Exhibit 4.9
Form 10-K 2001, Amendment No. 1
Headway Corporate Resources, Inc.
File No. 1-16025

                              AMENDED AND RESTATED
                                CREDIT AGREEMENT



                                  by and among



                       HEADWAY CORPORATE RESOURCES, INC.,
                                  as Borrower,


                             BANK OF AMERICA, N.A.,
                             as Agent and as Lender

                                       and

                   THE LENDERS PARTY HERETO FROM TIME TO TIME



                                 April 17, 2002







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                                TABLE OF CONTENTS
                                                                            Page
ARTICLE I....................................................................2

Definitions and Terms........................................................2

1.1.  Definitions............................................................2

1.2.  Rules of Interpretation...............................................20

ARTICLE II..................................................................21

The Loan Facility...........................................................21

2.1.  Conversion of Outstanding Loans to Term Loans.........................21

2.2.  Payment of Interest...................................................22

2.3.  Payment of Principal..................................................22

2.4.  Manner of Payment.....................................................24

2.5.  Notes.................................................................24

2.6.  Pro Rata Payments; Application of Proceeds............................24

2.7.  Deferred Restructuring Fee............................................25

ARTICLE III.................................................................25

Letters of Credit...........................................................25

3.1.  Letters of Credit.....................................................25

3.2.  Reimbursement.........................................................26

3.3.  Letter of Credit Facility Fees........................................29

3.4.  Administrative Fees...................................................29

ARTICLE IV..................................................................29

Security....................................................................29

4.1.  Security..............................................................29

4.3.  Information Regarding Collateral......................................30

4.4.  Intellectual Property.................................................30

4.5.  Pledged Stock.........................................................30

4.6.  Pledge and Subordination of Intercompany Notes........................30

4.7.  Further Assurances....................................................31

4.8.  Borrower Accounts.....................................................31

ARTICLE V...................................................................31

Taxes 31

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ARTICLE VI..................................................................33

Conditions to Effectiveness of this Amendment and Restatement...............33

ARTICLE VII.................................................................38

Representations and Warranties..............................................38

7.1.  Organization and Authority............................................38

7.2.  Loan Documents........................................................38

7.3   Solvency..............................................................39

7.4.  Subsidiaries and Stockholders.........................................39

7.5.  Ownership Interests...................................................39

7.6.  Financial Condition...................................................39

7.7.  Title to Properties...................................................40

7.8.  Taxes.................................................................40

7.9.  Other Agreements......................................................41

7.10. Litigation............................................................41

7.11. Margin Stock..........................................................41

7.12. Investment Company....................................................41

7.13. Intellectual Property.................................................41

7.14. No Untrue Statement...................................................42

7.15. No Consents, Etc......................................................42

7.16. Earnout Restructuring Agreement.......................................42

7.17. Employee Benefit Plans................................................42

7.18. No Default............................................................43

7.19. Environmental Matters.................................................43

7.20. Employment Matters....................................................44

7.21. RICO..................................................................45

ARTICLE VIII................................................................45

Affirmative Covenants.......................................................45

8.1.  Financial Reports, Etc................................................45

8.2.  Maintain Properties...................................................48

8.3.  Existence, Qualification, Etc.........................................48

8.4.  Regulations and Taxes.................................................48

8.5.  Insurance.............................................................48

8.6.  True Books............................................................49

8.7.  Right of Inspection...................................................49

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8.8.  Observe all Laws......................................................49

8.9.  Governmental Licenses.................................................49

8.10. Covenants Extending to Other Persons..................................50

8.11. Officer's Knowledge of Default........................................50

8.12. Suits or Other Proceedings............................................50

8.13. Notice of Environmental Complaint or Condition........................50

8.14. Environmental Compliance..............................................50

8.15. Indemnification.......................................................51

8.16. Further Assurances....................................................51

8.17. Employee Benefit Plans................................................51

8.18. Continued Operations..................................................52

8.19. New Subsidiaries......................................................52

8.19. Chief Restructuring Officer...........................................54

ARTICLE IX..................................................................54

Negative Covenants..........................................................54

9.1.  Financial Covenants...................................................54

9.2.  Acquisitions..........................................................55

9.3.  Liens.................................................................55

9.4.  Indebtedness..........................................................56

9.5.  Transfer of Assets....................................................57

9.6.  Investments...........................................................57

9.7.  Merger or Consolidation...............................................58

9.8.  Restricted Payments...................................................58

9.9.  Transactions with Affiliates..........................................58

9.10. Compliance with ERISA.................................................59

9.11. Fiscal Year...........................................................59

9.12. Dissolution, Etc......................................................59

9.13. Change of Control.....................................................59

9.14. Hedging Obligations...................................................59

9.15. Negative Pledge Clauses...............................................60

9.16. Restrict Payment of Dividends.........................................60

9.17. Subordinated Debt and Preferred Stock.................................60

9.18. Cash Usage............................................................60

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9.19. Modification of Limited Waiver........................................60

ARTICLE X...................................................................60

Events of Default and Acceleration..........................................60

10.1. Events of Default.....................................................60

10.2. Agent to Act..........................................................64

10.3. Cumulative Rights.....................................................64

10.4. No Waiver.............................................................64

10.5. Allocation of Proceeds................................................64

ARTICLE XI..................................................................65

The Agent...................................................................65

11.1. Appointment...........................................................65

11.2. Attorneys-in-fact.....................................................65

11.3. Limitation on Liability...............................................65

11.4. Reliance..............................................................65

11.5  Notice of Default.....................................................66

11.6. No Representations....................................................66

11.7. Indemnification.......................................................66

11.8. Lender................................................................67

11.9. Resignation...........................................................67

11.10. Sharing of Payments, etc.............................................67

11.11. Fees.................................................................68

ARTICLE XII.................................................................68

Miscellaneous...............................................................68

12.1. Assignments and Participations........................................68

12.2. Notices...............................................................70

12.3. Setoff................................................................71

12.4. Survival..............................................................72

12.5. Expenses..............................................................72

12.6. Amendments............................................................72

12.7. Counterparts..........................................................73

12.8. Termination...........................................................73

12.9. Indemnification; Limitation of Liability..............................74

12.10. Severability.........................................................74

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12.11. Entire Agreement.....................................................74

12.12. Agreement Controls...................................................74

12.13. Usury Savings Clause.................................................74

12.14. Confidentiality......................................................75

12.15. Termination of Prior Credit Facilities...............................75

12.16. Acknowledgements.....................................................75

12.17. Governing Law; Waiver of Jury Trial..................................76

12.18. Amendment and Restatement--Acknowledgement and Consents..............77

12.19. Release..............................................................78

12.19. Amendment of Subordination Agreements................................79

12.20. Third Party Beneficiaries............................................79


EXHIBIT A     Applicable 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     Form of Reaffirmation of Loan Documents..................D-1
EXHIBIT E     Form of Note.............................................E-1
EXHIBIT F     Compliance Certificate...................................F-1
EXHIBIT G     Form of Intercompany Notes...............................G-1
EXHIBIT H     Form of Warrant..........................................H-1
EXHIBIT I     Second Limited Waiver....................................I-1

Schedule 1.2    Existing Debt
Schedule 4.3    Information Regarding Collateral
Schedule 4.8    Exempted Deposit Accounts
Schedule 7.4    Subsidiaries and Investments in Other Persons
Schedule 7.6(b) Material Adverse Changes
Schedule 7.6(d) Deposit Accounts (including investment accounts)
Schedule 7.7    Liens
Schedule 7.8    Tax Matters
Schedule 7.10   Litigation
Schedule 7.18   Environmental Matters
Schedule 8.1(g) Certain Weekly Reports
Schedule 8.1(h) Certain Monthly Reports
Schedule 9.9    Affiliate Transactions

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                      AMENDED AND RESTATED CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 17, 2002 (the
"Agreement"), is made by and among HEADWAY CORPORATE RESOURCES, INC., a Delaware
corporation  having its principal  place of business in New York,  New York (the
"Borrower"),  BANK OF AMERICA,  N.A.,  (successor  in  interest to  NationsBank,
National  Association),  a national banking  association  organized and existing
under the laws of the  United  States,  in its  capacity  as a Lender and as the
Issuing Bank (each as hereinafter  defined) ("Bank of America" and  collectively
with 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, the "Lenders"),  and BANK OF AMERICA, N.A., (successor in interest
to 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  11.9,  the "Agent") for the purpose of
amending,  restating and continuing  the Original  Credit  Agreement  referenced
below, effectives as of the Effective Date (defined below);


                              W I T N E S S E T H:

     WHEREAS,  pursuant to that certain Credit  Agreement  dated as of March 19,
1998,  by  and  among  Borrower,   Lenders  and  Agent  (the  "Original   Credit
Agreement"),  Lenders  extended the credit  facilities set forth in the Original
Credit  Agreement to Borrower which were used for the purpose of providing funds
(i) to refinance certain Existing Debt (as hereinafter defined) of the Borrower,
(ii) to redeem,  repurchase  or otherwise  obtain  surrender of the Warrants (as
hereinafter defined),  (iii) to finance general working capital needs, including
the making of Acquisitions and Capital Expenditures  permitted  thereunder,  and
(iv) to provide for the general corporate purposes of the Borrower;

     WHEREAS,  at the Borrower's request the Lenders have from time to time made
Loans to the  Borrower  under the  Original  Credit  Agreement  and have  issued
Letters of Credit thereunder for the account of the Borrower;

     WHEREAS,   the   Guarantors   have  jointly  and   severally,   absolutely,
unconditionally  and  irrevocably  guarantied the payment and performance of the
Obligations  under the Loan  Documents  pursuant to, and in accordance  with the
terms of, the Guaranties and the other Loan Documents;

     WHEREAS,  to secure the payment and  performance of the Borrower's and each
other Credit Party's Obligations under the Loan Documents,  the Borrower and the
other Credit Parties have entered into the Security  Instruments  that grant the
Agent, for the benefit of the Lenders, valid,  enforceable,  perfected and first
priority security  interests in the Collateral,  subject only to Liens permitted
under Section 9.3(b)-(h) of this Agreement;

     WHEREAS,  Borrower,  Lenders  and Agent  desire to amend  and  restate  the
Original  Credit  Agreement  in  order  to,  among  other  things,  (i)  convert
outstanding   revolving  loans  to  term  loans,  (ii)  terminate  the  Lenders'
commitment  to fund  further  loans or issue  further  letters of credit,  (iii)


<PAGE>

modify  interest rates and fees payable;  (iv) extend the Maturity Date; and (v)
provide for certain other amendments as specified herein; and

     WHEREAS,  it is the  intention  of the parties to this  Agreement  that the
amendment and restatement of the Original Credit  Agreement shall not constitute
a refinancing of the Loans  outstanding on the Effective Date, that the Guaranty
previously  executed by each Domestic  Subsidiary of Borrower  shall continue in
full force and effect, and that all Obligations hereunder,  under the Guaranties
and under the other Loan Documents, shall continue to be secured by the grant to
Agent, on behalf of Lenders, of a first priority Lien on the Collateral.

     NOW,  THEREFORE,  in  consideration  of the  premises  and the  agreements,
provisions and covenants herein contained, the parties hereto agree as follows:

                                    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 or
     other  ownership  interest in another Person  (including the purchase of an
     option,  warrant or  convertible or similar type security to acquire such a
     controlling  interest  at the time it  becomes  exercisable  by the  holder
     thereof), whether by purchase of such equity or other ownership interest or
     upon  exercise of an option or warrant  for, or  conversion  of  securities
     into,  such equity or other ownership  interest,  or (ii) assets of another
     Person  which  constitute  all or any  material  part of the assets of such
     Person or of a line or lines of business conducted by such Person.

          "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
     10% or more of any class of the outstanding Voting Stock (or in the case of
     a Person  which is not a  corporation,  10% or more of the  equity or other
     ownership  interest) of the Borrower;  or (iii) 10% or more of any class of
     the  outstanding  voting  stock (or in the case of a Person  which is not a
     corporation,  10% or more of the  equity or other  ownership  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.  However,  no
     Lender shall be deemed an Affiliate of the Borrower, or vice versa.

          "Applicable  Percentage"  means,  with  respect to each  Lender at any
     time,  a fraction  determined  as follows:  (i) in  reference to Letters of
     Credit and Letter of Credit Commitments, a fraction, the numerator of which
     shall be such Lender's  Letter of Credit  Commitment and the denominator of
     which shall be the Total Letter of Credit Commitment; and (ii) in reference
     to Loans,  a fraction,  the  numerator  of which  shall be the  outstanding
     principal balance of such Lender's Loans and the denominator of which shall

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<PAGE>

     be the aggregate outstanding principal balance of all Loans. The Applicable
     Percentage  for each  Lender  as of the  Effective  Date is as set forth in
     Exhibit A; provided that the Applicable  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,  the "Lending
     Office" of such Lender (or of an affiliate of such  Lender)  designated  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 are to be maintained.

          "Applicable   Margin"  means  for  purposes  of  calculating  (i)  the
     applicable  interest  rate for any Loan  and  (ii) the  applicable  rate to
     determine  the fee for the issuance of Letters of Credit,  that percent per
     annum set forth below:

                       Applicable Margin        Applicable Margin
                           for Loans        for Letter of Credit Fee
                       -----------------    ------------------------
                             4.50%                   3.00%

          "Applications  for  Letters  of  Credit"  means,   collectively,   the
     applications for letters of credit, or similar  documentation,  executed by
     the Borrower pursuant to the Original Credit Agreement prior to the date of
     this Agreement and delivered to the Issuing Bank to support the issuance of
     Letters of Credit.

          "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,
     President and Chief  Operating  Officer or any Senior Vice President of the
     Borrower,  or with  respect to  financial  matters  only,  the Senior  Vice
     President and Director of Corporate  Development,  Chief Financial Officer,
     Chief Operating  Officer or Treasurer 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.

          "BAS" means Banc of America Strategic Securities, Inc.

          "Base Rate",  for any day,  means the per annum rate of interest equal
     to the sum of (x) the  greater  of (i) the Prime  Rate or (ii) the  Federal
     Funds  Effective  Rate plus  one-half  of one  percent  (.50%) plus (y) the
     Applicable  Margin.  Any change in the Base Rate resulting from a change in
     the Prime Rate or the Federal Funds  Effective Rate shall become  effective
     as of 12:01 A.M. of the Business Day on which each such change occurs.

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

          "Budget"  means a cash budget  delivered by the Borrower to the Agent,
     in form and substance  satisfactory  to Agent,  as the same may be amended,
     supplemented  or otherwise  modified from time to time in  accordance  with
     this Agreement.

          "Business Day" means 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.

          "Capital  Expenditures"  means,  with  respect to the Borrower and its
     Subsidiaries  on a consolidated  basis,  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) the present value of the lease
     payments due during such period under any Capital Lease entered into by the
     Borrower or its Subsidiaries 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.

          "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),  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 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;

               (ii) on any day, a majority of the Directors of the Borrower were
          not  Directors of the Borrower 24 months prior to such day,  provided,
          however,  that for  purposes  of this  clause  (ii),  up to three  new
          Directors  may be appointed  (for a total of nine  Directors),  and so
          long as the holders of the Preferred Stock and the  Subordinated  Debt
          do not have the right to appoint more than one third of the  Directors

                                       4
<PAGE>

          of Borrower  each new  Director so  appointed  shall be deemed to have
          been a Director 24 months before his or her appointment; or

               (iii) the  occurrence  of a "Change  of  Control",  as defined or
          described  in  the  Indenture   referred  to  in  the   definition  of
          "Subordinated Debt", in the Certificate of Designation with respect to
          the Series G Convertible Preferred Stock referred to in the definition
          of "Preferred Stock";

     provided,  however, that in calculating the percentage of Voting Stock held
     by any  "beneficial  owner"  under  clause  (i)  above  (x)  the  Series  G
     Convertible  Preferred  Stock  referred to in the  definition of "Preferred
     Stock," (y) the warrants delivered from time to time by the Borrower to the
     holders of the Subordinated Debt, the Series G Convertible  Preferred Stock
     and the  Lenders  shall  not be  included  in such  calculation  until  the
     conversion  rights or warrants  are  exercised or such  preferred  stock or
     warrants  are  otherwise   exchanged  for  Voting  Stock  (whether  through
     redemption or any other manner) and (z) the holders of the Preferred  Stock
     shall not be  deemed to be the  beneficial  owners of the  shares  that are
     subject to the voting agreement by and among such holders, the Borrower and
     certain  shareholders of the Borrower entered into as of the date hereof by
     virtue of such agreement.

          "China Venture" means a joint venture  agreement  between the Borrower
     and Shanghai Foreign Service Company, Ltd. ("SFSC"),  pursuant to which the
     Borrower  and  SFSC  has  established  a  joint  venture  company  for  the
     recruiting,  training and placing of information  technology  professionals
     from the Peoples Republic of China.

          "Closing  Date"  means  the  Closing  Date  of  the  Original   Credit
     Agreement, as such term is defined therein.

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

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

          "Collateral  Termination  Date"  means the date when all Loans and all
     Letter of Credit Outstandings together with all accrued and unpaid interest
     thereon have been paid,  except for such Letter of Credit  Outstandings  as
     have been fully cash collateralized in accordance with Section 10.1(B), all
     Letter of Credit  Commitments  shall have  terminated  or expired,  and the
     Borrower shall have fully,  finally and irrevocably  paid and satisfied all
     Obligations.

          "Compliance  Certificate" means a certificate in the Form of Exhibit F
     attached hereto.

          "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 latest

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<PAGE>

     audited financial statements of the Borrower referred to in Section 7.6(a),
     except  for any  change  required  by GAAP and  disclosed  in the  affected
     statement.

          "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,
     (v) depreciation, all determined on a consolidated basis in accordance with
     GAAP applied on a Consistent  Basis, (vi) goodwill  impairment  required by
     FASB 141-142,  to the extent the same is deducted from income to derive Net
     Income and (vii) Restructing Costs; provided, however, that with respect to
     an  Acquisition  that  is  accounted  for as a  "purchase",  for  the  four
     Four-Quarter  Periods ending next  following the date of such  Acquisition,
     Consolidated  EBITDA shall  include the results of operations of the Person
     or assets so acquired,  which  amounts  shall be determined on a historical
     pro forma basis as if such  Acquisition had been  consummated as a "pooling
     of  interests";   provided,   further,   however,   that  with  respect  to
     disposition,  sale,  conveyance,  transfer,  liquidation  or  cessation  of
     business of a Subsidiary of the Borrower or any division, operating unit or
     other  business  unit  of the  Borrower  during  such  measurement  period,
     Consolidated  EBITDA  shall  exclude  the  results  of  operations  of  the
     Subsidiary,  division,  operating  unit or other business unit so disposed,
     sold,  conveyed,  transferred,  liquidated  or the  business  of which  has
     ceased.

          "Consolidated Funded Indebtedness" means, with respect to the Borrower
     and its  Subsidiaries,  at any time as of which the amount thereof is to be
     determined,  the sum of (i) Indebtedness for Money Borrowed of the Borrower
     and its  Subsidiaries  at  such  time  and  (ii)  the  face  amount  of all
     outstanding Letters of Credit issued for the account of the Borrower or any
     of its  Subsidiaries  and all obligations  (to the extent not  duplicative)
     arising  under such Letters of Credit,  all  determined  on a  consolidated
     basis in accordance with GAAP applied on a Consistent 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  (but not
     including  any fees  incurred  in  connection  with this  Agreement  or the
     Subordinated Debt) 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  Net  Income"  means,  for  any  period  of  computation
     thereof,  the  gross  revenues  from  operations  of the  Borrower  and its
     Subsidiaries   (including   payments  received  by  the  Borrower  and  its
     Subsidiaries of (i) interest income,  and (ii) 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

                                       6
<PAGE>

     a consolidated basis in accordance with GAAP applied on a Consistent Basis;
     but excluding (for all purposes other than  compliance  with Section 9.1(a)
     hereof)  as  income:  (i)  net  gains  on the  sale,  conversion  or  other
     disposition  of  capital  assets,   (ii)  net  gains  on  the  acquisition,
     retirement, sale or other disposition of capital stock and other securities
     of the Borrower or its  Subsidiaries,  (iii) net gains on the collection of
     proceeds of life insurance  policies,  (iv) any write-up of any asset,  and
     (v) any other net gain or credit of an  extraordinary  nature as determined
     in accordance with GAAP applied on a Consistent Basis.

          "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
     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,  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;

     provided,  however,  in no event shall Earnouts be a Contingent  Obligation
     hereunder.

          "Credit Party" means, collectively, the Borrower and each Guarantor.

          "Default" means any event, act 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 the lesser of (i) a rate of  interest  per annum
     which  shall be two  percent  (2%) above the Base Rate and (ii) the maximum
     rate permitted by applicable law.

                                       7
<PAGE>

          "Deferred  Restructuring Fee" has the meaning assigned to such term in
     Section 2.7.

          "Deposit  Accounts"  means  any  demand,   time,  savings,   passbook,
     securities or like account with a bank, saving and loan association, credit
     union  or  like  organization  maintained  by  each  Credit  Party  and its
     Subsidiaries  or in which such  Credit  Party and its  Subsidiaries  has an
     interest.

          "Direct Foreign Subsidiary" means any Foreign Subsidiary a majority of
     whose  outstanding  Voting  Stock is owned by the  Borrower  or a  Domestic
     Subsidiary.

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

          "Domestic  Subsidiary" means a Subsidiary which is organized under the
     laws of one of the states or  territories  comprising  the United States of
     America.

          "Earnouts" has the specific  meaning therefor set forth in each of the
     Acquisition Documents and collectively means all such payments.

          "Effective Date" means the date as of which this Agreement is executed
     by the  Borrower,  the  Lenders  and the Agent  and on or before  which the
     conditions set forth in Article VI have been satisfied or duly waived.

          "Eligible Assignee" means (i) a Lender, (ii) an affiliate of a Lender,
     and (iii) any other Person  approved by the Agent which  approval shall not
     be unreasonably withheld,  provided, however, that neither the Borrower nor
     an affiliate of the Borrower shall qualify as an Eligible Assignee.

          "Eligible  Receivables"  means the gross  accounts  receivable  of the
     Borrower and its  Subsidiaries  (calculated in accordance with GAAP),  less
     all credits owing by the Borrower or any of its Subsidiaries to any account
     debtor with respect to accounts receivable, that shall be reasonably deemed
     to constitute  Eligible  Receivables by the Agent from time to time,  based
     upon customary  criteria for financings of the nature of this Agreement and
     shall exclude, among other things:

               (a) Accounts  receivable  that do not arise out of sales of goods
          or the  rendering  of services in the  ordinary  course of business or
          that are on other terms other than those  normal or  customary  in the
          Borrower's and its Subsidiaries' business;

               (b)  Accounts  receivable  owing  from  any  Person  that  is  an
          Affiliate of the Borrower;

               (c) Accounts  receivable  arising out of sales to account debtors
          in Asia (including Hong Kong, Tokyo and Sydney); and

                                       8
<PAGE>

               (d) Accounts  receivable owing from any Person that shall take or
          be the subject of any bankruptcy,  reorganization or similar action or
          proceeding.

          "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 Dollars  in the United  States of  America,
          expressed  to mature  not  later  than 90 days  following  the date of
          issuance  thereof and rated in an investment  grade rating category by
          S&P and 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-" or better by S&P and "A-3" or better by Moody's;

               (d) Municipal Obligations; and

               (e)  repurchase  agreements  entered into with (i) 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,  or
          (ii) any Lender.

          "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,  (ii)  is  assumed  by the
     Borrower or any of its ERISA  Affiliates in connection with any Acquisition
     or (iii) has at any time been  maintained for the employees of the Borrower
     or any current or former ERISA Affiliate.

          "Environmental Laws" means any federal,  state or local statute,  law,
     ordinance, code, rule, regulation,  order, or decree, 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.

                                       9
<PAGE>

          "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),  (c), (m) or (o) of
     the Code.

          "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.

          "Executive  Officer" means the Chief Executive Officer,  the President
     and Chief Operating Officer, the Chief Financial Officer, the Treasurer and
     any Senior  Vice  President  of the  Borrower  or any other  person who, by
     whatever title, has control over or  responsibility  for the management and
     operations of the Borrower.

          "Excess Cash Flow" means the excess of (i) the cash  balance  measured
     on a quarterly  basis over (ii) the sum of $8 million plus accrued  payroll
     taxes,  accrued workers  compensation,  accrued wages,  accrued bonuses and
     accrued commissions, all calculated in accordance with GAAP.

          "Existing  Debt" means such  Consolidated  Funded  Indebtedness as set
     forth on Schedule 1.2.

          "Federal Funds Effective Rate" means,  for any day, the rate per annum
     (rounded upward to the nearest 1/100th 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 (i) if such day is not a Business Day,
     the Federal  Funds  Effective  Rate for such day shall be such rate on such
     transactions  on the next preceding  Business Day, and (ii) if no such rate
     is so published on such next  succeeding  Business  Day, the Federal  Funds
     Effective  Rate for such day shall be the average rate charged to the Agent
     (in its individual  capacity) on such day on such transaction as determined
     by the Agent.

          "Fiscal  Month" means each  approximately  30-day fiscal period of the
     Borrower  and its  Subsidiaries  beginning  on a Sunday  and  ending on the
     Saturday of each calendar  month  closest to (whether  before or after) the
     last day of such calendar month.

          "Fiscal Quarter" means a three-month quarter of a Fiscal Year and when
     followed by reference to a year, means the first,  second,  third or fourth
     quarter of such Fiscal Year, as indicated.

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

          "Foreign Benefit Law" means any applicable  statute,  law,  ordinance,
     code,  rule,  regulation,  order or  decree  of any  foreign  nation or any

                                       10
<PAGE>

     province,  state,  territory,  protectorate or other political  subdivision
     thereof  regulating,  relating  to, or imposing  liability  or standards of
     conduct concerning, any Employee Benefit Plan.

          "Foreign  Subsidiary"  means  any  Subsidiary  that is not a  Domestic
     Subsidiary.

          "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 which have a
     maturity of not greater than one year.

          "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.

          "Grantor" has the meaning therefor set forth in Section 4.3.

          "Guarantor" means each Subsidiary now or hereafter existing, which has
     executed a Guaranty.

          "Guaranty"  means,  collectively  (or  individually as the context may
     indicate) (i) the Guaranty  Agreement between each Domestic  Subsidiary and
     the Agent  delivered  pursuant to the  Original  Credit  Agreement  for the
     benefit of the Lenders,  and (ii) any other Guaranty Agreement delivered to
     the Agent pursuant to Section 8.19, all as hereafter amended,  supplemented
     or replaced from time to time.

          "Hazardous Material" means and includes any pollutant, contaminant, or
     hazardous,  toxic or  dangerous  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.

          "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
     (including  without  limitation  commodity exchange rates) or forward rates

                                       11
<PAGE>

     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,
     commodity  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.

          "Indebtedness" means with respect to any Person,  without duplication,
     all indebtedness of such Person relating to its  Reimbursement  Obligations
     or  any  other   reimbursement   obligations  under  this  Agreement,   all
     Indebtedness  for Money Borrowed,  all  indebtedness of such Person for the
     acquisition  of  property  or  arising  under  Hedging   Obligations,   all
     indebtedness  of such  Person  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,  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 of such Person;  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, or deferred compensation obligations.

          "Indebtedness  for Money  Borrowed"  means with respect to any Person,
     without duplication,  all indebtedness in respect of money borrowed of such
     Person,  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 trade payables incurred in the ordinary course of business.

          "Indenture"  means the  Indenture  dated as of March 19, 1998  between
     State  Street Bank and Trust  Company,  as Trustee,  and the  Borrower  (as
     amended to the date hereof).

          "Intellectual Property Assignments" means those certain Assignments of
     Patents,  Trademarks,  Copyrights  and Licenses in the form attached to the
     Intellectual  Property  Security  Agreement  as Exhibit A, to be filed upon
     acceleration  of the Obligations  hereunder,  as from time to time amended,
     supplemented or restated.

          "Intellectual  Property Security  Agreement"  means,  collectively (or
     individually  as the context may indicate),  (i) that certain  Intellectual
     Property  Security  Agreement  delivered  pursuant to the  Original  Credit
     Agreement,  and (ii) all IPSA  Supplements,  all between the  Borrower  and
     certain  Guarantors in favor of the Agent for the benefit of the Lenders to
     collaterally secure payment and performance of their respective obligations
     hereunder and under the Guaranty, as applicable,  all as hereafter amended,
     supplemented or replaced from time to time.

                                       12
<PAGE>

          "Intercompany Advance" means a loan or advance heretofore or hereafter
     made by an Intercompany Note Holder to the Borrower,  a Domestic Subsidiary
     or Direct  Foreign  Subsidiary  of the  Borrower,  which is evidenced by an
     Intercompany  Note in which the Agent has a valid,  duly  perfected,  first
     priority  Lien  under  the  Intercompany  Note  Pledge  Agreement,  and the
     repayment  of which is  subordinated  to the  rights  of the  Agent and the
     Lenders under the Loan  Documents in accordance to the provisions set forth
     in the Intercompany Notes or in the Subordination Agreement.

          "Intercompany  Notes"  means,   collectively,   the  promissory  notes
     heretofore  issued and  described  on Schedule A to the  Intercompany  Note
     Pledge Agreement and promissory notes hereafter issued in the form attached
     as Exhibit G hereto (with appropriate  insertions) outstanding from time to
     time evidencing the Intercompany Advances.

          "Intercompany  Note Holder"  means,  at any date, the Borrower and any
     Domestic  Subsidiary  of the Borrower  who has  extended  any  Intercompany
     Advance that remains outstanding at such date.

          "Intercompany   Note  Pledge   Agreement"   means,   collectively  (or
     individually  as the contest may  indicate)  (i) that certain  Intercompany
     Note Pledge Agreement  executed by the Borrower,  certain  Subsidiaries and
     the Agent  pursuant to the Original  Credit  Agreement,  and (ii) any other
     Intercompany  Note Pledge  Agreement  in the form of Exhibit G delivered to
     the Agent pursuant to Section 8.19,  pursuant to which the Agent is granted
     a Lien in the Intercompany  Notes held by such Intercompany Note Holder, in
     each case as the same may be amended, supplemented or restated from time to
     time.

          "IPSA  Supplement"  means any supplement to the Intellectual  Property
     Security  Agreement in the form of Exhibit B to the  Intellectual  Property
     Security  Agreement,  with appropriate  revisions as to the identity of the
     grantor.

          "Issuing  Bank"  means  initially  Bank of  America  as the  issuer of
     Letters of Credit under  Article III, and  thereafter  any Lender which may
     succeed  Bank of America as the issuer of Letters of Credit  under  Article
     III.

          "LC  Account  Agreement"  means the LC Account  Agreement  between the
     Borrower and the Issuing  Bank,  executed  pursuant to the Original  Credit
     Agreement, as amended, modified or supplemented from time to time.

          "Lending Office" means, as to each Lender,  the Lending Office of such
     Lender  designated  on the signature  pages hereof or in an Assignment  and
     Acceptance  or such other office of such Lender (or of an affiliate of such
     Lender)  as such  Lender may from time to time  specify  to the  Authorized
     Representative  and the  Agent as the  office  by which its Loans are to be
     made and maintained.

          "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.

                                       13
<PAGE>

          "Letter of Credit  Commitment" means, with respect to each Lender, the
     obligation  of such  Lender  pursuant to its  Participations  in respect of
     Letters of Credit and  Reimbursement  Obligations up to an aggregate amount
     equal to such Lender's  Applicable  Percentage  of the aggregate  Letter of
     Credit Outstandings from time to time.

          "Letter of Credit  Facility"  means the facility  described in Article
     III providing for the continuation of Letters of Credit  outstanding on the
     date of this  Agreement  issued by the Issuing  Bank for the account of the
     Borrower.

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

          "Loan" or "Loans" means the loans made by Lenders to Borrower pursuant
     to the Original Credit Agreement, which are amended, restated and continued
     as term loans pursuant to Section 2.1.

          "Loan  Documents"  means  this  Agreement,  the  Notes,  the  Security
     Instruments,  the Guaranties, the Subordination Agreement, the Applications
     for Letters 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 time
     to time.

          "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 on a consolidated  basis,
     (ii)  the  ability  of any  Material  Credit  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 (including for purposes of clauses (ii) and (iii) the imposition of
     burdensome conditions thereon).

          "Material  Credit  Party" means (i) any direct or indirect  Subsidiary
     which has EBITDA, as defined below,  greater than 5% of Consolidated EBITDA
     (calculated for the most recent period for which the Agent has received the
     financial  information required under Section 8.1) and (ii) for purposes of

                                       14
<PAGE>

     clause (ii) of the definition of Material  Adverse  Effect,  all direct and
     indirect   Subsidiaries,   including   without   limitation  each  Material
     Subsidiary under (i) above,  which,  collectively,  have EBITDA equal to or
     greater than 95% of Consolidated  EBITDA (as calculated  under (ii) above).
     For  purposes  of this  definition,  "EBITDA"  means,  with  respect to any
     Subsidiary,  Consolidated  EBITDA as calculated for such Subsidiary without
     regard to the Borrower or any other Subsidiary.

          "Maturity  Date"  means the  earliest  of (x) June 30,  2003,  (y) the
     maturity of the Term Loan Facility and Letter of Credit Facility whether by
     acceleration  or  otherwise  and (z) the date on which the Term Loan  shall
     have been  permanently  repaid and all  Letters  of Credit  shall have been
     permanently  cancelled,  cash  collateralized  or otherwise  supported in a
     manner  satisfactory  to the  Agent,  the  Issuing  Bank and the  requisite
     Lenders and all other obligations shall have been paid in full in cash.

          "Moody's" means Moody's Investors Services, 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.

          "Net  Proceeds"  means (i) in  respect  of the  issuance  of equity or
     Indebtedness or the sale, lease or other disposition of assets,  the amount
     of cash, cash equivalents and the market value of marketable securities, as
     and when received,  net of all legal,  accounting,  banking,  underwriting,
     title and recording fees and expenses, commissions, discounts and all other
     reasonable and ordinary expenses  incurred in connection  therewith and all
     taxes required to be paid or accrued as a consequence  of such  transaction
     and (ii) in respect of proceeds of insurance  or resulting  from the taking
     of any asset by eminent domain,  the amount of cash,  cash  equivalents and
     market value of  marketable  securities  as and when  received,  net of all
     legal,  title  and  recording  fees and  expenses  incurred  in  connection
     therewith and all taxes  required to be paid or accrued as a consequence of
     such transaction.  However, notwithstanding anything to the contrary in the
     foregoing,  so long as no Event  of  Default  shall  have  occurred  and be
     continuing,  proceeds of casualty  insurance shall  constitute Net Proceeds
     only to the extent such proceeds exceed out-of-pocket expenses to repair or
     replace  property  damaged by the casualty  event  actually paid to Persons
     other than Affiliates within 90 days after the casualty event.

          "Notes"  means,  collectively,  the  promissory  notes of the Borrower
     evidencing Loans executed and delivered to the Lenders substantially in the
     form of Exhibit E.

          "Obligations"  means the obligations,  liabilities and Indebtedness of
     the Borrower  with respect to (i) the  principal and interest on the Loans,

                                       15
<PAGE>

     (ii) the Reimbursement  Obligations and otherwise in respect of the Letters
     of  Credit,  (iii) all  liabilities  of the  Borrower  to any Lender or its
     affiliates  which  arise under a Swap  Agreement,  and (iv) the payment and
     performance of all other  obligations,  liabilities and Indebtedness of the
     Borrower  to the  Lenders,  the Agent,  or BAS under any one or more of the
     other Loan Documents or with respect to the Loans or Letters of Credit.

          "Operating  Documents" means with respect to any corporation,  limited
     liability  company,  partnership,  limited  partnership,  limited liability
     partnership  or other legally  authorized  incorporated  or  unincorporated
     entity, the bylaws,  operating agreement,  partnership  agreement,  limited
     partnership  agreement  or  other  applicable  documents  relating  to  the
     operation, governance or management of such entity.

          "Organizational Action" means with respect to any corporation, limited
     liability  company,  partnership,  limited  partnership,  limited liability
     partnership  or other legally  authorized  incorporated  or  unincorporated
     entity, any corporate,  organizational or partnership action (including any
     required shareholder,  member or partner action), or other similar official
     action, as applicable, taken by such entity.

          "Organizational  Documents"  means with  respect  to any  corporation,
     limited  liability  company,  partnership,   limited  partnership,  limited
     liability   partnership  or  other  legally   authorized   incorporated  or
     unincorporated  entity,  the  articles  of  incorporation,  certificate  of
     incorporation, articles of organization, certificate of limited partnership
     or other applicable  organizational  or charter  documents  relating to the
     creation of such entity.

          "Participation"  means,  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  liability  of the
     Issuing Bank in respect of a Letter of Credit issued by the Issuing Bank 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  Liens" means  collectively  each of the Liens set forth in
     Section 9.3.

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

          "PIK Amount" has the meaning assigned to such term in Section 2.2(c).

                                       16
<PAGE>

          "Pledge Agreement" means, collectively (or individually as the context
     may indicate),  (i) that certain Pledge Agreement executed and delivered to
     Agent in connection with the Original Credit Agreement, and (ii) all Pledge
     Agreement  Supplements,  all between  the  Borrower  and  certain  Domestic
     Subsidiaries, as pledgors, and the Agent for the benefit of the Lenders, as
     pledgee,  pledging  (A)  100% of the  capital  stock  or  equity  or  other
     ownership interest of each Domestic  Subsidiary  specified therein owned by
     the Borrower and/or another  Domestic  Subsidiary and (B) 66% of the voting
     share  capital and 100% of the  nonvoting  share capital or equity or other
     ownership  interest and related interests and rights of each Direct Foreign
     Subsidiary,  and  securing  the  obligations  of each  pledgor  under  this
     Agreement and the Notes or the Guaranty,  as  applicable,  all as hereafter
     amended, supplemented or replaced from time to time.

          "Pledge  Agreement  Supplement"  means  a  supplement  to  the  Pledge
     Agreement  in  the  form  of  Exhibit  A  to  the  Pledge  Agreement,  with
     appropriate revisions as to the identity of the pledgor.

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

          "Preferred  Stock" means,  collectively,  (a) the Borrower's  Series E
     Convertible  Preferred Stock  containing such terms as are set forth in the
     Borrower's  Certificate of Designation filed with the Secretary of State of
     Delaware on October 25, 1996,  none of which are issued or  outstanding  on
     the  Effective  Date;  and (b) the  Series G  Convertible  Preferred  Stock
     containing  such terms as are set forth in the  Borrower's  Certificate  of
     Designation  filed with the  Secretary of State of Delaware on September 7,
     2001.

          "Prime Rate" means the rate of interest per annum  announced  publicly
     by the Agent as its prime  rate  from time to time.  The Prime  Rate is not
     necessarily the best or the lowest rate of interest offered by the Agent.

          "Principal  Office"  means the office of the Agent at Bank of America,
     N.A., 901 Main St., Dallas, Texas, 75202-3714,  Attention: Agency Services,
     or such  other  office  and  address  as the  Agent  may from  time to time
     designate.

          "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  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,  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.

                                       17
<PAGE>

          "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  for
     amounts  theretofore  paid by the Issuing Bank  pursuant to a drawing under
     such Letter of Credit.

          "Required  Lenders" means, as of any date, Lenders on such date having
     Credit Exposures (as defined below) aggregating at least (i) if there shall
     be fewer than three (3) Lenders,  100% of the aggregate Credit Exposures of
     all  Lenders  on such  date,  and (ii) if there  shall be three (3) or more
     Lenders,  66.67%  or  more 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 amount of such
     Lender's Applicable  Percentage of Letter of Credit Outstandings;  provided
     that if any  Lender  shall  have  failed  to pay to the  Issuing  Bank  its
     Applicable  Percentage of any drawing under any Letter of Credit  resulting
     in an outstanding Reimbursement  Obligation,  such Lender's Credit Exposure
     attributable to Letter of Credit Outstandings shall be deemed to be held by
     the Issuing Bank for purposes of this definition.

          "Replacement  Bank"  means (i) any Lender or Lenders  selected  by the
     Borrower  or (ii) one or a group of banks or other  financial  institutions
     selected by the  Borrower and  acceptable  to and approved by the Agent and
     the Required  Lenders in their  reasonable  discretion,  any of which shall
     replace any then existing Lender or Lenders  pursuant to Section 4.7 hereof
     and have a Letter of  Credit  Commitment  equal in amount to the  Letter of
     Credit Commitment of the replaced Lender or Lenders.

          "Restricted  Payment"  means (a) any  dividend or other  distribution,
     direct or  indirect,  on account of any shares of any class of stock of the
     Borrower  or any  Subsidiary  (other  than those  payable or  distributable
     solely to the  Borrower or any  Guarantor)  now or  hereafter  outstanding,
     including without limitation the Preferred Stock, except a dividend payable
     solely in shares of that  class of stock  issued  solely 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 Indebtedness, including without limitation the Subordinated Debt, or of
     any shares of any class of stock of the Borrower or any  Subsidiary  (other
     than  those  payable  or  distributable  solely  to  the  Borrower  or  any
     Guarantor) now or hereafter  outstanding,  including without limitation the
     Preferred Stock other than with respect to, and specifically excluding, its
     conversion;  (c) any payment  (other than to the Borrower or any Guarantor)
     made to redeem,  repurchase  or 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  Subsidiary  now  or  hereafter
     outstanding,  including  without  limitation the Preferred  Stock;  (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 any  Guarantor;  and (e) any payment or prepayment of principal
     of, premium, if any, or interest on, or redemption,  purchase,  retirement,
     defeasance  (including  in-substance or legal defeasance),  sinking fund or
     similar payment with respect to, any  Subordinated  Debt other than through
     the issuance of equity securities pursuant to the Warrants.

                                       18
<PAGE>

          "Restructuring Costs" means any reasonable,  out-of-pocket costs, fees
     and expenses  incurred in connection  with the  preparation,  execution and
     delivery of this Agreement or the  substantially  concurrent  amendment and
     restatement of the Indenture and any other agreement contemplated hereby or
     thereby to be  executed  substantially  concurrently  with this  Agreement,
     including,  but only to the extent  not set forth in the  Budget  delivered
     prior to the  Effective  Date,  any costs,  fees and  expenses  relating to
     management and other employee retention agreements.

          "Restructuring  Fee" means a fee in an amount equal to 0.50% times the
     aggregate  principal  amount of the Term Loan  Facility  plus the Letter of
     Credit Facility, in each case as determined on the Effective Date.

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

          "Security  Agreement"  means,  collectively  (or  individually  as the
     context may indicate),  (i) that certain  Security  Agreement  between each
     Credit Party and the Agent  executed and delivered in  connection  with the
     Original  Credit  Agreement,  and (ii) any  additional  Security  Agreement
     delivered  to the Agent  pursuant  to  Section  8.19 or  Article  IV all as
     hereafter amended, supplemented or replaced from time to time.

          "Security Instruments" means, collectively,  the Pledge Agreement, the
     Mortgage  of  Shares  dated as of the  Closing  Date  executed  by  Whitney
     Partners,  L.L.C.,  as hereinafter  amended,  supplemented or replaced from
     time to time, the Security  Agreement,  the Intellectual  Property Security
     Agreement, the Intellectual Property Assignment,  the LC Account Agreement,
     the  Intercompany  Note  Pledge  Agreement,  the  Subordination  Agreement,
     landlord waivers and all other agreements, instruments and other documents,
     whether now existing or  hereafter in effect,  pursuant to which any Credit
     Party  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 does not have unreasonably small capital to carry on its
          business as conducted and as proposed to be conducted.

                                       19
<PAGE>

          "Subordinated  Debt" means the Senior Subordinated Notes issued by the
     Borrower  on  the  Closing  Date  in  the  original   principal  amount  of
     $10,000,000  with a final  maturity  of not less than eight  years from the
     Closing Date  pursuant to the terms of the  Indenture of even date with the
     Original  Credit  Agreement,  between the  Borrower,  as Issuer,  and State
     Street  Bank  and  Trust  Company,  N.A.,  as  Trustee,  together  with any
     amendments  or  supplements  thereto  which are  permitted  by,  and do not
     constitute a Default or Event of Default under, this Agreement.

          "Subordinated  Debt  Documents"  means,  collectively,  the Securities
     Purchase  Agreement of even date with the Original Credit  Agreement by and
     among the Borrower,  GarMark Partners,  L.P., and Moore Global Investments,
     Ltd.,  Remington  Investment  Strategies,  L.P. and NationsBanc  Montgomery
     Securities,  LLC,  and the  Indenture  of even date,  herewith  between the
     Borrower,  as Issuer,  and State Street Bank and Trust  Company,  N.A.,  as
     Trustee,  pursuant  to the  terms of which the  Subordinated  Debt has been
     issued by the  Borrower on the Closing  Date,  as amended from time to time
     thereof without violation of Section 9.4 hereof,  each Senior  Subordinated
     Note  issued  by  the  Borrower   thereunder  and  all  other   agreements,
     instruments,  certificates  and  documents  issued  from  time  to  time in
     connection therewith.

          "Subordination  Agreement" means, collectively (or individually as the
     context may indicate),  (i) the Subordination  Agreement between the Credit
     Parties and the Agent executed  pursuant to the Original Credit  Agreement,
     and (ii) any  additional  Subordination  Agreement  delivered  to the Agent
     pursuant to Section 8.19 or Article IV all as hereafter  modified,  amended
     or supplemented from time to time.

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

          "Swap Agreement" means one or more agreements between the Borrower and
     any Person  with  respect to  Indebtedness  evidenced  by any or all of the
     Notes,  on terms  mutually  acceptable  to the Borrower and such Person and
     approved  by  each  of  the  Lenders,   which  agreements   create  Hedging
     Obligations;  provided, however, that no such approval of the Lenders shall
     be required  to the extent such  agreements  are entered  into  between the
     Borrower and any Lender.

          "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

                                       20
<PAGE>

     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 Letter of Credit Commitment" means an aggregate stated amount
      not to exceed $1,687,000.

          "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.

          "Warrants" means the Series E Warrants issued by the Borrower pursuant
     to that certain  Warrant  Purchase  Agreement  dated as of May 31, 1996, as
     thereafter amended.

          "Whitney" means, Whitney Partners, L.L.C.

     1.2.  Rules of Interpretation.

          (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 Articles  1, 8 or 9 of the New York  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.

                                       21
<PAGE>

          (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.

          (h) All dates and times of day  specified  herein  shall refer to such
     dates and times at Dallas, Texas.


                                   ARTICLE II

                                The Loan Facility

     2.1.  Conversion  of  Outstanding  Loans  to Term  Loans.  The  outstanding
principal  balances of the Loans made by the Lenders to the Borrower pursuant to
the Original Credit Agreement are set forth on Exhibit A, and equal  Seventy-Two
Million Dollars  ($72,000,000) in the aggregate.  Such Loans are hereby amended,
restated and continued as term loans subject to the terms of this Agreement. The
Lenders are under no  obligation  to fund further  Loans to Borrower  under this
Agreement. Amounts repaid on the Loans may not be reborrowed.

     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 hereof until such
     Loan shall be paid in full,  at the then  applicable  Base Rate;  provided,
     however,  that upon the occurrence and during the continuation of any Event
     of  Default,  the  outstanding  principal  amount of all Loans and,  to the
     extent permitted by applicable law, any interest  payments thereon not paid
     when due and any fees and other  amounts  then due and  payable  hereunder,
     shall thereafter bear interest payable upon demand at the Default Rate (or,
     in the case of any such  fees and  other  amounts,  at a rate  equal to the
     Default Rate).

          (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)  monthly  in  arrears on the last
     Business  Day of each  month and (ii)  upon the  payment  of any  principal
     amount of any Loan, including,  without limitation, upon payment in full of
     the principal amount of such Loan and termination of this Agreement.

          (c) So  long  as no  Event  of  Default  shall  have  occurred  and be
     continuing,  Borrower  may pay in kind a portion  of the  accrued  interest
     equal to the PIK Amount,  on or before the date such  interest is due, in a
     principal  amount  equal to the PIK Amount.  "PIK  Amount"  means an amount
     equal to the interest  which would have accrued on the Loans at a per annum
     rate of 1.50% for the applicable  interest  period.  Borrower's  payment in
     kind of the PIK Amount  during the  existence of an Event of Default  shall
     not serve to satisfy  Borrower's  obligation to pay interest in full on the

                                       22
<PAGE>

     date  due,  unless  Agent  otherwise  agrees  in  writing.  Subject  to the
     preceding  sentence,  the  aggregate  principal  PIK Amount shall be deemed
     added  to the  outstanding  principal  balances  of the  Loans  held by the
     Lenders,  on a pro rata basis, and shall thereafter  accrue interest in the
     same manner as all other outstanding  principal.  Agent's acceptance of, or
     failure  to  reject,  payment in kind of such  accrued  interest  shall not
     constitute a waiver of any Event of Default.

     2.3. Payment of Principal.

          (a)  Mandatory  Payments.   Notwithstanding  anything  herein  to  the
     contrary, the Loans shall be repaid and the Letters of Credit shall be cash
     collateralized in the amounts and under the circumstances set forth below:

               (i) Net Proceeds.  No later than the first Business Day following
          the date of receipt by any Credit Party or any other Subsidiary of the
          Borrower  (or the  receipt  by the  Agent,  in the  case of  insurance
          proceeds) of any Net Proceeds,  the Borrower  shall pay to Agent,  for
          the  benefit  of  the  Lenders,  an  aggregate  amount  equal  to  the
          applicable percentage of Net Proceeds, as follows:

                    (A)  100%  of  cumulative  Net  Proceeds  from  issuance  of
               Indebtedness permitted by this Agreement (other than Obligations,
               Intercompany Advances permitted under Section 9.4(e) and purchase
               money  Indebtedness  and  Capital  Leases  permitted  by  Section
               9.4(f));

                    (B) 50% of  cumulative  Net Proceeds in excess of $2 million
               from issuance of equity permitted by this Agreement; and

                    (C) 100% of all other Net Proceeds;

          provided,  however,  that, so long as no Event of Default has occurred
          and is  continuing,  if the Net  Proceeds  derived  from  transactions
          consummated  in a single  calendar  month  are less than  Twenty  Five
          Thousand  Dollars  ($25,000),  no prepayment from such Net Proceeds is
          required under this Section 2.3(a)(i), and if the Net Proceeds derived
          from  one or more  transactions  is less  than  Seventy-Five  Thousand
          Dollars  ($75,000),  Borrower may withhold  payment under this Section
          2.3(a)(i)  until such time as the aggregate  amount  payable equals or
          exceeds Seventy-Five Thousand Dollars ($75,000).

               (ii) Excess  Cash Flow.  No later than the 45th day after each of
          the first three Fiscal  Quarters of each Fiscal Year,  and on the 90th
          day after each Fiscal Year,  commencing with the Fiscal Quarter ending
          on March 31, 2002,  based on the  information  filed in the Borrower's
          Form 10-Q or 10-K, as applicable, for the Fiscal Quarter or the Fiscal
          Year  immediately  preceding (or, if Borrower ceases to be required to
          issue 10-Qs and 10-Ks,  financial statements in lieu thereof providing
          the same  information),  the  Borrower  shall  pay to  Agent,  for the
          benefit of the  Lenders,  an  aggregate  amount equal to 50% of Excess
          Cash Flow for the Fiscal Quarter immediately preceding.

                                       23
<PAGE>

               (iii) Minimum  Receivables.  Borrower shall, within ten (10) days
          after the end of each calendar month, prepay the Loans in an aggregate
          principal  amount  equal  to the  excess  of the  Minimum  Receivables
          (defined  below) over the  Eligible  Receivables  of Borrower  and its
          Subsidiaries  as of the  end of such  preceding  calendar  month.  The
          "Minimum  Receivables"  shall equal, at any time,  Thirty-one  Million
          Dollars  ($31,000,000) less the aggregate sum prepaid pursuant to this
          Section 2.3(a)(iii) to date.

               (iv) Repayment on Maturity Date. The entire outstanding principal
          amount of the Loans,  together  with all accrued  and unpaid  interest
          thereon and any and all other  Obligations shall be due and payable in
          full on the Maturity Date or at such earlier time as provided herein.

          (b)  Calculations  of Net Proceeds;  Additional  Prepayments  Based on
     Subsequent Calculations.  Concurrently with any payment pursuant to Section
     2.3(a)(i)(A)-(C),  the Borrower  shall  deliver to the Agent a  certificate
     duly executed by its chief financial officer  demonstrating the calculation
     of the  applicable Net Proceeds that gave rise to such  prepayment.  In the
     event that the Borrower  shall  subsequently  determine that the actual Net
     Proceeds  were  greater  than the amount set forth in such chief  financial
     officer's  certificate,  the Borrower  shall  promptly  make an  additional
     prepayment  of the Loans in an amount  equal to the amount of such  excess,
     and the  Borrower  shall  concurrently  therewith  deliver  to the  Agent a
     certificate of its chief financial officer  demonstrating the derivation of
     the additional Net Proceeds resulting in such excess.

          (c)  Voluntary  Payments.  The  principal  amount  of any  Loan may be
     prepaid in whole or in part at any time. All voluntary prepayments of Loans
     made by the  Borrower  shall be in the amount of (i)  $500,000 or (ii) such
     greater amount which is an integral multiple of $100,000.

     2.4. Manner of Payment.

          (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 12:30 P.M. on the date such payment is
     due.

          (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 12:30 P.M. 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 constitute or become a Default
     or Event of Default in  accordance  with the terms of Sections  10.1(a) and
     (b).  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

                                       24
<PAGE>

     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; provided that
      interest shall continue to accrue during the period of any such extension
      and provided further, that in no event shall any such due date be extended
      beyond the Maturity Date.

     2.5.  Notes.  Loans  made by each  Lender  shall be  evidenced  by the Note
payable to the order of such Lender in the  respective  amount of its Loans made
to  Borrower,  which  Note  shall be dated the  Effective  Date or a later  date
pursuant to an Assignment and Acceptance and shall be duly  completed,  executed
and  delivered by the  Borrower.  A Lender may elect at any time to exchange its
Note for a Note evidencing the outstanding  principal  balance of the Loans held
by such Lender,  together with such Lender's  Applicable  Percentage of each PIK
Amount added to principal to date.

     2.6.  Pro Rata  Payments;  Application  of  Proceeds.  (a) Each  payment on
account of the principal of and interest on the Loans and the fees  described in
Section  2.7 shall be made to the Agent for the  account of the Lenders pro rata
based  on  their  Applicable  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 (but in any event,  prior to 2:30
P.M. on the date such payment is received or deemed to be  received)  distribute
to the  Lenders  in  immediately  available  funds  payments  received  in fully
collected,  immediately  available  funds from the  Borrower.  All  payments  of
principal  received by Agent in respect of this Article 2 shall be applied first
to the repayment of the Term Loan Facility and thereafter to cash  collateralize
outstanding Letters of Credit.

     2.7...Deferred  Restructuring Fee. On or before the Maturity Date, Borrower
shall pay to Agent,  for  disbursement  to the Lenders in accordance  with their
Applicable  Percentages,  a fee (the "Deferred  Restructuring  Fee"),  which fee
shall be deemed fully earned on the Effective  Date, in an amount equal to 3.00%
times the aggregate  principal  amount of the Term Loan Facility plus the Letter
of Credit Facility,  in each case as determined on the Effective Date; provided,
however, that if all obligations under this Agreement are repaid in full in cash
and the  requirements  of Section  3.1(b) are met with respect to all Letters of
Credit on or before December 31, 2002, then the Deferred Restructuring Fee shall
equal 2.00% times the aggregate  principal amount of the Term Loan Facility plus
the Letter of Credit Facility, in each case as determined on the Effective Date;
provided,  further,  that the Deferred  Restructuring Fee shall be waived if (i)
all payment  obligations under this Agreement are repaid in full in cash and the
requirements  of Section 3.1(b) are met with respect to all Letters of Credit on
or before  June 30,  2002 or (ii) on or before the  Maturity  Date a sale of the
Borrower or its assets is consummated with Net Proceeds from such sale exceeding
$75  million,  and  concurrently  with the  closing  of such sale,  all  payment
obligations under this Agreement are repaid in full in cash and the requirements
of Section 3.1(b) are met with respect to all Letters of Credit.

                                       25
<PAGE>

                                   ARTICLE III

                                Letters of Credit

     3.1. Letters of Credit.

          (a) The Issuing Bank has issued certain  Letters of Credit pursuant to
     the  Original  Credit  Agreement  which remain  outstanding  as of the date
     hereof,  which shall constitute  Letters of Credit under this Agreement and
     shall  be  governed  by the  terms  of this  Agreement.  Letter  of  Credit
     Outstandings  aggregate  One  Million  Six  Hundred  Eighty-Seven  Thousand
     Dollars  ($1,687,000) as of the date hereof.  Neither the Issuing Bank, nor
     any Lender shall have any  obligation  to issue  further  Letters of Credit
     under this  Agreement.  No Letter of Credit  shall  have an expiry  date or
     payment  date  occurring  later than the earlier to occur of twelve  months
     after the date of its issuance or five  Business Days prior to the Maturity
     Date,  provided  that,  notwithstanding  the foregoing and anything in this
     Agreement to the  contrary  and without in any way limiting the  Borrower's
     obligation  to  fully  cash  collateralize,  replace  or  otherwise  return
     cancelled  and  undrawn  all Letters of Credit on the  Maturity  Date,  the
     expiry  date of any Letter of Credit may be  extended  or  permitted  to be
     extended  by the  Issuing  Bank  to a date  beyond  the  Maturity  Date  if
     necessary  to avoid a drawing  thereunder  (as  determined  in the sole and
     absolute discretion of the Issuing Bank and each of the Lenders).

          (b) On or before the  Maturity  Date,  the  Borrower  shall fully cash
     collateralize  all outstanding  Letters of Credit on terms  satisfactory to
     Agent,  unless  Required  Lenders agree in their sole  discretion to accept
     other credit support for one or more outstanding Letters of Credit. Letters
     of  Credit  shall  be  cash  collateralized  pursuant  to  the  LC  Account
     Agreement.

     3.2. Reimbursement.

          (a) The Borrower hereby  unconditionally  agrees to pay to the Issuing
     Bank  immediately  upon  demand,  at such office as the Issuing  Bank shall
     designate,  all amounts drawn under any Letter of Credit and all reasonable
     expenses  incurred by the Issuing  Bank in  connection  with the Letters 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.  The  Borrower  agrees to pay the  Issuing  Bank  interest on any
     Reimbursement  Obligations  not paid on the day on which drawing is paid on
     the  corresponding  Letter of  Credit at the Base Rate plus the  Applicable
     Margin  for such day,  and  thereafter  at the Base  Rate plus two  percent
     (2.0%),  or the maximum rate  permitted by applicable  law, if lower,  such
     rates to be  calculated  on the basis of a year of 360 days for actual days
     elapsed  commencing  on the date of such drawing  until such  Reimbursement
     Obligation is so paid by direct reimbursement by the Borrower.

                                       26
<PAGE>

          (b) In accordance with the provisions of Section  2.1(c),  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) holds or shall acquire 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  Percentage
     of such  liability,  and each Lender  (other than the Issuing Bank) thereby
     shall  absolutely,  unconditionally  and irrevocably  assume,  and shall be
     unconditionally  obligated  to pay  to  the  Issuing  Bank  as  hereinafter
     described,  its Applicable  Percentage of the liability of the Issuing Bank
     under such Letter of Credit.

          (d) If a drawing is presented under any Letter of Credit in accordance
     with the terms thereof and paid by the Issuing Bank and the Borrower  shall
     not  fully  reimburse  the  Issuing  Bank  in  respect  thereof  as of  the
     immediately following Business Day, then notice of such drawing and 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.

               (i)  Each  of the  Lenders  (including  the  Issuing  Bank in its
          capacity as Lender) shall fund by payment to the Agent for the account
          of the  Issuing  Bank  at  the  Principal  Office  in  Dollars  and in
          immediately  available funds the purchase from the Issuing Bank of its
          respective Participation in the related Reimbursement Obligation in an
          amount equal to its respective  Applicable  Percentage of such drawing
          under such Letter of Credit.

               (ii) 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
          Section  2.1(c)(iv),  fund the  purchase of its  Participation  in the
          amount of such  Lender's  Applicable  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 Section 2.1(c)(iv),  fund the
          purchase  of  its   Participation  in  the  amount  of  such  Lender's
          Applicable  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.

               (iii)  Simultaneously with the making of each payment by a Lender
          to the  Issuing  Bank  pursuant  to clause  (i),  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.

                                       27
<PAGE>

               (iv) Each  Lender's  obligation  to make payment to the Agent for
          the account of the Issuing Bank pursuant to this Section  3.2(d),  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 this  Section  3.2(d),
          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 this Section 3.2(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.

               (v) In the event the Lenders have purchased Participations in any
          Reimbursement  Obligation as set forth in clauses (i) and (iii) 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 the Agent which shall forward to each Lender an amount
          equal to its Applicable Percentage of such payment from the Borrower.

          (e) Not  later  than  ten  days  following  the  end of each  calendar
     quarter,  the Issuing Bank shall deliver to each Lender 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 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.

          (f) All Letters of Credit have been 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.

          (g) 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.

          (h) 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

                                       28
<PAGE>

     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.

          (i) Without  limiting  the  Borrower's  rights as set forth in Section
     3.2(h), the obligation of the Borrower immediately to 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 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 for any Letter of Credit, under all circumstances
     whatsoever, including the following circumstances:

               (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 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;

               (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 the
          Borrower's Obligations under this Agreement; or

               (vii) any other circumstance or happening whatsoever,  whether or
          not similar to any of the foregoing.

                                       29
<PAGE>

     3.3.  Letter of Credit  Facility Fees. The Borrower shall pay to the Agent,
for the pro rata benefit of the Lenders based on their Applicable 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  Letter of Credit  fees.
Additionally,  the  Borrower  shall pay to the  Agent a  fronting  fee,  for the
benefit of the Issuing Bank only,  equal to the greater of (a) $500 per annum or
(b) a fee on the  aggregate  amount  available  to be drawn on each  outstanding
Letter of Credit at a rate equal to 0.25% per annum.  Such fees shall be due and
payable  with  respect to each Letter of Credit in arrears on the last  Business
Day of each month. 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.

     3.4.  Administrative  Fees.  The Borrower shall pay to the Issuing Bank any
other  administrative  fees in  connection  with the  Letters  of Credit in such
amounts and at such times as the Issuing Bank and the Borrower  shall agree from
time to time.


                                   ARTICLE IV

                                    Security

     4.1. Security.  As security for the full and timely payment and performance
of all Obligations,  the Credit Parties shall on or before the Effective Date do
or cause to be done all  things  necessary  in the  opinion of the Agent and its
counsel to grant,  or reaffirm the existing  grant, to the Agent for the benefit
of the  Agent  and the  Lenders  a duly  perfected  first  priority  Lien in all
Collateral  subject  to no prior Lien or other  encumbrance  or  restriction  on
transfer other than  restrictions on transfer  imposed by applicable  securities
laws and other than any Permitted Liens then or at any time thereafter  existing
on any such Collateral.

     4.2. Intentionally Omitted.

     4.3. Information  Regarding Collateral.  The Borrower represents,  warrants
and covenants that (i) the chief executive office of the Borrower and each other
Person  providing   Collateral  pursuant  to  a  Security  Instrument  (each,  a
"Grantor")  at the  Effective  Date  is  located  at the  address  or  addresses
specified on Schedule  4.3,  and (ii)  Schedule 4.3 contains a true and complete
list of (a) the name and address of each  Grantor and of each other  Person that
has  effected  any  merger or  consolidation  with a Grantor or  contributed  or
transferred to a Grantor any property constituting  Collateral at any time since
January 1, 1998 (excluding  Persons making sales in the ordinary course of their
businesses to a Grantor of property constituting  inventory in the hands of such
seller),  (b) each location in which goods  constituting  Collateral are located
(together with the name of each owner of the property located at such address if
not the  applicable  Grantor,  and a  summary  description  of the  relationship
between the  applicable  Grantor and such Person),  (c) each trade style used by
any  Grantor  and  the  purposes  for  which  it  is  used,  (d)  the  state  of
incorporation of each Grantor and (e) the organizational  identification number,
if any, for Borrower and each Grantor.  The Borrower  shall not change or permit
any other  Grantor to change,  or use or permit  any other  Grantor to use,  any
additional trade style, except upon giving not less than thirty (30) days' prior
written notice to the Agent and taking or causing to be taken all such action at
Borrower's or such other  Grantor's  expense as required  under the terms of the
applicable Security  Instruments and as may be reasonably requested by the Agent

                                       30
<PAGE>

to perfect or maintain the  perfection  of the Lien of the Agent for the benefit
of itself and the Lenders in Collateral  including but not limited to delivering
revised schedules to the Security Agreement to the Agent.

     4.4.  Intellectual  Property.  The Borrower hereby reaffirms its pledge, or
agrees to pledge, or cause to be pledged,  all intellectual  property  interests
and  licenses  now  owned or  hereafter  acquired  or  created  and owned by the
Borrower and any Domestic Subsidiary within fifteen (15) days of the acquisition
or creation  of such  intellectual  property or license  (or, if owned as of the
Effective Date, immediately upon demand) by execution of an IPSA Supplement.

     4.5. Pledged Stock. The Borrower hereby reaffirms its pledge, or will cause
to be  pledged,  (a) 100% of the  capital  stock or  equity  or other  ownership
interest of each Domestic Subsidiary and (b) 66% of the voting share capital and
100% of the  nonvoting  share  capital and related  interests and rights of each
Direct Foreign  Subsidiary as may be now owned,  hereafter issued or acquired by
the  Borrower  or any  Domestic  Subsidiary  within  fifteen  (15)  days  of the
acquisition  or  issuance  of such  capital  stock,  equity  or other  ownership
interest (or, if owned as of the  Effective  Date,  immediately  upon demand) by
execution of a Pledge Agreement Supplement.

     4.6. Pledge and  Subordination  of Intercompany  Notes. The Borrower hereby
agrees to cause the  Intercompany  Note  Holders to  reaffirm  the  Intercompany
Pledge  Agreements  now  existing  or, with  respect to any  Intercompany  Notes
hereafter acquired or created,  to pledge,  grant a Lien and collaterally assign
to the Agent for the  benefit of the Lenders all  Intercompany  Notes  hereafter
arising or created  within  fifteen (15) days of the  acquisition or issuance of
such Intercompany Notes (or, if owned as of the Effective Date, immediately upon
demand) by execution of a supplement to the  Intercompany  Pledge  Agreements in
form and substance satisfactory to Agent.

     4.7. 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  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  reaffirmed  or  contemplated  hereby and by the
other Loan Documents and specifically  including all Collateral  acquired by any
Credit Party after the Effective Date.

     4.8. Borrower  Accounts.  As soon as practical,  and in any event not later
than 7 days from the Effective Date with respect to investment accounts,  and 45
days from the Effective Date with respect to all other accounts,  Borrower shall
cause all or  substantially  all Deposit  Accounts of the Credit Parties,  other
than the  payroll  accounts  and unused  accounts  to be closed by the  Borrower
identified on Schedule 4.8, to be transferred to and maintained with one or more
Lenders or third party depository  institutions,  subject to control  agreements
(in form and substance  satisfactory to Agent and Requisite Lenders) granting to
Agent on behalf of Lenders a security interest in such Deposit Accounts (subject
to the security  interest of the cash management bank (if such bank is a Lender)

                                       31
<PAGE>

in such Deposit  Accounts).  The cash  management  system of the Credit  Parties
shall be satisfactory  to Agent and Lenders,  including  mandatory  monthly cash
sweeps  from  foreign  accounts,  subject  to an  aggregate  minimum  balance of
$500,000 (or the Dollar  equivalent) being maintained in accounts  maintained in
the United Kingdom and an aggregate  minimum  balance of $100,000 (or the Dollar
equivalent) being maintained in accounts  maintained in Hong Kong, and mandatory
weekly cash sweeps from domestic  accounts to the extent the aggregate  domestic
cash  balance of the Credit  Parties  exceeds $5 million,  to be deposited in an
account  maintained  with the Agent (subject to a control  agreement in form and
substance  satisfactory  to the Agent and the  Lenders).  Such cash sweeps shall
occur on a regular weekly interval to be established by Borrower and approved by
Agent.  The control  agreements  referenced in this paragraph shall provide that
Borrower (or the appropriate Credit Party) shall have access to and use of funds
on account,  so long as no Event of Default having occurred and continuing,  and
subject to the terms and conditions of such control agreement.

                                    ARTICLE V

                                      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,  taxes imposed on its income,  and franchise  taxes imposed on it, by the
jurisdiction  under the laws of which  such  Lender (or its  Applicable  Lending
Office)  or the  Agent  (as the  case  may  be) is  organized  or any  political
subdivision  thereof (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 Article V) 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 present or future
stamp or documentary  taxes and any other excise or property taxes or charges or
similar  levies  which arise from any payment  made under this  Agreement or any
other Loan  Document or from the  execution or delivery  of, or  otherwise  with
respect to, this Agreement or any other Loan Document  (hereinafter  referred to
as "Other Taxes").

     (c) The Borrower agrees to indemnify each Lender and the Agent for the full
amount of Taxes and Other Taxes  (including,  without  limitation,  any Taxes or
Other Taxes  imposed or asserted by any  jurisdiction  on amounts  payable under
this  Article  V) 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.

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     (d) Each  Lender  organized  under the laws of a  jurisdiction  outside the
United  States,  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, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Lender  remains  lawfully able to do so),
shall provide the Borrower and the Agent with (i) 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) Internal Revenue Service Form
W-8 or W-9, as  appropriate,  or any successor  form  prescribed by the Internal
Revenue Service,  and (iii) 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  Article  V(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 Article V(a) or (b)
with respect to Taxes  imposed by the United  States;  provided,  however,  that
should a Lender,  which is otherwise exempt from or subject to a reduced rate of
withholding  tax,  become  subject to 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 Taxes.

     (f) If the  Borrower is required  to pay  additional  amounts to or for the
account of any Lender pursuant to this Article V, 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  judgment  of such  Lender,  is not
otherwise disadvantageous to such Lender.

     (g) Within  thirty  (30) days after the date of any  payment of 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 Article V shall  survive the  Maturity  Date and the payment in full of the
Notes.

                                   ARTICLE VI

          Conditions to Effectiveness of this Amendment and Restatement

     The effectiveness of this Agreement shall be subject to the satisfaction of
each of the conditions precedent set forth in this Article VI:

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<PAGE>

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

               (i) fully  executed  originals of each of this  Agreement and the
          Notes, and the  Reaffirmations  of Loan Documents in the form attached
          as Exhibit D;

               (ii) the favorable  written opinion or opinions of counsel to the
          Credit  Parties dated the Effective  Date,  including  counsel in each
          jurisdiction  in which any  Collateral may be located and special U.S.
          intellectual  property  counsel as to issues  related  to  Collateral,
          which  shall  include  such  matters as Agent  acting on behalf of the
          Lenders may reasonably  request,  and which legal opinions shall be in
          form  and  substance  reasonably  satisfactory  to the  Agent  and its
          counsel,  and shall be addressed  to the Agent,  the Lenders and their
          successors in interest;

               (iii)  resolutions of the board of directors or other appropriate
          governing  body  (or of the  appropriate  committee  thereof)  of each
          Credit Party  approving and  authorizing  the execution,  delivery and
          performance  of this Agreement and all other  instruments  executed in
          connection herewith,  certified as of the date hereof by the secretary
          or an  assistant  secretary  (or  equivalent)  of such Credit Party as
          being in full force and effect without modification or amendment;

               (iv) a certificate  of each Credit  Party,  executed on behalf of
          such Credit Party by its  secretary  or any  assistant  secretary  (or
          equivalent),  certifying  as to (A) the absence of any  amendments  or
          other  modifications  to the  Organizational  Documents  and Operating
          Documents  of such  Credit  Party  since  the  Closing  Date,  (B) the
          Organizational  Documents and Operating Documents of such Credit Party
          being in full  force  and  effect as of the date  hereof,  (C) the due
          organization  and good  standing  and valid  existence  of such Credit
          Party as an entity organized under the laws of the jurisdiction of its
          organization, and the absence of any proceeding for the dissolution or
          liquidation of such Credit Party, (D) the truth of the representations
          and warranties contained in this Agreement as though made on and as of
          the date hereof and (E) after  giving  effect to this  Agreement,  the
          absence of any event  occurring  and  continuing  that  constitutes  a
          Default or an Event of Default;

               (v) a certificate of each Credit Party, executed on its behalf by
          its secretary or an assistant  secretary (or  equivalent),  certifying
          the names and true  signatures  of the  officers of such Credit  Party
          authorized to sign this Agreement and any other documents, agreements,
          instruments or certificates to be delivered in connection therewith.

               (vi)  certificates  issued as of a recent date,  as acceptable to
          the  Agent,  by the  Secretary  of  State of its  respective  state of
          organization  of each Credit  Party as to the due  existence  and good
          standing of such Credit Party;

               (vii)  appropriate  certificates  of  good  standing,  issued  in
          respect of each Credit  Party as of a recent date by the  Secretary of
          State or comparable official of each jurisdiction in which the failure

                                       34
<PAGE>

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

               (viii) evidence of all insurance required by the Loan Documents;

               (ix) evidence of the filing or continuation of Uniform Commercial
          Code financing statements reflecting the filing in all places required
          by applicable law to perfect the Liens of the Agent for the benefit of
          the Lenders under the Security Instruments as a first priority Lien as
          to items of Collateral  in which a security  interest may be perfected
          by the filing of financing statements, and such other documents and/or
          evidence of other actions as may be necessary under  applicable law to
          perfect the Liens of the Agent for the  benefit of the  Lenders  under
          the Security Instruments as a first priority Lien in and to such other
          Collateral as the Agent may require;

               (x)  to the  extent  not in the  Agent's  possession,  all  stock
          certificates  or registrar's  pledge  certificates  evidencing all the
          Pledged  Stock,  accompanied,  as  applicable,  by duly executed stock
          powers in blank affixed thereto;

               (xi)  copies of all  documents  and  certificates  evidencing  or
          governing the  Subordinated  Debt and the Preferred  Stock in form and
          substance  acceptable  to the Lenders and  certified by an  Authorized
          Representative to be true, correct and complete;

               (xii) a Budget,  together with a duly executed certificate of the
          president or chief  financial  officer of the Borrower,  certifying to
          the Agent that the Budget was prepared based upon good faith estimates
          and assumptions that are reasonable as of the date hereof,  when taken
          as a whole, or of any omission of information  which causes the Budget
          to be false or  misleading  in any material  respect,  when taken as a
          whole;

               (xiii) a monthly business plan for Fiscal Year 2002 and quarterly
          business  plans for Fiscal  Year 2003,  in form,  scope and  substance
          acceptable to Agent;

               (xiv) copies of any other  documents or agreements  evidencing or
          governing any Consolidated Funded Indebtedness (other than any Capital
          Lease for which the present value of the lease payments due thereunder
          is less than $200,000,  applying a discount rate equal to the interest
          rate  provided in such lease,  all such leases  being so  indicated on
          Schedule  1.2)  of any  Credit  Party  to  remain  outstanding  on the
          Effective   Date,  and  after  giving  effect  to  the  repayment  and
          termination  of all  Existing  Debt  and  certified  by an  Authorized
          Representative to be true, correct and complete;

               (xv) to the extent not in the  Agent's  possession,  Intercompany
          Notes  outstanding as of the Effective Date together with endorsements
          or instruments of assignment executed in blank and attached thereto;

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<PAGE>

               (xvi)  payment in full of (a) all accrued and unpaid  interest on
          the Loans, (b) all fees and charges payable with respect to Letters of
          Credit,  (c) all other fees and  charges  accrued  and  payable by the
          Borrower or its Subsidiaries under the Original Credit Agreement as of
          the  Effective  Date,  (d) the  Restructuring  Fee,  (e) the  $250,000
          amendment  and waiver fee  referenced  in Section  6(k) of the Seventh
          Amendment to the Original Credit  Agreement,  (f) reimbursement of all
          of the reasonable, out of pocket costs, fees and expenses of the Agent
          and Lenders in connection  with this Agreement and the Original Credit
          Agreement  (including,  without  limitation,  the  attorneys'  fees of
          O'Melveny & Myers LLP and the fees of FTI/Policano & Manzo);

               (xviii) evidence that the Borrower has issued warrants to acquire
          15% of the fully-diluted common stock of the Borrower on the terms set
          forth in the Form of Warrant Agreement attached hereto as Exhibit H;

               (xix)  evidence  that  the  Subordinated  Debt  and the  Series G
          Preferred  Stock has been  amended,  in the  manner  described  in the
          Second Limited Waiver attached hereto as Exhibit I; and

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

          (b) Each of the  following  shall have  occurred  or be true and be so
     certified by the Credit Parties to the Lenders:

               (i) There shall not be pending or  threatened  any action,  suit,
          investigation,  litigation  or  proceeding  in any court or before any
          arbitrator or governmental  instrumentality  that could  reasonably be
          expected to have a material adverse effect on the Credit Parties,  the
          Credit  Facilities  or  any  of the  other  transactions  contemplated
          hereby;

               (ii) The  Borrower  shall  be in  compliance  with  all  existing
          material financial and contractual obligations,  on a pro forma basis,
          immediately  after  giving  effect  to this  Amendment  and any  other
          transactions contemplated hereby; and

               (iii) The Borrower,  its  Subsidiaries and any other Credit Party
          shall  have  received  all  government,  shareholder  and  third-party
          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  court  or  other  Governmental
          Authority or arbitral authority,  (B) the Organizational  Documents of
          any Credit Party or (C) any agreement, document or instrument to which

                                       36
<PAGE>

          any of the  Borrower or any other  Credit Party is a party or by which
          any of them or their properties is bound, if such default, conflict or
          violation could reasonably be expected to result in a Material Adverse
          Effect;  and all applicable waiting periods shall have expired without
          any action being taken or threatened in writing by any authority  that
          could restrain,  prevent or impose any material adverse  conditions on
          the Borrower's performance under this Agreement, or other transactions
          contemplated  hereby,  and no law or  regulation  shall be  applicable
          which in the reasonable judgment of the Agent could have such effect;

          (c)  In the good faith judgment of the Agent and the Lenders:

               (i) There shall not have  occurred a material  adverse  change in
          the business, assets, revenues,  operations,  conditions (financial or
          otherwise) or prospects of the Borrower and its Subsidiaries  taken as
          a whole  since  December  31,  2001 or in the  assumptions,  facts  or
          information   contained   in  the   financial   statements,   budgets,
          projections or pro forma balance sheets most recently delivered to the
          Agent by the Borrower;

               (ii) Agent and the Lenders shall have  completed and be satisfied
          with the results of, their business, financial, tax, legal, accounting
          and environmental due diligence  investigations of the Credit Parties.
          The Agent and the Lenders  shall also have  received  any  information
          reasonably necessary to conduct such due diligence;

               (iii) All financial statements, documents, appraisals, audits and
          other  items to be  delivered  pursuant  to Article  VI(a) in form and
          substance  acceptable  to the Lenders  shall have been reviewed by the
          Agent and reasonably determined thereby to be so acceptable; and

               (iv)  There  shall  not  have  occurred  or exist  (A) a  general
          suspension of or material  limitation on trading on the New York Stock
          Exchange or other national securities exchange, (B) the declaration of
          a general banking moratorium by any applicable  Governmental Authority
          or the  imposition  by any  applicable  Governmental  Authority of any
          material  limitation on transactions  of the type  contemplated by the
          Loan Documents,  or (C) any other material  disruption of financial or
          capital markets that could  reasonably be expected to adversely affect
          the transactions contemplated under the Loan Documents.

                                   ARTICLE VII

                         Representations and Warranties

     The Borrower  represents and warrants with respect to itself and each other
Credit Party (which representations and warranties shall survive the delivery of
the documents mentioned herein), that:

      7.1. Organization and Authority.

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<PAGE>

          (a) Each Credit Party is a corporation or  partnership  duly organized
     and validly existing under the laws of the jurisdiction of its formation;

          (b) Each Credit Party (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,  the  Notes  and all other  Loan  Document  to be
     delivered in connection  with this  Agreement,  and to reaffirm and perform
     each of the other Loan Documents to which it is a party;

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

          (e) Each of the Loan Documents to which any Credit Party is a party is
     and shall be the legal, valid and binding  obligation or agreement,  as the
     case may be, of such Credit Party, enforceable against such Credit 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,  (or, as the case may be,
reaffirmation)  and  performance  by each  Credit  Party  of  each  of the  Loan
Documents to which it is a party:

          (a) have been duly authorized by all requisite  Organizational  Action
     (including any required shareholder approval) of each Credit Party required
     for the lawful execution, delivery, reaffirmation 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 any  Credit  Party  or  its  properties,  or  (iii)  the  Organizational
     Documents or Operating Documents of any Credit Party;

          (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 any Credit
     Party is a party,  or by which the properties or assets of any Credit Party
     are bound and such conflict, breach or event of default could reasonably be
     expected to result in a Material Adverse Effect; and

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

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<PAGE>

     7.3.  Solvency.  The  Borrower is Solvent,  and the Borrower and the Credit
Parties on a consolidated basis are Solvent, in each case after giving effect to
the  transactions  contemplated by this Agreement and the  reaffirmation  of 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 any  additional
Subsidiaries  created or acquired  after the Effective  Date 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 the Borrower and
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  non-assessable;  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.

     7.5. Ownership Interests. The Borrower owns no interest in any Person other
than (i) the Persons listed in Schedule 7.4, (ii) equity  investments in Persons
not constituting  Subsidiaries  permitted under Section 9.7 and (iii) additional
Subsidiaries  created or acquired  after the Effective  Date in compliance  with
Section 8.19.

     7.6. Financial Condition.

          (a)  Except as set forth  therein,  all  annual  financial  statements
     provided by the Borrower to the Agent or any Lender prior to the  Effective
     Date  (including  the notes  thereto  with  respect to audited  statements)
     present fairly the financial condition of the Borrower and its Subsidiaries
     as of the end of such Fiscal Year and results of their  operations  and the
     changes in  stockholders'  equity for the Fiscal  Year then  ended,  all in
     conformity with GAAP applied on a Consistent Basis;

          (b)  Since  the  later of (i) the date of the last  audited  financial
     statements  delivered  to the  Lenders  or (ii)  the  date  of the  audited
     financial  statements  most recently  delivered  pursuant to Section 8.1(a)
     hereof,  there has been no Material  Adverse Effect nor have the businesses
     or  properties  of any  Material  Credit  Party been  materially  adversely
     affected except as set forth on Schedule 7.6(b); and

          (c) Except as set forth in the  financial  statements  referred  to in
     Section  7.6(a) or in Schedule 7.6 or as permitted by Section 9.4,  neither
     the 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.

          (d) Schedule  7.6(d)  annexed  hereto sets forth a true,  accurate and
     complete list of the Deposit  Accounts,  together with the account  number,
     name and address of each depository  institution and contact person thereat

                                       39
<PAGE>

     and balance maintained or otherwise credited to each such Account as of the
     date set forth therein.  In addition,  Schedule 7.6(d)  summarizes the cash
     management arrangements to fund operating needs of the Credit Parties as in
     existence as of the date hereof.

          (e) The aggregate amount of the earnout  payments  required to be made
     by the Borrower  under that certain Stock  Purchase  Agreement  dated as of
     July 31,  1998 (as amended  through the date  hereof,  the  "Carlyle  Stock
     Purchase  Agreement"),  by and among the Borrower,  Mitchell D. Berman, Max
     DeZara,  Ward P.  Feste,  Larry S. Loubet  Trust,  Jon Schultz and Larry S.
     Loubet, prior to giving effect to the Earnout  Restructuring  Agreement (as
     defined below) is $1,920,000.

          (f)  The  authorized   capital  stock  of  the  Borrower  consists  of
     20,000,000 shares of common stock, $0.0001 par value per share (the "Common
     Stock"),  and 5,000,000  shares of preferred  stock,  $0.0001 par value per
     share,  of which 1,000 shares have been  designated as Series G Convertible
     Preferred Stock,  $0.0001 par value per share (the "Preferred Stock").  The
     outstanding  capital  stock of the Borrower  consists  solely of 10,914,627
     shares of Common Stock and 1,000 shares of Preferred Stock.  Except for the
     Preferred  Stock,  options to  purchase  1,846,781  shares of Common  Stock
     issuable  under the Company's  employee  stock option plan and the warrants
     delivered by the Borrower to the holders of the  Subordinated  Debt and the
     Series G Convertible  Preferred Stock in connection with the limited waiver
     and  amendment  executed and  delivered by such holders and the Borrower on
     August 24, 2001 (as amended  pursuant to the Second  Limited Waiver of even
     date  herewith),  there are no  options,  warrants,  phantom  stock,  stock
     appreciation  rights or other  securities that are convertible into capital
     stock of the Company.  As of the date  hereof,  the book value per share of
     the Common Stock is not more than $0.00 per share,  and such book value has
     not been adjusted since such date.

     7.7. Title to Properties. The Borrower and each other Credit Party 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 Permitted Liens.

     7.8.  Taxes.  Except as set forth in Schedule 7.8, 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) as required by GAAP 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 other Credit Party 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

                                       40
<PAGE>

          (b)  after  giving  effect  to  this  Agreement,  in  default  in  the
     performance,  observance or fulfilment 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,  investigation  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 other
Credit  Party  or  affecting  the  Borrower  or any  other  Credit  Party or any
properties  or rights of the  Borrower or any other  Credit  Party,  which could
reasonably be likely to have a Material Adverse Effect.

     7.11. Margin Stock. The proceeds of the borrowings made hereunder have been
used by the Borrower only for the purposes 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 "purpose  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.  Neither the Borrower nor any other Credit 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.  ss.  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 Credit 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.  Intellectual Property. The Borrower and each other Credit Party owns
or has the right to use,  under  valid  license  agreements  or  otherwise,  all
patents, licenses, franchises,  trademarks, trademark rights, trade names, trade
name rights,  trade secrets and copyrights necessary and material to the conduct
of its businesses as now conducted and as  contemplated  by the Loan  Documents,
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
the  Borrower or any other Credit  Party in  accordance  with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to the
Agent in connection  with the  negotiation  or preparation of the Loan Documents
(which shall include marketing  materials prepared and distributed in connection
with syndication) contains any misrepresentation or untrue statement of material

                                       41
<PAGE>

fact or omits to state a material fact necessary,  in light of the circumstances
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 between 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 or any Subsidiary 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 effected, could 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. Earnout  Restructuring  Agreement.  The Borrower has delivered to the
Agent a true and correct  copy of the fully  executed  agreement  (the  "Earnout
Restructuring  Agreement") with respect to the Carlyle Stock Purchase  Agreement
providing that (i) the aggregate amount of earnout payments  required to be made
by the Borrower  pursuant to the Carlyle Stock Purchase  Agreement is $1,920,000
and (ii) that such amount began  repayment  commencing  in November  2001 with a
payment of $800,000 and in monthly principal  payments  thereafter not to exceed
$100,000 per month.  Such agreement remains in full force and effect and has not
been modified.

     7.17. Employee Benefit Plans.

          (a) The Borrower and each ERISA  Affiliate is in  compliance  with all
     applicable  provisions  of the  Code  and  ERISA  and the  regulations  and
     published  interpretations  thereunder  and in compliance  with all Foreign
     Benefit Laws with respect to all Employee  Benefit  Plans except (i) to the
     extent  such a failure  to  maintain  compliance  could not  reasonably  be
     expected to result in a Material  Adverse Effect;  or (ii) 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

                                       42
<PAGE>

     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 within the last six years 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 except to the extent such a failure to so  administer  or to maintain
     compliance could not reasonably be expected to result in a Material Adverse
     Effect;

          (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 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,  which,  if determined
     adversely  to the  Borrower or any ERISA  Affiliate,  would have a Material
     Adverse Effect.

     7.18. No Default.  As of the date hereof,  there does not exist any Default
or Event of Default hereunder after giving effect to this Agreement.

     7.19. Environmental Matters. Except as set forth in Schedule 7.18:

          (a) The  Borrower  and  each  Subsidiary  is in  compliance  with  all
     applicable Environmental Laws in all material respects, and has been issued
     and  maintains all required  federal,  state and local  permits,  licenses,
     certificates  and  approvals  pertaining  to Hazardous  Materials  that are
     necessary  to the conduct of its  business.  Neither the  Borrower  nor any
     Subsidiary  has been  notified of any pending or threatened  action,  suit,
     proceeding or investigation, and neither the Borrower nor any Subsidiary is
     aware of any fact,  which (i) calls into question,  or could  reasonably be
     expected to call into question,  material compliance by the Borrower or any
     Subsidiary with any Environmental  Laws, (ii) seeks, or could reasonably be
     expected to form the basis of a meritorious proceeding to seek, to suspend,
     revoke  or  terminate  any  license,  permit,   certification  or  approval

                                       43
<PAGE>

     necessary for the operation of the Borrower's or any Subsidiary's  facility
     or  the  generation,  handling,  storage,  treatment  or  disposal  of  any
     Hazardous  Material  that is necessary to the conduct of its  business,  or
     (iii) seeks to cause, or could  reasonably be expected to form the basis of
     a  meritorious  proceeding  to cause,  any  property of the Borrower or any
     other Credit Party to be subject to any material restrictions on ownership,
     use,  occupancy or  transferability  under any  Environmental  Law, or (iv)
     constitutes  a  reasonable  basis  to  conclude  that the  Borrower  or any
     Subsidiary is a potentially responsible party with regard to any release or
     threatened release of a Hazardous Material; and

          (b) Neither the Borrower nor any  Subsidiary,  nor, to the best of the
     Borrower's  knowledge,  any previous owner or operator of any real property
     owned or operated by the Borrower or any  Subsidiary  or any other  Person,
     has  managed,  generated,  stored,  released,  treated,  or disposed of any
     Hazardous  Material  on any portion of such  property,  or  transferred  or
     caused to be transferred  any Hazardous  Material from such property to any
     other location except in material  compliance with all Environmental  Laws.
     Except for Hazardous Materials necessary for the routine maintenance of the
     properties  owned or operated by the  Borrower and its  Subsidiaries  or as
     brought on to such  properties in the ordinary  course of the Borrower's or
     any  Subsidiary's  business,  which  Hazardous  Material  shall  be used in
     material  compliance with all applicable  Environmental  Laws, the Borrower
     covenants that it shall, and shall cause each Subsidiary to, not permit any
     Hazardous Materials to be brought on to the real property owned or operated
     by the Borrower  and its  Subsidiaries,  or if so brought or found  located
     thereon,  shall be  immediately  removed,  with  proper  disposal,  and all
     environmental  cleanup requirements shall be diligently undertaken pursuant
     to all Environmental Laws.

     7.20. Employment Matters.

          (a) None of the employees of the Borrower or any Subsidiary is subject
     to any  collective  bargaining  agreement  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 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 no pending or threatened any litigation, administrative proceeding
     or, 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.

                                       44
<PAGE>

     7.21.  RICO.  To the best  knowledge  of the  Borrower  or any  Subsidiary,
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
Liens,  seizure or other forfeiture under any criminal law, racketeer influenced
and corrupt organizations law, civil or criminal, or other similar laws.

                                  ARTICLE VIII

                              Affirmative Covenants

     Until the  payment  in full in cash of all  Obligations  and the  permanent
termination or cancellation of, full cash collateralization of or, in their sole
and absolute discretion,  the delivery of other credit support acceptable to the
Agent,  Issuing Bank and the Required Lenders for all Letters of Credit,  unless
the Required Lenders shall otherwise consent in writing, the Borrower shall, and
where applicable will cause each Guarantor 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  and  each  Lender  (i)  audited   consolidated  and  unaudited,
     Borrower-prepared  consolidating  balance  sheets of the  Borrower  and its
     Subsidiaries as at the end of such Fiscal Year, and the notes thereto (with
     respect to audited  statements only), and the related audited  consolidated
     and  unaudited,  Borrower-prepared  consolidating  statements of income and
     stockholders' equity and related consolidated statements of cash flows, and
     the respective notes thereto (with respect to audited statements only), for
     such Fiscal Year,  setting forth (other than for consolidating  statements)
     comparative  financial  statements  for  the  preceding  Fiscal  Year,  all
     prepared in  accordance  with GAAP with such changes from prior  periods as
     required by GAAP and noted in the auditor's opinion delivered therewith and
     containing, with respect to the consolidated financial statements, opinions
     of Ernst & Young,  or  other  such  "Big 5"  independent  certified  public
     accountants,  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  acceptable  to the  Lenders  (other  than  a  qualification
     regarding  the impending  Maturity Date of the financing  evidenced by this
     Agreement  and the Loan  Documents,  it being  agreed such a  qualification
     shall not by itself  prevent a  financial  statement  from  satisfying  the
     requirements  of this subsection  (a)), and (ii) a Compliance  Certificate,
     provided, however, that all deliveries under this paragraph for Fiscal Year
     2001 may be delivered on or before April 30, 2002;

          (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 and each  Lender (i)  consolidated  and  consolidating
     balance sheets of the Borrower and its  Subsidiaries  as at the end of such
     Fiscal Quarter, and the related  consolidated and consolidating  statements
     of income and stockholders'  equity and related  consolidated  statement of
     cash  flows  for  such  Fiscal  Quarter  in  each  case  setting  forth  in
     comparative form consolidated  figures for the corresponding  period of the
     preceding  Fiscal Year and  accompanied  by a certificate  of an Authorized

                                       45
<PAGE>

     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 GAAP with respect to interim  financial  statements,
     and  (ii)  a  certificate  of  an  Authorized   Representative   containing
     computations for such Fiscal 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 and 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;

          (d)  promptly  upon their  becoming  available  to the  Borrower,  the
     Borrower  shall  deliver  to the  Agent  and each  Lender a copy of (i) all
     regular or special reports or effective  registration  statements which the
     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 or other  report  submitted  to the Borrower or any
     Subsidiary  by  independent  accountants  in  connection  with any  annual,
     interim or  special  audit of the  Borrower  or any  Subsidiary  except for
     agreed upon procedures reports for compliance under third-party agreements,
     reports on employee  benefit  plan  financial  statements  and reports with
     respect to tax advisory matters;

          (e) not later than the last Business Day of each Fiscal Year,  deliver
     to the Administrative Agent and each Lender a capital and operating expense
     budget and consolidated  financial  projections  prepared by management for
     the Borrower  and its  Subsidiaries  for the next Fiscal Year,  prepared in
     accordance  with GAAP  applied  on a  Consistent  Basis  including  balance
     sheets, income statements and statements of cash flows (to include separate
     forecasts  for  Capital  Expenditures  by the  Borrower  and EBITDA by each
     direct Subsidiary of the Borrower) and a reasonably detailed explanation of
     any underlying  assumptions with respect thereto,  on a quarterly basis for
     the current Fiscal Year and on an annual basis for the next  succeeding two
     years; provided, however, that if at any time during such next Fiscal Year,
     management of the Borrower  determines  that the financial  projections  no
     longer accurately  reflect the projected  financial results for such Fiscal
     Year, as soon as practicable,  provide to the Agent and each Lender revised
     consolidated forecasts for such Fiscal Year;

          (f) as soon as  practicable  and in any event within  twenty (20) days
     following  the end of each  Fiscal  Month,  deliver  to the  Agent and each
     Lender an accounts receivable aging report in form and detail substantially
     similar to that furnished to the Agent prior to the Effective Date;

                                       46
<PAGE>

          (g) as soon as  available,  and in any event  not later  than the last
     Business  Day of each week after the date hereof,  deliver  such  financial
     information  and  projections  and reports  described  on  Schedule  8.1(g)
     annexed hereto,  prepared in a manner and in a form  satisfactory to Agent,
     together with such other  information  as may be reasonably  requested from
     time to time by the Agent or the Required  Lenders (it being understood and
     agreed that the delivery of any or all of such  financial  information  and
     projections shall not be deemed to be an amendment or other modification of
     the Budget);

          (h) as soon as  available,  and in any event not later  than the tenth
     calendar  day  after  the end of the  month  of June,  2002 and each  month
     thereafter,  deliver with  respect to such  preceding  month the  financial
     reports  described on Schedule 8.1(h) annexed hereto,  prepared in a manner
     and in a form satisfactory to Agent together with such other information as
     may be reasonably  requested from time to time by the Agent or the Required
     Lenders (it being  understood and agreed that the delivery of any or all of
     such financial  information  and  projections  shall not be deemed to be an
     amendment or other modification of the Budget);

          (i) as soon as practical and in any event within 30 days after the end
     of each calendar month, deliver (i) consolidated and consolidating  balance
     sheets of the  Borrower and its  Subsidiaries  as at the end of such month,
     and the related  consolidated  and  consolidating  statements of income and
     stockholders' equity and related  consolidated  statement of cash flows for
     such month in each case  setting  forth in  comparative  form  consolidated
     figures from the consolidated statements of income and stockholders' equity
     for the corresponding month of 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 month and the results of their
     operations and the changes in their  financial  position for such month, in
     conformity  with the  standards  set forth in GAAP with  respect to interim
     financial statements, and (ii) a Compliance Certificate;

          (j) promptly upon  receipt,  deliver  copies of all written  proposals
     from time to time received  regarding the purchase of assets of Borrower or
     it Subsidiaries,  or refinancing of the Obligations, and that the Agent and
     the Lenders shall have access to the personnel of the any  investment  bank
     or intermediary working for or on behalf of the Borrower to discuss,  among
     other things,  the status of Borrower's efforts to sell assets or refinance
     the Obligations;

          (k)  within  ten (10) days  after the end of each  calendar  month,  a
     certificate of an Authorized Representative stating Eligible Receivables of
     Borrower  and its  Subsidiaries  as of the end of such  preceding  calendar
     month; and

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

                                       47
<PAGE>

     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, 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,  and maintain free from Liens 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 where the failure to
be so licensed or qualified  would have a Material  Adverse  Effect and in which
its  ownership  or lease of  property or the nature of its  business  makes such
license or qualification necessary.

     8.4. Regulations and Taxes. Comply in all material respects with or contest
in good faith by appropriate  proceedings  diligently conducted 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  against any of its  properties  except  liabilities  being
contested in good faith by  appropriate  proceedings  diligently  conducted  and
against which adequate  reserves  required by GAAP have been established  unless
and until any Lien  resulting  therefrom  attaches  to any of its  property  and
becomes enforceable against its creditors.

     8.5. Insurance.  Comply in all respects with the requirements for insurance
coverage  set  forth  in each  of the  Security  Instruments  and,  without  any
limitation thereof, (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 and
otherwise as required by the Security  Instruments,  (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) and against loss by reason by business interruption. Each
of such policies of insurance shall have such limits,  deductibles,  exclusions,
co-insurance and other provisions  providing no less coverages than, to the best
of the  Borrower's  knowledge,  are  maintained by similar  businesses  that are
similarly  situated and shall 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 30 days'  prior  written
notice  before any such policy shall be  terminated,  lapse or be altered in any
manner.

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<PAGE>

     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, from time to time, 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, and to audit, the Collateral, controls and systems
of the Borrower and the Guarantors, all at reasonable times, and with reasonable
prior  notice to the  Borrower  and at the  expense  of the  Borrower;  provided
however,  following the occurrence and during the continuation of any Default or
Event of Default,  such  visits or  inspections  at the expense of the  Borrower
shall be unlimited.  The Borrower shall,  and shall cause its  Subsidiaries  to,
cooperate with and give full and complete access and make available to the Agent
and its representatives  retained from time to time by the Agent for the benefit
of the Lenders (including, without limitation, FTI/Policano & Manzo), on a daily
basis,  the books and records of the  Borrower  and its  Subsidiaries  and other
information  relating to the business or  financial  affairs of the Borrower and
its  Subsidiaries  (including,  without  limitation,  agreements  and  documents
pertaining to any receivables or payables),  and the operating management of the
Borrower and its Subsidiaries  shall meet, upon request,  with the Agent and the
representatives  of the Agent to discuss,  among other things, the financial and
operating  performance and business plans of the Borrower and its  Subsidiaries.
The Borrower shall,  and shall cause its Subsidiaries to, give full and complete
access  to such  other  information  as the  Agent  or its  representatives  may
reasonably  request from time to time, and shall cooperate and consult with, and
provide  to the Agent and such  representatives  all such  information.  Without
limiting the generality of the foregoing,  the Borrower  shall,  and shall cause
its  Subsidiaries  to,  permit  the  Agent and any of its  auditors,  examiners,
consultants or other  representatives  from time to time, in the sole discretion
of the Agent or as the Agent may be requested by the Required Lenders (which, in
any event, may be at least once every 60 days), to conduct Collateral audits and
reviews, including, without limitation, verification, inspection and examination
of the Collateral,  accounts  payable,  controls and systems of the Borrower and
its  Subsidiaries,  at the sole cost and expense of the Borrower and which costs
and expenses shall be deemed  "Obligations"  hereunder and shall be reimbursable
on demand.

     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 as are
required  for  the  conduct  of  its  business  as  currently  conducted  and as
contemplated  by the Loan  Documents  except  where the  failure to so obtain or
maintain any of the  foregoing  would not  reasonably be expected to result in a
Material Adverse Effect.

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<PAGE>

     8.10.  Covenants  Extending to Other Persons.  Cause each of its Guarantors
(and its  Subsidiaries  with  respect  to  Section  8.19) 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 8.19 inclusive.

     8.11.  Officer's  Knowledge of Default.  Upon any Executive  Officer of the
Borrower  obtaining  knowledge  of the  occurrence  of any  Default  or Event of
Default  hereunder  or  under  any  other  obligation  of  the  Borrower  or any
Subsidiary   or  other  Credit  Party  to  any  Lender,   cause  an   Authorized
Representative promptly to notify the Agent of the nature thereof, the period of
existence  thereof,  and what action the  Borrower or such  Subsidiary  or other
Credit Party proposes to take with respect thereto.

     8.12.  Suits  or  Other  Proceedings.  Upon any  Executive  Officer  of the
Borrower  obtaining  knowledge  of any  litigation  or other  proceedings  being
instituted  against the Borrower or any Subsidiary or other Credit Party, or any
attachment, levy, execution or other process being instituted against any assets
of the Borrower or any  Subsidiary  or other Credit  Party,  any or all of which
make a claim  or  claims  in an  aggregate  amount  greater  than  $500,000  not
otherwise covered by insurance,  cause an Authorized  Representative promptly to
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 Environmental  Complaint or Condition.  Promptly provide to
the Agent notice of,  including  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 (i)  violation  or alleged
violation by the Borrower or any Subsidiary of any applicable Environmental Law,
(ii) release or  threatened  release by the Borrower or any  Subsidiary,  or any
Person handling,  transporting, or disposing of any Hazardous Material on behalf
of 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  legally,  or (iii) 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.

     8.14.  Environmental  Compliance.  If the Borrower or any Subsidiary  shall
receive in writing any letter, notice,  complaint,  order,  directive,  claim or
citation  alleging  that the  Borrower or any  Subsidiary  (i) has  violated any
Environmental  Law,  (ii) has  released  or is about to  release  any  Hazardous
Material other than in compliance  with all  Environmental  Laws (or suffered or
permitted  such action by any other Person on or in respect of property owned or
operated by the Borrower or any Subsidiary), or (iii) is liable for the costs of
cleaning up,  removing,  remediating  or  responding  to a release or threatened
release of  Hazardous  Materials,  the  Borrower  and any  Subsidiary  shall (a)
provide  prompt  written  notice  thereof to the Agent  describing in reasonable
detail the nature of the matter and what action the  Borrower or the  applicable
Subsidiary proposes to take with respect thereto, and (b) 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,  unless and only during the period that the applicability of the
Environmental  Law,  the  fact of such  violation  or  liability  or the  action
required to remove or remedy such  violation is being  contested by the Borrower
or the applicable Subsidiary by appropriate proceedings diligently conducted and
all reserves with respect  thereto as may be required under  Generally  Accepted

                                       50
<PAGE>

Accounting  Principles,  if any,  have  been  made,  and no  Lien in  connection
therewith  shall have attached to any property of the Borrower or the applicable
Subsidiary which shall have become enforceable against creditors of such Person.

     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',  consultants'
and other experts' fees and disbursements)  arising directly or indirectly from,
out  of  or by  reason  of  (a)  the  violation  or  alleged  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
use,  generation,  handling,  storage,   transportation,   treatment,  emission,
release,  disclaim 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  repayment of the  Obligations or the Maturity Date and expiration
of 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 and the other Loan Documents.

     8.17 .Employee Benefit Plans.

          (a)  With  reasonable  promptness,  and in any  event  within  30 days
     thereof,  give  notice  to the  Agent of (a) the  establishment  of any new
     Employee Benefit 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 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

                                       51
<PAGE>

          (c) With  reasonable  promptness  but in any event  within 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 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 line or lines of business  substantially  as
heretofore conducted.

     8.19. New Subsidiaries.

          (a)  Promptly,  and in any event  within 15 Business  Days,  after the
     acquisition or creation of any Domestic  Subsidiary,  cause to be delivered
     to the Agent for the benefit of the Lenders each of the following:

               (i) a Guaranty executed by such Domestic Subsidiary substantially
          in the form of Exhibit I attached to the  Original  Credit  Agreement,
          mutatis mutandis;

               (ii) a Security  Agreement  executed by such Domestic  Subsidiary
          substantially in the form of Exhibit J attached to the Original Credit
          Agreement,  mutatis  mutandis,  together with such Uniform  Commercial
          Code financing  statements on Form UCC-1 or otherwise duly executed by
          such  Subsidiary  as "Debtor"  and naming the Agent for the benefit of
          the  Lenders  as  "Secured  Party",  in  form,  substance  and  number
          sufficient  in the  reasonable  opinion  of the Agent and its  special
          counsel to be filed in all Uniform  Commercial  Code filing offices in
          all jurisdictions in which filing is necessary or advisable to perfect
          in favor of the  Agent  for the  benefit  of the  Lenders  the Lien on
          Collateral  conferred by such Domestic  Subsidiary under such Security
          Agreement  to the  extent  such  Lien  may  be  perfected  by  Uniform
          Commercial Code filing;

               (iii) the Pledged Interests of such Domestic Subsidiary, which is
          issued or existing and outstanding,  together with duly executed stock
          powers or powers of assignment in blank affixed thereto or registrar's
          pledge  certificate  and  control  agreement,  as  applicable,  and an
          executed  Pledge  Agreement  Supplement  pledging  100% of the capital
          stock or equity or other ownership  interest of such newly acquired or
          created Domestic Subsidiary;

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<PAGE>

               (iv) a supplement  to the  appropriate  schedule  attached to the
          appropriate  Security  Instruments listing the additional  Collateral,
          certified   as  true,   correct  and   complete   by  the   Authorized
          Representative  (provided that the failure to deliver such  supplement
          shall not impair the rights  conferred under the Security  Instruments
          in after acquired Collateral);

               (v) an Intercompany Note in the form attached hereto as Exhibit G
          and  an  Intercompany   Note  Pledge  Agreement  and  a  Subordination
          Agreement executed by such Domestic  Subsidiary,  substantially in the
          forms of  Exhibits M and N,  respectively,  attached  to the  Original
          Credit Agreement, mutatis mutandis;

               (vi)  if  applicable,  an  IPSA  Supplement  and an  Intellectual
          Property Assignment;

               (vii) if  requested  by the  Agent or the  Required  Lenders,  an
          opinion of  counsel to such  Domestic  Subsidiary  and the  Subsidiary
          executing the Pledge Agreement  Supplement  referred to in (iii) above
          dated as of the date of  delivery of the  Guaranty  referred to in (i)
          above, the  Subordination  Agreement  referred in (v) above, 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,  rendered  with  respect  to  the  Subsidiaries  as of the
          Effective Date and the Collateral in which they grant the Agent a Lien
          for the benefit of itself and the Lenders; and

               (viii)  current  copies of the  Organizational  Documents of such
          Domestic 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
          Organizational Documents or by applicable law, of the shareholders) of
          such Domestic Subsidiary authorizing the actions and the execution and
          delivery of documents described in this Section 8.19;

          (b)  Promptly,  and in any event  within 30 Business  Days,  after the
     acquisition or creation of any Foreign Subsidiary, cause to be delivered to
     the Agent for the benefit of the Lenders each of the following:

               (i) the Pledged  Interests of such Foreign  Subsidiary,  which is
          issued or existing and outstanding,  together with duly executed stock
          powers or powers of assignment in blank affixed thereto or registrar's
          pledge  certificate  and  control  agreement,  as  applicable,  and an
          executed Pledge Agreement  Supplement pledging 66% of the voting share
          capital  and 100% of the  nonvoting  share  capital or equity or other
          ownership interest of such Foreign Subsidiary substantially similar in
          form and content to that  executed and  delivered as of the  Effective
          Date, with appropriate revisions as to the identity of the pledgor and
          securing the obligations of such pledgor under its Guaranty; and

               (ii) if  requested  by the  Agent  or the  Required  Lenders,  an
          opinion of counsel to the  Subsidiary  executing the Pledge  Agreement
          Supplement  referred to in (i) above, dated as of the date of delivery

                                       53
<PAGE>

          of such Pledge Agreement Supplement and addressed to the Agent and the
          Lenders,  in form and  substance  reasonably  acceptable to the Agent,
          and, if requested by the Agent or the Required Lenders,  an opinion of
          counsel  in  the   jurisdiction  of   incorporation   of  the  Foreign
          Subsidiary,  in form and substance reasonably acceptable to the Agent,
          in each case and  substantively  similar  to the  opinions  of counsel
          delivered  pursuant to Article  VI(a),  rendered  with  respect to the
          Subsidiaries as of the Effective Date and the Collateral in which they
          grant the Agent a Lien for the benefit of itself and the Lenders.

     8.20.  Chief  Restructuring  Officer.  Upon  request by  Required  Lenders,
promptly appoint a chief restructuring  officer approved by Required Lenders, on
terms approved by Required Lenders.

                                   ARTICLE IX

                               Negative Covenants

     Until the  payment  in full in cash of all  Obligations  and the  permanent
termination or cancellation of, full cash  collateralization  of or the delivery
of other credit support  acceptable to the Agent,  Issuing Bank and the Required
Lenders in their sole and absolute discretion for all Letters of Credit,  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)  Rolling  Three Month  Consolidated  EBITDA.  Permit  Consolidated
     EBITDA for the  three-month  period ended June 30, 2002, or any three-month
     period  ending  thereafter  to be  zero or  negative  as of the end of such
     three-month period.

          (b) First  Twelve  Months  Consolidated  EBITDA.  Permit  Consolidated
     EBITDA for any period set forth  below to be less than the amount set forth
     opposite such period:

                                               Consolidated EBITDA for
                                               such Period Must Not Be
              Measured Period:                        Less Than:
              ----------------                 -----------------------
      Three months ended June 30, 2002               $  500,000
      Six months  ended  September  30, 2002         $1,750,000
      Nine months  ended  December  31, 2002         $3,250,000
      Twelve  months  ended  March  31, 2003         $5,500,000


          (c) Capital Expenditures.  Permit Capital Expenditures for the portion
     of the applicable Fiscal Year ending on the applicable date set forth below
     to be greater than the amount set forth opposite such date:

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<PAGE>

                                        Maximum Consolidated YTD
                                      Capital Expenditures Cannot
             YTD Period Ended:                   Exceed:
            ------------------        ---------------------------
            June 30, 2002                      $  888,000
            September 30, 2002                 $1,142,000
            December 31, 2002                  $1,268,000
            March 31, 2003                     $  573,000
            June 30, 2003                      $  802,000


          (d) Deposit Accounts.  Open any Deposit Account or securities  account
     without  (i)  reasonable  prior  notice to Agent and (ii)  compliance  with
     Section 4.8 hereof.

     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.

     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

          (a) Liens created under the Security Instruments in favor of the Agent
     and the Lenders, and otherwise existing as of the date hereof and 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 are not yet
     enforceable against other creditors;

          (c) statutory or contractual 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 are
     not yet enforceable against other creditors;

          (d) Liens  incurred or  deposits  made (a) in the  ordinary  course of
     business (including,  without limitation,  performance and surety bonds) in
     connection  with workers'  compensation,  unemployment  insurance and other
     types of social  security  benefits  or (b) 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   or  title   defects,   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

                                       55
<PAGE>

     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)  purchase  money  Liens to  secure  Indebtedness  permitted  under
     Section  9.4(f)  (as  extended  or  renewed  as  permitted   under  Section
     9.4(g))and  incurred to purchase fixed assets,  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 secures such Indebtedness;

          (g) Liens  arising in connection  with Capital  Leases (as extended or
     renewed as permitted under Section 9.4(g)) provided that no such Lien shall
     extend to or cover any property or assets other than assets subject to such
     Capital Leases;

          (h)  judgment  and  other  similar  non-consensual  Liens  arising  in
     connection with court proceedings,  provided that, and only for so long as,
     the execution or other enforcement of such Liens is effectively  stayed and
     the claims secured  thereby are being actively  contested in good faith and
     by appropriate  proceedings and all reserves as may be required by GAAP, if
     any, have been made, and in any case only if the amounts  secured  thereby,
     if paid or payable,  could not,  individually  or in the aggregate,  have a
     Material Adverse Effect.

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

          (a)  Indebtedness  existing as of the  Effective  Date as set forth in
     Schedule 1.2; provided,  none of the instruments and agreements  evidencing
     or  governing  such   Indebtedness,   including   without   limitation  the
     Subordinated  Debt,  shall be amended,  modified or supplemented  after the
     Effective Date to change any terms of subordination,  payment of principal,
     interest, fees or other amounts due, or rights of conversion, put, exchange
     or other similar rights or any other covenants, terms or conditions thereof
     to be less  favorable to the Agent and the Lenders than such terms,  rights
     and conditions as in effect on the Effective 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 Hedging  Obligations  permitted  under
     Section 9.14;

          (e)  Intercompany  Advances  and loans to  Subsidiaries  permitted  by
     Section 9.6(g);

          (f)  purchase  money  Indebtedness  described  in  Section  9.3(f) and
     Capital Leases described in Section 9.3(g); and

                                       56
<PAGE>

          (g) Indebtedness extending the maturity of, or renewing,  refunding or
     refinancing,  in whole or in part, Indebtedness incurred under clauses (a),
     (e)  and  (f)  of  this  Section  9.4,  including  without  limitation  the
     Subordinated Debt; provided that the covenants, terms and conditions of any
     such extension,  renewal, refunding or refinancing Indebtedness (and of any
     agreement or instrument  entered into in connection  therewith) are no less
     favorable to the Agent and the Lenders  than the terms of the  Indebtedness
     as in  effect  prior to such  action,  and  provided  further  that (1) the
     aggregate principal amount of or interest rate or rates and fees payable on
     such extended,  renewed,  refunded or refinanced  Indebtedness shall not be
     increased by such action, (2) the group of direct or contingent obligors on
     such Indebtedness shall not be expanded as a result of any such action, (3)
     immediately  prior  to and  immediately  after  giving  effect  to any such
     extension,  renewal,  refunding  or  refinancing,  no  Default  or Event of
     Default shall have occurred and be continuing  and (4) no such action shall
     serve to prepay,  redeem,  purchase,  defease or otherwise satisfy prior to
     the scheduled maturity previously existing of such Indebtedness.

     9.5. Transfer of Assets Sell,  lease,  transfer or otherwise dispose of any
assets of the Borrower or any Subsidiary other than

          (a)  dispositions  of equipment  which,  in the  aggregate  during any
     Fiscal Year,  has a fair market value or book value,  whichever is less, of
     $500,000 or less and is replaced by  equipment  having at least  equivalent
     value;

          (b)  disposition  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.

     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
     Schedule 7.4;

          (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;

                                       57
<PAGE>

          (e) Intercompany Advances;

          (f) investments in Hedging  Obligations  permitted under Section 9.15;
     and

          (g) loans and advances  after the Effective Date to  Subsidiaries  who
     are not Guarantors provided (i) the aggregate  outstanding principal amount
     of such loans and  advances  shall not at any time  exceed  $500,000 in the
     aggregate  and  (ii)  all  evidence  of such  Indebtedness,  including  any
     promissory  notes,  shall be  pledged  to the Agent for the  benefit of the
     Lenders.

     9.7. Merger or Consolidation.  (a) Consolidate with or merge into any other
Person, or (b) permit any other Person to merge into it, provided,  however, (i)
any  Subsidiary  may  merge  into  or  consolidate  with  the  Borrower  and any
Subsidiary may merge into or consolidate  with any other wholly owned Guarantor,
and (ii) any other Person may merge into or consolidate with the Borrower or any
wholly owned  Guarantor 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 of a permitted  Acquisition shall execute
and deliver such agreements and other documents,  including a Guaranty, 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.  Notwithstanding anything herein to the contrary,
make any Restricted  Payment or apply or set apart any of their assets  therefor
or agree to do any of the foregoing (including,  without limitation, any payment
in respect of Subordinated Indebtedness).

     9.9. Transactions with Affiliates.  Other than transactions permitted under
Sections 9.4, 9.6 and  9.7(b)(i) or otherwise  set forth on Schedule 9.9,  enter
into any transaction after the Effective 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  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,  (c) in the case of
either (a) or (b),  in the  ordinary  course of  business  and  pursuant  to the
reasonable  requirements  of the Borrower's (or any  Subsidiary's)  business and
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,  and (d)  that the  Borrower  or any  Guarantor  may  enter  into any
transaction with any other Guarantor pursuant to the reasonable  requirements of
the Borrower's or Guarantor's  business and consistent with past practice of the
Borrower or Guarantor,  except as may be otherwise  limited or prohibited by any
provision of this Agreement.

     9.10  Compliance  with ERISA.  With respect to any Pension  Plan,  Employee
Benefit Plan or  Multiemployer  Plan and except as  otherwise  disclosed in this
Agreement:

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

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          (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 additional  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,  which
     liability  or  increase,   individually   or  together   with  all  similar
     liabilities and increases, is in excess of $1,000,000; 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.

     9.12.  Dissolution,  Etc. Wind up,  liquidate or dissolve  (voluntarily  or
involuntarily)  or commence or suffer any  proceedings  seeking any such winding
up,  liquidation  or  dissolution,   except  in  connection  with  a  merger  or
consolidation permitted pursuant to Section 9.7.

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

     9.14. Hedging Obligations.  Incur any Hedging Obligations or enter into any
agreements,   arrangements,   devices  or   instruments   relating   to  Hedging
Obligations,  except pursuant to Swap Agreements in an aggregate notional amount
not to exceed at any time 60% the aggregate outstanding principal balance of the
Loans.

     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 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 Guarantor may
enter into such an agreement in  connection  with  property  subject to any Lien

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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.

     9.16.  Restrict Payment of Dividends.  Enter into any agreement or covenant
prohibiting or limiting in any way the Borrower's or any  Subsidiary's  right or
power to pay any dividend or make any other distribution, direct or indirect, on
account of any shares of any class of stock of the  Borrower or any  Subsidiary,
now or hereafter outstanding, to the Borrower or any Guarantor.

     9.17. Subordinated Debt and Preferred Stock.

          (a) Except as otherwise permitted in Section 9.4(g),  prepay,  redeem,
     purchase,  defease or otherwise  satisfy  prior to the  scheduled  maturity
     thereof in any manner  (regardless of whether such prepayment,  redemption,
     purchase, defeasance or satisfaction is mandatory or optional), or make any
     payment in  violation  of any  subordination  terms of,  any  Indebtedness,
     including without  limitation the Subordinated  Debt, or redeem or purchase
     (regardless  of  whether  such  redemption  or  purchase  is  mandatory  or
     optional) any of the Preferred Stock; or

          (b) Amend, modify or change in any manner any term or condition of any
     Subordinated  Debt (including  without  limitation any of the  Subordinated
     Debt  Documents)  or any Preferred  Stock so that the terms and  conditions
     thereof  are less  favorable  to the Agent and the  Lenders  than the terms
     thereof as of the Effective Date.

     9.18. Cash Usage.  Transfer cash or other assets (by means of loan,  equity
contribution  or otherwise) to its  affiliated  operations in Hong Kong,  Tokyo,
Singapore or Syndey,  Australia at any time after such operations  report EBITDA
negative by $500,000 or more for the period after the Effective Date.

     9.19.  Modification  of  Limited  Waiver . Modify  the  Limited  Waiver and
Amendment   dated  August  24,  2001  or  the  Second  Limited  Waiver  executed
substantially concurrently herewith without the consent of Required Lenders.

                                    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 or  Reimbursement  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

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          (b) if default  shall be made in the due and  punctual  payment of any
     amount of interest on any Loan or  Reimbursement  Obligation  or in the due
     and  punctual  payment  of any  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 and such default  shall  continue for two (2)
     Business Days; or

          (c) if default shall be made in the  performance  or observance of any
     covenant set forth in Section 4.8, 8.7, 8.11, 8.12, 8.19 or Article IX; or

          (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  (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  or an  Executive  Officer  of the  Borrower  becomes  aware  of such
     default; 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;  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
     the Subordinated Debt or any other  Indebtedness  (other than the Loans and
     other Obligations) of the Borrower or any Subsidiary and the amount of such
     Indebtedness is not less than $1,000,000 in the aggregate  outstanding,  or
     (ii) a default,  which is not waived,  in the  performance,  observance  or
     fulfillment of any term or covenant  (other than as described in clause (i)
     above)  contained in any agreement or instrument under or pursuant to which
     the  Subordinated  Debt or any  such  Indebtedness  may have  been  issued,
     created, assumed,  guaranteed or secured by the Borrower or any Subsidiary,
     or any other event of default as specified in any  agreement or  instrument
     under or pursuant to which the Subordinated  Debt or any such  Indebtedness
     may have been  issued,  created,  assumed,  guaranteed  or  secured  by the
     Borrower  or any  Subsidiary,  and such  default or event of default  shall
     continue for more than the period of grace, if any, therein  specified,  or
     such  default  or event of default  shall  permit  (or,  with the giving of
     notice  or  lapse  of  time  or  both,  would  permit)  the  holder  of the
     Subordinated  Debt or 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 other Credit Party pursuant to or in connection with

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     any Loan Document (which shall not include marketing materials prepared and
     distributed in connection with  syndication),  shall be false or misleading
     in any material respect when given; or

          (g) if the Borrower or any  Subsidiary  or other Credit Party shall be
     unable to pay its debts  generally as they become due, admit in writing its
     inability 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,  or 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 other Credit Party 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 or any other Credit Party 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 other Credit Party 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 or
     other  Credit  Party 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 or other Credit Party
     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 an aggregate  amount in excess of  $1,000,000 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 excess of  $1,000,000 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, on a consolidated basis, 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 Hedging  Obligations
     permitted hereby is created and such breach shall continue beyond any grace

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     period,  if any,  relating thereto pursuant to the terms of such agreement,
     or if the Borrower or any Subsidiary  shall  disaffirm or seek to disaffirm
     any such agreement or any of its obligations thereunder; or

          (l) if there  shall  occur and be  continuing  an Event of  Default as
     defined in any of the other Loan Documents; or

          (m) if there  shall  occur and be  continuing  an Event of  Default as
     defined in the Indenture  referred to in the  definition  of  "Subordinated
     Debt  Documents",  a Series G Stock  Event of  Default  as  defined  in the
     Certificate of Designation  for the Series G Preferred Stock referred to in
     subpart (b) of the definition of "Preferred Stock"; or

          (n) if a Change of Control shall occur;

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) 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 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 to the Agent or
          the Lenders;

               (B) The  Borrower  shall,  upon demand of the Agent,  the Issuing
          Bank 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.

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     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,
the Issuing Bank or the Agent or any failure or delay on the part of any Lender,
the Issuing  Bank 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 3.3, 3.4 and 12.5;

          (b) amounts due to the Agent pursuant to Section 11.11;

          (c) payments of interest on Loans and Reimbursement Obligations, to be
     applied for the ratable benefit of the Lenders;

          (d) payments of principal of Loans and Reimbursement  Obligations,  to
     be applied for the ratable benefit of the Lenders;

          (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(h),  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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                                   ARTICLE XI

                                    The Agent

     11.1.  Appointment.  Each  Lender and the Issuing  Bank hereby  irrevocably
designates  and  appoints  Bank of  America  as the Agent  therefor  under  this
Agreement,  and each of the  Lenders and the  Issuing  Bank  hereby  irrevocably
authorizes  Bank of America as the Agent,  therefor,  to take such action on its
behalf under the  provisions of this  Agreement and the other Loan Documents and
to exercise such powers as are expressly  delegated to the Agent by the terms of
this Agreement and such other Loan Documents, together with such other powers as
are  reasonably  incidental  thereto.  The Agent  shall  not have any  duties or
responsibilities,  except those  expressly  set forth  herein,  or any fiduciary
relationship  with  any of the  Lenders  or the  Issuing  Bank,  and no  implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this  Agreement  or any other  Loan  Document  or  otherwise  exist
against the Agent.

     11.2. Attorneys-in-fact.  The Agent may execute any of its duties under the
Loan Documents by or through agents or  attorneys-in-fact  and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The Agent
shall  not be  responsible  for the  negligence,  gross  negligence  or  willful
misconduct  of any agents or  attorneys-in-fact  selected by it with  reasonable
care.

     11.3.  Limitation on Liability.  Neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact shall be liable to the Lenders
for any action  lawfully  taken or omitted to be taken by it or them under or in
connection with the Loan Documents  except for its or their own gross negligence
or willful  misconduct.  Neither  the Agent nor any of its  affiliates  shall be
responsible  in any manner to any of the Lenders for any  recitals,  statements,
representations  or warranties  made by the Borrower,  any other Credit Party or
any officer or representative  thereof contained in any Loan Document, or in any
certificate,  report, statement or other document referred to or provided for in
or received by the Agent under or in connection  with any Loan Document,  or for
the value, validity, effectiveness,  genuineness,  enforceability or sufficiency
of any Loan  Document,  or for any failure of the  Borrower or any other  Credit
Party to perform its obligations  under any Loan Document,  or for any recitals,
statements,  representations  or warranties  made,  or for the value,  validity,
effectiveness, genuineness, enforceability or sufficiency of any collateral. The
Agent shall not be under any obligation to any of the Lenders to ascertain or to
inquire as to the observance or  performance  of any of the terms,  covenants or
conditions  of any Loan Document on the part of the Borrower or any other Credit
Party or to inspect  the  properties,  books or records of the  Borrower  or any
other Credit Party.

     11.4.  Reliance.  The Agent shall be  entitled to rely,  and shall be fully
protected  in  relying,  upon any Note,  writing,  resolution,  notice,  consent
certificate,  affidavit,  letter,  cablegram,  telegram,  telefacsimile or telex
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed,  sent or made by the proper  Person
or Persons and upon advice and statements of legal counsel  (including,  without
limitation,  counsel to any Credit  Party),  independent  accountants  and other
experts  selected  by the  Agent.  The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes unless an Assignment  shall have been

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filed with and  accepted  by the Agent.  The Agent shall be fully  justified  in
failing or refusing to take any action under the Loan Documents  unless it shall
first receive advice or  concurrence  of the Lenders or the Required  Lenders as
provided in this Agreement or 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 or continuing to take any such action. The Agent shall
in all cases be fully protected in acting,  or in refraining from acting,  under
the Loan  Documents in accordance  with a request of the Required  Lenders,  and
such request and any action taken or failure to act  pursuant  thereto  shall be
binding upon all the Lenders and all present and future holders of the Notes.

     11.5. Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Agent has received notice from a Lender,  the Authorized  Representative  or the
Borrower  referring  to this  Agreement,  describing  such  Default  or Event of
Default and stating that such notice is a "notice of default". In the event that
the Agent  receives such a notice,  the Agent shall promptly give notice thereof
to the Lenders. The Agent shall take such action with respect to such Default or
Event of  Default  as shall be  reasonably  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  Event of Default as it shall deem
advisable in the best interests of the Lenders.

     11.6. No Representations.  Each Lender expressly  acknowledges that neither
the Agent nor any of its affiliates has made any  representations  or warranties
to it and that no act by the Agent hereafter taken,  including any review of the
affairs of the Borrower or its  Subsidiaries,  shall be deemed to constitute any
representation  or  warranty  by the  Agent or BAS to any  Lender.  Each  Lender
represents to the Agent that it has, independently and without reliance upon the
Agent,  BAS or any other Lender,  and based on such documents and information as
it has deemed appropriate,  made its own appraisal of and investigation into the
financial  condition,  creditworthiness,  affairs,  status  and  nature  of  the
Borrower  and each other  Credit  Party and made its own  decision to enter into
this  Agreement.  Each Lender also represents  that it will,  independently  and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem  appropriate at the time,  continue to make its
own credit  analysis,  appraisals  and  decisions in taking or not taking action
under the Loan Documents and to make such investigation as it deems necessary to
inform  itself as to the status and  affairs,  financial  or  otherwise,  of the
Borrower  and any other  Credit  Party.  Except for  notices,  reports and other
documents  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 the  Borrower,  its  Subsidiaries  and any other Credit
Party which may come into the possession of the Agent or any of its affiliates.

     11.7. Indemnification. Each of the Lenders agrees to indemnify the Agent in
its capacity as such (to the extent not  reimbursed by the Borrower or any other
Credit Party and without  limiting any  obligations of the Borrower or any other
Credit Party to do so), ratably according to the respective  principal amount of
the Notes held by them (or, if no Notes are  outstanding,  ratably in accordance
with their respective Applicable Percentages as then in effect) from and against
any and all liabilities,  obligations,  losses (excluding any losses suffered by
the  Agent as a result  of the  Borrower's  failure  to pay any fee owing to the

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Agent),  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements of any kind or nature  whatsoever which may at any time (including
without  limitation  at any time  following the payment of the Notes) be imposed
on, incurred by or asserted  against the Agent in any way relating to or arising
out of any Loan Document or any other  document  contemplated  by or referred to
therein or the transactions  contemplated thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing;  provided that no
Lender  shall be liable  for the  payment of any  portion  of such  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct.  The agreements in this  subsection  shall survive the Maturity Date
and the termination of this Agreement.

     11.8.  Lender.  The Agent and their  affiliates  may make loans to,  accept
deposits from and generally engage in any kind of business with the Borrower and
any other Credit Party as though it were not the Agent  hereunder.  With respect
to its Loans made or renewed  by it and any Note  issued to it, the Agent  shall
have the same  rights and  powers  under  this  Agreement  as any Lender and may
exercise  the same as though it were not the Agent,  and the terms  "Lender" and
"Lenders" shall,  unless the context otherwise  indicates,  include the Agent in
its individual capacity.

     11.9. Resignation. If the Agent shall resign as Agent under this Agreement,
then the Required Lenders may appoint,  with the consent, so long as there shall
not have  occurred  and be  continuing  a Default  or Event of  Default,  of the
Borrower,  which consent shall not be unreasonably  withheld,  a successor Agent
for the Lenders,  which  successor  Agent shall be a commercial  bank  organized
under the laws of the  United  States or any state  thereof,  having a  combined
surplus  and capital of not less than  $500,000,000,  whereupon  such  successor
Agent shall succeed to the rights, powers and duties of the former Agent and the
obligations  of the former Agent shall be terminated  and canceled,  without any
other  or  further  act or deed on the part of such  former  Agent or any of the
parties  to  this  Agreement;   provided,   however,  that  the  former  Agent's
resignation  shall not  become  effective  until such  successor  Agent has been
appointed  and has  succeeded of record to all right,  title and interest in any
collateral held by the Agent;  provided,  further,  that if the Required Lenders
and, if applicable,  the Borrower cannot agree as to a successor Agent within 90
days after such  resignation,  the Agent shall  appoint a successor  Agent which
satisfies  the  criteria  set forth above in this  Section  11.9 for a successor
Agent and the parties hereto agree to execute  whatever  documents are necessary
to effect  such  action  under this  Agreement  or any other  document  executed
pursuant to this Agreement;  provided, however that in such event all provisions
of the Loan Documents, shall remain in full force and effect. After any retiring
Agent's resignation  hereunder as Agent, the provisions of this Article XI shall
inure to its benefit as to any actions  taken or omitted to be taken by it while
it was Agent under this Agreement.

     11.10.  Sharing of  Payments,  etc.  Each  Lender  agrees that if it shall,
through the  exercise  of a right of banker's  lien,  set-off,  counterclaim  or
otherwise,  obtain payment with respect to its Obligations  (other than pursuant
to Article V) which results in its receiving more than its pro rata share of the
aggregate  payments  with  respect  to all of the  Obligations  (other  than any
payment expressly  provided hereunder to be distributed on other than a pro rata
basis and payments  pursuant to Article V), then (a) such Lender shall be deemed

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to have  simultaneously  purchased  from  the  other  Lenders  a share  in their
Obligations  so that the amount of the  Obligations  held by each of the Lenders
shall be pro rata and (b) such other adjustments shall be made from time to time
as shall be equitable to insure that the Lenders share such payments ratably. If
all or any portion of any such excess  payment is thereafter  recovered from the
Lender which  received the same,  the  purchase  provided in this Section  11.10
shall be  rescinded  to the  extent  of such  recovery,  without  interest.  The
Borrower expressly  consents to the foregoing  arrangements and agrees that each
Lender so purchasing a portion of the other  Lenders'  Obligations  may exercise
all rights of payment  (including,  without  limitation,  all rights of set-off,
banker's lien or counterclaim)  with respect to such portion as fully as if such
Lender were the direct holder of such portion.  Notwithstanding  anything to the
contrary  in the  foregoing,  a  Lender's  election  to forgive a portion of the
Obligations owing to such Lender in lieu of cash exercise of the warrants issued
to such Lender by  Company,  and such  Lender's  receipt of shares of Company in
exchange for such forgiveness of Obligations,  shall not be subject this Section
11.10,  and shall not diminish or affect the Obligations  owing to other Lenders
in any way.

     11.11.  Fees. The Borrower  agrees to pay to the Agent,  for its individual
account,  an annual  Agent's fee as from time to time agreed to by the  Borrower
and Agent in writing.


                                   ARTICLE XII

                                  Miscellaneous

     12.1. Assignments and Participations. Each Lender may assign to one or more
Eligible  Assignees  all or a portion of its rights,  obligations  or rights and
obligations  under  this  Agreement  (including,  without  limitation,  all or a
portion of its Loans, its Note, and its Letter 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  $5,000,000  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 Note; 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  (except such  processing fee shall be
          waived in the case of a Lender's  assignment of its entire interest to
          its  Affiliate,  provided  such  assignee  qualifies  as  an  Eligible
          Assignee without need for Agent approval).

Upon execution,  delivery, and acceptance of such Assignment and Acceptance, the
assignee  thereunder  shall  be a  party  hereto  and,  to the  extent  of  such

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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.  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
     13.2 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 Letter 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,  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  Letter  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 Letter of Credit Commitment).

          (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.

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<PAGE>

          (f)  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), subject, however, to the provisions of Section 12.14 hereof.

          (g) The Borrower may not assign, nor shall it cause,  suffer or permit
     any other Credit Party to assign any rights,  powers, duties or obligations
     under this Agreement or the other Loan Documents  without the prior written
     consent of all the Lenders.

     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 delivery to such telefacsimile number for
such  party,  and the  receipt  of such  message  is  verified  by the  sender's
telefacsimile machine, 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 or  telefacsimile  number,  as appropriate,  set forth below or such
other address or number as such party shall specify by notice hereunder:

          (a) if to the Borrower:

              Headway Corporate Resources, Inc.
              317 Madison Avenue, 3rd Floor
              New York, New York  10017
              Attention: Ms. Philicia G.Levinson, Senior Vice President and
                         Chief Financial Officer
              Telephone:  (212) 672-6661
              Telefacsimile: (212) 672-6699

              with copies to:

              Salans Hertzfeld Heilbronn Christy & Viener
              Rockefeller Center
              620 Fifth Avenue
              New York, New York 10020-2457
              Attention: Richard B. Salomon, Esq.
              Telephone: (212) 632-5500
              Telefacsimile: (212) 632-5555

              and:

              Weil, Gotshal & Manges LLP
              767 Fifth Avenue
              New York, NY  10153-0119
              Attn: Warren Buhle
              Telephone: (212) 310-8000
              Telefacsimile: (212) 310-8007 (fax)

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<PAGE>

          (b) if to the Agent or the Issuing Bank:

              Bank of America, N.A.
              Bank of America Agency Services
              901 Main St.
              Dallas, Texas 75202-3714
              Attention: Diana Lopez
              Telephone: (214) 209-2138
              Telefacsimile: (214) 209-2515

              with copies to:

              Banc of America Strategic Solutions, Inc.
              1101 Wootton Parkway
              Third Floor
              Rockville, Maryland 20852-1059
              Attention: Michael Heredia
              Telephone: (301) 517-3234
              Telefacsimile: (301) 517-3236

              and:
              O'Melveny & Myers LLP
              153 East 53rd Street, 54th Floor
              New York, New York  10022-4611
              Attention: Sandeep Qusba and David Kitchen
              Telephone: (212) 326-2117
              Telefacsimile: (213) 326-2061

          (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 Credit Party:

          At the  address  set forth on the  signature  page of the  Guaranty or
     Security Instrument executed by such Credit Party, as the case may be.

     12.3. Setoff. The Borrower agrees that the Agent and each Lender shall have
a lien for all the  Obligations  of the  Borrower  upon all  deposits or deposit
accounts,  of any kind,  or any  interest in any  deposits  or deposit  accounts
thereof,  now or hereafter  pledged,  mortgaged,  transferred or assigned to the
Agent or such Lender or otherwise in the  possession  or control of the Agent or
such  Lender  (other  than for  safekeeping)  for any purpose for the account or
benefit of the Borrower and including  any balance of any deposit  account or of
any credit of the Borrower  with the Agent or such Lender,  whether now existing
or hereafter  established.  The Borrower  hereby  authorizes  the Agent and each
Lender from and after the occurrence of an Event of Default at any time or times
with or without  prior notice to apply such balances or any part thereof to such
of the  Obligations  of the  Borrower to the  Lenders  then past due and in such
amounts  as  they  may  elect,   and  whether  or  not  the  collateral  or  the

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<PAGE>

responsibility of other Persons  primarily,  secondarily or otherwise liable may
be deemed  adequate.  For the purposes of this  paragraph,  all  remittances and
property  shall be deemed to be in the possession of the Agent or such Lender as
soon as the  same may be put in  transit  to it by mail or  carrier  or by other
bailee.

     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.  The obligations of the Borrower under Sections  3.2(g),  8.15,
12.5 and 12.9 shall  survive  repayment of all  Obligations,  occurrence  of the
Maturity Date and expiration or termination of this Agreement.  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 (a) to pay or reimburse the Agent for
all its reasonable  out-of-pocket costs and expenses incurred in connection with
the preparation,  negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expenses and
travel expenses  relating to closing),  and the consummation of the transactions
contemplated thereby, including the reasonable fees and disbursements of counsel
to the Agent,  (b) to pay or reimburse the Agent and each of the Lenders for all
their costs and expenses incurred in connection with the enforcement, workout or
preservation  of any rights under the Loan  Documents,  including the reasonable
fees and  disbursements  of their  separate  counsel or  consultants or auditors
engaged by Agent, and any payments in  indemnification  or otherwise  payable by
the  Lenders  to the  Agent  pursuant  to the  Loan  Documents,  and (c) to pay,
indemnify and hold the Agent and the Lenders harmless from any and all recording
and filing fees and any and all  liabilities  with respect to, or resulting from
any  failure to pay or delay in  paying,  documentary,  stamp,  excise and other
similar  taxes,  if any,  which may be  payable or  determined  to be payable in
connection  with the  execution  and delivery of any of the Loan  Documents,  or
consummation of any amendment,  supplement or modification  of, or any waiver or
consent under or in respect of, any Loan Document.

     12.6. Amendments. No amendment,  modification or waiver of any provision of
any Loan  Document and no consent by the Lenders to any  departure  therefrom by
the Borrower or any other Credit Party shall be effective unless such amendment,
modification  or waiver shall be in writing and signed by the Agent,  shall have
been approved by the Required  Lenders  through their written  consent,  and the
same shall then be effective  only for the period and on the  conditions and for
the  specific  instances  and  purposes  specified  in such  writing;  provided,
however, that, no such amendment, modification or waiver

          (a) which  changes,  extends or waives any  provision  of Section 2.6,
     Section 11.9 or this Section 12.6 or the due date of any scheduled  payment
     of  interest,  fees or  principal,  which  reduces  the rate of interest or
     amount of fees or principal  payable on any  Obligation,  which changes the

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     definition of "Required Lenders", which permits an assignment by any Credit
     Party  of its  Obligations  under  any Loan  Document,  which  reduces  the
     required consent of Lenders provided hereunder,  which increases or extends
     the  Letter  of  Credit  Commitment  of any  Lender,  or which  waives  any
     condition to the making of any Loan,  shall be effective  unless in writing
     and signed by each of the Lenders;

          (b) which  releases any material  amount of Collateral or the guaranty
     obligation of any Guarantor  under any Guaranty (other than pursuant to the
     express terms hereof or thereof) shall be effective unless with the written
     consent of each of the 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,  the Agent,  BAS 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 and expressly survive the termination
hereof).  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.

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<PAGE>

     12.9.  Indemnification;  Limitation of Liability.  In  consideration of the
execution  and  delivery of this  Agreement by the Agent and each Lender and the
extension of credit under the Loans, the Borrower hereby indemnifies, exonerates
and  holds  the  Agent,  BAS  and  each  Lender  and  each of  their  respective
affiliates,  officers, directors,  employees, agents and advisors (collectively,
the  "Indemnified  Parties")  free and  harmless  from and  against  any and all
claims,  actions,  causes of  action,  suits,  losses,  costs,  liabilities  and
damages, and expenses incurred in connection therewith  (irrespective of whether
any such  Indemnified  Party is a party to the action for which  indemnification
hereunder is sought),  including  reasonable  attorneys' fees and  disbursements
(collectively,  the  "Indemnified  Liabilities")  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, or in connection  with,  the  execution,
delivery,  enforcement,  performance or administration of this Agreement and the
other Loan Documents,  or any transaction financed or to be financed in whole or
in part,  directly  or  indirectly,  with the  proceeds of any Loan or Letter of
Credit,  whether or not such action is brought  against the Agent or any Lender,
the shareholders or creditors of the Agent or any Lender or an Indemnified Party
or an  Indemnified  Party is  otherwise  a party  thereto and whether or not the
transactions  contemplated  herein are  consummated,  except to the extent  such
claim, damage,  loss,  liability or expense is found in a final,  non-appealable
judgment  by a court  of  competent  jurisdiction  to have  resulted  from  such
Indemnified  Party's gross negligence or willful  misconduct,  and if and to the
extent that the foregoing  undertaking may be unenforceable for any reason,  the
Borrower  hereby  agrees to make the  maximum  contribution  to the  payment and
satisfaction of each of the Indemnified  Liabilities  which is permissible under
applicable  law. The Borrower  agrees that no  Indemnified  Party shall have any
liability (whether direct or indirect,  in contract or tort or otherwise) to it,
any of its Subsidiaries,  any Credit Party, or any security holders or creditors
thereof  arising  out of,  related  to or in  connection  with the  transactions
contemplated  herein,  except to the extent  that such  liability  is found in a
final  non-appealable  judgment  by a court of  competent  jurisdiction  to have
resulted from such Indemnified  Party's gross negligence or willful  misconduct;
provided,  however,  in no event  shall  any  Indemnified  Party be  liable  for
consequential, indirect or special, as opposed to direct, damages.

     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

                                       74
<PAGE>

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  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 Loan  Facility  or  Letter of  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 of 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. Termination of Prior Credit Facilities. The parties hereto which are
also parties to any Existing Debt acknowledge and agree that as of the Effective
Date such  Existing Debt and all  commitments  and  obligations  of each of such
Lenders  party  thereto and the Borrower  and its  Subsidiaries  thereunder  are
terminated,  except for such terms and  provisions  thereof which by their terms
survive any such termination.

     12.16. Acknowledgements. The Borrower hereby acknowledges that:

                                       75
<PAGE>

          (a) it has been advised by counsel in the  negotiation,  execution and
     delivery of this Agreement and the other Loan Documents;

          (b)  neither the Agent nor any Lender has any  fiduciary  relationship
     with or fiduciary duty to the Borrower arising out of or in connection with
     this  Agreement or any of the other Loan  Documents,  and the  relationship
     between the Agent and the Lenders,  on the one hand,  and the Borrower,  on
     the other  hand,  in  connection  herewith or  therewith  is solely that of
     debtor and creditor; and

          (c) no joint venture is created  hereby or by the other Loan Documents
     or otherwise exists by virtue of the transactions contemplated hereby among
     the Lenders or among the Borrower and the Lenders or among the Borrower and
     the Agent.

     12.17. 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 NEW YORK APPLICABLE TO CONTRACTS
     EXECUTED,  AND TO BE FULLY  PERFORMED,  IN SUCH STATE  NOTWITHSTANDING  ITS
     EXECUTION AND DELIVERY OUTSIDE SUCH STATE.

          (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 NEW YORK,  STATE OF NEW
     YORK,  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  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 HEREIN,  OR BY ANY OTHER METHOD OF SERVICE  PROVIDED FOR UNDER
     THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.

                                       76
<PAGE>

          (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 WITH THE FOREGOING, 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 WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
     SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.

     12.18. Amendment and Restatement--Acknowledgement and Consents.

          (a) The Security  Instruments and the Guaranties to which the Borrower
     and the other Credit Parties are party are herein  referred to collectively
     as the "Credit Support  Documents".  Each Credit Party hereby  acknowledges
     that it has reviewed the terms and  provisions  of the Loan  Documents  and
     this  Agreement.  Each such Credit Party hereby  confirms  that each Credit
     Support  Document  to  which  it is a  party  or  otherwise  bound  and all
     Collateral  encumbered  thereby will continue to guaranty or secure, as the
     case may be, to the fullest extent  possible the payment and performance of
     all "Guarantors'  Obligations" and "Secured  Obligations" and "Obligations"
     as the  case  may be (in  each  case  as  such  terms  are  defined  in the
     applicable  Credit  Support  Document),  including  without  limitation the
     payment and performance of all such  "Guarantors'  Obligations" or "Secured
     Obligations" or "Obligations", as the case may be, whether now or hereafter
     existing under or in respect of the Loan Documents.  Each such Credit Party
     acknowledges and agrees that each of the Credit Support  Documents to which
     it is a party or  otherwise  bound shall  continue in full force and effect
     and that all of its obligations  thereunder  shall be valid and enforceable
     and shall not be impaired or limited by the execution or  effectiveness  of
     this Agreement or the performance hereof.

          (b) The Credit Parties hereby acknowledge and reaffirm that, as of the
     date hereof and after giving effect to this Agreement and the  transactions

                                       77
<PAGE>

     contemplated hereby (including,  without  limitation,  the repayment of the
     Loans pursuant to Section 3(d) hereof),  the aggregate  principal amount of
     the  Obligations  owed to the  Lenders is  $72,000,000,  plus  accrued  and
     accruing  interest,  fees, costs and expenses due under the Loan Documents,
     and the Letter of Credit  Outstandings  is  $1,687,000.  The Credit Parties
     acknowledge and reaffirm that all Obligations  under the Loan Documents are
     payable by the Borrower in  accordance  with this  Agreement  and the other
     Loan  Documents and are jointly and severally  payable by the Guarantors in
     accordance  with the  Guaranties  and the other  Loan  Documents,  and each
     Credit Party unconditionally and irrevocably waives any claim or defense in
     respect of the Obligations,  including,  without  limitation,  any claim or
     defense based on any right of setoff or  counterclaim  and hereby  ratifies
     and affirms each and every waiver of claims and defenses  granted under the
     Loan Documents from time to time.

          (c) Each Credit  Party  hereby  reaffirms  and  acknowledges  (i) that
     pursuant  to the  Security  Instruments,  the Agent (for the benefit of the
     Lenders) has an enforceable, valid and perfected first priority Lien on and
     security interest in the Collateral, subject only to valid, enforceable and
     duly perfected Liens  permitted under Section  9.3(b)-(h) of this Agreement
     and (ii) the continuing  validity and  effectiveness of the Agent's and the
     Lenders'  rights under the Loan  Documents and applicable  law,  including,
     without  limitation,  the right of the Agent to recover any and all amounts
     owed to the Lenders, free of set-off or counterclaim,  by foreclosure on or
     redemption or other  disposition of the  Collateral.  Without  limiting the
     generality of the  foregoing,  the Credit  Parties  represent,  warrant and
     covenant  that (i) all  cash  deposited  in or  otherwise  credited  to the
     Deposit  Accounts as of the date hereof and at all times  hereafter are and
     will be cash  proceeds  (as such term is defined in the Uniform  Commercial
     Code)  resulting from the sale,  lease,  license,  collection,  exchange or
     other disposition or distribution of the Collateral and that the Agent (for
     the ratable benefit of the Lenders) has an enforceable, valid and perfected
     first priority Lien on and security  interest in all such cash proceeds and
     (ii) the cash  proceeds  referred to in the  preceding  clause (i) that are
     from time to time  deposited  in or  otherwise  maintained  in the  Deposit
     Accounts are not and shall not be commingled  with any other money,  checks
     or other funds that are not proceeds of Collateral or otherwise  subject to
     the Agent's first priority Liens.

          (d) Each Credit  Party hereby  ratifies  and confirms  that the terms,
     provisions  and  conditions of this  Agreement and the other Loan Documents
     (as amended  hereby) remain in full force and effect and this Agreement and
     each other Loan Document is enforceable in accordance with its terms.

          (e) Each Guarantor  acknowledges  and agrees that (i)  notwithstanding
     the conditions to effectiveness set forth in this Agreement, such Guarantor
     is not required by the terms of this  Agreement or any other Loan  Document
     to  consent  to the  terms  of this  Agreement  and  (ii)  nothing  in this
     Agreement or any other Loan Document shall be deemed to require the consent
     of such  Guarantor  to any  future  amendments  to or  modifications  of or
     standstill agreements with respect to this Agreement.

     12.19.  Release.  The Borrower and each other  Credit  Party,  on behalf of
itself,  and each of its Subsidiaries  (collectively,  the  "Releasors")  hereby

                                       78
<PAGE>

releases,  remises,  acquits and forever  discharges the Agent,  each Lender and
each   Issuing   Bank   and  each  of  their   respective   employees,   agents,
representatives,   consultants,   attorneys,  fiduciaries,  servants,  officers,
directors,   partners,   predecessors,   successors   and  assigns,   subsidiary
corporations, parent corporations, related corporate divisions, participants and
assigns (all of the foregoing  hereinafter called the "Released Parties"),  from
any and all actions and causes of action, judgments,  executions,  suits, debts,
claims, demands, liabilities, obligations, setoffs, recoupments,  counterclaims,
defenses,  damages and  expenses of any and every  character,  known or unknown,
suspected  or  unsuspected,  direct  and/or  indirect,  at law or in equity,  of
whatsoever  kind or nature,  whether  heretofore  or hereafter  arising,  for or
because of any matter or things  done,  omitted or suffered to be done by any of
the Released Parties prior to and including the date of execution hereof, and in
any way directly or  indirectly  arising out of or in any way  connected to this
Amendment, the Original Credit Agreement, any of the other Loan Documents or the
administration  or  enforcement  of any of such  documents (all of the foregoing
hereinafter called the "Released Matters").  Each Releasor acknowledges that the
agreements in this Section 12.19 are intended to be in full  satisfaction of all
or any alleged injuries or damages suffered or incurred by such Releasor arising
in connection with the Released  Matters and constitute a complete waiver of any
right of setoff or recoupment,  counterclaim or defense of any nature whatsoever
which arose prior to the date of this Agreement to payment or performance of the
Obligations.  Each Releasor  represents and warrants that it has no knowledge of
any  claim by it  against  the  Released  Parties  or of any  facts,  or acts or
omissions of the Released Parties which on the date hereof would be the basis of
a claim by the  Releasors  against the  Released  Parties  which is not released
hereby.  Each  Releasor  represents  and warrants  that it has not  purported to
transfer, assign, pledge or otherwise convey any of its right, title or interest
in any  Released  Matter to any other  person or entity  and that the  foregoing
constitutes a full and complete release of all Released Matters.  Releasors have
granted this release freely, and voluntarily and without duress.

     12.20. Amendment of Subordination Agreements.  Borrower, Agent, Lenders and
each Credit Party hereby acknowledge and agree that each Subordination Agreement
in effect as of the date hereof is hereby  amended by deleting the definition of
"Standstill  Period" contained therein and substituting  therefor the following:
"Standstill  Period"  means  the  period  of time  from the date  hereof  to and
including the 91st day following the Maturity Date."

     12.21. Third Party  Beneficiaries.  No Person other than the parties hereto
and with  respect  to Section  12.18  hereof,  the  Released  Parties,  shall be
entitled to claim any right or benefit under this Agreement,  including, without
limitation,  the status of third-party beneficiary of this Agreement and nothing
in this  Agreement,  express or  implied,  is  intended to confer upon any other
Person any rights or  remedies  of any nature  whatsoever  under or by reason of
this Agreement







                         [SIGNATURES ON FOLLOWING PAGES]




                                       79
<PAGE>



     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.


                              HEADWAY CORPORATE RESOURCES, INC.


                              By:   /s/


                              BANK OF AMERICA, N.A.



                              By:   /s/

                              Lending Office:

                                    Banc of America Strategic Solutions, Inc.
                                    1101 Wootton Parkway
                                    Third Floor
                                    Rockville, Maryland 20852-1059
                                    Attention: Michael Heredia
                                    Telephone: (301) 517-3234
                                    Telefacsimile: (301) 517-3236

                           Wire Transfer Instructions:
                                    Bank of America, N.A.
                                    ABA# 053000196
                                    Account No.: 1366212250600
                                    Reference: Headway Corporate Resources, Inc.
                                    Attention: Corporate Credit Support

                              FLEET NATIONAL BANK


                              /s/

                              Lending Office:
                                    Fleet National Bank
                                    Managed Assets Division
                                    777 Main Street
                                    Mailcode CTEH40221A
                                    Hartford, Connecticut 06115
                                    Attention: Chris Miller
                                    Telephone: (860) 986-1563
                                    Telefacimile: (860) 986-2435

                                       80
<PAGE>

                              Wire Transfer Instructions:
                                    Fleet National Bank
                                    ABA# 021300019
                                    Account No.: GL# 1510351-03102
                                    Reference:  Headway
                                    Attention:

                         CITIZENS BANK OF MASSACHUSETTS


                              /s/

                              Lending Office:
                                    Citizens Bank of Massachusetts
                                    28 State Street, 15th Floor
                                    Boston, Massachusetts 02109
                                    Attention:  Steve Petrarca
                                    Telephone:  (617) 994-7139
                                    Telefacsimile: (617) 263-0439

                              Wire Transfer Instructions:
                                    ABA#
                                    Account No.:
                                    Reference:
                                    Attention:

                         TRANSAMERICA BUSINESS CAPITAL CORPORATION


                              /s/

                              Lending Office:
                                    Transamerica Business Capital Corporation
                                    8750 W. Bryn Mawr, Suite 720
                                    Chicago, Illinois 60631
                                    Attention:  Ari Kaplan
                                    Telephone: (773) 864-3978
                                    Telefacsimile: (773) 380-6179

                              Wire Transfer Instructions:
                                    First National Bank of Chicago
                                    1 First National Plaza
                                    Chicago, Illinois 60670
                                    ABA# 071000013
                                    Account No.: 52-95416
                                    Reference:  Headway
                                    Attention:  Maria Copot

                                       81
<PAGE>

                         WACHOVIA BANK, NATIONAL ASSOCIATION


                              /s/

                              Lending Office:
                                    301 South College Street, CP-6
                                    Charlotte, North Carolina 28288-0760
                                    Attention:  Joel Thomas
                                    Telephone:  (704) 383-4281
                                    Telefacsimile: (704) 383-6249

                              Wire Transfer Instructions:

                                    -----------------------
                                    -----------------------
                                    -----------------------
                                    ABA# __________________
                                    Account No.:  _________
                                    Reference: ____________
                                    Attention: ____________


                              BANK OF AMERICA, N.A., as Agent for the Lenders


                              By:
                                    -----------------------------------------
                              Name:
                                    -----------------------------------------
                              Title:
                                    -----------------------------------------


                                       82
<PAGE>


                                    EXHIBIT A

                             Applicable Percentages



                                  Term Loan             Applicable Commitment
           Lender                   Amount                   Percentages
      ---------------------       -----------           ---------------------

      Bank of America, N.A.       $18,000,000                   25%

      Fleet National Bank         $25,200,000                   35%

      Transamerica Business
      Capital Corporation         $10,800,000                   15%

      Citizens Bank of
      Massachusetts               $10,800,000                   15%

      Wachovia Bank,
      National Association        $ 7,200,000                   10%


                                      A-1
<PAGE>

                                    EXHIBIT B

                        Form of Assignment and Acceptance

                              DATED _________,____

     Reference is made to the Amended and Restated Credit  Agreement dated as of
April 17, 2002 (the  "Agreement")  among HEADWAY  CORPORATE  RESOURCES,  INC., a
Delaware   corporation  (the  "Borrower"),   the  Lenders  (as  defined  in  the
Agreement),  BANK OF AMERICA,  N.A.,  (successor  in  interest  to  NationsBank,
National  Association),  as Agent  for the  Lenders.  Unless  otherwise  defined
herein, terms defined in the Agreement are used herein with the same meanings.

     (the "Assignor") and __________________ (the "Assignee")agree as follows:

     1. The Assignor hereby sells and assigns to the Assignee,  and the Assignee
hereby  purchases and assumes from the Assignor,  WITHOUT  RECOURSE,  a _______%
interest  in and to all of the  Assignor's  rights  and  obligations  under  the
Agreement  as of the  Effective  Date (as  defined  below),  including,  without
limitation,  such percentage  interest in the Loans owing to the Assignor on the
Effective Date, and evidenced by the Note held by the Assignor.

     2. The Assignor (i)  represents  and warrants  that, as of the date hereof,
(A) the aggregate  principal  amount of Loans owing to it (without giving effect
to the assignments  thereof which have not yet become  effective) is $__________
under a Note dated April 17, 2002 in the principal  amount of $_________ and (B)
the aggregate  principal amount of the  Participations  purchased by it (without
giving effect to the assignments thereof which have not yet become effective) is
$_________;  (ii)  represents  and warrants that it is the legal and  beneficial
owner of the interest  being  assigned by it hereunder and that such interest is
free and clear of any adverse claim;  (iii) makes no  representation or warranty
and assumes no  responsibility  with respect to any  statements,  warranties  or
representations  made in or in connection  with the Agreement or any of the Loan
Documents or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency  or value of the Agreement or any of the Loan Documents or any other
instrument or document furnished pursuant thereto;  (iv) makes no representation
or  warranty  and  assumes  no  responsibility  with  respect  to the  financial
condition  of the  Borrower  or any other  Credit  Party or the  performance  or
observance  by the Borrower or any other Credit Party of any of its  obligations
under any of the Loan  Documents or any other  instrument or document  furnished
pursuant thereto (v) represents and warrants that it has the power and authority
to execute and deliver this  Assignment,  that the execution and delivery hereof
has been duly  authorized,  and that this  Assignment has been duly executed and
(vi) attaches hereto the Note referred to in paragraph 1 above and requests that
the Agent  exchange such Notes for  replacement  Notes as follows:  a Note dated
_____________, 200_ in the principal amount of $________________, payable to the
order of the Assignor, and a Note, dated ____________________________  200__, in
the principal amount of $_________________.

     3. The Assignee (i) confirms that it has received a copy of the  Agreement,
together  with  copies of the  financial  statements  referred to in Section 8.1

                                      B-1
<PAGE>

thereof and such other documents and information as it has deemed appropriate to
make its own credit  analysis  and  decision to enter into this  Assignment  and
Acceptance;  (ii) agrees that it will,  independently  and without reliance upon
the Agent,  the  Assignor,  or any other Lender and based on such  documents and
information as it shall deem  appropriate at the time,  continue to make its own
credit  decisions  in taking or not taking  action under the  Assignment;  (iii)
appoints  and  authorizes  the Agent to take such  actions  on its behalf and to
exercise  such powers under the Loan  Documents as are delegated to the Agent by
the terms  thereof,  together  with such  powers  as are  reasonably  incidental
thereto;  (iv) will  perform  all of the  obligations  which by the terms of the
Agreement  are  required  to be  performed  by  the  Lender,  including  without
limitation  Section 12.14, (v) represents and warrants that it has the power and
authority to execute and deliver this Agreement, that the execution and delivery
hereof has been duly authorized, and that this Assignment has been duly executed
and (vi)  specifies as its address for notices the office set forth  beneath its
name on the signature pages hereof.

     4.  The  effective  date  for  this  Assignment  and  Acceptance  shall  be
_____________________________ (the "Effective Date"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Agent for acceptance
and recording by the Agent.

     5. Upon such  acceptance and recording,  as of the Effective  Date, (i) the
Assignee shall be a party to the Agreement  and, to the extent  provided in this
Assignment  and  Acceptance,  have  the  rights  and  obligations  of  a  Lender
thereunder  and under the Loan  Documents  and (ii) the Assignor  shall,  to the
extent provided in this Assignment and Acceptance,  relinquish its rights and be
released from its obligations under the Agreement and the other Loan Documents.

     6. Upon such  acceptance and recording,  from and after the Effective Date,
the Agent shall make all payments  under the  Agreement  and Notes in respect of
the interest assigned hereby  (including,  without  limitation,  all payments of
principal,  interest,  commitment  fees and letter of credit  fees with  respect
thereto) to the Assignee.  The Assignor and Assignee shall make all  appropriate
adjustments  in payments  under the Agreement and the Notes for periods prior to
the Effective Date directly between themselves.

     7. This  Assignment  and  Acceptance  shall be governed by and construed in
accordance with, the laws of the State of New York.

                  [Remainder of page intentionally left blank]

                                      B-2
<PAGE>



                                    [NAME OF ASSIGNOR]


                                    By:
                                       --------------------------------------
                                          Name:
                                               ------------------------------
                                          Title:
                                                -----------------------------

                                 Notice Address:

                                    After the Effective Date
                                    Outstanding Loans:            $___________
                                    Outstanding LC Participations:$___________

                                    [NAME OF ASSIGNEE]

                                    By:
                                       --------------------------------------
                                          Name:
                                               ------------------------------
                                          Title:
                                                -----------------------------

                                    Notice Address/Lending Office

                                    Wire transfer Instructions:



                                    After the Effective Date
                                    Outstanding Loans:            $___________
                                    Outstanding LC Participations:$___________


                                      B-3
<PAGE>


                                    Accepted  and  consented  to this  ____ day
                                    of  _______, ______

                                    BANK OF AMERICA, N.A., as Agent


                                    By:
                                       --------------------------------------
                                          Name:
                                               ------------------------------
                                          Title:
                                                -----------------------------



                                      B-4
<PAGE>


                                     EXHIBIT C

       Notice of Appointment (or Revocation) of Authorized Representative

     Reference is hereby made to the Amended and Restated Credit Agreement dated
as of April 17, 2002 (the "Agreement") among HEADWAY CORPORATE RESOURCES,  INC.,
a  Delaware  corporation  (the  "Borrower"),  the  Lenders  (as  defined  in the
Agreement),  and BANK OF AMERICA,  N.A.,  (successor in interest to NationsBank,
National Association),  as Agent for the Lenders. Capitalized terms used but not
defined  herein  shall have the  respective  meanings  therefor set forth in the
Agreement.

     The Borrower  hereby  nominates,  constitutes  and appoints each individual
named below as an Authorized Representative under the Loan Documents, and hereby
represents and warrants that (i) set forth opposite each such  individual's name
is a true and  correct  statement  of such  individual's  office  (to which such
individual has been duly elected or appointed),  a genuine specimen signature of
such  individual  and an address  for the  giving of notice,  and (ii) each such
individual  has  been  duly  authorized  by the  Borrower  to act as  Authorized
Representative under the Loan Documents:

      Name and Address            Office             Specimen Signature

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

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

Borrower  hereby revokes  (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Representative.

      This the ___ day of __________________, ___.

                                      C-1
<PAGE>


                                     EXHIBIT D

                     Form of Reaffirmation of Loan Documents

                         REAFFIRMATION OF LOAN DOCUMENTS


     This Reaffirmation of Loan Documents  ("Agreement"),  made and entered into
as of April 17,  2002,  made by HEADWAY  CORPORATE  RESOURCES,  INC., a Delaware
corporation  having  its  principal  place of  business  in New  York,  New York
("Borrower") and THE UNDERSIGNED  GUARANTORS  ("Guarantors")  for the benefit of
each  financial  institution  executing and  delivering a signature  page to the
Amended  Credit  Agreement  and  each  other  financial  institution  which  may
hereafter  execute and deliver an instrument  of assignment  with respect to the
Amended Credit Agreement,  the "Lenders"),  and BANK OF AMERICA, N.A. (successor
in  interest  to  NationsBank,   National   Association),   a  national  banking
association  organized and existing under the laws of the United States,  in its
capacity as a Lender,  as the Issuing  Bank and in its capacity as agent for the
Lenders (in such capacity, the "Agent");

                                   BACKGROUND

     A. The Borrower,  Agent and the Lenders are parties to that certain  Credit
Agreement dated as of March 19, 1998, by and among  Borrower,  Lenders and Agent
(the "Original  Credit  Agreement"),  pursuant to which the Lenders extended the
credit  facilities set forth in the Original Credit  Agreement to Borrower.  The
Borrower,  Agent and the Lenders have executed  concurrently herewith an Amended
and Restated Credit Agreement (the "Amended Credit Agreement"), which amends and
restates the Original Credit Agreement. Capitalized terms used in this Agreement
without definition have the meanings defined in the Amended Credit Agreement.

     B.  Execution  and  delivery  of this  Agreement  by the  Borrower  and the
Guarantors ("Credit Parties") is a condition to the effectiveness of the Amended
Credit Agreement.

     NOW,  THEREFORE,  intending to be legally bound  hereby,  and to induce the
Lenders to execute the Amended  Credit  Agreement,  the Borrower and  Guarantors
acknowledge, confirm, reaffirm and agree as follows:

     1. Acknowledgment, Confirmation and Reaffirmation. Each Credit Party hereby
ratifies,  confirms  and  reaffirms,  without  condition,  all of the  terms and
conditions  of,  and all of its  obligations  under,  the  Guaranties,  Security
Instruments and other Loan Documents to which it is a party,  for the purpose of
guarantying,  securing, and supporting the Obligations under the Original Credit
Agreement as amended by the Amended Credit  Agreement.  Each Credit Party hereby
waives any  defenses,  defaults,  set-offs  or  counterclaims  available  to it,
whether known or unknown, against enforcement of any such Loan Documents.

     2. Further  Reaffirmation  of Security  Interest.  Each Credit Party hereby
confirms and  represents  to Agent and its Lenders that each  security  interest
granted in the Loan Documents  creates a valid and continuing  security interest

                                      D-1
<PAGE>

in the Collateral  described  therein in favor of Agent on behalf of the Lenders
and that each such  security  interest is properly  perfected.  For avoidance of
doubt,  each Credit Party hereby  reaffirms its grant of, and does hereby grant,
all security interests purported to be created under the Loan Documents to which
it is a party  for  purposes  of  securing  the  prompt  and  full  payment  and
performance of all Obligations under the Original Credit Agreement as amended by
the Amended Credit Agreement, to the same extent and manner as if the provisions
of the Loan Documents  granting such security interests were set forth at length
herein  mutatis  mutandis.  Each  Guarantor  hereby  agrees to take such further
action as may be  reasonably  requested  by Agent  from time to time to  further
confirm, create or perfect such security interests.

     3. The Borrower and each other Credit Party, on behalf of itself,  and each
of its Subsidiaries  (collectively,  the "Releasors") hereby releases,  remises,
acquits and forever  discharges the Agent, each Lender and each Issuing Bank and
each  of  their  respective  employees,  agents,  representatives,  consultants,
attorneys,  fiduciaries,  servants, officers, directors, partners, predecessors,
successors and assigns,  subsidiary corporations,  parent corporations,  related
corporate divisions,  participants and assigns (all of the foregoing hereinafter
called the "Released  Parties"),  from any and all actions and causes of action,
judgments, executions, suits, debts, claims, demands, liabilities,  obligations,
setoffs, recoupments,  counterclaims,  defenses, damages and expenses of any and
every  character,  known or unknown,  suspected or  unsuspected,  direct  and/or
indirect, at law or in equity, of whatsoever kind or nature,  whether heretofore
or hereafter  arising,  for or because of any matter or things done,  omitted or
suffered to be done by any of the Released  Parties  prior to and  including the
date of execution hereof,  and in any way directly or indirectly  arising out of
or in any way connected to this Amendment, the Original Credit Agreement, any of
the other Loan  Documents or the  administration  or  enforcement of any of such
documents (all of the foregoing hereinafter called the "Released Matters"). Each
Releasor  acknowledges  that the agreements in this Section 3 are intended to be
in full  satisfaction  of all or any  alleged  injuries  or damages  suffered or
incurred by such Releasor  arising in connection  with the Released  Matters and
constitute a complete waiver of any right of setoff or recoupment,  counterclaim
or  defense  of any  nature  whatsoever  which  arose  prior to the date of this
Agreement to payment or performance of the Obligations. Each Releasor represents
and  warrants  that it has no  knowledge of any claim by it against the Released
Parties or of any facts,  or acts or omissions of the Released  Parties which on
the date  hereof  would be the  basis of a claim by the  Releasors  against  the
Released  Parties which is not released  hereby.  Each Releasor  represents  and
warrants  that it has not  purported  to transfer,  assign,  pledge or otherwise
convey any of its right,  title or interest in any Released  Matter to any other
person or entity and that the foregoing  constitutes a full and complete release
of all  Released  Matters.  Releasors  have granted  this  release  freely,  and
voluntarily and without duress.

     4. Miscellaneous.

          (a) This  Acknowledgment  shall be binding  upon the  Credit  Parties,
     their successors, assigns and other legal representatives,  and shall inure
     to the benefit of the Lenders, their successors and assigns.

          (b) Each  Credit  Party  acknowledges  that  this  Agreement  is being
     delivered  to  Lender as an  inducement  for the  Lender to enter  into the
     Amended Credit Agreement, and the Lenders may rely upon this Agreement.

                                      D-2
<PAGE>


          (c) This  Acknowledgment  shall be construed under and governed by the
     laws of New York.





                  [Remainder of page intentionally left blank]


                                      D-3
<PAGE>


     IN WITNESS WHEREOF,  the parties hereto have executed this Reaffirmation of
Guaranties as of the day and year first above written.


                        HEADWAY CORPORATE RESOURCES, INC.


                        By:
                               -----------------------------------------
                        Name:
                               -----------------------------------------
                        Title:
                               -----------------------------------------



                        BANK OF AMERICA, N.A.


                        By:
                               -----------------------------------------
                        Name:
                               -----------------------------------------
                        Title:
                               -----------------------------------------



                        BANK OF AMERICA, N.A., as Agent for the Lenders


                        By:
                               -----------------------------------------
                        Name:
                               -----------------------------------------
                        Title:
                               -----------------------------------------



                                      D-4
<PAGE>


                        GUARANTORS:
                        WHITNEY PARTNERS, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES, INC.
                        CERTIFIED TECHNICAL STAFFING, INC.
                        CORPORATE STAFF ADMINISTRATION, INC.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF NEW YORK, INC.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF NORTH CAROLINA, INC.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF CONNECTICUT, INC.
                        ASA PERSONNEL SERVICES, L.L.C.
                        HCSS WEST, INC.
                        HCSS HOLDINGS, INC.
                        HCSS EAST, INC.
                        CHENEY ASSOCIATES, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF FLORIDA, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF NEW JERSEY, L.L.C.
                        CARLYLE GROUP, LTD.
                        HEADWAY TECHNOLOGY RESOURCES
                           OF TEXAS, L.L.C.
                        HEADWAY TECHNOLOGY RESOURCES
                           INTERNATIONAL, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF CALIFORNIA ONE, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF CALIFORNIA TWO, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF CALIFORNIA THREE, L.L.C.


                        By:
                           ---------------------------------------------
                        Name:
                             -------------------------------------------
                        Title:
                              ------------------------------------------


                                      D-5

<PAGE>


                                    EXHIBIT E

                                  Form of Note

                                 Promissory Note

$______________                                            New York, New York

                                                              ______ __, 200_

     FOR  VALUE  RECEIVED,   HEADWAY  CORPORATE  RESOURCES,   INC.,  a  Delaware
corporation having its principal place of business located in New York, New York
(the    "Borrower"),    hereby    promises    to   pay   to   the    order    of
__________________________________________  (the  "Lender"),  in its  individual
capacity,  at the office of BANK OF  AMERICA,  N.A.,  (successor  in interest to
NationsBank,  National  Association),  as agent for the Lenders  (the  "Agent"),
located  at  __________________________,  _____________________________________,
Dallas,  Texas  ______  (or at such  other  place or  places  as the  Agent  may
designate in writing) at the times set forth in the Amended and Restated  Credit
Agreement  dated  as of  April  17,  2002  among  the  Borrower,  the  financial
institutions party thereto  (collectively,  the "Lenders") and the Agent, and as
further amended, supplemented or replaced from time to time, (the "Agreement" --
all  capitalized  terms not otherwise  defined  herein shall have the respective
meanings set forth in the  Agreement),  in lawful money of the United  States of
America,  in immediately  available  funds,  the principal amount of ___________
DOLLARS  ($__________)  or, if less than such  principal  amount,  the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower pursuant
to the Agreement, plus all amounts added to principal pursuant to Section 2.2(c)
of the Agreement from time to time or the unpaid  principal  amount thereof,  on
the Maturity Date or such earlier date as may be required  pursuant to the terms
of the  Agreement,  and to pay  interest  from the  date  hereof  on the  unpaid
principal amount hereof,  in like money, at said office, on the dates and at the
rates  provided  in  Article  II of the  Agreement.  All or any  portion  of the
principal  amount of Loans may be prepaid or  required to be prepaid as provided
in the Agreement.

     If payment of all sums due hereunder is accelerated  under the terms of the
Agreement or under the terms of the other Loan Documents  executed in connection
with the Agreement,  the then remaining  principal amount and accrued but unpaid
interest  shall bear interest  which shall be payable on demand at the rates per
annum set forth in the proviso to Section 2.2(a) of the Agreement.  Further,  in
the event of such  acceleration,  this Note  shall  become  immediately  due and
payable,  without  presentation,  demand,  protest or notice of any kind, all of
which are hereby waived by the Borrower.

     In the event any amount  evidenced by this Note is not paid when due at any
stated or accelerated  maturity,  the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees, and interest due hereunder thereon at the rates set forth above.

     Interest hereunder shall be computed as provided in the Agreement.

                                      E-1
<PAGE>

     This Note is issued in  replacement  of that  certain  Note of the Borrower
dated October 28, 1998 in favor of the Lender and does not constitute a novation
of the indebtedness evidenced thereby.

     This Note is one of the Notes  referred to in the  Agreement  and is issued
pursuant to and entitled to the benefits and security of the  Agreement to which
reference  is  hereby  made  for a more  complete  statement  of the  terms  and
conditions upon which the Revolving Loans evidenced  hereby were or are made and
are to be repaid.  This Note is subject to certain  restrictions  on transfer or
assignment as provided in the Agreement.

     All Persons  bound on this  obligation,  whether  primarily or  secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent  permitted by law the benefits of all  provisions  of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability  hereon  until  judgment be obtained
and  execution  issued  against any other of them and is returned  satisfied  or
until it can be shown that the maker or any other  party  hereto had no property
available for the  satisfaction  of the debt  evidenced by this  instrument,  or
until any other proceedings can be had against any of them, also their right, if
any,  to  require  the  holder  hereof  to hold as  security  for this  Note any
collateral  deposited  by any of said Persons as  security.  Protest,  notice of
protest, notice of dishonor,  diligence or any other formality are hereby waived
by all parties bound hereon.

     This Note shall be governed by, and construed in accordance  with,  the law
of the State of New York.

     IN WITNESS WHEREOF,  the Borrower has caused this Note to be made, executed
and  delivered  by its duly  authorized  representative  as of the date and year
first above written, all pursuant to authority duly granted.


                                    HEADWAY CORPORATE RESOURCES, INC.
WITNESS:

                                    By:
------------------------------         ---------------------------------------
                                    Name:
                                         -------------------------------------
                                    Title:
------------------------------            ------------------------------------

                                      E-2
<PAGE>


                    ACKNOWLEDGMENT OF EXECUTION ON BEHALF OF
                        HEADWAY CORPORATE RESOURCES, INC.


STATE OF __________________

COUNTY OF ________________

     Before me, the undersigned,  Notary Public in and for said County and State
on  this   ___  day  of   ____________   ,  200_   A.D.,   personally   appeared
___________________________,   known  to  be  the   ___________________  of  the
above-named  corporation (the "Borrower"),  who, being by me duly sworn, said he
works at Headway  Corporate  Resources,  Inc.,  New York,  New York, and that by
authority  duly given by, and as the act of, the  Borrower,  the  foregoing  and
annexed  Note  dated  ________________,  200____, was  signed  by  him  as  said
_______________________ on behalf of the Borrower.

      Witness my hand and official seal this ____ day of ____________ , 200__.


                                  ---------------------------------------------
                                  Notary Public

(SEAL)

My commission expires:
-----------------------

                                      E-3
<PAGE>


                                    EXHIBIT F

                         Form of Compliance Certificate


Bank of America, N.A.
as Agent
-----------------------
Dallas, Texas
Attention: Agency Services
Telefacsimile:  (214) ___-____

with a copy to:
Bank of America
6610 Rockledge Drive, 6th Floor
MD2-600-06-13
Bethesda, MD 20817
Attention:  Michael Heredia
Telephone:  (301) 571-0724
Telefacsimile:    (301) 571-0719

     Reference is hereby made to the Amended and Restated Credit Agreement dated
as of April 17, 2002 (as  amended,  the  "Agreement")  among  Headway  Corporate
Resources,  Inc.,  a Delaware  corporation  (the  "Borrower"),  the  Lenders (as
defined in the Agreement) and Bank of America, N.A., as successor in interest to
Bank of America, N.A., as Agent for the Lenders (the "Agent"). Capitalized terms
used  but not  otherwise  defined  herein  shall  have the  respective  meanings
therefor set forth in the  Agreement.  The  undersigned,  a duly  authorized and
acting Authorized Representative,  hereby certifies to you as of __________ (the
"Determination Date") as follows:

1.    Calculations:

            A.    Compliance with Section 9(a): Rolling Three Month Consolidated
                  EBITDA

                  For the three-month period ending _____________:

                  1.    Consolidated EBITDA for such period:

                        (i)   Consolidated Net Income, plus       $____________
                        (ii)  Consolidated Interest Expense,
                              plus                                $____________
                        (iii) taxes on income, plus               $____________
                        (iv)  depreciation and amortization, plus $____________
                        (v)   goodwill impairment, plus           $____________
                        (vi)  Restructuring Costs                 $____________

                  Total                                           $____________

                                      F-1
<PAGE>

                  Required:  Three month period ending on or after June 30, 2002
                  total must be greater than zero.

            B.    Compliance with Section 9(b): First Twelve Months Consolidated
                  EBITDA

                  For the ______-month period ending _____________:

                  1.    Consolidated EBITDA for such period:

                        (i)   Consolidated Net Income, plus       $____________
                        (ii)  Consolidated Interest Expense,
                              plus                                $____________
                        (iii) taxes on income, plus               $____________
                        (iv)  depreciation and amortization, plus $____________
                        (v)   goodwill impairment, plus           $____________
                        (vi)  Restructuring Costs                 $____________

                  Total                                           $____________

                  Required:  Not less than:


                                               Consolidated EBITDA for
           Measured Period:               such Period Must Not Be Less Than:
   -----------------------------------    ----------------------------------
   Three months ended June 30, 2002                  $  500,000
   Six months ended September 30, 2002               $1,750,000
   Nine months ended December 31, 2002               $3,250,000
   Twelve months ended March 31, 2003                $5,500,000

            C.    Compliance with Section 9(c): Capital Expenditures

                  1.    Fiscal Year-to-date ended ___________
                        Capital Expenditures                      $____________

                  Required: Not more than:

                                         Maximum Consolidated YTD
           YTD Period Ended:        Capital Expenditures Cannot Exceed:
          ------------------        -----------------------------------
          June 30, 2002                       $  888,000
          September 30, 2002                  $1,142,000
          December 31, 2002                   $1,268,000
          March 31, 2003                      $  573,000
          June 30, 2003                       $  802,000


                                      F-2
<PAGE>

2.   No Default

          A. Since __________ (the date of the last similar  certification),  no
     Default or Event of Default  specified  in Article X of the  Agreement  has
     occurred and is continuing.

          B. If a Default or Event of Default has occurred since __________ (the
     date of the last similar certification),  the Borrower proposes to take the
     following  action with  respect to such  Default or Event of  Default:_____
     ________________________.


          (Note,  if no Default or Event of Default  has  occurred,  insert "Not
          Applicable").


3.   Representations

     Borrower  hereby  represents  and warrants  with respect to itself and each
other Credit Party that, as of the date of  determination,  the  representations
and  warranties  set  forth in  Sections  7.4,  7.5,  7.6 and 7.8 of the  Credit
Agreement  continue to be true and correct in all respects,  except as disclosed
on the disclosure schedule attached to this certificate.

     IN WITNESS  WHEREOF,  I have  executed this  Certificate  this _____ day of
__________, ______.

                                    HEADWAY CORPORATE RESOURCES, INC.


                                    By:____________________________________
                            Authorized Representative


                                      F-3
<PAGE>

                                    EXHIBIT G

                            Form of Intercompany Note


                          INTERCOMPANY PROMISSORY NOTE


                                                           _______________, 2002

     FOR VALUE RECEIVED,  (a) Headway Corporate  Resources,  Inc., a corporation
organized under the laws of Delaware  ("Company"),  promises to pay on demand to
the order of each  Subsidiary  of Company  that is a  signatory  hereto  (each a
"Subsidiary"  and  collectively,  the  "Subsidiaries")  the principal  amount of
indebtedness  from  time  to  time  outstanding  to such  Subsidiary,  (b)  each
Subsidiary  promises  to pay on  demand to the order of  Company  the  principal
amount of indebtedness  from time to time  outstanding to Company,  and (c) each
Subsidiary  promises to pay on demand to the order of any other  Subsidiary  the
principal  amount  of  indebtedness  from  time  to  time  outstanding  to  such
Subsidiary.  Company and each Subsidiary in its capacity as a borrower hereunder
are  referred  to herein as a "Payor" and  Company  and each  Subsidiary  in its
capacity as a lender hereunder are referred to herein as "Payee."

     Unless  otherwise  defined herein,  capitalized  terms used herein have the
same meaning as defined in that certain  Amended and Restated  Credit  Agreement
dated as of April 17, 2002 (as such credit agreement has been or may be amended,
supplemented or otherwise  modified from time to time, the "Amended and Restated
Credit  Agreement")  by and among  Company,  Bank of America,  N.A.,  a national
banking association  organized and existing under the laws of the United States,
in its  capacity  as a Lender and Bank of  America,  N.A.,  a  national  banking
association  organized and existing under the laws of the United States,  in its
capacity as agent for the Lenders.

     This note ("Note") will evidence the  obligation of each maker of this Note
to repay loans,  advances or  distributions  among Company and the  Subsidiaries
from  time  to  time,  without  redundancy,  whether  or  not  evidenced  by  an
Intercompany  Note. All payments in respect of this Note shall be made in lawful
money of the  United  States of  America  at the chief  executive  office of the
appropriate  Payee,  or at such  other  place as shall  be  designated  for such
purpose by such Payee. Each Payor and Payee agrees to record in their respective
accounting  records  all  outstanding  loans  hereunder  and all  payments  made
hereunder;  provided,  however,  that the  failure  by any  Payor or Payee to so
record  any such  loan or any  payment  made on this  Note  shall  not  limit or
otherwise  affect the obligations of any Payor hereunder with respect to amounts
owed under this Note.

     From and  after  such  time as the Loans (as  defined  in the  Amended  and
Restated  Credit  Agreement)  shall  become due and  payable  (whether at stated
maturity, by acceleration or otherwise), the obligations of each Borrower to any
of its Subsidiaries under this Note shall be subordinated in right of payment to
the payment in full of the Obligations.

                                      G-1
<PAGE>

     Each  maker  hereby  consents  to the  pledge  of this  Note and any  other
Intercompany Note pursuant to the Intercompany Note Pledge Agreement  referenced
in the  Amended  and  Restated  Credit  Agreement,  and hereby  agrees to tender
performance to the pledgee as and when  contemplated  by the  Intercompany  Note
Pledge Agreement.

     THIS NOTE SHALL BE  GOVERNED  BY, AND SHALL BE  CONSTRUED  AND  ENFORCED IN
ACCORDANCE  WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,  WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.



                  [Remainder of page intentionally left blank]


                                      G-2
<PAGE>


     IN WITNESS WHEREOF, each Payor has caused this Note to be duly executed and
delivered by its officer  thereunto duly authorized as of the date first written
above.



                        HEADWAY CORPORATE RESOURCES, INC.


                              By:
                                    -----------------------------------------
                              Name:
                                    -----------------------------------------
                              Title:
                                    -----------------------------------------



                                      G-3
<PAGE>



                        WHITNEY PARTNERS, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES, INC.
                        CERTIFIED TECHNICAL STAFFING, INC.
                        CORPORATE STAFF ADMINISTRATION, INC.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF NEW YORK, INC.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF NORTH CAROLINA, INC.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF CONNECTICUT, INC.
                        ASA PERSONNEL SERVICES, L.L.C.
                        HCSS WEST, INC.
                        HCSS HOLDINGS, INC.
                        HCSS EAST, INC.
                        CHENEY ASSOCIATES, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF FLORIDA, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF NEW JERSEY, L.L.C.
                        CARLYLE GROUP, LTD.
                        HEADWAY TECHNOLOGY RESOURCES
                           OF TEXAS, L.L.C.
                        THE WHITNEY GROUP (ASIA) LIMITED
                        WHITNEY O'NEILL PTY LIMITED
                        TYZACK HOLDINGS LIMITED
                        WHITNEY GROUP (EUROPE) LIMITED
                        WHITNEY ASIA PTE LTD.
                        TYZACK & PARTNERS LTD.
                        HEADWAY TECHNOLOGY RESOURCES, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF CALIFORNIA ONE, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF CALIFORNIA TWO, L.L.C.
                        HEADWAY CORPORATE STAFFING SERVICES
                           OF CALIFORNIA THREE, L.L.C.


                        By:
                           ---------------------------------------------
                        Name:
                             -------------------------------------------
                        Title:
                              ------------------------------------------


                                      G-4