<PAGE>


                                                              [CONFORMED COPY]

                                                                  EXHIBIT 10.1



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                                PANAVISION INC.



                         _____________________________
 


                               CREDIT AGREEMENT


                           Dated as of June 5, 1997


                         ______________________________



                           THE CHASE MANHATTAN BANK,
                            as Administrative Agent





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<PAGE>


                              TABLE OF CONTENTS

     This Table of Contents is not part of the Agreement to which it is 
attached but is inserted for convenience of reference only.

                                                                         Page

Section 1.  Definitions and Accounting Matters . . . . . . . . . . . . .    1
     1.01  Certain Defined Terms . . . . . . . . . . . . . . . . . . . .    1
     1.02  Accounting Terms and Determinations . . . . . . . . . . . . .   28
     1.03  Classes, Currencies and Types of Loans; Sub-Classes 
             of Revolving Credit Loans . . . . . . . . . . . . . . . . .   30

Section 2.  Commitments, Loans, Evidence of Debt and  Prepayments. . . .   30
     2.01  Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30
     2.02  Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . .  33
     2.03  Letters of Credit. . . . . . . . . . . . . . . . . . . . . . .  33
     2.04  Changes of Commitments . . . . . . . . . . . . . . . . . . . .  39
     2.05  Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . .  41
     2.06  Lending Offices. . . . . . . . . . . . . . . . . . . . . . . .  41
     2.07  Several Obligations; Remedies Independent. . . . . . . . . . .  41
     2.08  Evidence of Debt . . . . . . . . . . . . . . . . . . . . . . .  42
     2.09  Optional Prepayments and Conversions or Continuations 
             of Loans . . . . . . . . . . . . . . . . . . . . . . . . . .  43
     2.10  Mandatory Prepayments and Reductions of Commitments. . . . . .  43

Section 3.  Payments of Principal and Interest. . . . . . . . . . . . . .  48
     3.01  Repayment of Loans . . . . . . . . . . . . . . . . . . . . . .  48
     3.02  Interest . . . . . . . . . . . . . . . . . . . . . . . . . . .  49

Section 4.  Payments; Pro Rata Treatment; Computations; Etc . . . . . . .  50
     4.01  Payments . . . . . . . . . . . . . . . . . . . . . . . . . . .  50
     4.02  Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . .  51
     4.03  Computations . . . . . . . . . . . . . . . . . . . . . . . . .  52
     4.04  Minimum Amounts. . . . . . . . . . . . . . . . . . . . . . . .  52
     4.05  Certain Notices. . . . . . . . . . . . . . . . . . . . . . . .  53
     4.06  Non-Receipt of Funds by the Administrative Agent . . . . . . .  54
     4.07  Sharing of Payments, Etc.. . . . . . . . . . . . . . . . . . .  55

Section 5.  Yield Protection, Etc . . . . . . . . . . . . . . . . . . . .  57
     5.01  Additional Costs . . . . . . . . . . . . . . . . . . . . . . .  57
     5.02  Limitation on Types of Loans . . . . . . . . . . . . . . . . .  59
     5.03  Illegality . . . . . . . . . . . . . . . . . . . . . . . . . .  60
     5.04  Treatment of Affected Loans. . . . . . . . . . . . . . . . . .  60
     5.05  Compensation . . . . . . . . . . . . . . . . . . . . . . . . .  62
     5.06  Additional Costs in Respect of Letters of Credit . . . . . . .  62
     5.07  U.S. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . .  63
     5.08  Replacement Lenders. . . . . . . . . . . . . . . . . . . . . .  65


                                      (i)

<PAGE>

Section 6.  Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . .  66
     6.01  The Guarantee. . . . . . . . . . . . . . . . . . . . . . . . .  66
     6.02  Obligations Unconditional. . . . . . . . . . . . . . . . . . .  66
     6.03  Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . .  68
     6.04  Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . .  68
     6.05  Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . .  68
     6.06  Instrument for the Payment of Money. . . . . . . . . . . . . .  68
     6.07  Continuing Guarantee . . . . . . . . . . . . . . . . . . . . .  69
     6.08  Rights of Contribution . . . . . . . . . . . . . . . . . . . .  69
     6.09  General Limitation on Guarantee Obligations. . . . . . . . . .  70

Section 7.  Conditions Precedent. . . . . . . . . . . . . . . . . . . . .  70
     7.01  Effectiveness and Initial Extension of Credit. . . . . . . . .  70
     7.02  Initial and Subsequent Extensions of Credit. . . . . . . . . .  74

Section 8.  Representations and Warranties. . . . . . . . . . . . . . . .  74
     8.01  Existence. . . . . . . . . . . . . . . . . . . . . . . . . . .  74
     8.02  Financial Condition. . . . . . . . . . . . . . . . . . . . . .  75
     8.03  Litigation . . . . . . . . . . . . . . . . . . . . . . . . . .  76
     8.04  No Breach. . . . . . . . . . . . . . . . . . . . . . . . . . .  76
     8.05  Action . . . . . . . . . . . . . . . . . . . . . . . . . . . .  77
     8.06  Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . .  77
     8.07  Use of Credit. . . . . . . . . . . . . . . . . . . . . . . . .  77
     8.08  ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  77
     8.09  Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  78
     8.10  Investment Company Act . . . . . . . . . . . . . . . . . . . .  78
     8.11  Public Utility Holding Company Act . . . . . . . . . . . . . .  78
     8.12  Material Agreements and Liens. . . . . . . . . . . . . . . . .  78
     8.13  Environmental Matters. . . . . . . . . . . . . . . . . . . . .  79
     8.14  Capitalization . . . . . . . . . . . . . . . . . . . . . . . .  79
     8.15  Subsidiaries, Etc. . . . . . . . . . . . . . . . . . . . . . .  80
     8.16  Title to Assets. . . . . . . . . . . . . . . . . . . . . . . .  81
     8.17  True and Complete Disclosure . . . . . . . . . . . . . . . . .  81

Section 9.  Covenants of the Borrower . . . . . . . . . . . . . . . . . .  82
     9.01  Financial Statements Etc.. . . . . . . . . . . . . . . . . . .  82
     9.02  Litigation . . . . . . . . . . . . . . . . . . . . . . . . . .  86
     9.03  Existence, Etc.. . . . . . . . . . . . . . . . . . . . . . . .  87
     9.04  Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . .  87
     9.05  Prohibition of Fundamental Changes . . . . . . . . . . . . . .  88
     9.06  Limitation on Liens. . . . . . . . . . . . . . . . . . . . . .  91
     9.07  Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . .  93
     9.08  Investments. . . . . . . . . . . . . . . . . . . . . . . . . .  93
     9.09  Restricted Payments. . . . . . . . . . . . . . . . . . . . . .  94
     9.10  Certain Financial Covenants. . . . . . . . . . . . . . . . . .  95
     9.11  Subordinated Indebtedness. . . . . . . . . . . . . . . . . . .  97
     9.12  Lines of Business. . . . . . . . . . . . . . . . . . . . . . .  97
     9.13  Transactions with Affiliates . . . . . . . . . . . . . . . . .  98
     9.14  Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . .  98
     9.15  Certain Obligations Respecting Subsidiaries. . . . . . . . . .  99
     9.16  Modifications of Certain Documents . . . . . . . . . . . . . . 101


                                      (ii)

<PAGE>

Section 10.  Events of Default. . . . . . . . . . . . . . . . . . . . . . 101

Section 11.  The Administrative Agent . . . . . . . . . . . . . . . . . . 106
     11.01  Appointment, Powers and Immunities. . . . . . . . . . . . . . 106
     11.02  Reliance by Administrative Agent. . . . . . . . . . . . . . . 107
     11.03  Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . 107
     11.04  Rights as a Lender. . . . . . . . . . . . . . . . . . . . . . 108
     11.05  Indemnification . . . . . . . . . . . . . . . . . . . . . . . 108
     11.06  Non-Reliance on Administrative Agent and Other Lenders. . . . 109
     11.07  Failure to Act. . . . . . . . . . . . . . . . . . . . . . . . 109
     11.08  Resignation or Removal of Administrative Agent. . . . . . . . 110
     11.09  Consents under Other Loan Documents . . . . . . . . . . . . . 110

Section 12.  Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 111
     12.01  Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
     12.02  Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
     12.03  Expenses, Etc.. . . . . . . . . . . . . . . . . . . . . . . . 111
     12.04  Amendments, Etc.. . . . . . . . . . . . . . . . . . . . . . . 113
     12.05  Successors and Assigns. . . . . . . . . . . . . . . . . . . . 114
     12.06  Assignments and Participations. . . . . . . . . . . . . . . . 114
     12.07  Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 118
     12.08  Captions. . . . . . . . . . . . . . . . . . . . . . . . . . . 118
     12.09  Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 118
     12.10  Governing Law; Submission to Jurisdiction . . . . . . . . . . 118
     12.11  Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . 119
     12.12  Treatment of Certain Information; Confidentiality . . . . . . 119


SCHEDULE I   - Commitments
SCHEDULE II  - Material Agreements and Liens
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV  - Equity Interests of the Borrower
SCHEDULE V   - Litigation
SCHEDULE VI  - Taxes
SCHEDULE VII - Environmental Matters


EXHIBIT A - Form of Incremental Term Loan Activation Notice
EXHIBIT B - Form of Security Agreement
EXHIBIT C - Form of Opinion of Special New York Counsel to the Obligors
EXHIBIT D - Form of Opinion of Special New York Counsel to Chase
EXHIBIT E - Form of Guarantee Assumption Agreement
EXHIBIT F - Form of Confidentiality Agreement
EXHIBIT G - Form of Assignment and Acceptance


                                     (iii)

<PAGE>

     CREDIT AGREEMENT dated as of June 5, 1997 between:  PANAVISION INC., a 
Delaware corporation (the "BORROWER"); each of the Subsidiaries of the 
Borrower identified under the caption "SUBSIDIARY GUARANTORS" on the 
signature pages hereof and each Subsidiary of the Borrower that becomes a 
"Subsidiary Guarantor" after the date hereof pursuant to Section 9.15(a) 
hereof (individually, a "SUBSIDIARY GUARANTOR" and, collectively, the 
"SUBSIDIARY GUARANTORS" and, together with the Borrower, the "OBLIGORS"); 
each of the lenders that is a signatory hereto identified under the caption 
"LENDERS" on the signature pages hereto and each lender that becomes a 
"Lender" after the date hereof pursuant to Section 12.06(b) hereof 
(individually, a "LENDER" and, collectively, the "LENDERS"); and THE CHASE 
MANHATTAN BANK, as administrative agent for the Lenders (in such capacity, 
together with its successors in such capacity, the "ADMINISTRATIVE AGENT").

     The Borrower has requested that the Lenders extend credit to the 
Borrower, under the guarantee of the Subsidiary Guarantors, in an aggregate 
principal or face amount not to exceed $150,000,000 at any one time 
outstanding to finance the Visual Action Acquisition (as defined below) and 
the payment of fees, commissions and expenses payable in connection 
therewith, to refinance loans outstanding under the Existing Credit Agreement 
(as defined below) and to provide funds for the general corporate purposes of 
the Borrower and its Subsidiaries.  The Lenders are prepared to extend such 
credit upon the terms and conditions hereof and, accordingly, the parties 
hereto agree as follows:

     Section 1.  DEFINITIONS AND ACCOUNTING MATTERS.

     1.01  CERTAIN DEFINED TERMS.  As used herein, the following terms shall 
have the following meanings (all terms defined in this Section 1.01 or in 
other provisions of this Agreement in the singular to have the same meanings 
when used in the plural and VICE VERSA):

     "ACQUIRED ENTITY" shall mean any business, assets or Person subject to 
an Acquisition permitted under Section 9.05(b)(iv) hereof.

      "ACQUISITION" shall mean any transaction, or any series of related 
transactions, consummated after the date of this Agreement, by which the 
Borrower and/or any of its Subsidiaries (a) acquires any going business or 
all or substantially all of the assets of any corporation, partnership, joint 
venture or other firm or any division of any corporation, partnership, joint 
venture or other firm or the right to use or manage or otherwise exploit any 
such business or assets, whether through purchase or lease of assets, merger 
or otherwise, (b) directly or indirectly 

                               CREDIT AGREEMENT

<PAGE>

                                     - 2 -

acquires control of at least a majority (in number of votes) of the 
securities of a corporation which have ordinary voting power for the election 
of directors or (c) directly or indirectly acquires control of a majority 
ownership interest in any partnership, joint venture or other firm.  The 
terms "ACQUIRE" and "ACQUIRED" used as a verb shall have a correlative 
meaning.

     "ADMINISTRATIVE QUESTIONNAIRE" means an administrative questionnaire in 
a form supplied by the Administrative Agent.

     "AFFILIATE" shall mean any Person that directly or indirectly controls, 
or is under common control with, or is controlled by, the Borrower and, if 
such Person is an individual, any member of the immediate family (including 
parents, spouse, children and siblings) of such individual and any trust 
whose principal beneficiary is such individual or one or more members of such 
immediate family and any Person who is controlled by any such member or 
trust.  As used in this definition, "CONTROL" (including, with its 
correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall 
mean possession, directly or indirectly, of power to direct or cause the 
direction of management or policies (whether through ownership of securities 
or partnership or other ownership interests, by contract or otherwise), 
PROVIDED that, in any event, any Person that owns directly or indirectly 
securities having 5% or more of the voting power for the election of 
directors or other governing body of a corporation or 5% or more of the 
partnership or other ownership interests of any other Person (other than as a 
limited partner of such other Person) will be deemed to control such 
corporation or other Person.  Notwithstanding the foregoing, (a) no 
individual shall be an Affiliate solely by reason of his or her being a 
director, officer or employee of the Borrower or any of its Subsidiaries and 
(b) none of the Wholly Owned Subsidiaries of the Borrower shall be Affiliates.

     "APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each 
Type and Currency of Loan, the "Lending Office" of such Lender (or of an 
affiliate of such Lender) designated for such Type and Currency of Loan on 
such Lender's Administrative Questionnaire 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 Administrative Agent and the Borrower as the office by 
which its Loans of such Type and Currency are to be made and maintained.

     "APPLICABLE FEE RATE" shall mean, during any Accrual Period (as defined 
in the definition of "Applicable Margin" in this Section 1.01), the rate 
indicated opposite the applicable Total Debt Ratio indicated below for such 
Accrual Period:


                               CREDIT AGREEMENT

<PAGE>

                                     - 3 -

             RANGE
              OF
        TOTAL DEBT RATIO                   APPLICABLE FEE RATE (% P.A.)
   -------------------------             -------------------------------

     Greater than or equal
         to 1.75  to 1                                0.375%

     Greater than or equal
       to 1.25 to 1 but
      less than 1.75 to 1                             0.3125%

      Less than 1.25 to 1                             0.25%.

     The Total Debt Ratio for each Accrual Period shall be determined as set 
forth in the definition of "Applicable Margin" in this Section 1.01.

     Anything in this Agreement to the contrary notwithstanding, the 
Applicable Fee Rate shall be 0.375% (i) during any period when an Event of 
Default shall have occurred and be continuing, or (ii) so long as the 
Borrower shall be in default of its obligation to deliver any financial 
statements pursuant to Section 9.01(b) or 9.01(c) hereof.

     "APPLICABLE MARGIN" shall mean, (a) with respect to Revolving Credit 
Loans and Tranche A Term Loans of any Type during any Accrual Period (as 
defined below), the respective rates indicated below for such Loans opposite 
the applicable Total Debt Ratio indicated below for such Accrual Period and 
(b) with respect to Incremental Term Loans of any Type, the rate per annum 
agreed to by the Borrower and the Incremental Term Loan Lenders and set forth 
in the Incremental Term Loan Activation Notice:

             RANGE
              OF                        APPLICABLE MARGIN (% P.A.)
        TOTAL DEBT RATIO           BASE RATE LOANS    EUROCURRENCY LOANS 
        ----------------           ---------------    ------------------

     Greater than or equal
          to 2.00 to 1                    0%                  1.25%

     Greater than or equal
        to 1.75 to 1 but
       less than 2.00 to 1                0%                  1.00%

     Greater than or equal
       to 1.25 to 1 but
      less than 1.75 to 1                 0%                  0.75%

      Less than 1.25 to 1                 0%                  0.625%.

     For purposes of this definition and the definition of "Applicable Fee 
Rate", an "ACCRUAL PERIOD" shall mean the period commencing 


                               CREDIT AGREEMENT

<PAGE>

                                     - 4 -

during any fiscal quarter on the date (the "CHANGE DATE") that is the third 
Business Day following the receipt by the Administrative Agent of the 
certificate referred to in the next following paragraph to but not including 
the Change Date in the immediately following fiscal quarter, PROVIDED that 
the initial Accrual Period shall commence on the Effective Date and continue 
until the Change Date during the fiscal quarter commencing July 1, 1997.

     The Total Debt Ratio for the initial Accrual Period shall be determined 
on the basis of the certificate of a Senior Officer delivered pursuant to 
Section 7.01(m) hereof.  The Total Debt Ratio for any Accrual Period after 
the initial Accrual Period shall be determined on the basis of a certificate 
of a Senior Officer setting forth a calculation of the Total Debt Ratio as at 
the last day of the fiscal quarter ending immediately prior to the first day 
of such Accrual Period, each of which certificates shall be delivered 
together with the financial statements for the fiscal quarter on which such 
calculation is based, PROVIDED that, with respect to the last fiscal quarter 
of a fiscal year of the Borrower, the Borrower may (but shall not be required 
to) provide such certificate and accompanying unaudited financial statements 
for such fiscal quarter (of the type contemplated by Section 9.01(b) hereof) 
to the Administrative Agent prior to the delivery of the audited financial 
statements of the Borrower required to be delivered pursuant to Section 
9.01(c) hereof and such certificate shall be the basis for determining the 
Total Debt Ratio for purposes of this definition and the definition of 
"Applicable Fee Rate".

     Anything in this Agreement to the contrary notwithstanding, the 
Applicable Margin for Revolving Credit Loans or Tranche A Term Loans that are 
Eurocurrency Loans shall be the highest rates provided for above (I.E. 1.25%) 
(i) during any period when an Event of Default shall have occurred and be 
continuing, or (ii) so long as the Borrower shall be in default of its 
obligation to deliver any financial statements pursuant to Section 9.01(b) or 
9.01(c) hereof.

     "AVAILABLE DOLLAR COMMITMENT" shall mean, at any time, for any Revolving 
Credit Lender, the Revolving Credit Commitment of such Lender as in effect at 
such time MINUS, if such Lender is a Sterling Lender, the Dollar Equivalent 
of the aggregate outstanding principal amount of Sterling Loans made by such 
Lender. 

     "BANKRUPTCY CODE" shall mean the Federal Bankruptcy Code of 1978, as 
amended from time to time.

     "BASE RATE" shall mean, for any day, a rate per annum equal to the 
higher of (a) the Federal Funds Rate for such day 


                               CREDIT AGREEMENT

<PAGE>

                                     - 5 -

plus 1/2 of 1% and (b) the Prime Rate for such day.  Each change in any 
interest rate provided for herein based upon the Base Rate resulting from a 
change in the Base Rate shall take effect at the time of such change in the 
Base Rate.

     "BASE RATE LOANS" shall mean Loans that bear interest at rates based 
upon the Base Rate.

     "BASIC DOCUMENTS" shall mean, collectively, this Agreement, the other 
Loan Documents and the Visual Action Acquisition Documents.

     "BASLE ACCORD" shall mean the proposals for risk-based capital framework 
described by the Basle Committee on Banking Regulations and Supervisory 
Practices in its paper entitled "International Convergence of Capital 
Measurement and Capital Standards" dated July 1988, as amended, modified and 
supplemented and in effect from time to time or any replacement thereof.

     "BUSINESS DAY" shall mean any day (a) on which commercial banks are not 
authorized or required to close in New York City or London and (b) if such 
day relates to a borrowing of, a payment or prepayment of principal of or 
interest on, a Conversion of or into, or a Continuation of an Interest Period 
for, a Eurocurrency Loan or a notice by the Borrower with respect to any such 
borrowing, payment, prepayment, Conversion or a Continuation of an Interest 
Period, that is also a day on which dealings in Dollar deposits are carried 
out in the London interbank market or on which dealings in Pound Sterling 
deposits are carried out in the Paris interbank market, as the case may be.

      "CAPITAL EXPENDITURES" shall mean, for any period, expenditures 
(including, without limitation, the aggregate amount of assets capitalized 
under Capital Lease Obligations incurred during such period) made by the 
Borrower or any of its Subsidiaries to acquire or construct fixed assets, 
plant and equipment (including renewals, improvements and replacements, but 
excluding repairs) during such period computed in accordance with GAAP; 
PROVIDED that in calculating Capital Expenditures there shall be excluded any 
expenditure to the extent made with the proceeds of any Casualty Event or any 
Excluded Disposition.

     "CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all obligations 
of such Person to pay rent or other amounts under a lease of (or other 
agreement conveying the right to use) Property to the extent such obligations 
are required to be classified and accounted for as a capital lease on a 
balance sheet of such Person under GAAP, and, for purposes of this Agreement, 
the amount of such obligations shall be the capitalized amount thereof, 
determined in accordance with GAAP.


                               CREDIT AGREEMENT

<PAGE>

                                     - 6 -

     "CASUALTY EVENT" shall mean, with respect to any Property of any Person, 
any loss of or damage to, or any condemnation or other taking of, such 
Property for which such Person or any of its Subsidiaries receives insurance 
proceeds, or proceeds of a condemnation award or other compensation.

     "CHASE" shall mean The Chase Manhattan Bank.

     "CLASS" shall have the meaning assigned to such term in Section 1.03 
hereof.

     "CODE" shall mean the Internal Revenue Code of 1986, as amended from 
time to time.

     "COLLATERAL ACCOUNT" shall have the meaning assigned to such term in 
Section 4.01 of the Security Agreement.

     "COMMITMENTS" shall mean, collectively, the Revolving Credit 
Commitments, the Tranche A Term Loan Commitments and the Incremental Term 
Loan Commitments.

     "CONTINUE", "CONTINUATION" and "CONTINUED" shall refer to the 
continuation pursuant to Section 2.09 hereof of a Eurocurrency Loan from one 
Interest Period to the next Interest Period for such Loan.

     "CONVERT", "CONVERSION" and "CONVERTED" shall refer to a conversion 
pursuant to Section 2.09 hereof of one Type of Loans into another Type of 
Loans, which may be accompanied by the transfer by a Lender (at its sole 
discretion) of a Loan from one Applicable Lending Office to another.

     "CURRENCY" shall mean Dollars or Pounds Sterling.

     "CURRENCY VALUATION NOTICE" shall have the meaning assigned to such term 
in Section 2.10(h) hereof.

     "DEBT SERVICE" shall mean, for any period, the sum, for the Borrower and 
its Subsidiaries (determined on a consolidated basis without duplication in 
accordance with GAAP), of the following:  (a) all regularly scheduled 
payments of principal of Indebtedness (including, without limitation, the 
principal component of any payments in respect of Capital Lease Obligations) 
made during such period PLUS (b) all Interest Expense for such period.

     "DEFAULT" shall mean an Event of Default or an event that with notice or 
lapse of time or both would become an Event of Default.


                               CREDIT AGREEMENT

<PAGE>

                                    - 7 -


      "DISPOSITION" shall mean any sale, assignment, transfer or other 
disposition of any Property (whether now owned or hereafter acquired) by the 
Borrower or any of its Subsidiaries to any other Person.

      "DOLLAR EQUIVALENT" shall mean, with respect to any Sterling Loan, the 
amount of Dollars that would be required to purchase the amount of Pounds 
Sterling of such Loan on the date such Loan is requested (or, in the case of 
any determination made under Section 2.01(e), 2.05(a), 2.09 or 2.10(h) 
hereof, on the date specified in such Section), based on the spot selling 
rate at which Chase offers to sell Pounds Sterling in Dollars in the London 
foreign exchange market at approximately 11:00 a.m. London time for delivery 
two Business Days later.

      "DOLLAR LOANS" shall mean the Revolving Credit Loans provided for in 
Section 2.01(a)(i) hereof, which may be Base Rate Loans and/or Eurodollar 
Loans.

      "DOLLARS" and "$" shall mean lawful money of the United States of 
America.

      "EBITDA" shall mean, for any period, the sum, for the Borrower and its 
Subsidiaries (determined on a consolidated basis without duplication in 
accordance with GAAP), of the following: (a) net income for such period 
(calculated after eliminating extraordinary gains and losses and unusual 
items) PLUS (b) income and other taxes (to the extent deducted in determining 
net income) for such period PLUS (c) depreciation and amortization and other 
non-cash charges (to the extent deducted in determining net income) for such 
period PLUS (d) the aggregate amount of Interest Expense for such period 
MINUS (e) the aggregate amount of interest income for such period PLUS (f) 
the aggregate amount of upfront or one-time fees or expenses payable in 
respect of Interest Rate Protection Agreements during such period (to the 
extent deducted in determining net income for such period) PLUS (g) the 
amount of unrealized foreign exchange losses (net of any gains) (or MINUS the 
amount of unrealized foreign exchange gains (net of any losses)); PROVIDED 
that there shall be added back to the calculation of EBITDA non-cash minority 
interests related to Panavision Canada Holdings to the extent deducted in 
calculating EBITDA for such period.

      "EFFECTIVE DATE" shall mean the date upon which all of the conditions 
set forth in Section 7.01 hereof have been satisfied or waived.

      "ENVIRONMENTAL LAWS" shall mean any and all present and future Federal, 
state, local and foreign laws, rules or regulations, and any orders or 
decrees, in each case as now or hereafter in effect, relating to the 
regulation or protection of 

                            CREDIT AGREEMENT
<PAGE>

                                     - 8 -


human health, safety or the environment or to emissions, discharges, Releases 
or threatened Releases of pollutants, contaminants, chemicals or toxic or 
hazardous substances or wastes into the indoor or outdoor environment, 
including, without limitation, ambient air, soil, surface water, ground 
water, wetlands, land or subsurface strata, or otherwise relating to the 
manufacture, processing, distribution, generation, recycling, use, treatment, 
storage, disposal, transport or handling of pollutants, contaminants, 
chemicals or toxic or hazardous substances or wastes (or the effect of the 
same on human health or safety).

      "EQUITY ISSUANCE" shall mean (a) any issuance or sale by the Borrower 
or any of its Subsidiaries after the Effective Date of (i) any of its capital 
stock, (ii) any warrants or options exercisable in respect of its capital 
stock (other than any warrants or options issued to directors, officers or 
employees of the Borrower or any of its Subsidiaries pursuant to employee 
benefit plans established in the ordinary course of business and any capital 
stock of the Borrower issued upon the exercise of such warrants or options) 
or (iii) any other security or instrument representing an equity interest (or 
the right to obtain any equity interest) in the Borrower or any of its 
Subsidiaries or (b) the receipt by the Borrower or any of its Subsidiaries 
after the Effective Date of any capital contribution (whether or not 
evidenced by any equity security issued by the recipient of such 
contribution); PROVIDED that Equity Issuance shall not include (w) any such 
issuance or sale by any Subsidiary of the Borrower to the Borrower or any 
Subsidiary of the Borrower, (x) any capital contribution by the Borrower or 
any Subsidiary of the Borrower to any Subsidiary of the Borrower, (y) any 
issuance of convertible subordinated debt that constitutes Subordinated 
Indebtedness issued in accordance with Section 9.11(a) hereof or (z) any 
issuance of equity securities upon the exercise of any conversion right with 
respect to such convertible subordinated debt.

      "EQUITY RIGHTS" shall mean, with respect to any Person, any 
subscriptions, options, warrants, commitments, preemptive rights or 
agreements of any kind (including, without limitation, any stockholders' or 
voting trust agreements) for the issuance, sale, registration or voting of, 
or securities convertible into, any additional shares of capital stock of any 
class, or partnership or other ownership interests of any type in, such 
Person.

      "ERISA" shall mean the Employee Retirement Income Security Act of 1974, 
as amended from time to time.

      "ERISA AFFILIATE" shall mean any corporation or trade or business that 
is a member of any group of organizations 

                              CREDIT AGREEMENT
<PAGE>


                                     - 9 -


(i) described in Section 414(b) or (c) of the Code of which the Borrower is a 
member and (ii) solely for purposes of potential liability under Section 
302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created 
under Section 302(f) of ERISA and Section 412(n) of the Code, described in 
Section 414(m) or (o) of the Code of which the Borrower is a member.

      "EUROCURRENCY LOANS" shall mean Loans that bear interest at rates based 
on rates referred to in the definition of "Eurocurrency Rate" in this Section 
1.01.

      "EUROCURRENCY RATE" shall mean, for any Interest Period for any 
Eurocurrency Loan denominated in either Currency, the rate for deposits in 
such Currency for a period comparable to such Interest Period which appears 
on Telerate Page 3750 as of 11:00 a.m., London time, on the day that is two 
Business Days preceding the first day of such Interest Period; PROVIDED that, 
if such rate does not appear on such Telerate Page, the "Eurocurrency Rate" 
shall be the arithmetic mean (rounded upwards, if necessary, to the nearest 
1/100 of 1%), as determined by the Administrative Agent, of the rates per 
annum quoted by the respective Reference Lenders at approximately 11:00 a.m. 
London time (or as soon thereafter as practicable) on the date two Business 
Days prior to the first day of such Interest Period for the offering by the 
respective Reference Lenders to leading banks in the London interbank market 
of Dollar deposits or to leading banks in the Paris interbank market of Pound 
Sterling deposits, as the case may be, having a term comparable to such 
Interest Period and in an amount comparable to the respective principal 
amount of such Loan to be made by the respective Reference Lenders for such 
Interest Period.  If any Reference Lender is not participating in any 
Eurocurrency Loan during any Interest Period therefor, the Eurocurrency Rate 
for such Interest Period shall be determined by reference to the amount of 
the Loan that such Reference Lender would have made or had outstanding during 
such Interest Period had it been participating in such Loan during such 
Interest Period.  If any Reference Lender does not timely furnish the 
information required for determination of any Eurocurrency Rate, the 
Administrative Agent shall determine such Eurocurrency Rate on the basis of 
the information timely furnished by the remaining Reference Lenders.

      "EURODOLLAR LOANS" shall mean Eurocurrency Loans denominated in Dollars.

      "EUROSTERLING LOANS" shall mean Eurocurrency Loans denominated in 
Pounds Sterling.

      "EVENT OF DEFAULT" shall have the meaning assigned to such term in 
Section 10 hereof.

                               CREDIT AGREEMENT
<PAGE>


                                     - 10 -


      "EXCESS CASH FLOW" shall mean, for any period, (a) EBITDA for such 
period MINUS (b) the sum of (i) the aggregate amount of Debt Service for such 
period PLUS (ii) taxes payable in cash in respect of such period PLUS (iii) 
Capital Expenditures made during such period (except for any such Capital 
Expenditures to the extent financed with the proceeds of Indebtedness, or 
Capital Lease Obligations, incurred pursuant to Section 9.07(e) hereof during 
such period) PLUS (iv) any increase (or MINUS any decrease) in Working 
Capital from the beginning of such period to the end of such period PLUS (v) 
cash receipts during such period in respect of any gains to the extent not 
required pursuant to Section 2.10(a) or 2.10(d) hereof to be applied to the 
prepayment of Loans and/or the reduction of Commitments (or MINUS cash 
receipts during such period in respect of losses relating thereto) PLUS (vi) 
the aggregate amount of prepayments made under Section 2.09 hereof during 
such period PLUS (vii) the amount of any Restricted Payment (other than any 
taxes payable in cash pursuant to clause (i) of this definition) paid during 
such period as permitted pursuant to Section 9.09 hereof.

      "EXCLUDED DISPOSITION" shall mean any Disposition of any Property (a) 
sold or disposed of in the ordinary course of business and on ordinary 
business terms (including sales of inventory and obsolete, worn-out or 
surplus Property) and (b) any other dispositions of Property, to the extent 
that the proceeds of such disposition are used to acquire other Property used 
or useful in the business of the Borrower or any of its Subsidiaries within a 
period of 60 days after the end of the fiscal quarter in which such 
disposition was made.

      "EXISTING CREDIT AGREEMENT" shall mean the Second Amended and Restated 
Credit Agreement dated as of December 5, 1996 between PILP, the subsidiary 
guarantors named therein, the lenders party thereto and The Chase Manhattan 
Bank, as administrative agent for such lenders.

      "FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum 
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the 
weighted average of the rates on overnight Federal funds transactions with 
members of the Federal Reserve System arranged by Federal funds brokers on 
such day, as published by the Federal Reserve Bank of New York on the 
Business Day next succeeding such day, PROVIDED that (a) if the day for which 
such rate is to be determined is not a Business Day, the Federal Funds Rate 
for such day shall be such rate on such transactions on the next preceding 
Business Day as so published on the next succeeding Business Day and (b) if 
such rate is not so published for any Business Day, the Federal Funds Rate 
for such Business Day shall be the average rate charged to Chase on such 
Business Day on such transactions as determined by the 

                                    CREDIT AGREEMENT
<PAGE>


                                    - 11 -



Administrative Agent.

      "FIXED CHARGES" shall mean, for any period, the sum of (i) Debt Service 
for such period PLUS (ii) taxes payable in cash in respect of such period.

      "FIXED CHARGES RATIO" shall mean, as at any date, the ratio of (a) 
EBITDA for the period of four consecutive fiscal quarters ending on or most 
recently ended prior to such date MINUS Capital Expenditures for such period 
to (b) Fixed Charges for such period.

      "FOREIGN SUBSIDIARY" shall have the meaning assigned to such term in 
Section 9.15(a) hereof.

      "GAAP" shall mean generally accepted accounting principles applied on a 
basis consistent with those that, in accordance with the last sentence of 
Section 1.02(a) hereof, are to be used in making the calculations for 
purposes of determining compliance with this Agreement.

      "GUARANTEE" shall mean a guarantee, an endorsement, a contingent 
agreement to purchase or to furnish funds for the payment or maintenance of, 
or otherwise to be or become contingently liable under or with respect to, 
the Indebtedness, other obligations, net worth, working capital or earnings 
of any Person, or a guarantee of the payment of dividends or other 
distributions upon the stock or equity interests of any Person, or an 
agreement to purchase, sell or lease (as lessee or lessor) Property, 
products, materials, supplies or services primarily for the purpose of 
enabling a debtor to make payment of such debtor's obligations or an 
agreement to assure a creditor against loss, and including, without 
limitation, causing a bank or other financial institution to issue a letter 
of credit or other similar instrument for the benefit of another Person, but 
excluding endorsements for collection or deposit in the ordinary course of 
business.  The terms "GUARANTEE" and "GUARANTEED" used as a verb shall have a 
correlative meaning.

      "GUARANTEE ASSUMPTION AGREEMENT" shall mean a Guarantee Assumption 
Agreement substantially in the form of Exhibit E hereto by an entity that, 
pursuant to Section 9.15(a) hereof is required to become a "Subsidiary 
Guarantor" hereunder in favor of the Administrative Agent.

      "HAZARDOUS MATERIAL" shall mean, collectively, (a) any petroleum or 
petroleum products, flammable materials, explosives, radioactive materials, 
asbestos, urea formaldehyde foam insulation, and transformers or other 
equipment that contain polychlorinated biphenyls ("PCB's"), (b) any chemicals 
or other materials or substances that are now or hereafter become defined 

                            CREDIT AGREEMENT
<PAGE>


                                 - 12 -


as or included in the definition of "hazardous substances", "hazardous 
wastes", "hazardous materials", "extremely hazardous wastes", "restricted 
hazardous wastes", "toxic substances", "toxic pollutants", "contaminants" or 
"pollutants" under any Environmental Law and (c) any other chemical or other 
material or substance, exposure to which is now or hereafter prohibited, 
limited or regulated under any Environmental Law.

      "INCREMENTAL TERM LOAN ACTIVATION DATE" shall mean the date designated 
as such in the Incremental Term Loan Activation Notice.

      "INCREMENTAL TERM LOAN ACTIVATION NOTICE" shall mean a notice 
substantially in the form of Exhibit A hereto.

      "INCREMENTAL TERM LOAN COMMITMENT" shall mean, for each Incremental 
Term Loan Lender, on and after the Incremental Term Loan Activation Date, the 
obligation of such Incremental Term Loan Lender to make or continue 
Incremental Term Loans in an aggregate principal amount up to but not 
exceeding the amount set opposite the name of such Incremental Term Loan 
Lender on the Incremental Term Loan Activation Notice under the caption 
"Incremental Term Loan Commitment" or, in the case of any Person that becomes 
an Incremental Term Loan Lender pursuant to an assignment permitted under 
Section 12.06(b) hereof, as specified in the respective instrument of 
assignment pursuant to which such assignment is effected (as the same may be 
reduced or increased pursuant to an assignment permitted under Section 
12.06(b) hereof).  The aggregate principal amount of the Incremental Term 
Loan Commitments on the date hereof is zero and shall not exceed $50,000,000.

      "INCREMENTAL TERM LOAN COMMITMENT TERMINATION DATE" shall mean the date 
designated as such in the Incremental Term Loan Activation Notice.

      "INCREMENTAL TERM LOAN LENDERS" shall mean the Lenders from time to 
time holding Incremental Term Loans and/or Incremental Term Loan Commitments 
(including after giving effect to any assignments thereof permitted by 
Section 12.06(b) hereof).

      "INCREMENTAL TERM LOAN PRINCIPAL PAYMENT DATES" shall mean the 
Quarterly Dates specified as such in the Incremental Term Loan Activation 
Notice.

      "INCREMENTAL TERM LOANS" shall mean the loans provided for by Section 
2.01(b) hereof, which may be Base Rate Loans and/or Eurodollar Loans.

      "INDEBTEDNESS" shall mean, for any Person: (a) obligations created, 
issued or incurred by such Person for 

                                  CREDIT AGREEMENT
<PAGE>

                                   - 13 -


borrowed money (whether by loan, the issuance and sale of debt securities or 
the sale of Property to another Person subject to an understanding or 
agreement, contingent or otherwise, to repurchase such Property from such 
Person); (b) obligations of such Person to pay the deferred purchase or 
acquisition price of Property or services (including in respect of 
non-competition agreements), other than trade accounts payable (other than 
for borrowed money) arising, and accrued expenses incurred, in the ordinary 
course of business so long as such trade accounts payable are payable within 
180 days of the date the respective goods are delivered or the respective 
services are rendered; (c) Indebtedness of others secured by a Lien on the 
Property of such Person, whether or not the respective indebtedness so 
secured has been assumed by such Person; (d) obligations of such Person in 
respect of letters of credit or similar instruments issued or accepted by 
banks and other financial institutions for account of such Person; (e) 
Capital Lease Obligations of such Person; and (f) Indebtedness of others 
Guaranteed by such Person.

      "INFORMATION MEMORANDUM" shall mean the Confidential Information 
Memorandum dated May, 1997 prepared by the Borrower with respect to the 
credit facilities referred to in this Agreement.

      "INTEREST COVERAGE RATIO" shall mean, as at any date, the ratio of (a) 
EBITDA for the period of four consecutive fiscal quarters ending on or most 
recently ended prior to such date to (b) Interest Expense of the Borrower and 
its Subsidiaries (determined on a consolidated basis without duplication in 
accordance with GAAP) for such period.

      "INTEREST EXPENSE" shall mean, for any period, the sum, for any Person 
and its Subsidiaries (determined on a consolidated basis without duplication 
in accordance with GAAP), of the following:  (a) all interest in respect of 
Indebtedness (including, without limitation, the interest component of any 
payments in respect of Capital Lease Obligations but excluding any 
capitalized financing costs) accrued or capitalized during such period 
(whether or not actually paid during such period), but excluding any non-cash 
interest PLUS (b) the net amount payable (or MINUS the net amount receivable) 
under Interest Rate Protection Agreements during such period (whether or not 
actually paid or received during such period).  For purposes hereof, the 
aggregate amount of upfront or one-time fees or expenses payable in respect 
of Interest Rate Protection Agreements shall be amortized over the life of 
the respective Interest Rate Protection Agreements in equal installments, and 
only the portion thereof so amortized during any period shall be treated as 
"Interest Expense" for such period.

                                CREDIT AGREEMENT
<PAGE>

                                    - 14 -


      "INTEREST PERIOD" shall mean, for any Eurocurrency Loan, each period 
commencing on the date such Eurocurrency Loan is made or, in the case of a 
Eurodollar Loan, Converted from a Base Rate Loan or (in the event of a 
Continuation) the last day of the next preceding Interest Period for such 
Loan and (subject to the provisions of Section 2.01(d) hereof) ending on the 
numerically corresponding day in the first, second, third or sixth calendar 
month thereafter, as the Borrower may select as provided in Section 4.05 
hereof, except that each Interest Period that commences on the last Business 
Day of a calendar month (or on any day for which there is no numerically 
corresponding day in the appropriate subsequent calendar month) shall end on 
the last Business Day of the appropriate subsequent calendar month.  
Notwithstanding the foregoing:

    (i)  no Interest Period for any Revolving Credit Loan may commence
    before and end after any Revolving Credit Commitment Reduction Date unless,
    after giving effect thereto, the aggregate principal amount of the
    Revolving Credit Loans having Interest Periods that end after such
    Revolving Credit Commitment Reduction Date shall be equal to or less than
    the aggregate amount of the Revolving Credit Commitments on such Commitment
    Reduction Date;

    (ii)  no Interest Period for any Tranche A Term Loan or Incremental
    Term Loan may commence before and end after any Tranche A Term Loan 
    Principal Payment Date or Incremental Term Loan Principal Payment Date, 
    respectively, unless, after giving effect thereto, the aggregate principal 
    amount of the Tranche A Term Loans or Incremental Term Loans having Interest
    Periods that end after such Tranche A Term Loan Principal Payment Date or 
    Incremental Term Loan Principal Payment Date, as the case may be, shall be 
    equal to or less than the aggregate principal amount of the Tranche A Term 
    Loans or Incremental Term Loans scheduled to be outstanding after giving 
    effect to the payments of principal required to be made on such Tranche A 
    Term Loan Principal Payment Date or Incremental Term Loan Principal Payment
    Date;

    (iii)  each Interest Period that would otherwise end on a day that is
    not a Business Day shall end on the next succeeding Business Day (or, in
    the case of an Interest Period for a Eurocurrency Loan, if such next
    succeeding Business Day falls in the next succeeding calendar month, on the
    next preceding Business Day); and

    (iv)  notwithstanding clauses (i) and (ii) above, no Interest Period
    shall have a duration of less than one month and, if the Interest Period
    for any Eurocurrency Loan would otherwise be a shorter period, such Loan
    shall not be 

                               CREDIT AGREEMENT
<PAGE>


                                     - 15 -


    available hereunder for such period.

      "INTEREST RATE PROTECTION AGREEMENT" shall mean, for any Person, an 
interest rate swap, cap or collar agreement or similar arrangement between 
such Person and one or more financial institutions providing for the transfer 
or mitigation of interest risks either generally or under specific 
contingencies.

      "INVESTMENT" shall mean, for any Person:  (a) the acquisition (whether 
for cash, Property, services or securities or otherwise) of capital stock, 
bonds, notes, debentures, partnership or other ownership interests or other 
securities of any other Person or any agreement to make any such acquisition 
(including, without limitation, any "short sale" or any sale of any 
securities at a time when such securities are not owned by the Person 
entering into such sale); (b) the making of any deposit with, or advance, 
loan or other extension of credit to, any other Person (including the 
purchase of Property from another Person subject to an understanding or 
agreement, contingent or otherwise, to resell such Property to such Person); 
(c) the entering into of any Guarantee of, or other contingent obligation 
with respect to, Indebtedness or other liability of any other Person and 
(without duplication) any amount committed to be advanced, lent or extended 
to such Person; or (d) the entering into of any Interest Rate Protection 
Agreement or any "swap agreement" (as defined in Section 101(53)(b) of the 
Bankruptcy Code).

      "ISSUING LENDER" shall mean Chase, as the issuer of Letters of Credit 
under Section 2.03 hereof, together with its successors and assigns in such 
capacity.

      "LETTER OF CREDIT" shall have the meaning assigned to such term in 
Section 2.03 hereof.

      "LETTER OF CREDIT DOCUMENTS" shall mean, with respect to any Letter of 
Credit, collectively, any application therefor and any other agreements, 
instruments, guarantees or other documents (whether general in application or 
applicable only to such Letter of Credit) governing or providing for (a) the 
rights and obligations of the parties concerned or at risk with respect to 
such Letter of Credit or (b) any collateral security for any of such 
obligations, each as the same may be modified and supplemented and in effect 
from time to time.

      "LETTER OF CREDIT INTEREST" shall mean, for each Revolving Credit 
Lender, such Lender's participation interest (or, in the case of the Issuing 
Lender, the Issuing Lender's retained interest) in the Issuing Lender's 
liability under Letters of Credit and such Lender's rights and interests in 
Reimbursement Obligations and fees, interest and other amounts 

                               CREDIT AGREEMENT
<PAGE>


                                     - 16 -



payable in connection with Letters of Credit and Reimbursement Obligations.

      "LETTER OF CREDIT LIABILITY" shall mean, without duplication, at any 
time and in respect of any Letter of Credit, the sum of (a) the undrawn face 
amount of such Letter of Credit PLUS (b) the aggregate unpaid principal 
amount of all Reimbursement Obligations of the Borrower at such time due and 
payable in respect of all drawings made under such Letter of Credit.  For 
purposes of this Agreement, a Revolving Credit Lender (other than the Issuing 
Lender) shall be deemed to hold a Letter of Credit Liability in an amount 
equal to its participation interest in the related Letter of Credit under 
Section 2.03 hereof, and the Issuing Lender shall be deemed to hold a Letter 
of Credit Liability in an amount equal to its retained interest in the 
related Letter of Credit after giving effect to the acquisition by the 
Revolving Credit Lenders other than the Issuing Lender of their participation 
interests under said Section 2.03.

      "LETTER OF CREDIT LIMIT" shall mean $5,000,000.

      "LIEN" shall mean, with respect to any Property, any mortgage, lien, 
pledge, charge, security interest or encumbrance of any kind in respect of 
such Property.  For purposes of this Agreement and the other Loan Documents, 
a Person shall be deemed to own subject to a Lien any Property that it has 
acquired or holds subject to the interest of a vendor or lessor under any 
conditional sale agreement, capital lease or other title retention agreement 
(other than an operating lease) relating to such Property.

      "LOAN DOCUMENTS" shall mean, collectively, this Agreement, any 
promissory notes issued pursuant hereto, the Letter of Credit Documents and 
the Security Documents.

      "LOANS" shall mean, collectively, the Revolving Credit Loans and the 
Term Loans.

      "MAJORITY LENDERS" shall mean Lenders holding in the aggregate 51% of 
the Commitments and Loans.

      "MAJORITY REVOLVING CREDIT LENDERS" shall mean Revolving Credit Lenders 
having at least 51% of the aggregate amount of the Revolving Credit 
Commitments or, if the Revolving Credit Commitments shall have terminated, 
Lenders holding at least 51% of the sum of (a) the aggregate unpaid principal 
amount of the Revolving Credit Loans plus (b) the aggregate amount of all 
Letter of Credit Liabilities.

      "MANAGEMENT GROUP" shall mean, collectively, William C. 

                             CREDIT AGREEMENT

<PAGE>

                                     -17-

Scott, John S. Farrand and Jeffrey J. Marcketta.

    "MARGIN STOCK" shall mean "margin stock" within the meaning of 
Regulations G, T, U and X.

    "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the 
Property, business, operations, financial condition, prospects or liabilities 
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of any 
Obligor to perform its obligations under any of the Loan Documents to which 
it is a party, (c) the validity or enforceability of any of the Loan 
Documents, (d) the rights and remedies of the Lenders and the Administrative 
Agent under any of the Loan Documents or (e) the timely payment of the 
principal of or interest on the Loans or the Reimbursement Obligations or 
other amounts payable in connection therewith.

    "MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined as such in 
Section 3(37) of ERISA to which contributions have been made by the Borrower 
or any ERISA Affiliate and that is covered by Title IV of ERISA.

    "NET AVAILABLE PROCEEDS" shall mean:

         (i)   in the case of any Disposition, the amount of Net Cash
    Payments received in connection with such Disposition;

         (ii)  in the case of any Casualty Event, the aggregate amount of
    proceeds of insurance, condemnation awards and other compensation received 
    by the Borrower and its Subsidiaries in respect of such Casualty Event net 
    of (A) reasonable expenses incurred by the Borrower and its Subsidiaries in
    connection therewith, (B) contractually required repayments of Indebtedness 
    to the extent secured by a Lien on such Property or contractually required
    payments to a lessor in respect of such Property and (C) any income and 
    transfer taxes payable by the Borrower or any of its Subsidiaries in respect
    of such Casualty Event;

         (iii) in the case of any Equity Issuance, the aggregate amount of
    all cash received by the Borrower and/or its Subsidiaries in respect of
    such Equity Issuance net of expenses incurred by the Borrower and/or its
    Subsidiaries in connection therewith; and

         (iv)  in the case of any issuance or incurrence of Indebtedness, the
    aggregate amount of all cash received by the Borrower and its Subsidiaries
    in respect of such Indebtedness net of expenses incurred by the Borrower
    and its Subsidiaries in connection therewith.


                               CREDIT AGREEMENT
<PAGE>

                                     -18-

     "NET CASH PAYMENTS" shall mean, with respect to any Disposition, the 
aggregate amount of all cash payments received by the Borrower and/or its 
Subsidiaries directly or indirectly in connection with such Disposition; 
PROVIDED that:  (a) Net Cash Payments shall be net of (i) the amount of any 
legal, title and recording tax expenses, commissions and other fees and 
expenses paid by the Borrower and/or its Subsidiaries in connection with such 
Disposition and (ii) any foreign, U.S. Federal, state and local income or 
other taxes (including sales and value added taxes and including taxes 
payable in connection with the transfer of funds to the Borrower or any of 
its Subsidiaries in connection with a prepayment pursuant to Section 2.10(d) 
hereof) estimated to be payable by the Borrower and its Subsidiaries as a 
result of such Disposition; (b) Net Cash Payments shall be net of any 
repayments by the Borrower and/or any of its Subsidiaries of Indebtedness to 
the extent that (i) such Indebtedness is secured by a Lien on the Property 
that is the subject of such Disposition and (ii) the transferee of (or holder 
of a Lien on) such Property requires that such Indebtedness be repaid as a 
condition to the purchase of such Property; and (c) Net Cash Payments shall 
be net of appropriate amounts to be provided by the Borrower and/or any of 
its Subsidiaries as a reserve (whether or not contained in an escrow or 
similar arrangement) against any liabilities associated with such Disposition 
and retained by the Borrower and/or any such Subsidiary after such 
Disposition, including pension and other post-retirement liabilities, 
liabilities relating to environmental matters and liabilities under 
indemnification obligations associated with such Disposition.

    "NEW ZEALAND ACQUISITION AGREEMENT" shall mean the Share Sale Agreement 
dated as of May 18, 1997 between Visual Action Holdings and the Borrower.

    "NEW ZEALAND PLEDGE AGREEMENT" shall mean the Share Charge Agreement 
dated June 5, 1997 pursuant to which the Borrower grants to the 
Administrative Agent a security interest in shares of capital stock of Visual 
Action NZ, as the same shall be modified and supplemented and in effect from 
time to time.

    "PANAVISION CANADA HOLDINGS" shall mean Panavision Canada Holdings Inc., 
a Canada corporation.

    "PANAVISION EUROPE" means Panavision Europe Limited, a U.K. limited 
company.

    "PANAVISION LUXEMBOURG" means Panavision Luxembourg S.a.r.l., a 
Luxembourg corporation.

    "PANAVISION U.K. L.P." means Panavision U.K. L.P., a U.K. limited 
partnership.


                               CREDIT AGREEMENT
<PAGE>

                                     -19-

    "PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity 
succeeding to any or all of its functions under ERISA.

    "PERMITTED INVESTMENTS" shall mean, with respect to any Person: (a) 
direct obligations of the United States of America, or of any agency thereof, 
or obligations guaranteed as to principal and interest by the United States 
of America, or of any agency thereof, in either case maturing not more than 
360 days from the date of acquisition thereof; (b) U.S. dollar denominated 
(or, with respect to Foreign Subsidiaries, U.S. dollar denominated and 
non-U.S. dollar denominated) time deposits and certificates of deposit of (i) 
any Lender or (ii) any domestic (or, with respect to Foreign Subsidiaries, 
any domestic or nondomestic) bank or trust company having capital, surplus 
and undivided profits of at least $500,000,000, maturing not more than 360 
days from the date of acquisition thereof; (c) repurchase obligations with 
respect to obligations of the type (but not necessarily the maturity) 
described in clause (a) above issued by any bank or trust company described 
in clause (b) above and maturing not more than 270 days from the date of 
acquisition thereof by such Person; (d) commercial paper rated A-1 or better 
or P-1 by Standard & Poor's Ratings Group, a Division of The McGraw Hill 
Companies, Inc., or Moody's Investors Services, Inc., respectively, maturing 
not more than 90 days from the date of acquisition thereof; (e) interests in 
any money market mutual fund registered under the Investment Company Act of 
1940, as amended, the portfolio of which is limited to obligations described 
in the foregoing clauses (a), (b), (c) and (d), so long as such fund has 
total assets of at least $1,000,000,000 and is rated AAAm-G or better or AAA 
or better by Standard & Poor's Ratings Group or Moody's Investors Services, 
Inc., respectively; and (f) the Warburg Pincus Cash Reserve Fund, so long as 
substantially all of the investments in the portfolio of such Fund consist of 
obligations (i) which are of the type referred to in the foregoing clauses 
(a), (b), (c) and (d), and (ii) which mature within one year of the date upon 
which they are acquired; in each case so long as the same (x) provide for the 
payment of principal and interest (and not principal alone or interest alone) 
and (y) are not subject to any contingency regarding the payment of principal 
or interest.

    "PERSON" shall mean any individual, corporation, company, voluntary 
association, partnership, limited liability company, joint venture, trust, 
unincorporated organization or government (or any agency, instrumentality or 
political subdivision thereof).

    "PILP" shall mean Panavision International, L.P., a Delaware limited 
partnership.


                               CREDIT AGREEMENT
<PAGE>

                                     -20-

    "PLAN" shall mean an employee benefit or other plan established or 
maintained by the Borrower or any ERISA Affiliate and that is covered by 
Title IV of ERISA, other than a Multiemployer Plan.

    "POST-DEFAULT RATE" shall mean a rate per annum equal to 2% PLUS the Base 
Rate as in effect from time to time PLUS the Applicable Margin for Base Rate 
Loans, PROVIDED that, with respect to principal of a Eurocurrency Loan that 
shall become due (whether at stated maturity, by acceleration, by optional or 
mandatory prepayment or otherwise) on a day other than the last day of the 
Interest Period therefor, the "Post-Default Rate" shall be, for the period 
from and including such due date to but excluding the last day of such 
Interest Period, 2% PLUS the interest rate for such Loan as provided in 
Section 3.02(b) hereof and, thereafter, the rate provided for above in this 
definition.

    "POUNDS STERLING" and "L" shall mean lawful money of England.

    "PRIME RATE" shall mean the rate of interest from time to time announced 
by Chase at the principal office of Chase in New York, New York as its prime 
commercial lending rate.

    "PROPERTY" shall mean any right or interest in or to property of any kind 
whatsoever, whether real, personal or mixed and whether tangible or 
intangible.

    "PURCHASE PRICE" shall mean with respect to any acquisition under Section 
9.05(b)(iv) hereof, an amount equal to the sum of (i) the aggregate 
consideration, whether cash, Property or securities (including, without 
limitation, any Indebtedness incurred pursuant to Section 9.07(e) hereof), 
paid or delivered by the Borrower and its Subsidiaries (but excluding any 
fees or expenses payable) in connection with such acquisition PLUS (ii) the 
aggregate amount of liabilities of the Acquired Entity (net of current assets 
of the Acquired Entity) that would be reflected on a balance sheet (if such 
were to be prepared) of the Borrower and its Subsidiaries after giving effect 
to such acquisition.

    "QUARTERLY DATES" shall mean the last Business Day of March, June, 
September and December in each year, the first of which shall be the first 
such day after the Effective Date.

    "REFERENCE LENDERS" shall mean Chase and each other Lender (if any) 
designated as such by the Administrative Agent after the Effective Date (or 
their respective Applicable Lending Offices, as the case may be).


                               CREDIT AGREEMENT
<PAGE>

                                     -21-

    "REGISTERED HOLDER" shall have the meaning assigned to such term in 
Section 5.07(a)(ii) hereof.

    "REGISTERED LOAN" shall have the meaning assigned to such term in Section 
12.06(g) hereof.

    "REGULATIONS A, D, G, T, U AND X" shall mean, respectively, Regulations 
A, D, G, T, U and X of the Board of Governors of the Federal Reserve System 
(or any successor), as the same may be modified and supplemented and in 
effect from time to time.

    "REGULATORY CHANGE" shall mean, with respect to any Lender, any change 
after the Effective Date in Federal, state or foreign law or regulations 
(including, without limitation, Regulation D) or the adoption or making after 
such date of any interpretation, directive or request applying to a class of 
banks or other financial institutions including such Lender of or under any 
Federal, state or foreign law or regulations (whether or not having the force 
of law and whether or not failure to comply therewith would be unlawful) by 
any court or governmental or monetary authority charged with the 
interpretation or administration thereof.

    "REIMBURSEMENT OBLIGATIONS" shall mean, at any time, the obligations of 
the Borrower then outstanding, or that may thereafter arise in respect of all 
Letters of Credit then outstanding, to reimburse amounts paid by the Issuing 
Lender in respect of any drawings under a Letter of Credit.

    "RELEASE" shall mean any release, spill, emission, leaking, pumping, 
injection, deposit, disposal, discharge, dispersal, leaching or migration 
into or through ambient air, soil, surface water, ground water, wetlands, 
land or subsurface strata.

    "RESERVE REQUIREMENT" shall mean, for any Interest Period for any 
Eurocurrency Loan, the average maximum rate at which reserves (including, 
without limitation, any marginal, supplemental or emergency reserves) are 
required to be maintained during such Interest Period under Regulation D by 
member banks of the Federal Reserve System in New York City with deposits 
exceeding one billion Dollars against "Eurocurrency liabilities" (as such 
term is used in Regulation D).  Without limiting the effect of the foregoing, 
the Reserve Requirement shall include any other reserves required to be 
maintained by such member banks by reason of any Regulatory Change with 
respect to (i) any category of liabilities that includes deposits by 
reference to which the Eurocurrency Rate for any Interest Period for any 
Eurocurrency Loans is to be determined as provided in the definition of 
"Eurocurrency Rate" in this Section 1.01 or


                               CREDIT AGREEMENT
<PAGE>

                                     -22-

(ii) any category of extensions of credit or other assets that includes 
Eurocurrency Loans.

    "RESTRICTED PAYMENT" shall mean distributions or dividends (in cash, 
Property or obligations) on, or other payments on account of, or the setting 
apart of money for a sinking or other analogous fund for, or the purchase, 
redemption, retirement or other acquisition of, or any shares of any class of 
stock of, the Borrower or of any warrants, options or other rights to acquire 
the same (or to make any payments to any Person, such as "phantom stock" 
payments, where the amount thereof is calculated with reference to the fair 
market or equity value of the Borrower or any of its Subsidiaries), but 
excluding distributions or dividends (or options therein) payable solely in 
shares of capital stock of the Borrower.

    "REVOLVING CREDIT COMMITMENT" shall mean, as to each Revolving Credit 
Lender, the obligation of such Lender to make Revolving Credit Loans, and to 
issue or participate in Letters of Credit pursuant to Section 2.03 hereof, in 
an aggregate principal or face amount at any one time outstanding up to but 
not exceeding the amount set opposite the name of such Lender on Schedule I 
hereto under the caption "Revolving Credit Commitment" or, in the case of a 
Person that becomes a Revolving Credit Lender pursuant to an assignment 
permitted under Section 12.06(b) hereof, as specified in the respective 
instrument of assignment pursuant to which such assignment is effected (as 
the same may be reduced at any time or from time to time pursuant to Section 
2.04 or 2.10 hereof).  The original aggregate principal amount of the 
Revolving Credit Commitments is $90,000,000.  The obligation of each Sterling 
Lender to make Sterling Loans to the Borrower in an amount up to but not 
exceeding its Sterling Sub-Limit shall constitute a portion of such Lender's 
Revolving Credit Commitment.

    "REVOLVING CREDIT COMMITMENT PERCENTAGE" shall mean, with respect to any 
Revolving Credit Lender, the ratio of (a) the amount of the Revolving Credit 
Commitment of such Lender to (b) the aggregate amount of the Revolving Credit 
Commitments of all of the Lenders.

    "REVOLVING CREDIT COMMITMENT TERMINATION DATE" shall mean the Quarterly 
Date falling on or nearest to June 30, 2004.

    "REVOLVING CREDIT COMMITMENT REDUCTION DATES" shall mean the Quarterly 
Date falling on or nearest to March 31, 1999 and each Quarterly Date 
thereafter to and including the Revolving Credit Commitment Termination Date.

    "REVOLVING CREDIT LENDERS" shall mean (a) on the date hereof, the Lenders 
having Revolving Credit Commitments on


                               CREDIT AGREEMENT
<PAGE>

                                     -23-

Schedule I hereto and (b) thereafter, the Lenders from time to time holding 
Revolving Credit Loans and Revolving Credit Commitments after giving effect 
to any assignments thereof permitted by Section 12.06(b) hereof.

    "REVOLVING CREDIT LOANS" shall mean the loans provided for in Section 
2.01(a) hereof, which, in the case of Dollar Loans, may be Base Rate Loans or 
Eurodollar Loans and, in the case of Sterling Loans, may be Eurosterling 
Loans only.

    "SAMUELSON GROUP" means Samuelson Group Limited, a U.K. limited company.

    "SECURITY AGREEMENT" shall mean the Security Agreement dated as of June 
5, 1997, between the Borrower, certain of the other Obligors and the 
Administrative Agent, in substantially the form attached as Exhibit B hereto 
and as the same shall be further modified and supplemented and in effect from 
time to time.

    "SECURITY DOCUMENTS" shall mean, collectively, the Security Agreement, 
the New Zealand Pledge Agreement, the U.K. Pledge Agreement, all Uniform 
Commercial Code financing statements required by the Security Agreement to be 
filed with respect to the security interests in personal Property created 
pursuant to the Security Agreement and all filings, recordings, registrations 
and/or other similar steps required by the New Zealand Pledge Agreement, the 
U.K. Pledge Agreement with respect to the charges created pursuant thereto.

    "SENIOR OFFICER" shall mean the chief executive officer or chief 
financial officer of the Borrower (it being understood that any individual 
acting in the capacity of a Senior Officer shall act on behalf of the 
Borrower and not in his or her individual capacity).

    "SIGNIFICANT SUBSIDIARY" shall mean, as at any time, any Subsidiary of 
the Borrower that has assets in excess of $2,000,000 at such time (or, if 
such Subsidiary's assets are denominated in a currency other than Dollars, 
the U.S. dollar equivalent thereof).

    "STERLING EQUIVALENT" shall mean, with respect to any amount in Dollars, 
the amount of Pounds Sterling that could be purchased with such amount of 
Dollars using the reciprocal of the foreign exchange rate(s) specified in the 
definition of the term "Dollar Equivalent", as determined by the 
Administrative Agent.

    "STERLING LENDER" shall mean (a) on the date hereof, the Revolving Credit 
Lenders having a Sterling Sub-Limit on Schedule I hereto and (b) thereafter, 
the Revolving Credit


                               CREDIT AGREEMENT
<PAGE>

                                     -24-

Lenders from time to time holding Sterling Loans and having Sterling 
Sub-Limits after giving effect to any assignments thereof permitted by 
Section 12.06(b) hereof

    "STERLING LOANS" shall mean the Revolving Credit Loans provided for in 
Section 2.01(a)(ii) hereof, which may be Eurosterling Loans only.

    "STERLING SUB-LIMIT" shall mean, as to each Sterling Lender, the 
obligation of such Lender to make Revolving Credit Loans, in an aggregate 
principal at any one time outstanding up to but not exceeding the amount set 
opposite the name of such Lender on Schedule I hereto under the caption 
"Sterling Sub-Limit" or, in the case of a Person that becomes a Sterling 
Lender pursuant to an assignment permitted under Section 12.06(b) hereof, as 
specified in the respective instrument of assignment pursuant to which such 
assignment is effected (as the same may be reduced at any time or from time 
to time pursuant to Section 2.04 or 2.10 hereof).  The original aggregate 
principal amount of the Sterling Sub-Limit is the Sterling Equivalent of 
$40,000,000.  No Sterling Lender's Sub-Limit may exceed such Sterling 
Lender's Revolving Credit Commitment LESS an amount equal to such Sterling 
Lender's Revolving Credit Commitment Percentage of the Letter of Credit Limit.

    "SUB-CLASS" shall have the meaning assigned to such term in Section 1.03 
hereof.

    "SUBORDINATED INDEBTEDNESS" shall mean Indebtedness of the Borrower or 
any of its Subsidiaries incurred in accordance with Section 9.11(a) hereof.

    "SUBSIDIARY" shall mean, with respect to any Person, any corporation, 
partnership or other entity of which at least a majority of the securities or 
other ownership interests having by the terms thereof ordinary voting power 
to elect a majority of the board of directors or other persons performing 
similar functions of such corporation, partnership or other entity 
(irrespective of whether or not at the time securities or other ownership 
interests of any other class or classes of such corporation, partnership or 
other entity shall have or might have voting power by reason of the happening 
of any contingency) is at the time directly or indirectly owned or controlled 
by such Person or one or more Subsidiaries of such Person or by such Person 
and one or more Subsidiaries of such Person.

    "TERM LOAN LENDERS" shall mean, collectively, the Tranche A Term Loan 
Lenders and the Incremental Term Loan Lenders (if any).

    "TERM LOANS" shall mean, collectively, the Tranche A


                               CREDIT AGREEMENT
<PAGE>

                                     -25-

Term Loans and the Incremental Term Loans, if any. 

    "TOTAL DEBT RATIO" shall mean, as at any date, the ratio of (a) the sum, 
for the Borrower and its Subsidiaries (determined on a consolidated basis 
without duplication in accordance with GAAP), of the aggregate amount of all 
Indebtedness (including, without limitation, all Subordinated Indebtedness, 
except as expressly provided below) as at such date to (b) EBITDA for the 
period of four consecutive fiscal quarters ending on, or most recently ended 
prior to, such date; PROVIDED that in calculating Total Debt Ratio for 
purposes of determining the "Applicable Margin" and the "Applicable Fee Rate" 
(and for no other purpose), Indebtedness shall not include any Subordinated 
Indebtedness of the Borrower or its Subsidiaries.

    "TRANCHE A TERM LOAN LENDERS" shall mean (a) on the date hereof, the 
Lenders having Term Loan Commitments on Schedule I hereto and (b) thereafter, 
the Lenders from time to time holding Term Loan Commitments after giving 
effect to any assignments thereof permitted by Section 12.06(b) hereof.

    "TRANCHE A TERM LOAN COMMITMENT" shall mean, for each Tranche A Term Loan 
Lender, the obligation of such Tranche A Term Loan Lender to make (on the 
Effective Date) or Continue Tranche A Term Loans in an amount up to but not 
exceeding the amount set opposite the name of such Lender on Schedule I 
hereto under the caption "Tranche A Term Loan Commitment" or, in the case of 
any Person that becomes a Tranche A Term Loan Lender pursuant to an 
assignment permitted under Section 12.06(b) hereof, as specified in the 
respective instrument of assignment pursuant to which such assignment is 
effected (as the same may be reduced or increased pursuant to an assignment 
permitted under Section 12.06(b) hereof).  The original aggregate principal 
amount of the Tranche A Term Loan Commitments is $60,000,000.

    "TRANCHE A TERM LOAN PRINCIPAL PAYMENT DATES" shall mean the Quarterly 
Dates falling on or nearest to March 31, June 30, September 30 and December 
31 of each year, commencing with March  31, 1998 through and including June 
30, 2004.

    "TRANCHE A TERM LOANS" shall mean the loans provided for by Section 
2.01(b) hereof, which may be Base Rate Loans and/or Eurodollar Loans.

    "TYPE" shall have the meaning assigned to such term in Section 1.03 
hereof.

    "U.K. PERSON" shall mean a citizen or resident of the United Kingdom, a 
corporation, partnership or other entity created or organized in or under any 
laws of the United Kingdom or any political subdivision thereof, or any 
estate or trust that is subject to U.K. income taxation regardless of the 
source of


                               CREDIT AGREEMENT
<PAGE>

                                     -26-

its income.

    "U.K. PLEDGE AGREEMENT" shall mean the Share Charge Agreement dated as of 
June 5, 1997 pursuant to which the Borrower grants to the Administrative 
Agent a security interest in shares of Panavision Europe, as the same shall 
be modified and supplemented and in effect from time to time.

    "U.K. TAXES" shall mean any present or future tax, assessment or other 
charge or levy imposed by or on behalf of the United States of America or any 
taxing authority thereof.

    "U.S. ACQUISITION AGREEMENT" shall mean the Share Sale Agreement dated as 
of May 18, 1997 between Visual Action Holdings Inc. and the Borrower.

    "U.S. PERSON" shall mean a citizen or resident of the United States of 
America, a corporation, partnership or other entity created or organized in 
or under any laws of the United States of America or any State thereof, or 
any estate or trust that is subject to Federal income taxation regardless of 
the source of its income.

    "U.S. TAXES" shall mean any present or future tax, assessment or other 
charge or levy imposed by or on behalf of the United States of America or any 
taxing authority thereof.

    "VDI" means Victor Duncan Inc., a Michigan corporation.

    "VISUAL ACTION ACQUISITION" shall mean (a) the purchase by Panavision 
Europe of the share capital of Samuelson Group, (b) the purchase by the 
Borrower of the share capital of Visual Action NZ and (c) the purchase by the 
Borrower of all issued and outstanding shares of capital stock of VDI.

    "VISUAL ACTION ACQUISITION AGREEMENT" shall mean the Agreement for the 
sale and purchase of the share capital of Samuelson Group dated as of May 18, 
1997 between Visual Action Holdings, Panavision Europe and the Borrower.

    "VISUAL ACTION ACQUISITION DOCUMENTS" shall mean the Visual Action 
Acquisition Agreement, the New Zealand Acquisition Agreement, the U.S. 
Acquisition Agreement and all other agreements and instruments (together with 
any and all exhibits, annexes and schedules thereto) executed and delivered 
between any of Visual Action Holdings, Visual Action Holdings Inc., Visual 
Action NZ, the Borrower, Panavision Europe and their respective Affiliates, 
in connection with the Visual Action Acquisition.

    "VISUAL ACTION HOLDINGS" means Visual Action Holdings plc, a U.K. public 
limited company.


                               CREDIT AGREEMENT
<PAGE>

                                     -27-

     "VISUAL ACTION HOLDINGS INC." means Visual Action Holdings Inc., a
Delaware corporation.

     "VISUAL ACTION NZ" means Visual Action Holdings (N.Z.) Limited, a New
Zealand limited company.

     "WARBURG AFFILIATE" shall mean any Subsidiary of any of the entities 
listed in clauses (i) through (v), inclusive, of the definition of "Warburg 
Pincus" in this Section 1.01.

      "WARBURG PINCUS" shall mean, collectively: (i) Warburg, Pincus Capital 
Company, L.P., a Delaware limited partnership, (ii) Warburg, Pincus Capital 
Partners, L.P., a Delaware limited partnership, (iii) Warburg, Pincus 
Investors, L.P., a Delaware limited partnership, (iv) Warburg, Pincus & Co., 
a New York general partnership, and (v) any other venture banking fund in 
which Warburg, Pincus & Co. is the general partner.

     "WHOLLY OWNED SUBSIDIARY" shall mean, with respect to any Person, any 
corporation, partnership or other entity of which all of the equity 
securities or other ownership interests (other than, in the case of a 
corporation, directors' qualifying shares and, in the case of Panavision 
Canada Holdings, shares and/or options for shares issued (or to be issued) to 
its management) are directly or indirectly owned or controlled by such Person 
or one or more Wholly Owned Subsidiaries of such Person or by such Person and 
one or more Wholly Owned Subsidiaries of such Person (it being understood 
that, in the case of Panavision Canada Holdings, the issue of such shares 
and/or options contemplated above shall not preclude it from being treated as 
a Wholly-Owned Subsidiary of the Borrower for purposes of this Agreement).

    "WORKING CAPITAL" shall mean, as at such date, for the Borrower and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) the sum of inventory PLUS accounts
receivable MINUS (b) the sum of accounts payable PLUS accrued expenses at such
date.

                                CREDIT AGREEMENT
<PAGE>

                                     -28-

     1.02  ACCOUNTING TERMS AND DETERMINATIONS.

     (a)  Except as otherwise expressly provided herein, all accounting terms 
used herein shall be interpreted, and all financial statements and 
certificates and reports as to financial matters required to be delivered to 
the Lenders hereunder shall (unless otherwise disclosed to the Lenders in 
writing at the time of delivery thereof in the manner described in Section 
1.02(b) hereof) be prepared, in accordance with generally accepted accounting 
principles in the United States applied on a basis consistent with those used 
in the preparation of the latest financial statements furnished to the 
Lenders hereunder (which, prior to the delivery of the first financial 
statements under Section 9.01 hereof, shall mean the audited financial 
statements as at December 31, 1996 referred to in Section 8.02 hereof).  All 
calculations made for the purposes of determining compliance with this 
Agreement shall (except as otherwise expressly provided herein) be made by 
application of U.S. generally accepted accounting principles applied on a 
basis consistent with those used in the preparation of the latest annual or 
quarterly financial statements furnished to the Lenders pursuant to Section 
9.01 hereof (or, prior to the delivery of the first financial statements 
under Section 9.01 hereof, used in the preparation of the audited financial 
statements as at December 31, 1996 referred to in Section 8.02 hereof) unless

       (i)  the Borrower shall have objected to determining such
    compliance on such basis at the time of delivery of such financial
    statements or

       (ii)  the Majority Lenders shall so object in writing within 30 days
    after delivery of such financial statements,

in either of which events such calculations shall be made on a basis 
consistent with those used in the preparation of the latest financial 
statements as to which such objection shall not have been made (which, if 
objection is made in respect of the first financial statements delivered 
under Section 9.01 hereof, shall mean the audited financial statements 
referred to in Section 8.02 hereof).

     (b)  The Borrower shall deliver to the Lenders at the same time as the 
delivery of any annual or quarterly financial statement under Section 9.01 
hereof (i) a description in reasonable detail of any material variation 
between the application of accounting principles employed in the preparation 
of such statement and the application of accounting principles employed in 
the preparation of the next preceding annual or quarterly financial 
statements as to which no objection has been made in accordance with the last 
sentence of Section 1.02(a) hereof and (ii) reasonable estimates of the 
difference between 

                                CREDIT AGREEMENT

<PAGE>
 
                                     -29-

such statements arising as a consequence thereof.

     (c)  Except as expressly provided herein, all calculations made pursuant 
to this Agreement with respect to any period prior to the consummation of the 
Visual Action Acquisition (or with respect to any period in which an 
Acquisition is consummated) shall be calculated on a pro forma basis as if 
the Visual Action Acquisition (or such Acquisition) had been consummated on 
the first day of such period and as if any Indebtedness incurred or assumed 
in connection with the Visual Action Acquisition (or such Acquisition) were 
outstanding throughout such period, using the estimates and pro forma 
adjustments set forth in the pro forma financial statements described in 
clause (v) of Section 8.02 hereof (or, in the case of an Acquisition, such 
reasonable estimates and pro forma adjustments effected in accordance with 
U.S. generally accepted accounting principles as the Borrower shall propose 
and the Administrative Agent shall approve).

     (d)  To enable the ready and consistent determination of compliance with 
the covenants set forth in Section 9 hereof, the Borrower will not change (i) 
the last day of its fiscal year from December 31 of each year, or (ii) the 
last days of the first three fiscal quarters in each of its fiscal years from 
March 31, June 30 and September 30 of each year, respectively.

      1.03  CLASSES, CURRENCIES AND TYPES OF LOANS; SUB-CLASSES OF REVOLVING 
CREDIT LOANS.  Loans hereunder are distinguished by "Class", by "Currency" 
and by "Type".  The "Class" of a Loan (or of a Commitment to make a Loan) 
refers to whether such Loan is a Revolving Credit Loan, a Tranche A Term Loan 
or an Incremental Term Loan, each of which constitutes a Class.  The 
"Currency" of a Loan refers to the Currency in which such Loan is 
denominated.  The "Type" of a Loan refers to whether such Loan is a Base Rate 
Loan or a Eurocurrency Loan, each of which constitutes a Type.  Loans may be 
identified by Class, Currency and Type.  Revolving Credit Loans hereunder are 
also distinguished by "Sub-Class".  The "Sub-Class" of a Revolving Credit 
Loan refers to whether such Loan is a Dollar Loan or a Sterling Loan.

      Section 2.  COMMITMENTS, LOANS, EVIDENCE OF DEBT AND PREPAYMENTS.

      2.01  LOANS.

      (a)  REVOLVING CREDIT LOANS.

      (i)  Each Revolving Credit Lender severally agrees, on the terms
and conditions of this Agreement, to 

                                CREDIT AGREEMENT
<PAGE>

                                     -30-

make loans to the Borrower in Dollars during the period from and including 
the Effective Date to but not including the Revolving Credit Commitment 
Termination Date in an aggregate principal amount at any one time outstanding 
up to but not exceeding the Available Dollar Commitment of such Lender, 
PROVIDED that in no event shall the aggregate principal amount of all Dollar 
Loans, together with the aggregate amount of all Letter of Credit 
Liabilities, exceed the aggregate Available Dollar Commitments of the 
Revolving Credit Lenders at any time. Subject to the terms and conditions of 
this Agreement, during such period the Borrower may borrow, repay and 
reborrow the amount of the Available Dollar Commitments of the Revolving 
Credit Lenders by means of Base Rate Loans and Eurodollar Loans and may 
Convert such Dollar Loans of one Type into Dollar Loans of another Type (as 
provided in Section 2.09 hereof) or Continue Dollar Loans of one Type as 
Dollar Loans of the same Type (as provided in Section 2.09 hereof).

      (ii)  Each Sterling Lender severally agrees, on the terms and
conditions of this Agreement, to make loans to the Borrower in Pounds
Sterling during the period from and including the Effective Date to but not
including the Revolving Credit Commitment Termination Date in an aggregate
principal amount at any one time outstanding up to but not exceeding the
Sterling Equivalent of the lesser of (a) the amount of the Sterling
Sub-Limit of such Sterling Lender as in effect from time to time and (b) the
unutilized Revolving Credit Commitment of such Sterling Lender (for which
purpose use of the Revolving Credit Commitments shall be deemed to include
the aggregate amount of such Sterling Lender's Revolving Credit Commitment
Percentage of all outstanding Letter of Credit Liabilities), PROVIDED that
in no event shall the aggregate principal amount of Sterling Loans exceed
the aggregate amount of the Sterling Sub-Limits as in effect from time to
time.  Subject to the terms and conditions of this Agreement, during such
period the Borrower may borrow, repay and reborrow the amount of the
Sterling Sub-Limits by means of Eurosterling Loans and Continue such
Eurosterling Loans as provided in Section 2.09 hereof.

       (iii)  Anything herein to the contrary notwithstanding, Revolving
Credit Loans shall not be available hereunder unless the Tranche A Term
Loan Commitments are fully utilized on the Effective Date.

     (b)  TRANCHE A TERM LOANS.  Each Tranche A Term Loan Lender severally
agrees, on the terms and conditions of this Agreement, to make a term loan to
the Borrower in Dollars on the Effective Date in an aggregate principal amount
up to but not 

                                CREDIT AGREEMENT

<PAGE>

                                     -31-

exceeding the amount of the Tranche A Term Loan Commitment of such Lender.  
Thereafter the Borrower may Convert Tranche A Term Loans of one Type into 
Tranche A Term Loans of another Type (as provided in Section 2.09 hereof) or 
Continue Tranche A Term Loans of one Type as Tranche A Term Loans of the same 
Type (as provided in Section 2.09 hereof).

     (c)  INCREMENTAL TERM LOANS.  The Borrower and one or more of the 
Lenders may, with the consent of the Administrative Agent, at any one time 
during the period from and including the Effective Date to but excluding the 
Revolving Credit Commitment Termination Date agree that such Lenders shall 
become Incremental Term Loan Lenders by executing and delivering to the 
Administrative Agent an Incremental Term Loan Activation Notice specifying 
the respective Incremental Term Loan Commitments of the Incremental Term Loan 
Lenders, the Incremental Term Loan Activation Date, the Incremental Term Loan 
Commitment Termination Date, the rate of commitment fee, if any, payable by 
the Borrower in respect of the Incremental Term Loan Commitments, the 
Applicable Margin for Incremental Term Loans and, subject to Section 3.01(c) 
hereof, the Incremental Term Loan Principal Payment Dates and the amounts of 
the installments of principal of the Incremental Term Loans payable thereon, 
and otherwise duly completed.  Each Incremental Term Loan Lender severally 
agrees, on the terms and conditions of this Agreement, to make one or more 
term loans to the Borrower in Dollars during the period from and including 
the Incremental Term Loan Activation Date to but excluding the Incremental 
Term Loan Commitment Termination Date in an aggregate principal amount up to 
but not exceeding the amount of the Incremental Term Loan Commitment of such 
Incremental Term Loan Lender as in effect from time to time.  Thereafter, 
subject to the terms and conditions of this Agreement, the Borrower may 
Convert Incremental Term Loans of one Type into Incremental Term Loans of 
another Type (as provided in Section 2.09 hereof) or Continue Incremental 
Term Loans of one Type as Incremental Term Loans of the same Type (as 
provided in Section 2.09 hereof).

     (d)  LIMIT ON EUROCURRENCY LOANS.  No more than ten separate Interest 
Periods in respect of Eurocurrency Loans of all Classes from each Lender may 
be outstanding at any one time.

     (e)  CURRENCY EQUIVALENTS.  Except as provided in Section 2.10(h), for 
purposes of determining (i) whether the amount of any borrowing of a Sterling 
Loan from a Sterling Lender would exceed such Sterling Lender's Sterling 
Sub-Limit or Revolving Credit Commitment, (ii) whether the amount of any 
borrowing of Sterling Loans would exceed the aggregate Sterling Sub-Limits, 
(iii) whether the amount of any borrowing of a Dollar Loan from a Revolving 
Credit Lender would exceed such Revolving Credit Lender's Available Dollar 
Commitment or (iv) whether the 

                                CREDIT AGREEMENT

<PAGE>

                                     -32-

issuance of any Letter of Credit would exceed the Available Dollar 
Commitments, the outstanding principal amount of any Sterling Loan shall be 
deemed to be the Dollar Equivalent (determined as of the date of borrowing of 
such Loan or the issuance of any Letter of Credit) of the amount in Pounds 
Sterling of such Loan.

     2.02  BORROWINGS.  The Borrower shall give the Administrative Agent 
notice of each borrowing hereunder as provided in Section 4.05 hereof.  Not 
later than 1:00 p.m. New York time (or, if with respect to a borrowing of 
Sterling Loans, 1:00 p.m. London time) on the date specified for each 
borrowing hereunder, each Lender shall make available the amount of the Loan 
or Loans to be made by it on such date to the Administrative Agent, at an 
account in New York, New York (or, if with respect to a borrowing of Sterling 
Loans, London, England) specified by the Administrative Agent, in immediately 
available funds, for account of the Borrower.  The amount so received by the 
Administrative Agent shall, subject to the terms and conditions of this 
Agreement, be made available to the Borrower by depositing the same, in 
immediately available funds, in an account of the Borrower designated by the 
Borrower and maintained with Chase at its principal office in New York, New 
York (or, in the case of Sterling Loans, in an account of the Borrower 
designated by the Borrower).

     2.03  LETTERS OF CREDIT.  Subject to the terms and conditions of this 
Agreement, the Available Dollar Commitments of the Revolving Credit Lenders 
may be utilized, upon the request of the Borrower, in addition to the Dollar 
Loans provided for by Section 2.01(a) hereof, by the issuance by the Issuing 
Lender of letters of credit (collectively, "LETTERS OF CREDIT") for account 
of the Borrower or any of its Subsidiaries (as specified by the Borrower), 
PROVIDED that in no event shall (i) the aggregate amount of all Letter of 
Credit Liabilities, together with the aggregate principal amount of Dollar 
Loans, exceed the aggregate amount of the Available Dollar Commitments from 
time to time, (ii) the outstanding aggregate amount of all Letter of Credit 
Liabilities exceed the Letter of Credit Limit and (iii) the expiration date 
(without giving effect to any extension thereof by reason of an interruption 
of business) of any Letter of Credit extend beyond the earlier of the 
Revolving Credit Commitment Termination Date and the date eighteen months 
following the issuance of such Letter of Credit (PROVIDED that any such 
Letter of Credit may provide for automatic extensions thereof to a date not 
later than twelve months beyond the current expiration date, so long as such 
extended expiration date is not later than eighteen months after the date 
upon which such automatic extension may no longer be canceled).  The 
following additional provisions shall apply to Letters of Credit:

                                CREDIT AGREEMENT

<PAGE>

                                     -33-

     (a)  The Borrower shall give the Administrative Agent at least three 
Business Days' irrevocable prior notice (effective upon receipt) specifying 
the Business Day (which shall be no later than 30 days preceding the 
Revolving Credit Commitment Termination Date) each Letter of Credit is to be 
issued and the account party or parties therefor and describing in reasonable 
detail the proposed terms of such Letter of Credit (including the beneficiary 
thereof) and the nature of the transactions or obligations proposed to be 
supported thereby (including whether such Letter of Credit is to be a 
commercial letter of credit or a standby letter of credit). Upon receipt of 
any such notice, the Administrative Agent shall advise each Lender of the 
contents thereof.

     (b)  On each day during the period commencing with the issuance by the 
Issuing Lender of any Letter of Credit and until such Letter of Credit shall 
have expired or been terminated, the Revolving Credit Commitment of each 
Revolving Credit Lender shall be deemed to be utilized for all purposes of 
this Agreement in an amount equal to such Lender's Revolving Credit 
Commitment Percentage of the then undrawn face amount of such Letter of 
Credit.  Each Revolving Credit Lender (other than the Issuing Lender) agrees 
that, upon the issuance of any Letter of Credit hereunder, it shall 
automatically acquire a participation in the Issuing Lender's liability under 
such Letter of Credit in an amount equal to such Lender's Revolving Credit 
Commitment Percentage of such liability, and each Revolving Credit Lender 
(other than the Issuing Lender) thereby shall absolutely, unconditionally and 
irrevocably assume, as primary obligor and not as surety, and shall be 
unconditionally obligated to the Issuing Lender to pay and discharge when 
due, its Revolving Credit Commitment Percentage of the Issuing Lender's 
liability under such Letter of Credit.

     (c)  Upon receipt from the beneficiary of any Letter of Credit of any 
demand for payment under such Letter of Credit, the Issuing Lender shall 
promptly notify the Borrower (through the Administrative Agent) of the amount 
to be paid by the Issuing Lender as a result of such demand and the date on 
which payment is to be made by the Issuing Lender to such beneficiary in 
respect of such demand.  Notwithstanding the identity of the account party of 
any Letter of Credit, the Borrower hereby unconditionally agrees to pay and 
reimburse the Administrative Agent for account of the Issuing Lender for the 
amount of each demand for payment under such Letter of Credit that is in 
substantial compliance with the provisions of such Letter of Credit at or 
prior to the date on which payment is to be made by the 

                                CREDIT AGREEMENT

<PAGE>

                                     -34-

Issuing Lender to the beneficiary thereunder, without presentment, demand, 
protest or other formalities of any kind.

     (d)  Forthwith upon its receipt of a notice referred to in paragraph (c) 
of this Section 2.03, the Borrower shall advise the Administrative Agent 
whether or not the Borrower intends to borrow hereunder to finance its 
obligation to reimburse the Issuing Lender for the amount of the related 
demand for payment, PROVIDED that, unless the Borrower shall otherwise notify 
the Administrative Agent within one Business Day of its receipt of such 
notice, the Borrower shall be deemed to have requested a borrowing hereunder 
in the lowest amount permitted under Section 4.04 which would enable the 
Borrower to fulfill its payment obligation in respect of such demand for 
payment.  The proceeds of such borrowing will be applied automatically to the 
payment of the Reimbursement Obligation arising in respect of such demand for 
payment, with any remaining portion of such borrowing in excess of the amount 
of such Reimbursement Obligation being made available to the Borrower as 
provided in Section 2.02 hereof.

     (e)  Each Revolving Credit Lender (other than the Issuing Lender) shall 
pay to the Administrative Agent for account of the Issuing Lender at its 
principal office in New York, New York in Dollars and in immediately 
available funds, the amount of such Lender's Revolving Credit Commitment 
Percentage of any payment under a Letter of Credit upon notice by the Issuing 
Lender (through the Administrative Agent) to such Revolving Credit Lender 
requesting such payment and specifying such amount.  Each such Revolving 
Credit Lender's obligation to make such payment to the Administrative Agent 
for account of the Issuing Lender under this paragraph (e), and the Issuing 
Lender's right to receive the same, shall be absolute and unconditional and 
shall not be affected by any circumstance whatsoever, including, without 
limitation, the failure of any other Revolving Credit Lender to make its 
payment under this paragraph (e), the financial condition of the Borrower (or 
any other account party), the existence of any Default or the termination of 
the Commitments.  Each such payment to the Issuing Lender shall be made 
without any offset, abatement, withholding or reduction whatsoever.  If any 
Revolving Credit Lender shall default in its obligation to make any such 
payment to the Administrative Agent for account of the Issuing Lender, for so 
long as such default shall continue the Administrative Agent may at the 
request of the Issuing Lender withhold from any payments received by the 
Administrative Agent under this Agreement for account of such Revolving 
Credit Lender the amount so in default and, 

                                CREDIT AGREEMENT
<PAGE>
                                     -35-

to the extent so withheld, pay the same to the Issuing Lender in satisfaction 
of such defaulted obligation.

     (f)  Upon the making of each payment by a Revolving Credit Lender to the 
Issuing Lender pursuant to paragraph (e) above in respect of any Letter of 
Credit, such Lender shall, automatically and without any further action on 
the part of the Administrative Agent, the Issuing Lender or such Lender, 
acquire (i) a participation in an amount equal to such payment in the 
Reimbursement Obligation owing to the Issuing Lender by the Borrower 
hereunder and under the Letter of Credit Documents relating to such Letter of 
Credit and (ii) a participation in a percentage equal to such Lender's 
Revolving Credit Commitment Percentage in any interest or other amounts 
payable by the Borrower hereunder and under such Letter of Credit Documents 
in respect of such Reimbursement Obligation (other than the commissions, 
charges, costs and expenses payable to the Issuing Lender pursuant to 
paragraph (g) of this Section 2.03).  Upon receipt by the Issuing Lender from 
or for account of the Borrower of any payment in respect of any Reimbursement 
Obligation or any such interest or other amount (including by way of setoff 
or application of proceeds of any collateral security) the Issuing Lender 
shall promptly pay to the Administrative Agent for account of each Revolving 
Credit Lender entitled thereto, such Revolving Credit Lender's Revolving 
Credit Commitment Percentage of such payment, each such payment by the 
Issuing Lender to be made in the same money and funds in which received by 
the Issuing Lender.  In the event any payment received by the Issuing Lender 
and so paid to the Revolving Credit Lenders hereunder is rescinded or must 
otherwise be returned by the Issuing Lender, each Revolving Credit Lender 
shall, upon the request of the Issuing Lender (through the Administrative 
Agent), repay to the Issuing Lender (through the Administrative Agent) the 
amount of such payment paid to such Lender, with interest at the rate 
specified in paragraph (j) of this Section 2.03.

     (g)  The Borrower shall pay to the Administrative Agent for account of 
each Revolving Credit Lender (ratably in accordance with their respective 
Revolving Credit Commitment Percentages) a letter of credit fee in respect of 
each Letter of Credit at a rate per annum equal to the Applicable Margin for 
Revolving Credit Loans that are Eurocurrency Loans MINUS 1/4 of 1%, in 
respect of the daily average undrawn face amount of such Letter of Credit for 
the period from and including the date of issuance of such Letter of Credit 
(i) in the case of a Letter of Credit that expires in accordance with its 
terms, to and including such expiration date and (ii) in the case of a Letter 
of Credit that is drawn in full or is otherwise terminated other than on the 
stated expiration date of such Letter of Credit, to but excluding the date 
such Letter of Credit is drawn in full or is terminated (such fee to be 
non-refundable, to be paid in arrears on each Quarterly Date and on the 
Revolving Credit Commitment Termination Date and to be calculated for any day 
after giving effect to any payments made under such Letter of Credit on such 
day).  In addition, the Borrower shall pay to the Administrative Agent for 
account of the Issuing Lender a fronting fee in respect of each Letter of 
Credit in an amount equal to 1/4 of 1% per annum of the daily average undrawn 
face amount of such Letter of Credit for the period from and including the 
date of issuance of such Letter of Credit (i) in the case of a Letter of 
Credit that expires in accordance with its terms, to and including such 
expiration date and (ii) in the case of a Letter of Credit that is 

                                CREDIT AGREEMENT
<PAGE>

                                     -36-

drawn in full or is otherwise terminated other than on the stated expiration 
date of such Letter of Credit, to but excluding the date such Letter of 
Credit is drawn in full or is terminated (such fee to be non-refundable, to 
be paid in arrears on each Quarterly Date and on the Revolving Credit 
Commitment Termination Date and to be calculated for any day after giving 
effect to any payments made under such Letter of Credit on such day) plus all 
commissions, charges, costs and expenses in the amounts customarily charged 
by the Issuing Lender from time to time in like circumstances with respect to 
the issuance of, or amendments to, each Letter of Credit and drawings and 
other transactions relating thereto.

     (h)  Upon the request of any Revolving Credit Lender from time to time, 
the Issuing Lender shall deliver any other information reasonably requested 
by such Lender with respect to each Letter of Credit then outstanding.

     (i)  The issuance by the Issuing Lender of each Letter of Credit shall, 
in addition to the conditions precedent set forth in Section 7 hereof, be 
subject to the conditions precedent that (i) such Letter of Credit shall be 
in such form, contain such terms and support such transactions as shall be 
satisfactory to the Issuing Lender consistent with its then current practices 
and procedures with respect to letters of credit of the same type and (ii) 
the Borrower shall have executed and delivered such applications, agreements 
and other instruments relating to such Letter of Credit as the Issuing Lender 
shall have reasonably requested consistent with its then current practices 
and procedures with respect to letters of credit of the same type, PROVIDED 
that such application, agreement or other instrument shall not impose any 
financial obligation on the Borrower or any of its Subsidiaries inconsistent 
with this Agreement and in the event of any conflict between any such 
application,

                                CREDIT AGREEMENT

<PAGE>

                                -37-

    agreement or other instrument and the provisions of this Agreement or any
    Security Document, the provisions of this Agreement and the Security 
    Documents shall control.

         (j)  To the extent that any Lender shall fail to pay any amount 
    required to be paid pursuant to paragraph (e) or (f) of this Section 2.03 
    on the due date therefor, such Lender shall pay interest to the Issuing 
    Lender (through the Administrative Agent) on such amount from and including
    such due date to but excluding the date such payment is made at a rate per
    annum equal to the Federal Funds Rate, PROVIDED that if such Lender shall 
    fail to make such payment to the Issuing Lender within three Business Days
    of such due date, then, retroactively to the due date, such Lender shall be
    obligated to pay interest on such amount at the Post-Default Rate.

         (k)  The issuance by the Issuing Lender of any modification or 
    supplement to any Letter of Credit hereunder shall be subject to the same 
    conditions applicable under this Section 2.03 to the issuance of new 
    Letters of Credit, and no such modification or supplement shall be issued 
    hereunder unless either (i) the respective Letter of Credit affected 
    thereby would have complied with such conditions had it originally been 
    issued hereunder in such modified or supplemented form or (ii) each 
    Revolving Credit Lender shall have consented thereto.

The Borrower hereby indemnifies and holds harmless each Revolving Credit 
Lender and the Administrative Agent from and against any and all claims and 
damages, losses, liabilities, costs or expenses that such Lender or the 
Administrative Agent may incur (or that may be claimed against such Lender or 
the Administrative Agent by any Person whatsoever) by reason of or in 
connection with the execution and delivery or transfer of or payment or 
refusal to pay by the Issuing Lender under any Letter of Credit; PROVIDED 
that the Borrower shall not be required to indemnify any Lender or the 
Administrative Agent for any claims, damages, losses, liabilities, costs or 
expenses to the extent, but only to the extent, caused by (x) the willful 
misconduct or gross negligence of the Issuing Lender in determining whether a 
request presented under any Letter of Credit complied with the terms of such 
Letter of Credit or (y) in the case of the Issuing Lender, such Lender's 
failure to pay under any Letter of Credit after the presentation to it of a 
request strictly complying with the terms and conditions of such Letter of 
Credit.  Nothing in this Section 2.03 is intended to limit the other 
obligations of the Borrower, any Lender or the Administrative Agent under 
this Agreement.

                              CREDIT AGREEMENT

<PAGE>

                                  -38-

    2.04  CHANGES OF COMMITMENTS.

    (a)  The aggregate amount of the Revolving Credit Commitments shall be 
automatically reduced to zero on the Revolving Credit Commitment Termination 
Date.  In addition, the aggregate amount of the Revolving Credit Commitments 
shall be automatically reduced on each Revolving Credit Commitment Reduction 
Date set forth in column (A) below to the amount (subject to reduction 
pursuant to paragraph (c) below) set forth in column (B) below opposite such 
Revolving Credit Commitment Reduction Date:

            (A)                               (B)
     Revolving Credit                   Revolving Credit
   Commitment Reduction                Commitments Reduced
    Date Falling on or                  to the Following
       Nearest To:                           Amounts
       -----------                    --------------------

   March 31, 1999                         $87,750,000
   June 30, 1999                           85,500,000
   September 30, 1999                      83,250,000
   December 31, 1999                       81,000,000

   March 31, 2000                          78,500,000
   June 30, 2000                           76,000,000
   September 30, 2000                      73,500,000
   December 31, 2000                       71,000,000

   March 31, 2001                          68,500,000
   June 30, 2001                           66,000,000
   September 30, 2001                      63,500,000
   December 31, 2001                       61,000,000

   March 31, 2002                          55,937,500
   June 30, 2002                           50,875,000
   September 30, 2002                      45,812,500
   December 31, 2002                       40,750,000

   March 31, 2003                          35,687,500
   June 30, 2003                           30,625,000
   September 30, 2003                      25,562,500
   December 31, 2003                       20,500,000

   March 31, 2004                          10,250,000
   June 30, 2004                                    0

    (b)  The Borrower shall have the right at any time or from time to time 
(i) so long as no Revolving Credit Loans or Letter of Credit Liabilities are 
outstanding, to terminate the Revolving Credit Commitments, (ii) to reduce 
the aggregate 

                              CREDIT AGREEMENT

<PAGE>

                                 -39-

unutilized amount of the Revolving Credit Commitments , (iii) to reduce the 
aggregate unutilized amount of the Sterling Sub-Limits and (iv) to terminate 
the Term Loan Commitments; PROVIDED that (x) the Borrower shall give notice 
of each such termination or reduction as provided in Section 4.05 hereof and 
(y) each partial reduction of either the Revolving Credit Commitments or the 
Term Loan Commitments shall be in an aggregate amount at least equal to 
$5,000,000 (or a larger multiple of $1,000,000).  In addition, the Revolving 
Credit Commitments (including the Sterling Sub-Limits) shall be automatically 
reduced to the extent required pursuant to Section 2.10(f) hereof.

    (c)  Each partial reduction in the aggregate amount of the Revolving 
Credit Commitments pursuant to paragraph (b)(ii) above, or Section 2.10(f) 
hereof, on any date shall be applied to scheduled reductions in the Revolving 
Credit Commitments ratably as follows:  each such reduction shall result in 
an automatic and simultaneous reduction (but not below zero) of the aggregate 
amount of Revolving Credit Commitments set forth in column (B) in paragraph 
(a) above (ratably in accordance with the respective remaining amounts 
thereof, after giving effect to any prior reductions pursuant to this 
paragraph (c)).

    (d)  Each reduction in the aggregate amount of the Revolving Credit 
Commitments shall result in an automatic and simultaneous ratable reduction 
(but not below zero) of the aggregate amount of the Sterling Sub-Limits.

    (e)  Any portion of the Tranche A Term Loan Commitments not used on the 
Effective Date shall be automatically terminated on the Effective Date. Any 
portion of the Incremental Term Loan Commitments not used on the Incremental 
Term Loan Commitment Termination Date shall be automatically terminated on 
the Incremental Term Loan Commitment Termination Date.

    (f)  The Commitments once terminated or reduced may not be reinstated.

                               CREDIT AGREEMENT

<PAGE>

                                 -40-


    2.05  COMMITMENT FEE.

    (a)  The Borrower shall pay to the Administrative Agent for account of 
each Revolving Credit Lender commitment fee on the daily average unutilized 
amount of such Lender's Revolving Credit Commitment (for which purpose (x) 
the aggregate amount of any Letter of Credit Liabilities shall be deemed to 
be a pro rata (based on the Revolving Credit Commitments) use of each 
Lender's Revolving Credit Commitment and (y) the outstanding principal amount 
of any Sterling Loan shall be deemed to be the Dollar Equivalent of such 
Sterling Loan on the most recent date such amount was determined pursuant to 
Section 2.10(h)(i)), for the period from and including the Effective Date to 
but not including the earlier of the date such Revolving Credit Commitment is 
terminated and the Revolving Credit Commitment Termination Date, at the 
Applicable Fee Rate during each Accrual Period.

    (b)  The Borrower shall pay to the Administrative Agent for account of 
each Incremental Term Loan Lender commitment fee, if any, on the daily 
average unutilized amount of such Incremental Term Loan Lender's Incremental 
Term Loan Commitment, for the period from and including the Incremental Term 
Loan Activation Date to but not including the earlier of the date such 
Incremental Term Loan Commitment is terminated and the Incremental Term Loan 
Commitment Termination Date, at a rate per annum agreed to by the Borrower 
and the Incremental Term Loan Lenders and specified in the Incremental Term 
Loan Activation Notice.

    (c)  Accrued commitment fee shall be payable on each Quarterly Date and 
on the earlier of the date the relevant Commitments are terminated and the 
Revolving Credit Commitment Termination Date or the Incremental Term Loan 
Commitment Termination Date, as the case may be.

    2.06  LENDING OFFICES.  The Loans of each Type made by each Lender shall 
be made and maintained at such Lender's Applicable Lending Office for Loans 
of such Type.

    2.07  SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT.  The failure of any 
Lender to make any Loan to be made by it on the date specified therefor shall 
not relieve any other Lender of its obligation to make its Loan on such date, 
but neither any Lender nor the Administrative Agent shall be responsible for 
the failure of any other Lender to make a Loan to be made by such other 
Lender, and (except as otherwise provided in Section 4.06 hereof) no Lender 
shall have any obligation to the Administrative Agent or any other Lender for 
the failure by such Lender to make any Loan required to be made by such 
Lender.

                               CREDIT AGREEMENT

<PAGE>

                                -41-


    2.08  EVIDENCE OF DEBT.

    (a)  Each Lender shall maintain in accordance with its usual practice an 
account or accounts evidencing the indebtedness of the Borrower to such 
Lender resulting from each Loan made by such Lender, including the amounts of 
principal and interest payable and paid to such Lender from time to time 
hereunder.

    (b)  The Administrative Agent shall maintain accounts in which it shall 
record (i) the amount of each Loan made hereunder, the Class, Sub-Class (if 
such Loan is a Revolving Credit Loan) and Type thereof and the Interest 
Period applicable thereto, (ii) the amount of any principal or interest due 
and payable or to become due and payable from the Borrower to each Lender 
hereunder and (iii) the amount of any sum received by the Administrative 
Agent hereunder for the account of the Lenders and each Lender's share 
thereof.

    (c)  The entries made in the accounts maintained pursuant to paragraph 
(a) or (b) of this Section shall be PRIMA FACIE evidence of the existence and 
amounts of the obligations recorded therein; PROVIDED that the failure of any 
Lender or the Administrative Agent to maintain such accounts or any error 
therein shall not in any manner affect the obligation of the Borrower to 
repay the Loans in accordance with the terms of this Agreement.

    (d)  Any Lender may request that Loans made by it be evidenced by a 
promissory note.  In such event, the Borrower shall prepare, execute and 
deliver to such Lender a promissory note payable to the order of such Lender 
(or, if requested by such Lender, to such Lender and its registered assigns) 
in a form approved by the Administrative Agent.  Thereafter, the Loans 
evidenced by such promissory note and interest thereon shall at all times 
(including after assignment pursuant to Section 12.06) be represented by one 
or more promissory notes in such form (payable to the order of each Lender 
holding a portion of such Loans, or, if such promissory note is a registered 
note, to such Lender and its registered assigns).

                            CREDIT AGREEMENT

<PAGE>

                                  -42-

    2.09  OPTIONAL PREPAYMENTS AND CONVERSIONS OR CONTINUATIONS OF LOANS. 
Subject to Section 4.04 hereof, the Borrower shall have the right to prepay 
Loans, to Convert Dollar  Loans and Term Loans of one Type into Loans of 
another Type or to Continue Eurocurrency Loans from one Interest Period to 
another Interest Period, at any time or from time to time, PROVIDED that:  
(a) the Borrower shall give the Administrative Agent notice of each such 
prepayment, Conversion or Continuation as provided in Section 4.05 hereof 
(and, upon the date specified in any such notice of prepayment, the amount to 
be prepaid shall become due and payable hereunder); (b) upon any prepayment 
or Conversion of Eurocurrency Loans other than on the last day of an Interest 
Period for such Loans, the Borrower shall pay any amounts owing under Section 
5.05 hereof as a result of such prepayment or Conversion; (c) any Conversion 
into or Continuation of Eurocurrency Loans shall be subject to the provisions 
of Section 2.01(d) hereof; and (d) prepayments of the Term Loans shall be 
applied pro rata to the then remaining principal installments thereof.  
Notwithstanding the foregoing, and without limiting the rights and remedies 
of the Lenders under Section 10 hereof, in the event that any Event of 
Default shall have occurred and be continuing, the Administrative Agent may 
(and at the request of the Majority Lenders shall) suspend the right of the 
Borrower to Convert any Loan into a Eurodollar Loan, or to Continue any Loan 
as a Eurocurrency Loan, in which event (x) all Eurodollar Loans shall be 
Converted (on the last day(s) of the respective Interest Periods therefor) 
into, or Continued as, as the case may be, Base Rate Loans and (y) each 
Sterling Loans shall be deemed repaid (on the last day of the Interest Period 
therefor) and automatically reborrowed as a Base Rate Loan in an aggregate 
principal amount equal to the Dollar Equivalent of such Sterling Loan on the 
last day of the Interest Period therefor.

                              CREDIT AGREEMENT

<PAGE>

                                -43-

    2.10  MANDATORY PREPAYMENTS AND REDUCTIONS OF COMMITMENTS.

    (a)  CASUALTY EVENTS.  Upon the date 90 days following the receipt by the 
Borrower or any of its Subsidiaries of the proceeds of insurance, 
condemnation award or other compensation in respect of any Casualty Event 
affecting any Property of the Borrower or any of its Subsidiaries (or upon 
such earlier date as the Borrower or such Subsidiary, as the case may be, 
shall have determined not to repair or replace the Property affected by such 
Casualty Event), the Borrower shall prepay the Loans (and/or provide cover 
for Letter of Credit Liabilities as specified in paragraph (g) below), and 
the Commitments shall be subject to automatic reduction, in an aggregate 
amount, if any, equal to 100% of the Net Available Proceeds of such Casualty 
Event not theretofore applied (or committed to be applied pursuant to 
executed construction contracts or equipment orders) to the repair or 
replacement of such Property or to the purchase of other Property used or 
useful in the business of the Borrower and its Subsidiaries, such prepayment 
and reduction to be effected in each case in the manner and to the extent 
specified in paragraph (f) below, PROVIDED that, notwithstanding the 
foregoing, the Borrower shall not be required to make any prepayment or 
reduce the Commitments under this paragraph (a) until such time as the 
aggregate amount of the required prepayments and reductions of Commitments 
hereunder, after deducting any such amounts previously applied to prepayments 
and reductions pursuant to this paragraph (a), shall be greater than or equal 
to $1,000,000.  Nothing in this paragraph (a) shall be deemed to limit any 
obligation of the Borrower and its Subsidiaries pursuant to the Security 
Agreement to remit to the Collateral Account the proceeds of insurance, 
condemnation award or other compensation received in respect of any Casualty 
Event, and the Administrative Agent shall release such proceeds to the 
Borrower in the manner, and to the extent, provided in Section 4.01(d) of the 
Security Agreement.

    (b)  EQUITY ISSUANCE.  Upon any Equity Issuance after the Effective Date 
(other than an Equity Issuance in connection with the exercise of stock 
options held by any of the Management Group) at a time when the Total Debt 
Ratio is greater than or equal to 1.25 to 1, the Borrower shall prepay the 
Loans (and/or provide cover for Letter of Credit Liabilities as specified in 
paragraph (g) below), and the Commitments shall be subject to automatic 
reduction, in an aggregate amount equal to the lesser of (i) 50% of the Net 
Available Proceeds of such Equity Issuance or (ii) the amount of such Net 
Available Proceeds that, when applied to the prepayment of Loans as 
contemplated by this Section 2.10, will result in the Total Debt Ratio being 
less than 1.25 to 1, such prepayment and reduction to be effected in each 

                             CREDIT AGREEMENT

<PAGE>

                                -44-


case in the manner and to the extent specified in paragraph (f) below.

    (c)  EXCESS CASH FLOW.  Not later than the date 90 days after the end of 
each fiscal year of the Borrower, the Borrower shall prepay the Term Loans in 
an aggregate amount equal to 50% of Excess Cash Flow for such fiscal year, 
such prepayment and reduction to be effected in each case in the manner and 
to the extent specified in paragraph (f) below.

    (d)  SALE OF ASSETS.  Without limiting the obligation of the Borrower to 
obtain the consent of the Majority Lenders pursuant to Section 9.05 hereof to 
any Disposition not otherwise permitted hereunder, the Borrower agrees, on or 
prior to the occurrence of any Disposition (other than an Excluded 
Disposition) in which the Net Available Proceeds of such Disposition shall 
exceed $250,000 (herein, the "CURRENT DISPOSITION"), to deliver to the 
Administrative Agent (which shall promptly forward a copy thereof to the 
Lenders) a statement, certified by a Senior Officer, in form and detail 
reasonably satisfactory to the Administrative Agent, of the estimated amount 
of the Net Available Proceeds of the Current Disposition that will (on the 
date of the Current Disposition) be received in cash, in which event the 
Borrower will prepay the Loans (and/or provide cover for Letter of Credit 
Liabilities as specified in paragraph (g) below), and the Commitments shall 
be subject to automatic reduction (in each case in the manner specified in 
paragraph (f) below as follows:

    (i)  upon the date of the Current Disposition, in an aggregate amount 
equal to 100% of the Net Available Proceeds thereof to the extent received in 
cash on the date of the Current Disposition; and

    (ii)  thereafter, from time to time as the Borrower or any of its 
Subsidiaries shall receive Net Available Proceeds during such quarterly 
fiscal period in cash under deferred payment or escrow arrangements or 
Investments entered into or received in connection with any Disposition, in 
an amount equal to (x) 100% of the aggregate amount of such Net Available 
Proceeds MINUS (y) any transaction expenses associated with Dispositions and 
not previously deducted in the determination of Net Available Proceeds PLUS 
(or MINUS, as the case may be) (z) any other adjustment received or paid by 
the Borrower or such Subsidiary pursuant to the respective agreements giving 
rise to Dispositions and not previously taken into account in the 
determination of the Net Available Proceeds of Dispositions,

PROVIDED that, notwithstanding the foregoing, the Borrower shall not be 
required to make any prepayment or reduce Commitments 

                               CREDIT AGREEMENT

<PAGE>

                               -45-

under this paragraph (d) until such time as the aggregate amount of the 
required prepayments and reductions of Commitments pursuant to the foregoing 
clauses (i) and (ii) (with respect to the then Current Disposition and all 
prior Dispositions as to which a prepayment has not yet been made under this 
paragraph (d)), after deducting any such amounts previously applied to 
prepayments and reductions of Commitments pursuant to this paragraph (d), 
shall be greater than or equal to $1,000,000.

    (e)  DEBT ISSUANCE.  Upon any issuance or incurrence of Indebtedness 
after the Effective Date (other than Indebtedness permitted under Sections 
9.07(a), (b), (d) and (e) hereof), (i) at any time when the Total Debt Ratio 
is greater than or equal to 1.25 to 1, in respect of Subordinated 
Indebtedness permitted under Section 9.11(a) hereof or (ii) in respect of any 
other Indebtedness (other than the Loans), the Borrower shall prepay the 
Loans (and/or provide cover for Letter of Credit Liabilities as specified in 
paragraph (g) below), and the Commitments shall be subject to automatic 
reduction, in an aggregate amount equal to 100% of the Net Available Proceeds 
thereof (or, with respect to any Subordinated Indebtedness referred to in 
clause (i) above, the amount of such Net Available Proceeds that, when 
applied to the prepayment of Loans as contemplated by this Section 2.10, will 
result in the Total Debt Ratio being less than 1.25 to 1, whichever amount is 
lesser), such prepayment to be effected in each case in the manner and to the 
extent specified in paragraph (f) below;

    (f)  APPLICATION.  Prepayments and reductions of Commitments described in 
the above paragraphs of this Section 2.10 shall be applied without penalty or 
premium (except for any interest rate breakage costs pursuant to Section 5.05 
hereof), first, to repay Term Loans, ratably as between the outstanding 
Tranche A Term Loans and the outstanding Incremental Term Loans (if any) and 
ratably to the then remaining respective principal installments thereof and, 
thereafter, except for prepayments described in paragraph (c) above, to 
reduce permanently the aggregate amount of Revolving Credit Commitments (and, 
if after such reduction the aggregate principal amount of Revolving Credit 
Loans, together with the aggregate amount of Letter of Credit Liabilities, 
exceed the aggregate amount of such Revolving Credit Commitments, to prepay 
Revolving Credit Loans and/or provide cover for outstanding letters of credit 
as provided in paragraph (g) below).  Notwithstanding the foregoing, the 
amount required to be applied in respect of the Term Loans under paragraph 
(c) above shall be applied in respect of such Term Loans as follows:  first, 
25% of such amount shall be applied ratably as between the outstanding 
Tranche A Term Loans and the outstanding Incremental Term Loans and in direct 
order of the then remaining principal installments thereof scheduled to fall 
due during the period of 12 months immediately succeeding 

                             CREDIT AGREEMENT

<PAGE>

                             -46-

the date of such application; and, then, the remainder shall be applied as 
provided above in this paragraph (f).

    (g)  COVER FOR LETTER OF CREDIT LIABILITIES.  In the event that the 
Borrower shall be required pursuant to this Section 2.10, or pursuant to 
Section 3.01(a) hereof, to provide cover for Letter of Credit Liabilities, 
the Borrower shall effect the same by paying to the Administrative Agent 
immediately available funds in an amount equal to the required amount, which 
funds shall be retained by the Administrative Agent in the Collateral Account 
(as provided therein as collateral security in the first instance for the 
Letter of Credit Liabilities) until such time as the Letters of Credit shall 
have been terminated and all of the Letter of Credit Liabilities have been 
paid in full.

    (h)  CURRENCY VALUATION.

         (i)  On each Quarterly Date and upon the receipt by the Administrative
    Agent of a Currency Valuation Notice (as defined below), but in any event 
    no more than once in any rolling 30-day period, the Administrative Agent 
    shall promptly determine the aggregate outstanding principal amount of all 
    Sterling Loans and the aggregate outstanding principal amount of all 
    Revolving Credit Loans (for which purpose the outstanding principal amount 
    of any Sterling Loan shall be deemed to be the Dollar Equivalent 
    (determined as of the Business Day on which the Administrative Agent shall 
    have received such Currency Valuation Notice prior to 11:00 a.m. New York 
    time (or, if received by the Administrative Agent after such time on any 
    Business Day, as of the next succeeding Business Day) or as of such 
    Quarterly Date) of the amount in Pounds Sterling of such Loan).  Upon 
    making such determination, the Administrative Agent shall promptly 
    notify the Revolving Credit Lenders and the Borrower thereof.

         (ii)  If, on the date of such determination, (A) the aggregate 
    outstanding principal amount of all Sterling Loans exceeds 105% of the 
    aggregate amount of the Sterling Sub-Limits as then in effect or (B) the 
    aggregate outstanding principal amount of all Revolving Credit Loans exceeds
    the aggregate amount of the Revolving Credit Commitments as then in effect,
    the Borrower shall, if requested (through the Administrative Agent) by any
    Sterling Lender or Revolving Credit Lender, as the case may be, prepay the
    Sterling Loans or the Revolving Credit Loans in an amount such that after
    giving effect thereto the aggregate outstanding principal amount of the
    Sterling Loans does not exceed the aggregate amount of the Sterling
    Sub-Limits or the aggregate outstanding principal amount of the Revolving
    Credit Loans does not exceed the aggregate

                           CREDIT AGREEMENT

<PAGE>

Revolving Credit Commitments, as the case may be.  Any such payment pursuant 
to the foregoing clauses (A) and (B) shall be accompanied by any amounts 
payable under Sections 3.02 and 5.05 hereof.

<PAGE>
                                     -47-

    Revolving Credit Commitments, as the case may be. Any such payment 
    pursuant to the foregoing clauses (A0 and (B) shall be accompanied by any 
    amounts payable under Sections 3.02 and 5.05 hereof.

For purposes of this Section 2.10(h), "CURRENCY VALUATION NOTICE" shall mean 
a notice given by any Sterling Lender or Revolving Credit Lender to the 
Administrative Agent stating that such notice is a "Currency Valuation 
Notice" and requesting that the Administrative Agent determine the aggregate 
outstanding principal amount of Sterling Loans or the Revolving Credit Loans, 
as the case may be.

         Section 3.  PAYMENTS OF PRINCIPAL AND INTEREST.

         3.01  REPAYMENT OF LOANS.

         (a)  REVOLVING CREDIT LOANS.  The Borrower hereby promises to pay to 
the Administrative Agent for account of each Lender the entire outstanding 
principal amount of such Lender's Revolving Credit Loans, and each Revolving 
Credit Loan shall mature, on the Revolving Credit Commitment Termination Date.

         (b)  TRANCHE A TERM LOANS.  The Borrower hereby promises to pay to 
the Administrative Agent for account of the Tranche A Term Loan Lenders the 
principal of the Tranche A Term Loans in twenty-six installments payable on 
the Tranche A Principal Payment Dates as follows:

                Tranche A
          Principal Payment Date
         Falling on or Nearest to:               Amount of Installment ($)
         --------------------------              -------------------------
         
           March 31, 1998                                1,250,000
           June 30, 1998                                 1,250,000
           September 30, 1998                            1,250,000
           December 31, 1998                             1,250,000
         
           March 31, 1999                                2,500,000
           June 30, 1999                                 2,500,000
           September 30, 1999                            2,500,000
           December 31, 1999                             2,500,000

           March 31, 2000                                2,500,000
           June 30, 2000                                 2,500,000
           September 30, 2000                            2,500,000
           December 31, 2000                             2,500,000

                               CREDIT AGREEMENT

<PAGE>

                                     -48-

           March 31, 2001                                2,500,000
           June 30, 2001                                 2,500,000
           September 30, 2001                            2,500,000
           December 31, 2001                             2,500,000

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

           March 31, 2003                                2,500,000
           June 30, 2003                                 2,500,000
           September 30, 2003                            2,500,000
           December 31, 2003                             2,500,000

           March 31, 2004                                2,500,000
           June 30, 2004                                 2,500,000
                                                         
If the Borrower does not borrow the full amount of the aggregate Tranche A 
Term Loan Commitments on the Effective Date, the shortfall shall be applied 
to reduce the foregoing installments ratably.

         (c)  INCREMENTAL TERM LOANS.  The Borrower hereby promises to pay to 
the Administrative Agent for account of the Incremental Term Loan Lenders the 
principal of the Incremental Term Loans on the Incremental Term Loan 
Principal Payment Dates in the installments specified in the Incremental Term 
Loan Activation Notice.  Notwithstanding the foregoing, the scheduled 
installments set forth in the Incremental Term Loan Activation Notice shall 
not require the Borrower (i) to repay any principal of the Incremental Term 
Loans prior to March 31, 1999, (ii) to repay more than 2.5% of the original 
principal amount of the Incremental Term Loans on any Quarterly Date in 
calendar year 1999, (iii) to repay more than 5% of the original principal 
amount of the Incremental Term Loans on any Quarterly Date in calendar years 
2000, 2001, 2002, 2003 or on March 31, 2004, June 30, 2004 or September 30, 
2004.   Scheduled installments of principal of the Incremental Term Loans on 
and after December 31, 2004 shall be as the Borrower and the Incremental Term 
Loan Lenders agree in the Incremental Term Loan Activation Notice.

         3.02  INTEREST.  The Borrower hereby promises to pay to the 
Administrative Agent for account of each Lender interest on the unpaid 
principal amount of each Loan made by such Lender for the period from and 
including the date of such Loan to but excluding the date such Loan shall be 
paid in full, at the following rates per annum:

         (a)  during such periods as such Loan is a Base Rate Loan, the Base 
Rate (as in effect from time to time) PLUS 

                               CREDIT AGREEMENT

<PAGE>

                                      -49-

the Applicable Margin; and

         (b)  during each Interest Period for such Loan during which such 
Loan is a Eurocurrency Loan, the Eurocurrency Rate for such Interest Period 
PLUS the Applicable Margin.

Notwithstanding the foregoing, the Borrower hereby promises to pay to the 
Administrative Agent for account of each Lender interest on all of the Loans 
or Reimbursement Obligations hereunder at the applicable Post-Default Rate on 
any principal of any Loan made by such Lender and on any other amount payable 
by the Borrower hereunder to or for account of such Lender, that shall not be 
paid in full when due (whether at stated maturity, by acceleration, by 
mandatory prepayment or otherwise), for the period from and including the due 
date thereof to but excluding the date the same is paid in full.  Accrued 
interest on each Loan shall be payable (i) in the case of a Base Rate Loan, 
quarterly on the Quarterly Dates, (ii) in the case of a Eurocurrency Loan, on 
the last day of each Interest Period therefor and, if such Interest Period is 
longer than three months, at three-month intervals following the first day of 
such Interest Period, and (iii) in the case of any Loan, upon the payment or 
prepayment thereof or the Conversion of such Loan to a Loan of another Type 
(but only on the principal amount so paid, prepaid or Converted), except that 
interest payable at the Post-Default Rate shall be payable from time to time 
on demand. Promptly after the determination of any interest rate provided for 
herein or any change therein, the Administrative Agent shall give notice 
thereof to the Lenders to which such interest is payable and to the Borrower.

         Section 4.  PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

         4.01  PAYMENTS.

         (a)  Except to the extent otherwise provided herein, all payments of 
principal, interest, Reimbursement Obligations and other amounts to be made 
by the Borrower under this Agreement, and, except to the extent otherwise 
provided therein, all payments to be made by the Obligors under any other 
Loan Document, shall be made in the Currency in which such Loan or other 
amount is denominated, in immediately available funds, without deduction, 
set-off or counterclaim, to the Administrative Agent at an account in New 
York, New York (or, if such payment is a payment of principal or interest 
with respect to Sterling Loans, at an account in London, England) specified 
by the Administrative Agent, not later than 1:00 p.m. New York time (or, if 
such payment is a payment of principal or interest with respect to Sterling 
Loans, 1:00 p.m. London time) on the date on which such payment shall become 
due (each such payment made after 

                                 CREDIT AGREEMENT

<PAGE>

                                     -50-

such time on such due date to be deemed to have been made on the next 
succeeding Business Day).  All amounts owing under this Agreement (other than 
principal of and interest on Sterling Loans) are denominated and payable in 
Dollars.

         (b)  Any Lender for whose account any such payment is to be made may 
(but shall not be obligated to) debit the amount of any such payment that is 
not made to the Administrative Agent when due pursuant to Section 4.01(a) 
hereof to any ordinary deposit account of the Borrower with such Lender (with 
notice to the Borrower and the Administrative Agent), PROVIDED that such 
Lender's failure to give such notice shall not affect the validity thereof.

         (c)  The Borrower shall, at the time of making each payment under 
this Agreement for account of any Lender, specify to the Administrative Agent 
(which shall so notify the intended recipient(s) thereof) the Loans, 
Reimbursement Obligations or other amounts payable by the Borrower hereunder 
to which such payment is to be applied (and in the event that the Borrower 
fails to so specify, or if an Event of Default has occurred and is 
continuing, the Administrative Agent may distribute such payment to the 
Lenders for application in such manner as it or the Majority Lenders, subject 
to Section 4.02 hereof, may determine to be appropriate).

         (d)  Except to the extent otherwise provided in the last sentence of 
Section 2.03(e) hereof, each payment received by the Administrative Agent 
under this Agreement for account of any Lender shall be paid by the 
Administrative Agent promptly to such Lender, in immediately available funds, 
for account of such Lender's Applicable Lending Office for the Loan or other 
obligation in respect of which such payment is made.

         (e)  If the due date of any payment under this Agreement would 
otherwise fall on a day that is not a Business Day, such date shall be 
extended to the next succeeding Business Day, and interest shall be payable 
for any principal so extended for the period of such extension.

         4.02  PRO RATA TREATMENT.  Except to the extent otherwise provided 
herein:  (a) each borrowing of Loans of a particular Class or Sub-Class from 
the Lenders under Section 2.01 hereof shall be made from the relevant 
Lenders, each payment of commitment fee under Section 2.05 hereof in respect 
of Commitments of a particular Class shall be made for account of the 
relevant Lenders, and each termination or reduction of the amount of the 
Commitments of a particular Class or the Sterling Sub-Limits under Section 
2.03 hereof shall be applied to the respective Commitments of such Class of 
the relevant Lenders or the Sterling Sub-Limits, pro rata according to the 
amounts of 

                              CREDIT AGREEMENT

<PAGE>

                                     -51-

their respective Commitments of such Class or their respective Sterling 
Sub-Limits, as the case may be; (b) except as otherwise provided in Section 
5.04 hereof, Eurocurrency Loans of any Class or Currency having the same 
Interest Period shall be allocated pro rata among the relevant Lenders 
according to the amounts of their respective Revolving Credit Commitments, 
Sterling Sub-Limits, Tranche A Term Loan Commitments and Incremental Term 
Loan Commitments (in the case of the making of Loans) or their respective 
Dollar Loans, Sterling Loans, Tranche A Term Loans and Incremental Term Loans 
(in the case of Conversions and Continuations of Loans); (c) each payment or 
prepayment of principal of Dollar Loans, Sterling Loans, Tranche A Term Loans 
and Incremental Term Loans by the Borrower shall be made for account of the 
relevant Lenders pro rata in accordance with the respective unpaid principal 
amounts of the Loans of such Class or Sub-Class held by them; and (d) each 
payment of interest on Dollar Loans, Sterling Loans, Tranche A Term Loans and 
Incremental Term Loans by the Borrower shall be made for account of the 
relevant Lenders pro rata in accordance with the amounts of interest on such 
Loans then due and payable to the respective Lenders.

         4.03  COMPUTATIONS.  Interest on Eurodollar Loans and commitment fee 
and letter of credit fees shall be computed on the basis of a year of 360 
days and actual days elapsed (including the first day but, except as 
otherwise provided in Section 2.03(g) hereof, excluding the last day) 
occurring in the period for which payable and interest on Eurosterling Loans, 
Base Rate Loans and Reimbursement Obligations shall be computed on the basis 
of a year of 365 or 366 days, as the case may be, and actual days elapsed 
(including the first day but excluding the last day) occurring in the period 
for which payable. Notwithstanding the foregoing, for each day that the Base 
Rate is calculated by reference to the Federal Funds Rate, interest on Base 
Rate Loans and Reimbursement Obligations shall be computed on the basis of a 
year of 360 days and actual days elapsed.

         4.04  MINIMUM AMOUNTS.  Except for mandatory prepayments made 
pursuant to Section 2.10 hereof and Conversions or prepayments made pursuant 
to Section 5.04 hereof, (a) each borrowing, Conversion and partial prepayment 
of principal of Base Rate Loans shall be in an aggregate amount at least 
equal to $1,000,000 or a larger multiple of $100,000 and (b) each borrowing, 
Continuation, Conversion or partial prepayment of principal of Eurocurrency 
Loans shall be in an aggregate amount at least equal to $1,000,000 or a 
larger multiple of $1,000,000, or, in the case of Sterling Loans, the 
Sterling Equivalent thereof rounded downwards to the nearest L1,000 
(borrowings, Conversions or prepayments of or into Loans of different Types 
or, in the case of Eurocurrency Loans, having different Interest 

                              CREDIT AGREEMENT

<PAGE>

                                     -52-

Periods at the same time hereunder to be deemed separate borrowings, 
Conversions and prepayments for purposes of the foregoing, one for each Type 
or Interest Period), and if any Eurodollar Loans would otherwise be in a 
lesser principal amount for any period, such Loans shall be Base Rate Loans 
during such period.

         4.05  CERTAIN NOTICES.  Notices by the Borrower to the 
Administrative Agent of terminations or reductions of the Commitments, of 
borrowings, Conversions, Continuations and optional prepayments of Loans, of 
Classes of Loans, of Currencies of Loans, of Types of Loans and of the 
duration of Interest Periods shall be irrevocable and shall be effective only 
if received by the Administrative Agent not later than 12:00 noon New York 
time (or, if such notice relates to a borrowing, Continuation or optional 
prepayment of Sterling Loans, not later than 12:00 noon London time) on the 
number of Business Days prior to the date of the relevant termination, 
reduction, borrowing, Conversion, Continuation or prepayment or the first day 
of such Interest Period specified below:
          
                                                      Number of
                                                       Business
                  Notice                              Days Prior
                  ------                              -----------

          Termination or reduction
          of Commitments                                    3
          
          Borrowing or prepayment of,
          or Conversions into,
          Base Rate Loans                                   1

          Borrowing or prepayment of,
          Conversions into, Continuations
          as, or duration of Interest
          Period for, Eurocurrency Loans                    3
          
          
Notwithstanding the foregoing, the Borrower may give a notice of prepayment 
of all outstanding Loans or termination of Commitments that is conditioned 
upon the effectiveness of other credit facilities, in which case such notice 
may be revoked by the Borrower (by notice to the Administrative Agent on or 
prior to the specified effective date) if such condition is not satisfied.  
Each such notice of termination or reduction shall specify the amount and the 
Class of the Commitments to be terminated or reduced.  Each such notice of 
borrowing, Conversion, Continuation or optional prepayment shall specify the 
Class of Loans to be borrowed, Converted, Continued or prepaid and the amount 
(subject to Section 4.04 hereof) and Type of each Loan to be borrowed, 
Converted, Continued or prepaid and the date of borrowing, 

                              CREDIT AGREEMENT

<PAGE>

                                     -53-

Conversion, Continuation or optional prepayment (which shall be a Business 
Day).  Each notice of borrowing, Continuation or optional prepayment of 
Revolving Credit Loans shall specify the Sub-Class of each Loan to be 
borrowed, Continued or prepaid.  Each such notice of the duration of an 
Interest Period shall specify the Loans to which such Interest Period is to 
relate.  The Administrative Agent shall promptly notify the Lenders of the 
contents of each such notice.  In the event that the Borrower fails to select 
the Type of Loan, or the duration of any Interest Period for any Eurodollar 
Loan, within the time period and otherwise as provided in this Section 4.05, 
such Loan (if outstanding as a Eurodollar Loan) will be automatically 
Converted into a Base Rate Loan on the last day of the then current Interest 
Period for such Loan or (if outstanding as a Base Rate Loan) will remain as, 
or (if not then outstanding) will be made as, a Base Rate Loan. In the event 
that the Borrower fails to select the duration of any Interest Period for any 
Eurosterling Loan, the Borrower shall be deemed to have selected an interest 
period of one month.  In the event that the Borrower fails to select the 
Sub-Class of any Revolving Credit Loan, such Loan will be made as a Dollar 
Loan.

         4.06  NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.  Unless the 
Administrative Agent shall have been notified by a Lender or the Borrower 
(the "PAYOR") prior to the date on which the Payor is to make payment to the 
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to 
be made by such Lender hereunder or (in the case of the Borrower) a payment 
to the Administrative Agent for account of one or more of the Lenders 
hereunder (such payment being herein called the "REQUIRED PAYMENT"), which 
notice shall be effective upon receipt, that the Payor does not intend to 
make the Required Payment to the Administrative Agent, the Administrative 
Agent may assume that the Required Payment has been made and may, in reliance 
upon such assumption (but shall not be required to), make the amount thereof 
available to the intended recipient(s) on such date; and, if the Payor has 
not in fact made the Required Payment to the Administrative Agent, the 
recipient(s) of such payment shall, on demand, repay to the Administrative 
Agent the amount so made available together with interest thereon in respect 
of each day during the period commencing on the date (the "ADVANCE DATE") 
such amount was so made available by the Administrative Agent until the date 
the Administrative Agent recovers such amount at a rate per annum equal to 
the Federal Funds Rate for such day and, if such recipient(s) shall fail 
promptly to make such payment, the Administrative Agent shall be entitled to 
recover such amount, on demand, from the Payor, together with interest as 
aforesaid, PROVIDED that if neither the recipient(s) nor the Payor shall 
return the Required Payment to the Administrative Agent within three Business 
Days of the Advance Date, then, retroactively to the Advance Date, the Payor 
and the recipient(s) 

                              CREDIT AGREEMENT

<PAGE>

                                      -54-

shall each be obligated to pay interest on the Required Payment as follows:

              (i)  if the Required Payment shall represent a payment to be 
         made by the Borrower to the Lenders, the Borrower and the 
         recipient(s) shall each be obligated retroactively to the Advance 
         Date to pay interest in respect of the Required Payment at the 
         Post-Default Rate (without duplication of the obligation of the 
         Borrower under Section 3.02 hereof to pay interest on the Required 
         Payment at the Post-Default Rate), it being understood that the 
         return by the recipient(s) of the Required Payment to the 
         Administrative Agent shall not limit such obligation of the 
         Borrower under said Section 3.02 to pay interest at the 
         Post-Default Rate in respect of the Required Payment, and

              (ii)  if the Required Payment shall represent proceeds of a Loan 
         to be made by the Lenders to the Borrower, the Payor and the 
         Borrower shall each be obligated retroactively to the Advance Date 
         to pay interest in respect of the Required Payment pursuant to 
         whichever of the rates specified in Section 3.02 hereof is 
         applicable to the Type of such Loan, it being understood that the 
         return by the Borrower of the Required Payment to the 
         Administrative Agent shall not limit any claim the Borrower may 
         have against the Payor in respect of such Required Payment.

         4.07  SHARING OF PAYMENTS, ETC.

         (a)  Each Obligor agrees that, in addition to (and without 
limitation of) any right of set-off, banker's lien or counterclaim a Lender 
may otherwise have, each Lender shall be entitled, at its option (to the 
fullest extent permitted by law), to set off and apply any deposit (general 
or special, time or demand, provisional or final), or other indebtedness, 
held by it for the credit or account of such Obligor at any of its offices, 
in Dollars or in any other currency, against any principal of or interest on 
any of such Lender's Loans, Reimbursement Obligations or any other amount 
payable to such Lender hereunder, that is not paid when due (regardless of 
whether such deposit or other indebtedness is then due to such Obligor), in 
which case it shall promptly notify such Obligor and the Administrative Agent 
thereof, PROVIDED that such Lender's failure to give such notice shall not 
affect the validity thereof.

         (b)  If any Lender shall obtain from any Obligor payment of any 
principal of or interest on any Loan of any Class denominated in a Currency 
owing to it or any Letter of Credit Liability owing to it or payment of any 
other amount under this Agreement or any other Loan Document through the 
exercise of any right of set-off, banker's lien or counterclaim or similar 
right 

                              CREDIT AGREEMENT

<PAGE>

                                     -55-

or otherwise (other than from the Administrative Agent as provided herein), 
and, as a result of such payment, such Lender shall have received a greater 
percentage of the principal of or interest on the Loans of such Class and 
denominated in such Currency (the "APPLICABLE LOANS") or Letter of Credit 
Liabilities or such other amounts then due hereunder or thereunder by such 
Obligor to such Lender than the percentage received by any other Lender to 
which principal of or interest on the Applicable Loans or Letter of Credit 
Liabilities or such other amounts is then due hereunder, it shall promptly 
purchase from such other Lenders participations in (or, if and to the extent 
specified by such Lender, direct interests in) the Applicable Loans or Letter 
of Credit Liabilities or such other amounts, respectively, owing to such 
other Lenders (or in interest due thereon, as the case may be) in such 
amounts, and make such other adjustments from time to time as shall be 
equitable, to the end that all the Lenders shall share the benefit of such 
excess payment (net of any expenses that may be incurred by such Lender in 
obtaining or preserving such excess payment) pro rata in accordance with the 
unpaid principal of and/or interest on the Applicable Loans or Letter of 
Credit Liabilities or such other amounts, respectively, owing to each of the 
Lenders.  To such end all the Lenders shall make appropriate adjustments 
among themselves (by the resale of participations sold or otherwise) if such 
payment is rescinded or must otherwise be restored.

         (c)  The Borrower agrees that any Lender so purchasing such a 
participation (or direct interest) may exercise all rights of set-off, 
banker's lien, counterclaim or similar rights with respect to such 
participation as fully as if such Lender were a direct holder of Loans or 
other amounts (as the case may be) owing to such Lender in the amount of such 
participation.

         (d)  Nothing contained herein shall require any Lender to exercise 
any such right or shall affect the right of any Lender to exercise, and 
retain the benefits of exercising, any such right with respect to any other 
indebtedness or obligation of any Obligor.  If, under any applicable 
bankruptcy, insolvency or other similar law, any Lender receives a secured 
claim in lieu of a set-off to which this Section 4.07 applies, such Lender 
shall, to the extent practicable, exercise its rights in respect of such 
secured claim in a manner consistent with the rights of the Lenders entitled 
under this Section 4.07 to share in the benefits of any recovery on such 
secured claim.

                              CREDIT AGREEMENT

<PAGE>

                                     -56-

         Section 5.  YIELD PROTECTION, ETC.

         5.01  ADDITIONAL COSTS.

         (a)  The Borrower shall pay directly to each Lender from time to 
time such amounts as such Lender may determine to be necessary to compensate 
such Lender for any costs that such Lender determines are attributable to its 
making or maintaining of any Eurocurrency Loans or its obligation to make any 
Eurocurrency Loans hereunder, or any reduction in any amount receivable by 
such Lender hereunder in respect of any of such Loans or such obligation 
(such increases in costs and reductions in amounts receivable being herein 
called "ADDITIONAL COSTS"), resulting from any Regulatory Change that:

              (i)  shall subject any Lender (or its Applicable Lending Office 
         for any of such Loans) to any tax, duty or other charge in respect 
         of such Loans or changes the basis of taxation of any amounts 
         payable to such Lender under this Agreement in respect of any of 
         such Loans (excluding changes in the rate of tax on the overall net 
         income of such Lender or of such Applicable Lending Office by the 
         jurisdiction in which such Lender has its principal office or such 
         Applicable Lending Office and excluding any U.S. Taxes that would 
         not be payable under the proviso in the first paragraph of Section 
         5.07(a) hereof); or
         
              (ii)  imposes or modifies any reserve, special deposit or similar
         requirements (other than, in the case of any Lender for any period 
         as to which the Borrower is required to pay any amount under 
         paragraph (d) below, the reserves against "Eurocurrency 
         liabilities" under Regulation D therein referred to) relating to 
         any extensions of credit or other assets of, or any deposits with 
         or other liabilities of, such Lender (including, without 
         limitation, any of such Loans or any deposits referred to in the 
         definition of "Eurocurrency Rate" in Section 1.01 hereof), or any 
         commitment of such Lender (including, without limitation, the 
         Commitments of such Lender hereunder); or

              (iii)  imposes any other condition affecting this Agreement (or 
         any of such extensions of credit or liabilities) or its Commitments.

If any Lender requests compensation from the Borrower under this Section 
5.01(a), the Borrower may, by notice to such Lender (with a copy to the 
Administrative Agent), suspend the obligation of such Lender thereafter to 
make or Continue Eurocurrency Loans, or to Convert Base Rate Loans into 
Eurodollar Loans, until the Regulatory Change giving rise to such request 
ceases to be in

                              CREDIT AGREEMENT
<PAGE>

                                     -57-

effect (in which case the provisions of Section 5.04 hereof shall be 
applicable), PROVIDED that such suspension shall not affect the right of such 
Lender to receive the compensation so requested.

    (b)  Without limiting the effect of the foregoing provisions of this 
Section 5.01 (but without duplication), the Borrower shall pay directly to 
each Lender from time to time on request such amounts as such Lender may 
determine to be necessary to compensate such Lender (or, without duplication, 
the holding company of which such Lender is a subsidiary) for any costs that 
it determines are attributable to the maintenance by such Lender (or any 
Applicable Lending Office or such holding company), pursuant to any law or 
regulation or any interpretation, directive or request (whether or not having 
the force of law and whether or not failure to comply therewith would be 
unlawful) of any court or governmental or monetary authority (i) following 
any Regulatory Change or (ii) implementing any risk-based capital guideline 
or other requirement (whether or not having the force of law and whether or 
not the failure to comply therewith would be unlawful) hereafter issued by 
any government or governmental or supervisory authority implementing at the 
national level the Basle Accord, of capital in respect of its Commitments or 
Loans (such compensation to include, without limitation, an amount equal to 
any reduction of the rate of return on assets or equity of such Lender (or 
any Applicable Lending Office or such holding company) to a level below that 
which such Lender (or any Applicable Lending Office or such holding company) 
could have achieved but for such law, regulation, interpretation, directive 
or request).

    (c)  Each Lender shall notify the Borrower of any event occurring after 
the Effective Date entitling such Lender to compensation under Section 
5.01(a) or 5.01(b) hereof as promptly as practicable, but in any event within 
45 days, after such Lender obtains actual knowledge thereof; PROVIDED that 
(i) if any Lender fails to give such notice within 45 days after it obtains 
actual knowledge of such an event, such Lender shall, with respect to 
compensation payable pursuant to this Section 5.01 in respect of any costs 
resulting from such event, only be entitled to payment under this Section 
5.01 for costs incurred from and after the date 45 days prior to the date 
that such Lender does give such notice and (ii) each Lender will designate a 
different Applicable Lending Office for the Loans of such Lender affected by 
such event if such designation will avoid the need for, or reduce the amount 
of, such compensation and will not, in the sole opinion of such Lender, be 
disadvantageous to such Lender, except that such Lender shall have no 
obligation to designate an Applicable Lending Office located in the United 
States of America.  Each Lender will furnish to the Borrower a certificate 
setting forth the basis and amount of each request by such Lender


                               CREDIT AGREEMENT
<PAGE>

                                     -58-

for compensation under Section 5.01(a) or 5.01(b) hereof.  Determinations and 
allocations by any Lender for purposes of this Section 5.01 of the effect of 
any Regulatory Change pursuant to Section 5.01(a) hereof, or of the effect of 
capital maintained pursuant to Section 5.01(b) hereof, on its costs or rate 
of return of maintaining Loans or its obligation to make Loans, or on amounts 
receivable by it in respect of Loans, and of the amounts required to 
compensate such Lender under this Section 5.01, shall be conclusive, PROVIDED 
that such determinations and allocations are made on a reasonable basis.

    (d)  Without limiting the effect of the foregoing, the Borrower shall pay 
to each Lender on the last day of each Interest Period so long as such Lender 
is maintaining reserves against "Eurocurrency liabilities" under Regulation D 
(or, unless the provisions of paragraph (b) above are applicable, so long as 
such Lender is, by reason of any Regulatory Change, maintaining reserves 
against any other category of liabilities that includes deposits by reference 
to which the interest rate on Eurocurrency Loans is determined as provided in 
this Agreement or against any category of extensions of credit or other 
assets of such Lender that includes any Eurocurrency Loans) an additional 
amount (determined by such Lender and notified to the Borrower through the 
Administrative Agent) equal to the product of the following for each 
Eurocurrency Loan for each day during such Interest Period:

         (i)   the principal amount of such Eurocurrency Loan outstanding on 
    such day; and

         (ii)  the remainder of (x) a fraction the numerator of which is the
    rate (expressed as a decimal) at which interest accrues on such Eurocurrency
    Loan for such Interest Period as provided in this Agreement (less the
    Applicable Margin) and the denominator of which is one MINUS the effective 
    rate (expressed as a decimal) at which such reserve requirements are 
    imposed on such Lender on such day MINUS (y) such numerator; and

         (iii) 1/360.

    5.02  LIMITATION ON TYPES OF LOANS.  Anything herein to the contrary 
notwithstanding, if, on or prior to the determination of the Eurocurrency 
Rate for any Interest Period for any Eurocurrency Loan;

         (a)  the Administrative Agent determines, which determination shall 
    be conclusive, that quotations of interest rates for the relevant deposits 
    referred to in the definition of "Eurocurrency Rate" in Section 1.01 hereof 
    are not being provided in the relevant amounts or for the


                               CREDIT AGREEMENT
<PAGE>

                                     -59-

    relevant maturities for purposes of determining rates of interest for 
    Eurocurrency Loans as provided herein; or

         (b)  if the Majority Lenders determine, which determination shall be 
    conclusive, and notify the Administrative Agent that the relevant rates of 
    interest referred to in the definition of "Eurocurrency Rate" in Section 
    1.01 hereof upon the basis of which the rate of interest for Eurocurrency 
    Loans for such Interest Period is to be determined are not likely adequately
    to cover the cost to such Lenders of making or maintaining Eurocurrency 
    Loans for such Interest Period;

then the Administrative Agent shall give the Borrower and each Lender prompt 
notice thereof and, so long as such condition remains in effect, the Lenders 
shall be under no obligation to make additional Eurocurrency Loans, to 
Continue Eurocurrency Loans or to Convert Base Rate Loans into Eurodollar 
Loans, and the Borrower shall, on the last day(s) of the then current 
Interest Period(s) for the outstanding Eurocurrency Loans, either prepay such 
Loans or, in the case of Eurodollar Loans, Convert such Loans into Base Rate 
Loans in accordance with Section 2.09 hereof.

    5.03  ILLEGALITY.  Notwithstanding any other provision of this Agreement, 
in the event that it becomes unlawful, or any central bank or other 
governmental authority asserts that it is unlawful, for any Lender or its 
Applicable Lending Office to honor its obligation to make or maintain 
Eurocurrency Loans hereunder (and, in the sole opinion of such Lender, the 
designation of a different Applicable Lending Office would either not avoid 
such unlawfulness or would be disadvantageous to such Lender), then such 
Lender shall promptly notify the Borrower thereof (with a copy to the 
Administrative Agent) and such Lender's obligation to make or Continue 
Eurocurrency Loans, or to Convert Base Rate Loans into Eurodollar Loans, 
shall be suspended until such time as such Lender may again make and maintain 
Eurocurrency Loans (in which case the provisions of Section 5.04 hereof shall 
be applicable).

    5.04  TREATMENT OF AFFECTED LOANS.  If the obligation of any Lender to 
make Eurodollar Loans or to Continue, or to Convert Base Rate Loans into, 
Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03 hereof, 
such Lender's Eurodollar Loans shall be automatically Converted into Base 
Rate Loans on the last day(s) of the then current Interest Period(s) for 
Eurodollars Loans (or, in the case of a Conversion resulting from a 
circumstance described in Section 5.03 hereof, on such earlier date as such 
Lender may specify to the Borrower with a copy to the Administrative Agent) 
and, unless and until such Lender gives notice as provided below that the 
circumstances specified in


                               CREDIT AGREEMENT
<PAGE>

                                     -60-

Section 5.01 or 5.03 hereof that gave rise to such Conversion no longer exist:

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

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

If such Lender gives notice to the Borrower with a copy to the Administrative 
Agent that the circumstances specified in Section 5.01 or 5.03 hereof that 
gave rise to the Conversion of such Lender's Eurodollar Loans pursuant to 
this Section 5.04 no longer exist (which such Lender agrees to do promptly 
upon such circumstances ceasing to exist) at a time when Eurodollar Loans of 
the same Class made by other Lenders are outstanding, such Lender's Base Rate 
Loans of such Class shall be automatically Converted, on the first day(s) of 
the next succeeding Interest Period(s) for such outstanding Eurodollar Loans, 
to the extent necessary so that, after giving effect thereto, all Base Rate 
Loans and Eurodollar Loans of such Class are allocated among the Lenders 
ratably (as to principal amounts, Types and Interest Periods) in accordance 
with their respective Commitments of such Class.

    If the obligation of any Sterling Lender to make or Continue Eurosterling 
Loans shall be suspended pursuant to Section 5.01 or 5.03 hereof, then, 
unless and until such Lender gives notice to the Borrower with a copy to the 
Administrative Agent that the circumstances specified in Section 5.01 or 5.03 
hereof that gave rise to such suspension no longer exist (which such Lender 
agrees to do promptly upon such circumstances ceasing to exist), all Sterling 
Loans that would otherwise be made by a Sterling Lender as Eurosterling Loans 
shall be made as Dollar Loans.

    5.05  COMPENSATION.  The Borrower shall pay to the Administrative Agent 
for account of each Lender, upon the request of such Lender through the 
Administrative Agent, such amount or amounts as shall be sufficient (in the 
reasonable opinion of such Lender) to compensate it for any loss, cost or 
expense (including, without limitation, any loss, cost or expense incurred by 
reason of the liquidation or reemployment of deposits or other funds required 
by such Lender to fund its Eurocurrency


                               CREDIT AGREEMENT
<PAGE>

                                     -61-

Loans) which such Lender may sustain:

         (a)  if any payment, mandatory or optional prepayment or Conversion 
    of a Eurocurrency Loan made by such Lender for any reason (including, 
    without limitation, the acceleration of the Loans pursuant to Section 10 
    hereof) occurs on a date other than the last day of the Interest Period for 
    such Loan; or

         (b)  if the Borrower fails for any reason (including, without 
    limitation, the failure of any of the conditions precedent specified in 
    Section 7 hereof to be satisfied) to borrow a Eurocurrency Loan from such 
    Lender on the date for such borrowing specified in the relevant notice of 
    borrowing given pursuant to Section 2.02 hereof.

Calculation of all amounts payable to a Lender under this Section 5.05 shall 
be made as though such Lender had actually funded its relevant Eurocurrency 
Loan through the purchase of a Eurocurrency deposit bearing interest at the 
Eurocurrency Rate in an amount equal to the amount of such Loan, having a 
maturity comparable to the relevant Interest Period and through the transfer 
of such Eurocurrency deposit from an offshore office of such Lender to a 
domestic office of such Lender in the United States of America; PROVIDED, 
HOWEVER, that each Lender may fund each of its Eurocurrency Loans in any 
manner it sees fit and the foregoing assumption shall be utilized only for 
the calculation of amounts payable under this Section 5.05.


                               CREDIT AGREEMENT
<PAGE>

                                     -62-

    5.06  ADDITIONAL COSTS IN RESPECT OF LETTERS OF CREDIT.  Without limiting 
the obligations of the Borrower under Section 5.01 hereof (but without 
duplication), if as a result of any Regulatory Change or any risk-based 
capital guideline or other requirement heretofore or hereafter issued by any 
government or governmental or supervisory authority implementing at the 
national level the Basle Accord there shall be imposed, modified or deemed 
applicable any tax, reserve, special deposit, capital adequacy or similar 
requirement against or with respect to or measured by reference to Letters of 
Credit issued or to be issued hereunder and the result shall be to increase 
the cost to any Lender or Lenders of issuing (or purchasing participations 
in) or maintaining its obligation hereunder to issue (or purchase 
participations in) any Letter of Credit hereunder or reduce any amount 
receivable by any Lender hereunder in respect of any Letter of Credit (which 
increases in cost, or reductions in amount receivable, shall be the result of 
such Lender's or Lenders' reasonable allocation of the aggregate of such 
increases or reductions resulting from such event), then, upon demand by such 
Lender or Lenders (through the Administrative Agent), the Borrower shall pay 
immediately to the Administrative Agent for account of such Lender or 
Lenders, from time to time as specified by such Lender or Lenders (through 
the Administrative Agent), such additional amounts as shall be sufficient to 
compensate such Lender or Lenders (through the Administrative Agent) for such 
increased costs or reductions in amount.  A statement as to such increased 
costs or reductions in amount incurred by any such Lender or Lenders, 
submitted by such Lender or Lenders to the Borrower shall be conclusive in 
the absence of manifest error as to the amount thereof.

    5.07  U.S. TAXES.

    (a)  The Borrower agrees to pay to each Lender that is not a U.S. Person 
such additional amounts as are necessary in order that the net payment of any 
amount due to such non-U.S. Person hereunder after deduction for or 
withholding in respect of any U.S. Taxes imposed with respect to such payment 
(or in lieu thereof, payment of such U.S. Taxes by such non-U.S. Person), 
will not be less than the amount stated herein to be then due and payable, 
PROVIDED that the foregoing obligation to pay such additional amounts shall 
not apply:

         (i)  to any payment to any Lender hereunder (other than in respect 
    of any Registered Loan) unless such Lender is, on the Effective Date (or on 
    the date it becomes a Lender hereunder as provided in Section 12.06(b) 
    hereof) and on the date of any change in the Applicable Lending Office of 
    such Lender, either entitled to submit a Form 1001 (relating to such Lender 
    and entitling it to a complete exemption from withholding on all interest to
    be received by it hereunder


                               CREDIT AGREEMENT
<PAGE>

                                     -63-

    in respect of the Loans) or Form 4224 (relating to all interest to be 
    received by such Lender hereunder in respect of the Loans),

         (ii)  to any payment to any Lender hereunder in respect of a 
    Registered Loan (a "REGISTERED HOLDER"), unless such Registered Holder (or, 
    if such Registered Holder is not the beneficial owner of such Registered 
    Loan, the beneficial owner thereof) is, on the Effective Date (or on the 
    date such Registered Holder becomes a Lender as provided in Section 12.06(b)
    hereof) and on the date of any change in the Applicable Lending Office of 
    such Lender, entitled to submit a Form W-8, together with an annual 
    certificate stating that such Registered Holder (or beneficial owner, as the
    case may be) (w) is not a "bank" within the meaning of Section 881(c)(3)(A) 
    of the Code, (x) is not a 10-percent shareholder (within the meaning of 
    Section 871(h)(3)(B) of the Code) of the Borrower, (y) is not a controlled 
    foreign corporation related to the Borrower (within the meaning of Section 
    871(h)(4)(B) of the Code) and (z) is not acting as a conduit entity (within 
    the meaning of U.S. Treasury Regulation Section 1.881-3), or

         (iii) to any U.S. Taxes imposed solely by reason of the failure by 
    such non-U.S. Person (or, if such non-U.S. Person is not the beneficial 
    owner of the relevant Loan, such beneficial owner) to comply with applicable
    certification, information, documentation or other reporting requirements 
    (including, without limitation, the failure to timely submit a Form 1001, 
    4224 or W-8 (together with the annual certificate required under clause (ii)
    above), as applicable) concerning the nationality, residence, identity or 
    connections with the United States of America of such non-U.S. Person (or 
    beneficial owner, as the case may be) if such compliance is required by 
    statute or regulation of the United States of America as a precondition to 
    relief or exemption from such U.S. Taxes.

For the purposes of this Section 5.07(a), (A) "FORM 1001" shall mean Form 
1001 (Ownership, Exemption, or Reduced Rate Certificate) of the Department of 
the Treasury of the United States of America, (B) "FORM 4224" shall mean Form 
4224 (Exemption from Withholding of Tax on Income Effectively Connected with 
the Conduct of a Trade or Business in the United States) of the Department of 
the Treasury of the United States of America and (C) "FORM W-8" shall mean 
Form W-8 (Certificate of Foreign Status) of the Department of Treasury of the 
United States of America.  Each of the Forms referred to in the foregoing 
clauses (A), (B) and (C) shall include such successor and related forms as 
may from time to time be adopted by the relevant taxing authorities of the 
United States of America to


                               CREDIT AGREEMENT
<PAGE>

                                     -64-

document a claim to which such Form relates.

    (b)  Within 30 days after paying any amount to the Administrative Agent 
or any Lender from which it is required by law to make any deduction or 
withholding, and within 30 days after it is required by law to remit such 
deduction or withholding to any relevant taxing or other authority, the 
Borrower shall deliver to the Administrative Agent for delivery to such 
non-U.S. Person evidence satisfactory to such Person of such deduction, 
withholding or payment (as the case may be).

    (c)  The Borrower further agrees to pay to each Sterling Lender such 
additional amounts as are necessary in order that the net payment of any 
amount due to such Sterling Lender that is not a U.K. Person hereunder after 
deduction for or withholding in respect of any U.K. Taxes imposed with 
respect to such payment (or in lieu thereof, payment of such U.K. Taxes by 
such non-U.K. Person), will not be less than the amount stated herein to be 
then due and payable, PROVIDED that the foregoing obligation to pay such 
additional amounts shall not apply:

         (i)  to any payment to any Sterling Lender hereunder unless such 
    Sterling Lender is, on the date hereof (or on the date it becomes a 
    Sterling Lender hereunder as provided in Section 12.06(b) hereof) and on 
    the date of any change in the Applicable Lending Office for Sterling Loans 
    of such Sterling Lender, either entitled to a complete exemption from 
    withholding or deduction by the Borrower of U.K. Taxes on all interest to 
    be received by such Sterling Lender hereunder in respect of the Sterling 
    Loans made by such Sterling Lender to the Borrower, or

         (ii)  to any U.K. Taxes required to be deducted or withheld solely 
    by reason of the failure by such Sterling Lender to comply with applicable 
    certification, information, documentation or other reporting requirements 
    concerning the nationality, residence, identity or connections with the 
    United Kingdom of such Sterling Lender if such compliance is required by 
    statute or regulation as a precondition to relief or exemption from such 
    U.K. Taxes.

    5.08  REPLACEMENT LENDERS.  At any time within 30 days after the payment 
by the Borrower to any Lender of any amount pursuant to Section 5.01(a), 
5.01(b) or 5.07 hereof that the Borrower deems material, the Borrower may, by 
notice to the Administrative Agent and each Lender that requested the payment 
of such amount, nominate or propose a bank or other financial institution 
that is willing to become the assignee of the Loans and (if any) Commitments 
of such Lender (a "REPLACEMENT LENDER") pursuant to Section 12.06(b) hereof, 
and within 15 Business Days after receipt of such proposal from the Borrower, 
such Lender


                               CREDIT AGREEMENT
<PAGE>

                                     -65-

shall execute and deliver to the Administrative Agent an Assignment and 
Acceptance substantially in the form of Exhibit G hereto whereby such Lender 
shall assign its entire Loans and (if any) Commitments to the proposed 
Replacement Lender in accordance with Section 12.06(b) hereof unless, prior 
to the expiration of such period, the Administrative Agent shall have 
notified the Borrower and such Lender that the proposed Replacement Lender is 
not reasonably acceptable to the Administrative Agent; PROVIDED that in no 
event will (i) any Lender be required to enter into such Assignment and 
Acceptance under this Section 5.08 at a price less than par plus accrued 
interest and prorated fees and other costs due hereunder (including, without 
limitation, break funding costs incurred by such Lender as a result of such 
assignment being effected on a day other than the last day of an Interest 
Period, which amount (if any) shall be payable by the Borrower to such 
Lender) to the effective date thereof, (ii) the Administrative Agent or any 
Lender be obligated to assist the Borrower in identifying any Person that is 
willing to become such a Replacement Lender and (iii) any such assignment be 
required if the consummation thereof conflicts with any law, regulation or 
rule.

    Section 6.  GUARANTEE.

    6.01  THE GUARANTEE.  The Subsidiary Guarantors hereby jointly and 
severally guarantee to each Lender and the Administrative Agent and their 
respective successors and assigns the prompt payment in full when due 
(whether at stated maturity, by acceleration or otherwise) of the principal 
of and interest on the Loans made by the Lenders to the Borrower and all 
other amounts from time to time owing to the Lenders or the Administrative 
Agent by the Borrower under this Agreement and by any Obligor under any of 
the other Loan Documents (including, without limitation, all Reimbursement 
Obligations), and all obligations of the Borrower or any of its Subsidiaries 
to any Lender or any affiliate of a Lender in respect of any Interest Rate 
Protection Agreement, in each case strictly in accordance with the terms 
thereof (such obligations being herein collectively called the "GUARANTEED 
OBLIGATIONS").  The Subsidiary Guarantors hereby further jointly and 
severally agree that if the Borrower shall fail to pay in full when due 
(whether at stated maturity, by acceleration or otherwise) any of the 
Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same, 
without any demand or notice whatsoever, and that in the case of any 
extension of time of payment or renewal of any of the Guaranteed Obligations, 
the same will be promptly paid in full when due (whether at extended 
maturity, by acceleration or otherwise) in accordance with the terms of such 
extension or renewal.

    6.02  OBLIGATIONS UNCONDITIONAL.  The obligations of


                               CREDIT AGREEMENT
<PAGE>

                                     -66-

the Subsidiary Guarantors under Section 6.01 hereof are absolute and 
unconditional, joint and several, irrespective of the value, genuineness, 
validity, regularity or enforceability of the obligations of the Borrower 
under this Agreement or any other agreement or instrument referred to herein 
or therein, or any substitution, release or exchange of any other guarantee 
of or security for any of the Guaranteed Obligations, and, to the fullest 
extent permitted by applicable law, irrespective of any other circumstance 
whatsoever that might otherwise constitute a legal or equitable discharge or 
defense of a surety or guarantor, it being the intent of this Section 6.02 
that the obligations of the Subsidiary Guarantors hereunder shall be absolute 
and unconditional, joint and several, under any and all circumstances.  
Without limiting the generality of the foregoing, it is agreed that the 
occurrence of any one or more of the following shall not alter or impair the 
liability of the Subsidiary Guarantors hereunder, which shall remain absolute 
and unconditional as described above:

         (i)   at any time or from time to time, without notice to the 
    Subsidiary Guarantors, the time for any performance of or compliance with 
    any of the Guaranteed Obligations shall be extended, or such performance or 
    compliance shall be waived;

         (ii)  any of the acts mentioned in any of the provisions of this 
    Agreement or any other agreement or instrument referred to herein or therein
    shall be done or omitted;

         (iii) the maturity of any of the Guaranteed Obligations shall be 
    accelerated, or any of the Guaranteed Obligations shall be modified, 
    supplemented or amended in any respect, or any right under this Agreement or
    any other agreement or instrument referred to herein or therein shall be 
    waived or any other guarantee of any of the Guaranteed Obligations or any 
    security therefor shall be released or exchanged in whole or in part or 
    otherwise dealt with; or

         (iv)  any lien or security interest granted to, or in favor of, the 
    Administrative Agent or any Lender or Lenders as security for any of the 
    Guaranteed Obligations shall fail to be perfected.

The Subsidiary Guarantors hereby expressly waive diligence, presentment, 
demand of payment, protest and all notices whatsoever, and any requirement 
that the Administrative Agent or any Lender exhaust any right, power or 
remedy or proceed against the Borrower under this Agreement or any other 
agreement or instrument referred to herein or therein, or against any other 
Person under any other guarantee of, or security for, any of the 


                               CREDIT AGREEMENT

<PAGE>

                                       67


Guaranteed Obligations.

          6.03  REINSTATEMENT.  The obligations of the Subsidiary Guarantors 
under this Section 6 shall be automatically reinstated if and to the extent 
that for any reason any payment by or on behalf of the Borrower in respect of 
the Guaranteed Obligations is rescinded or must be otherwise restored by any 
holder of any of the Guaranteed Obligations, whether as a result of any 
proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary 
Guarantors jointly and severally agree that they will indemnify the 
Administrative Agent and each Lender on demand for all reasonable costs and 
expenses (including, without limitation, fees of counsel) incurred by the 
Administrative Agent or such Lender in connection with such rescission or 
restoration, including any such costs and expenses incurred in defending 
against any claim alleging that such payment constituted a preference, 
fraudulent transfer or similar payment under any bankruptcy, insolvency or 
similar law.

          6.04  SUBROGATION.  The Subsidiary Guarantors hereby jointly and 
severally agree that until the payment and satisfaction in full of all 
Guaranteed Obligations and the expiration and termination of the Commitments 
of the Lenders under this Agreement they shall not exercise any right or 
remedy arising by reason of any performance by them of their guarantee in 
Section 6.01 hereof, whether by subrogation or otherwise, against the 
Borrower or any other Subsidiary Guarantor of any of the Guaranteed 
Obligations or any security for any of the Guaranteed Obligations.

          6.05  REMEDIES.  The Subsidiary Guarantors jointly and severally 
agree that, as between the Subsidiary Guarantors and the Lenders, the 
obligations of the Borrower under this Agreement may be declared to be 
forthwith due and payable as provided in Section 10 hereof (and shall be 
deemed to have become automatically due and payable in the circumstances 
provided in said Section 10) for purposes of Section 6.01 hereof 
notwithstanding any stay, injunction or other prohibition preventing such 
declaration (or such obligations from becoming automatically due and payable) 
as against the Borrower and that, in the event of such declaration (or such 
obligations being deemed to have become automatically due and payable), such 
obligations (whether or not due and payable by the Borrower) shall forthwith 
become due and payable by the Subsidiary Guarantors for purposes of said 
Section 6.01.

          6.06  INSTRUMENT FOR THE PAYMENT OF MONEY.  Each Subsidiary 
Guarantor hereby acknowledges that the guarantee in this Section 6 
constitutes an instrument for the payment of money, and consents and agrees 
that any Lender or the Administrative Agent, at its sole option, in the event 
of a

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                                       68

dispute by such Subsidiary Guarantor in the payment of any moneys due 
hereunder, shall have the right to bring motion-action under New York CPLR 
Section 3213.

          6.07  CONTINUING GUARANTEE.  The guarantee in this Section 6 is a 
continuing guarantee, and shall apply to all Guaranteed Obligations whenever 
arising.

          6.08  RIGHTS OF CONTRIBUTION.  The Subsidiary Guarantors hereby 
agree, as between themselves, that if any Subsidiary Guarantor shall become 
an Excess Funding Guarantor (as defined below) by reason of the payment by 
such Subsidiary Guarantor of any Guaranteed Obligations, each other 
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but 
subject to the next sentence), pay to such Excess Funding Guarantor an amount 
equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and 
determined, for this purpose, without reference to the Properties, debts and 
liabilities of such Excess Funding Guarantor) of the Excess Payment (as 
defined below) in respect of such Guaranteed Obligations.  The payment 
obligation of a Subsidiary Guarantor to any Excess Funding Guarantor under 
this Section 6.08 shall be subordinate and subject in right of payment to the 
prior payment in full of the obligations of such Subsidiary Guarantor under 
the other provisions of this Section 6 and such Excess Funding Guarantor 
shall not exercise any right or remedy with respect to such excess until 
payment and satisfaction in full of all of such obligations.

          For purposes of this Section 6.08, (i) "EXCESS FUNDING GUARANTOR" 
shall mean, in respect of any Guaranteed Obligations, a Subsidiary Guarantor 
that has paid an amount in excess of its Pro Rata Share of such Guaranteed 
Obligations, (ii) "EXCESS PAYMENT" shall mean, in respect of any Guaranteed 
Obligations, the amount paid by an Excess Funding Guarantor in excess of its 
Pro Rata Share of such Guaranteed Obligations and (iii) "PRO RATA SHARE" 
shall mean, for any Subsidiary Guarantor, the ratio (expressed as a 
percentage) of (x) the amount by which the aggregate present fair saleable 
value of all Properties of such Subsidiary Guarantor (excluding any shares of 
stock of any other Subsidiary Guarantor) exceeds the amount of all the debts 
and liabilities of such Subsidiary Guarantor (including contingent, 
subordinated, unmatured and unliquidated liabilities, but excluding the 
obligations of such Subsidiary Guarantor hereunder and any obligations of any 
other Subsidiary Guarantor that have been Guaranteed by such Subsidiary 
Guarantor) to (y) the amount by which the aggregate fair saleable value of 
all Properties of all of the Borrower and the Subsidiary Guarantors exceeds 
the amount of all the debts and liabilities (including contingent, 
subordinated, unmatured and unliquidated liabilities, but excluding the 
obligations of the Borrower and the Subsidiary Guarantors hereunder and under 
the other Loan Documents) of the 

                                CREDIT AGREEMENT

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                                       69

Borrower and the Subsidiary Guarantors, determined (A) with respect to any 
Subsidiary Guarantor that is a party hereto on the Effective Date, as of the 
Effective Date, and (B) with respect to any other Subsidiary Guarantor, as of 
the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.

          6.09  GENERAL LIMITATION ON GUARANTEE OBLIGATIONS.  In any action 
or proceeding involving any state corporate law, or any state or Federal 
bankruptcy, insolvency, reorganization or other law affecting the rights of 
creditors generally, if the obligations of any Subsidiary Guarantor under 
Section 6.01 hereof would otherwise, taking into account the provisions of 
Section 6.08 hereof, be held or determined to be void, invalid or 
unenforceable, or subordinated to the claims of any other creditors, on 
account of the amount of its liability under said Section 6.01, then, 
notwithstanding any other provision hereof to the contrary, the amount of 
such liability shall, without any further action by such Subsidiary 
Guarantor, any Lender, the Administrative Agent or any other Person, be 
automatically limited and reduced to the highest amount that is valid and 
enforceable and not subordinated to the claims of other creditors as 
determined in such action or proceeding.

          Section 7.  CONDITIONS PRECEDENT.

          7.01  EFFECTIVENESS AND INITIAL EXTENSION OF CREDIT.  The 
effectiveness of this Agreement and the obligation of any Lender to make its 
initial extension of credit hereunder (whether by making a Loan or issuing a 
Letter of Credit) is subject to the conditions precedent that the 
Administrative Agent shall have received, on or before July 31, 1997, the 
following documents (with sufficient copies for each Lender), each of which 
shall be reasonably satisfactory to the Administrative Agent (and to the 
extent specified below, to each Lender) in form and substance:

          (a)  CORPORATE DOCUMENTS.  Certified copies of the charter and 
     by-laws (or equivalent documents) of each Obligor and of all partnership 
     and corporate authority for each Obligor (including, without limitation, 
     board of director resolutions and evidence of the incumbency, including 
     specimen signatures, of officers) with respect to the execution, 
     delivery and performance of such of the Basic Documents to which such 
     Obligor is intended to be a party and each other document to be 
     delivered by such Obligor from time to time in connection herewith and 
     the extensions of credit hereunder (and the Administrative Agent and 
     each Lender may conclusively rely on such certificate until it receives 
     notice in writing from such Obligor to the contrary).

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                                       70

          (b)  SENIOR OFFICER'S CERTIFICATE.  A certificate of a Senior 
     Officer, dated the Effective Date, to the effect set forth in the first 
     sentence of Section 7.02 hereof.

          (c)  OPINIONS OF COUNSEL TO THE OBLIGORS.  Opinions, dated the 
     Effective Date, of (i) Willkie Farr & Gallagher, special New York 
     counsel to the Obligors, substantially in the form of Exhibit C hereto, 
     (ii) Osler, Hoskin & Harcourt, special Canadian counsel to Panavision 
     Canadian Holdings Inc. and (iii) Bell Gully Buddle Weir, special New 
     Zealand counsel to the Borrower, in each case in form and substance 
     satisfactory to the Lenders and (in the case of clause (i)) covering 
     such other matters as the Administrative Agent or any Lender may 
     reasonably request (and each Obligor hereby instructs each such counsel 
     to deliver such opinion to the Lenders and the Administrative Agent).

          (d)  OPINIONS OF COUNSEL TO CHASE.  Opinions, dated the Effective 
     Date, of (i) Milbank, Tweed, Hadley & McCloy, special New York counsel 
     to Chase, substantially in the form of Exhibit D hereto and (ii) 
     Milbank, Tweed, Hadley & McCloy, special English counsel to Chase (and 
     Chase hereby instructs each such counsel to deliver such opinions to the 
     Lenders).

          (e)  SECURITY AGREEMENT.  The Security Agreement, duly executed and 
     delivered by the Borrower, each of the other Obligors party thereto and 
     the Administrative Agent and the certificates identified under the name 
     of each such Obligor in Annex 1 thereto, in each case accompanied by 
     undated stock powers executed in blank.  In addition, each Obligor shall 
     have taken such other action (including, without limitation, delivering 
     to the Administrative Agent, for filing, appropriately completed and 
     duly executed copies of Uniform Commercial Code financing statements) as 
     the Administrative Agent shall have requested in order to perfect the 
     security interests created pursuant to the Security Agreement.

          (f)  NEW ZEALAND PLEDGE AGREEMENTS.  The New Zealand Pledge 
     Agreement, duly executed and delivered by the Borrower and the 
     Administrative Agent and the share certificate(s) of Visual Action NZ 
     identified therein (in each case accompanied by undated stock transfer 
     forms executed in blank). In addition, the Borrower shall have taken 
     such other action as the Administrative Agent shall have requested in 
     order to create valid first priority Liens on the shares of Visual 
     Action NZ.

          (g)  U.K. PLEDGE AGREEMENTS.  The U.K. Pledge Agreement, duly      
     executed and delivered by the Borrower and

                                CREDIT AGREEMENT

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                                       71

     the Administrative Agent and the share certificate(s) of Panavision Europe
     identified therein (in each case accompanied by undated stock transfer 
     forms executed in blank).  In addition, the Borrower shall have taken 
     such other action as the Administrative Agent shall have requested in 
     order to create valid first priority Liens on the shares of Panavision 
     Europe.

          (h)  INSURANCE.  Certificates of insurance evidencing the existence 
     of all insurance required to be maintained by the Borrower pursuant to 
     Section 9.04 hereof and the designation of the Administrative Agent as 
     the loss payee or additional named insured, as the case may be, 
     thereunder to the extent required by said Section 9.04, such 
     certificates to be in such form and contain such information as is 
     specified in said Section 9.04.

          (i)  CONSUMMATION OF THE VISUAL ACTION ACQUISITION. Evidence that 
     prior to or concurrently with the making of the initial extensions of 
     credit hereunder:

               (i)  the condition set forth in clause 5 of the Visual Action 
          Acquisition Agreement shall have been satisfied and "Completion" 
          (as defined therein) shall have occurred in accordance with clause 
          4 thereof, and each other transaction contemplated by the 
          Acquisition shall have been consummated and no material provision 
          of the Acquisition Documents shall have been waived, amended, 
          supplemented or otherwise modified; and

               (ii)  the aggregate cash consideration paid in respect of the 
          Acquisition on the Effective Date shall be in an aggregate amount 
          shall not exceed L37,500,00 (subject to purchase price adjustments 
          as set forth in the Visual Action Acquisition Agreement);

     and the Administrative Agent shall have received a  certificate from a 
     Senior Officer to such effect.

          (j)  COPIES OF THE VISUAL ACTION ACQUISITION DOCUMENTS.  Copies of 
     (i) each Visual Action Acquisition Document, each as in effect on the 
     Effective Date, and (ii) upon the request of the Administrative Agent, 
     any agreement, certificate, court order or other writing delivered by 
     any party to the Acquisition Documents in connection with the closings 
     thereunder.

          (k)  REPAYMENT OF EXISTING INDEBTEDNESS.  Evidence that the 
     principal of and interest on, and all other amounts owing in respect of, 
     the Indebtedness (including, without

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                                       72

     limitation, any contingent or other amounts payable in respect of 
     letters of credit) that is to be repaid on the Effective Date 
     (including, without limitation, all Indebtedness under the Existing 
     Credit Agreement) shall have been (or shall be simultaneously) paid in 
     full, that any commitments to extend credit under the agreements or 
     instruments relating to such Indebtedness shall have been canceled or 
     terminated and that all Guarantees in respect of, and all Liens 
     securing, any such Indebtedness shall have been released (or 
     arrangements for such release satisfactory to the Administrative Agent 
     shall have been made).

          (l)  EVIDENCE OF APPROVALS.  Evidence that all governmental and 
     third party approvals necessary or, in the discretion of the 
     Administrative Agent, advisable in connection with the Acquisition, the 
     financing contemplated hereby and the continuing operations of the 
     Borrower and its Subsidiaries shall have been obtained and be in full 
     force and effect, and all applicable waiting periods shall have expired 
     without any action being taken or threatened by any competent authority 
     which would restrain, prevent or otherwise impose adverse conditions on 
     the Acquisition or the financing thereof.

          (m)  CERTAIN FINANCIAL MATTERS.  A certificate of a Senior Officer, 
     dated the Effective Date, setting forth the Total Debt Ratio as at the 
     Effective Date (calculated as of the Effective Date on a pro forma basis 
     determined so as to give effect to the Visual Action Acquisition and the 
     other transactions contemplated to occur on such date).

          (n)  FINANCIAL STATEMENTS.  To the extent not previously delivered, 
     the financial statements of the Borrower referred to in Section 8.02 
     hereof.

          (o)  OTHER DOCUMENTS.  Such other documents as the Administrative 
     Agent or any Lender or special New York counsel to Chase may reasonably 
     request.

     The obligation of any Lender to make its initial extension of credit 
     hereunder is also subject to the payment by the Borrower of such fees as 
     the Borrower shall have agreed to pay to any Lender or the 
     Administrative Agent in connection herewith, including, without 
     limitation, the reasonable fees and expenses of Milbank, Tweed, Hadley & 
     McCloy, special New York counsel to Chase, in connection with the 
     negotiation, preparation, execution and delivery of this Agreement and 
     the other Loan Documents and the extensions of credit hereunder (to the 
     extent that statements for such fees and expenses have been delivered to 
     the Borrower).

          7.02  INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT.  The

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<PAGE>

                                       73

     obligation of the Lenders to make any Loan or otherwise extend credit to 
     the Borrower upon the occasion of each borrowing or other extension of 
     credit hereunder is subject to the further conditions precedent that, 
     both immediately prior to the making of such Loan or other extension of 
     credit and also after giving effect thereto and to the intended use 
     thereof:

          (a) no Default shall have occurred and be continuing; and

          (b) the representations and warranties made by the Borrower in 
     Section 8 hereof, and by each Obligor in each of the other Loan 
     Documents to which it is a party, shall be true and complete on and as 
     of the date of the making of such Loan or other extension of credit with 
     the same force and effect as if made on and as of such date (or, if any 
     such representation or warranty is expressly stated to have been made as 
     of a specific date (it being understood that references to "the date 
     hereof" are references to a specific date), as of such specific date).

     Each notice of borrowing or request for the issuance of a Letter of 
     Credit by the Borrower hereunder shall constitute a certification by the 
     Borrower to the effect set forth in the preceding sentence (both as of 
     the date of such notice or request and, unless the Borrower otherwise 
     notifies the Administrative Agent prior to the date of such borrowing or 
     issuance, as of the date of such borrowing or issuance).

          Section 8.  REPRESENTATIONS AND WARRANTIES.  The Borrower 
     represents and warrants to the Administrative Agent and the Lenders that:

          8.01  EXISTENCE.  Each of the Borrower and its Subsidiaries:  (a) 
     is a corporation, partnership or other entity duly organized, validly 
     existing and in good standing under the laws of the jurisdiction of its 
     organization; (b) has all requisite corporate or other power, and has 
     all material governmental licenses, authorizations, consents and 
     approvals necessary to own its assets and carry on its business as now 
     being or as proposed to be conducted; and (c) is qualified to do 
     business and is in good standing in all jurisdictions in which the 
     nature of the business conducted by it makes such qualification 
     necessary and where failure so to qualify could reasonably be expected 
     (either individually or in the aggregate) to have a Material Adverse 
     Effect.

          8.02  FINANCIAL CONDITION.  The Borrower has heretofore furnished 
     to each of the Lenders the following financial statements:

                                CREDIT AGREEMENT

<PAGE>

                                       74

               (i)  consolidated balance sheets of the Borrower and its 
          Subsidiaries as at December 31, 1996 and the related consolidated 
          statements of income, retained earnings and cash flows of the 
          Borrower and its Subsidiaries for the fiscal year ended on said 
          date, with the opinion thereon of Ernst & Young LLP,

               (ii)  the unaudited consolidated balance sheets of the 
          Borrower and its Subsidiaries as at March 31, 1997 and the related 
          consolidated statements of income, retained earnings and cash flows 
          of the Borrower and its Subsidiaries for the three-month period 
          ended on such date,

               (iii)  pro forma consolidated balance sheets of the Borrower 
          and its Subsidiaries as at March 31, 1997, adjusted to give effect 
          to the consummation of the Acquisition and the financings 
          contemplated in connection therewith as if such transactions had 
          occurred as of such dates, and

               (iv)  projections of consolidated statements of income and 
          cash flows of the Borrower and its Subsidiaries through 2000, all 
          after giving effect to the Acquisition.

The financial statements described in clauses (i) and (ii) above are complete 
and correct in all material respects and fairly present the consolidated 
financial condition of the Borrower and its Subsidiaries or Samuelson Group 
and its Subsidiaries, as the case may be, and the consolidated results of 
their respective operations for the fiscal year and three-month period ended 
on said dates (subject, in the case of such financial statements as at March 
31, 1997 to normal year-end audit adjustments), all in accordance with 
generally accepted accounting principles and practices applied on a 
consistent basis.  The pro forma balance sheet referred to in clause (iii) 
above reflects the proper application (based on reasonable estimates) of pro 
forma adjustments after giving effect to the Acquisition.  The projections 
referred to in clause (iv) above are based on reasonable estimates.

          None of the Borrower and its Subsidiaries has on the Effective Date 
(after giving effect to the Visual Action Acquisition and the other 
transactions contemplated to occur on such date) any material contingent 
liabilities, liabilities for taxes, unusual forward or long-term commitments 
or unrealized or anticipated losses from any unfavorable commitments, except 
as referred to or reflected or provided for in said balance sheets as at said 
dates and except for liabilities with respect to the Visual Action 
Acquisition as set forth in the Visual Action Acquisition Documents.  Except 
for the Visual Action Acquisition to be consummated on the Effective Date, 
since December 31, 1996, there has been no material adverse change in the 
consolidated

                                CREDIT AGREEMENT

<PAGE>

                                       75

financial condition, operations, business, assets, liabilities or prospects 
taken as a whole of the Borrower and its Subsidiaries from that set forth in 
(x) the financial statements referred to in clause (i) above as at said date 
and (y) from and after the delivery thereof, the financial statements 
referred to in Section 9.01(d) as at said date.

          8.03  LITIGATION.  Except as set forth in Schedule V hereto, there 
are no legal or arbitral proceedings, or any proceedings by or before any 
governmental or regulatory authority or agency, now pending or (to the 
knowledge of the Borrower) threatened against the Borrower or any of its 
Subsidiaries or that could reasonably be expected (either individually or in 
the aggregate) to have a Material Adverse Effect, or that seek to enjoin or 
otherwise challenge any of the transactions (including the Visual Action 
Acquisition) contemplated by this Agreement.

          8.04  NO BREACH.  None of the execution and delivery of this 
Agreement and the other Basic Documents, the consummation of the transactions 
herein and therein contemplated or compliance with the terms and provisions 
hereof and thereof will conflict with or result in a breach of, or require 
any consent under the charter, partnership agreement or by-laws of any 
Obligor, or any applicable law or regulation, or any order, writ, injunction 
or decree of any court or governmental authority or agency, or any material 
agreement or instrument to which the Borrower or any of its Subsidiaries is a 
party or by which any of them or any of their Property is bound or to which 
any of them is subject, or constitute a default under any such agreement or 
instrument, or (except for the Liens created pursuant to the Security 
Documents) result in the creation or imposition of any Lien upon any Property 
of the Borrower or any of its Subsidiaries pursuant to the terms of any such 
agreement or instrument.

          8.05  ACTION.  Each Obligor has all necessary partnership or 
corporate power, authority and legal right to execute, deliver and perform 
its obligations under each of the Basic Documents to which it is a party; the 
execution, delivery and performance by each Obligor of each of the Basic 
Documents to which it is a party have been duly authorized by all necessary 
partnership or corporate action on its part (including, without limitation, 
any required partner or shareholder approvals); and this Agreement has been 
duly and validly executed and delivered by each Obligor and constitutes, and 
the other Basic Documents to which it is a party when executed and delivered 
by such Obligor will constitute, its legal, valid and binding obligation, 
enforceable against each Obligor in accordance with its terms, except as such 
enforceability may be limited by (a) bankruptcy, insolvency, reorganization, 
moratorium or similar laws of general applicability affecting the enforcement 
of creditors' rights and (b) the application of general principles of equity 
(regardless

                                CREDIT AGREEMENT

<PAGE>
                                       76

of whether such enforceability is considered in a proceeding in equity or at 
law).

          8.06  APPROVALS.  No authorizations, approvals or consents of, and 
no filings or registrations with, any governmental or regulatory authority or 
agency, or any securities exchange, are necessary for the execution, delivery 
or performance by any Obligor of this Agreement or any of the other Basic 
Documents to which it is a party or for the legality, validity or 
enforceability hereof or thereof, except for filings, recordings and 
registrations in respect of the Liens created pursuant to the Security 
Documents.

          8.07  USE OF CREDIT.  Neither the Borrower nor any of its 
Subsidiaries is engaged principally, or as one of its important activities, 
in the business of extending credit for the purpose, whether immediate, 
incidental or ultimate, of buying or carrying Margin Stock, and no part of 
the proceeds of any Loan hereunder will be used to buy or carry any Margin 
Stock.

          8.08  ERISA.  Each Plan, and, to the knowledge of the Borrower, 
each Multiemployer Plan, is in compliance with, and has been administered in 
compliance with, the applicable provisions of ERISA, the Code and any other 
Federal or State law except where failure to so comply could not reasonably 
be expected to have a Material Adverse Effect, and no event or condition has 
occurred and is continuing as to which the Borrower would be under an 
obligation to furnish a report to the Lenders under Section 9.01(f) hereof 
which could reasonably be likely to lead to liabilities in excess of $500,000.

          8.09  TAXES.   Except as set forth in Schedule VI hereto, the 
Borrower and its Subsidiaries have filed all Federal income tax returns and 
all other material tax returns that are required to be filed by them and have 
paid all taxes due pursuant to such returns or pursuant to any assessment 
received by the Borrower or any of its Subsidiaries.  The charges, accruals 
and reserves on the books of the Borrower and its Subsidiaries in respect of 
taxes and other governmental charges are, in the opinion of the Borrower, 
adequate.

          8.10  INVESTMENT COMPANY ACT.  Neither the Borrower nor any of its 
Subsidiaries is an "investment company", or a company "controlled" by an 
"investment company", within the meaning of the Investment Company Act of 
1940, as amended.

          8.11  PUBLIC UTILITY HOLDING COMPANY ACT.  Neither the Borrower nor 
any of its Subsidiaries is a "holding company", or an "affiliate" of a 
"holding company" or a "subsidiary company" of a "holding company", within 
the meaning of the Public Utility Holding Company Act of 1935, as amended.

                                CREDIT AGREEMENT

<PAGE>

                                     -77-

          8.12  MATERIAL AGREEMENTS AND LIENS.

          (a)  Part A of Schedule II hereto is a complete and correct list of 
each credit agreement, loan agreement, indenture, agreement for purchase of 
Property or services, guarantee, letter of credit or other arrangement 
providing for or otherwise relating to any Indebtedness or any extension of 
credit (or commitment for any extension of credit) to, or guarantee by, the 
Borrower or any of its Subsidiaries outstanding on the Effective Date (after 
giving effect to the Visual Action Acquisition and the other transactions 
contemplated to occur on such date) as to which (in the case of any such 
arrangement) the aggregate principal or face amount equals or exceeds (or may 
equal or exceed) $500,000, and the aggregate principal or face amount 
outstanding or that may become outstanding under each such arrangement is 
correctly described in Part A of said Schedule II.

          (b)  Part B of Schedule II hereto is a complete and correct list of 
each Lien securing Indebtedness of any Person outstanding on the Effective 
Date (after giving effect to the Visual Action Acquisition and the other 
transactions contemplated to occur on such date) the aggregate principal or 
face amount of which equals or exceeds (or may equal or exceed) $500,000 and 
covering any Property of the Borrower or any of its Subsidiaries, and the 
aggregate Indebtedness secured (or that may be secured) by each such Lien and 
the Property covered by each such Lien is correctly described in Part B of 
said Schedule II.

          8.13  ENVIRONMENTAL MATTERS.  Each of the Borrower and its 
Subsidiaries has obtained all environmental, health and safety permits, 
licenses and other authorizations required under all Environmental Laws to 
carry on its business as now being or as proposed to be conducted, except to 
the extent failure to have any such permit, license or authorization could 
not reasonably be expected (either individually or in the aggregate) to have 
a Material Adverse Effect.  Each of such permits, licenses and authorizations 
is in full force and effect and each of the Borrower and its Subsidiaries is 
in compliance with the terms and conditions thereof, and is also in 
compliance with all other limitations, restrictions, conditions, standards, 
prohibitions, requirements, obligations, schedules and timetables contained 
in any applicable Environmental Law or in any regulation, code, plan, order, 
decree, judgment, injunction, notice or demand letter issued, entered, 
promulgated or approved thereunder, except to the extent failure to comply 
therewith could not reasonably be expected (either individually or in the 
aggregate) to have a Material Adverse Effect.  Except as set forth on 
Schedule VII hereto, no notice, notification, demand, request for 
information, citation, summons or order has been issued, no complaint has 
been filed, no penalty has been assessed and no 

                               CREDIT AGREEMENT

<PAGE>

                                     -78-

investigation or review is pending or (to the knowledge of the Borrower) 
threatened by any governmental or other entity with respect to any alleged 
failure by the Borrower or any of its Subsidiaries to have any environmental, 
health or safety permit, license or other authorization required under any 
Environmental Law in connection with the conduct of the business of the 
Borrower or any of its Subsidiaries or with respect to any generation, 
treatment, storage, recycling, transportation, discharge or disposal, or any 
Release of any Hazardous Materials generated by the Borrower or any of its 
Subsidiaries, in each case which could reasonably be expected to lead to 
fines, penalties or liabilities in excess of $500,000.  All environmental 
investigations, studies, audits, tests, reviews or other analyses conducted 
by or that are in the possession of the Borrower or any of its Subsidiaries 
in relation to facts, circumstances or conditions at or affecting any site or 
facility now or previously owned, operated or leased by the Borrower or any 
of its Subsidiaries and that could reasonably be expected to have a Material 
Adverse Effect have been made available to the Administrative Agent.

          8.14  CAPITALIZATION.   As of the Effective Date (after giving 
effect to the Visual Action Acquisition and the other transactions 
contemplated to occur on such date), (i) there are no outstanding Equity 
Rights with respect to the Borrower except as set forth on Schedule IV hereto 
and (ii) there are no outstanding obligations of the Borrower or any of its 
Subsidiaries to repurchase, redeem, or otherwise acquire any partnership 
interest, shares of capital stock or other ownership interests of the 
Borrower nor are there any outstanding obligations of the Borrower or any of 
its Subsidiaries to make payments to any Person, such as "phantom stock" 
payments, where the amount thereof is calculated with reference to the fair 
market value or equity value of the Borrower or any of its Subsidiaries.

                               CREDIT AGREEMENT


<PAGE>

                                     -79-

          8.15  SUBSIDIARIES, ETC.

          (a)  Set forth in Part A of Schedule III hereto is a complete and 
correct list of all of the Subsidiaries of the Borrower as of the date of the 
Effective Date (after giving effect to the Visual Action Acquisition and the 
other transactions contemplated to occur on such date), together with, for 
each such Subsidiary, (i) the jurisdiction of organization of such 
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary 
and (iii) the nature of the ownership interests held by each such Person and 
the percentage of ownership of such Subsidiary represented by such ownership 
interests.  Except as disclosed in Part A of Schedule III hereto, (x) each of 
the Borrower and its Subsidiaries owns, free and clear of Liens (other than 
Liens created pursuant to the Security Documents), and has the unencumbered 
right to vote, all outstanding ownership interests in each Person shown to be 
held by it in Part A of Schedule III hereto, (y) all of the issued and 
outstanding capital stock of each such Person organized as a corporation is 
validly issued, fully paid and nonassessable and (z) there are no outstanding 
Equity Rights with respect to such Person.

          (b)  Set forth in Part B of Schedule III hereto is a complete and 
correct list of all Investments (other than Investments disclosed in Part A 
of said Schedule III hereto and other than Investments of the type referred 
to in clauses (b), (c), (d) or (e) of Section 9.08 hereof) held by the 
Borrower or any of its Subsidiaries in any Person on the Effective Date 
(after giving effect to the Visual Action Acquisition and the other 
transactions contemplated to occur on such date) and, for each such 
Investment, (x) the identity of the Person or Persons holding such Investment 
and (y) the nature of such Investment.  Except as disclosed in Part B of 
Schedule III hereto, each of the Borrower and its Subsidiaries owns, free and 
clear of all Liens (other than Liens created pursuant to the Security 
Documents), all such Investments.

          (c)  None of the Subsidiaries of the Borrower is, on the Effective 
Date (after giving effect to the Visual Action Acquisition and the other 
transactions contemplated to occur on such date), subject to any indenture, 
agreement, instrument or other arrangement of the type described in Section 
9.15(c) hereof.  As of the Effective Date (after giving effect to the Visual 
Action Acquisition and the other transactions contemplated to occur on such 
date), (i) Panavision U.K. L.P. does not engage in any activity, or own or 
hold any Property or assets, other than (x) the ownership of the capital 
shares of Panavision Luxembourg and (y) the making of loans to Panavision 
Luxembourg in an aggregate principal amount not exceeding L18,091,000 and 

                               CREDIT AGREEMENT

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                                     -80-

(ii) Panavision Luxembourg does not engage in any activity, or own any 
Property or assets, other than the making of a loan to Panavision Europe in 
an aggregate principal amount not exceeding L18,091,000 and the holding of a 
promissory note representing such loan.

          8.16  TITLE TO ASSETS.  The Borrower owns and has on the Effective 
Date (after giving effect to the Visual Action Acquisition and the other 
transactions contemplated to occur on such date) good and marketable title 
(subject only to Liens permitted by Section 9.06 hereof) to the material 
Properties shown to be owned in the most recent financial statements referred 
to in Section 8.02 hereof (other than Properties disposed of in the ordinary 
course of business or otherwise permitted to be disposed of pursuant to 
Section 9.05 hereof).  The Borrower owns and has on the Effective Date (after 
giving effect to the Visual Action Acquisition and the other transactions 
contemplated to occur on such date) good and marketable title to, and enjoys 
on the Effective Date peaceful and undisturbed possession of, all material 
Properties (subject only to Liens permitted by Section 9.06 hereof) that are 
necessary for the operation and conduct of its businesses.

          8.17  TRUE AND COMPLETE DISCLOSURE.  The information, reports, 
financial statements, exhibits and schedules (including, without limitation, 
the Information Memorandum) furnished in writing by or on behalf of the 
Obligors to the Administrative Agent or any Lender in connection with the 
negotiation, preparation or delivery of this Agreement and the other Basic 
Documents or included herein or therein or delivered pursuant hereto or 
thereto, when taken as a whole do not contain any untrue statement of 
material fact or omit to state any material fact necessary to make the 
statements herein or therein, in light of the circumstances under which they 
were made, not misleading.  All written information furnished after the 
Effective Date by the Borrower and its Subsidiaries to the Administrative 
Agent and the Lenders in connection with this Agreement and the other Basic 
Documents and the transactions contemplated hereby and thereby (including, 
without limitation, any information memorandum prepared in connection with 
the primary syndication of this Agreement to the Lenders other than Chase) 
will be true, complete and accurate in every material respect, or (in the 
case of projections) based on reasonable estimates, on the date as of which 
such information is stated or certified.  There is no fact known to the 
Borrower that could have a Material Adverse Effect that has not been 
disclosed herein, in the other Loan Documents or in a report, financial 
statement, exhibit, schedule, disclosure letter or other writing furnished to 
the Lenders for use in connection with the transactions contemplated hereby 
or thereby.

                               CREDIT AGREEMENT


<PAGE>

                                     -81-

          Section 9.  COVENANTS OF THE BORROWER.  The Borrower covenants and 
agrees with the Lenders and the Administrative Agent that, so long as any 
Commitment, Loan or Letter of Credit Liability is outstanding and until 
payment in full of all amounts payable by the Borrower hereunder:

          9.01  FINANCIAL STATEMENTS ETC.  The Borrower shall deliver to the 
Administrative Agent, together with copies for each of the Lenders (which 
copies the Administrative Agent shall promptly forward to the Lenders):

          (a)  as soon as available and in any event within 45 days after the 
     end of each calendar monthly period (other than the month of December), 
     consolidated statements of income, retained earnings and cash flows of 
     the Borrower and its Subsidiaries for such period and for the period 
     from the beginning of the respective fiscal year to the end of such 
     period, and the related consolidated balance sheet of the Borrower and 
     its Subsidiaries as at the end of such period, setting forth in each 
     case in comparative form the corresponding consolidated figures for the 
     corresponding periods in the preceding fiscal year;

          (b)  as soon as available and in any event within 45 days after the 
     end of each of the first three quarterly fiscal periods of each fiscal 
     year of the Borrower, consolidated statements of income, retained 
     earnings and cash flows of the Borrower and its Subsidiaries for such 
     period and for the period from the beginning of the respective fiscal 
     year to the end of such period, and the related consolidated balance 
     sheets of the Borrower and its Subsidiaries as at the end of such 
     period, setting forth in each case in comparative form the corresponding 
     consolidated figures for the corresponding periods in the preceding 
     fiscal year (except that, in the case of balance sheets, such comparison 
     shall be to the last day of the prior fiscal year), accompanied by a 
     certificate of a Senior Officer, which certificate shall state (i) that 
     said consolidated financial statements fairly present the consolidated 
     financial condition and results of operations of the Borrower and its 
     Subsidiaries in accordance with generally accepted accounting 
     principles, consistently applied, as at the end of, and for, such period 
     (subject to normal year-end audit adjustments) and (ii) the amount of 
     any Restricted Payment paid during such period as permitted pursuant to 
     Section 9.09 hereof;

          (c)  as soon as available and in any event within 90 days after the 
     end of each fiscal year of the Borrower, 

                               CREDIT AGREEMENT

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                                     -82-

     consolidated statements of income, retained earnings and cash flows of 
     the Borrower and its Subsidiaries for such fiscal year and the related 
     consolidated balance sheets of the Borrower and its Subsidiaries as at 
     the end of such fiscal year, setting forth in each case in comparative 
     form the corresponding consolidated figures for the preceding fiscal 
     year, and accompanied by an opinion thereon of independent certified 
     public accountants of recognized national standing, which opinion shall 
     state that said consolidated financial statements fairly present the 
     consolidated financial condition and results of operations of the 
     Borrower and its Subsidiaries as at the end of, and for, such fiscal 
     year in accordance with generally accepted accounting principles, and a 
     statement of such accountants to the effect that, in making the 
     examination necessary for their opinion, nothing came to their attention 
     that caused them to believe that the Borrower was not in compliance with 
     Section 9.10 hereof, insofar as such Section relates to accounting 
     matters;

          (d)  as soon as possible and in any event within 60 days after the 
     Effective Date, the consolidated balance sheets of Samuelson Group and 
     its Subsidiaries as at December 31, 1996 and the related consolidated 
     statements of profit and loss and cash flows of Samuelson Group and its 
     Subsidiaries for the fiscal year ended on said date, with the opinion 
     thereon of Coopers & Lybrand, together with a certificate of a Senior 
     Officer to the effect that, to the best of such Senior Officer's 
     knowledge, such financial statements are complete and correct in all 
     material respects and fairly present the consolidated financial 
     condition of Samuelson Group and its Subsidiaries and the consolidated 
     results of their operations for the fiscal year ended on said date, all 
     in accordance with generally accepted accounting principles and 
     practices applied on a consistent basis;

          (e)  promptly upon their becoming available, copies of all 
     registration statements and regular periodic reports that the Borrower 
     shall have filed with the Securities and Exchange Commission (or any 
     governmental agency substituted therefor) or any national securities 
     exchange;

          (f)  promptly upon the mailing thereof to the shareholders of the 
     Borrower generally or to holders of Subordinated Indebtedness generally, 
     copies of all financial statements, reports and proxy statements so 
     mailed, and promptly following the receipt thereof by the Borrower, 
     copies of any notices or demands made by any holder (or a trustee for 
     any holder) of any Subordinated Indebtedness to or upon the Borrower;

                               CREDIT AGREEMENT


<PAGE>

                                     -83-

          (g)  as soon as possible, and in any event within 20 Business Days 
     after the Borrower knows that any of the events or conditions specified 
     below with respect to any Plan or Multiemployer Plan has occurred or 
     exists, a statement signed by a Senior Officer setting forth details 
     respecting such event or condition and the action, if any, that the 
     Borrower or its ERISA Affiliate proposes to take with respect thereto 
     (and a copy of any report or notice required to be filed with or given 
     to the PBGC by the Borrower or an ERISA Affiliate with respect to such 
     event or condition):

               (i)  any reportable event, as defined in Section 4043(c) of 
          ERISA and the regulations issued thereunder, with respect to a 
          Plan, as to which the PBGC has not by regulation waived the notice 
          requirement of Section 4043(a) of ERISA (PROVIDED that a failure to 
          meet the minimum funding standard of Section 412 of the Code or 
          Section 302 of ERISA, including, without limitation, the failure to 
          make on or before its due date a required installment under Section 
          412(m) of the Code or Section  302(e) of ERISA, shall be a 
          reportable event regardless of the issuance of any waivers in 
          accordance with Section 412(d) of the Code); and any request for a 
          waiver under Section 412(d) of the Code for any Plan;

               (ii)  the distribution under Section 4041 of ERISA of a notice 
          of intent to terminate any Plan or any action taken by the Borrower 
          or an ERISA Affiliate to terminate any Plan, in each case other 
          than in a standard termination;

               (iii)  the institution by the PBGC of proceedings under 
          Section 4042 of ERISA for the termination of, or the appointment of 
          a trustee to administer, any Plan, or the receipt by the Borrower 
          or any ERISA Affiliate of a notice from a Multiemployer Plan that 
          such action has been taken by the PBGC with respect to such 
          Multiemployer Plan;

               (iv)  the complete or partial withdrawal from a Multiemployer 
          Plan by the Borrower or any ERISA Affiliate that results in 
          liability under Section 4201 or 4204 of ERISA (including the 
          obligation to satisfy secondary liability as a result of a 
          purchaser default) or the receipt by the Borrower or any ERISA 
          Affiliate of notice from a Multiemployer Plan that it is in 
          reorganization or insolvency pursuant to Section 4241 or 4245 of 
          ERISA or that it intends to terminate or has 

                               CREDIT AGREEMENT

<PAGE>

                                     -84-

          terminated under Section 4041A of ERISA;

               (v)  the institution of a proceeding by a fiduciary of any 
          Multiemployer Plan against the Borrower or any ERISA Affiliate to 
          enforce Section 515 of ERISA, which proceeding is not dismissed 
          within 30 days; and

               (vi)  the adoption of an amendment to any Plan that, pursuant 
          to Section 401(a)(29) of the Code or Section 307 of ERISA, would 
          result in the loss of tax-exempt status of the trust of which such 
          Plan is a part if the Borrower or an ERISA Affiliate fails to 
          timely provide security to the Plan in accordance with the 
          provisions of said Sections;

          (h)  promptly after the Borrower knows or has reason to believe 
     that any Default has occurred, a notice of such Default describing the 
     same in reasonable detail and, together with such notice or as soon 
     thereafter as possible, a description of the action that the Borrower 
     has taken or proposes to take with respect thereto;

          (i)  promptly upon becoming available for each fiscal year (but not 
     later than 15 days after the beginning of each fiscal year), an annual 
     budget of the Borrower and its Subsidiaries for such fiscal year, 
     containing (i) a forecast balance sheet, and statements of income and 
     cash flows, (ii) an explanation of assumptions used to arrive at such 
     forecasts and (iii) an estimate of the calculation of compliance with 
     the covenants set forth in Section 9.10 for the relevant forecast 
     period; and

          (j)  from time to time such other information regarding the 
     financial condition, operations, business or prospects of the Borrower 
     or any of its Subsidiaries (including, without limitation, any Plan or 
     Multiemployer Plan and any reports or other information required to be 
     filed under ERISA) or Affiliates as any Lender or the Administrative 
     Agent may reasonably request.

The Borrower will furnish to the Administrative Agent, together with copies 
for each of the Lenders (which copies the Administrative Agent shall promptly 
forward to the Lenders), at the time it furnishes each set of financial 
statements pursuant to Section 9.01(b) or 9.01(c) hereof, a certificate of a 
Senior Officer (i) to the effect that no Default has occurred and is 
continuing (or, if any Default has occurred and is continuing, describing the 
same in reasonable detail and describing the action that the Borrower has 
taken or proposes to take with respect thereto) and (ii) setting forth in 
reasonable detail the 


                               CREDIT AGREEMENT

<PAGE>

                                     -85-

computations necessary to determine whether the Borrower is in compliance 
with Sections 9.07(e), 9.08(f), 9.09(a), 9.09(b), 9.09(c) and 9.10 hereof as 
of the end of the respective monthly accounting period, quarterly fiscal 
period or fiscal year.

          9.02  LITIGATION.

          (a)  The Borrower will promptly give to the Administrative Agent, 
together with copies for each of the Lenders (which copies the Administrative 
Agent shall promptly forward to the Lenders), notice of all legal or arbitral 
proceedings, and of all proceedings by or before any governmental or 
regulatory authority or agency, and any material development in respect of 
such legal or other proceedings, affecting the Borrower or any of its 
Subsidiaries, but only if such proceedings, if adversely determined, could 
reasonably be expected (either individually or in the aggregate) to have a 
Material Adverse Effect.

          (b)  Without limiting the generality of the obligations under 
Section 9.02(a) hereof, the Borrower will give to the Administrative Agent, 
together with copies for each Lender (which copies the Administrative Agent 
shall promptly forward to the Lenders), notice of the assertion of any 
environmental matter by any Person against, or with respect to the activities 
of, the Borrower or any of its Subsidiaries and notice of any alleged 
violation of or non-compliance with any Environmental Laws or any permits, 
licenses or authorizations, but only if such environmental matter or alleged 
violation, if adversely determined, could reasonably be expected (either 
individually or in the aggregate) to have a Material Adverse Effect.

          9.03  EXISTENCE, ETC.  The Borrower will, and will cause each of 
its Subsidiaries to:

          (a)  preserve and maintain its legal existence and all of its 
     material rights, privileges, licenses and franchises (PROVIDED that 
     nothing in this Section 9.03 shall prohibit any transaction expressly 
     permitted under Section 9.05 hereof);

          (b)  comply with the requirements of all applicable laws, rules, 
     regulations and orders of governmental or regulatory authorities if 
     failure to comply with such requirements could reasonably be expected 
     (either individually or in the aggregate) to have a Material Adverse 
     Effect;

          (c)  pay and discharge all taxes, assessments and governmental 
     charges or levies imposed on it or on its income or profits or on any of 
     its Property prior to the 

                               CREDIT AGREEMENT

<PAGE>

                                       86

     date on which penalties attach thereto, except for any such tax, 
     assessment, charge or levy the payment of which is being contested in 
     good faith and by proper proceedings and against which adequate reserves 
     are being maintained;

          (d)  maintain all of its Properties used or useful in its business 
     in good working order and condition, ordinary wear and tear excepted;

          (e)  keep adequate records and books of account, in which complete 
     entries will be made in accordance with generally accepted accounting 
     principles consistently applied; and

          (f)  permit representatives of any Lender or the Administrative 
     Agent, during normal business hours and upon reasonable notice to the 
     Borrower, to examine, copy and make extracts from its books and records, 
     to inspect any of its Properties, and to discuss its business and 
     affairs with its officers, all to the extent reasonably requested by 
     such Lender or the Administrative Agent (as the case may be).

          9.04  INSURANCE.  The Borrower will, and will cause each of its 
Subsidiaries to, maintain insurance with financially sound and reputable 
insurance companies, and with respect to Property and risks of a character 
usually maintained by corporations engaged in the same or similar business 
similarly situated, against loss, damage and liability of the kinds and in 
the amounts customarily maintained by such corporations, PROVIDED that in any 
event the Borrower will maintain property damage insurance with respect to 
the tangible personal and real property subject to the Liens of the Security 
Documents in such amounts, and subject to such deductibles, as shall be 
reasonably satisfactory to the Administrative Agent, and shall name the 
Administrative Agent as loss payee under each policy of such insurance.

          9.05  PROHIBITION OF FUNDAMENTAL CHANGES.

          (a)  MERGERS AND CONSOLIDATIONS.  The Borrower will not, nor will 
     it permit any of its Subsidiaries to, enter into any transaction of 
     merger or consolidation or amalgamation, or liquidate, wind up or 
     dissolve itself (or suffer any liquidation or dissolution).

          (b)  ACQUISITIONS.  The Borrower will not, nor will it permit any 
     of its Subsidiaries to, acquire any business or Property from, or 
     capital stock of, or be a party to any Acquisition of, any Person except 
     for:

               (i)   purchases of inventory and other Property to be

                                CREDIT AGREEMENT

<PAGE>
                                       87

          sold or used in the ordinary course of business;

               (ii)  Investments permitted under Section 9.08 hereof;

               (iii) Capital Expenditures;

               (iv) the Visual Action Acquisition; and

               (v)  the Borrower and its Wholly Owned Subsidiaries may effect
          any Acquisition, so long as:

                    (A)  the aggregate Purchase Price of all Acquisitions 
               shall not exceed $40,000,000 and the aggregate Purchase Price 
               of any individual Acquisition shall not exceed $15,000,000, 
               PROVIDED that the aggregate Purchase Price of all Acquisitions 
               of Persons which, after giving effect to such Acquisition, are 
               less than 80% owned by the Borrower and/or any of its Wholly 
               Owned Subsidiaries shall not exceed $20,000,000;

                    (B)  each Acquired Entity shall engage in a line of 
               business (1) related to the manufacturing, sale, distribution 
               or rental of media and/or film equipment (or any line of 
               business substantially similar to the line(s) of business 
               conducted by the Borrower and its Subsidiaries on the 
               Effective Date) or (2) otherwise acceptable to the Majority 
               Lenders;

                    (C)  such Acquisition (if by purchase of assets, merger 
               or consolidation) shall be effected in such manner so that the 
               relevant Acquired Entity (and the related assets) is owned by 
               the Borrower and/or any of its Subsidiaries and, if effected 
               by merger or consolidation involving the Borrower, the 
               Borrower shall be the continuing or surviving entity;

                    (D)  such Acquisition (if by purchase of stock or other 
               ownership interests) shall be effected in such manner so that 
               the Acquired Entity becomes either a direct Subsidiary of the 
               Borrower or a direct Subsidiary of a direct Wholly Owned 
               Subsidiary of the Borrower;

                    (E)  the Borrower shall deliver to the Administrative 
               Agent, no later than five Business Days prior to the 
               consummation of such Acquisition, a reasonably detailed 
               description of the material terms of such Acquisition 
               (including, without limitation, the business, assets or 
               Person, the Purchase Price thereof, the method and structure 
               of payment thereof and (if such Acquisition involves the 
               purchase of real

                                CREDIT AGREEMENT

<PAGE>

                                       88

               Property) the estimated fair market value of such
               Property);

                    (F)  to the extent applicable, the Borrower shall have 
               complied (or made arrangements satisfactory to the 
               Administrative Agent to comply) with the provisions of 
               Sections 9.15 hereof, including, without limitation, delivery 
               to the Administrative Agent of the certificates evidencing the 
               capital stock or other ownership interests of any new 
               Subsidiary Acquired pursuant to such Acquisition, accompanied 
               by undated stock or other powers executed in blank;

                    (G)  the sum, for the Acquired Entity and its 
               Subsidiaries, if any (determined on a consolidated basis 
               without duplication in accordance with GAAP), of (a) net 
               income for the period of four consecutive fiscal quarters 
               ending on or most recently prior to the date of such 
               Acquisition (calculated after eliminating extraordinary gains 
               and losses and unusual items) PLUS (b) income and other taxes 
               (to the extent deducted in determining net income for such 
               period) PLUS (c) depreciation and amortization and other 
               non-cash charges (to the extent deducted in determining net 
               income for such period) PLUS (d) the aggregate amount of 
               Interest Expense for such period MINUS (e) the aggregate 
               amount of interest income for such period PLUS (f) the 
               aggregate amount of upfront or one-time fees or expenses 
               payable in respect of Interest Rate Protection Agreements 
               during such period (to the extent deducted in determining net 
               income for such period) PLUS (g) the amount of unrealized 
               foreign exchange losses (net of any gains) (or MINUS the 
               amount of unrealized foreign exchange gains (net of any 
               losses)) PLUS (h) expenses, including excess compensation or 
               parachute payments, in connection with such Acquisition (to 
               the extent deducted in determining net income for such period) 
               MINUS (i) expenditures (including, without limitation, the 
               aggregate amount of assets capitalized under Capital Lease 
               Obligations incurred during such period computed in accordance 
               with GAAP) made by the Acquired Entity or any of its 
               Subsidiaries to acquire or construct fixed assets, plant and 
               equipment (including renewals, improvements and replacements, 
               but excluding repairs) during such period computed in 
               accordance with GAAP shall exceed zero;

                    (H)  immediately prior to such Acquisition and after 
               giving effect thereto, no Default shall have occurred or be 
               continuing;

                                CREDIT AGREEMENT

<PAGE>

                                       89

                    (I)  after giving effect to such Acquisition the Borrower 
               shall be in compliance with Section 9.10 hereof (the 
               determination of such compliance to be calculated on a pro 
               forma basis, as at the end of and for the period of four 
               fiscal quarters most recently ended prior to the date of such 
               Acquisition for which financial statements of the Borrower and 
               its Subsidiaries are available, under the assumption that such 
               Acquisition shall have been made or consummated, and any 
               Indebtedness in connection therewith shall have been incurred, 
               at the beginning of the applicable period, and under the 
               assumption that interest for such period had been equal to the 
               actual weighted average interest rate in effect for the Loans 
               hereunder on the date of such Acquisition); and

                    (J)  on or prior to the date of the consummation of such 
               Acquisition, the Borrower shall have delivered to the 
               Administrative Agent a certificate of a Senior Officer showing 
               the calculations in reasonable detail to demonstrate 
               compliance with the requirements of clauses (G) and (I) above 
               and certifying as to clause (H) above.

          In addition, but not as a condition precedent to any Acquisition, 
          the Borrower shall deliver to the Administrative Agent promptly 
          following the consummation of each Acquisition, a copy of the 
          relevant fully executed acquisition agreement (including schedules 
          and exhibits thereto).

           (c)  DISPOSITIONS.  The Borrower will not, nor will it permit any 
     of its Subsidiaries to, convey, sell, lease, transfer or otherwise 
     dispose of, in one transaction or a series of transactions, any part of 
     its business or Property, whether now owned or hereafter acquired 
     (including, without limitation, receivables and leasehold interests, but 
     excluding:

               (i)  Excluded Dispositions; and

               (ii)  additional Dispositions having a market value not 
          exceeding $3,000,000 during any fiscal year or $6,000,000 in the 
          aggregate for all such Dispositions.




                                CREDIT AGREEMENT

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                                       90

          (d)  CERTAIN EXCLUSIONS.  Notwithstanding the foregoing provisions 
     of this Section 9.05:

               (i)  any Wholly Owned Subsidiary of the Borrower may be merged 
          or consolidated with or into:  (x) the Borrower if the Borrower 
          shall be the continuing or surviving corporation or (y) any other 
          Wholly Owned Subsidiary of the Borrower;

               (ii)  any Wholly Owned Subsidiary of the Borrower may sell, 
          lease, transfer or otherwise dispose of any or all of its Property 
          (upon voluntary liquidation or otherwise) to the Borrower or 
          another Wholly Owned Subsidiary of the Borrower (other than 
          Panavision U.K. L.P. or Panavision Luxembourg); and

               (iii)  the Borrower may cause Panavision Italia S.rl. to be 
          liquidated.

          9.06  LIMITATION ON LIENS.  The Borrower will not, nor will it 
permit any of its Subsidiaries to, create, incur, assume or suffer to exist 
any Lien upon any of its Property, whether now owned or hereafter acquired, 
except:

          (a)  Liens created pursuant to the Security Documents;

          (b)  Liens in existence on the Effective Date (after giving effect 
     to the Visual Action Acquisition and the other transactions contemplated 
     to occur on such date) and listed in Part B of Schedule II hereto 
     (excluding, however, following the making of any Loans to be made 
     hereunder on the Effective Date, Liens securing Indebtedness to be 
     repaid with the proceeds of such Loans, as indicated on said Schedule 
     II);

          (c)  Liens imposed by any governmental authority for taxes, 
     assessments or charges not yet due or that are being contested in good 
     faith and by appropriate proceedings if adequate reserves with respect 
     thereto are maintained on the books of the Borrower or the affected 
     Subsidiaries, as the case may be, in accordance with GAAP;

          (d)  carriers', warehousemen's, mechanics', materialmen's, 
     repairmen's or other like Liens arising in the ordinary course of 
     business that are not overdue for a period of more than 30 days or that 
     are being contested in good faith and by appropriate proceedings and 
     Liens securing judgments but only to the extent for an amount and for a 
     period not resulting in an Event of Default under Section 10(h) hereof;

                                CREDIT AGREEMENT

<PAGE>
                                       91

          (e)  pledges or deposits under worker's compensation, unemployment 
     insurance and other social security legislation;

          (f)  deposits to secure the performance of bids, trade contracts 
     (other than for Indebtedness), leases, statutory obligations, surety and 
     appeal bonds, performance bonds and other obligations of a like nature 
     incurred in the ordinary course of business;

          (g)  easements, rights-of-way, restrictions and other similar 
     encumbrances incurred in the ordinary course of business and 
     encumbrances consisting of zoning restrictions, easements, licenses, 
     restrictions on the use of Property or minor imperfections in title 
     thereto that, in the aggregate, are not material in amount, and that do 
     not in any case materially detract from the value of the Property 
     subject thereto or interfere with the ordinary conduct of the business 
     of the Borrower or any of its Subsidiaries; and

          (h)  Liens upon real and/or tangible personal Property acquired 
     after the Effective Date (by purchase, construction or otherwise) by the 
     Borrower or any of its Subsidiaries, each of which Liens secures 
     Indebtedness under Section 9.07(e) hereof and which Liens either (A) 
     existed on such Property before the time of its acquisition and was not 
     created in anticipation thereof or (B) was created solely for the 
     purpose of securing Indebtedness representing, or incurred to finance, 
     refinance or refund, the cost (including the cost of construction) of 
     such Property; PROVIDED that no such Lien shall extend to or cover any 
     Property of the Borrower or such Subsidiary other than the Property so 
     acquired and improvements thereon.

          9.07  INDEBTEDNESS.  The Borrower will not, nor will it permit any 
of its Subsidiaries to, create, incur or suffer to exist any Indebtedness 
except:

          (a)  Indebtedness to the Lenders hereunder, including, without 
     limitation, Incremental Term Loans, in an aggregate principal amount up 
     to but not exceeding $50,000,000;

          (b)  Indebtedness outstanding on the Effective Date (after giving 
     effect to the Visual Action Acquisition and the other transactions 
     contemplated to occur on such date) and listed in Part A of Schedule II 
     hereto;

          (c)  Subordinated Indebtedness incurred after the Effective Date in 
     accordance with Section 9.11(a) hereof;

          (d)  Indebtedness of Subsidiaries of the Borrower to

                                CREDIT AGREEMENT

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                                       92

the Borrower or to other Subsidiaries of the Borrower, and
Indebtedness of the Borrower to any Subsidiary of the Borrower; and

          (e)  additional Indebtedness of the Borrower and its Subsidiaries 
     (including, without limitation, Capital Lease Obligations and other 
     Indebtedness secured by Liens permitted under Sections 9.06(h) hereof) 
     up to but not exceeding $12,000,000 at any one time outstanding.

          9.08  INVESTMENTS.  The Borrower will not, nor will it permit any 
of its Subsidiaries to, make or permit to remain outstanding any Investments 
except:

          (a)  Investments outstanding on the Effective Date (after giving 
     effect to the Visual Action Acquisition and the other transactions 
     contemplated to occur on such date), as identified in Part B of Schedule 
     III hereto;

          (b)  operating deposit accounts with banks;

          (c)  Permitted Investments;

          (d)  Investments by the Borrower and its Subsidiaries in the 
     Borrower and its Subsidiaries;

          (e)  Interest Rate Protection Agreement not entered into for 
     speculative purposes;

          (f)  advances, loans or extensions of credit arising in connection 
     with the sale of inventory or supplies, or the provision of services, by 
     the Borrower or any of its Subsidiaries in the ordinary course of 
     business having a term not exceeding 180 days for the Borrower or any of 
     its Subsidiaries (other than Foreign Subsidiaries) or 360 days for any 
     Foreign Subsidiary;

          (g)  loans to directors, officers, employees or agents up to but 
     not exceeding $1,500,000 in the aggregate at any one time outstanding;

          (h)  Investments made as a result of the receipt of non-cash 
     consideration from a Disposition permitted under Section 9.05(c) hereof, 
     up to but not exceeding $1,000,000 (with respect to the fair market 
     value of such non-cash consideration) in the aggregate at any one time 
     outstanding;

          (i)  Investments in dealers and customers received in connection 
     with any bankruptcy or reorganization of such Person as a result of an 
     Investment otherwise permitted hereunder;

                                CREDIT AGREEMENT

<PAGE>
                                       93

          (j)  Investments comprised of progress payments to suppliers up to 
     but not exceeding $1,000,000 in the aggregate at any one time 
     outstanding;

          (k)  additional Investments (other than any Investments permitted 
     under any of the foregoing clauses, but excluding any Investments 
     permitted under clause (l) below) of up to but not exceeding $4,000,000 
     in the aggregate during any fiscal year, PROVIDED that in no event shall 
     the aggregate amount of all such Investments exceed $6,000,000; and

          (l)  Acquisitions permitted under Section 9.05(b)(iv) hereof.

          9.09  RESTRICTED PAYMENTS.  The Borrower will not, nor will it 
permit any of its Subsidiaries to, declare or make any Restricted Payment at 
any time; PROVIDED that, so long as at the time thereof and after giving 
effect thereto no Default shall have occurred and be continuing, the Borrower 
may:

          (a)  if, as of the last day of any fiscal year of the Borrower 
     ending on or after December 31, 1996 (the "PRECEDING FISCAL YEAR"), the 
     Total Debt Ratio is less than 1.25 to 1, make Restricted Payments during 
     the succeeding fiscal year in an aggregate amount not exceeding the net 
     income of the Borrower and its Subsidiaries for such preceding fiscal 
     year PLUS an amount equal to any amount which could previously have been 
     paid under this clause (a) but which was not theretofore paid, PROVIDED 
     that the Borrower shall have delivered to the Administrative Agent, at 
     least 10 Business Days (but not more than 20 Business Days) prior to the 
     date of declaration of any such Restricted Payment, a certificate of a 
     Senior Officer setting forth computations in reasonable detail 
     demonstrating compliance with the requirements of this clause (a); and

          (b) Panavision Canada Holdings may repurchase its shares held by 
     management from time to time, up to but not exceeding $3,000,000 in the 
     aggregate.

          Nothing herein shall be deemed to prohibit the payment of dividends 
by any Subsidiary of the Borrower to the Borrower or to any other Subsidiary 
of the Borrower.

          9.10  CERTAIN FINANCIAL COVENANTS.

          (a)  TOTAL DEBT RATIO.  The Borrower will not permit the Total Debt 
Ratio to exceed the following respective ratios at any time during the 
following respective periods:

                                CREDIT AGREEMENT

<PAGE>

                                       94

              Period                                         Ratio
              ------                                         -----

        From and including the
          Effective Date to and
          including December 30, 1997                       2.50 to 1

        From and including
          December 31, 1997
          to and including
          March 30, 1998                                    2.25 to 1

        From and including
          March 31, 1998
          to and including
          September 29, 1998                                2.00 to 1

        From and including
          September 30, 1998
          to and including
          March 30, 1999                                    1.75 to 1

        From and including
          March 31, 1999
          to and including
          September 29, 1999                                1.50 to 1

        From and including
          September 30, 1999
          and at all times
          thereafter                                        1.25 to 1


          (b)  INTEREST COVERAGE RATIO.  The Borrower will cause the Interest 
Coverage Ratio to exceed the following respective ratios at the end of each 
fiscal quarter during the following respective periods:

              Period                                         Ratio
              ------                                         -----

        From and including the
          Effective Date
          to and including
          December 30, 1998                                  4.5 to 1

        From and including
          December 31, 1998
          and at all times
          thereafter                                         6.0 to 1

          (c)  FIXED CHARGES RATIO.  The Borrower will not permit

                                CREDIT AGREEMENT

<PAGE>
                                       95

the Fixed Charges Ratio to be less than 1.05 to 1 at the end of any fiscal 
quarter.

          (d)  CAPITAL EXPENDITURES.  The Borrower will not permit the 
aggregate amount of Capital Expenditures in any fiscal year of the Borrower 
(for purposes of this Section 9.10(d), the "CURRENT FISCAL YEAR") to exceed 
the sum of (x) $48,000,000 PLUS an amount equal to 50% of Excess Cash Flow 
for the preceding fiscal year.  If the aggregate amount of Capital 
Expenditures for the preceding fiscal year were less than the amount 
permitted for such fiscal year in the preceding sentence, then the shortfall 
shall be added to the amount of Capital Expenditures permitted for the 
Current Fiscal Year (but not any other) and, for purposes hereof, the amount 
of Capital Expenditures made during the Current Fiscal Year shall be deemed 
to be made first from the amount of any carryover from the preceding fiscal 
year.

          9.11  SUBORDINATED INDEBTEDNESS.

          (a)  INCURRENCE.  The Borrower may, at any time after the Effective 
Date, incur additional Indebtedness so long as each of the following 
conditions shall be satisfied:

                (i)  such additional Indebtedness is subordinated to the 
          obligations of the Borrower to pay principal of and interest on the 
          Loans and the other obligations hereunder and under the Loan 
          Documents on terms of subordination, and pursuant to documentation 
          containing other terms (including, without limitation, interest, 
          amortization, covenants and events of default), in each case in 
          form and substance reasonably satisfactory to the Majority Lenders;

               (ii)  the Net Available Proceeds of such Indebtedness are 
          applied to the prepayment of the Loans to the extent required by 
          Section 2.10(e) hereof; and

               (iii)  after giving effect to the incurrence of such 
          Indebtedness and the application of proceeds thereof, no Default 
          shall have occurred and be continuing.

Any Subsidiary Guarantor may Guarantee such Indebtedness so long as such 
Guarantee is similarly subordinated to the Guarantee of such Subsidiary 
Guarantor hereunder upon terms (including, without limitation, terms of 
subordination) in form and substance reasonably satisfactory to the Majority 
Lenders.

          (b)  PAYMENTS AND PREPAYMENTS.  The Borrower will not, nor will it 
permit any of its Subsidiaries to, purchase, redeem, retire or otherwise 
acquire for value, or set apart any money for a sinking, defeasance or other 
analogous fund for the purchase, redemption, retirement or other acquisition 
of, or make any 

                                CREDIT AGREEMENT

<PAGE>
                                    - 96 -

voluntary payment or prepayment of the principal of or interest on, or any 
other amount owing in respect of, any Subordinated Indebtedness, except for 
regularly scheduled payments or prepayments of principal and interest in 
respect thereof required pursuant to the instruments evidencing such 
Subordinated Indebtedness.

          9.12  LINES OF BUSINESS.  The Borrower will not, nor will it permit 
any of its Subsidiaries to, engage in any line or lines of business activity 
other than that related to the manufacturing, sale, distribution or rental of 
media and/or film equipment or lines of business substantially similar to 
that conducted by the Borrower and its Subsidiaries on the Effective Date 
(after giving effect to the Visual Action Acquisition and the other 
transactions contemplated to occur on such date).

          9.13  TRANSACTIONS WITH AFFILIATES.  Except as expressly permitted 
by this Agreement, the Borrower will not, nor will it permit any of its 
Subsidiaries to, directly or indirectly:  (a) make any Investment in an 
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any 
Property to an Affiliate; (c) merge into or consolidate with or purchase or 
acquire Property from an Affiliate; or (d) enter into any other transaction 
directly or indirectly with or for the benefit of an Affiliate (including, 
without limitation, Guarantees and assumptions of obligations of an 
Affiliate); PROVIDED that, notwithstanding the foregoing:

          (i)  any Affiliate who is an individual may serve as a director, 
     officer or employee of the Borrower or any of its Subsidiaries and 
     receive indemnification and reasonable compensation for his or her 
     services in such capacity;

          (ii)  the Borrower and its Subsidiaries may enter into transactions 
     (other than extensions of credit by the Borrower or any of its 
     Subsidiaries to an Affiliate) providing for the leasing of Property, the 
     rendering or receipt of services or the purchase or sale of inventory 
     and other Property in the ordinary course of business if the monetary or 
     business consideration arising therefrom would be substantially as 
     advantageous to the Borrower and its Subsidiaries as the monetary or 
     business consideration that would obtain in a comparable transaction 
     with a Person not an Affiliate; and

          (iii)  the Borrower and its Subsidiaries may make Permitted 
     Investments in the Warburg Pincus Cash Reserve Fund meeting the 
     requirements of the definition of "Permitted Investments" in Section 
     1.01 hereof.

          9.14  USE OF PROCEEDS.  The Borrower will use the


                                CREDIT AGREEMENT

<PAGE>
                                    - 97 -

proceeds of (i) the Tranche A Term Loans and the Revolving Credit Loans 
made hereunder on the Effective Date to refinance the loans under the 
Existing Credit Agreement, to finance the Visual Action Acquisition and to 
pay fees and expenses incurred in connection with the Visual Action 
Acquisition and this Agreement, (ii) the Revolving Credit Loans made 
hereunder after the Effective Date to finance the ongoing working capital and 
capital expenditure requirements of the Borrower and its Subsidiaries and to 
provide funds for general corporate purposes of the Borrower and its 
Subsidiaries and (iii) the Incremental Term Loans made hereunder for general 
corporate purposes of the Borrower and its Subsidiaries (including, without 
limitation, Acquisitions permitted under Section 9.05(b)(v)).  The Borrower 
will use such proceeds in compliance with all applicable legal and regulatory 
requirements, including, without limitation, Regulations G, T, U and X and 
the Securities Act of 1933 and the Securities Exchange Act of 1934 and the 
regulations thereunder.  Neither the Administrative Agent nor any Lender 
shall have any responsibility as to the use of any of such proceeds.

          9.15  CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES.

          (a)  SUBSIDIARY GUARANTORS.  The Borrower will take such action, 
and will cause each of its Subsidiaries to take such action, from time to 
time as shall be necessary to ensure that all Subsidiaries of the Borrower 
are "Subsidiary Guarantors" hereunder.  Without limiting the generality of 
the foregoing, in the event that the Borrower or any of its Subsidiaries 
shall form or acquire any new entity that shall constitute a Subsidiary 
hereunder, the Borrower and its Subsidiaries will cause such new Subsidiary 
to:

          (i)  become a "Subsidiary Guarantor" hereunder, and a "Securing 
     Party" under the Security Agreement, pursuant to a Guarantee Assumption 
     Agreement;

          (ii)  cause such Subsidiary to take such action (including, without 
     limitation, delivering such shares of stock and executing and delivering 
     such Uniform Commercial Code financing statements) as shall be necessary 
     to create and perfect valid and enforceable first priority Liens on 
     substantially all of the Property of such new Subsidiary (other than 
     real Property and fixtures owned or leased by such Subsidiary) as 
     collateral security for the obligations of such new Subsidiary hereunder 
     (PROVIDED that any such security interests shall be subject to the 
     provisions of Section 5.04(c) of the Security Agreement and to any Liens 
     permitted under Section 9.06 hereof and existing at the time such entity 
     becomes a Subsidiary); and

          (iii)  deliver such proof of partnership or corporate 


                                CREDIT AGREEMENT

<PAGE>
                                    - 98 -


     action, incumbency of officers, opinions of counsel (subject to usual 
     and customary exceptions and assumptions) and other documents as is 
     consistent with those delivered by each Obligor pursuant to Section 7.01 
     hereof on the Effective Date or as the Administrative Agent shall have 
     requested;

PROVIDED that, if any such Subsidiary is organized as a corporation under the 
laws of a jurisdiction other than the United States of America or a State 
thereof (each a "FOREIGN SUBSIDIARY"), such Subsidiary shall not be required 
to become a Subsidiary Guarantor hereunder or a Securing Party under the 
Security Agreement and, if such Foreign Subsidiary is a direct Subsidiary of 
the Borrower or a Subsidiary of the Borrower that is organized under the laws 
of the United States of America or a State thereof, the Borrower shall 
forthwith pledge, or cause to be pledged, to the Administrative Agent (for 
the benefit of the Lenders) under the Security Agreement (or, at the request 
of the Majority Lenders, under a pledge or other agreement governed by the 
law of such Subsidiary's jurisdiction of organization) (x) 66% of the voting 
capital stock of such Foreign Subsidiary having ordinary voting power for the 
election of the board of directors of such Foreign Subsidiary and (y) 100% of 
all other stock of such Foreign Subsidiary; and PROVIDED FURTHER that 
Panavision U.K. L.P. shall not be required to become a Subsidiary Guarantor 
hereunder.

          (b)  OWNERSHIP OF SUBSIDIARIES.  The Borrower will, and will cause 
each of its Subsidiaries to, take such action from time to time as shall be 
necessary to ensure that each of its Subsidiaries formed or acquired after 
the Effective Date is a Wholly Owned Subsidiary, except that with respect to 
Subsidiaries formed or acquired pursuant to Section 9.05(b)(v) or 9.08(k) 
hereof, such Subsidiaries shall not be required to be Wholly Owned 
Subsidiaries. In the event that any additional shares of stock shall be 
issued by any Subsidiary, the respective Obligor agrees forthwith to deliver 
to the Administrative Agent pursuant to the Security Agreement the 
certificates evidencing such shares of stock, accompanied by undated stock 
powers executed in blank and to take such other action as the Administrative 
Agent shall request to perfect the security interest created therein pursuant 
to the Security Agreement.

          (c)  CERTAIN RESTRICTIONS.  The Borrower will not permit any of its 
Subsidiaries to enter into, after the Effective Date, any indenture, 
agreement, instrument or other arrangement that, directly or indirectly, 
prohibits or restrains, or has the effect of prohibiting or restraining, or 
imposes materially adverse conditions upon, the incurrence or payment of 
Indebtedness, the granting of Liens, the declaration or payment of dividends, 
the making of loans, advances or Investments or the sale, assignment, 
transfer or other disposition of Property; 


                                CREDIT AGREEMENT

<PAGE>
                                    - 99 -

PROVIDED that the foregoing shall not prohibit (i) any customary 
nonassignment provisions entered into in the ordinary course of business in 
leases and other agreements, (ii) any restriction with respect to a 
Subsidiary imposed pursuant to an agreement which has been entered into for 
the sale or disposition of all or substantially all of the capital stock or 
assets of such Subsidiary, PROVIDED that the consummation of such transaction 
is otherwise permitted under this Agreement, (iii) any restriction pursuant 
to applicable law or regulations, (iv) any restriction on the sale or other 
disposition of Property securing Indebtedness as a result of a Lien on such 
Property, and (v) any restriction contained in any instrument constituting 
Indebtedness permitted under Section 9.07(e) hereof, PROVIDED that such 
restrictions are consistent with, and not materially more restrictive (as 
conclusively determined in good faith by a Senior Officer) than comparable 
provisions included in this Agreement.

          9.16  MODIFICATIONS OF CERTAIN DOCUMENTS.  The Borrower will not, 
nor will it permit any of its Subsidiaries to, consent to any modification, 
supplement, or waiver of any of the provisions of any provision of its 
respective charter or by-laws (or equivalent documents), if in each case such 
modification, supplement or waiver could reasonably be expected to be adverse 
to the interests of the Lenders under the Loan Documents, in each case 
without the prior consent of the Majority Lenders; PROVIDED that, the 
Borrower shall, in any event, notify the Administrative Agent in writing of 
any proposed modification, supplement or waiver of any provision of any of 
the foregoing agreements or documents at least ten Business Days prior to 
proposed effective date of such modification, supplement or waiver.

          Section 10.  EVENTS OF DEFAULT.  If one or more of the following 
events (herein called "EVENTS OF DEFAULT") shall occur and be continuing:

          (a)  The Borrower shall default in the payment when due (whether at 
     stated maturity or at mandatory or optional prepayment) of (i) any 
     principal of any Loan or Reimbursement Obligation, (ii) any interest on 
     any Loan or Reimbursement Obligation or (iii) any fee or any other 
     amount payable by it hereunder or under any other Loan Document and, in 
     the case of any such default in the payment of any fee or other amount, 
     such default shall continue for two or more Business Days; or

          (b)  The Borrower or any of its Subsidiaries shall default in the 
     payment when due of any principal of or interest on any of its other 
     Indebtedness aggregating $5,000,000 or more; or any event specified in 
     any note, agreement, indenture or other document evidencing or 


                                CREDIT AGREEMENT

<PAGE>
                                    - 100 -

     relating to any such Indebtedness shall occur if the effect of such 
     event is to cause, or (with the giving of any notice or the lapse of 
     time or both) to permit the holder or holders of such Indebtedness (or a 
     trustee or agent on behalf of such holder or holders) to cause, such 
     Indebtedness to become due, or to be prepaid in full (whether by 
     redemption, purchase, offer to purchase or otherwise), prior to its 
     stated maturity; or any event specified in any Interest Rate Protection 
     Agreement to which any Obligor is a party shall occur if the effect of 
     such event is to cause, or (with the giving of any notice or the lapse 
     of time or both) to permit, termination or liquidation payment or 
     payments aggregating $5,000,000 or more to become due; or

          (c)  Any representation, warranty or certification made or deemed 
     made herein or in any other Loan Document (or in any modification or 
     supplement hereto or thereto) by any Obligor, or any certificate 
     furnished to any Lender or the Administrative Agent pursuant to the 
     provisions hereof or thereof, shall prove to have been false or 
     misleading as of the time made or furnished in any material respect; or

          (d)  Any of the following shall occur and be continuing:  (i) the 
     Borrower shall default in the performance of any of its obligations 
     under any of Sections 9.05, 9.06, 9.07, 9.08, 9.09, 9.10, 9.11 or 9.16 
     hereof; (ii) any Obligor shall default in the performance of any of its 
     obligations under Section 5.02 of the Security Agreement; or (iii) any 
     Obligor shall default in the performance of any of its other obligations 
     in this Agreement or any other Loan Document and such default shall 
     continue unremedied for a period of 30 or more days after notice thereof 
     to the Borrower by the Administrative Agent or any Lender (through the 
     Administrative Agent); or

          (e)  The Borrower or any of its Significant Subsidiaries shall 
     admit in writing its inability to, or be generally unable to, pay its 
     debts as such debts become due; or

          (f)  The Borrower or any of its Significant Subsidiaries shall (i) 
     apply for or consent to the appointment of, or the taking of possession 
     by, a receiver, custodian, trustee, examiner or liquidator of itself or 
     of all or a substantial part of its Property, (ii) make a general 
     assignment for the benefit of its creditors, (iii) commence a voluntary 
     case under the Bankruptcy Code or other applicable laws of similar 
     effect, (iv) file a petition seeking to take advantage of any other law 
     relating to bankruptcy, insolvency, reorganization, liquidation, 


                                CREDIT AGREEMENT

<PAGE>
                                    - 101 -

     dissolution, arrangement or winding-up, or composition or readjustment 
     of debts, (v) fail to controvert in a timely and appropriate manner, or 
     acquiesce in writing to, any petition filed against it in an involuntary 
     case under the Bankruptcy Code or other applicable laws of similar 
     effect or (vi) take any corporate action for the purpose of effecting 
     any of the foregoing; or

          (g)  A proceeding or case shall be commenced, without the 
     application or consent of the Borrower or any of its Significant 
     Subsidiaries, in any court of competent jurisdiction, seeking (i) its 
     reorganization, liquidation, dissolution, arrangement or winding-up, or 
     the composition or readjustment of its debts, (ii) the appointment of a 
     receiver, custodian, trustee, examiner, liquidator or the like of the 
     Borrower or such Significant Subsidiary or of all or any substantial 
     part of its Property, or (iii) similar relief in respect of the Borrower 
     or such Significant Subsidiary under any law relating to bankruptcy, 
     insolvency, reorganization, winding-up, or composition or adjustment of 
     debts, and such proceeding or case shall continue undismissed, or an 
     order, judgment or decree approving or ordering any of the foregoing 
     shall be entered and continue unstayed and in effect, for a period of 60 
     or more days; or an order for relief against the Borrower or any of its 
     Significant Subsidiaries shall be entered in an involuntary case under 
     the Bankruptcy Code or other applicable laws of similar effect; or

          (h)  A final judgment or judgments for the payment of money of 
     $5,000,000 or more in the aggregate (net of judgment amounts to the 
     extent covered by insurance or indemnity where the insurer or 
     indemnitor, as the case may be, has admitted liability in respect of 
     such judgment) shall be rendered by one or more courts, administrative 
     tribunals or other bodies having jurisdiction against the Borrower or 
     any of its Significant Subsidiaries and the same shall not be discharged 
     (or provision shall not be made for such discharge), or a stay of 
     execution thereof shall not be procured, within 45 days from the date of 
     entry thereof and the Borrower or the relevant Subsidiary shall not, 
     within said period of 45 days, or such longer period during which 
     execution of the same shall have been stayed, appeal therefrom and cause 
     the execution thereof to be stayed during such appeal; or

          (i)  An event or condition specified in Section 9.01(f) hereof 
     shall occur or exist with respect to any Plan or Multiemployer Plan and, 
     as a result of such event or condition, together with all other such 
     events or conditions, the Borrower or any ERISA Affiliate shall incur 


                                CREDIT AGREEMENT

<PAGE>
                                    - 102 -

     or, in the opinion of the Majority Lenders, shall be reasonably likely 
     to incur a liability to a Plan, a Multiemployer Plan or the PBGC (or any 
     combination of the foregoing) that, in the determination of the Majority 
     Lenders, would (either individually or in the aggregate) have a Material 
     Adverse Effect; or

          (j)  There shall have been asserted against the Borrower or any of 
     its Subsidiaries, or any predecessor in interest of the Borrower or any 
     of its Subsidiaries or Affiliates, of (or there shall have been asserted 
     against the Borrower or any of its Subsidiaries) any claims or 
     liabilities, whether accrued, absolute or contingent, based on or 
     arising from the generation, storage, transport, handling or disposal of 
     Hazardous Materials by the Borrower or any of its Subsidiaries, 
     Affiliates or predecessors that, in the reasonable judgment of the 
     Majority Lenders, are reasonably likely to be determined adversely to 
     the Borrower or any of its Subsidiaries, and the amount thereof (either 
     individually or in the aggregate) is reasonably likely to have a 
     Material Adverse Effect (insofar as such amount is payable by the 
     Borrower or any of its Subsidiaries but after deducting any portion 
     thereof that is reasonably expected to be paid by other creditworthy 
     Persons jointly and severally liable therefor); or

          (k)  Any of the following events shall occur and be continuing:

               (i)  any person or group (within the meaning of Rule 13d-5 
          under the Securities Exchange Act of 1934, as amended (the 
          "EXCHANGE ACT") and Section 13(d) and 14(d) of the Exchange Act 
          (other than Warburg Pincus and the Warburg Affiliates) becomes, 
          directly or indirectly, in a single transaction or in a related 
          series of transactions by way of merger, consolidation or other 
          business combination or otherwise, the "beneficial owner" (as 
          defined in Rule 13d-3 under the Exchange Act) of more than 35% (or 
          such higher percentage as shall be owned at such time by Warburg 
          Pincus and/or the Warburg Affiliates) of the capital stock of the 
          Borrower on a fully-diluted basis (in other words, giving effect to 
          the exercise of any warrants, options and conversion and other 
          rights); or

               (ii)  a majority of the Board of Directors of the Borrower 
          shall no longer be composed of individuals (x) who are members of 
          said Board on the Effective Date, (y) whose election or nomination 
          to said Board has been approved by individuals referred to in the 
          foregoing clause (x) constituting at the time of such election or 


                                CREDIT AGREEMENT

<PAGE>
                                    - 103 -

          nomination at least a majority of said Board or (z) whose election 
          or nomination to said Board was approved by individuals referred to 
          in the foregoing clauses (x) and (y) constituting at the time of 
          such election or nomination at least a majority of said Board; or

          (l)  The Liens created by the Security Documents shall at any time 
     not (other than by reason of the action of the Administrative Agent or 
     any of the Lenders) constitute a valid and perfected Lien on the 
     collateral intended to be covered thereby (to the extent perfection by 
     filing, registration, recordation or possession is required herein or 
     therein) in favor of the Administrative Agent, free and clear of all 
     other Liens (other than Liens permitted under Section 9.06 hereof or 
     under the respective Security Documents), or, except for expiration in 
     accordance with its terms, any of the Security Documents shall for 
     whatever reason be terminated or cease to be in full force and effect, 
     or any Subsidiary Guarantor shall contest the enforceability of its 
     obligations hereunder;

THEREUPON:

          (1)  in the case of an Event of Default other than one referred to 
     in clause (f) or (g) of this Section 10 with respect to any Obligor, the 
     Administrative Agent may, (and, upon the direction of the Majority 
     Lenders, shall) by notice to the Borrower, terminate the Commitments 
     and/or declare the principal amount then outstanding of, and the accrued 
     interest on, the Loans, the Reimbursement Obligations and all other 
     amounts payable by the Obligors hereunder (including, without 
     limitation, any amounts payable under Section 5.05 or 5.06 hereof) to be 
     forthwith due and payable, whereupon such amounts shall be immediately 
     due and payable without presentment, demand, protest or other 
     formalities of any kind, all of which are hereby expressly waived by 
     each Obligor; and

          (2)  in the case of the occurrence of an Event of Default referred 
     to in clause (f) or (g) of this Section 10 with respect to any Obligor, 
     the Commitments shall automatically be terminated and the principal 
     amount then outstanding of, and the accrued interest on, the Loans, the 
     Reimbursement Obligations and all other amounts payable by the Obligors 
     hereunder (including, without limitation, any amounts payable under 
     Section 5.05 or 5.06 hereof) shall automatically become immediately due 
     and payable without presentment, demand, protest or other formalities of 
     any kind, all of which are hereby expressly waived by each Obligor.


                                CREDIT AGREEMENT

<PAGE>
                                    - 104 -

          In addition, upon the occurrence and during the continuance of any 
Event of Default (if the Administrative Agent has declared the principal 
amount then outstanding of, and accrued interest on, the Revolving Credit 
Loans and all other amounts payable by the Borrower hereunder to be due and 
payable), the Borrower agrees that it shall, if requested by the 
Administrative Agent or the Majority Revolving Credit Lenders through the 
Administrative Agent (and, in the case of any Event of Default referred to in 
clause (f) or (g) of this Section 10 with respect to the Borrower, forthwith, 
without any demand or the taking of any other action by the Administrative 
Agent or such Lenders) provide cover for the Letter of Credit Liabilities by 
paying to the Administrative Agent immediately available funds in an amount 
equal to the then aggregate undrawn face amount of all Letters of Credit, 
which funds shall be held by the Administrative Agent in the Collateral 
Account as collateral security in the first instance for the Letter of Credit 
Liabilities and be subject to withdrawal only as therein provided.

          Section 11.  THE ADMINISTRATIVE AGENT.

          11.01  APPOINTMENT, POWERS AND IMMUNITIES.  Each Lender hereby 
appoints and authorizes the Administrative Agent to act as its agent 
hereunder and under the other Loan Documents (and specifically as agent under 
the New Zealand Pledge Agreement and the U.K. Pledge Agreement) with such 
powers as are specifically delegated to the Administrative Agent by the terms 
of this Agreement and of the other Loan Documents, together with such other 
powers as are reasonably incidental thereto.  The Administrative Agent (which 
term as used in this sentence and in Section 11.05 hereof and the first 
sentence of Section 11.06 hereof shall include reference to its affiliates 
and its own and its affiliates' officers, directors, employees and agents):

          (a)  shall have no duties or responsibilities except those 
     expressly set forth in this Agreement and in the other Loan Documents, 
     and shall not by reason of this Agreement or any other Loan Document be 
     a trustee for any Lender;

          (b)  shall not be responsible to the Lenders for any recitals, 
     statements, representations or warranties contained in this Agreement or 
     in any other Loan Document, or in any certificate or other document 
     referred to or provided for in, or received by any of them under, this 
     Agreement or any other Loan Document, or for the value, validity, 
     effectiveness, genuineness, enforceability or sufficiency of this 
     Agreement or any other Loan Document or any other document referred to 
     or provided for herein or therein or for any failure by the Borrower or 
     any other 


                                CREDIT AGREEMENT

<PAGE>
                                    - 105 -

     Person to perform any of its obligations hereunder or thereunder;

          (c)  shall not, except to the extent expressly instructed by the 
     Majority Lenders with respect to collateral security under the Security 
     Documents, be required to initiate or conduct any litigation or 
     collection proceedings hereunder or under any other Loan Document; and

          (d)  shall not be responsible for any action taken or omitted to be 
     taken by it hereunder or under any other Loan Document or under any 
     other document or instrument referred to or provided for herein or 
     therein or in connection herewith or therewith, except for its own gross 
     negligence or willful misconduct.

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

          11.02  RELIANCE BY ADMINISTRATIVE AGENT.  The Administrative Agent 
shall be entitled to rely upon any certification, notice or other 
communication (including, without limitation, any thereof by telephone, 
telecopy, telegram or cable) reasonably believed by it to be genuine and 
correct and to have been signed or sent by or on behalf of the proper Person 
or Persons, and upon advice and statements of legal counsel, independent 
accountants and other experts selected by the Administrative Agent.  As to 
any matters not expressly provided for by this Agreement or any other Loan 
Document, the Administrative Agent shall in all cases be fully protected in 
acting, or in refraining from acting, hereunder or thereunder in accordance 
with instructions given by the Majority Lenders or, if provided herein, in 
accordance with the instructions given by the Majority Revolving Credit 
Lenders or all of the Lenders as is required in such circumstance, and such 
instructions of such Lenders and any action taken or failure to act pursuant 
thereto shall be binding on all of the Lenders.

          11.03  DEFAULTS.  The Administrative Agent shall not be deemed to 
have knowledge or notice of the occurrence of a Default unless the 
Administrative Agent has received notice from a Lender or the Borrower 
specifying such Default and stating that such notice is a "Notice of 
Default".  In the event that the Administrative Agent receives such a notice 
of the occurrence of a Default, the Administrative Agent shall give prompt 
notice thereof to the Lenders.  The Administrative Agent shall (subject to 
Section 11.07 hereof) take such action with respect to such Default as shall 
be directed by the Majority Lenders or, if provided herein, the Majority 
Revolving Credit Lenders, PROVIDED


                                CREDIT AGREEMENT
<PAGE>
                                   - 106 -

that, unless and until the Administrative Agent shall have received such 
directions, the Administrative Agent may (but shall not be obligated to) take 
such action, or refrain from taking such action, with respect to such Default 
as it shall deem advisable in the best interest of the Lenders except to the 
extent that this Agreement expressly requires that such action be taken, or 
not be taken, only with the consent or upon the authorization of the Majority 
Lenders, the Majority Revolving Credit Lenders or all of the Lenders.

          11.04  RIGHTS AS A LENDER.  With respect to its Commitments and the 
Loans made by it, Chase (and any successor acting as Administrative Agent) in 
its capacity as a Lender hereunder shall have the same rights and powers 
hereunder as any other Lender and may exercise the same as though it were not 
acting as the Administrative Agent, and the term "Lender" or "Lenders" shall, 
unless the context otherwise indicates, include the Administrative Agent in 
its individual capacity.  Chase (and any successor acting as Administrative 
Agent) and its affiliates may (without having to account therefor to any 
Lender) accept deposits from, lend money to, make investments in and 
generally engage in any kind of banking, trust or other business with the 
Obligors (and any of their Subsidiaries or Affiliates) as if it were not 
acting as the Administrative Agent, and Chase and its affiliates (and any 
such successor) and its affiliates may accept fees and other consideration 
from the Obligors for services in connection with this Agreement or otherwise 
without having to account for the same to the Lenders.

          11.05  INDEMNIFICATION.  The Lenders agree to indemnify the 
Administrative Agent (to the extent not reimbursed under Section 12.03 
hereof, but without limiting the obligations of the Borrower under said 
Section 12.03) ratably in accordance with the aggregate principal amount of 
the Loans and Reimbursement Obligations held by the Lenders (or, if no Loans 
or Reimbursement Obligations are at the time outstanding, ratably in 
accordance with their respective Commitments), for any and all liabilities, 
obligations, losses, damages, penalties, actions, judgments, suits, costs, 
expenses or disbursements of any kind and nature whatsoever that may be 
imposed on, incurred by or asserted against the Administrative Agent 
(including by any Lender) arising out of or by reason of any investigation in 
or in any way relating to or arising out of this Agreement or any other Loan 
Document or any other documents contemplated by or referred to herein or 
therein or the transactions contemplated hereby or thereby (including, 
without limitation, the costs and expenses that the Borrower is obligated to 
pay under Section 12.03 hereof) or the enforcement of any of the terms hereof 
or thereof or of any such other documents, PROVIDED that no Lender shall be 
liable for any of the foregoing to the extent they arise from the gross 
negligence or willful misconduct of the party to be indemnified.


                                CREDIT AGREEMENT

<PAGE>
                                   - 107 -

          11.06  NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.  
Each Lender agrees that it has, independently and without reliance on the 
Administrative Agent or any other Lender, and based on such documents and 
information as it has deemed appropriate, made its own credit analysis of the 
Borrower and its Subsidiaries and decision to enter into this Agreement and 
that it will, independently and without reliance upon the Administrative 
Agent or any other Lender, and based on such documents and information as it 
shall deem appropriate at the time, continue to make its own analysis and 
decisions in taking or not taking action under this Agreement or under any 
other Loan Document.  The Administrative Agent shall not be required to keep 
itself informed as to the performance or observance by any Obligor of this 
Agreement or any of the other Loan Documents or any other document referred 
to or provided for herein or therein or to inspect the Properties or books of 
the Borrower or any of its Subsidiaries.  Except for notices, reports and 
other documents and information expressly required to be furnished to the 
Lenders by the Administrative Agent hereunder or under the Security 
Documents, the Administrative 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 or any of its 
Subsidiaries (or any of their affiliates) that may come into the possession 
of the Administrative Agent or any of its affiliates.

          11.07  FAILURE TO ACT.  Except for action expressly required of the 
Administrative Agent hereunder and under the other Loan Documents, the 
Administrative Agent shall in all cases be fully justified in failing or 
refusing to act hereunder and thereunder unless it shall receive further 
assurances to its satisfaction from the Lenders of their indemnification 
obligations under Section 11.05 hereof against any and all liability and 
expense that may be incurred by it by reason of taking or continuing to take 
any such action.

          11.08  RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT.  Subject to 
the appointment and acceptance of a successor Administrative Agent as 
provided below, the Administrative Agent may resign at any time by giving 
notice thereof to the Lenders and the Borrower, and the Administrative Agent 
may be removed at any time with or without cause by the Majority Lenders.  
Upon any such resignation or removal, the Majority Lenders shall have the 
right (with the consent of the Borrower, such consent not to be unreasonably 
withheld) to appoint a successor Administrative Agent.  If no successor 
Administrative Agent shall have been so appointed by the Majority Lenders and 
shall have accepted such appointment within 30 days after the retiring 
Administrative Agent's giving of notice of resignation or the Majority 
Lenders' removal of the retiring Administrative Agent, then the retiring 


                                CREDIT AGREEMENT

<PAGE>
                                   - 108 -

Administrative Agent may, on behalf of the Lenders, appoint a successor 
Administrative Agent, that shall be a bank that has an office in New York, 
New York with a combined capital and surplus of at least $500,000,000.  Upon 
the acceptance of any appointment as Administrative Agent hereunder by a 
successor Administrative Agent, such successor Administrative Agent shall 
thereupon succeed to and become vested with all the rights, powers, 
privileges and duties of the retiring Administrative Agent, and the retiring 
Administrative Agent shall be discharged from its duties and obligations 
hereunder.  After any retiring Administrative Agent's resignation or removal 
hereunder as Administrative Agent, the provisions of this Section 11 shall 
continue in effect for its benefit in respect of any actions taken or omitted 
to be taken by it while it was acting as the Administrative Agent.

          11.09  CONSENTS UNDER OTHER LOAN DOCUMENTS.  Except as otherwise 
provided in Section 12.04 hereof with respect to this Agreement, the 
Administrative Agent may, with the prior consent of the Majority Lenders (but 
not otherwise), consent to any modification, supplement or waiver under any 
of the Loan Documents, PROVIDED that, without the prior consent of each 
Lender, the Administrative Agent shall not (except as provided herein or in 
the Security Documents) release any collateral or otherwise terminate any 
Lien under any Security Document providing for collateral security, agree to 
additional obligations being secured by such collateral security (unless the 
Lien for such additional obligations shall be junior to the Lien in favor of 
the other obligations secured by such Security Document, in which event the 
Administrative Agent may consent to such junior Lien provided that it obtains 
the consent of the Majority Lenders thereto), alter the relative priorities 
of the obligations entitled to the benefits of the Liens created under the 
Security Documents, except that no such consent shall be required, and the 
Administrative Agent is hereby authorized, to release any Lien covering 
Property that is the subject of either a disposition of Property permitted 
hereunder or a disposition to which the Majority Lenders have consented.

          Section 12.  MISCELLANEOUS.

          12.01  WAIVER.  No failure on the part of the Administrative Agent 
or any Lender to exercise and no delay in exercising, and no course of 
dealing with respect to, any right, power or privilege under this Agreement 
shall operate as a waiver thereof, nor shall any single or partial exercise 
of any right, power or privilege under this Agreement preclude any other or 
further exercise thereof or the exercise of any other right, power or 
privilege.  The remedies provided herein are cumulative and not exclusive of 
any remedies provided by law.


                                CREDIT AGREEMENT

<PAGE>
                                   - 109 -

          12.02  NOTICES.  All notices, requests and other communications 
provided for herein and in the Security Documents (including, without 
limitation, any modifications of, or waivers or consents under, this 
Agreement) shall be given or made in writing (including, without limitation, 
by telecopy), delivered to the intended recipient at the address or telecopy 
number specified (i) in the case of the Borrower and the Administrative 
Agent, below their respective names on the signature pages hereof, (ii) in 
the case of any Subsidiary Guarantor, below the signature of the Borrower on 
the signature pages hereof and (iii) in the case of any other Lender, in its 
Administrative Questionnaire; or, as to any party, at such other address as 
shall be designated by such party in a notice to each other party.  Except as 
otherwise provided in this Agreement, all such communications shall be deemed 
to have been duly given when transmitted by telecopier or personally 
delivered or, in the case of a mailed notice, upon receipt, in each case 
given or addressed as aforesaid.

          12.03  EXPENSES, ETC.  The Borrower agrees to pay or reimburse each 
of the Lenders and the Administrative Agent for: (a) all reasonable 
out-of-pocket costs and expenses of the Administrative Agent (including, 
without limitation, the reasonable fees and expenses of Milbank, Tweed, 
Hadley & McCloy, special New York counsel to Chase) in connection with (i) 
the negotiation, preparation, execution and delivery of this Agreement and 
the other Loan Documents and the making of the extensions of credit hereunder 
and (ii) the negotiation or preparation of any modification, supplement or 
waiver of any of the terms of this Agreement or any of the other Loan 
Documents (whether or not consummated); (b) all reasonable out-of-pocket 
costs and expenses of the Lenders and the Administrative Agent (including, 
without limitation, the reasonable fees and expenses of legal counsel) in 
connection with (i) any Default and any enforcement or collection proceedings 
resulting therefrom, including, without limitation, all manner of 
participation in or other involvement with (x) bankruptcy, insolvency, 
receivership, foreclosure, winding up or liquidation proceedings, (y) 
judicial or regulatory proceedings and (z) workout, restructuring or other 
negotiations or proceedings (whether or not the workout, restructuring or 
transaction contemplated thereby is consummated) and (ii) the enforcement of 
this Section 12.03; and (c) all transfer, stamp, documentary or other similar 
taxes, assessments or charges levied by any governmental or revenue authority 
in respect of this Agreement or any of the other Loan Documents or any other 
document referred to herein or therein and all costs, expenses, taxes, 
assessments and other charges incurred in connection with any filing, 
registration, recording or perfection of any security interest contemplated 
by any Security Document or any other document referred to therein.


                                CREDIT AGREEMENT

<PAGE>
                                   - 110 -

          The Borrower hereby agrees to indemnify the Administrative Agent 
and each Lender and their respective directors, officers, trustees, 
employees, attorneys and agents from, and hold each of them harmless against, 
any and all losses, liabilities, claims, damages or expenses incurred by any 
of them (including, without limitation, any and all losses, liabilities, 
claims, damages or expenses incurred by the Administrative Agent to any 
Lender, whether or not the Administrative Agent or any Lender is a party 
thereto) arising out of or by reason of any investigation or litigation or 
other proceedings (including any threatened investigation or litigation or 
other proceedings) relating to the extensions of credit hereunder or any 
actual or proposed use by the Borrower or any of its Subsidiaries of the 
proceeds of any of the extensions of credit hereunder, including, without 
limitation, the reasonable fees and disbursements of counsel incurred in 
connection with any such investigation or litigation or other proceedings 
(but excluding any such losses, liabilities, claims, damages or expenses 
incurred by reason of the gross negligence or willful misconduct of the 
Person to be indemnified).  Without limiting the generality of the foregoing, 
the Borrower will indemnify the Administrative Agent and each Lender from, 
and hold the Administrative Agent and each Lender harmless against, any 
losses, liabilities, claims, damages or expenses described in the preceding 
sentence (including any Lien filed against any Property covered by the 
Mortgages or any part of the collateral thereunder in favor of any 
governmental entity, but excluding, as provided in the preceding sentence, 
any loss, liability, claim, damage or expense incurred by reason of the gross 
negligence or willful misconduct of the Person to be indemnified) arising 
under any Environmental Law as a result of the past, present or future 
operations of the Borrower or any of its Subsidiaries (or any predecessor in 
interest to the Borrower or any of its Subsidiaries), or the past, present or 
future condition of any site or facility owned, operated or leased at any 
time by the Borrower or any of its Subsidiaries (or any such predecessor in 
interest), or any Release or threatened Release of any Hazardous Materials at 
or from any such site or facility, excluding any such Release or threatened 
Release that shall occur during any period when the Administrative Agent or 
any Lender shall be in possession of any such site or facility following the 
exercise by the Administrative Agent or any Lender of any of its rights and 
remedies hereunder or under any of the Security Documents, but including any 
such Release or threatened Release occurring during such period that is a 
continuation of conditions previously in existence, or of practices employed 
by the Borrower and its Subsidiaries, at such site or facility.

          12.04  AMENDMENTS, ETC.  Except as otherwise expressly provided in 
this Agreement, any provision of this Agreement may be modified or 
supplemented only by an instrument in writing 


                                CREDIT AGREEMENT

<PAGE>
                                   - 111 -

signed by the Borrower and the Majority Lenders, or by the Borrower and the 
Administrative Agent acting with the consent of the Majority Lenders, and any 
provision of this Agreement may be waived by the Majority Lenders or by the 
Administrative Agent acting with the consent of the Majority Lenders; 
PROVIDED that:  (a) no modification, supplement or waiver shall, unless by an 
instrument signed by all of the Lenders or by the Administrative Agent acting 
with the consent of all of the Lenders (i) increase, or extend the term of 
any of the Commitments, or extend the time or waive any requirement for the 
reduction or termination of any of the Commitments, (ii) extend the date 
fixed for any payment of principal of or interest on any Loan, the 
Reimbursement Obligations or any fee hereunder, (iii) reduce the amount of 
any such payment of principal, (iv) reduce the rate at which interest is 
payable thereon or any fee is payable hereunder, (v) alter the rights or 
obligations of the Borrower to prepay Loans, (vi) alter the manner in which 
payments or prepayments of principal, interest or other amounts hereunder 
shall be applied as between the Lenders or Types or Classes of Loans, (vii) 
alter the terms of this Section 12.04, (viii) modify the definition of the 
term "Majority Lenders" or "Majority Revolving Credit Lenders", or modify in 
any other manner the number or percentage of the Lenders required to make any 
determinations or waive any rights hereunder or to modify any provision 
hereof, (ix) release any Subsidiary Guarantor from any of its guarantee 
obligations under Section 6 hereof (except in connection with the disposition 
of such Subsidiary in a transaction permitted hereunder or to which the 
Majority Lenders shall have consented), or (x) waive any of the conditions 
precedent set forth in Section 7.01 hereof; (b) any modification or 
supplement of Section 11 hereof, or of any of the rights or duties of the 
Administrative Agent hereunder, shall require the consent of the 
Administrative Agent; and (c) any modification or supplement of Section 6 
hereof shall require the consent of each Subsidiary Guarantor.

          12.05  SUCCESSORS AND ASSIGNS.  This Agreement shall be binding 
upon and inure to the benefit of the parties hereto and their respective 
successors and permitted assigns.

          12.06  ASSIGNMENTS AND PARTICIPATIONS.

          (a)  No Obligor may assign any of its rights or obligations 
hereunder without the prior consent of all of the Lenders and the 
Administrative Agent.

          (b)  Each Lender may assign any of its Loans, its Commitments, and, 
if such Lender is a Revolving Credit Lender, its Letter of Credit Interest 
(but only with the consent of, (x) in the case of its outstanding 
Commitments, the Borrower and the Administrative Agent, which consent in 
either case shall not be unreasonably withheld and, (y) in the case of the 
Revolving 


                                CREDIT AGREEMENT

<PAGE>
                                   - 112 -

Credit Commitment or a Letter of Credit Interest, the Issuing Lender), 
PROVIDED that:

          (i)  no such consent by the Borrower, the Administrative Agent or 
     the Issuing Lender shall be required in the case of any assignment to 
     another Lender (or any of its affiliates);

          (ii)  except to the extent the Borrower and the Administrative 
     Agent shall otherwise consent, any such partial assignment (other than 
     to another Lender) shall be in an amount at least equal to $5,000,000, 
     and after giving effect thereto, the assigning Lender shall have 
     Commitments and Loans in an aggregate amount of at least $5,000,000;

          (iii)  each such assignment by a Lender of its Revolving Credit 
     Loans, Revolving Credit Commitment or Letter of Credit Interest shall be 
     made in such manner so that (A) the same portion of its Revolving Credit 
     Loans, Revolving Credit Commitment and Letter of Credit Interest is 
     assigned to the respective assignee and (B) after giving effect to such 
     assignment, the Revolving Credit Commitment of the assignor equals or 
     exceeds the sum of (x) its Sterling Sub-Limit (if any) PLUS (y) its 
     Revolving Credit Commitment Percentage of the Letter of Credit Limit;

          (iv)  each such assignment by a Sterling Lender of its Sterling 
     Loans shall be made in such manner so that (A) the same portion of its 
     Sterling Loans and Sterling Sub-Limit is assigned to the respective 
     assignee, (B) after giving effect to such assignment, the Revolving 
     Credit Commitments of the assignor and the assignee exceed the sum of 
     (x) their respective Sterling Sub-Limits PLUS (y) their respective 
     Revolving Credit Commitment Percentages of the Letter of Credit Limit;

          (v)  each such assignment by a Lender of its Incremental Term Loans 
     shall be made in such manner so that the same portion of its Incremental 
     Term Loans and Incremental Term Loan Commitment is assigned to the 
     respective assignee; and

          (vi)  each such assignment shall be effected pursuant to an 
     Assignment and Acceptance substantially in the form of Exhibit G hereto, 
     executed by the assigning Lender and the assignee and delivered to the 
     Administrative Agent for its acceptance and recording in the register 
     referred to below.

Upon execution and delivery of such Assignment and Acceptance, and subject to 
the consent thereto by the Borrower, the Administrative Agent and the Issuing 
Lender to the extent 


                                CREDIT AGREEMENT

<PAGE>
                                   - 113 -

required above, the assignee shall have, to the extent of such assignment 
(unless otherwise consented to by the Borrower, the Administrative Agent and 
the Issuing Lender), the obligations, rights and benefits of a Lender 
hereunder holding the Commitment(s), Loans and, if applicable, Letter of 
Credit Interest (or portions thereof) assigned to it and specified in such 
Assignment and Acceptance (in addition to the Commitment(s), Loans and Letter 
of Credit Interest, if any, theretofore held by such assignee) and the 
assigning Lender shall, to the extent of such assignment, be released from 
the Commitment(s) (or portion(s) thereof) so assigned.  Upon each such 
assignment the assigning Lender shall pay the Administrative Agent an 
assignment fee of $3,000.  The Administrative Agent shall maintain a register 
for the recordation of the names and addresses of the Lenders and the 
principal amount of the Loans owing by the Borrower to each Lender from time 
to time.  The entries in such register shall be conclusive, in the absence of 
clearly demonstrable error, and the Borrower, the Administrative Agent and 
the Lenders may treat each Person whose name is recorded therein as the owner 
of the Loan or Loans recorded therein for all purposes of this Agreement.  
Such register shall be available for inspection by the Borrower and any 
Lender at any reasonable time upon reasonable prior notice.

          (c)  A Lender may sell or agree to sell to one or more other 
Persons (each a "PARTICIPANT") a participation in all or any part of any 
Loans or Letter of Credit Interest held by it, or in its Commitments, 
PROVIDED that such Participant shall not have any rights or obligations under 
this Agreement or any other Loan Document (the Participant's rights against 
such Lender in respect of such participation to be those set forth in the 
agreements executed by such Lender in favor of the Participant).  All amounts 
payable by the Borrower to any Lender under Section 5 hereof in respect of 
Loans, Letter of Credit Interest held by it, and its Commitments, shall be 
determined as if such Lender had not sold or agreed to sell any 
participations in such Loans, Letter of Credit Interest and Commitments, and 
as if such Lender were funding each of such Loans, Letter of Credit Interest 
and Commitments in the same way that it is funding the portion of such Loans, 
Letter of Credit Interest and Commitments in which no participations have 
been sold.  In no event shall a Lender that sells a participation agree with 
the Participant to take or refrain from taking any action hereunder or under 
any other Loan Document except that such Lender may agree with the 
Participant that it will not, without the consent of the Participant, agree 
to (i) extend the term of such Lender's related Commitment or extend the 
amount or date of any scheduled reduction of such Commitment pursuant to 
Section 2.04 hereof, (ii) extend the date fixed for the payment of principal 
of or interest on the related Loan or Loans, Reimbursement Obligations or any 
portion of any fee hereunder payable to the Participant, (iii) reduce the 
amount 


                                CREDIT AGREEMENT

<PAGE>
                                   - 114 -

of any such payment of principal, (iv) reduce the rate at which interest is 
payable thereon, or any fee hereunder payable to the Participant, to a level 
below the rate at which the Participant is entitled to receive such interest 
or fee or (v) consent to any modification, supplement or waiver hereof or of 
any of the other Loan Documents to the extent that the same, under Section 
11.09 or 12.04 hereof, requires the consent of each Lender.

          (d)  In addition to the assignments and participations permitted 
under the foregoing provisions of this Section 12.06, any Lender may (without 
notice to the Borrower, the Administrative Agent or any other Lender and 
without payment of any fee) (i) assign and pledge all or any portion of its 
Loans and any promissory note issued hereunder to any Federal Reserve Bank as 
collateral security pursuant to Regulation A and any Operating Circular 
issued by such Federal Reserve Bank and (ii) assign all or any portion of its 
rights under this Agreement and its Loans to an affiliate.  No such 
assignment shall release the assigning Lender from its obligations hereunder 
(except that such assignment shall release the assigning Lender to the extent 
the same is effected in accordance with the provisions of paragraph (b) 
above).

          (e)  A 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 12.12(b) hereof.

          (f)  Anything in this Section 12.06 to the contrary 
notwithstanding, no Lender may assign or participate any interest in any Loan 
or Reimbursement Obligation held by it hereunder to the Borrower or any of 
its Affiliates or Subsidiaries without the prior consent of each Lender, 
except that this paragraph (f) shall not prohibit any such assignment or 
participation to any Affiliate of the Borrower that is a bank or trust 
company organized under the laws of the United States of America or a State 
thereof and that is supervised by the Office of the Comptroller of the 
Currency or the Board of Governors of the Federal Reserve.

          (g)  At the request of any Lender that is not a U.S. Person and is 
not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, the 
Borrower shall maintain, or cause to be maintained, a register (which will be 
separate from the register referred to in the last sentence of Section 
12.06(b) hereof) that, at the request of the Borrower, shall be kept by the 
Administrative Agent on behalf of the Borrower at no charge to the Borrower 
at the address to which notices to the Administrative Agent are to be sent 
hereunder, on which it enters the name of such Lender as the registered owner 
of each Loan held 


                                CREDIT AGREEMENT

<PAGE>
                                   - 115 -

by such Lender.  Each Loan so registered shall be a "REGISTERED LOAN".  A 
Registered Loan may be assigned or otherwise transferred in whole or in part 
by registration of such assignment or transfer on such register.  Any 
assignment or transfer of all or part of such Loan may be effected by 
registration of such assignment or transfer on such register, together with 
the surrender of the promissory note, if any, evidencing the same duly 
endorsed by (or accompanied by a written instrument of assignment or transfer 
duly executed by) the holder of such promissory note, whereupon, at the 
request of the designated assignee(s) or transferee(s), one or more new 
promissory notes, payable to such Lender or its registered assigns, in the 
same aggregate principal amount shall be issued to the designated assignee(s) 
or transferee(s).  Prior to the registration of assignment or transfer of any 
Registered Loan, the Borrower shall treat the Person in whose name such Loan 
is registered as the owner thereof for the purpose of receiving all payments 
thereon and for all other purposes, notwithstanding notice to the contrary.  
The register referred to above in this Section 12.06(g) shall be available 
for inspection by the Borrower and any Lender that is a Registered Holder at 
any reasonable time upon reasonable prior notice.

          12.07  SURVIVAL.  The obligations of the Borrower under Sections 
5.01, 5.05, 5.06, 5.07 and 12.03 hereof, the obligations of each Subsidiary 
Guarantor under Section 6.03 hereof, and the obligations of the Lenders under 
Section 11.05 hereof, shall survive the repayment of the Loans and 
Reimbursement Obligations and the termination of the Commitments and, in the 
case of any Lender that may assign any interest in its Commitments, Loans or 
Letter of Credit Interest hereunder, shall survive the making of such 
assignment, notwithstanding that such assigning Lender may cease to be a 
"Lender" hereunder. In addition, each representation and warranty made, or 
deemed to be made by a notice of any extension of credit (whether by means of 
a Loan or a Letter of Credit), herein or pursuant hereto shall survive the 
making of such representation and warranty, and no Lender shall be deemed to 
have waived, by reason of making any extension of credit hereunder (whether 
by means of a Loan or Letter of Credit), any Default that may arise by reason 
of such representation or warranty proving to have been false or misleading, 
notwithstanding that such Lender or the Administrative Agent may have had 
notice or knowledge or reason to believe that such representation or warranty 
was false or misleading at the time such extension of credit was made.

          12.08  CAPTIONS.  The table of contents and captions and section 
headings appearing herein are included solely for convenience of reference 
and are not intended to affect the interpretation of any provision of this 
Agreement.



                                CREDIT AGREEMENT


<PAGE>
                                   - 116 -

          12.09  COUNTERPARTS.  This Agreement may be executed in any number 
of counterparts, all of which taken together shall constitute one and the 
same instrument and any of the parties hereto may execute this Agreement by 
signing any such counterpart.

          12.10  GOVERNING LAW; SUBMISSION TO JURISDICTION.  This Agreement 
shall be governed by, and construed in accordance with, the law of the State 
of New York.  Each Obligor hereby submits to the nonexclusive jurisdiction of 
the United States District Court for the Southern District of New York and of 
the Supreme Court of the State of New York sitting in New York County 
(including, without limitation, its Appellate Division), and of any other 
appellate court in the State of New York, for the purposes of all legal 
proceedings arising out of or relating to this Agreement or the transactions 
contemplated hereby.  Each Obligor hereby irrevocably waives, to the fullest 
extent permitted by applicable law, any objection that it may now or 
hereafter have to the laying of the venue of any such proceeding brought in 
such a court and any claim that any such proceeding brought in such a court 
has been brought in an inconvenient forum.

          12.11  WAIVER OF JURY TRIAL.  EACH OF THE OBLIGORS, THE 
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY IRREVOCABLY WAIVES, TO THE 
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY 
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR 
THE TRANSACTIONS CONTEMPLATED HEREBY.

          12.12  TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.

          (a)  The Borrower acknowledges that from time to time financial 
advisory, investment banking and other services may be offered or provided to 
the Borrower or one or more of its Subsidiaries (in connection with this 
Agreement or otherwise) by any Lender or by one or more subsidiaries or 
affiliates of such Lender and the Borrower hereby authorizes each Lender to 
share any information delivered to such Lender by the Borrower and its 
Subsidiaries pursuant to this Agreement, or in connection with the decision 
of such Lender to enter into this Agreement, to any such subsidiary or 
affiliate, it being understood that any such subsidiary or affiliate 
receiving such information shall be bound by the provisions of Section 
12.12(b) hereof as if it were a Lender hereunder.  Such authorization shall 
survive the repayment of the Loans and Reimbursement Obligations and the 
termination of the Commitments.

          (b)  Each Lender and the Administrative Agent agrees (on behalf of 
itself and each of its affiliates, directors, 


                                CREDIT AGREEMENT

<PAGE>
                                   - 117 -

officers, employees and representatives) to keep confidential, in accordance 
with their customary procedures for handling confidential information of the 
same nature, any non-public information supplied to it by the Borrower 
pursuant to this Agreement that is identified by the Borrower as being 
confidential at the time the same is delivered to the Lenders or the 
Administrative Agent, PROVIDED that nothing herein shall limit the disclosure 
of any such information (i) after such information shall have become public 
(other than through a violation of this Section 12.12), (ii) to the extent 
required by statute, rule, regulation or judicial process, (iii) to counsel 
for any of the Lenders or the Administrative Agent, (iv) to bank examiners 
(or any other regulatory authority having jurisdiction over any Lender or the 
Administrative Agent), or to auditors or accountants, (v) to the 
Administrative Agent or any other Lender (or to Chase Securities, Inc.), (vi) 
in connection with any litigation to which any one or more of the Lenders or 
the Administrative Agent is a party, or in connection with the enforcement of 
rights or remedies hereunder or under any other Loan Document, (vii) to a 
subsidiary or affiliate of such Lender as provided in Section 12.12(a) hereof 
or (viii) to any assignee or participant (or prospective assignee or 
participant) so long as such assignee or participant (or prospective assignee 
or participant) first executes and delivers to the respective Lender a 
Confidentiality Agreement substantially in the form of Exhibit F hereto (or 
executes and delivers to such Lender an acknowledgement to the effect that it 
is bound by the provisions of this Section 12.12(b), which acknowledgement 
may be included as part of the respective assignment or participation 
agreement pursuant to which such assignee or participant acquires an interest 
in the Loans or Letter of Credit Interest hereunder); PROVIDED, FURTHER, that 
in no event shall any Lender or the Administrative Agent be obligated or 
required to return any materials furnished by the Borrower.  The obligations 
of any assignee that has executed a Confidentiality Agreement in the form of 
Exhibit F hereto shall be superseded by this Section 12.12 upon the date upon 
which such assignee becomes a Lender hereunder pursuant to Section 12.06(b) 
hereof.


                                CREDIT AGREEMENT

<PAGE>
                                   - 118 -

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement 
to be duly executed and delivered as of the day and year first above written.

                                       BORROWER


                                       PANAVISION INC.



                                       By /s/ Jeffrey J. Marcketta
                                         ---------------------------------
                                           Title: Executive Vice President

                                       Address for Notices:

                                       Panavision Inc.
                                       6219 De Soto Avenue
                                       Woodland Hills, CA 91367-2602

                                       Attention:  Jeffrey J. Marcketta
                                       Telecopier No.:  (818) 316-1110
                                       Telephone No.:   (818) 316-1000





                                CREDIT AGREEMENT

<PAGE>
                                   - 119 -

                                       SUBSIDIARY GUARANTORS


                                       PANAVISION INTERNATIONAL, L.P.

                                       By Panavision Inc.,
                                          its general partner



                                       By /s/ Jeffrey J. Marcketta
                                          --------------------------------
                                           Title: Executive Vice President


                                       KEEPCO I, INC.



                                       By /s/ Jeffrey J. Marcketta
                                          --------------------------------
                                           Title: Assistant Secretary


                                       KEEPCO II, INC.



                                       By /s/ Jeffrey J. Marcketta
                                          --------------------------------
                                           Title: Assistant Secretary


                                       PANAVISION U.K. HOLDINGS, INC.



                                       By /s/ Jeffrey J. Marcketta
                                          --------------------------------
                                           Title: Vice President


                                       VICTOR DUNCAN, INC.



                                       By /s/ Jeffrey J. Marcketta
                                          --------------------------------
                                           Title: Vice President


                                CREDIT AGREEMENT

<PAGE>
                                   - 120 -

                                       LENDERS


                                       THE CHASE MANHATTAN BANK


                                       By /s/ Tracey A. Navin
                                          --------------------------------
                                           Title: Vice President


                                       CIBC INC.


                                       By /s/ Matthew B. Jones
                                          --------------------------------
                                           Title: Authorized Signatory


                                       BANKBOSTON, N.A.


                                       By /s/ Kathryn Ticknor
                                          --------------------------------
                                           Title: Director


                                       THE BANK OF NOVA SCOTIA


                                       By /s/ Stephen Lockhart
                                          --------------------------------
                                           Title: Vice President


                                       BANK OF HAWAII


                                       By /s/ Robert L. Wilson
                                          -------------------------------
                                           Title: Vice President


                                       ABN AMRO BANK N.V.


                                       By /s/ William Swiontek
                                          --------------------------------
                                           Title: Group Vice President


                                       By /s/ John A. Miller
                                          --------------------------------
                                           Title: Group Vice President



                                CREDIT AGREEMENT

<PAGE>
                                   - 121 -

                                       BANK OF TOKYO-MITSUBISHI TRUST
                                         COMPANY



                                       By /s/ Glenn B. Eckert
                                          --------------------------------
                                           Title: Vice President


                                       FLEET NATIONAL BANK



                                       By /s/ Eric Meyer
                                          --------------------------------
                                           Title: Vice President


                                       LLOYDS BANK PLC



                                       By /s/ Ted Walser
                                          --------------------------------
                                           Title: Senior Vice President


                                       By /s/ Paul Briamonte
                                          --------------------------------
                                           Title: Vice President B374



                                CREDIT AGREEMENT

<PAGE>
                                   - 122 -

                                       ADMINISTRATIVE AGENT


                                       THE CHASE MANHATTAN BANK,
                                       as Administrative Agent


                                       By /s/ Tracey A. Navin
                                          --------------------------------
                                           Title: Vice President

                                       Address for Notices to
                                       the Administrative Agent:

                                         The Chase Manhattan Bank
                                         1 Chase Manhattan Plaza
                                         8th Floor
                                         New York, New York  10081

                                         Attention:  Agent Bank Services
                                         Telecopier No.:  (212) 552-5658
                                       Telephone No.:  (212) 552-7400



                                CREDIT AGREEMENT

<PAGE>

                                                                     SCHEDULE I
                                       
                                  COMMITMENTS
<TABLE>
<CAPTION>
                                                                    Tranche A
                             Revolving Credit    Sterling           Term Loan
Lender                       Commitment          Sub-Limit          Commitment
------                       ----------------    ---------          ----------
<S>                          <C>                 <C>                <C>
The Chase Manhattan
  Bank                         $21,600,000.00    $ 8,474,576.26     $14,400,000.00
CIBC Inc.                       13,800,000.00      7,796,610.17       9,200,000.00
BankBoston, N.A.                12,000,000.00      6,779,661.02       8,000,000.00
The Bank of Nova
  Scotia                        12,000,000.00      6,779,661.02       8,000,000.00
Bank of Hawaii                   6,600,000.00                         4,400,000.00
ABN AMRO Bank N.V.               6,000,000.00      3,389,830.51       4,000,000.00
Bank of Tokyo-Mitsubishi
  Trust Company                  6,000,000.00                         4,000,000.00
Fleet National Bank              6,000,000.00      3,389,830.51       4,000,000.00
Lloyds Bank plc                  6,000,000.00      3,389,830.51       4,000,000.00
                               --------------    --------------     --------------
                               $90,000,000.00    $40,000,000.00     $60,000,000.00
</TABLE>



                                CREDIT AGREEMENT

<PAGE>


                                                                    SCHEDULE II

                                       
                          MATERIAL AGREEMENTS AND LIENS


                         [Section 8.12(a), (b); 9.07(b)]


A.  Material Agreements




B.  Liens

                                       
                                   SCHEDULE I
<PAGE>

                                                                   SCHEDULE III
                                       

                         SUBSIDIARIES AND INVESTMENTS


                            [Section 8.15(a), (b)]


A.  Subsidiaries




B.  Investments


                                       
                                   SCHEDULE II
<PAGE>

                                                             SCHEDULE IV       


              EQUITY INTERESTS OF THE BORROWER

                    [Section 8.14]










                     SCHEDULE III

<PAGE>

                                                             SCHEDULE V


                           LITIGATION

                         [Section 8.03]










                          SCHEDULE IV

<PAGE>

                                                             SCHEDULE VI

                           TAXES

                      [Section 8.09]










                       SCHEDULE V

<PAGE>

                                                             SCHEDULE VII

                  ENVIRONMENTAL MATTERS

                     [Section 8.13]










                     SCHEDULE VI

<PAGE>

                                                             EXHIBIT A


           [Form of Incremental Term Loan Activation Notice]

               INCREMENTAL TERM LOAN ACTIVATION NOTICE


To: The Chase Manhattan Bank
    as Administrative Agent under
    the Credit Agreement referred to below

         Reference is hereby made to the Credit Agreement dated as of June 5, 
1997 (as modified and supplemented and in effect from time to time, the 
"CREDIT AGREEMENT") between Panavision Inc., the Subsidiary Guarantors party 
thereto, the Lenders party thereto and The Chase Manhattan Bank, as 
Administrative Agent. Terms defined in the Credit Agreement and not defined 
herein are used herein as defined therein.

         This notice is the Incremental Term Loan Activation Notice referred 
to in the Credit Agreement, and the Borrower and each of the Lenders 
signatory hereto (the "INCREMENTAL TERM LOAN LENDERS") hereby notify you that:

         1.   The Incremental Term Loan Activation Date is            .
                                                           -----------

         2.   The Incremental Term Loan Commitment Termination Date is
                         .
              -----------

         3.   The Incremental Term Loan Commitment of each Incremental Term 
              Loan Lender is set forth opposite such Incremental Term Loan 
              Lender's name on the signature pages hereof under the caption
              "Incremental Term Loan Commitment".

         Each of the Incremental Term Loan Lenders and the Borrower hereby 
agrees that (a) the rate of commitment fee payable by the Borrower to each 
Incremental Term Loan Lender under Section 2.05(b) of the Credit Agreement on 
the daily average unused amount of such Incremental Term Loan Commitment 
shall be               , (b) the Applicable Margin for Incremental Term Loans 
         --------------
shall be                and (c) the Incremental Term Loan Principal Payment 
         --------------
Dates shall be the Quarterly Dates falling on or nearest to March 31, June 
30, September 30 and December 31 of each year, commencing with             , 
                                                               ------------
through and including                     .
                      --------------------

         The Borrower and the Incremental Term Loan Lenders further agree 
that the principal of the Incremental Term Loans shall be payable in 
            installments payable on the Incremental Term Loan Principal 
-----------
Payment Dates as follows:



                INCREMENTAL TERM LOAN ACTIVATION NOTICE                       

<PAGE>

                                    - 2 -

                                              Amount of Installment
   Incremental Term Loan                       (as a percentage of
  Principal Payment Date                        Incremental Term
 Falling on or Nearest to:                       Loans borrowed)
--------------------------                   ----------------------


              [TO BE COMPLETED IN ACCORDANCE WITH
            SECTION 3.01(c) OF THE CREDIT AGREEMENT]



                                             PANAVISION INC.



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



INCREMENTAL TERM LOAN COMMITMENT             [NAME OF INCREMENTAL TERM LOAN 
--------------------------------             
$                                            LENDER]



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


              [COMPLETE FOR EACH INCREMENTAL TERM LOAN LENDER]



CONSENTED TO:

THE CHASE MANHATTAN BANK,
  as Administrative Agent


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






                INCREMENTAL TERM LOAN ACTIVATION NOTICE

<PAGE>

                                                             EXHIBIT B


                 [Form of Security Agreement]

                     SECURITY AGREEMENT


         SECURITY AGREEMENT dated as of June 5, 1997 between PANAVISION INC., 
a Delaware corporation (the "BORROWER"); each of the Subsidiaries of the 
Borrower that may become a "Securing Party" hereunder pursuant to the 
provisions of Section 6.11 hereof, (individually, a "SUBSIDIARY GUARANTOR" 
and, collectively, the "SUBSIDIARY GUARANTORS" and, together with the 
Borrower, the "SECURING PARTIES"); and THE CHASE MANHATTAN BANK, as 
administrative agent for the lenders or other financial institutions or 
entities party, as lenders, to the Credit Agreement referred to below (in 
such capacity, together with its successors in such capacity, the 
"ADMINISTRATIVE AGENT").

         The Borrower, the Subsidiary Guarantors, certain lenders and the 
Administrative Agent are parties to a Credit Agreement dated as of June 5, 
1997 (as modified and supplemented and in effect from time to time, the 
"CREDIT AGREEMENT"), providing, subject to the terms and conditions thereof, 
for extensions of credit (by making of loans, including, without limitation, 
the Incremental Term Loans referred to therein and issuing letters of credit) 
to be made by the Lenders (as defined in the Credit Agreement) to the 
Borrower in an aggregate principal or face amount not exceeding $200,000,000. 
In addition, the Borrower may from time to time be obligated to one or more 
of the Lenders (as so defined), or an Affiliate of any Lender, in respect of 
one or more Interest Rate Protection Agreements (such indebtedness being 
herein referred to as the "OTHER INDEBTEDNESS").

         To induce the Lenders (as so defined) to enter into the Credit 
Agreement and to extend credit thereunder and to extend credit to the 
Borrower that would constitute Other Indebtedness, and for other good and 
valuable consideration, the receipt and sufficiency of which are hereby 
acknowledged, each Securing Party has agreed to pledge and grant a security 
interest in the Collateral (as hereinafter defined) as security for the 
Secured Obligations (as so defined).  Accordingly, the parties hereto agree 
as follows:

         Section 1.  DEFINITIONS.  Terms defined in the Credit Agreement are 
used herein as defined therein.  In addition, as used herein:

         "ACCOUNTS" shall have the meaning ascribed thereto in Section 3(e) 
hereof.

         "COLLATERAL" shall have the meaning ascribed thereto in 

                      SECURITY AGREEMENT

<PAGE>

Section 3 hereof.

         "COLLATERAL ACCOUNT" shall have the meaning ascribed thereto in 
Section 4.01 hereof.

         "COPYRIGHT COLLATERAL" shall mean all Copyrights, whether now owned 
or hereafter acquired by any Obligor, including each Copyright identified in 
Annex 2 hereto.

         "COPYRIGHTS" shall mean all copyrights, copyright registrations and 
applications for copyright registrations, including, without limitation, all 
renewals and extensions thereof, the right to recover for all past, present 
and future infringements thereof, and all other rights of any kind whatsoever 
accruing thereunder or pertaining thereto.

         "DOCUMENTS" shall have the meaning ascribed thereto in Section 3(k) 
hereof.

         "EQUIPMENT" shall have the meaning ascribed thereto in Section 3(i) 
hereof.

         "INSTRUMENTS" shall have the meaning ascribed thereto in Section 
3(f) hereof.

         "INTELLECTUAL PROPERTY" shall mean, collectively, all Copyright 
Collateral, all Patent Collateral and all Trademark Collateral, together with 
(a) all inventions, processes, production methods, proprietary information, 
know-how and trade secrets; (b) all licenses or user or other agreements 
granted to any Obligor with respect to any of the foregoing, in each case 
whether now or hereafter owned or used including, without limitation, the 
licenses or other agreements with respect to the Copyright Collateral, the 
Patent Collateral or the Trademark Collateral, listed in Annex 5 hereto; (c) 
all information, customer lists, identification of suppliers, data, plans, 
blueprints, specifications, designs, drawings, recorded knowledge, surveys, 
engineering reports, test reports, manuals, materials standards, processing 
standards, performance standards, catalogs, computer and automatic machinery 
software and programs; (d) all field repair data, sales data and other 
information relating to sales or service of products now or hereafter 
manufactured; (e) all accounting information and all media in which or on 
which any information or knowledge or data or records may be recorded or 
stored and all computer programs used for the compilation or printout of such 
information, knowledge, records or data; and (f) all consents, permits, 
variances, certifications and approvals of governmental agencies now or 
hereafter held by any Securing Party.

                      SECURITY AGREEMENT

<PAGE>

                                    - 3 -

         "INVENTORY" shall have the meaning ascribed thereto in Section 3(g) 
hereof.

         "ISSUERS" shall mean, collectively, the respective corporations, 
partnerships or other entities identified beneath the names of the Securing 
Parties on Annex 1 hereto under the caption "ISSUER".

         "MOTOR VEHICLES" shall mean motor vehicles, tractors, trailers and 
other like property, whether or not the title thereto is governed by a 
certificate of title or ownership.

         "PARTNERSHIP COLLATERAL" shall mean, collectively, the Collateral 
described in clause (d) of Section 3 hereof and the proceeds of and to any 
such property and, to the extent related to any such property or such 
proceeds, all books, correspondence, credit files, records, invoices and 
other papers.

         "PATENT COLLATERAL" shall mean all Patents, whether now owned or 
hereafter acquired by any Obligor, including each Patent identified in Annex 
3 hereto.

         "PATENTS" shall mean all patents and patent applications, including, 
without limitation, the inventions and improvements described and claimed 
therein together with the reissues, divisions, continuations, renewals, 
extensions and continuations-in-part thereof, all income, royalties, damages 
and payments now or hereafter due and/or payable under and with respect 
thereto, including, without limitation, damages and payments for past or 
future infringements thereof, the right to sue for past, present and future 
infringements thereof, and all rights corresponding thereto throughout the 
world.

         "PLEDGED STOCK" shall have the meaning ascribed thereto in Section 
3(a) hereof.

         "SECURED OBLIGATIONS" shall mean, collectively, (a) in the case of 
the Borrower, the principal of and interest on the Loans made by the Lenders 
to the Borrower and all other amounts from time to time owing to the Lenders 
or the Administrative Agent by the Borrower under the Loan Documents 
(including, without limitation, all Reimbursement Obligations, Other 
Indebtedness and interest thereon), (b) in the case of the Subsidiary 
Guarantors, all obligations of the Subsidiary Guarantors under the Credit 
Agreement and the other Loan Documents (including, without limitation, in 
respect of their Guarantee under, and pursuant to the terms of, Section 6 of 
the Credit Agreement) and (c) in the case of all Securing Parties, all 
obligations of the Securing Parties to the Lenders and the 

                      SECURITY AGREEMENT

<PAGE>

                                    - 4 -

Administrative Agent hereunder.

         "STOCK COLLATERAL" shall mean, collectively, the Collateral 
described in clauses (a) through (c) of Section 3 hereof and the proceeds of 
and to any such property and, to the extent related to any such property or 
such proceeds, all books, correspondence, credit files, records, invoices and 
other papers.

         "TRADEMARK COLLATERAL" shall mean all Trademarks, whether now owned 
or hereafter acquired by any Securing Party, including each Trademark 
identified in Annex 2 hereto but excluding any Trademark transferred in 
accordance with Section 5.04(b)(ii) hereof.  Notwithstanding the foregoing, 
the Trademark Collateral does not and shall not include any Trademark that 
would be rendered invalid, abandoned, void or unenforceable by reason of its 
being included as part of the Trademark Collateral.

         "TRADEMARKS" shall mean all trade names, trademarks and service 
marks, logos, trademark and service mark registrations, and applications for 
trademark and service mark registrations, including, without limitation, all 
renewals of trademark and service mark registrations, all rights 
corresponding thereto throughout the world, the right to recover for all 
past, present and future infringements thereof, all other rights of any kind 
whatsoever accruing thereunder or pertaining thereto, together, in each case, 
with the product lines and goodwill of the business connected with the use 
of, and symbolized by, each such trade name, trademark and service mark.

         "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial Code as 
in effect from time to time in the State of New York.








                      SECURITY AGREEMENT

<PAGE>

                                     - 5 -

          Section 2.  REPRESENTATIONS AND WARRANTIES.  Each Securing Party 
represents and warrants to the Lenders and the Administrative Agent that:

          (a)  Such Securing Party is the sole beneficial owner of the 
     Collateral in which it purports to grant a security interest pursuant to 
     Section 3 hereof and no Lien exists or will exist upon such Collateral 
     at any time (and no right or option to acquire the same exists in favor 
     of any other Person), except for Liens permitted under Section 9.06 of 
     the Credit Agreement and except for the pledge and security interest in 
     favor of the Administrative Agent for the benefit of the Lenders created 
     or provided for herein, which pledge and security interest constitute a 
     first priority perfected pledge and security interest in and to all of 
     such Collateral.

          (b)  The Pledged Stock represented by the certificates identified 
     under the name of such Securing Party in Annex 1 hereto is, and all 
     other Pledged Stock in which such Securing Party shall hereafter grant a 
     security interest pursuant to Section 3 hereof will be, duly authorized, 
     validly existing, fully paid and non-assessable and none of such Pledged 
     Stock is or will be subject to any contractual restriction, or any 
     restriction under the charter or by-laws of the respective Issuer of 
     such Pledged Stock, upon the transfer of such Pledged Stock (except for 
     (i) any such restriction contained herein or in the Credit Agreement and 
     (ii) the Unanimous Shareholder Agreement (the "Unanimous Shareholder 
     Agreement") governing Panavision Canada Holdings Inc. made as of January 
     18, 1995 and the provisions contained in the articles of incorporation 
     of Panavision Canada Holdings Inc. as of the date hereof which require 
     the directors of Panavision Canada Holdings Inc. to approve any transfer 
     of its shares (which provisions, however, have been complied with by the 
     sole shareholder of Panavision Canada Holdings Inc. acting pursuant to 
     the Unanimous Shareholder Agreement in relation to the pledge 
     contemplated hereby and any enforcement and/or resulting sale of such 
     Pledged Stock hereunder)).

          (c)  The Pledged Stock represented by the certificates identified 
     under the name of such Securing Party in Annex 1 hereto constitutes all 
     (or, in the case of an Issuer organized under the laws a jurisdiction 
     other than the United States of America or a State thereof, 66%) of the 
     issued and outstanding shares of capital stock of any class of the 
     Issuers beneficially owned by such Securing Party on the date hereof 
     (whether or not registered in the name of such Securing Party) and said 
     Annex 1 correctly identifies, as at the date hereof, the respective 
     Issuers of such 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                     - 6 -

     Pledged Stock, the respective class and par value of the shares 
     comprising such Pledged Stock and the respective number of shares (and 
     registered owners thereof) represented by each such certificate.  The 
     partnership interests identified under the name of such Securing Party 
     in Annex 1 hereto constitute all of the partnership interests of the 
     Issuers beneficially owned by such Securing Party on the date hereof, 
     and Annex 1 correctly identifies, as of the date hereof, the partnership 
     interests of the Issuers held by such Securing Party.

          (d)  Annexes 2, 3 and 4 hereto, respectively, set forth under the 
     name of such Securing Party a complete and correct list of all 
     Copyrights, Patents and Trademarks owned by such Securing Party on the 
     date hereof; except pursuant to licenses and other user agreements 
     entered into by such Securing Party in the ordinary course of business, 
     that are listed in Annex 5 hereto, such Securing Party owns and 
     possesses the right to use, and has done nothing to authorize or enable 
     any other Person to use, any Copyright, Patent or Trademark listed in 
     said Annexes 2, 3 and 4, and all registrations listed in said Annexes 2, 
     3 and 4 are valid and in full force and effect; except as may be set 
     forth in said Annex 5, such Securing Party owns and possesses the right 
     to use all Copyrights, Patents and Trademarks.

          (e)  Annex 5 hereto sets forth a complete and correct list of all 
     licenses and other user agreements included in the Intellectual Property 
     on the date hereof.

          (f)  To such Securing Party's knowledge, (i) except as set forth in 
     Annex 5 hereto, there is no violation by others of any right of such 
     Securing Party with respect to any Copyright, Patent or Trademark listed 
     in Annexes 2, 3 and 4 hereto, respectively, under the name of such 
     Securing Party and (ii) such Securing Party is not infringing in any 
     respect upon any Copyright, Patent or Trademark of any other Person; and 
     no proceedings have been instituted or are pending against such Securing 
     Party or, to such Securing Party's knowledge, threatened, and no claim 
     against such Securing Party has been received by such Securing Party, 
     alleging any such violation, except as may be set forth in said Annex 5.

          (g)  Such Securing Party does not own any Trademarks registered in 
     the United States of America to which the last sentence of the 
     definition of Trademark Collateral applies.

          (h)  Any goods now or hereafter produced by such Securing Party or 
     any of its Subsidiaries included in the Collateral have been and will be 
     produced in compliance with 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                     - 7 -

     the requirements of the Fair Labor Standards Act, as amended.

          Section 3.  COLLATERAL.  As collateral security for the prompt 
payment in full when due (whether at stated maturity, by acceleration or 
otherwise) of the Secured Obligations, each Securing Party hereby pledges and 
grants to the Administrative Agent, for the benefit of the Lenders as 
hereinafter provided, a security interest in all of such Securing Party's 
right, title and interest in the following property, whether now owned by 
such Securing Party or hereafter acquired and whether now existing or 
hereafter coming into existence (all being collectively referred to herein as 
"COLLATERAL"):

          (a)  the shares of common and preferred stock of the Issuers 
     represented by the certificates identified in Annex 1 hereto under the 
     name of such Securing Party and all other shares, but only to the extent 
     set forth in Section 5.04(a)(i) hereof, of capital stock of whatever 
     class of the Issuers, now or hereafter owned by such Securing Party, in 
     each case together with the certificates evidencing the same 
     (collectively, the "PLEDGED STOCK"), it being understood that to the 
     extent a Securing Party shall have delivered stock certificates of 
     Panavision Canada Holdings Inc. representing a number of shares greater 
     than the number of shares representing Pledged Stock, the Administrative 
     Agent agrees that (i) such excess stock shall not thereby be deemed 
     pledged but shall be held for the benefit of the Securing Party, and 
     (ii) at any time and from time to time, at the request of such Securing 
     Party, to return to such Securing Party certificate(s) representing up 
     to the number of the shares in excess of shares representing the Pledged 
     Stock; PROVIDED that in no event shall the number of shares represented 
     by the certificate(s) in the possession of the Administrative Agent be 
     less than the number of shares of Panavision Canada Holdings Inc. 
     pledged pursuant to the terms of this Agreement;

          (b)  all shares, securities, moneys or property representing a 
     dividend on any of the Pledged Stock, or representing a distribution or 
     return of capital upon or in respect of the Pledged Stock, or resulting 
     from a split-up, revision, reclassification or other like change of the 
     Pledged Stock or otherwise received in exchange therefor, and any 
     subscription warrants, rights or options issued to the holders of, or 
     otherwise in respect of, the Pledged Stock;

          (c)  without affecting the obligations of such Securing Party under 
     any provision prohibiting such action hereunder or under the Credit 
     Agreement, in the event of any 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                     - 8 -

     consolidation or merger in which an Issuer is not the surviving 
     corporation, all shares of each class of the capital stock of the 
     successor corporation (unless such successor corporation is such 
     Securing Party itself) formed by or resulting from such consolidation or 
     merger (the Pledged Stock, together with all other certificates, shares, 
     securities, properties or moneys as may from time to time be pledged 
     hereunder pursuant to clause (a) or (b) above and this clause (c) being 
     herein collectively called the "STOCK COLLATERAL");

          (d)  all partnership interests held by such Securing Party (other 
     than, in the case of Panavision U.K. Holdings, Inc., the limited 
     partnership interest in Panavision U.K. L.P. held by it), all 
     certificates (if any) representing or evidencing such partnership 
     interests (including, without limitation, the certificates, if any, 
     identified in Annex 1 hereto under the name of such Securing Party, and 
     all of the rights of such Securing Party under any partnership agreement 
     to which such Securing Party is a party (including, without limitation, 
     all right, title and interest (if any) of such Securing Party as a 
     limited or general partner, as the case may be, to participate in the 
     operation or management of the partnership and all rights of such 
     Securing Party to the property, assets, partnership interests and 
     distributions under such partnership agreement), and all present and 
     future rights of such Securing Party to receive payment of money or 
     other distributions or payments arising out of or in connection with any 
     limited or general partnership interest of such Securing Party, as the 
     case may be (such partnership interests, certificates and rights herein 
     called collectively "PARTNERSHIP COLLATERAL";

          (e)  all accounts and, subject to Section 5.04(c) hereof, general 
     intangibles (each as defined in the Uniform Commercial Code) of such 
     Securing Party constituting any right to the payment of money, including 
     (but not limited to) all moneys due and to become due to such Securing 
     Party in respect of any loans or advances or for Inventory or Equipment 
     or other goods sold or leased or for services rendered, all moneys due 
     and to become due to such Securing Party under any guarantee (including 
     a letter of credit) of the purchase price of Inventory or Equipment sold 
     by such Securing Party and all tax refunds (such accounts, general 
     intangibles and moneys due and to become due being herein called 
     collectively "ACCOUNTS");

          (f)  all instruments, chattel paper or letters of credit (each as 
     defined in the Uniform Commercial Code) of such Securing Party 
     evidencing, representing, arising from or existing in respect of, 
     relating to, securing or 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                     - 9 -

     otherwise supporting the payment of, any of the Accounts, including (but 
     not limited to) promissory notes, drafts, bills of exchange and trade 
     acceptances (herein collectively called "INSTRUMENTS");

          (g)  all inventory (as defined in the Uniform Commercial Code) of 
     such Securing Party, fuel, tires and other spare parts, all goods 
     obtained by such Securing Party in exchange for such inventory, and any 
     products made or processed from such inventory including all substances, 
     if any, commingled therewith or added thereto (herein collectively 
     called "INVENTORY");

          (h)  all Intellectual Property and all other accounts or general 
     intangibles of such Securing Party not constituting Intellectual 
     Property or Accounts;

          (i)  all equipment (as defined in the Uniform Commercial Code) of 
     such Securing Party, including all Motor Vehicles (herein collectively 
     called "EQUIPMENT");

          (j)  subject to Section 5.04(c) hereof, each contract and other 
     agreement of such Securing Party relating to the sale or other 
     disposition of Inventory or Equipment;

          (k)  all documents of title (as defined in the Uniform Commercial 
     Code) or other receipts of such Securing Party covering, evidencing or 
     representing Inventory or Equipment (herein collectively called 
     "DOCUMENTS");

          (l)  all rights, claims and benefits of such Securing Party against 
     any Person arising out of, relating to or in connection with Inventory 
     or Equipment purchased by such Securing Party, including, without 
     limitation, any such rights, claims or benefits against any Person 
     storing or transporting such Inventory or Equipment;

          (m)  the balance from time to time in the Collateral Account; and

          (n)  all proceeds, products, offspring, accessions, rents, profits, 
     income, benefits, substitutions and replacements of and to any of the 
     property of such Securing Party described in the preceding clauses of 
     this Section 3 (including, without limitation, any proceeds of insurance 
     thereon and all causes of action, claims and warranties now or hereafter 
     held by any Securing Party in respect of any of the items listed above) 
     and, to the extent related to any property described in said clauses or 
     such proceeds, products and accessions, all books, correspondence, 
     credit files, records, invoices and other papers, including without 
     limitation all tapes, cards, computer runs and other papers 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 10 -

     and documents in the possession or under the control of such Securing 
     Party or any computer bureau or service company from time to time acting 
     for such Securing Party.

          Section 4.  CASH PROCEEDS OF COLLATERAL.

          4.01  COLLATERAL ACCOUNT.

          (a)  There is hereby established with the Administrative Agent a 
cash collateral account (the "COLLATERAL ACCOUNT") in the name and under the 
control of the Administrative Agent into which there shall be deposited from 
time to time the cash proceeds of any of the Collateral and any other cash 
proceeds of insurance, condemnation award or other compensation in respect of 
any Casualty Event affecting any Property of any Securing Party (whether 
received by the Administrative Agent or by any Securing Party) required to be 
delivered to the Administrative Agent pursuant hereto and into which the 
Securing Parties may from time to time deposit any additional amounts that 
any of them wishes to pledge to the Administrative Agent for the benefit of 
the Lenders as additional collateral security hereunder.  The balance from 
time to time in the Collateral Account shall constitute part of the 
Collateral hereunder and shall not constitute payment of the Secured 
Obligations until applied as hereinafter provided.

          (b)  Without limiting the generality of the provisions of the 
foregoing paragraph (a), promptly following the occurrence of any Casualty 
Event affecting the Property of any Securing Party (whether or not such 
Property is Collateral under this Agreement) resulting in a loss in excess of 
$500,000, such Securing Party through the Borrower shall give prompt notice 
thereof to the Administrative Agent and shall cause the proceeds of 
insurance, condemnation award or other compensation received as a result of 
such Casualty Event to be paid to the Administrative Agent, for deposit into 
the Collateral Account, as additional collateral security for the payment of 
the Secured Obligations.  To the extent the Administrative Agent shall 
receive proceeds of any such Casualty Event resulting in a loss of $500,000 
or less, the Administrative Agent will, so long as no Event of Default shall 
have occurred and be continuing, promptly remit such proceeds to the relevant 
Securing Party through the Borrower.

          (c)  The balance from time to time in the Collateral Account shall 
be subject to withdrawal only as provided in this paragraph (c) and paragraph 
(d) below.  The Administrative Agent shall (except as otherwise provided in 
the last sentence of this paragraph (c)) remit the collected balance 
outstanding to the credit of the Collateral Account to or upon the order of 
the relevant Securing Party as such Securing Party through the 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 11 -

Borrower shall from time to time instruct, PROVIDED that (i) deposits in the 
Collateral Account that constitute any proceeds of insurance, condemnation 
award or other compensation in respect of any Casualty Event affecting any 
Property of any Securing Party shall be subject to withdrawal only as 
provided in paragraph (d) below and (ii) at any time following the occurrence 
and during the continuance of an Event of Default, the Administrative Agent 
may (and, if instructed by the Lenders as specified in Section 11.03 of the 
Credit Agreement, shall) in its (or their) discretion apply or cause to be 
applied (subject to collection) the balance from time to time outstanding to 
the credit of the Collateral Account (regardless of the origin thereof) to 
the payment of the Secured Obligations in the manner specified in Section 
5.09 hereof.

          (d)  With respect to any proceeds that are required to be paid into 
the Collateral Account pursuant to paragraph (b) above, the Borrower may, at 
its option, to be exercised by delivery of notice to the Administrative Agent 
within 120 days of the respective Casualty Event, elect to apply any proceeds 
of insurance, condemnation award or other compensation received as a result 
of such Casualty Event either:  (i) to restoration, replacement or repair of 
the Property affected by such Casualty Event (the "DAMAGED PROPERTY") or to 
the purchase of other Property used or useful in the business of the Borrower 
and its Subsidiaries; or (ii) to the prepayment of the Loans and the 
reduction of the Commitments in the manner and to the extent specified in 
Section 2.09(f) of the Credit Agreement.  Failure of the Borrower to make 
such an election within 120 days after the date of any such Casualty Event 
shall constitute an election to so apply such proceeds to the prepayment of 
the Loans and the reduction of the Commitments as aforesaid.

          If the Borrower elects to restore, replace or repair the Damaged 
Property or make such a purchase, any such proceeds (and any earnings 
thereon) held in the Collateral Account shall be applied by the Borrower to 
the restoration and repair of the Damaged Property and advanced to the 
Borrower by the Administrative Agent in periodic installments upon compliance 
by the Borrower with such reasonable conditions to disbursement as may be 
imposed by the Administrative Agent, including, but not limited to, 
reasonable retention amounts and receipt of lien releases.

          Following the occurrence and the continuation of any Event of 
Default, the Administrative Agent shall have no obligation to release any of 
such proceeds to the Borrower for restoration, replacement or repair of 
Damaged Property.  All insurance proceeds remaining after the payment for 
restoration and repair of Damaged Property pursuant to this paragraph (d) 
may, at the option of the Administrative Agent, be applied to the prepayment 
of the Loans and the reduction of the Commitments in 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 12 -

the manner and extent specified in Section 2.09(f) of the Credit Agreement or 
(if consented to by the Majority Lenders) released to the Borrower.

          (e)  The Administrative Agent shall be entitled at its option to 
participate in any compromise, adjustment or settlement in connection with 
any claims for loss, damage or destruction under any policy or policies of 
insurance, in excess of $500,000, and the Securing Parties shall within 5 
Business Days after request therefor reimburse the Administrative Agent for 
all reasonable out-of-pocket expenses (including reasonable attorneys' fees 
and disbursements) incurred by the Administrative Agent in connection with 
such participation.  No Securing Party shall make any compromise, adjustment 
or settlement in connection with any such claim without approval of the 
Administrative Agent.

          4.02  INVESTMENT OF BALANCE IN COLLATERAL ACCOUNT.  Amounts on 
deposit in the Collateral Account shall be invested from time to time in such 
Permitted Investments as the respective Securing Party through the Borrower 
(or, after the occurrence and during the continuance of a Default, the 
Administrative Agent) shall determine, which Permitted Investments shall be 
held in the name and be under the control of the Administrative Agent, 
PROVIDED that (i) at any time after the occurrence and during the continuance 
of an Event of Default, the Administrative Agent may (and, if instructed by 
the Lenders as specified in Section 11.03 of the Credit Agreement, shall) in 
its (or their) discretion at any time and from time to time elect to 
liquidate any such Permitted Investments and to apply or cause to be applied 
the proceeds thereof to the payment of the Secured Obligations in the manner 
specified in Section 5.09 hereof and (ii) if requested by the respective 
Securing Party through the Borrower, such Permitted Investments may be held 
in the name and under the control of one or more of the Lenders that is a 
bank or trust company (and in that connection each Lender, pursuant to 
Section 11.10 of the Credit Agreement, has agreed that such Permitted 
Investments shall be held by such Lender as a collateral sub-agent for the 
Administrative Agent hereunder).

          4.03  COVER FOR LETTER OF CREDIT LIABILITIES.  Amounts deposited 
into the Collateral Account as cover for Letter of Credit Liabilities under 
the Credit Agreement pursuant to Section 2.10(g) or the last paragraph of 
Section 10 thereof shall be held by the Administrative Agent in a separate 
sub-account (designated "Letter of Credit Liabilities Sub-Account") and all 
amounts held in such sub-account shall constitute collateral security FIRST 
for the Letter of Credit Liabilities outstanding from time to time and SECOND 
as collateral security for the other Secured Obligations hereunder.

          Section 5.  FURTHER ASSURANCES; REMEDIES.  In furtherance of the 
grant of the pledge and security interest 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 13 -

pursuant to Section 3 hereof, the Securing Parties hereby jointly and 
severally agree with each Lender and the Administrative Agent as follows:

          5.01  DELIVERY AND OTHER PERFECTION.  Each Securing Party shall:

          (a)  if any of the shares, securities, certificates, moneys or 
     property required to be pledged by such Securing Party under clauses 
     (a), (b), (c) and (d) of Section 3 hereof are received by such Securing 
     Party, forthwith either (x) transfer and deliver to the Administrative 
     Agent such shares, securities or certificates so received by such 
     Securing Party (together with the certificates for any such shares and 
     securities duly endorsed in blank or accompanied by undated stock powers 
     duly executed in blank), all of which thereafter shall be held by the 
     Administrative Agent, pursuant to the terms of this Agreement, as part 
     of the Collateral or (y) take such other action as the Administrative 
     Agent shall deem necessary or appropriate to duly record the Lien 
     created hereunder in such shares, securities, certificates, moneys or 
     property in said clauses (a), (b), (c) and (d);

          (b)  with respect to any limited partnership interest held by any 
     Securing Party, execute and deliver written instructions to the 
     partnership to register the Lien created hereunder in such limited 
     partnership interest in the books and records maintained by such 
     partnership for such registrations and cause such partnership to execute 
     and deliver to the Administrative Agent a written confirmation to the 
     effect that the Lien created hereunder in such limited partnership 
     interest has been duly registered in such books and records;

          (c)  deliver and pledge to the Administrative Agent any and all 
     Instruments, endorsed and/or accompanied by such instruments of 
     assignment and transfer in such form and substance as the Administrative 
     Agent may request; PROVIDED, that so long as no Default shall have 
     occurred and be continuing, such Securing Party may retain for 
     collection in the ordinary course any Instruments received by such 
     Securing Party in the ordinary course of business and the Administrative 
     Agent shall, promptly upon request of such Securing Party through the 
     Borrower, make appropriate arrangements for making any Instrument 
     pledged by such Securing Party available to such Securing Party for 
     purposes of presentation, collection or renewal (any such arrangement to 
     be effected, to the extent deemed appropriate by the Administrative 
     Agent, against trust receipt or like document);
                                       
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<PAGE>

                                    - 14 -

          (d)  give, execute, deliver, file and/or record any financing 
     statement, notice, instrument, document, agreement or other papers that 
     may be necessary or desirable (in the judgment of the Administrative 
     Agent) to create, preserve, perfect or validate the security interest 
     granted pursuant hereto or to enable the Administrative Agent to 
     exercise and enforce its rights hereunder with respect to such pledge 
     and security interest, including, without limitation, causing any or all 
     of the Stock Collateral to be transferred of record into the name of the 
     Administrative Agent or its nominee (and the Administrative Agent agrees 
     that if any Stock Collateral is transferred into its name or the name of 
     its nominee, the Administrative Agent will thereafter promptly give to 
     the respective Securing Party copies of any notices and communications 
     received by it with respect to the Stock Collateral pledged by such 
     Securing Party hereunder), PROVIDED that notices to account debtors in 
     respect of any Accounts or Instruments shall be subject to the 
     provisions of clause (h) below;

          (e)  at any time during the continuance of an Event of Default, 
     upon request of the Administrative Agent, cause the Administrative Agent 
     to be listed as the lienholder on any certificate of title or ownership 
     covering any Motor Vehicle and within 120 days of such request deliver 
     evidence of the same to the Administrative Agent;

          (f)  keep full and accurate books and records relating to the 
     Collateral, and stamp or otherwise mark such books and records in such 
     manner as the Administrative Agent may reasonably require in order to 
     reflect the security interests granted by this Agreement;

          (g)  permit representatives of the Administrative Agent, upon 
     reasonable notice, at any time during normal business hours to inspect 
     and make abstracts from its books and records pertaining to the 
     Collateral, and permit representatives of the Administrative Agent to be 
     present at such Securing Party's place of business to receive copies of 
     all communications and remittances relating to the Collateral, and 
     forward copies of any notices or communications received by such 
     Securing Party with respect to the Collateral, all in such manner as the 
     Administrative Agent may require; and

          (h)  upon the occurrence and during the continuance of any Default, 
     upon request of the Administrative Agent, promptly notify (and such 
     Securing Party hereby authorizes the Administrative Agent so to notify) 
     each account debtor in respect of any Accounts or Instruments that such 
     Collateral has been assigned to the Administrative Agent hereunder, and 
     that any payments due or to become due in 

                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 15 -

     respect of such Collateral are to be made directly to the Administrative 
     Agent;

          (h)  furnish to the Administrative Agent from time to time (but, 
     unless a Default shall have occurred and be continuing, no more 
     frequently than quarterly) statements and schedules further identifying 
     and describing the Copyright Collateral, the Patent Collateral and the 
     Trademark Collateral, respectively, and such other reports in connection 
     with the Copyright Collateral, the Patent Collateral and the Trademark 
     Collateral, as the Administrative Agent may reasonably request, all in 
     reasonable detail;

          (i)  promptly upon request of the Administrative Agent, following 
     receipt by the Administrative Agent of any statements, schedules or 
     reports pursuant to clause (h) above, modify this Agreement by amending 
     Annexes 2, 3 and/or 4 hereto, as the case may be, to include any 
     Copyright, Patent or Trademark that becomes part of the Collateral under 
     this Agreement.

          5.02  OTHER FINANCING STATEMENTS AND LIENS.  Except as otherwise 
permitted under Section 9.06 of the Credit Agreement, without the prior 
written consent of the Administrative Agent (granted with the authorization 
of the Lenders as specified in Section 11.09 of the Credit Agreement), no 
Securing Party shall file or suffer to be on file, or authorize or permit to 
be filed or to be on file, in any jurisdiction, any financing statement or 
like instrument with respect to the Collateral in which the Administrative 
Agent is not named as the sole secured party for the benefit of the Lenders.

          5.03  PRESERVATION OF RIGHTS.  The Administrative Agent shall not 
be required to take steps necessary to preserve any rights against prior 
parties to any of the Collateral.

          5.04  SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.

          (a)  STOCK COLLATERAL AND PARTNERSHIP COLLATERAL.

          (i)  (x)  At all times that an Issuer is organized as a corporation 
under the laws of a jurisdiction other than the United States of America or a 
State thereof the relevant Securing Party will cause the Pledged Stock of 
such Issuer to constitute at all times 66% (in number of votes) of the total 
number of shares of each class of capital stock having ordinary voting power 
for the election of the board of directors of such Issuer then outstanding 
and 100% of the total number of shares of each class of all other capital 
stock of such Issuer then outstanding, (y) at all times that an Issuer is 
organized under the laws of 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 16 -

the United States of America or a State thereof the relevant Securing Party 
will cause the Pledged Stock to constitute at all times 100% of the total 
number of shares of each class of capital stock of the Issuer then 
outstanding and (z) at all times that an Issuer is organized under the laws 
of the United States or any State thereof and is owned by a Person not so 
organized, no such securities of such Issuer shall constitute Pledged Stock.

          (ii)  So long as no Event of Default shall have occurred and be 
continuing, the Securing Parties shall have the right to exercise all voting, 
consensual and other powers of ownership pertaining to the Stock Collateral 
and the Partnership Collateral for all purposes not inconsistent with the 
terms of this Agreement or any other Loan Document, PROVIDED that the 
Securing Parties jointly and severally agree that they will not vote the 
Stock Collateral or exercise any powers of ownership with respect to the 
Partner Collateral in any manner that is inconsistent with the terms of this 
Agreement or any other Loan Document; and the Administrative Agent shall 
execute and deliver to the Securing Parties or cause to be executed and 
delivered to the Securing Parties all such proxies, powers of attorney, 
dividend and other orders, and all such instruments, without recourse, as the 
Securing Parties may reasonably request for the purpose of enabling the 
Securing Parties to exercise the rights and powers that they are entitled to 
exercise pursuant to this Section 5.04(a)(ii).

          (iii)  If any Event of Default shall have occurred, then so long as 
such Event of Default shall continue, and whether or not the Administrative 
Agent or any Lender exercises any available right to declare any Secured 
Obligation due and payable or seeks or pursues any other relief or remedy 
available to it under applicable law or under this Agreement, the Credit 
Agreement or any other Loan Document relating to such Secured Obligation, all 
dividends and other distributions on the Stock Collateral and the Partnership 
Collateral shall be paid directly to the Administrative Agent and retained by 
it in the Collateral Account as part of the Stock Collateral or the 
Partnership Collateral, as the case may be, subject to the terms of this 
Agreement, and, if the Administrative Agent shall so request in writing, the 
Securing Parties jointly and severally agree to execute and deliver to the 
Administrative Agent appropriate additional dividend, distribution and other 
orders and documents to that end, PROVIDED that if such Event of Default is 
cured, any such dividend or distribution theretofore paid to the 
Administrative Agent shall, upon request of the Securing Parties (except to 
the extent theretofore applied to the Secured Obligations), be returned by 
the Administrative Agent to the Securing Parties.
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 17 -

          (b)  INTELLECTUAL PROPERTY.

          (i)  For the purpose of enabling the Administrative Agent to 
exercise rights and remedies under Section 5.05 hereof at such time as the 
Administrative Agent shall be lawfully entitled to exercise such rights and 
remedies, and for no other purpose, each Securing Party hereby grants to the 
Administrative Agent, to the extent assignable, an irrevocable, non-exclusive 
license (exercisable without payment of royalty or other compensation to such 
Securing Party) to use, assign, license or sublicense any of the Intellectual 
Property now owned or hereafter acquired by such Securing Party, wherever the 
same may be located, including in such license reasonable access to all media 
in which any of the licensed items may be recorded or stored and to all 
computer programs used for the compilation or printout thereof.

          (ii)  Notwithstanding anything contained herein to the contrary, 
but subject to the provisions of Section 9.05 of the Credit Agreement that 
limit the right of the Securing Parties to dispose of their property, so long 
as no Event of Default shall have occurred and be continuing, the Securing 
Parties will be permitted to exploit, use, enjoy, protect, license, 
sublicense, assign, sell, dispose of or take other actions with respect to 
the Intellectual Property in the ordinary course of the business of the 
Securing Parties.  In furtherance of the foregoing, unless an Event of 
Default shall have occurred and be continuing the Administrative Agent shall 
from time to time, upon the request of the respective Securing Party through 
the Borrower, execute and deliver any instruments, certificates or other 
documents, in the form so requested, that such Securing Party through the 
Borrower shall have certified are appropriate (in their judgment) to allow 
them to take any action permitted above (including relinquishment of the 
license provided pursuant to clause (i) immediately above as to any specific 
Intellectual Property).  Further, upon the payment in full of all of the 
Secured Obligations and cancellation or termination of the Commitments and 
Letter of Credit Liabilities or earlier expiration of this Agreement or 
release of the Collateral, the Administrative Agent shall grant back to the 
Securing Parties the license granted pursuant to clause (i) immediately 
above.  The exercise of rights and remedies under Section 5.05 hereof by the 
Administrative Agent shall not terminate the rights of the holders of any 
licenses or sublicenses theretofore granted by the Securing Parties in 
accordance with the first sentence of this clause (ii).
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 18 -

          (c)  Notwithstanding the provisions of Section 3 hereof, the grant 
of a security interest contained therein shall not extend to, and the 
Collateral shall not include, (I) any chattel paper and general intangibles 
or contract rights which are now or hereafter held by a Securing Party as 
licensee, lessee or otherwise, to the extent that (a) such chattel paper, 
general intangible or contract right is not assignable or capable of being 
encumbered as a matter of law or under the terms of the license, lease or 
other agreement applicable thereto (but solely to the extent that any such 
restriction shall be enforceable under applicable law), without the consent 
of the licensor or lessor or other applicable party thereto and (b) such 
consent has not been obtained; provided, however, that the Collateral shall 
extend to and include (i) any and all proceeds of such chattel paper, general 
intangible or contract right to the extent that the assignment or encumbering 
of such proceeds is not so restricted and (ii) upon any such licensor, lessor 
or other applicable party's consent with respect to any such otherwise 
excluded chattel paper, general intangible or contract right being obtained, 
such chattel paper, general intangible and contract right and any proceeds 
thereof that might theretofore have been excluded from such grant of security 
interest contained in Section 3 hereof and the Collateral.

          5.05  EVENTS OF DEFAULT, ETC.  During the period during which an 
Event of Default shall have occurred and be continuing:

          (a)  each Securing Party shall, at the request of the 
     Administrative Agent, assemble the Collateral owned by it at such place 
     or places, reasonably convenient to both the Administrative Agent and 
     such Securing Party, designated in its request;

          (b)  the Administrative Agent may make any reasonable compromise or 
     settlement deemed desirable with respect to any of the Collateral and 
     may extend the time of payment, arrange for payment in installments, or 
     otherwise modify the terms of, any of the Collateral;

          (c)  the Administrative Agent shall have all of the rights and 
     remedies with respect to the Collateral of a secured party under the 
     Uniform Commercial Code (whether or not said Code is in effect in the 
     jurisdiction where the rights and remedies are asserted) and such 
     additional rights and remedies to which a secured party is entitled 
     under the laws in effect in any jurisdiction where any rights and 
     remedies hereunder may be asserted, including, without limitation, the 
     right, to the maximum extent permitted by law, to exercise all voting, 
     consensual and other powers of ownership pertaining to the Collateral as 
     if the Administrative Agent were the sole and absolute owner 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 19 -

     thereof (and each Securing Party agrees to take all such action as may 
     be appropriate to give effect to such right);

          (d)  the Administrative Agent in its discretion may, in its name or 
     in the name of the Securing Parties or otherwise, demand, sue for, 
     collect or receive any money or property at any time payable or 
     receivable on account of or in exchange for any of the Collateral, but 
     shall be under no obligation to do so; and

          (e)  the Administrative Agent may, upon ten Business Days' prior 
     written notice to the Securing Parties of the time and place, with 
     respect to the Collateral or any part thereof that shall then be or 
     shall thereafter come into the possession, custody or control of the 
     Administrative Agent, the Lenders or any of their respective agents, 
     sell, lease, assign or otherwise dispose of all or any part of such 
     Collateral, at such place or places as the Administrative Agent deems 
     best, and for cash or for credit or for future delivery (without thereby 
     assuming any credit risk), at public or private sale, without demand of 
     performance or notice of intention to effect any such disposition or of 
     the time or place thereof (except such notice as is required above or by 
     applicable statute and cannot be waived), and the Administrative Agent 
     or any Lender or anyone else may be the purchaser, lessee, assignee or 
     recipient of any or all of the Collateral so disposed of at any public 
     sale (or, to the extent permitted by law, at any private sale) and 
     thereafter hold the same absolutely, free from any claim or right of 
     whatsoever kind, including any right or equity of redemption (statutory 
     or otherwise), of the Securing Parties, any such demand, notice and 
     right or equity being hereby expressly waived and released.  In the 
     event of any sale, assignment, or other disposition of any of the 
     Trademark Collateral, the goodwill connected with and symbolized by the 
     Trademark Collateral subject to such disposition shall be included and 
     the Securing Parties shall supply to the Administrative Agent or its 
     designee, for inclusion in such sale, assignment or other disposition, 
     all Intellectual Property relating to such Trademark Collateral.  The 
     Administrative Agent may, without notice or publication, adjourn any 
     public or private sale or cause the same to be adjourned from time to 
     time by announcement at the time and place fixed for the sale, and such 
     sale may be made at any time or place to which the sale may be so 
     adjourned.

The proceeds of each collection, sale or other disposition under this Section 
5.05, including by virtue of the exercise of the license granted to the 
Administrative Agent in Section 5.04(b) hereof, shall be applied in 
accordance with Section 5.09 hereof.
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 20 -

          The Securing Parties recognize that, by reason of certain 
prohibitions contained in the Securities Act of 1933, as amended, and 
applicable state securities laws, the Administrative Agent may be compelled, 
with respect to any sale of all or any part of the Collateral, to limit 
purchasers to those who will agree, among other things, to acquire the 
Collateral for their own account, for investment and not with a view to the 
distribution or resale thereof.  The Securing Parties acknowledge that any 
such private sales may be at prices and on terms less favorable to the 
Administrative Agent than those obtainable through a public sale without such 
restrictions, and, notwithstanding such circumstances, agree that any such 
private sale shall be deemed to have been made in a commercially reasonable 
manner and that the Administrative Agent shall have no obligation to engage 
in public sales and no obligation to delay the sale of any Collateral for the 
period of time necessary to permit the respective Issuer or issuer thereof to 
register it for public sale.

          5.06  DEFICIENCY.  If the proceeds of sale, collection or other 
realization of or upon the Collateral pursuant to Section 5.05 hereof are 
insufficient to cover the costs and expenses of such realization and the 
payment in full of the Secured Obligations, the Securing Parties shall remain 
liable for any deficiency (in the case of any Subsidiary Guarantor, subject 
to Section 6.09 of the Credit Agreement).

          5.07  REMOVALS, ETC.  Without at least 30 days' prior written 
notice to the Administrative Agent, no Securing Party shall (i) maintain any 
of its books and records with respect to the Collateral at any office or 
maintain its principal place of business at any place, or permit any 
Inventory or Equipment (except Inventory or Equipment leased in the ordinary 
course of business to third parties) to be located anywhere, other than at 
the address indicated beneath the signature of the Borrower to the Credit 
Agreement or at one of the locations identified in Annex 4 hereto under its 
name or in transit from one of such locations to another or (ii) change its 
name, or the name under which it does business, from the name shown on the 
signature pages hereto.

          5.08  PRIVATE SALE.  The Administrative Agent and the Lenders shall 
incur no liability as a result of the sale of the Collateral, or any part 
thereof, at any private sale pursuant to Section 5.05 hereof conducted in a 
commercially reasonable manner.  Each Securing Party hereby waives, to the 
extent permitted by applicable law, any claims against the Administrative 
Agent or any Lender arising by reason of the fact that the price at which the 
Collateral may have been sold at such a private sale was less than the price 
that might have been obtained at a public sale or was less than the aggregate 
amount of the Secured Obligations, even if the Administrative Agent 
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 21 -

accepts the first offer received and does not offer the Collateral to more 
than one offeree.

          5.09  APPLICATION OF PROCEEDS.  Except as otherwise herein 
expressly provided, and except as provided below in this Section 5.09, the 
proceeds of any collection, sale or other realization of all or any part of 
the Collateral pursuant hereto, and any other cash at the time held by the 
Administrative Agent under Section 4 hereof or this Section 5, shall be 
applied by the Administrative Agent:

          FIRST, to the payment of the costs and expenses of such collection, 
     sale or other realization, including reasonable out-of-pocket costs and 
     expenses of the Administrative Agent and the fees and expenses of its 
     agents and counsel, and all expenses incurred and advances made by the 
     Administrative Agent in connection therewith;

          NEXT, to the payment in full of the Secured Obligations, in each 
     case equally and ratably in accordance with the respective amounts 
     thereof then due and owing or as the Lenders holding the same may 
     otherwise agree; and

          FINALLY, to the payment to the respective Securing Party, or their 
     respective successors or assigns, or as a court of competent 
     jurisdiction may direct, of any surplus then remaining.

Notwithstanding the foregoing, the proceeds of any cash or other amounts held 
in the "Letter of Credit Liabilities Sub-Account" of the Collateral Account 
pursuant to Section 4.03 hereof shall be applied FIRST to the Letter of 
Credit Liabilities outstanding from time to time and SECOND to the other 
Secured Obligations in the manner provided above in this Section 5.09.

          As used in this Section 5, "PROCEEDS" of Collateral shall mean 
cash, securities and other property realized in respect of, and distributions 
in kind of, Collateral, including any thereof received under any 
reorganization, liquidation or adjustment of debt of the Securing Parties or 
any issuer of or obligor on any of the Collateral.

          5.10  ATTORNEY-IN-FACT.  Without limiting any rights or powers 
granted by this Agreement to the Administrative Agent while no Event of 
Default has occurred and is continuing, upon the occurrence and during the 
continuance of any Event of Default the Administrative Agent is hereby 
appointed the attorney-in-fact of each Securing Party for the purpose of 
carrying out the provisions of this Section 5 and taking any action and 
executing any instruments that the Administrative Agent may deem necessary or 
advisable to accomplish the purposes hereof, which appointment as 
attorney-in-fact is irrevocable and coupled with an interest.  
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 22 -

Without limiting the generality of the foregoing, so long as the 
Administrative Agent shall be entitled under this Section 5 to make 
collections in respect of the Collateral, the Administrative Agent shall have 
the right and power to receive, endorse and collect all checks made payable 
to the order of any Securing Party representing any dividend, payment or 
other distribution in respect of the Collateral or any part thereof and to 
give full discharge for the same.

          5.11  PERFECTION.  Prior to or concurrently with the execution and 
delivery of this Agreement, each Securing Party shall (i) file such financing 
statements and other documents in such offices as the Administrative Agent 
may request to perfect the security interests granted by Section 3 hereof, 
and (ii) deliver to the Administrative Agent all certificates identified in 
Annex 1 hereto, accompanied by undated stock powers duly executed in blank.

          5.12  TERMINATION.  When all Secured Obligations shall have been 
paid in full and the Commitments of the Lenders under the Credit Agreement 
and all Letter of Credit Liabilities shall have expired or been terminated, 
this Agreement shall terminate, and the Administrative Agent shall forthwith 
cause to be assigned, transferred and delivered, against receipt but without 
any recourse, warranty or representation whatsoever, any remaining Collateral 
and money received in respect thereof, to or on the order of the respective 
Securing Party and to be released and canceled all licenses and rights 
referred to in Section 5.04(b) hereof.  The Administrative Agent shall also 
execute and deliver to the respective Securing Party upon such termination 
such confirmation of termination of Liens (which shall be addressed to other 
potential lenders to a Securing Party) as may be requested by a Securing 
Party (acting through the Borrower), such Uniform Commercial Code termination 
statements, certificates for terminating the Liens on the Motor Vehicles and 
such other documentation as shall be reasonably requested by the respective 
Securing Party to effect the termination and release of the Liens on the 
Collateral.

          5.13  FURTHER ASSURANCES.  Each Securing Party agrees that, from 
time to time upon the written request of the Administrative Agent, such 
Securing Party will execute and deliver such further documents and do such 
other acts and things as the Administrative Agent may reasonably request in 
order fully to effect the purposes of this Agreement.
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 23 -

          Section 6.  MISCELLANEOUS.

          6.01  NO WAIVER.  No failure on the part of the Administrative 
Agent or any Lender to exercise, and no course of dealing with respect to, 
and no delay in exercising, any right, power or remedy hereunder shall 
operate as a waiver thereof; nor shall any single or partial exercise by the 
Administrative Agent or any Lender of any right, power or remedy hereunder 
preclude any other or further exercise thereof or the exercise of any other 
right, power or remedy. The remedies herein are cumulative and are not 
exclusive of any remedies provided by law.

          6.02  NOTICES.  All notices, requests, consents and demands 
hereunder shall be in writing and telecopied or delivered to the intended 
recipient at its "Address for Notices" specified pursuant to Section 12.02 of 
the Credit Agreement and shall be deemed to have been given at the times 
specified in said Section 12.02.

          6.03  EXPENSES.  The Securing Parties jointly and severally agree 
to reimburse each of the Lenders and the Administrative Agent for all 
reasonable costs and expenses of the Lenders and the Administrative Agent 
(including, without limitation, the reasonable fees and expenses of legal 
counsel) in connection with (i) any Default and any enforcement or collection 
proceeding resulting therefrom, including, without limitation, all manner of 
participation in or other involvement with (w) performance by the 
Administrative Agent of any obligations of the Securing Parties in respect of 
the Collateral that the Securing Parties have failed or refused to perform, 
(x) bankruptcy, insolvency, receivership, foreclosure, winding up or 
liquidation proceedings, or any actual or attempted sale, or any exchange, 
enforcement, collection, compromise or settlement in respect of any of the 
Collateral, and for the care of the Collateral and defending or asserting 
rights and claims of the Administrative Agent in respect thereof, by 
litigation or otherwise, including expenses of insurance, (y) judicial or 
regulatory proceedings and (z) workout, restructuring or other negotiations 
or proceedings (whether or not the workout, restructuring or transaction 
contemplated thereby is consummated) and (ii) the enforcement of this Section 
6.03, and all such costs and expenses shall be Secured Obligations entitled 
to the benefits of the collateral security provided pursuant to Section 3 
hereof.

          6.04  AMENDMENTS, ETC.  The terms of this Agreement may be waived, 
altered or amended only by an instrument in writing duly executed by each 
Securing Party and the Administrative Agent (with the consent of the Lenders 
as specified in Section 11.09 of the Credit Agreement).  Any such amendment 
or waiver shall be binding upon the Administrative Agent and each Lender, 
each holder of any of the Secured Obligations and each Securing Party.
                                       
                              SECURITY AGREEMENT
<PAGE>

                                    - 24 -

          6.05  SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon 
and inure to the benefit of the respective successors and assigns of each 
Securing Party, the Administrative Agent, the Lenders and each holder of any 
of the Secured Obligations (PROVIDED, however, that no Securing Party shall 
assign or transfer its rights hereunder without the prior written consent of 
the Administrative Agent).

          6.06  CAPTIONS.  The captions and section headings appearing herein 
are included solely for convenience of reference and are not intended to 
affect the interpretation of any provision of this Agreement.

          6.07  COUNTERPARTS.  This Agreement may be executed in any number 
of counterparts, all of which taken together shall constitute one and the 
same instrument and any of the parties hereto may execute this Agreement by 
signing any such counterpart.

          6.08  GOVERNING LAW.   This Agreement shall be governed by, and 
construed in accordance with, the law of the State of New York.

          6.09  AGENTS AND ATTORNEYS-IN-FACT.  The Administrative Agent may 
employ agents and attorneys-in-fact in connection herewith and shall not be 
responsible for the negligence or misconduct of any such agents or 
attorneys-in-fact selected by it in good faith.

          6.10  SEVERABILITY.  If any provision hereof is invalid and 
unenforceable in any jurisdiction, then, to the fullest extent permitted by 
law, (i) the other provisions hereof shall remain in full force and effect in 
such jurisdiction and shall be liberally construed in favor of the 
Administrative Agent and the Lenders in order to carry out the intentions of 
the parties hereto as nearly as may be possible and (ii) the invalidity or 
unenforceability of any provision hereof in any jurisdiction shall not affect 
the validity or enforceability of such provision in any other jurisdiction.

          6.11  ADDITIONAL SECURING PARTIES.   To the extent required by 
Section 9.15(a) of the Credit Agreement, new Subsidiaries formed or acquired 
by the Borrower or any of its Subsidiaries that shall constitute a 
"Subsidiary" under the Credit Agreement after the date hereof shall become a 
"Subsidiary Guarantor" under the Credit Agreement and a "Securing Party" 
under this Agreement, by executing and delivering to the Administrative Agent 
a Guarantee Assumption Agreement in the form of Exhibit E to the Credit 
Agreement.  Accordingly, upon the execution and delivery of any such 
Guarantee Assumption Agreement by any such new Subsidiary, such new 
Subsidiary shall 

                                       
                              SECURITY AGREEMENT
<PAGE>

                                  - 25 -

automatically and immediately, and without any further action on the part of 
any Person, become a "Securing Party" for all purposes of this Agreement, and 
each of Annex 1, 2, 3 and 4 hereto shall be deemed to be supplemented in the 
manner specified in said Guarantee Assumption Agreement.




                               SECURITY AGREEMENT
<PAGE>

                                   - 26 -

IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to 
be duly executed and delivered as of the day and year first above written.

                                     PANAVISION INC.



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


                                     SUBSIDIARY GUARANTORS

                                     PANAVISION INTERNATIONAL, L.P.


                                     By Panavision Inc.,
                                        its general partner


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


                                     KEEPCO I, INC.


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

                                     KEEPCO II, INC.


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


                                     PANAVISION U.K. HOLDINGS, INC.


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


                                     VICTOR DUNCAN, INC.


                                     By
                                       --------------------

                          SECURITY AGREEMENT
<PAGE>

                                    - 27 -

                                       Title:




                                     THE CHASE MANHATTAN BANK,
                                       as Administrative Agent


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



                           SECURITY AGREEMENT
<PAGE>




                                                                 ANNEX 1


                            PLEDGED STOCK

                      [See Section 2(b) and (c)]



[NAME OF SECURING PARTY]

              CERTIFICATE     REGISTERED
ISSUER            NOS.          OWNER         NUMBER OF SHARES
------        -----------     ----------      ----------------


                  [COMPLETE FOR EACH SECURING PARTY]




                    ANNEX 1 TO SECURITY AGREEMENT
<PAGE>





                                                           ANNEX 2


             LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS
             AND APPLICATIONS FOR COPYRIGHT REGISTRATIONS

                         [See Section 2(d)]







                     ANNEX 2 TO SECURITY AGREEMENT
<PAGE>



                                                           ANNEX 3

                 LIST OF PATENTS AND PATENT APPLICATIONS

                           [See Section 2(d)]





                      ANNEX 3 TO SECURITY AGREEMENT

<PAGE>





                                                               ANNEX 4




             LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
               TRADEMARK AND SERVICE MARK REGISTRATIONS AND
         APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONS


                           [See Section 2(d)]


[Complete for each Securing Party:]

[NAME OF SECURING PARTY]

                 Application (A)
                 Registration (R)        Registration
Mark             Or Serial No. (S)       Or Filing Date
-------------------------------------------------------





                       ANNEX 4 TO SECURITY AGREEMENT
<PAGE>








                                                           ANNEX 5




              LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS

                      [See Section 2(d), (e) and (f)]


[Complete for each Securing Party:]

[NAME OF SECURING PARTY]




                        ANNEX 3 TO SECURITY AGREEMENT
<PAGE>


                                                           ANNEX 6




                              LIST OF LOCATIONS

                              [See Section 5.07]


[Complete for each Securing Party:]

[NAME OF SECURING PARTY]







                         ANNEX 4 TO SECURITY AGREEMENT


<PAGE>
                                                                     EXHIBIT E
                                       
                    [Form of Guarantee Assumption Agreement]

                         GUARANTEE ASSUMPTION AGREEMENT


          GUARANTEE ASSUMPTION AGREEMENT dated as of ____________ __, 199_, 
by _______________________, a ______________ corporation (the "ADDITIONAL 
SUBSIDIARY GUARANTOR"), in favor of THE CHASE MANHATTAN BANK, as 
administrative agent for the lenders or other financial institutions or 
entities party, lenders, to the Credit Agreement referred to below (in such 
capacity together with its successors in such capacity, the "ADMINISTRATIVE 
AGENT").

          Panavision Inc., a Delaware corporation, the "Subsidiary 
Guarantors" referred to therein, certain lenders named therein (the 
"LENDERS"), and the Administrative Agent are parties to a Credit Agreement 
dated as of June 5, 1997 (as modified and supplemented and in effect from 
time to time, the "CREDIT AGREEMENT").

          Pursuant to Section 9.15(a) of the Credit Agreement, the Additional 
Subsidiary Guarantor hereby agrees to become a "Subsidiary Guarantor" for all 
purposes of the Credit Agreement, and a "Securing Party" for all purposes of 
the Security Agreement.  Without limiting the generality of the foregoing, 
the Additional Subsidiary Guarantor hereby, jointly and severally with the 
other Subsidiary Guarantors, guarantees to each Lender and the Administrative 
Agent and their respective successors and assigns the prompt payment in full 
when due (whether at stated maturity, by acceleration or otherwise) of all 
Guaranteed Obligations (as defined in Section 6.01 of the Credit Agreement) 
in the same manner and to the same extent as is provided in Section 6 of the 
Credit Agreement.  In addition, the Additional Subsidiary Guarantor hereby 
makes the representations and warranties set forth in Sections 8.01, 8.04, 
8.05 and 8.06 of the Credit Agreement, and in Section 2 of the Security 
Agreement, with respect to itself and its obligations under this Agreement 
(with any reference in said Sections to the Loan Documents being deemed to 
include a reference to this Agreement).  In addition, Annexes 1, 2, 3 and 4 
to the Security Agreement shall be deemed to be supplemented in respect of 
the Additional Subsidiary Guarantor as specified in Appendix A hereto.


                        ANNEX 4 TO SECURITY AGREEMENT
<PAGE>

                                     - 2 -

          IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused 
this Guarantee Assumption Agreement to be duly executed and delivered as of 
the day and year first above written.

                                       [ADDITIONAL SUBSIDIARY GUARANTOR]


                                       By_____________________________
                                          Title:


Accepted and Agreed:

THE CHASE MANHATTAN BANK,
  as Administrative Agent


By_________________________
  Title:






                                       
                        GUARANTEE ASSUMPTION AGREEMENT
<PAGE>


                                                                     APPENDIX A



Supplement to Annex 1:

     [To be completed]



Supplement to Annex 2:

     [To be completed]



Supplement to Annex 3:

     [To be completed]



Supplement to Annex 4:

     [To be completed]





                        GUARANTEE ASSUMPTION AGREEMENT
<PAGE>

                                                                     EXHIBIT F
                                       
                       [Form of Confidentiality Agreement]

                           CONFIDENTIALITY AGREEMENT


                                                         [Date]


[Insert Name and
  Address of Prospective
  Participant or Assignee]



          Re:  Credit Agreement dated as of June 5, 1997 (the "CREDIT
               AGREEMENT") between Panavision Inc. (the "BORROWER"), the
               Subsidiary Guarantors party thereto, the lenders party thereto
               and The Chase Manhattan Bank, as Administrative Agent.

Dear Ladies and Gentlemen:

          As a Lender party to the Credit Agreement, we have agreed with the 
Borrower pursuant to Section 12.12 of the Credit Agreement to use reasonable 
precautions to keep confidential, except as otherwise provided therein, all 
non-public information identified by the Borrower as being confidential at 
the time the same is delivered to us pursuant to the Credit Agreement.

          As provided in said Section 12.12, we are permitted to provide you, 
as a prospective [holder of a participation in the Loans (as defined in the 
Credit Agreement)] [assignee Lender], with certain of such non-public 
information subject to the execution and delivery by you, prior to receiving 
such non-public information, of a Confidentiality Agreement in this form.  
Such information will not be made available to you until your execution and 
return to us of this Confidentiality Agreement.

          Accordingly, in consideration of the foregoing, you agree (on 
behalf of yourself and each of your affiliates, directors, officers, 
employees and representatives and for the benefit of us and each Obligor) 
that (A) such information will not be used by you except in connection with 
the proposed [participation] [assignment] mentioned above and (B) you shall 
use reasonable precautions, in accordance with your customary procedures for 
handling confidential information and in accordance with safe and sound 
banking practices, to keep such information confidential, PROVIDED that 
nothing herein shall limit the disclosure of any such information (i) after 
such information shall have become public (other than through a violation of 
Section 12.12 of the Credit Agreement), (ii) to the 

                        GUARANTEE ASSUMPTION AGREEMENT
<PAGE>

                                     - 2 -

extent required by statute, rule, regulation or judicial process, (iii) to 
your counsel or to counsel for any of the Lenders or the Administrative 
Agent, (iv) to bank examiners (or any other regulatory authority having 
jurisdiction over you or any Lender or the Administrative Agent), or to 
auditors or accountants, (v) to the Administrative Agent or any other Lender 
(or to Chase Securities, Inc.), (vi) in connection with any litigation to 
which you or any one or more of the Lenders or the Administrative Agent are a 
party, or in connection with the enforcement of rights or remedies under the 
Credit Agreement or under any other Loan Document, (vii) to a subsidiary or 
affiliate of yours as provided in Section 12.12(a) of the Credit Agreement or 
(viii) to any assignee or participant (or prospective assignee or 
participant) so long as such assignee or participant (or prospective assignee 
or participant) first executes and delivers to you a Confidentiality 
Agreement substantially in the form hereof; PROVIDED, FURTHER, that in no 
event shall you be obligated to return any materials furnished to you 
pursuant to this Confidentiality Agreement.

          If you are a prospective assignee, your obligations under this 
Confidentiality Agreement shall be superseded by Section 12.12 of the Credit 
Agreement on the date upon which you become a Lender under the Credit 
Agreement pursuant to Section 12.06(b) thereof.

          Please indicate your agreement to the foregoing by signing as 
provided below the enclosed copy of this Confidentiality Agreement and 
returning the same to us.

                                       Very truly yours,


                                       [INSERT NAME OF LENDER]



                                       By_________________________


The foregoing is agreed to
as of the date of this letter.



[INSERT NAME OF PROSPECTIVE
 PARTICIPANT OR ASSIGNEE]


By_________________________


                                       
                           CONFIDENTIALITY AGREEMENT
<PAGE>

                                                                     EXHIBIT G
 
                       [Form of Assignment and Acceptance]

          Reference is made to the Credit Agreement dated as of June 5, 1997, 
as amended, supplemented or otherwise modified from time to time (the "CREDIT 
AGREEMENT"), among Panavision Inc. (the "BORROWER"), each of the subsidiary 
guarantors party thereto (each a "SUBSIDIARY GUARANTOR", and, collectively, 
the "SUBSIDIARY GUARANTORS" and, together with the Borrower, the "OBLIGORS"), 
each of the lenders party thereto (each a "LENDER", and, collectively, the 
"LENDERS"), and The Chase Manhattan Bank, as administrative agent for the 
Lenders (in such capacity, the "ADMINISTRATIVE AGENT").  Terms defined in the 
Credit Agreement are used herein with the same meanings.

          [__________] (the "ASSIGNOR") and [___________] (the "ASSIGNEE") 
agree as follows:

          1.   The Assignor hereby irrevocably sells and assigns to the 
Assignee without recourse to the Assignor, and the Assignee hereby 
irrevocably purchases and assumes from the Assignor without recourse to the 
Assignor, as of the Effective Date set forth in Schedule 1 hereto (the 
"EFFECTIVE DATE"), an interest (the "ASSIGNED INTEREST") in and to the 
Assignor's rights and obligations under the Credit Agreement with respect to 
those credit facilities contained in the Credit Agreement as set forth on 
Schedule 1 (individually, an "ASSIGNED FACILITY"; collectively, the "ASSIGNED 
FACILITIES"), in a principal amount and percentage for each Assigned Facility 
as set forth on Schedule 1.

          2.   The Assignor (i) makes no representation or warranty and 
assumes no responsibility with respect to any statements, warranties or 
representations made in or in connection with the Credit Agreement, the other 
Loan Documents or any other instrument or document furnished pursuant 
thereto, or the execution, legality, validity, enforceability, genuineness, 
sufficiency or value of the Credit Agreement, the other Loan Documents or any 
other instrument or document furnished pursuant thereto, other than that it 
has not created any adverse claim upon the interest being assigned by it 
hereunder and that such interest is free and clear of any adverse claim; (ii) 
makes no representation or warranty and assumes no responsibility with 
respect to the financial condition of the Borrower, any of its Subsidiaries 
or any other obligor or the performance or observance by the Borrower, any of 
its Subsidiaries or any other obligor of any of their respective obligations 
under the Credit Agreement, any other Loan Document or any other instrument 
or document or any other instrument or document furnished pursuant hereto or 
thereto; and (iii) attaches the promissory note(s), if 

                           CONFIDENTIALITY AGREEMENT
<PAGE>

                                    - 2 -

any, held by it evidencing the Assigned Facilities and requests that the 
Administrative Agent exchange such promissory note(s), if any, for a new 
promissory note or new promissory notes, as the case may be, payable to the 
Assignor (if the Assignor has retained any interest in the Assigned Facility) 
and a new promissory note or new promissory notes, as the case may be, 
payable to the Assignee in the respective amounts which reflect the 
assignment being made hereby (and after giving effect to any other 
assignments which have become effective on the Effective Date).

          3.  The Assignee (i) represents and warrants that it is legally 
authorized to enter into this Assignment and Acceptance; (ii) confirms that 
it has received a copy of the Credit Agreement, together with copies of the 
financial statements delivered pursuant to Sections [9.01(b) and (c)] 
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; (iii) agrees that it will, independently and 
without reliance upon the Assignor, the Administrative Agent or any other 
Lender and based on such documents and information as it shall deem 
appropriate at the time, continue to make its own credit decisions in taking 
or not taking action under the Credit Agreement, the other Loan Documents or 
any other instrument or document furnished pursuant hereto or thereto; (iv) 
appoints and authorizes the Administrative Agent to take such action as agent 
on its behalf and to exercise such powers under the Credit Agreement, the 
other Loan Documents or any other instrument or document furnished pursuant 
hereto or thereto as are delegated to the Administrative Agent by the terms 
thereof, together with such powers as are incidental thereto; and (v) agrees 
that it will be bound by the provisions of the Credit Agreement and will 
perform in accordance with its terms all the obligations which by the terms 
of the Credit Agreement are required to be performed by it as a Lender.

          4.  Following the execution of this Assignment and Acceptance, it 
will be delivered to the Administrative Agent for acceptance by it and 
recording by the Administrative Agent pursuant to Section 12.06(b) of the 
Credit Agreement, effective as of the Effective Date which date shall not, 
unless otherwise agreed to by the Administrative Agent, be earlier than five 
Business Days after the date of such acceptance and recording by the 
Administrative Agent and shall in no event be earlier than the date the 
information contained herein is recorded in the Register pursuant to Section 
12.06(b) of the Credit Agreement).

          5.  Upon such acceptance and recording, from and after the 
Effective Date, the Administrative Agent shall make all payments in respect 
of the Assigned Interest (including payments of principal, interest, fees and 
other amounts) to the Assignee 

                       FORM OF ASSIGNMENT AND ACCEPTANCE
<PAGE>

                                    - 3 -

whether such amounts have accrued prior to the Effective Date or accrue 
subsequent to the Effective Date.

          6.  From and after the Effective Date, (i) the Assignee shall be a 
party to the Credit Agreement and, to the extent provided in this Assignment 
and Acceptance, have the rights and obligations of a Lender thereunder and 
under the other Loan Documents and shall be bound by the provisions thereof 
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 Credit Agreement except as provided in Section 12.07 of the Credit 
Agreement.

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

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment 
and Acceptance to be executed on Schedule 1 hereto by their respective duly 
authorized officers.





                       FORM OF ASSIGNMENT AND ACCEPTANCE
<PAGE>

                                       

                                 Schedule 1 to
                          Assignment and Acceptance
            relating to the Credit Agreement, dated as of June 5, 1997,
                      among Panavision Inc., as Borrower,
            the Lenders named therein and The Chase Manhattan Bank,
                   as administrative agent for the Lenders
                (in such capacity, the "Administrative Agent")


Name of Assignor:  _______________

Name of Assignee:  _______________

Effective Date of
Assignment:       _______________



                         Principal Amount           Percentage of
Assigned Facility            Assigned            Aggregate Commitment
-----------------        ----------------        --------------------










[ASSIGNOR]                   [ASSIGNEE]


By_______________________         By________________________
  Title:                            Title:





                       FORM OF ASSIGNMENT AND ACCEPTANCE
<PAGE>

                                    - 2 -

[Consented to and] Accepted:

THE CHASE MANHATTAN BANK,
  as Administrative Agent


By_________________________
   Title:


[Consented to:

PANAVISION INC.(1)


By_________________________
   Title:]


[Consented to:

THE CHASE MANHATTAN BANK,(2)
  as Issuing Lender


By_________________________
   Title:]








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

(1)   If required by 12.06(b) of the Credit Agreement. 

(2)   If required by 12.06(b) of the Credit Agreement.


                       FORM OF ASSIGNMENT AND ACCEPTANCE