
December 31, 1997 for each Base Rate Loan, (ii) on the last day of the
applicable Interest Period for each Eurodollar Rate Loan and, if such Interest
Period extends for more than three (3) months, at intervals of three (3) months
after the first day of such Interest Period, and (iii) upon payment in full of
the principal amount of such Loan and termination of all commitments to make
Loans hereunder.

         2.3.   Payment of Principal.  The principal amount of each Revolving
Loan shall be due and payable to the Agent for the benefit of each Lender in
full on the Revolving Credit Termination Date, or earlier as specifically
provided herein.  The principal amount of each Line of Credit Loan shall be due
and payable to the Agent for the benefit of each Lender in full on the Line of
Credit Termination Date, or earlier as specifically provided herein.  The
principal amount of any Base Rate Loan may be prepaid in whole or in part at
any time.  The principal amount of any Eurodollar Rate Loan may be prepaid only
at the end of the applicable Interest Period unless the Borrower shall pay to
the Agent for the account of the Lenders the additional amount, if any,
required under Section 5.5. All prepayments of Loans made by the Borrower shall
be in the amount of $1,000,000 or such greater amount which is an integral
multiple of $500,000, or the amount equal to all Revolving Credit Outstandings
or Line of Credit Outstandings, or such other amount as necessary to comply
with Section 2.1(d) or Section 2.8.

         2.4.   Non-Conforming Payments.  (a)  Each payment of principal
(including any prepayment) and payment of interest and fees, and any other
amount required to be paid to the Lenders with respect to the  Loans, shall be
made to the Agent at the Principal Office, for the account of each Lender, in
Dollars and in immediately available funds before 12:00 Noon on the date such
payment is due.  The Agent may, but shall not be obligated to, debit the amount
of any such payment which is not made by such time to any ordinary deposit
account, if any, of the Borrower with the Agent.

         (b)      The Agent shall deem any payment made by or on behalf of the
Borrower hereunder that is not made both in Dollars and in immediately
available funds and prior to 12:00 Noon to be a non-conforming payment.  Any
such payment shall not be deemed to be received by the Agent until the later of
(i) the time such funds become available funds and (ii) the next Business Day.
Any non-conforming payment may, at the option of the Agent, constitute or
become a Default or Event of Default provided, that, if the Agent determines
such non-conforming payment to be a Default or Event of Default, the Agent will
provide notification to the Borrower after such determination has been made.
Interest shall continue to accrue on any principal as to which a non-conforming
payment is made until the later of (x) the date such funds become available
funds or (y) the next Business Day at the Default Rate from the date such
amount was due and payable.

         (c)      In the event that any payment hereunder or under the Notes
becomes due and payable on a day other than a Business Day, then such due date
shall be extended to the next succeeding Business Day unless provided otherwise
under clause (ii) of the definition of "Interest Period"; provided that
interest shall continue to accrue during the period of any such extension and
provided 







                                     29

<PAGE>   36

further, that in no event shall any such due date be extended beyond the
Revolving Credit Termination Date or Line of Credit Termination Date, as the
case may be.

         2.5.   Notes.  (a)  Revolving Loans made by each Lender shall be
evidenced by the Revolving Note payable to the order of such Lender in the
respective amount of its Applicable Commitment Percentage of the Revolving
Credit Commitment, which Revolving Note shall be dated the Closing Date or a
later date pursuant to an Assignment and Acceptance and shall be duly
completed, executed and delivered by the Borrower.

                 (b)  Line of Credit Loans made by each Lender shall be
evidenced by the Line of Credit Note payable to the order of such Lender in the
respective amount of its Applicable Commitment Percentage of the Line of Credit
Commitment, which Line of Credit Note shall be dated the Closing Date or a
later date pursuant to an Assignment and Acceptance and shall be duly
completed, executed and delivered by the Borrower.

                 (c)   Swing Line Loans made by NationsBank shall be evidenced
by the Swing Line Note payable to the order of NationsBank in the principal
amount of $5,000,000, which Swing Line Note shall be dated the Closing Date.

         2.6.   Pro Rata Payments.  Except as otherwise provided herein, (a)
each payment on account of the principal of and interest on the Loans and the
fees described in Section 2.10 shall be made to the Agent for the account of
the Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by the Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from the Borrower.

         2.7.   Reductions.  The Borrower shall, by notice from an Authorized
Representative, have the right from time to time but not more frequently than
once each calendar month, upon not less than three (3) Business Days' written
notice to the Agent, effective upon receipt, to permanently reduce the Total
Revolving Credit Commitment. The Agent shall give each Lender, within one (1)
Business Day of receipt of such notice, telefacsimile notice, or telephonic
notice (confirmed in writing), of such reduction.  Each such reduction shall be
in the aggregate amount of $5,000,000 or such greater amount which is in an
integral multiple of $1,000,000, or the entire remaining Total Revolving Credit
Commitment, and shall permanently reduce the Total Revolving Credit Commitment.
Each reduction of the Total Revolving Credit Commitment shall be accompanied by
payment of the Revolving Loans to the extent that the principal amount of
Revolving Credit Outstandings plus Letter of Credit Outstandings plus Swing
Line Outstandings exceeds the Total Revolving Credit Commitment after giving
effect to such reduction, together with accrued and unpaid interest on the
amounts prepaid.  No such reduction shall result in the payment of any
Eurodollar Rate Loan other than on the last day of the Interest Period of such
Eurodollar Rate Loan unless such prepayment is accompanied by amounts due, if
any, under Section 5.5.






                                     30

<PAGE>   37

         2.8.   Conversions and Elections of Subsequent Interest Periods.
Provided that no Default or Event of Default shall have occurred and be
continuing and subject to the limitations set forth below and in Article V, the
Borrower may:

                 (a)       upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M.
on any Business Day, Convert all or a part of Eurodollar Rate Loans under
either the Revolving Credit Facility or the Line of Credit Facility to Base
Rate Loans on the last day of the Interest Period for such Eurodollar Rate
Loans; and

                 (b)       upon delivery, effective upon receipt, of a properly
completed Interest Rate Selection Notice to the Agent on or before 10:30 A.M.
three (3) Business Days' prior to the date of such election or Conversion:

                          (i)     elect a subsequent Interest Period for all or
                 a portion of Eurodollar Rate Loans under either the Revolving
                 Credit Facility or the Line of Credit Facility to begin on the
                 last day of the then current Interest Period for such
                 Eurodollar Rate Loans; and

                         (ii)     Convert Base Rate Loans under either the
                 Revolving Credit Facility or the Line of Credit Facility to
                 Eurodollar Rate Loans on any Business Day.

         Each election and Conversion pursuant to this Section 2.8 shall be 
subject to the limitations on Eurodollar Rate Loans set forth in the definition
of "Interest Period" herein and in Sections 2.1, 2.3 and Article V.  The Agent
shall give written notice to each Lender of such notice of election or
Conversion prior to 3:00 P.M. on the day such notice of election or Conversion
is received.  All such Continuations or Conversions of Loans shall be effected
pro rata based on the Applicable Commitment Percentages of the Lenders.

         2.9.   Increase and Decrease in Amounts.  The amount of the Total
Revolving Credit Commitment which shall be available to the Borrower as
Advances shall be reduced by the aggregate amount of Outstanding Letters of
Credit and Outstanding Swing Line Loans.

         2.10.  Facility Fees.

                 (a)   Revolving Credit Facility.  For the period beginning on
the Closing Date and ending on the Revolving Credit Termination Date, the
Borrower agrees to pay to the Agent, for the pro rata benefit of the Lenders
based on their Applicable Commitment Percentages, an unused fee equal to the
Applicable Unused Fee for the Revolving Credit Facility multiplied by the
average daily amount by which the Total Revolving Credit Commitment exceeds the
sum of (i) Revolving Credit Outstandings without giving effect to Swing Line
Outstandings plus (ii) Letter of Credit Outstandings.  Such fees shall be due
in arrears on the last Business Day of each March, June, September and December
commencing December 31, 1997 to and on the Revolving Credit Termination Date.
Notwithstanding the foregoing, so long as any Lender fails to make available
any portion of its Revolving Credit Commitment when requested, such Lender
shall not be entitled to 







                                     31

<PAGE>   38

receive payment of its pro rata share of such fee until such Lender shall make
available such portion.  Such fee shall be calculated on the basis of a year of
360 days for the actual number of days elapsed.

                 (b)    Line of Credit Facility.   For the period beginning on
the Closing Date and ending on the Line of Credit Termination Date, the
Borrower agrees to pay to the Agent, for the pro rata benefit of the Lenders
based on their Applicable Commitment Percentages, an unused fee equal to the
Applicable Unused Fee for the Line of Credit Facility multiplied by the average
daily amount by which the Total Line of Credit Commitment exceeds the aggregate
principal amount of Line of Credit Outstandings.  Such fees shall be due in
arrears on the last Business Day of each March, June, September and December
commencing December 31, 1997 to and on Line of Credit Termination Date.
Notwithstanding the foregoing, so long as any Lender fails to make available
any portion of its Line of Credit Commitment when requested, such Lender shall
not be entitled to receive payment of its pro rata share of such fee until such
Lender shall make available such portion.  Such fee shall be calculated on the
basis of a year of 360 days for the actual number of days elapsed.

         2.11.  Deficiency Advances.  No Lender shall be responsible for any
default of any other Lender in respect to such other Lender's obligation to
make any Loan or fund its purchase of any Participation hereunder nor shall the
Revolving Credit Commitment or Line of Credit Commitment of any Lender
hereunder be increased as a result of such default of any other Lender.
Without limiting the generality of the foregoing, in the event any Lender shall
fail to advance funds to the Borrower under the Revolving Credit Facility or
Line of Credit Facility as herein provided, the Agent may in its discretion,
but shall not be obligated to, advance under the Revolving Note or Line of
Credit Note, as the case may be, in its favor as a Lender all or any portion of
such amount or amounts (each, a "deficiency advance") and shall thereafter be
entitled to payments of principal of and interest on such deficiency advance in
the same manner and at the same interest rate or rates to which such other
Lender would have been entitled had it made such advance under its Revolving
Note or Line of Credit Note, as the case may be; provided that, upon payment to
the Agent from such other Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest thereon, from the
most recent date or dates interest was paid to the Agent by the Borrower on
each Loan comprising such deficiency advance at the interest rate per annum for
overnight borrowing by the Agent from the Federal Reserve Bank, then such
payment shall be credited against the applicable Note of the Agent in full
payment of such deficiency advance and the Borrower shall be deemed to have
borrowed the amount of such deficiency advance from such other Lender as of the
most recent date or dates, as the case may be, upon which any payments of
interest were made by the Borrower thereon.

         2.12.  Use of Proceeds.  The proceeds of the Loans made pursuant to
this Agreement shall be used by the Borrower to refinance existing debt,
finance Permitted Acquisitions, and for general working capital needs and other
corporate purposes, including letters of credit.

         2.13.  Line of Credit Extension.

                 (a)       Extension of Stated Termination Date.  At the request
of the Borrower the Lenders may, in their sole discretion, elect to extend the
Stated Termination Date then in effect for  additional periods of up to 364
days each; provided, however, that at no time shall the committed 





                                     32

<PAGE>   39

term of the Line of Credit Facility exceed 364 days.  The Borrower shall notify
the Lenders of its request for such an extension by delivering to the Agent
notice of such request signed by an Authorized Representative not more than
ninety (90) days nor less than sixty (60) days prior to the Stated Termination
Date then in effect.  If the Lenders shall elect to so extend, the Agent shall
notify the Borrower in writing within sixty (60) days of its receipt of such
request for extension of the decision of the Lenders as to whether to extend
the Stated Termination Date.  Failure by any Lender to respond to a request for
an extension shall constitute a refusal of such Lender to give its consent to
such extension.  Failure by the Agent to give such notice shall constitute
refusal by the Lenders to extend the Stated Termination Date.  In no event
shall the Stated Termination Date extend beyond the Revolving Credit
Termination Date.

                 (b)      Term Loan Option.  In the event the Borrower fails to
exercise its option to extend the Stated Termination Date or the Lenders fail
to consent to such extension, the Borrower shall have the option to convert the
Line of Credit Outstandings as of the Stated Termination Date into a term loan
in the original principal amount equal to such Line of Credit Outstandings (the
"Term Loan Option").  Line of Credit Loans so converted by the Borrower in
accordance with this subsection (b) shall be referred to as the "Term Loans".
The Term Loans shall mature on the Revolving Credit Termination Date.  The Term
Loans may be comprised of Base Rate Loans and Eurodollar Rate Loans as the
Borrower may elect in accordance with the provisions hereof. The Term Loans
shall bear interest on the same terms as the Line of Credit Loans prior to
their conversion to Term Loans.  Amounts repaid or prepaid on the Term Loans
may not be reborrowed.  For purposes of this Agreement, in the event the
Borrower shall elect the Term Loan Option, then on and after the Line of Credit
Termination Date (i) references herein to the "Total Line of Credit Commitment"
shall mean the aggregate principal amount of the Term Loans as of the Line of
Credit Termination Date less all payments made with respect to the Term Loans
hereunder, (ii) references herein to "Line of Credit Commitment" shall mean,
with respect to each Lender, the obligation of such Lender to make Term Loans
in a principal amount equal to such Lender's Applicable Commitment Percentage
of the aggregate Term Loans and (iii) references herein to the "Line of Credit
Termination Date" shall mean the Term Loan Termination Date.

         2.14.  Swing Line.  (a) Notwithstanding any other provision of this
Agreement to the contrary, if and when there shall be more than one Lender
under this Agreement, in order to administer the Revolving Credit Facility in
an efficient manner and to minimize the transfer of funds between the Agent and
the Lenders, NationsBank may make available Swing Line Loans to the Borrower
prior to the Revolving Credit Termination Date.  NationsBank shall not make any
Swing Line Loan pursuant hereto (i) if to the actual knowledge of NationsBank
the Borrower is not in compliance with all the conditions to the making of
Revolving Loans set forth in this Agreement, (ii) if after giving effect to
such Swing Line Loan, the Swing Line Outstandings exceed $5,000,000, (iii) if
after giving effect to such Swing Line Loan, the sum of the Swing Line
Outstandings, Revolving Credit Outstandings and Letter of Credit Outstandings
exceeds the Total Revolving Credit Commitment or (iv) if the number of Lenders
is less than two.  Swing Line Loans shall be limited to Base Rate Loans.  The
Borrower may borrow, repay and reborrow under this Section 2.14.  Unless
notified to the contrary by NationsBank, borrowings under the Swing Line shall
be made in the minimum amount of $100,000 or, if greater, in amounts which are
integral multiples of $50,000, or in the amount necessary to effect a Base Rate
Refunding Loan, upon written request by telefacsimile 







                                     33

<PAGE>   40
 
transmission, effective upon receipt, by an Authorized Representative of the
Borrower made to NationsBank not later than 12:30 P.M. on the Business Day of
the requested borrowing.  Each such Borrowing Notice shall specify the amount
of the borrowing and the date of borrowing, and shall be in the form of Exhibit
D-2, with appropriate insertions.  Unless notified to the contrary by
NationsBank, each repayment of a Swing Line Loan shall be in a minimum amount
of $100,000 and an integral multiple of $50,000 in excess thereof or the
aggregate amount of all Swing Line Outstandings.  If the Borrower instructs
NationsBank to debit any demand deposit account of the Borrower in the amount
of any payment with respect to a Swing Line Loan, or NationsBank otherwise
receives repayment, after 12:30 P.M. on a Business Day, such payment shall be
deemed received on the next Business Day.

         (b)     Swing Line Loans shall bear interest at the Base Rate, the
interest payable on Swing Line Loans is solely for the account of NationsBank,
and all accrued and unpaid interest on Swing Line Loans shall be payable on the
dates and in the manner provided in Sections 2.2(b) and 2.4 with respect to
interest on Base Rate Loans.  The Swing Line Outstandings shall be evidenced by
the Note delivered to NationsBank pursuant to Section 2.5(c).

         (c)     Upon the making of a Swing Line Loan, each Lender shall be
deemed to have purchased from NationsBank a Participation therein in an amount
equal to that Lender's Applicable Commitment Percentage of such Swing Line
Loan.  Upon demand made by NationsBank, each Lender shall, according to its
Applicable Commitment Percentage of such Swing Line Loan, promptly provide to
NationsBank its purchase price therefor in an amount equal to its Participation
therein.  Any Advance made by a Lender pursuant to demand of NationsBank of the
purchase price of its Participation shall be deemed (i) provided that the
conditions to making Revolving Loans shall be satisfied, a Base Rate Refunding
Loan under Section 2.1 until the Borrower Converts such Base Rate Loan in
accordance with the terms of Section 2.8, and (ii) in all other cases, the
funding by each Lender of the purchase price of its Participation in such Swing
Line Loan.  The obligation of each Lender to so provide its purchase price to
NationsBank shall be absolute and unconditional and shall not be affected by
the occurrence of an Event of Default or any other occurrence or event.

         The Borrower, at its option and subject to the terms hereof, may
request an Advance pursuant to Section 2.1 in an amount sufficient to repay
Swing Line Outstandings on any date and the Agent shall provide from the
proceeds of such Advance to NationsBank the amount necessary to repay such Swing
Line Outstandings (which NationsBank shall then apply to such repayment) and
credit any balance of the Advance in immediately available funds in the manner
directed by the Borrower pursuant to Section 2.1(d)(ii).  The proceeds of such
Advances shall be paid to NationsBank for application to the Swing Line
Outstandings and the Lenders shall then be deemed to have made Loans in the
amount of such Advances.  The Swing Line shall continue in effect until the
Revolving Credit Termination Date, at which time all Swing Line Outstandings and
accrued interest thereon shall be due and payable in full.




                                     34


<PAGE>   41

                                  ARTICLE III

                               Letters of Credit

         3.1.  Letters of Credit.  The Issuing Bank agrees, subject to the
terms and conditions of this Agreement, upon request of the Borrower to issue
from time to time for the account of the Borrower Letters of Credit upon
delivery to the Issuing Bank of an Application and Agreement for Letter of
Credit relating thereto in form and content acceptable to the Issuing Bank;
provided, that (i) the Letter of Credit Outstandings shall not exceed the Total
Letter of Credit Commitment and (ii) no Letter of Credit shall be issued if,
after giving effect thereto, Letter of Credit Outstandings plus Revolving
Credit Outstandings plus Swing Line Outstandings shall exceed the Total
Revolving Credit Commitment.  No Letter of Credit shall have an expiry date
(including all rights of the Borrower or any beneficiary named in such Letter
of Credit to require renewal) or payment date occurring later than the earlier
to occur of one year after the date of its issuance or the fifth Business Day
prior to the Revolving Credit Termination Date.

         3.2.  Reimbursement.

                 (a)      The Borrower hereby unconditionally agrees to pay to
the Issuing Bank immediately on demand at the Principal Office all amounts
required to pay all drafts drawn or purporting to be drawn under the Letters of
Credit and all reasonable expenses incurred by the Issuing Bank in connection
with the Letters of Credit, and in any event and without demand to place in
possession of the Issuing Bank (which shall include Advances under the
Revolving Credit Facility if permitted by Section 2.1 and Swing Line Loans if
permitted by Section 2.14) sufficient funds to pay all debts and liabilities
arising under any Letter of Credit.  The Issuing Bank agrees to give the
Borrower prompt notice of any request for a draw under a Letter of Credit.  The
Issuing Bank may charge any account the Borrower may have with it for any and
all amounts the Issuing Bank pays under a Letter of Credit, plus charges and
reasonable expenses as from time to time agreed to by the Issuing Bank and the
Borrower; provided that to the extent permitted by Section 2.1(d)(iv) and
Section 2.14, amounts shall be paid pursuant to Advances under the Revolving
Credit Facility or, if the Borrower shall elect, by Swing Line Loans.  The
Borrower agrees to pay the Issuing Bank interest on any Reimbursement
Obligations not paid when due hereunder at the Base Rate plus two percent
(2.0%), or the maximum rate permitted by applicable law, if lower, such rate to
be calculated on the basis of a year of 360 days for actual days elapsed.

                 (b)      In accordance with the provisions of Section 2.1(d),
the Issuing Bank shall notify the Agent of any drawing under any Letter of
Credit promptly following the receipt by the Issuing Bank of such drawing.

                 (c)      Each Lender (other than the Issuing Bank) shall
automatically acquire on the date of issuance thereof, a Participation in the
liability of the Issuing Bank in respect of each Letter of Credit in an amount
equal to such Lender's Applicable Commitment Percentage of such liability, and
to the extent that the Borrower is obligated to pay the Issuing Bank under
Section 3.2(a), each Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably





                                     35

<PAGE>   42

assume, and shall be unconditionally obligated to pay to the Issuing Bank as
hereinafter described, its Applicable Commitment Percentage of the liability of
the Issuing Bank under such Letter of Credit.

                          (i)     Each Lender (including the Issuing Bank in
                 its capacity as a Lender) shall, subject to the terms and
                 conditions of Article II, pay to the Agent for the account of
                 the Issuing Bank at the Principal Office in Dollars and in
                 immediately available funds, an amount equal to its Applicable
                 Commitment Percentage of any drawing under a Letter of Credit,
                 such funds to be provided in the manner described in Section
                 2.1(d)(iv).

                         (ii)     Simultaneously with the making of each
                 payment by a Lender to the Issuing Bank pursuant to Section
                 2.1(d)(iv)(B), such Lender shall, automatically and without
                 any further action on the part of the Issuing Bank or such
                 Lender, acquire a Participation in an amount equal to such
                 payment (excluding the portion thereof constituting interest
                 accrued prior to the date the Lender made its payment) in the
                 related Reimbursement Obligation of the Borrower.  The
                 Reimbursement Obligations of the Borrower shall be immediately
                 due and payable whether by Advances made in accordance with
                 Section 2.1(d)(iv), Swing Line Loans made in accordance with
                 Section 2.14, or otherwise.

                        (iii)     Each Lender's obligation to make payment to
                 the Agent for the account of the Issuing Bank pursuant to
                 Section 2.1(d)(iv) and this Section 3.2(c), and the right of
                 the Issuing Bank to receive the same, shall be absolute and
                 unconditional, shall not be affected by any circumstance
                 whatsoever and shall be made without any offset, abatement,
                 withholding or reduction whatsoever.  If any Lender is
                 obligated to pay but does not pay amounts to the Agent for the
                 account of the Issuing Bank in full upon such request as
                 required by Section 2.1(d)(iv) or this Section 3.2(c), such
                 Lender shall, on demand, pay to the Agent for the account of
                 the Issuing Bank interest on the unpaid amount for each day
                 during the period commencing on the date of notice given to
                 such Lender pursuant to Section 2.1(d) until such Lender pays
                 such amount to the Agent for the account of the Issuing Bank
                 in full at the interest rate per annum for overnight borrowing
                 by the Agent from the Federal Reserve Bank.

                         (iv)     In the event the Lenders have purchased
                 Participations in any Reimbursement Obligation as set forth in
                 clause (ii) above, then at any time payment (in fully
                 collected, immediately available funds) of such Reimbursement
                 Obligation, in whole or in part, is received by Issuing Bank
                 from the Borrower, Issuing Bank shall promptly pay to each
                 Lender an amount equal to its Applicable Commitment Percentage
                 of such payment from the Borrower.

                 (d)      Promptly following the end of each calendar quarter,
the Issuing Bank shall deliver to the Agent a notice describing the aggregate
undrawn amount of all Letters of Credit at the end of such quarter.  Upon the
request of any Lender from time to time, the Issuing Bank shall deliver 






                                     36

<PAGE>   43

to the Agent, and the Agent shall deliver to such Lender, any other information
reasonably requested by such Lender with respect to each Letter of Credit
outstanding.

                 (e)      The issuance by the Issuing Bank of each Letter of
Credit shall, in addition to the conditions precedent set forth in Article VI,
be subject to the conditions that such Letter of Credit be in such form and
contain such terms as shall be reasonably satisfactory to the Issuing Bank
consistent with the then current practices and procedures of the Issuing Bank
with respect to similar letters of credit, and the Borrower shall have executed
and delivered such other instruments and agreements relating to such Letters of
Credit as the Issuing Bank shall have reasonably requested consistent with such
practices and procedures and shall not be in conflict with any of the express
terms herein contained.  All Letters of Credit shall be issued pursuant to and
subject to the Uniform Customs and Practice for Documentary Credits, 1993
revision, International Chamber of Commerce Publication No. 500 and all
subsequent amendments and revisions thereto.

                 (f)      The Borrower agrees that Issuing Bank may, in its
sole discretion, accept or pay, as complying with the terms of any Letter of
Credit, any drafts or other documents otherwise in order which may be signed or
issued by an administrator, executor, trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, liquidator, receiver,
attorney in fact or other legal representative of a party who is authorized
under such Letter of Credit to draw or issue any drafts or other documents.

                 (g)      Without limiting the generality of  the provisions of
Section 12.9, the Borrower hereby agrees to indemnify and hold harmless the
Issuing Bank, each other Lender and the Agent from and against any and all
claims and damages, losses, liabilities, reasonable costs and expenses which
the Issuing Bank, such other Lender or the Agent may incur (or which may be
claimed against the Issuing Bank, such other Lender or the Agent) by any Person
by reason of or in connection with the issuance or transfer of or payment or
failure to pay under any Letter of Credit; provided that the Borrower shall not
be required to indemnify the Issuing Bank, any other Lender or the Agent for
any claims, damages, losses, liabilities, costs or expenses to the extent, but
only to the extent, (i) caused by the willful misconduct or gross negligence of
the party to be indemnified or (ii) caused by the failure of the Issuing Bank
to pay under any Letter of Credit after the presentation to it of a request for
payment strictly complying with the terms and conditions of such Letter of
Credit, unless such payment is prohibited by any law, regulation, court order
or decree. The indemnification and hold harmless provisions of this Section
3.2(g) shall survive repayment of the Obligations, occurrence of the Revolving
Credit Termination Date and expiration or termination of this Agreement.

                 (h)      Without limiting Borrower's rights as set forth in
Section 3.2(g), the obligation of the Borrower to immediately reimburse the
Issuing Bank for drawings made under Letters of Credit and the Issuing Bank's
right to receive such payment shall be absolute, unconditional and irrevocable,
and that such obligations of the Borrower shall be performed strictly in
accordance with the terms of this Agreement and such Letters of Credit and the
related Applications and Agreement for any Letter of Credit, under all
circumstances whatsoever, including the following circumstances:







                                     37

<PAGE>   44

                          (i)     any lack of validity or enforceability of the
                 Letter of Credit, the obligation supported by the Letter of
                 Credit or any other agreement or instrument relating thereto
                 (collectively, the "Related LC Documents");

                         (ii)     any amendment or waiver of or any consent to
                 or departure from all or any of the Related LC Documents;

                        (iii)     the existence of any claim, setoff, defense
                 (other than the defense of payment in accordance with the
                 terms of this Agreement) or other rights which the Borrower
                 may have at any time against any beneficiary or any transferee
                 of a Letter of Credit (or any persons or entities for whom any
                 such beneficiary or any such transferee may be acting), the
                 Agent, the Lenders or any other Person, whether in connection
                 with the Loan Documents, the Related LC Documents or any
                 unrelated transaction;

                         (iv)     any breach of contract or other dispute
                 between the Borrower and any beneficiary or any transferee of
                 a Letter of Credit (or any persons or entities for whom such
                 beneficiary or any such transferee may be acting), the Agent,
                 the Lenders or any other Person;

                          (v)     any draft, statement or any other document
                 presented under the Letter of Credit proving to be forged,
                 fraudulent, invalid or insufficient in any respect or any
                 statement therein being untrue or inaccurate in any respect
                 whatsoever; or

                         (vi)     any delay, extension of time, renewal,
                 compromise or other indulgence or modification granted or
                 agreed to by the Agent, with or without notice to or approval
                 by the Borrower in respect of any of Borrower's Obligations
                 under this Agreement.

         3.3.  Letter of Credit Facility Fees.  The Borrower shall pay to the
Agent, (i) for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, a fee on the aggregate amount available to be drawn on
each outstanding Letter of Credit at a rate equal to the Applicable Margin for
Eurodollar Rate Loans that are Revolving Credit Loans and (ii) for the Issuing
Bank a fee equal to an amount agreed to from time to time by the Borrower and
the Issuing Bank based on the aggregate amount available to be drawn on each
outstanding Letter of Credit provided, however, in no event shall such fee
exceed 1% per annum on the aggregate amount available to be drawn on each
outstanding Letter of Credit.  Such fees shall be due with respect to each
Letter of Credit quarterly in arrears on the last day of each March, June,
September and December, the first such payment to be made on the first such
date occurring after the date of issuance of a Letter of Credit.  The fees
described in this Section 3.3 shall be calculated on the basis of a year of 360
days for the actual number of days elapsed.






                                     38

<PAGE>   45

                                   ARTICLE IV

                                    Security

         4.1.   Facility Guaranty.  To guarantee the full and timely payment
and performance of all Obligations now existing or hereafter arising, the
Borrower shall cause the Facility Guaranty to be delivered by each Subsidiary
other than those Subsidiaries listed on Schedule 4.1, in form and substance
reasonably acceptable to the Agent, on or before the Closing Date.  The
Borrower hereby agrees to cause a Facility Guaranty to be delivered by any
hereafter acquired or created Subsidiary or upon any previously existing Person
becoming a Subsidiary pursuant to the terms of Section 8.19 hereof.

         4.2.    Stock Pledge.  As security for the full and timely payment
and performance of (i) all Obligations now existing or hereafter arising under
the Loan Documents and (ii) certain Guarantors' obligations under the Facility
Guaranty, the Borrower and each Subsidiary owning any Pledged Stock shall on or
before the Closing Date deliver to the Agent, in substantially the form of
Exhibit J hereto, the Pledge Agreement together with certificates representing
such Pledged Stock and stock powers duly executed in blank as may be required
by the Agent in accordance with the terms hereof and thereof.  In addition to
any Pledge Agreement required to be delivered pursuant to Section 8.19 hereof,
the Borrower and each Subsidiary hereby agree to pledge to the Agent for the
benefit of the Lenders (x) 100% of the capital stock and related interests and
rights of any domestic Subsidiary hereafter acquired or created and owned
directly or indirectly by Borrower and (y) 65% of the Voting Stock and 100% of
the non-voting common stock and related interests and rights of any foreign
Subsidiary owned by the Borrower or any domestic Subsidiary hereafter acquired
or created and, in each case, to deliver to the Agent a Pledge Agreement in
substantially the form of Exhibit J hereto and content acceptable to the Agent
within thirty (30) days of the acquisition or creation of such domestic
Subsidiary or foreign Subsidiary, as the case may be.

         4.3.    Pledge of Partnership Interests.  (a) As security for the
full and timely payment and performance of (i) all Obligations now existing or
hereafter arising and (ii) if applicable, the Guarantors' Obligations under the
Guaranty Agreement, the Borrower and each Person owning any Assigned Interests
shall on or before the Closing Date deliver to the Agent, in substantially the
form of Exhibit L, a Collateral Assignment of Partnership Interests together
with a Receipt and Certificate of Registrar as may be required by the Agent,
which Collateral Assignment of Partnership Interests shall pledge to the Agent
for the benefit of the Lenders 100% of the ownership interests and rights in
certain limited partnerships in accordance with the terms hereof.

         (b)     The Borrower and each Subsidiary hereby agree to collaterally
assign to the Agent for the benefit of the Lenders 100% of the ownership
interests and rights in limited partnership and joint ventures hereafter
acquired or created which are deemed Subsidiaries hereunder and to deliver to
the Agent a Collateral Assignment of Partership Interests substantially in the
form of Exhibit L hereto within thirty (30) days of the acquisition or creation
of such Subsidiary pursuant to the terms of Section 8.19.





                                     39

<PAGE>   46

         4.4.   Further Assurances.  At the request of the Agent, the Borrower
will or will cause its Subsidiaries, as the case may be to execute, by its duly
authorized officers, alone or with the Agent, any certificate, instrument,
statement or document, or to procure any such certificate, instrument,
statement or document, or to take such other action (and pay all reasonable
connected costs) which the Agent reasonably deems necessary from time to time
to create, continue or preserve the liens and security interests in Collateral
(and the perfection and priority thereof) of the Agent contemplated hereby and
by the other Loan Documents.





                                     40

<PAGE>   47

                                   ARTICLE V

                            Change in Circumstances

         5.1.    Increased Cost and Reduced Return.

         (a)     Except with respect to Taxes (as defined in Section 5.6(a)),
as to which the provisions of Section 5.6 shall apply, if, after the date
hereof, the adoption of any applicable law, rule, or regulation, or any change
in any applicable law, rule, or regulation, 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 any Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such governmental
authority, central bank, or comparable agency:

                          (i)     shall subject such Lender (or its Applicable
         Lending Office) to any tax, duty, or other charge with respect to any
         Eurodollar Rate Loans, its Note, or its obligation to make Eurodollar
         Rate Loans, or change the basis of taxation of any amounts payable to
         such Lender (or its Applicable Lending Office) under this Agreement or
         its Note in respect of any Eurodollar Rate Loans (other than taxes of
         the type described in clauses (i) through (iv) of Section 5.6(a) 
         imposed on the overall net income of such Lender by the jurisdiction 
         in which such Lender has its principal office or such Applicable 
         Lending Office);

                          (ii)    shall impose, modify, or deem applicable any
         reserve, special deposit, assessment, or similar requirement (other
         than the Reserve Requirement utilized in the determination of the
         Eurodollar Rate) relating to any extensions of credit or other assets
         of, or any deposits with or other liabilities or commitments of, such
         Lender (or its Applicable Lending Office), including the Revolving
         Credit Commitment and Line of Credit Commitment of such Lender
         hereunder; or

                          (iii)   shall impose on such Lender (or its
         Applicable Lending Office) or on the London interbank market any other
         condition affecting this Agreement or its Note or any of such
         extensions of credit or liabilities or commitments;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Rate Loans or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Note with respect to any Eurodollar Rate Loans, then the
Borrower shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction.  If any Lender
requests compensation by the Borrower under this Section 5.1(a), the Borrower
may, by notice to such Lender (with a copy to the Agent), suspend the
obligation of such Lender to make or Continue Eurodollar Rate Loans, or to
Convert Base Rate Loans into Eurodollar Rate Loans, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.4 shall be applicable); provided that such suspension
shall not affect the right of such Lender to receive the compensation so
requested with respect to outstanding Eurodollar Rate Loans.





                                     41

<PAGE>   48

         (b)     If, after the date hereof, any Lender shall have determined
that the adoption of any applicable law, rule, or regulation regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such governmental authority, central bank, or comparable agency, has or
would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender or such
corporation would have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for
such reduction.

         (c)     Each Lender shall promptly notify the Borrower and the Agent
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Lender to compensation pursuant to this Section 5.1 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
reasonable judgment of such Lender, be otherwise disadvantageous to it.  Any
Lender claiming compensation under this Section 5.1 shall furnish to the
Borrower and the Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder.  In determining such amount, such Lender
may use any reasonable averaging and attribution methods.

         5.2.    Limitation on Types of Loans.  If on or prior to the first day
of any Interest Period for any Eurodollar Rate Loan:

                 (a)      the Agent determines (which determination shall be
         conclusive) that by reason of circumstances affecting the relevant
         market, adequate and reasonable means do not exist for ascertaining
         the Eurodollar Rate for such Interest Period; or

                 (b)      the Required Lenders determine (which determination
         shall be conclusive) and notify the Agent that the Eurodollar Rate
         will not adequately and fairly reflect the cost to the Lenders of
         funding Eurodollar Rate Loans for such Interest Period;

then the Agent shall give the Borrower prompt notice thereof specifying the
relevant amounts or periods, and so long as such condition remains in effect,
the Lenders shall be under no obligation to make additional Eurodollar Rate
Loans, Continue Eurodollar Rate Loans, or to Convert Base Rate Loans into
Eurodollar Rate Loans and the Borrower shall, on the last day(s) of the then
current Interest Period(s) for the affected and outstanding Eurodollar Rate
Loans, either prepay such Loans or Convert such Loans into Base Rate Loans in
accordance with the terms of this Agreement.

         5.3.    Illegality.  Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate Loans
hereunder, then such Lender shall promptly notify the Borrower thereof and such
Lender's obligation to make or Continue Eurodollar Rate Loans and to Convert
other Types of Loans into Eurodollar Rate Loans shall be suspended until such
time as such Lender may again make, 





                                     42

<PAGE>   49

maintain, and fund Eurodollar Rate Loans (in which case the provisions of
Section 5.4 shall be applicable).

         5.4.    Treatment of Affected Loans.  If the obligation of any Lender
to make a Eurodollar Rate Loan or to Continue, or to Convert Loans of any other
Type into, Eurodollar Rate Loans of a particular Type shall be suspended
pursuant to Section 5.1 or 5.3 hereof (Loans of such Type being herein called
"Affected Loans" and such Type being herein called the "Affected Type"), such
Lender's Affected Loans shall be automatically Converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for Affected Loans
(or, in the case of a Conversion required by Section 5.3 hereof, on such
earlier date as such Lender may specify to the Borrower with a copy to the
Agent) and, unless and until such Lender gives notice as provided below that
the circumstances specified in Section 5.1 or 5.3 hereof that gave rise to such
Conversion no longer exist:

                 (a)      to the extent that such Lender's Affected Loans have
         been so Converted, all payments and prepayments of principal that
         would otherwise be applied to such Lender's Affected Loans shall be
         applied instead to its Base Rate Loans; and

                 (b)      all Loans that would otherwise be made or Continued
         by such Lender as Loans of the Affected Type shall be made or
         Continued instead as Base Rate Loans, and all Loans of such Lender
         that would otherwise be Converted into Loans of the Affected Type
         shall be Converted instead into (or shall remain as) Base Rate Loans.

If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.1 or 5.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 5.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Revolving
Credit and Line of Credit Commitments.

         5.5.    Compensation.  Upon the request of any Lender, the Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:

                 (a)      any payment, prepayment, or Conversion of a
         Eurodollar Rate Loan for any reason (including, without limitation,
         the acceleration of the Loans pursuant to Section 10.1) on a date 
         other than the last day of  the Interest Period for such Loan; or

                 (b)      any failure by the Borrower for any reason
         (including, without limitation, the failure of any condition precedent
         specified in Article VI to be satisfied) to borrow, Convert, Continue,
         or prepay a Eurodollar Rate Loan on the date for such borrowing, 
         Conversion,





                                     43
<PAGE>   50

         Continuation, or prepayment specified in the relevant notice of 
         borrowing, prepayment, Continuation, or Conversion under 
         this Agreement.

         5.6.    Taxes.  (a)  Any and all payments by the Borrower to or for
the account of any Lender or the Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Agent, (i) franchise taxes, (ii) in addition to the
taxes described in clauses (i), (iii) and (iv) of this Section 5.6(a), any
taxes (other than withholding taxes) that would not be imposed but for a
connection between the Lender or the Agent and the jurisdiction imposing such
taxes (other than a connection arising solely by virtue of the activities of
such Lender or the Agent pursuant to or in respect of this Agreement or any
other Loan Document), (iii) any taxes imposed on or with respect to or measured
by the Agent's or any Lender's assets, income, receipts, gains, capital, net
worth or profits, and (iv) any taxes arising after the Closing Date solely as a
result of or attributable to a Lender changing its designated lending office
after the Lender becomes a party hereto (all such non-excluded taxes, duties,
levies, imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes").  If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable under this Agreement
or any other Loan Document to any Lender or the Agent, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
5.6) such Lender or the Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions, (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law, and (iv) the Borrower shall furnish to the Agent, at its address referred
to in Section 12.2, the original or a certified copy of a receipt evidencing
payment thereof.

         (b)     In addition, the Borrower agrees to pay any and all stamp or
documentary taxes and any other excise or property taxes or charges or similar
levies (specifically excluding, without limitation, any Taxes of the type
described in clauses (i) through (iv) of Section 5.6(a)) which are imposed on
the execution or delivery of this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").

         (c)     If the Borrower fails to pay any Taxes or Other Taxes
(collectively, "Indemnifiable Taxes") when due to the appropriate taxing
authority (as required by Section 5.6(a) or Section 5.6(b), respectively, the
Borrower agrees to indemnify each Lender and the Agent for the full amount of
such Indemnifiable  Taxes (including, without limitation, any such
Indemnifiable Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section 5.6) paid by such Lender or the Agent (as the case may be)
and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto.

         (d)      Each Lender organized under the laws of a jurisdiction
outside the United States, (x) on or prior to the date of its execution and
delivery of this Agreement in the case of each Lender listed on the signature
pages hereof and on or prior to the date on which it becomes a Lender in the
case of each other Lender, (y) on or prior to the date such Lender changes its
Applicable Lending Office, and (z) from time to time thereafter if requested in
writing by the Borrower or the Agent (but 









                                     44

<PAGE>   51

only so long as such Lender remains lawfully able to do so), shall provide the
Borrower and the Agent with (i) two properly completed and duly executed copies
of Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States, (ii)
two properly completed and duly executed copies of Internal Revenue Service
Form W-8 or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) two properly completed and duly executed
copies of any other form or certificate required by any taxing authority
(including any certificate required by Sections 871(h) and 881(c) of the
Internal Revenue Code), certifying that such Lender is entitled to an exemption
from or a reduced rate of tax on payments pursuant to this Agreement or any of
the other Loan Documents.

         (e)     For any period with respect to which a Lender has failed to
provide the Borrower and the Agent with the appropriate form pursuant to
Section 5.6(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 5.6(a) or 5.6(b) with respect to Indemnifiable Taxes; provided,
however, that should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Indemnifiable Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Indemnifiable Taxes.

         (f)     If the Borrower is required to pay additional amounts to or
for the account of any Lender pursuant to this Section 5.6, then such Lender
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the reasonable judgment
of such Lender, is not otherwise disadvantageous to such Lender.

         (g)     Within thirty (30) days after the date of any payment of
Indemnifiable Taxes, the Borrower shall furnish to the Agent the original or a
certified copy of a receipt evidencing such payment.

         (h)     Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 5.6 shall survive the termination of the Revolving
Credit and Line of Credit Commitments and the payment in full of the Notes.

         5.7.    Replacement Banks.  The Borrower may, in its sole discretion,
on ten (10) Business Days' prior written notice to the Agent and a Lender,
cause a Lender who has incurred increased costs or is unable to make Eurodollar
Rate Loans to (and such Lender shall) assign, pursuant to Section 12.1, all of
its rights and obligations under this Agreement to an Eligible Assignee
designated by the Borrower which is willing to become a Lender for a purchase
price equal to the outstanding principal amount of the Loans payable to such
Lender plus any accrued but unpaid interest on such Loans, any accrued but
unpaid fees with respect to such Lender's Revolving Credit Commitment and 






                                     45

<PAGE>   52

any other amount payable to such Lender under this Agreement;  provided,
however, that any expenses or other amounts which would be owing to such Lender
pursuant to any indemnification provision hereof (including, if applicable,
Section 5.5) shall be payable by the Borrower as if the Borrower had prepaid
the Loans of such Lender rather than such Lender having assigned its interest
hereunder. The assignee shall pay the applicable processing fee under Section
12.1.





                                     46

<PAGE>   53

                                   ARTICLE VI

            Conditions to Making Loans and Issuing Letters of Credit

         6.1.   Conditions of Initial Advance.  The obligation of the Lenders
to make the initial Advance under the Revolving Credit Facility and the Line of
Credit Facility, and of the Issuing Bank to issue any Letter of Credit, and of
NationsBank to make any Swing Line Loan, is subject to the conditions precedent
that:

                 (a)      the Agent shall have received on the Closing Date, in
         form and substance satisfactory to the Agent and Lenders, the
         following:

                          (i)     executed originals of each of this Agreement,
                 the Notes, the initial Facility Guaranties, the Security
                 Instruments, the LC Account Agreement and the other Loan
                 Documents, together with all schedules and exhibits thereto;

                         (ii)     the written opinion or opinions with respect
                 to the Loan Documents and the transactions contemplated
                 thereby of special counsel to the Loan Parties dated the
                 Closing Date, addressed to the Agent and the Lenders and
                 satisfactory to the Agent, substantially in the form of
                 Exhibit G;

                        (iii)     resolutions of the boards of directors or
                 other appropriate governing body (or of the appropriate
                 committee thereof) of each Loan Party certified by its
                 secretary or assistant secretary as of the Closing Date,
                 approving and adopting the Loan Documents to be executed by
                 such Person, and authorizing the execution and delivery
                 thereof;

                         (iv)     specimen signatures of the officers of each
                 of the Loan Parties executing the Loan Documents on behalf of
                 such Loan Party, certified by the secretary or assistant
                 secretary of such Loan Party;

                          (v)     the charter documents of each of the Loan
                 Parties certified as of a recent date by the Secretary of
                 State of its state of organization;

                         (vi)     the bylaws of each of the Loan Parties
                 certified as of the Closing Date as true and correct by its
                 secretary or assistant secretary;

                        (vii)     certificates issued as of a recent date by
                 the Secretaries of State of the respective jurisdictions of
                 formation of each of the Loan Parties as to the due existence
                 and good standing of such Person;

                       (viii)     appropriate certificates of qualification to
                 do business and as to good standing issued in respect of each
                 of the Loan Parties as of a recent date by the Secretary of
                 State or comparable official of each jurisdiction in which the
                 failure to 





                                     47

<PAGE>   54

                 be qualified to do business or authorized so to conduct 
                 business could have a Material Adverse Effect;

                         (ix)     notice of appointment of the initial
                 Authorized Representative(s);

                          (x)     certificate of an Authorized Representative
                 dated the Closing Date demonstrating compliance with the
                 financial covenants contained in Sections 9.1(a) through
                 9.1(c) as of the most recent quarter end, substantially in the
                 form of Exhibit H;

                         (xi)     an initial Borrowing Notice, if any, and, if
                 elected by the Borrower, Interest Rate Selection Notice;

                        (xii)     all stock certificates evidencing Pledged
                 Stock, accompanied by duly executed stock powers (or other
                 appropriate transfer documents) in blank affixed thereto;

                        (xiii)     Certificate and Receipt of Registrar of all 
                 of the Assigned Interests;

                        (xiv)     evidence that all fees payable by the
                 Borrower on the Closing Date to the Agent and the Lenders have
                 been paid in full;

                        (xv)     evidence of insurance required by the Loan 
                 Documents; and

                        (xvi)     such other documents, instruments,
                 certificates and opinions as the Agent or any Lender may
                 reasonably request on or prior to the Closing Date in
                 connection with the consummation of the transactions
                 contemplated hereby.

                 (b)      In the good faith judgment of the Agent:

                          (i)     there shall not have occurred or become known
                 to the Agent or the Lenders any event, condition, situation or
                 status since the date of the information contained in the
                 financial and business projections, budgets, pro forma data
                 and forecasts concerning the Borrower and its Subsidiaries
                 delivered to the Agent after September 30, 1997 and prior to
                 the Closing Date that has had or could reasonably be expected
                 to result in a Material Adverse Effect;

                          (ii)    there shall not have occurred or become known
                 to the Agent or the Lenders any disruption or adverse change
                 in the financial or capital markets generally prior to the
                 Closing Date that has had or could reasonably be expected to
                 result in a Material Adverse Effect;

                        (iii)     no litigation, action, suit, investigation or
                 other arbitral, administrative or judicial proceeding shall be
                 pending or threatened which could reasonably be likely to
                 result in a Material Adverse Effect;






                                     48

<PAGE>   55

                         (iv)     the Loan Parties shall have received all
                 approvals, consents and waivers, and shall have made or given
                 all necessary filings and notices as shall be required to
                 consummate the transactions contemplated hereby without the
                 occurrence of any default under, conflict with or violation of
                 (A) any applicable law, rule, regulation, order or decree of
                 any Governmental Authority or arbitral authority or (B) any
                 agreement, document or instrument to which any of the Loan
                 Parties is a party or by which any of them or their properties
                 is bound; and

                          (v)     the Agent shall have completed all due
                 diligence with respect to the Borrower and its Subsidiaries in
                 scope and determination satisfactory to NationsBank in its
                 sole discretion.

         6.2.   Conditions of Revolving Loans, Line of Credit Loans and Letter
of Credit.  The obligations of the Lenders to make any Revolving Loans and Line
of Credit Loans and the Issuing Bank to issue Letters of Credit and NationsBank
to make Swing Line Loans, hereunder on or subsequent to the Closing Date are
subject to the satisfaction of the following conditions:

                 (a)      the Agent or, in the case of Swing Line Loans,
         NationsBank shall have received a Borrowing Notice if required by
         Article II;

                 (b)      the representations and warranties of the Loan
         Parties set forth in Article VII and in each of the other Loan
         Documents shall be true and correct in all material respects on and as
         of the date of such Advance, Swing Line Loan or Letter of Credit
         issuance or renewal, with the same effect as though such
         representations and warranties had been made on and as of such date,
         except to the extent that such representations and warranties
         expressly relate to an earlier date and except that the financial
         statements referred to in Section 7.6(a)(i) shall be deemed to be
         those financial statements most recently delivered to the Agent and
         the Lenders pursuant to Section 8.1 from the date financial
         statements are delivered to the Agent and the Lenders in accordance
         with such Section;

                 (c)      in the case of the issuance of a Letter of Credit,
         the Borrower shall have executed and delivered to the Issuing Bank an
         Application and Agreement for Letter of Credit in form and content
         acceptable to the Issuing Bank together with such other instruments
         and documents as it shall request;

                 (d)      at the time of (and after giving effect to) each
         Advance, Swing Line Loan or the issuance of a Letter of Credit, no 
         Default or Event of Default specified in Article X shall have 
         occurred and be continuing; and

                 (e)      immediately after giving effect to:

                          (i)     a Revolving Loan, the aggregate principal
                 balance of all outstanding Revolving Loans for each Lender
                 shall not exceed such Lender's Revolving Credit Commitment;







                                     49
<PAGE>   56

                         (ii)     a Line of Credit Loan, the aggregate
                 principal balance of all outstanding Line of Credit Loans for
                 each Lender shall not exceed such Lender's Line of Credit
                 Commitment;

                        (iii)     a Letter of Credit or renewal thereof, the
                 aggregate principal balance of all outstanding Participations
                 in Letters of Credit and Reimbursement Obligations (or in the
                 case of the Issuing Bank, its remaining interest after
                 deduction of all Participations in Letters of Credit and
                 Reimbursement Obligations of other Lenders) for each Lender
                 and in the aggregate shall not exceed, respectively, (X) such
                 Lender's Letter of Credit Commitment or (Y) the Total Letter
                 of Credit Commitment;

                         (iv)     a Swing Line Loan, the Swing Line
                 Outstandings shall not exceed $5,000,000;

                          (v)     a Revolving Loan, Swing Line Loan or a Letter
                 of Credit or renewal thereof, the sum of Letter of Credit
                 Outstandings plus Revolving Credit Outstandings plus Swing
                 Line Outstandings shall not exceed the Total Revolving Credit
                 Commitment; and

                         (vi)     a Line of Credit Loan, all Line of Credit
                 Outstandings shall not exceed the Total Line of Credit 
                 Commitment.





                                     50


<PAGE>   57

                                  ARTICLE VII

                         Representations and Warranties

         The Borrower represents and warrants with respect to itself and to its
Subsidiaries (which representations and warranties shall survive the delivery
of the documents mentioned herein and the making of Loans), that:

         7.1.  Organization and Authority.

                 (a)      The Borrower and each Subsidiary is a corporation or
         partnership duly organized and validly existing under the laws of the
         jurisdiction of its formation;

                 (b)      The Borrower and each Subsidiary (x) has the
         requisite power and authority to own its properties and assets and to
         carry on its business as now being conducted and as contemplated in
         the Loan Documents, and (y) is qualified to do business in every
         jurisdiction in which failure so to qualify would have a Material
         Adverse Effect;

                 (c)      The Borrower has the power and authority to execute,
         deliver and perform this Agreement and the Notes, and to borrow
         hereunder, and to execute, deliver and perform each of the other Loan
         Documents to which it is a party;

                 (d)      Each Guarantor has the power and authority to
         execute, deliver and perform the Facility Guaranty and each of the
         other Loan Documents to which it is a party; and

                 (e)      When executed and delivered, each of the Loan
         Documents to which any Loan Party is a party will be the legal, valid
         and binding obligation or agreement, as the case may be, of such Loan
         Party, enforceable against such Loan Party in accordance with its
         terms, subject to the effect of any applicable bankruptcy, moratorium,
         insolvency, reorganization or other similar law affecting the
         enforceability of creditors' rights generally and to the effect of
         general principles of equity (whether considered in a proceeding at
         law or in equity);

         7.2.  Loan Documents.  The execution, delivery and performance by
each Loan Party of each of the Loan Documents to which it is a party:

                 (a)      have been duly authorized by all requisite corporate
         action (including any required shareholder approval) of such Loan
         Party required for the lawful execution, delivery and performance
         thereof;

                 (b)      do not violate any provisions of (i) applicable law,
         rule or regulation, (ii) any judgment, writ, order, determination,
         decree or arbitral award of any Governmental Authority or arbitral
         authority binding on such Loan Party or its properties, or (iii) the
         charter documents or bylaws of such Loan Party;






                                     51
<PAGE>   58

                 (c)      does not and will not be in conflict with, result in
         a breach of or constitute an event of default, or an event which, with
         notice or lapse of time or both, would constitute an event of default,
         under any contract, indenture, agreement or other instrument or
         document to which such Loan Party is a party, or by which the
         properties or assets of such Loan Party are bound; and

                 (d)      does not and will not result in the creation or
         imposition of any Lien upon any of the properties or assets of such
         Loan Party or any Subsidiary except any Liens in favor of the Agent
         and the Lenders created by the Security Instruments;

         7.3.  Solvency.  Each Loan Party is Solvent after giving effect to
the transactions contemplated by the Loan Documents;

         7.4.  Subsidiaries and Stockholders.  The Borrower has no
Subsidiaries other than those Persons listed as Subsidiaries in Schedule 7.4
and no additional Subsidiaries will be created or acquired after the Closing
Date except in compliance with Section 8.19; Schedule 7.4 states as of the date
hereof the organizational form of each entity, the authorized and issued
capitalization of each Subsidiary listed thereon, the number of shares or other
equity interests of each class of capital stock or interest issued and
outstanding of each such Subsidiary and the number and/or percentage of
outstanding shares or other equity interest (including options, warrants and
other rights to acquire any interest) of each such class of capital stock or
other equity interest owned by Borrower or by any such Subsidiary; the
outstanding shares or other equity interests of each such Subsidiary have been
duly authorized and validly issued and are fully paid and nonassessable; and
Borrower and each such Subsidiary owns beneficially and of record all the
shares and other interests it is listed as owning in Schedule 7.4, free and
clear of any Lien other than Liens permitted under Section 9.3;

         7.5.  Ownership Interests.  Borrower owns no interest in any Person
other than the Persons listed in Schedule 7.4, equity investments in Persons
not constituting Subsidiaries permitted under Section 9.6 and no additional
Subsidiaries will be created or acquired after the Closing Date except in
compliance with Section 8.19;

         7.6.  Financial Condition.

                 (a)      The Borrower has heretofore furnished to each Lender
         audited consolidated balance sheets of the Borrower and its
         Subsidiaries as at December 31, 1996 and the notes thereto and the
         related consolidated statements of operations, stockholders' equity
         and cash flows for the Fiscal Year then ended as examined and
         certified by KPMG Peat Marwick, L.L.P., and unaudited consolidated
         interim financial statements of the Borrower and its Subsidiaries
         consisting of consolidated balance sheets and related consolidated
         statements of income, stockholders' equity and cash flows, in each
         case without notes, for and as of the end of the three (3) month
         period ending September 30, 1997.  Except as set forth therein, such
         financial statements (including the notes thereto) present fairly the
         financial condition of the Borrower and its Subsidiaries as of the end
         of such Fiscal Year and three (3) month period and results of their
         operations and the changes in its stockholders' equity for the Fiscal
         Year and interim period then ended, all in conformity with GAAP
         applied on a 







                                     52

<PAGE>   59

         Consistent Basis, subject however, in the case of unaudited interim 
         statements to year end audit adjustments;

                 (b)      since September 30, 1997 there has been no material
         adverse change in the condition, financial or otherwise, of the
         Borrower or any of its Subsidiaries, taken as a whole, or in the
         businesses, properties, performance, prospects or operations of the
         Borrower or its Subsidiaries, taken as a whole, nor have such
         businesses or properties been materially adversely affected as a
         result of any fire, explosion, earthquake, accident, strike, lockout,
         combination of workers, flood, embargo or act of God; and

                 (c)      except as set forth in the financial statements
         referred to in Section 7.6(a) or in Schedule 7.6 or permitted by
         Section 9.4, neither Borrower nor any Subsidiary has incurred, other
         than in the ordinary course of business, any material Indebtedness,
         Contingent Obligation or other commitment or liability which remains
         outstanding or unsatisfied;

         7.7.  Title to Properties.  The Borrower and each of its
Subsidiaries has good and marketable title to all its real and personal
properties, subject to no transfer restrictions or Liens of any kind, except
for the transfer restrictions and Liens described in Schedule 7.7 and Liens
permitted by Section 9.3;

         7.8.  Taxes. The Borrower and each of its Subsidiaries has filed or
caused to be filed all federal, state and local tax returns which are required
to be filed by it and, except for taxes and assessments being contested in good
faith by appropriate proceedings diligently conducted and against which
reserves reflected in the financial statements described in Section 7.6(a) and
satisfactory to the Borrower's independent certified public accountants have
been established, have paid or caused to be paid all taxes as shown on said
returns or on any assessment received by it, to the extent that such taxes have
become due;

         7.9.  Other Agreements.  Neither the Borrower nor any Subsidiary is

                 (a)      a party to or subject to any judgment, order, decree,
         agreement, lease or instrument, or subject to other restrictions,
         which individually or in the aggregate could reasonably be expected to
         have a Material Adverse Effect; or

                 (b)      in default in the performance, observance or
         fulfillment of any of the obligations, covenants or conditions
         contained in any agreement or instrument to which the Borrower or any
         Subsidiary is a party, which default has, or if not remedied within
         any applicable grace period could reasonably be likely to have, a
         Material Adverse Effect;

         7.10. Litigation.  Except as set forth in Schedule 7.10, there is no
action, suit, or proceeding at law or in equity or by or before any
governmental instrumentality or agency or arbitral body pending, or, to the
knowledge of the Borrower, threatened by or against the Borrower or any
Subsidiary or affecting the Borrower or any Subsidiary or any properties or
rights of the Borrower or any Subsidiary or to the knowledge of the Borrower
any investigation pending or threatened, 



                                     53

<PAGE>   60

which could reasonably be likely to have a Material Adverse Effect on the
Borrower and its Subsidiaries, taken as a whole;

         7.11. Margin Stock.  The proceeds of the borrowings made hereunder
will be used by the Borrower only for the purposes expressly authorized herein.
Except as expressly authorized herein, none of such proceeds will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
stock or for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry margin stock or for any other purpose
which might constitute any of the Loans under this Agreement a Apurpose credit@
within the meaning of said Regulation U or Regulation X (12 C.F.R. Part 224) of
the Board.  Neither the Borrower nor any agent acting in its behalf has taken
or will take any action which might cause this Agreement or any of the
documents or instruments delivered pursuant hereto to violate any regulation of
the Board or to violate the Securities Exchange Act of 1934, as amended, or the
Securities Act of 1933, as amended, or any state securities laws, in each case
as in effect on the date hereof;

         7.12. Investment Company.  No Loan Party is an "investment company," or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended (15 U.S.C. Section 80a-1, et seq.).  The application of the
proceeds of the Loans and repayment thereof by the Borrower and the performance
by the Borrower and the other Loan Parties of the transactions contemplated by
the Loan Documents will not violate any provision of said Act, or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder,
in each case as in effect on the date hereof;

         7.13. Patents, Etc.  The Borrower and each Subsidiary owns or has
the right to use, under valid license agreements or otherwise, all material
patents, licenses, franchises, trademarks, trademark rights, trade names, trade
name rights, trade secrets and copyrights necessary to or used in the conduct
of its businesses, without known conflict with any patent, license, franchise,
trademark, trade secret, trade name, copyright, other proprietary right of any
other Person;

         7.14. No Untrue Statement.  Neither (a) this Agreement nor any other
Loan Document or certificate or document executed and delivered by or on behalf
of any Loan Party in accordance with or pursuant to any Loan Document nor (b)
any statement, representation, or warranty (written or oral) provided or made
to the Agent by or on behalf of any Loan Party in connection with the
negotiation or preparation of the Loan Documents contains any misrepresentation
or untrue statement of material fact or omits to state a material fact
necessary, in light of the circumstance under which it was made, in order to
make any such warranty, representation or statement contained therein not
misleading;

         7.15. No Consents, Etc.  Neither the respective businesses or
properties of the Borrower or any Subsidiary, nor any relationship among the
Borrower or any Subsidiary and any other Person, nor any circumstance in
connection with the execution, delivery and performance of the Loan Documents
and the transactions contemplated thereby, is such as to require a consent,
approval or authorization of, or filing, registration or qualification with,
any Governmental Authority or any other Person on the part of the Borrower as
a condition to the execution, delivery and performance of, or consummation of
the transactions contemplated by the Loan Documents, which, if not obtained or






                                     54

<PAGE>   61

effected, would be reasonably likely to have a Material Adverse Effect, or if
so, such consent, approval, authorization, filing, registration or
qualification has been duly obtained or effected, as the case may be;

         7.16. Employee Benefit Plans.

                 (a)      The Borrower and each ERISA Affiliate is in material
         compliance with all applicable provisions of ERISA and the regulations
         and published interpretations thereunder and in material compliance
         with all Foreign Benefit Laws with respect to all Employee Benefit
         Plans except for any required amendments for which the remedial
         amendment period as defined in Section 401(b) of the Code has not yet
         expired.  Each Employee Benefit Plan that is intended to be qualified
         under Section 401(a) of the Code has been determined by the Internal
         Revenue Service to be so qualified, and each trust related to such
         plan has been determined to be exempt under Section 501(a) of the
         Code.  No material liability has been incurred by the Borrower or any
         ERISA Affiliate which remains unsatisfied for any taxes or penalties
         with respect to any Employee Benefit Plan or any Multiemployer Plan;

                 (b)      Neither the Borrower nor any ERISA Affiliate has (i)
         engaged in a nonexempt prohibited transaction described in Section
         4975 of the Code or Section 406 of ERISA affecting any of the
         Employee Benefit Plans or the trusts created thereunder which could
         subject any such Employee Benefit Plan or trust to a material tax or
         penalty on prohibited transactions imposed under Internal Revenue Code
         Section 4975 or ERISA, (ii) incurred any accumulated funding
         deficiency with respect to any Employee Benefit Plan, whether or not
         waived, or any other liability to the PBGC which remains outstanding
         other than the payment of premiums and there are no premium payments
         which are due and unpaid, (iii) failed to make a required contribution
         or payment to a Multiemployer Plan, or (iv) failed to make a required
         installment or other required payment under Section 412 of the Code,
         Section 302 of ERISA or the terms of such Employee Benefit Plan;

                 (c)      No Termination Event has occurred or is reasonably
         expected to occur with respect to any Pension Plan or Multiemployer
         Plan, and neither the Borrower nor any ERISA Affiliate has incurred
         any unpaid withdrawal liability with respect to any Multiemployer
         Plan;

                 (d)      The present value of all vested accrued benefits
         under each Employee Benefit Plan which is subject to Title IV of
         ERISA, did not, as of the most recent valuation date for each such
         plan, exceed the then current value of the assets of such Employee
         Benefit Plan allocable to such benefits;

                 (e)      To the best of the Borrower's knowledge, each
         Employee Benefit Plan subject to Title IV of ERISA, maintained by the
         Borrower or any ERISA Affiliate, has been administered in accordance
         with its terms in all material respects and is in compliance in all
         material respects with all applicable requirements of ERISA and other
         applicable laws, regulations and rules;





                                     55

<PAGE>   62

                 (f)      The consummation of the Loans and the issuance of the
         Letters of Credit provided for herein will not involve any prohibited
         transaction under ERISA which is not subject to a statutory or
         administrative exemption; and

                 (g)      No material proceeding, claim, lawsuit and/or
         investigation exists or, to the best knowledge of the Borrower after
         due inquiry, is threatened concerning or involving any Employee
         Benefit Plan;

         7.17. No Default.  As of the date hereof, there does not exist any
Default or Event of Default hereunder.

         7.18. Hazardous Materials.  The Borrower and each Subsidiary is in
material compliance with all applicable Environmental Laws in all material
respects. Neither the Borrower nor any Subsidiary has received written notice
of any action, suit, proceeding or investigation which (i) alleges that
Borrower or any Subsidiary is not in compliance with applicable Environmental
Laws, which noncompliance, if proven, would have a Material Adverse Effect;
(ii) seeks to suspend, revoke, or terminate any license, permit, or approval
necessary for the generation, handling, storage, treatment or disposal of
Hazardous Material, and which, if suspended, revoked or terminated would have
Material Adverse Effect; or (iii) seeks to impose on any property owned by
Borrower or any Subsidiary, a material restriction on the ownership, use,
occupancy, or transferability under applicable Environmental Laws, which
restriction would have Material Adverse Effect.

         7.19. Employment Matters.  (a)  None of the employees of the
Borrower or any Subsidiary is subject to any collective bargaining agreement a
dispute under which is reasonably likely to result in a Material Adverse Effect
and there are no strikes, work stoppages, election or decertification petitions
or proceedings, unfair labor charges, equal opportunity proceedings, or other
material labor/employee related controversies or proceedings pending or, to the
best knowledge of the Borrower, threatened against the Borrower or any
Subsidiary or between the Borrower or any Subsidiary and any of its employees,
other than employee grievances arising in the ordinary course of business which
could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect; and

         (b)     Except to the extent a failure to maintain compliance would
not have a Material Adverse Effect, the Borrower and each Subsidiary is in
compliance in all material respects with all applicable laws, rules and
regulations pertaining to labor or employment matters, including without
limitation those pertaining to wages, hours, occupational safety and taxation
and there is neither pending or threatened any litigation, administrative
proceeding nor, to the knowledge of the Borrower, any investigation, in respect
of such matters which, if decided adversely, could reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect.

         7.20. RICO.  Neither the Borrower nor any Subsidiary is engaged in
or has engaged in any course of conduct that could subject any of their
respective properties to any Lien, seizure or other forfeiture under any
criminal law, racketeer influenced and corrupt organizations law, civil or
criminal, or other similar laws.





                                     56

<PAGE>   63

         7.21. Security Interests.  Subject to the Agent taking such actions
as may be necessary to perfect its interest, the Security Instruments create
valid and perfected security interests in favor of the Agent, for the benefit
of the Lenders, in the Pledged Stock and Assigned Interests, subject to no
other security interest, lien, encumbrance or adverse claim of record noted in
the stock record books (other than restrictions on transfer imposed by
applicable securities laws) and no filings or recordations are necessary to
perfect the security interests created by the Pledge Agreement in the Pledged
Stock other than such filings or recordations as have already been made.








                                     57
<PAGE>   64

                                  ARTICLE VIII

                             Affirmative Covenants

         Until the Facility Termination Date, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and where applicable will
cause each Subsidiary to:

         8.1. Financial Reports, Etc.  (a)  As soon as practical and in any
event within 90 days after the end of each Fiscal Year of the Borrower, deliver
or cause to be delivered to the Agent, with sufficient copies for each Lender
of, (i) a consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such Fiscal Year, and the notes thereto, and the related
consolidated statements of operations, stockholders' equity and cash flows, and
the respective notes thereto, for such Fiscal Year, setting forth comparative
financial statements for the preceding Fiscal Year, all prepared in accordance
with GAAP applied on a Consistent Basis and containing, opinions of KPMG Peat
Marwick L.L.P., or other such independent certified public accountants selected
by the Borrower and approved by the Agent, which are unqualified as to the
scope of the audit performed and as to the "going concern" status of the
Borrower and without any exception not reasonably acceptable to the Lenders,
and (ii) a certificate of an Authorized Representative demonstrating compliance
with Sections 9.1(a) through 9.1(c) and Section 9.2, which certificate shall be
in the form of Exhibit H;

         (b)     as soon as practical and in any event within 45 days after the
end of each fiscal quarter (except the last fiscal quarter of the Fiscal Year),
deliver to the Agent with sufficient copies for each Lender (i) a consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated statements of income, stockholders'
equity and cash flows for such fiscal quarter and for the period from the
beginning of the then current Fiscal Year through the end of such reporting
period and setting forth comparative statements for the comparative time period
in the preceding Fiscal Year, and accompanied by a certificate of an Authorized
Representative to the effect that such financial statements present fairly the
financial position of the Borrower and its Subsidiaries as of the end of such
fiscal period and the results of their operations and the changes in their
financial position for such fiscal period, in conformity with the standards set
forth in Section 7.6(a) with respect to interim financial statements, and (ii)
a certificate of an Authorized Representative containing computations for such
quarter comparable to that required pursuant to Section 8.1(a)(ii);

         (c)     together with each delivery of the financial statements
required by Section 8.1(a)(i), deliver to the Agent, with sufficient copies for
each Lender a letter from the Borrower's accountants specified in Section
8.1(a)(i) stating that in performing the audit necessary to render an opinion
on the financial statements delivered under Section 8.1(a)(i), they obtained no
knowledge of any Default or Event of Default by the Borrower in the fulfillment
of the terms and provisions of this Agreement insofar as they relate to
financial matters (which at the date of such statement remains uncured); or if
the accountants have obtained knowledge of such Default or Event of Default, a
statement specifying the nature and period of existence thereof;





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<PAGE>   65

         (d)     promptly upon their becoming available to the Borrower, the
Borrower shall deliver to the Agent with sufficient copies for each Lender a
copy of (i) all regular or special reports or effective registration statements
which Borrower or any Subsidiary shall file with the Securities and Exchange
Commission (or any successor thereto) or any securities exchange, (ii) any
proxy statement distributed by the Borrower or any Subsidiary to its
shareholders, bondholders or the financial community in general, and (iii) any
management letter submitted to the Borrower by independent accountants in
connection with any annual, interim or special audit of the Borrower;

         (e)     promptly, from time to time, deliver or cause to be delivered
to the Agent and each Lender such other information regarding Borrower's and
any Subsidiary's operations, business affairs and financial condition as the
Agent or such Lender may reasonably request; and

         (f)     promptly notify the Agent of the termination of any contract,
the loss of which would have a Material Adverse Effect on the Borrower and its
Subsidiaries taken as a whole;

         Subject to Section 12.14, the Agent and the Lenders are hereby
authorized to deliver a copy of any such financial or other information
delivered hereunder to the Lenders (or any affiliate of any Lender) or to the
Agent, to any Governmental Authority having jurisdiction over the Agent or any
of the Lenders pursuant to any written request therefor or in the ordinary
course of examination of loan files, or to any other Person who shall acquire
or consider the assignment of, or acquisition of any participation interest in,
any Obligation permitted by this Agreement;

         8.2. Maintain Properties.  Maintain all properties necessary to its
operations in good working order and condition, make all needed repairs,
replacements and renewals to such properties to the extent failure to do so
would have a Material Adverse Effect, and maintain free from Liens, except
those permitted under Section 9.3, all trademarks, trade names, patents,
copyrights, trade secrets, know-how, and other intellectual property and
proprietary information (or adequate licenses thereto), in each case as are
reasonably necessary to conduct its business as currently conducted or as
contemplated hereby, all in accordance with customary and prudent business
practices.

         8.3. Existence, Qualification, Etc.  Except as otherwise expressly
permitted under Section 9.7, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and all material
rights and franchises, and maintain its license or qualification to do business
as a foreign corporation and good standing in each jurisdiction in which the
failure to maintain such license or qualification would have a Material Adverse
Effect.

         8.4. Regulations and Taxes.  Comply in all material respects with
or contest in good faith all statutes and governmental regulations and pay all
taxes, assessments, governmental charges, claims for labor, supplies, rent and
any other obligation which, if unpaid, would become a Lien not otherwise
permitted under Section 9.3 against any of its properties except liabilities
being contested in good faith by appropriate proceedings diligently conducted
and against which adequate reserves acceptable to the Borrower's independent
certified public accountants have been established unless and until any Lien
resulting therefrom attaches to any of its property and becomes enforceable
against its creditors.






                                     59

<PAGE>   66

         8.5. Insurance.  (a)  Keep all of its insurable properties
adequately insured at all times with responsible insurance carriers against
loss or damage by fire and other hazards to the extent and in the manner as are
customarily insured against by similar businesses owning such properties
similarly situated, (b) maintain general public liability insurance at all
times with responsible insurance carriers against liability on account of
damage to persons and property and (c) maintain insurance under all applicable
workers' compensation laws (or in the alternative, maintain required reserves
if self-insured for workers' compensation purposes) such policies of insurance
to have such limits, deductibles, exclusions, co-insurance and other provisions
providing no less coverages than that specified in Schedule 8.5, such insurance
policies to be in form reasonably satisfactory to the Agent.  Each of the
policies of insurance described in this Section 8.5 shall provide that the
insurer shall give the Agent not less than thirty (30) days' prior written
notice before any such policy shall be terminated, lapse or be altered in any
manner.

         8.6. True Books.  Keep true books of record and account in which
full, true and correct entries will be made of all of its dealings and
transactions, and set up on its books such reserves as may be required by GAAP
with respect to doubtful accounts and all taxes, assessments, charges, levies
and claims and with respect to its business in general, and include such
reserves in interim as well as year-end financial statements.

         8.7. Right of Inspection.  Permit any Person designated by any
Lender or the Agent to visit and inspect any of the properties, corporate books
and financial reports of the Borrower or any Subsidiary and to discuss its
affairs, finances and accounts with its principal officers and independent
certified public accountants, all at reasonable times, at reasonable intervals
and with reasonable prior notice.

         8.8. Observe all Laws.  Conform to and duly observe in all material
respects all laws, rules and regulations and all other valid requirements of
any Governmental Authority with respect to the conduct of its business.

         8.9. Governmental Licenses.  Obtain and maintain all licenses,
permits, certifications and approvals of all applicable Governmental
Authorities which are material to the conduct of its business except those the
failure of which to maintain would not have a Material Adverse Effect.

         8.10.  Covenants Extending to Other Persons.  Cause each of
its Subsidiaries to do with respect to itself, its business and its assets,
each of the things required of the Borrower in Sections 8.2 through 8.9, and
8.18 inclusive.

         8.11.  Officer's Knowledge of Default.  Upon any Authorized
Representative of the Borrower obtaining knowledge of any Default or Event of
Default hereunder or under any other obligation of the Borrower or any
Subsidiary to any Lender, or any event, development or occurrence which could
reasonably be expected to have a Material Adverse Effect, cause such Authorized
Representative to promptly notify the Agent of the nature thereof, the period
of existence thereof, and advise the Agent within three (3) Business Days what
action the Borrower or such Subsidiary proposes to take with respect thereto.




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<PAGE>   67

         8.12.         Suits or Other Proceedings.  Upon any Authorized
Representative of the Borrower obtaining knowledge of any litigation or other
proceedings being instituted against the Borrower or any Subsidiary, or any
attachment, levy, execution or other process being instituted against any
assets of the Borrower or any Subsidiary, making a claim or claims in an
aggregate amount greater than $1,000,000 not otherwise covered by insurance,
promptly deliver to the Agent written notice thereof stating the nature and
status of such litigation, dispute, proceeding, levy, execution or other
process.

         8.13.         Notice of Discharge of Hazardous Material or
Environmental Complaint.  Promptly provide to the Agent true, accurate and
complete copies of any and all notices, complaints, orders, directives, claims,
or citations received by the Borrower or any Subsidiary relating to any (a)
violation or alleged violation by the Borrower or any Subsidiary of any
applicable Environmental Law; (b) release or threatened release by the Borrower
or any Subsidiary, or at any facility or property owned or leased or operated
by the Borrower or any Subsidiary, of any Hazardous Material, except where
occurring in compliance with applicable Environmental Laws; or (c) liability or
alleged liability of the Borrower or any Subsidiary for the costs of cleaning
up, removing, remediating or responding to a release of Hazardous Materials; in
each case, if determined adversely against Borrower or any subsidiary is likely
to result in a Material Adverse Effect.

         8.14.         Environmental Compliance.  If the Borrower or any
Subsidiary shall receive any letter, notice, complaint, order, directive, claim
or citation alleging that the Borrower or any Subsidiary has violated any
Environmental Law or is liable for the costs of cleaning up, removing,
remediating or responding to a release of Hazardous Materials, the Borrower
shall, within the time period permitted by the applicable Environmental Law or
the Governmental Authority responsible for enforcing such Environmental Law,
remove or remedy, or cause the applicable Subsidiary to remove or remedy, such
violation or release or satisfy such liability or shall be contesting in good
faith such letter, notice, complaint, order, directive, claim or citation.

         8.15.         Indemnification.  Without limiting the generality of
Section 12.9, the Borrower hereby agrees to indemnify and hold the Agent and
the Lenders, and their respective officers, directors, employees and agents,
harmless from and against any and all claims, losses, penalties, liabilities,
damages and expenses (including assessment and cleanup costs and reasonable
attorneys' fees and disbursements) arising directly or indirectly from, out of
or by reason of (a) the violation of any Environmental Law by the Borrower or
any Subsidiary or with respect to any property owned, operated or leased by the
Borrower or any Subsidiary or (b) the handling, storage, treatment, emission or
disposal of any Hazardous Materials by or on behalf of the Borrower or any
Subsidiary or on or with respect to property owned or leased or operated by the
Borrower or any Subsidiary.  The provisions of this Section 8.15 shall survive
the Facility Termination Date and expiration or termination of this Agreement.

         8.16.         Further Assurances.  At the Borrower's cost and
expense, upon request of the Agent, duly execute and deliver or cause to be
duly executed and delivered, to the Agent such further instruments, documents,
certificates, financing and continuation statements, and do and cause to be
done such further acts that may be reasonably necessary or advisable in the
reasonable opinion of the Agent to carry out more effectively the provisions
and purposes of this Agreement, the Security Instruments and the other Loan
Documents.





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<PAGE>   68

         8.17.         Employee Benefit Plans.

                 (a)      With reasonable promptness, and in any event within
         thirty (30) days thereof, give notice to the Agent of (a) the
         establishment of any new Pension Plan (which notice shall include a
         copy of such plan), (b) the commencement of contributions to any
         Employee Benefit Plan to which the Borrower or any of its ERISA
         Affiliates was not previously contributing, (c) any material increase
         in the benefits of any existing Employee Benefit Plan, (d) each
         funding waiver request filed with respect to any Employee Benefit Plan
         and all communications received or sent by the Borrower or any ERISA
         Affiliate with respect to such request and (e) the failure of the
         Borrower or any ERISA Affiliate to make a required installment or
         payment under Section 302 of ERISA or Section 412 of the Code by the
         due date;

                 (b)      Promptly and in any event within fifteen (15) days of
         becoming aware of the occurrence or forthcoming occurrence of any (a)
         Termination Event or (b) nonexempt "prohibited transaction," as such
         term is defined in Section 406 of ERISA or Section 4975 of the Code,
         in connection with any Pension Plan or any trust created thereunder,
         deliver to the Agent a notice specifying the nature thereof, what
         action the Borrower or any ERISA Affiliate has taken, is taking or
         proposes to take with respect thereto and, when known, any action
         taken or threatened by the Internal Revenue Service, the Department of
         Labor or the PBGC with respect thereto; and

                 (c)      With reasonable promptness but in any event within
         fifteen (15) days for purposes of clauses (a), (b) and (c), deliver to
         the Agent copies of (a) any unfavorable determination letter from the
         Internal Revenue Service regarding the qualification of an Employee
         Benefit Plan under Section 401(a) of the Code, (b) all notices
         received by the Borrower or any ERISA Affiliate of the PBGC's intent
         to terminate any Pension Plan or to have a trustee appointed to
         administer any Pension Plan, (c) each Schedule B (Actuarial
         Information) to the annual report (Form 5500 Series) filed by the
         Borrower or any ERISA Affiliate with the Internal Revenue Service with
         respect to each Pension Plan and (d) all notices received by the
         Borrower or any ERISA Affiliate from a Multiemployer Plan sponsor
         concerning the imposition or amount of withdrawal liability pursuant
         to Section 4202 of ERISA.  The Borrower will notify the Agent in
         writing within five (5) Business Days of the Borrower or any ERISA
         Affiliate obtaining knowledge or reason to know that the Borrower or
         any ERISA Affiliate has filed or intends to file a notice of intent to
         terminate any Pension Plan under a distress termination within the
         meaning of Section 4041(c) of ERISA.

         8.18.         Continued Operations.  Continue at all times to
conduct its business and engage principally in the same or similar line or
lines of business substantially as heretofore conducted.

         8.19.         New Subsidiaries.  Within thirty (30) days of the
acquisition or creation of any  Subsidiary, cause to be delivered to the Agent
for the benefit of the Lenders each of the following:

                 (a)      a Facility Guaranty executed by such Subsidiary
substantially in the form of Exhibit I;







                                     62
<PAGE>   69

                 (b)      (i)     in the case that such Subsidiary is a
         corporation or otherwise issues certificated interests and is directly
         owned by the Borrower or a Subsidiary which has previously delivered a
         Pledge Agreement, a Pledge Agreement Supplement substantially in the
         form set forth in Exhibit A to Exhibit J of this Agreement and a 
         revised Schedule I to the Pledge Agreement dated the date hereof
         together with stock certificates or other appropriate evidence of
         ownership representing 100% of the capital stock and related interests
         and rights of a domestic Subsidiary which are owned directly or
         indirectly by the Borrower and duly executed stock powers or powers of
         assignment in blank affixed thereto; or

                          (ii)    in the case that such Subsidiary is a
         corporation or otherwise issues certificated interests and is directly
         owned by a Subsidiary which has not previously delivered a Pledge
         Agreement, a Pledge Agreement substantially in the form of
         Exhibit J, with appropriate revisions as to the identity of the
         pledgor and securing Obligations of such Pledgor under its
         Facility Guaranty, together with stock certificates or other
         appropriate evidence of ownership representing 100% of the capital
         stock and related interests and rights of a domestic Subsidiary which
         are owned directly or indirectly by the Borrower and duly executed
         stock powers or powers of assignment in blank affixed thereto;

                 (c)      in the case that such Subsidiary is a partnership
         that has not issued certificates evidencing ownership of such
         partnership, the Collateral Assignment of Partnership Interests and
         Certificate and Receipt of Registrar of such partnership with respect
         to the registration of the Lien on Assigned Interests so long as such
         assignment is not prohibited by the governing documents of such
         partnership;

                 (d)      an opinion of counsel to the Subsidiary dated as of
         the date of delivery of the Facility Guaranty and other Loan Documents
         provided for in this Section 8.19 and addressed to the Agent
         and the Lenders, in form and substance reasonably acceptable to the
         Agent (which opinion may include assumptions and qualifications of
         similar effect to those contained in the opinions of counsel delivered
         pursuant to Section 6.1(a)), to the effect that:

                          (i)     such Subsidiary is duly organized, validly
                 existing and in good standing in the jurisdiction of its
                 formation, has the requisite power and authority to own its
                 properties and conduct its business as then owned and then
                 conducted and proposed to be conducted, and is duly qualified
                 to transact business and is in good standing as a foreign
                 corporation or partnership in each other jurisdiction in which
                 the character of the properties owned or leased, or the
                 business carried on by it, requires such qualification except
                 where the failure to so qualify would not have a Material
                 Adverse Effect;

                          (ii)    the execution, delivery and performance of
                 the Facility Guaranty and other Loan Documents described in
                 this Section 8.19 to which the Borrower or such Subsidiary is
                 a signatory have been duly authorized by all requisite
                 corporate or partnership action (including any required
                 shareholder or partner approval), each of such agreements has
                 been duly executed and delivered and constitutes the valid and
                 binding agreement of the Borrower or such Subsidiary,
                 enforceable against the 







                                     63
<PAGE>   70

                 Borrower or such Subsidiary in accordance with its terms, 
                 subject to the effect of any applicable bankruptcy, 
                 moratorium, insolvency, reorganization or other similar law 
                 affecting the enforceability of creditors' rights generally 
                 and to the effect of general principles of equity (whether 
                 considered in a proceeding at law or in equity);

                 (e)      current copies of the charter documents, including
         partnership agreements and certificate of limited partnership, if
         applicable, and bylaws of such Subsidiary, minutes of duly called and
         conducted meetings (or duly effected consent actions) of the Board of
         Directors, partners, or appropriate committees thereof (and, if
         required by such charter documents, bylaws or by applicable law, of
         the shareholders) of such Subsidiary authorizing the actions and the
         execution and delivery of documents described in this Section 8.19.





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<PAGE>   71

                                   ARTICLE IX

                               Negative Covenants

         Until the Obligations have been paid and satisfied in full, no Letters
of Credit remain outstanding and this Agreement has been terminated in
accordance with the terms hereof, unless the Required Lenders shall otherwise
consent in writing, the Borrower will not, nor will it permit any Subsidiary
to:

         9.1.   Financial Covenants.

                 (a)      Consolidated Shareholders= Equity.  Permit
Consolidated Shareholders' Equity, as at the last day of each fiscal quarter of
the Borrower and until (but excluding) the last day of the next following
fiscal quarter of the Borrower, to be less than the sum of (A) 100% of
Consolidated Shareholders' Equity at September 30, 1997 plus (B) 100% of the
proceeds (reduced only by actual payments of reasonable, out-of-pocket issuance
expenses) of each sale of equity interest (or securities other than those
constituting Indebtedness exchangeable, convertible or exercisable into equity
interests) in the Borrower or any Subsidiary, plus (C) 100% of Consolidated Net
Income greater than -0- during the immediately preceding fiscal quarter of the
Borrower ending on such day (including in Consolidated Net Income for purposes
of this Section 9.1 only any net gain or credit of an extraordinary nature)
minus (D) the amount of the purchase price of the common stock of the Borrower
purchased pursuant to Section 9.8(i) so long as such stock is carried on the
consolidated balance sheet as treasury stock.

                 (b)      Consolidated Fixed Charge Coverage Ratio.  Permit the
Consolidated Fixed Charge Coverage Ratio as of the end of any Four-Quarter
Period be less than 2.50 to 1.00.

                 (c)      Consolidated Leverage Ratio.  Permit at any time the
Consolidated Leverage Ratio to exceed 2.00 to 1.00.

                 (d)      Capital Expenditures.  Permit Capital Expenditures to
exceed $100,000,000 in any Fiscal Year.

         9.2.   Acquisitions.  Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
order to effect any Acquisition, except for Permitted Acquisitions.  The
approval of the Required Lenders, which approval shall be given in the Required
Lenders' sole discretion, shall be required if the Cost of Acquisition for any
single Acquisition shall exceed $35,000,000 or if such Acquisition shall cause
the aggregate Cost of Acquisition for all Acquisitions in any Fiscal Year to
exceed $150,000,000.

         9.3.   Liens.  Incur, create or permit to exist any Lien, charge or
other encumbrance of any nature whatsoever with respect to any property or
assets now owned or hereafter acquired by the Borrower or any Subsidiary, other
than






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<PAGE>   72

                 (a)      Liens created under the Security Instruments in favor
         of the Agent and the Lenders, and otherwise existing as of the date
         hereof and as set forth in Schedule 7.7;

                 (b)      Liens imposed by law for taxes, assessments or
         charges of any Governmental Authority for claims not yet due or which
         are being contested in good faith by appropriate proceedings
         diligently conducted and with respect to which adequate reserves or
         other appropriate provisions are being maintained in accordance with
         GAAP and which Liens may not be executed upon the property subject
         thereto;

                 (c)      statutory Liens of landlords and Liens of carriers,
         warehousemen, mechanics, materialmen and other Liens imposed by law or
         created in the ordinary course of business and in existence less than
         90 days from the date of creation thereof for amounts not yet due or
         which are being contested in good faith by appropriate proceedings
         diligently conducted and with respect to which adequate reserves or
         other appropriate provisions are being maintained in accordance with
         GAAP and which Liens may not be executed upon the property subject
         thereto;

                 (d)      Liens incurred or deposits made in the ordinary
         course of business (including, without limitation, surety bonds and
         appeal bonds) in connection with workers' compensation, unemployment
         insurance and other types of social security benefits or to secure the
         performance of tenders, bids, leases, contracts (other than for the
         repayment of Indebtedness), statutory obligations and other similar
         obligations or arising as a result of progress payments under
         government contracts;

                 (e)      easements (including reciprocal easement agreements
         and utility agreements), rights-of-way, covenants, consents,
         reservations, encroachments, variations and zoning and other
         restrictions, charges or encumbrances (whether or not recorded), which
         do not interfere materially with the ordinary conduct of the business
         of the Borrower or any Subsidiary and which do not materially detract
         from the value of the property to which they attach or materially
         impair the use thereof to the Borrower or any Subsidiary;

                 (f)      Liens on assets of Subsidiaries securing Indebtedness
         owed to the Borrower or a Guarantor; provided that if such Subsidiary
         is a Guarantor or such Subsidiary's stock is Pledged Stock, the
         promissory note evidencing such Indebtedness shall be pledged to the
         Agent as security for the Obligations;

                 (g)      purchase money Liens to secure Indebtedness permitted
         under Section 9.4(f) and incurred to purchase fixed assets or
         equipment, provided such Indebtedness represents not less than 75% and
         not more than 100% of the purchase price of such assets as of the date
         of purchase thereof and no property other than the assets so purchased
         secure such Indebtedness; and

                 (h)      Liens arising in connection with Capital Leases
         permitted under Section 9.4(g) provided that no such Lien shall extend
         to any property other than the property which is the subject to such
         Capital Leases.







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<PAGE>   73

         9.4.   Indebtedness.  Incur, create, assume or permit to exist any
Indebtedness of the Borrower, howsoever evidenced, except:

                 (a)      Indebtedness existing as of the Closing Date as set
         forth in Schedule 7.6; provided, none of the instruments and
         agreements evidencing or governing such Indebtedness shall be amended,
         modified or supplemented after the Closing Date to change any terms of
         subordination, repayment or rights of Conversion, put, exchange or
         other rights from such terms and rights as in effect on the Closing
         Date;

                 (b)      Indebtedness owing to the Agent or any Lender in
         connection with this Agreement, any Note or other Loan Document;

                 (c)      the endorsement of negotiable instruments for deposit
         or collection or similar transactions in the ordinary course of
         business;

                 (d)      Indebtedness arising from Rate Hedging Obligations
         permitted under Section 9.14;

                 (e)      intercompany Indebtedness for loans and advances made
         by the Borrower or any Guarantor to the Borrower or any Guarantor,
         provided that such intercompany Indebtedness is evidenced by a
         promissory note or similar written instrument acceptable to the Agent
         which provides that such Indebtedness is subordinated to obligations,
         liabilities and undertakings of the holder or owner thereof under the
         Loan Documents on terms acceptable to the Agent;

                 (f)      purchase money Indebtedness in an aggregate amount
         not to exceed $1,000,000 at any time;

                 (g)      Capital Leases in an aggregate principal amount not
         to exceed $1,000,000;

                 (h)      Indebtedness of Guarantors guaranteed by the 
         Borrower; and

                 (i)      Unsecured Indebtedness payable to the seller of
         Permitted Acquisition representing all or a portion of the purchase
         price of the Person or assets so acquired so long as such Indebtedness
         does not cause a Default or Event of Default and so long as the
         aggregate amount of such Indebtedness does not exceed $25,000,000.

         9.5.   Transfer of Assets.  Sell, lease, transfer or otherwise
dispose of any assets of Borrower or any Subsidiary other than (a) dispositions
of inventory in the ordinary course of business, (b) dispositions of property
that is substantially worn, damaged, obsolete or, in the judgment of the
Borrower, no longer best used or useful in its business or that of any
Subsidiary, (c) transfers of assets necessary to give effect to merger or
consolidation transactions permitted by Section 9.7, and (d) the disposition of
Eligible Securities in the ordinary course of management of the investment 
portfolio of the Borrower and its Subsidiaries.






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<PAGE>   74

         9.6.   Investments.  Purchase, own, invest in or otherwise acquire,
directly or indirectly, any stock or other securities, or make or permit to
exist any interest whatsoever in any other Person or permit to exist any loans
or advances to any Person, except that Borrower may maintain investments or
invest in:

                 (a)      securities of any Person acquired in an Acquisition
         permitted hereunder;

                 (b)      Eligible Securities;

                 (c)      investments existing as of the date hereof and as set
         forth in Schedules 7.4 and 9.6;

                 (d)      accounts receivable arising and trade credit granted
         in the ordinary course of business and any securities received in
         satisfaction or partial satisfaction thereof in connection with
         accounts of financially troubled Persons to the extent reasonably
         necessary in order to prevent or limit loss; and

                 (e)      loans to or investments in Subsidiaries which are 
         Guarantors.

         9.7.   Merger or Consolidation.  (a) Consolidate with or merge into
any other Person, or (b) permit any other Person to merge into it, or (c)
liquidate, wind-up or dissolve or sell, transfer or lease or otherwise dispose
of all or a substantial part of its assets (other than sales permitted under
Section 9.5 (c)); provided, however, (i) any Subsidiary of the Borrower may
merge or transfer all or substantially all of its assets into or consolidate
with the Borrower or any wholly-owned Subsidiary of the Borrower, and (ii) any
other Person may merge into or consolidate with the Borrower or any
wholly-owned Subsidiary and any Subsidiary may merge into or consolidate with
any other Person in order to consummate an Acquisition permitted by Section
9.2, provided further, that any resulting or surviving entity shall execute and
deliver such agreements and other documents, including compliance with Section
8.19, and take such other action as the Agent may require to evidence or
confirm its express assumption of the obligations and liabilities of its
predecessor entities under the Loan Documents.

         9.8.   Restricted Payments.  Make any Restricted Payment or apply or
set apart any of their assets therefor or agree to do any of the foregoing,
except as permitted under Section 9.6 except:

                 (a)      the purchase of common stock of the Borrower to make
         shares available pursuant to Borrower's 1998 Employee Stock Purchase
         Plan, so long as the total purchase price of such stock does not
         exceed $10,000,000 in the aggregate during any Fiscal Year; and

                 (b)      pro rata distributions to Persons owning a minority
         interest in any Subsidiary.

         9.9.   Transactions with Affiliates.  Other than transactions
permitted under Sections 9.6 and 9.7, enter into any transaction after the
Closing Date, including, without limitation, the purchase, sale, lease or
exchange of property, real or personal, or the rendering of any service, with
any Affiliate of the Borrower, except (a) that such Persons may render services
to the Borrower or its Subsidiaries 



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<PAGE>   75

for compensation at the same rates generally paid by Persons engaged in the
same or similar businesses for the same or similar services, (b) that the
Borrower or any Subsidiary may render services to such Persons for compensation
at the same rates generally charged by the Borrower or such Subsidiary and (c)
in either case in the ordinary course of business and pursuant to the
reasonable requirements of the Borrower's (or any Subsidiary's) business
consistent with past practice of the Borrower and its Subsidiaries and upon
fair and reasonable terms no less favorable to the Borrower (or any Subsidiary)
than would be obtained in a comparable arm's-length transaction with a Person
not an Affiliate.

         9.10.  Compliance with ERISA.  With respect to any Pension Plan,
Employee Benefit Plan or Multiemployer Plan:

                 (a)      permit the occurrence of any Termination Event which
         would result in a liability on the part of the Borrower or any ERISA
         Affiliate to the PBGC; or

                 (b)      permit the present value of all benefit liabilities
         under all Pension Plans to exceed the current value of the assets of
         such Pension Plans allocable to such benefit liabilities; or

                 (c)      permit any accumulated funding deficiency (as defined
         in Section 302 of ERISA and Section 412 of the Code) with respect to
         any Pension Plan, whether or not waived; or

                 (d)      fail to make any contribution or payment to any
         Multiemployer Plan which the Borrower or any ERISA Affiliate may be
         required to make under any agreement relating to such Multiemployer
         Plan, or any law pertaining thereto; or

                 (e)      engage, or permit any Borrower or any ERISA Affiliate
         to engage, in any prohibited transaction under Section 406 of ERISA or
         Sections 4975 of the Code for which a civil penalty pursuant to
         Section 502(I) of ERISA or a tax pursuant to Section 4975 of the Code
         may be imposed; or

                 (f)      permit the establishment of any Employee Benefit Plan
         providing post-retirement welfare benefits or establish or amend any
         Employee Benefit Plan which establishment or amendment could result in
         liability to the Borrower or any ERISA Affiliate or increase the
         obligation of the Borrower or any ERISA Affiliate to a Multiemployer
         Plan; or

                 (g)      fail, or permit the Borrower or any ERISA Affiliate
         to fail, to establish, maintain and operate each Employee Benefit Plan
         in compliance in all material respects with the provisions of ERISA,
         the Code, all applicable Foreign Benefit Laws and all other applicable
         laws and the regulations and interpretations thereof.

         9.11.  Fiscal Year.  Change its Fiscal Year.






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<PAGE>   76

         9.12.  Prepayments, Etc. of Indebtedness.  Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in any
manner, or make any payment in violation of any subordination terms of, any
Indebtedness other than the Obligations.

         9.13.  Change in Control.  Cause, suffer or permit to exist or occur
any Change of Control.

         9.14.  Rate Hedging Obligations.  Incur any Rate Hedging Obligations
or enter into any agreements, arrangements, devices or instruments relating to
Rate Hedging Obligations, except (i) pursuant to Swap Agreements or (ii) for
Rate Hedging Obligations incurred to limit risks of currency or interest rate
fluctuations to which the Borrower and its Subsidiaries are otherwise subject
by virtue of the operations of their businesses, and not for speculative
purposes.

         9.15.  Negative Pledge Clauses. Enter into or cause, suffer or permit
to exist any agreement with any Person, other than the Agent and the Lenders
pursuant to this Agreement or any other Loan Documents, which prohibits or
limits the ability of any of the Borrower or any Subsidiary to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, provided that the Borrower
and any Subsidiary may enter into such an agreement in connection with property
subject to any Lien permitted by this Agreement and not released after the date
hereof, when such prohibition or limitation is by its terms effective only
against the assets subject to such Lien.







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<PAGE>   77

                                   ARTICLE X

                       Events of Default and Acceleration

         10.1.    Events of Default.  If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
Governmental Authority), that is to say:

                 (a)      if default shall be made in the due and punctual
         payment of the principal of any Loan, Reimbursement Obligation or
         other Obligation, when and as the same shall be due and payable
         whether pursuant to any provision of Article II or Article III, at
         maturity, by acceleration or otherwise; or

                 (b)      if default shall be made in the due and punctual
         payment of any amount of interest on any Loan, Reimbursement
         Obligation or other Obligation or of any fees or other amounts payable
         to any of the Lenders or the Agent on the date on which the same shall
         be due and payable; or

                 (c)      if default shall be made in the performance or
         observance of any covenant set forth in Section 8.7, 8.11, 8.19 or
         Article IX;

                 (d)      if a default shall be made in the performance or
         observance of, or shall occur under, any covenant, agreement or
         provision contained in this Agreement or the Notes (other than as
         described in clauses (a), (b) or (c) above) and such default shall
         continue for 30 or more days after the earlier of receipt of notice of
         such default by the Authorized Representative from the Agent (which
         notice the Agent shall give on the request of any Lender), or if a
         default shall be made in the performance or observance of, or shall
         occur under, any covenant, agreement or provision contained in any of
         the other Loan Documents (beyond any applicable grace period, if any,
         contained therein) or in any instrument or document evidencing or
         creating any obligation, guaranty, or Lien in favor of the Agent or
         any of the Lenders or delivered to the Agent or any of the Lenders in
         connection with or pursuant to this Agreement or any of the
         Obligations (beyond any applicable grace period), or if any Loan
         Document ceases to be in full force and effect (other than by reason
         of any action by the Agent), or if without the written consent of the
         Lenders, this Agreement or any other Loan Document shall be
         disaffirmed or shall terminate, be terminable or be terminated or
         become void or unenforceable for any reason whatsoever (other than in
         accordance with its terms in the absence of default or by reason of
         any action by the Lenders or the Agent); or

                 (e)      if there shall occur (i) a default, which is not
         waived, in the payment of any principal, interest, premium or other
         amount with respect to any Indebtedness or Rate Hedging Obligation
         (other than the Loans and other Obligations) of the Borrower or any
         Subsidiary in an amount not less than $100,000 in the aggregate
         outstanding, or (ii) a default, 






                                     71
<PAGE>   78

         which is not waived, in the performance, observance or fulfillment of
         any term or covenant contained in any agreement or instrument under or
         pursuant to which any such Indebtedness or Rate Hedging
         Obligation may have been issued, created, assumed, guaranteed or
         secured by the Borrower or any Subsidiary, or (iii) any other event of
         default as specified in any agreement or instrument under or pursuant
         to which any such Indebtedness or Rate Hedging Obligation may have
         been issued, created, assumed, guaranteed or secured by the Borrower
         or any Subsidiary, and such default or event of default referred to in
         clauses (i) through (iii) shall continue for more than the period of
         grace, if any, therein specified, or such default or event of default
         shall permit the holder of any such Indebtedness (or any agent or
         trustee acting on behalf of one or more holders) to accelerate the
         maturity thereof; or

                 (f)      if any representation, warranty or other statement of
         fact contained in any Loan Document or in any writing, certificate,
         report or statement at any time furnished to the Agent or any Lender
         by or on behalf of the Borrower or any Subsidiary pursuant to or in
         connection with any Loan Document, or otherwise, shall be false in any
         material respect when given or shall fail to state a material fact; or

                 (g)      if the Borrower or any Subsidiary shall be unable to
         pay its debts generally as they become due; file a petition to take
         advantage of any insolvency statute; make an assignment for the
         benefit of its creditors; commence a proceeding for the appointment of
         a receiver, trustee, liquidator or conservator of itself or of the
         whole or any substantial part of its property; file a petition or
         answer seeking liquidation, reorganization or arrangement or similar
         relief under the federal bankruptcy laws or any other applicable law
         or statute; or

                 (h)      if a court of competent jurisdiction shall enter an
         order, judgment or decree appointing a custodian, receiver, trustee,
         liquidator or conservator of the Borrower or any Subsidiary or of the
         whole or any substantial part of its properties and such order,
         judgment or decree continues unstayed and in effect for a period of
         sixty (60) days, or approve a petition filed against the Borrower or
         any Subsidiary seeking liquidation, reorganization or arrangement or
         similar relief under the federal bankruptcy laws or any other
         applicable law or statute of the United States of America or any
         state, which petition is not dismissed within sixty (60) days; or if,
         under the provisions of any other law for the relief or aid of
         debtors, a court of competent jurisdiction shall assume custody or
         control of the Borrower or any Subsidiary or of the whole or any
         substantial part of its properties, which control is not relinquished
         within sixty (60) days; or if there is commenced against the Borrower
         or any Subsidiary any proceeding or petition seeking reorganization,
         arrangement or similar relief under the federal bankruptcy laws or any
         other applicable law or statute of the United States of America or any
         state which proceeding or petition remains undismissed for a period of
         sixty (60) days; or if the Borrower or any Subsidiary takes any action
         to indicate its consent to or approval of any such proceeding or
         petition; or

                 (i)      if (i) one or more judgments or orders where the
         amount not covered by insurance (or the amount as to which the insurer
         denies liability) is in excess of $100,000 is rendered against the
         Borrower or any Subsidiary, or (ii) there is any attachment,
         injunction or execution against any of the Borrower's or Subsidiaries'
         properties for any amount in 





                                     72
<PAGE>   79

         excess of $100,000 in the aggregate; and such judgment, attachment,    
         injunction or execution remains unpaid, unstayed, undischarged,
         unbonded or undismissed for a period of thirty (30) days; or

                 (j)      if the Borrower or any Subsidiary shall, other than
         in the ordinary course of business (as determined by past practices),
         suspend all or any part of its operations material to the conduct of
         the business of the Borrower and its Subsidiaries, taken as a whole,
         for a period of more than sixty (60) days; or

                 (k)      if the Borrower or any Subsidiary shall breach any of
         the material terms or conditions of any agreement under which any Rate
         Hedging Obligations permitted hereby is created and such breach shall
         continue beyond any grace period, if any, relating thereto pursuant to
         the terms of such agreement; or

                 (l)      if there shall occur a Termination Event; or

                 (m)      if there shall occur and not be waived an Event of
         Default as defined in any of the other Loan Documents; or

                 (n)      if there shall occur a Change in Control;

then, and in any such event and at any time thereafter, if such Event of
Default or any other Event of Default shall have not been waived,

                          (A)     either or both of the following actions may
                 be taken:  (i) the Agent, with the consent of the Required
                 Lenders, may, and at the direction of the Required Lenders
                 shall, declare any obligation of the Lenders and the Issuing
                 Bank to make further Loans and Swing Line Loans or to issue
                 additional Letters of Credit terminated, whereupon the
                 obligation of each Lender to make further Loans, of
                 NationsBank to make further Swing Line Loans, and of the
                 Issuing Bank to issue additional Letters of Credit, hereunder
                 shall terminate immediately, and (ii) the Agent shall at the
                 direction of the Required Lenders, at their option, declare by
                 notice to the Borrower any or all of the Obligations to be
                 immediately due and payable, and the same, including all
                 interest accrued thereon and all other obligations of the
                 Borrower to the Agent and the Lenders, shall forthwith become
                 immediately due and payable without presentment, demand,
                 protest, notice or other formality of any kind, all of which
                 are hereby expressly waived, anything contained herein or in
                 any instrument evidencing the Obligations to the contrary
                 notwithstanding; provided, however, that notwithstanding the
                 above, if there shall occur an Event of Default under clause
                 (g) or (h) above, then the obligation of the Lenders to make
                 Loans, of NationsBank to make Swing Line Loans, and of the
                 Issuing Bank to issue Letters of Credit hereunder shall
                 automatically terminate and any and all of the Obligations
                 shall be immediately due and payable without the necessity of
                 any action by the Agent or the Required Lenders or notice by 
                 the Agent or the Lenders;






                                     73

<PAGE>   80

                          (B)     The Borrower shall, upon demand of the Agent
                 or the Required Lenders, deposit cash with the Agent in an
                 amount equal to the amount of any Letter of Credit
                 Outstandings, as collateral security for the repayment of any
                 future drawings or payments under such Letters of Credit, and
                 such amounts shall be held by the Agent pursuant to the terms
                 of the LC Account Agreement; and

                          (C)     the Agent and each of the Lenders shall have
                 all of the rights and remedies available under the Loan
                 Documents or under any applicable law.

         10.2.    Agent to Act.  In case any one or more Events of Default shall
occur and not have been waived, the Agent may, and at the direction of the
Required Lenders shall, proceed to protect and enforce their rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or
in any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.

         10.3.    Cumulative Rights.  No right or remedy herein conferred upon
the Lenders or the Agent is intended to be exclusive of any other rights or
remedies contained herein or in any other Loan Document, and every such right
or remedy shall be cumulative and shall be in addition to every other such
right or remedy contained herein and therein or now or hereafter existing at
law or in equity or by statute, or otherwise.

         10.4.    No Waiver.  No course of dealing between the Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies under any Loan Document or otherwise
available to it shall operate as a waiver of any rights or remedies and no
single or partial exercise of any rights or remedies shall operate as a waiver
or preclude the exercise of any other rights or remedies hereunder or of the
same right or remedy on a future occasion.

         10.5.    Allocation of Proceeds.  If an Event of Default has occurred
and not been waived, and the maturity of the Notes has been accelerated
pursuant to Article X hereof, all payments received by the Agent hereunder, in
respect of any principal of or interest on the Obligations or any other amounts
payable by the Borrower hereunder, shall be applied by the Agent in the
following order:

                 (a)      amounts due to the Lenders pursuant to Sections 2.10,
         3.3 and 12.5;

                 (b)      amounts due to the Agent pursuant to Section 11.8;

                 (c)      payments of interest on Loans, Swing Line Loans and
         Reimbursement Obligations, to be applied for the ratable benefit of
         the Lenders (with amounts payable in respect of Swing Line
         Outstandings being included in such calculation and paid to
         NationsBank);

                 (d)      payments of principal of Loans, Swing Line Loans and
         Reimbursement Obligations, to be applied for the ratable benefit of
         the Lenders (with amounts payable in 





                                     74
<PAGE>   81

         respect of Swing Line Outstandings being included in such calculation
         and paid to NationsBank);

                 (e)      payments of cash amounts to the Agent in respect of
         outstanding Letters of Credit pursuant to Section 10.1(B);

                 (f)      amounts due to the Lenders pursuant to Sections
         3.2(g), 8.15 and 12.9;

                 (g)      payments of all other amounts due under any of the
         Loan Documents, if any, to be applied for the ratable benefit of the
         Lenders;

                 (h)      amounts due to any of the Lenders in respect of
         Obligations consisting of liabilities under any Swap Agreement with
         any of the Lenders on a pro rata basis according to the amounts owed;
         and

                 (i)      any surplus remaining after application as provided
         for herein, to the Borrower or otherwise as may be required by
         applicable law.








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<PAGE>   82

                                   ARTICLE XI

                                   The Agent

         11.1.   Appointment, Powers, and Immunities.  Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto.  The Agent (which term as used in this sentence and in
Section 11.5 and the first sentence of Section 11.6 hereof shall include its
affiliates and its own and its affiliates' officers, directors, employees, and
agents):

                 (a)     shall not have any duties or responsibilities except
         those expressly set forth in this Agreement and shall not be a trustee
         or fiduciary for any Lender;

                 (b)      shall not be responsible to the Lenders for any
         recital, statement, representation, or warranty (whether written or
         oral) made in or in connection with any Loan Document or any
         certificate or other document referred to or provided for in, or
         received by any of them under, any Loan Document, or for the value,
         validity, effectiveness, genuineness, enforceability, or sufficiency
         of any Loan Document, or any other document referred to or provided
         for therein or for any failure by any Loan Party or any other Person
         to perform any of its obligations thereunder;

                 (c)      shall not be responsible for or have any duty to
         ascertain, inquire into, or verify the performance or observance of
         any covenants or agreements by any Loan Party or the satisfaction of
         any condition or to inspect the property (including the books and
         records) of any Loan Party or any of its Subsidiaries or affiliates;

                 (d)      shall not be required to initiate or conduct any
         litigation or collection proceedings under any Loan Document; and

                 (e)      shall not be responsible for any action taken or
         omitted to be taken by it under or in connection with any Loan
         Document, except for its own gross negligence or willful misconduct.

The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care.

         11.2.   Reliance by Agent.  The Agent shall be entitled to rely upon
any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telefacsimile)
believed by it to be genuine and correct and to have been signed, sent or made
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel for any Loan Party), independent
accountants, and other experts selected by the Agent.  The Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof
unless and until the Agent receives and accepts an Assignment and Acceptance
executed in 







                                     76
<PAGE>   83

accordance with Section 12.1 hereof.  As to any matters not expressly
provided for by this Agreement, the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding on all of the Lenders; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or
that is contrary to any Loan Document or applicable law unless it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking any such action.

         11.3.   Defaults.  The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless the Agent has
received written notice from a Lender or the Borrower specifying such Default
or Event of Default and stating that such notice is a "Notice of Default".  In
the event that the Agent receives such a notice of the occurrence of a Default
or Event of Default, the Agent shall give prompt notice thereof to the Lenders.
The Agent shall (subject to Section 11.2 hereof) take such action with respect
to such Default or Event of Default as shall reasonably be directed by the
Required Lenders, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
or Event of Default as it shall deem advisable in the best interest of the
Lenders.

         11.4.   Rights as Lender.  With respect to its Revolving Credit
Commitment and Line of Credit Commitment and the Loans made by it, NationsBank
(and any successor acting as Agent) in its capacity as a Lender hereunder shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity.  NationsBank (and any successor acting as Agent) and
its affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any Loan
Party or any of its Subsidiaries or affiliates as if it were not acting as
Agent, and NationsBank (and any successor acting as Agent) and its affiliates
may accept fees and other consideration from any Loan Party or any of its
Subsidiaries or affiliates for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.

         11.5.   Indemnification.  The Lenders agree to indemnify the Agent (to
the extent not reimbursed under Section 12.9 hereof, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with
their respective Revolving Credit and Line of Credit Commitments, for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys' fees), or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against the Agent (including by any Lender) in any way relating to or arising
out of any Loan Document or the transactions contemplated thereby or any action
taken or omitted by the Agent under any Loan Document;  provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the
gross negligence or willful misconduct of the Person to be indemnified.
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs or expenses payable by
the Borrower under Section 12.5, to the extent that the Agent is not promptly
reimbursed for such costs 






                                     77

<PAGE>   84

and expenses by the Borrower.  The agreements contained in this Section 11.5
shall survive payment in full of the Loans and all other amounts payable under
this Agreement.

         11.6.   Non-Reliance on Agent and Other Lenders.  Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Loan Parties and their
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under the Loan Documents.  Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Loan Party or any of its Subsidiaries
or affiliates that may come into the possession of the Agent or any of its
affiliates.

         11.7.   Resignation of Agent.  The Agent may resign at any time by
giving notice thereof to the Lenders and the Borrower.  Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent.  If no successor Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent which shall be a
commercial bank organized under the laws of the United States of America having
combined capital and surplus of at least $500,000,000.  Upon the acceptance of
any appointment as Agent hereunder by a successor, such successor shall
thereupon succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder.  After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article XI
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.

         11.8.   Fees.  The Borrower agrees to pay to the Agent, for its
individual account, an annual Agent's administrative fee to administer
borrowings hereunder not to exceed $5,000 per Lender with a minimum of $25,000
per year as from time to time agreed to by the Borrower and Agent in writing.




                                     78


<PAGE>   85

                                  ARTICLE XII

                                 Miscellaneous

         12.1.  Assignments and Participations.  (a)       Each Lender may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Loans, its Note, and its Revolving Credit Commitment and Line of
Credit Commitment); provided, however, that

                 (i)      each such assignment shall be to an Eligible
Assignee;

                 (ii)     except in the case of an assignment to another Lender
or an assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least equal to
$10,000,000 or an integral multiple of $1,000,000 in excess thereof;

                 (iii)    each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and obligations
under this Agreement and the Notes; and

                 (iv)     the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and Acceptance in the
form of Exhibit B hereto, together with any Note subject to such assignment and
a processing fee of $3,500.

Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder
and the assigning Lender shall, to the extent of such assignment, relinquish
its rights and be released from its obligations under this Agreement (other
than the rights set forth in Sections 12.5 and 12.9).  Upon the consummation of
any assignment pursuant to this Section, the assignor, the Agent and the
Borrower shall make appropriate arrangements so that, if required, new Notes
are issued to the assignor and the assignee.  If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 5.6.

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

         (c)     Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Agent shall, 





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<PAGE>   86

if such Assignment and Acceptance has been completed and is in substantially
the form of Exhibit B hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the parties thereto.

         (d)     Each Lender may sell participations to one or more Persons in
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Revolving Credit Commitment, Line of Credit Commitment
and its Loans); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (iii) the participant shall be entitled to the benefit of the
yield protection provisions contained in Article V and the right of set-off
contained in Section 12.3, and (iv) the Borrower shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right
to enforce the obligations of the Borrower relating to its Loans and its Note
and to approve any amendment, modification, or waiver of any provision of this
Agreement (other than amendments, modifications, or waivers decreasing the
amount of principal of or the rate at which interest is payable on such Loans
or Note, extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Note, or extending its Revolving Credit
Commitment or Line of Credit Commitment).  No sale of any participation
hereunder shall give rise to Taxes or increased costs payable by the Borrower
under Section 5.6 hereof, or otherwise increase or expose the Borrower to any
obligation or liability hereunder or reduce any rights or benefits to the
Borrower hereunder.

         (e)     Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any portion of
its Loans and its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank.  No such assignment shall release the assigning Lender from its
obligations hereunder.

         (f)     Subject to Section 12.14, any Lender may furnish any
information concerning the Borrower or any of its Subsidiaries in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants).

         12.2.  Notices.  Any notice shall be conclusively deemed to have been
received by any party hereto and be effective (i) on the day on which delivered
(including hand delivery by commercial courier service) to such party (against
receipt therefor), (ii) on the date of receipt at such address, telefacsimile
number or telex number as may from time to time be specified by such party in
written notice to the other parties hereto or otherwise received), in the case
of notice by telegram, telefacsimile or telex, respectively (where the receipt
of such message is verified by return), or (iii) on the fifth Business Day
after the day on which mailed, if sent prepaid by certified or registered mail,
return receipt requested, in each case delivered, transmitted or mailed, as the
case may be, to the address, telex number or telefacsimile number, as
appropriate, set forth below or such other address or number as such party
shall specify by notice hereunder:





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<PAGE>   87

                 (a)      if to the Borrower:

                          Lincare Holdings, Inc.
                          19337 US 19 North
                          Suite 500
                          Clearwater, Florida 34624
                          Attn: Paul G. Gabos
                          Telephone:      (813) 530-7700
                          Telefacsimile:  (813) 532-4091

                 (b)      if to the Agent:

                          NationsBank, National Association
                          Independence Center, 15th Floor
                          NC1-001-15-04
                          Charlotte, North Carolina  28255
                          Attention: Jeff Strickland, Agency Services
                          Telephone:       (704) 388-1107
                          Telefacsimile:   (704) 386-9923

                 (c)      if to the Lenders:

                          At the addresses set forth on the signature pages
                          hereof and on the signature page of each Assignment
                          and Acceptance;

                 (d)      if to any other Loan Party, at the address set forth
                          on the signature page of the Facility Guaranty or
                          Security Instrument executed by such Loan Party, as
                          the case may be.

         12.3.  Right of Set-off; Adjustments.  (a) Upon the occurrence and
during the continuance of any Event of Default, each Lender (and each of its
affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its affiliates)
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note held by such Lender, irrespective of whether such Lender shall have
made any demand under this Agreement or such Note and although such obligations
may be unmatured.  Each Lender agrees promptly to notify the Borrower after any
such set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.  The rights of each Lender under this Section 12.3 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.

         (b)     If any Lender (a "benefitted Lender") shall at any time
receive any payment of all or part of the Loans owing to it, or interest
thereon, or receive any collateral in respect thereof (whether 






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<PAGE>   88

voluntarily or involuntarily, by set-off, or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of such other Lender's Loans owing to it, or interest
thereon, such benefitted Lender shall purchase for cash from the other Lenders
a participating interest in such portion of each such other Lender's Loans
owing to it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from
such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.  The Borrower agrees that any Lender so purchasing a participation
from a Lender pursuant to this Section 12.3 may, to the fullest extent
permitted by law, exercise all of its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Person were the
direct creditor of the Borrower in the amount of such participation.

         12.4.  Survival.  All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the issuance of the Letters of Credit and the execution and delivery to the
Lenders of this Agreement and the Notes and shall continue in full force and
effect so long as any of Obligations remain outstanding or any Lender has any
commitment hereunder or the Borrower has continuing obligations hereunder
unless otherwise provided herein.  Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party and all covenants, provisions
and agreements by or on behalf of the Borrower which are contained in the Loan
Documents shall inure to the benefit of the successors and permitted assigns of
the Lenders or any of them.

         12.5.  Expenses. The Borrower agrees to pay on demand all reasonable
costs and expenses of the Agent in connection with the syndication,
preparation, execution, delivery, administration, modification, and amendment
of this Agreement, the other Loan Documents, and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under the Loan
Documents.  The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation,
reasonable attorneys' fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the Loan
Documents and the other documents to be delivered hereunder.

         12.6.  Amendments and Waivers.  Any provision of this Agreement or
any other Loan Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the
Required Lenders (and, if Article XI or the rights or duties of the Agent are
affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all the Lenders, (i) increase the Revolving Credit
Commitments or Line of Credit Commitments of the Lenders, (ii) reduce the
principal of or rate of interest on any Loan or any fees or other amounts
payable hereunder, (iii) postpone any date fixed for the payment of any
scheduled installment of principal of or interest on any Loan or any fees or
other amounts payable hereunder or for termination of any Revolving Credit
Commitment or Line of Credit Commitment, (iv) change the percentage of the
Revolving Credit and Line of Credit Commitments or of the unpaid principal







                                     82

<PAGE>   89

amount of the Notes, or the number of Lenders, which shall be required for the
Lenders or any of them to take any action under this Section 12.6 or any other
provision of this Agreement or (v) release any Guarantor or all or any material
portion of the Collateral; and provided, further, that no such amendment or
waiver that affects the rights, privileges or obligations of NationsBank as
provider of Swing Line Loans, shall be effective unless signed in writing by
NationsBank or that affects the rights, privileges or obligations of the
Issuing Bank as issuer of Letters of Credit, shall be effective unless signed
in writing by the Issuing Bank;

Notwithstanding any provision of the other Loan Documents to the contrary, as
between the Agent and the Lenders, execution by the Agent shall not be deemed
conclusive evidence that the Agent has obtained the written consent of the
Required Lenders.  No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances, except as otherwise expressly provided herein.  No delay
or omission on any Lender's or the Agent's part in exercising any right, remedy
or option shall operate as a waiver of such or any other right, remedy or
option or of any Default or Event of Default.

         12.7.  Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart.

         12.8.  Termination.  The termination of this Agreement shall not
affect any rights of the Borrower, the Lenders or the Agent or any obligation
of the Borrower, the Lenders or the Agent, arising prior to the effective date
of such termination, and the provisions hereof shall continue to be fully
operative until all transactions entered into or rights created or obligations
incurred prior to such termination have been fully disposed of, concluded or
liquidated and the Obligations arising prior to or after such termination have
been irrevocably paid in full.  The rights granted to the Agent for the benefit
of the Lenders under the Loan Documents shall continue in full force and
effect, notwithstanding the termination of this Agreement, until all of the
Obligations have been paid in full after the termination hereof (other than
Obligations in the nature of continuing indemnities or expense reimbursement
obligations not yet due and payable, which shall continue) or the Borrower has
furnished the Lenders and the Agent with an indemnification satisfactory to the
Agent and each Lender with respect thereto.  All representations, warranties,
covenants, waivers and agreements contained herein shall survive termination
hereof until payment in full of the Obligations unless otherwise provided
herein.  Notwithstanding the foregoing, if after receipt of any payment of all
or any part of the Obligations, any Lender is for any reason compelled to
surrender such payment to any Person because such payment is determined to be
void or voidable as a preference, impermissible setoff, a diversion of trust
funds or for any other reason, this Agreement shall continue in full force and
the Borrower shall be liable to, and shall indemnify and hold the Agent or such
Lender harmless for, the amount of such payment surrendered until the Agent or
such Lender shall have been finally and irrevocably paid in full.  The
provisions of the foregoing sentence shall be and remain effective
notwithstanding any contrary action which may have been taken by the Agent or
the Lenders in reliance upon such payment, and any such contrary action so
taken shall be without prejudice to the Agent or the Lenders' rights under this
Agreement and shall be deemed to have been conditioned upon such payment having
become final and irrevocable.







                                     83

<PAGE>   90

         12.9.  Indemnification; Limitation of Liability.          (a)
The Borrower agrees to indemnify and hold harmless the Agent and each Lender
and each of their affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' fees) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation, or proceeding or
preparation of defense in connection therewith) the Loan Documents, any of the
transactions contemplated herein or the actual or proposed use of the proceeds
of the Loans, except to the extent such claim, damage, loss, liability, cost,
or expense is found in a judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 12.9 applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by the
Borrower, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated.  The
Borrower agrees not to assert any claim against the Agent, any Lender, any of
their affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for special,
indirect, consequential, or punitive damages arising out of or otherwise
relating to the Loan Documents, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Loans.

         (b)     Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 12.9 shall survive the payment in full of the Loans
and all other amounts payable under this Agreement.

         12.10. Severability.  If any provision of this Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more
of the parties hereto, then such provision shall remain in effect with respect
to all parties, if any, as to whom such provision is neither illegal nor
invalid, and in any event all other provisions hereof shall remain effective
and binding on the parties hereto.

         12.11. Entire Agreement.  This Agreement, together with the other
Loan Documents, constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all previous proposals,
negotiations, representations, commitments and other communications between or
among the parties, both oral and written, with respect thereto.

         12.12. Agreement Controls.  In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of
this Agreement, the terms and provisions of this Agreement shall control to the
extent of such conflict.

         12.13. Usury Savings Clause.  Notwithstanding any other provision
herein, the aggregate interest rate charged under any of the Notes, including
all charges or fees in connection therewith deemed in the nature of interest
under applicable law shall not exceed the Highest Lawful Rate (as such term is
defined below).  If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined below), the 






                                     84
<PAGE>   91

outstanding amount of the Loans made hereunder shall bear interest at the
Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect.  In
addition, if when the Loans made hereunder are repaid in full the total
interest due hereunder (taking into account the increase provided for above) is
less than the total amount of interest which would have been due hereunder if
the stated rates of interest set forth in this Agreement had at all times been
in effect, then to the extent permitted by law, the Borrower shall pay to the
Agent an amount equal to the difference between the amount of interest paid and
the amount of interest which would have been paid if the Highest Lawful Rate
had at all times been in effect. Notwithstanding the foregoing, it is the
intention of the Lenders and the Borrower to conform strictly to any applicable
usury laws.  Accordingly, if any Lender contracts for, charges, or receives any
consideration which constitutes interest in excess of the Highest Lawful Rate,
then any such excess shall be canceled automatically and, if previously paid,
shall at such Lender's option be applied to the outstanding amount of the Loans
made hereunder or be refunded to the Borrower.  As used in this paragraph, the
term "Highest Lawful Rate" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to such Lender which are presently in effect or, to
the extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.

         12.14. Confidentiality.  The Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by the Borrower pursuant to this Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand or any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure
by any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed participant or assignee.

         12.15. GOVERNING LAW; WAIVER OF JURY TRIAL.

                 (A)      THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER
         THAN THOSE SECURITY INSTRUMENTS WHICH EXPRESSLY PROVIDE THAT THEY
         SHALL BE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION) SHALL BE
         GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
         OF FLORIDA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
         PERFORMED, IN SUCH STATE NOTWITHSTANDING ITS EXECUTION AND DELIVERY
         OUTSIDE SUCH STATE.




                                     85

<PAGE>   92

                 (B)      THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY AGREES
         AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
         RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN
         MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT SITTING IN THE COUNTY
         OF PINELLAS, STATE OF FLORIDA, UNITED STATES OF AMERICA AND, BY THE
         EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER EXPRESSLY
         WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
         OF VENUE IN, OR TO THE EXERCISE OF JURISDICTION OVER IT AND ITS
         PROPERTY BY, ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING,
         AND THE BORROWER HEREBY IRREVOCABLY SUBMITS GENERALLY AND
         UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
         SUIT, ACTION OR PROCEEDING.

                 (C)      THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE
         MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR
         OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING, OR BY
         REGISTERED OR CERTIFIED MAIL (POSTAGE PREPAID) TO THE ADDRESS OF THE
         BORROWER PROVIDED IN SECTION 12.2, OR BY ANY OTHER METHOD OF SERVICE
         PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF
         FLORIDA.

                 (D)      NOTHING CONTAINED IN SUBSECTIONS (A) OR (B) HEREOF
         SHALL PRECLUDE THE AGENT OR ANY LENDER FROM BRINGING ANY SUIT, ACTION
         OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT IN THE
         COURTS OF ANY JURISDICTION WHERE THE BORROWER OR ANY OF THE BORROWER'S
         PROPERTY OR ASSETS MAY BE FOUND OR LOCATED.  TO THE EXTENT PERMITTED
         BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION, THE BORROWER HEREBY
         IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND
         EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING,
         OBJECTION TO THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY
         ANY SUCH OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE AVAILABLE
         UNDER APPLICABLE LAW.

                 (E)      IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
         RIGHTS OR REMEDIES UNDER OR RELATED TO ANY LOAN DOCUMENT OR ANY
         AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
         THE FUTURE BE DELIVERED IN CONNECTION THEREWITH, THE BORROWER, THE
         AGENT AND THE LENDERS HEREBY AGREE, TO THE EXTENT PERMITTED BY
         APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
         BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY IRREVOCABLY WAIVE, TO
         THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH 






                                     86


<PAGE>   93

PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.

                        [Signatures on following pages]








                                     87
<PAGE>   94

         IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.


                                        LINCARE HOLDINGS INC.
WITNESS:

/s/ Terry J. Witcher                    By: /s/  Paul G. Gabos
----------------------                      --------------------------------
                                        Name:   Paul G. Gabos 
                                        Title:  Chief Financial Officer, 
/s/  Angela Bryant                      Secretary & Treasurer
----------------------



                            Signature Page 1 of 2

<PAGE>   95

                                        NATIONSBANK, NATIONAL ASSOCIATION,
                                        as Agent for the Lenders


                                        By:  /s/ James E. Harden, Jr.
                                            ------------------------------
                                        Name:   James E. Harden, Jr.
                                        Title:  Vice President


                                        NATIONSBANK, NATIONAL ASSOCIATION



                                        By: /s/ James E. Harden, Jr.
                                           ------------------------------- 
                                        Name:   James E. Harden, Jr.
                                        Title:  Vice President


                                        Lending Office:
                                             NationsBank, National Association
                                             Independence Center, 15th Floor
                                             NC1-001-15-04
                                             Charlotte, North Carolina  28255
                                             Attention: Jeff Strickland, Agency
                                                        Services 
                                             Telephone:      (704) 388-1107 
                                             Telefacsimile:  (704) 386-9923

                                        Wire Transfer Instructions:
                                             NationsBank, National Association
                                             ABA# 063100277
                                             Account No.: _________________
                                             Reference: Lincare Holdings, Inc.
                                             Attention: Agency Services



                            Signature Page 2 of 2