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                                CREDIT AGREEMENT


                                      among


                          OMNIQUIP INTERNATIONAL, INC.,


                          VARIOUS LENDING INSTITUTIONS,


                      MORGAN STANLEY SENIOR FUNDING, INC.,
                      as Syndication Agent and Co-Arranger,


                       FIRST UNION CAPITAL MARKETS CORP.,
                                 as Co-Arranger,


                                       and


                          FIRST UNION INVESTORS, INC.,
                             as Administrative Agent


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

                           Dated as of August 4, 1999

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

                                 $25,821,762.94



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<PAGE>


                                TABLE OF CONTENTS
                                -----------------

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                                                                            ----

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

     1.01 The Commitments......................................................1
     1.02 Minimum Amount of Each Borrowing.....................................1
     1.03 Notice of Borrowing..................................................1
     1.04 Disbursement of Funds................................................2
     1.05 Notes................................................................3
     1.06 Conversions..........................................................3
     1.07 Pro Rata Borrowings..................................................3
     1.08 Interest.............................................................4
     1.09 Interest Periods.....................................................4
     1.10 Increased Costs, Illegality, etc. ...................................5
     1.11 Breakage.............................................................7
     1.12 Change of Lending Office.............................................8
     1.13 Replacement of Banks.................................................8

SECTION 2. Commitment Commission; Fees; Reductions of Commitment...............9

     2.01 Fees.................................................................9
     2.02 Voluntary Termination of Unutilized Commitments......................9
     2.03 Mandatory Reduction of Commitments...................................9

SECTION 3. Prepayments; Payments; Taxes.......................................10

     3.01 Voluntary Prepayments...............................................10
     3.02 Mandatory Repayments and Commitment Reductions......................11
     3.03 Method and Place of Payment.........................................13
     3.04 Net Payments........................................................13

SECTION 4. Conditions Precedent...............................................15

     4.01 Execution of Agreement; Notes.......................................15
     4.02 Officer's Certificate...............................................15
     4.03 Opinions of Counsel.................................................15
     4.04 Corporate Documents; Proceedings, etc. .............................16
     4.05 Adverse Change, etc. ...............................................16
     4.06 Litigation..........................................................16
     4.07 Amended and Restated Pledge Agreement...............................16
     4.08 Amended and Restated Security Agreement.............................17
     4.09 Subsidiaries Guaranty...............................................17
     4.10 Amended and Restated Mortgages; Title Insurance, etc. ..............17
     4.11 Solvency Certificate................................................17


                                      (i)

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                                                                            Page
                                                                            ----

     4.12 Fees, etc. .........................................................18
     4.13 Non-U.S. Assets; Financial Statements...............................18

SECTION 5. Conditions Precedent to All Credit Events..........................18

     5.01 No Default; Representations and Warranties..........................18
     5.02 Notice of Borrowing.................................................18
     5.03 Total Unutilized Revolving Loan Commitment Under the Existing
          Credit Agreement....................................................18

SECTION 6. Representations, Warranties and Agreements.........................19

     6.01 Corporate and Other Status..........................................19
     6.02 Corporate and Other Power and Authority.............................19
     6.03 No Violation........................................................19
     6.04 Approvals...........................................................20
     6.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
          Projections, etc. ..................................................20
     6.06 Litigation..........................................................21
     6.07 True and Complete Disclosure........................................21
     6.08 Use of Proceeds; Margin Regulations.................................21
     6.09 Tax Returns and Payments............................................21
     6.10 Compliance with ERISA...............................................22
     6.11 The Security Documents..............................................23
     6.12 Properties..........................................................24
     6.13 Capitalization......................................................24
     6.14 Subsidiaries........................................................25
     6.15 Compliance with Statutes, etc. .....................................25
     6.16 Investment Company Act..............................................25
     6.17 Public Utility Holding Company Act .................................25
     6.18 Environmental Matters...............................................25
     6.19 Labor Relations.....................................................26
     6.20 Patents, Licenses, Franchises and Formulas..........................26
     6.21 Indebtedness........................................................26

SECTION 7. Affirmative Covenants..............................................27

     7.01 Incorporation by Reference..........................................27
     7.02 Additional Information Covenants....................................27

SECTION 8. Negative Covenants.................................................27

     8.01 Incorporation by Reference..........................................27
     8.02 Bank Accounts.......................................................28

SECTION 9. Events of Default..................................................28

     9.01 Payments............................................................28
     9.02 Representations, etc. ..............................................28


                                      (ii)

<PAGE>

                                                                            Page
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     9.03 Covenants...........................................................28
     9.04 Default Under Other Agreements......................................28
     9.05 Bankruptcy, etc. ...................................................28
     9.06 ERISA...............................................................29
     9.07 Security Documents..................................................29
     9.08 Subsidiaries Guaranty...............................................30
     9.09 Judgments...........................................................30
     9.10 Change of Control...................................................30

SECTION 10. Definitions and Accounting Terms..................................30

     10.01 Defined Terms......................................................30

SECTION 11. The Administrative Agent and the Syndication Agent................49

     11.01 Appointment........................................................49
     11.02 Nature of Duties...................................................50
     11.03 Lack of Reliance on the Administrative agent and the Syndication
           Agent..............................................................50
     11.04 Certain Rights of the Agents.......................................50
     11.05 Reliance...........................................................51
     11.06 Indemnification....................................................51
     11.07 The Administrative Agent and the Syndication Agent in Their
           Individual Capacity................................................51
     11.08 Holders............................................................51
     11.09 Resignation by the Administrative Agent and the Syndication Agent..52

SECTION 12. Miscellaneous.....................................................52

     12.01 Payment of Expenses, etc. .........................................52
     12.02 Right of Setoff....................................................53
     12.03 Notices............................................................54
     12.04 Benefit of Agreement; Assignments; Participations..................54
     12.05 No Waiver; Remedies Cumulative.....................................56
     12.06 Payments Pro Rata..................................................56
     12.07 Calculations; Computations; Accounting Terms.......................57
     12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
           WAIVER OF JURY TRIAL...............................................57
     12.09 Counterparts.......................................................58
     12.10 Effectiveness......................................................58
     12.11 Headings Descriptive...............................................58
     12.12 Amendment or Waiver, etc. .........................................58
     12.13 Survival...........................................................59
     12.14 Domicile of Loans..................................................59
     12.15 Register...........................................................60
     12.16 Confidentiality....................................................60
     12.17 Limitation on Increased Costs......................................61


                                     (iii)

<PAGE>

                                                                            Page
                                                                            ----

         SCHEDULE I          Commitments
         SCHEDULE II         Bank Addresses
         SCHEDULE III        Real Property
         SCHEDULE IV         Non-U.S. Assets
         SCHEDULE V          Subsidiaries
         SCHEDULE VI         Existing Indebtedness
         SCHEDULE VII        Projections


         EXHIBIT A           Notice of Borrowing
         EXHIBIT B           Form of Note
         EXHIBIT C           Section 4.04(b)(ii) Certificate
         EXHIBIT D           Opinion of Dickstein, Shapiro, Morin &
                             Oshinsky LLP, counsel to the Credit Parties
         EXHIBIT E           Officers' Certificate
         EXHIBIT F           Form of Amended and Restated Pledge Agreement
         EXHIBIT G           Form of Amended and Restated Security Agreement
         EXHIBIT H           Form of Subsidiaries Guaranty
         EXHIBIT I           Solvency Certificate
         EXHIBIT J           Assignment and Assumption Agreement
         EXHIBIT K           Notice of Account Designation






                                      (iv)

<PAGE>

                  CREDIT  AGREEMENT,  dated as of August 4, 1999, among OMNIQUIP
INTERNATIONAL,  INC., a Delaware  corporation (the "Borrower"),  the Banks party
hereto from time to time,  MORGAN STANLEY SENIOR  FUNDING,  INC., as Syndication
Agent and  Co-Arranger,  First Union Capital  Markets Corp.,  as Co-Arranger and
FIRST UNION INVESTORS, INC., as Administrative Agent (all capitalized terms used
herein and defined in Section 10 are used herein as therein defined).


                              W I T N E S S E T H :
                              - - - - - - - - - - -

                  WHEREAS,  subject to and upon the terms and conditions  herein
set forth,  the Banks are willing to make  available  to the Borrower the credit
facility provided for herein;


                  NOW, THEREFORE, IT IS AGREED:

                  SECTION 1. Amount and Terms of Credit.

                  1.01  The  Commitments.  Subject  to and upon  the  terms  and
conditions set forth herein,  each Bank severally  agrees,  at any time and from
time to time on and after the Effective  Date and prior to the Maturity Date, to
make a revolving loan or revolving loans (each a "Loan" and,  collectively,  the
"Loans") to the Borrower,  which Loans (i) shall, at the option of the Borrower,
be  incurred  and  maintained  as,  and/or  converted  into,  Base Rate Loans or
Eurodollar  Loans,  provided that except as otherwise  specifically  provided in
Section  1.10(b),  all Loans comprising the same Borrowing shall at all times be
of the same  Type,  (ii) may be repaid and  reborrowed  in  accordance  with the
provisions  hereof  and  (iii)  shall not  exceed  for any such Bank at any time
outstanding that aggregate  principal amount which equals the Commitment of such
Bank at such time.

                  1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each  Borrowing of Loans shall not be less than the Minimum  Borrowing
Amount and, if greater,  shall be in integral  multiples of $100,000.  More than
one  Borrowing  may  occur  on the  same  date,  but at no time  shall  there be
outstanding more than eight Borrowings of Eurodollar Loans.

                  1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
incur Loans hereunder,  the Borrower shall give the Administrative  Agent at its
Notice  Office at least one  Business  Day's prior notice of each Base Rate Loan
and at least three  Business  Days' prior notice of each  Eurodollar  Loan to be
incurred  hereunder,  provided that any such notice shall be deemed to have been
given on a certain day only if given  before 12:00 Noon  (Eastern  time) on such
day.  Each such  notice  (each a "Notice  of  Borrowing"),  except as  otherwise
expressly  provided in Section 1.10,  shall be irrevocable and shall be given by
the Borrower in writing,  or by telephone promptly confirmed in writing,  in the
form of Exhibit A,  appropriately  completed to specify the aggregate  principal
amount of the Loans to be incurred pursuant to such Borrowing,  the date of such
Borrowing  (which shall be a Business Day) and whether the Loans being  incurred
pursuant to such Borrowing are to be initially  maintained as Base Rate Loans or
Eurodollar  Loans and, if Eurodollar  Loans,  the initial  Interest Period to be
applicable thereto. The Administrative Agent

<PAGE>

shall promptly give each Bank notice of such proposed Borrowing,  of such Bank's
proportionate share thereof and of the other matters required by the immediately
preceding sentence to be specified in the Notice of Borrowing.

                  (b) Without in any way limiting the obligation of the Borrower
to confirm in writing any  telephonic  notice of any  Borrowing or prepayment of
Loans,  the  Administrative  Agent may act without  liability  upon the basis of
telephonic   notice  of  such   Borrowing   or   prepayment,   believed  by  the
Administrative  Agent in good faith to be from the Chief Executive Officer,  the
President,  the  Vice  President-Finance,   the  Chief  Financial  Officer,  the
Treasurer,  any Assistant  Treasurer or the Controller of the Borrower,  or from
any other  authorized  person  of the  Borrower  designated  in  writing  by the
Borrower to the  Administrative  Agent as being authorized to give such notices,
prior to receipt of written confirmation. In each such case, the Borrower hereby
waives the right,  absent manifest error, to dispute the Administrative  Agent's
record of the terms of such telephonic notice of such Borrowing or prepayment of
Loans.

                  1.04  Disbursement of Funds. No later than 12:00 Noon (Eastern
time) on the date  specified  in each Notice of  Borrowing,  each Bank will make
available its pro rata portion  (determined in accordance  with Section 1.07) of
each such Borrowing  requested to be made on such date. All such amounts will be
made  available  in Dollars and in  immediately  available  funds at the Payment
Office of the  Administrative  Agent,  and the  Administrative  Agent  will make
available to the Borrower at the Payment  Office the aggregate of the amounts so
made  available  by the Banks by  delivery  of such  amounts  to the  Borrower's
Account.  Unless the  Administrative  Agent shall have been notified by any Bank
prior to the date of Borrowing  that such Bank does not intend to make available
to the  Administrative  Agent such Bank's portion of any Borrowing to be made on
such date,  the  Administrative  Agent may  assume  that such Bank has made such
amount available to the  Administrative  Agent on such date of Borrowing and the
Administrative  Agent may (but shall not be obligated to), in reliance upon such
assumption,  make  available to the  Borrower a  corresponding  amount.  If such
corresponding  amount is not in fact made available to the Administrative  Agent
by such Bank,  the  Administrative  Agent  shall be  entitled  to  recover  such
corresponding  amount on demand  from such Bank.  If such Bank does not pay such
corresponding amount forthwith upon the Administrative  Agent's demand therefor,
the  Administrative  Agent shall  promptly  notify the Borrower and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative  Agent shall also be entitled to recover on demand from such Bank
or the Borrower,  as the case may be, interest on such  corresponding  amount in
respect of each day from the date such  corresponding  amount was made available
by the  Administrative  Agent to the Borrower until the date such  corresponding
amount is recovered by the  Administrative  Agent,  at a rate per annum equal to
(i) if recovered  from such Bank, the Federal Funds Rate for each day during the
period  consisting  of the first  three  Business  Days  following  such date of
availability  and thereafter at the Base Rate as in effect from time to time and
(ii) if recovered  from the  Borrower,  the rate of interest  applicable  to the
respective  Borrowing,  as determined  pursuant to Section 1.08. Nothing in this
Section  1.04 shall be deemed to relieve  any Bank from its  obligation  to make
Loans  hereunder or to prejudice  any rights which the Borrower may have against
any Bank as a result of any failure by such Bank to make Loans hereunder.

                                      -2-

<PAGE>

                  1.05 Notes. (a) The Borrower's obligation to pay the principal
of,  and  interest  on,  the Loans  made by each Bank  shall be  evidenced  by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B, with blanks  appropriately  completed in conformity  herewith
(each a "Note" and, collectively, the "Notes").

                  (b) The Note  issued to each Bank shall (i) be executed by the
Borrower,  (ii) be payable to such Bank or its  registered  assigns and be dated
the Effective Date (or, if issued after the Effective Date, be dated the date of
the  issuance  thereof),  (iii) be in a  stated  principal  amount  equal to the
Commitment of such Bank (or, if issued after the  termination  thereof,  be in a
stated  principal  amount  equal to the  outstanding  Loans of such Bank at such
time) and be payable in the outstanding  principal amount of the Loans evidenced
thereby,  (iv) mature on the Maturity Date, (v) bear interest as provided in the
appropriate  clause  of  Section  1.08 in  respect  of the Base  Rate  Loans and
Eurodollar  Loans,  as the case may be,  evidenced  thereby,  (vi) be subject to
voluntary  prepayment  as provided in Section  3.01 and  mandatory  repayment as
provided in Section 3.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.

                  (c) Each Bank will note on its internal  records the amount of
each Loan made by it and each  payment in respect  thereof and will prior to any
transfer  of its Note  endorse  on the  reverse  side  thereof  the  outstanding
principal amount of Loans evidenced  thereby.  Failure to make any such notation
or any error in such notation  shall not affect the  Borrower's  obligations  in
respect of such Loans.

                  1.06  Conversions.  The  Borrower  shall  have the  option  to
convert,  on any Business  Day  occurring  after the  Effective  Date,  all or a
portion  equal to at least  the  Minimum  Borrowing  Amount  of the  outstanding
principal amount of Loans made pursuant to one or more Borrowings of one or more
Types of Loans into a Borrowing  of another  Type of Loan,  provided  that,  (i)
except  as  otherwise  provided  in  Section  1.10(b),  Eurodollar  Loans may be
converted  into  Base  Rate  Loans  only on the last day of an  Interest  Period
applicable  to the Loans  being  converted  and no such  partial  conversion  of
Eurodollar  Loans  shall  reduce  the  outstanding   principal  amount  of  such
Eurodollar  Loans made  pursuant to a single  Borrowing to less than the Minimum
Borrowing  Amount  applicable  thereto  and (ii)  Base  Rate  Loans  may only be
converted  into  Eurodollar  Loans  if no  Default  or Event  of  Default  is in
existence on the date of the conversion.  Each such conversion shall be effected
by the Borrower by giving the Administrative Agent at its Notice Office prior to
12:00 Noon  (Eastern  time) at least three  Business  Days' prior notice (each a
"Notice of Conversion")  specifying the Loans to be so converted,  the Borrowing
or  Borrowings  pursuant to which such Loans were made and,  if to be  converted
into Eurodollar Loans, the Interest Period to be initially  applicable  thereto.
The Administrative Agent shall give each Bank prompt notice of any such proposed
conversion  affecting any of its Loans.  Upon any such  conversion  the proceeds
thereof will be deemed to be applied  directly on the day of such  conversion to
prepay the outstanding principal amount of the Loans being converted.

                  1.07 Pro Rata  Borrowings.  All Borrowings of Loans under this
Agreement  shall be  incurred  from  the  Banks  pro rata on the  basis of their
Commitments.  No Bank shall be responsible  for any default by any other Bank of
its obligation to make Loans  hereunder and each Bank shall be obligated to make
the Loans provided to be made by it hereunder,  regardless of the failure of any
other Bank to make its Loans hereunder.

                                      -3-

<PAGE>

                  1.08  Interest.  (a) The  Borrower  agrees to pay  interest in
respect of the unpaid  principal amount of each Base Rate Loan from the date the
proceeds thereof are made available to the Borrower until the earlier of (i) the
maturity  thereof (whether by acceleration or otherwise) and (ii) the conversion
of such Base Rate Loan into a Eurodollar  Loan  pursuant to Section  1.06,  at a
rate per  annum  which  shall be equal to the sum of the  Applicable  Base  Rate
Margin plus the Base Rate in effect from time to time.

                  (b) The  Borrower  agrees to pay  interest  in  respect of the
unpaid  principal  amount of each  Eurodollar  Loan  from the date the  proceeds
thereof are made available to the Borrower until the earlier of (i) the maturity
thereof  (whether by  acceleration or otherwise) and (ii) the conversion of such
Eurodollar Loan into a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10, as
applicable,  at a rate per  annum  which  shall,  during  each  Interest  Period
applicable thereto, be equal to the sum of the Applicable Eurodollar Margin plus
the Eurodollar Rate for such Interest Period.

                  (c) Overdue  principal  and, to the extent  permitted  by law,
overdue  interest in respect of each Loan and any other overdue  amount  payable
hereunder shall, in each case, bear interest at a rate per annum equal to 2% per
annum in excess of the rate otherwise applicable to Base Rate Loans from time to
time,  provided that at no time shall any Loan bear interest after maturity at a
rate per annum which is less than 2% in excess of the rate applicable thereto at
maturity  without the  application  of the preceding  provisions of this Section
1.08(c), with such interest to be payable on demand.

                  (d) Accrued (and theretofore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan,  quarterly  in arrears on each  Quarterly
Payment Date, (ii) in respect of each  Eurodollar  Loan, on the last day of each
Interest  Period  applicable  thereto and (iii) in respect of each Loan,  on any
repayment or prepayment (on the amount repaid or prepaid),  at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.

                  (e) Upon each Interest  Determination Date, the Administrative
Agent shall determine the Eurodollar Rate for each Interest Period applicable to
Eurodollar  Loans and shall promptly  notify the Borrower and the Banks thereof.
Each such  determination  shall,  absent manifest error, be final and conclusive
and binding on all parties hereto.

                  1.09  Interest  Periods.  At the time it gives  any  Notice of
Borrowing  or Notice of  Conversion  in respect of the making of, or  conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or on the third  Business  Day prior to the  expiration  of an Interest
Period  applicable  to  such  Eurodollar  Loan  (in the  case of any  subsequent
Interest  Period),  the  Borrower  shall have the right to elect,  by giving the
Administrative  Agent notice  thereof,  the  interest  period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, two or three-month period, provided that:

                    (i) all Eurodollar Loans comprising a Borrowing shall at all
     times have the same Interest Period;

                                      -4-

<PAGE>
                    (ii) the initial  Interest  Period for any  Eurodollar  Loan
     shall commence on the date of Borrowing of such  Eurodollar Loan (including
     the date of any  conversion  thereto  from a Loan of a different  Type) and
     each Interest  Period  occurring  thereafter in respect of such  Eurodollar
     Loan shall commence on the day on which the immediately  preceding Interest
     Period applicable thereto expires;

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

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

                    (v) no  Interest  Period may be  selected at any time when a
     Default or an Event of Default is then in existence; and

                    (vi) no Interest Period in respect of any Borrowing of Loans
     shall be selected which extends beyond the Maturity Date.

                  If upon the expiration of any Interest Period  applicable to a
Borrowing of  Eurodollar  Loans,  the  Borrower  has failed to elect,  or is not
permitted to elect,  a new Interest  Period to be applicable to such  Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to convert
such  Eurodollar  Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.

                  1.10 Increased Costs,  Illegality,  etc. In the event that any
Bank shall have determined (which determination shall, absent manifest error, be
final and  conclusive  and binding upon all parties  hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):

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

                    (ii) at any time, that such Bank shall incur increased costs
     or reductions in the amounts received or receivable  hereunder with respect
     to any  Eurodollar  Loan  because of (x) any change  since the date of this
     Agreement in any applicable law or governmental  rule,  regulation,  order,
     guideline  or  request  (whether  or not having the force of law) or in the
     interpretation or administration  thereof and including the introduction of
     any new law or governmental rule, regulation,  order, guideline or request,
     such as,  for  example,  but not  limited  to: (A) a change in the basis of
     taxation  of payment to any Bank

                                      -5-

<PAGE>

     of the principal of or interest on the Notes or any other  amounts  payable
     hereunder  (except  for  changes  in the rate of tax on, or  determined  by
     reference to, the net income or profits of such Bank or any change in a tax
     imposed  solely on deposits or net assets of a Bank,  in each case pursuant
     to the laws of the  jurisdiction  in which it is  organized or in which its
     principal office or applicable lending office is located or any subdivision
     thereof or therein) or (B) a change in official reserve requirements,  but,
     in all events, excluding reserves required under Regulation D to the extent
     included  in the  computation  of the  Eurodollar  Rate  and/or  (y)  other
     circumstances  since  the  date of this  Agreement  affecting  the New York
     interbank Eurodollar market; or

                    (iii) at any time,  that the  making or  continuance  of any
     Eurodollar Loan has been made (x) unlawful by any law or governmental rule,
     regulation or order, (y) impossible by compliance by any Bank in good faith
     with any  governmental  request (whether or not having force of law) or (z)
     impracticable as a result of a contingency occurring after the date of this
     Agreement which materially and adversely  affects the interbank  Eurodollar
     market;

then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone promptly confirmed
in writing) to the Borrower and,  except in the case of clause (i) above, to the
Administrative  Agent of such  determination  (which  notice the  Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the
case of clause (i) above,  Eurodollar  Loans shall no longer be available  until
such time as the  Administrative  Agent notifies the Borrower and the Banks that
the  circumstances  giving  rise to such notice by the  Administrative  Agent no
longer exist,  and any Notice of Borrowing or Notice of Conversion  given by the
Borrower  with  respect to  Eurodollar  Loans  which have not yet been  incurred
(including by way of conversion) shall be deemed rescinded by the Borrower,  (y)
in the case of clause (ii) above, the Borrower shall,  subject to the provisions
of this Section  1.10(a) and Section  12.17 (to the extent  applicable),  pay to
such Bank,  within ten Business Days after such Bank's written request  therefor
and the delivery to the Borrower of the written notice  described  below in this
clause (y), such  additional  amounts (in the form of an increased rate of, or a
different method of calculating,  interest or otherwise as such Bank in its sole
discretion  shall determine (but without  duplication of any amounts that may be
payable to such Bank under  Section  1.10(c)) as shall be required to compensate
such  Bank for such  increased  costs  or  reductions  in  amounts  received  or
receivable hereunder reasonably determined by such Bank in good faith (a written
notice as to the  additional  amounts owed to such Bank,  showing in  reasonable
detail the basis for the calculation thereof,  submitted to the Borrower by such
Bank shall,  absent  manifest  error, be final and conclusive and binding on all
the parties  hereto) and (z) in the case of clause  (iii)  above,  the  Borrower
shall take one of the  actions  specified  in Section  1.10(b)  as  promptly  as
possible and, in any event, within the time period required by law.

                  (b) At any time that any  Eurodollar  Loan is  affected by the
circumstances  described in Section  1.10(a)(ii) or (iii), the Borrower may (and
in the case of a  Eurodollar  Loan  affected by the  circumstances  described in
Section  1.10(a)(iii)  shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion,  by giving the  Administrative
Agent telephonic notice (confirmed in writing) as promptly as practicable and in
any event  within one Business Day after the date that the Borrower was notified
by the affected Bank or the Administrative Agent pursuant to Section 1.10(a)(ii)
or (iii) or (y) if the affected

                                      -6-

<PAGE>

Eurodollar Loan is then outstanding,  upon at least three Business Days' written
notice to the  Administrative  Agent,  require the affected Bank to convert such
Eurodollar  Loan into a Base Rate Loan,  provided that, if more than one Bank is
affected at any time,  then all affected Banks must be treated the same pursuant
to this Section 1.10(b).

                  (c)  If  at  any  time  after  the  Effective  Date  any  Bank
determines that the introduction of or any change (which  introduction or change
shall  have  occurred  after  the  Effective  Date)  in  any  applicable  law or
governmental rule, regulation,  order, guideline,  directive or request (whether
or not having the force of law) concerning  capital  adequacy,  or any change in
interpretation or administration thereof by any governmental authority,  central
bank,  the NAIC or comparable  agency,  will have the effect of  increasing  the
amount of capital  required  or expected  to be  maintained  by such Bank or any
corporation  controlling  such  Bank  based  on the  existence  of  such  Bank's
Commitments  hereunder or its  obligations  hereunder,  then the Borrower shall,
subject to the  provisions  of this  Section  1.10(c) and Section  12.17 (to the
extent applicable), pay to such Bank, within ten Business Days after its written
demand therefor, such additional amounts as shall be required to compensate such
Bank or such other corporation for the increased cost to such Bank or such other
corporation  or the  reduction  in the rate of return to such Bank or such other
corporation as a result of such increase of capital (but without  duplication of
any  amounts  that may be  payable  to such  Bank  under  Section  1.10(a)).  In
determining such additional  amounts,  each Bank will act reasonably and in good
faith and will use  averaging  and  attribution  methods  which are  reasonable,
provided that such Bank's determination of compensation owing under this Section
1.10(c) shall, absent manifest error, be final and conclusive and binding on all
the parties hereto. Each Bank, upon determining that any additional amounts will
be payable  pursuant to this Section  1.10(c),  will give prompt  written notice
thereof to the Borrower,  which notice shall  describe in reasonable  detail the
introduction  of or change in applicable law or governmental  rule,  regulation,
order,   guideline,   directive  or  request  or  change  in  interpretation  or
administration and the basis for calculation of such additional amounts.

                  1.11 Breakage. The Borrower shall compensate each Bank, within
ten Business Days after its written  request  (which  request shall set forth in
reasonable  detail  the  basis  for  requesting  such  compensation),   for  all
reasonable losses, expenses and liabilities (including,  without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds  required by such Bank to fund its  Eurodollar  Loans
but excluding loss of anticipated  profits) which such Bank may sustain:  (i) if
for any reason (other than a default by such Bank or the Administrative Agent) a
Borrowing of, or conversion from or into,  Eurodollar  Loans does not occur on a
date  specified  therefor  in a Notice of  Borrowing  or  Notice  of  Conversion
(whether  or not  withdrawn  by the  Borrower  or deemed  withdrawn  pursuant to
Section 1.10(a));  (ii) if any repayment  (including any repayment made pursuant
to Section 3.01 or 3.02 or as a result of an  acceleration of the Loans pursuant
to Section 9) or  conversion  of any of its  Eurodollar  Loans  occurs on a date
which is not the last day of an Interest Period with respect  thereto;  (iii) if
any prepayment of any of its Eurodollar  Loans is not made on any date specified
in a notice of prepayment given by the Borrower; or (iv) as a consequence of (x)
any other  default by the Borrower to repay its Loans when required by the terms
of  this  Agreement  or any  Note  held by such  Bank or (y) any  election  made
pursuant to Section  1.10(b).  Each Bank agrees to use  commercially  reasonable
efforts to minimize  its losses,  expenses  and  liabilities  described  in this
Section 1.11.

                                      -7-

<PAGE>

                  1.12  Change of Lending  Office.  Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section  1.10(a)(ii)  or
(iii),  Section  1.10(c) or  Section  3.04 with  respect  to such Bank,  it will
(subject to overall  policy  considerations  of such Bank),  if requested by the
Borrower, designate another Lending Office for any Loans affected by such event,
provided  that such  designation  is made on such  terms  that such Bank and its
Lending Office suffer no economic,  legal or regulatory  disadvantage which such
Bank determines,  in its sole discretion, to be adverse in any material respect,
with the object of  avoiding  the  consequence  of the event  giving rise to the
operation of such Section. Nothing in this Section 1.12 shall affect or postpone
any of the  obligations  of the  Borrower  or the right of any Bank  provided in
Sections 1.10 and 3.04.

                  1.13   Replacement  of  Banks.  (a)  If  any  Bank  becomes  a
Defaulting Bank or otherwise defaults in its obligations to make Loans, (b) upon
the  occurrence of an event giving rise to the operation of Section  1.10(a)(ii)
or (iii), Section 1.10(c) or Section 3.04 with respect to any Bank which results
in such Bank charging to the Borrower  increased  costs  materially in excess of
those being generally charged by the other Banks or (c) in the case of a refusal
by a Bank to consent to one or more  proposed  changes,  waivers,  discharges or
terminations  with  respect to this  Agreement  which have been  approved by the
Required Banks as (and to the extent) provided in Section 12.12(b), the Borrower
shall have the right,  if no Default or Event of Default then exists (or, in the
case of  preceding  clause  (c),  no  Default  or Event of  Default  will  exist
immediately after giving effect to such replacement),  to replace such Bank (the
"Replaced  Bank")  with  one  or  more  other  Eligible  Transferees  (it  being
acknowledged  that the Replaced Bank shall be under no obligation to identify or
secure the  commitment of such Eligible  Transferee or assist in  identifying or
securing  the  commitment  of such  Eligible  Transferee),  none  of whom  shall
constitute a Defaulting  Bank at the time of such  replacement  and each of whom
shall be reasonably  acceptable to the Administrative Agent  (collectively,  the
"Replacement  Bank"),  provided that (1) at the time of any replacement pursuant
to this  Section  1.13,  the  Replacement  Bank  shall  enter  into  one or more
Assignment and Assumption  Agreements pursuant to Section 12.04(b) (and with all
fees  payable  pursuant to said Section  12.04(b) to be paid by the  Replacement
Bank)  pursuant to which the  Replacement  Bank shall acquire the Commitment and
outstanding Loans of the Replaced Bank and, in connection  therewith,  shall pay
to the  Replaced  Bank in respect  thereof an amount  equal to the sum of (i) an
amount equal to the principal of, and all accrued  interest on, all  outstanding
Loans of the  Replaced  Bank  and  (ii) an  amount  equal  to all  accrued,  but
theretofore  unpaid, Fees owing to the Replaced Bank, and (2) all obligations of
the Borrower  due and owing to the Replaced  Bank at such time (other than those
specifically  described  in clause (1) above in respect of which the  assignment
purchase price has been, or is concurrently  being,  paid) shall be paid in full
to such Replaced Bank concurrently with such replacement.  Upon the execution of
the  respective  Assignment  and  Assumption  Agreement,  the payment of amounts
referred to in clauses (1) and (2) above and, if so requested by the Replacement
Bank, delivery to the Replacement Bank of the appropriate Note or Notes executed
by the  Borrower,  the  Replacement  Bank shall become a Bank  hereunder and the
Replaced Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions under this Agreement (including,  without limitation,
Sections  1.10,  1.11,  3.04,  11.06 and 12.01),  which shall survive as to such
Replaced Bank. Replacements pursuant to this Section 1.13 shall

                                      -8-

<PAGE>

only be effected by assignments which otherwise meet the applicable requirements
of Section 12.04(b).

                  SECTION  2.  Commitment   Commission;   Fees;   Reductions  of
Commitment.

                  2.01   Fees.   (a)  The   Borrower   agrees   to  pay  to  the
Administrative  Agent for distribution to each  Non-Defaulting Bank a commitment
commission (the  "Commitment  Commission") for the period from and including the
Effective  Date to but  excluding the Maturity Date (or such earlier date as the
Total  Commitment shall have been  terminated),  computed at a rate for each day
equal to the Applicable  Commitment  Commission  Percentage on the daily average
Unutilized   Commitment  of  such   Non-Defaulting   Bank.   Accrued  Commitment
Commissions  shall be due and  payable  quarterly  in arrears on each  Quarterly
Payment Date and on the Maturity  Date or such earlier date upon which the Total
Commitment is terminated.

                  (b) The  Borrower  agrees to pay to the Agents,  for their own
account,  such other fees as have been agreed to in writing by the  Borrower and
the Agents.

                  2.02 Voluntary Termination of Unutilized Commitments. (a) Upon
at least one Business Day's prior written notice to the Administrative  Agent at
its Notice Office (which notice the Administrative Agent shall promptly transmit
to each of the Banks),  the Borrower  shall have the right,  at any time or from
time to time,  without  premium or penalty,  to terminate  the Total  Unutilized
Commitment, in whole or in part, in integral multiples of $1,000,000 in the case
of partial  reductions to the Total  Unutilized  Commitment,  provided that each
such reduction shall apply  proportionately to permanently reduce the Commitment
of each Bank.

                  (b) In the event of a refusal  by a Bank to  consent to one or
more proposed changes, waivers,  discharges or terminations with respect to this
Agreement  which have been approved by the Required Banks as (and to the extent)
provided in Section  12.12(b),  the Borrower may, subject to its compliance with
the requirements of Section 12.12(b), upon 5 Business Days' prior written notice
to  the   Administrative   Agent  at  its  Notice   Office   (which  notice  the
Administrative Agent shall promptly transmit to each of the Banks) terminate the
Commitment  of such Bank and, so long as all Loans,  together  with  accrued and
unpaid  interest,  Fees and all other  amounts,  owing to such  Bank are  repaid
concurrently  with the  effectiveness  of such  termination  pursuant to Section
3.01(b)  (at which time  Schedule  I shall be deemed  modified  to reflect  such
changed amounts), and at such time such Bank shall no longer constitute a "Bank"
for purposes of this Agreement,  except with respect to  indemnifications  under
this Agreement (including, without limitation,  Sections 1.10, 1.11, 3.04, 11.06
and 12.01), which shall survive as to such repaid Bank.

                  2.03  Mandatory  Reduction  of  Commitments.   (a)  The  Total
Commitment (and the Commitment of each Bank) shall (i) terminate in its entirety
on the Maturity Date and (ii) be reduced from time to time prior to such date to
the extent required by Section 3.02.

                  (b) Each  reduction of the Total  Commitment  pursuant to this
Section 2.03 (or pursuant to Section 3.02) shall be applied  proportionately  to
permanently reduce the Commitment of each Bank.

                                      -9-

<PAGE>

                  SECTION 3. Prepayments; Payments; Taxes.

                  3.01  Voluntary  Prepayments.  (a) The Borrower shall have the
right to prepay the Loans,  without  premium or penalty,  in whole or in part at
any time and from time to time on the following terms and conditions:

                    (i) the Borrower shall give the  Administrative  Agent prior
     to 12:00 Noon (Eastern time) at its Notice Office (x) at least one Business
     Day's prior written  notice (or  telephonic  notice  promptly  confirmed in
     writing)  of its intent to prepay  Base Rate  Loans and (y) at least  three
     Business  Days'  prior  written  notice  (or  telephonic   notice  promptly
     confirmed in writing) of its intent to prepay  Eurodollar Loans, the amount
     of such prepayment and the Types of Loans to be prepaid and, in the case of
     Eurodollar  Loans, the specific  Borrowing or Borrowings  pursuant to which
     made, which notice the Administrative Agent shall promptly transmit to each
     of the Banks;

                    (ii)  each  prepayment  shall be in an  aggregate  principal
     amount of at least  $500,000  and, if greater,  in  integral  multiples  of
     $100,000,  provided that if any partial prepayment of Eurodollar Loans made
     pursuant to any Borrowing shall reduce the outstanding  principal amount of
     Eurodollar Loans made pursuant to such Borrowing to an amount less than the
     Minimum Borrowing Amount applicable thereto, then such Borrowing may not be
     continued  as a  Borrowing  of  Eurodollar  Loans  and any  election  of an
     Interest  Period with respect  thereto given by the Borrower  shall have no
     force or effect;

                    (iii)  prepayments of Eurodollar Loans made pursuant to this
     Section  3.01(a)  may only be made on the last  day of an  Interest  Period
     applicable  thereto  unless such  prepayment is accompanied by any breakage
     costs and any other amounts due such Bank in accordance  with Section 1.11;
     and

                    (iv) each  prepayment  in respect of any Loans made pursuant
     to a Borrowing  shall be applied pro rata among such Loans,  provided that,
     at the  Borrower's  election,  in connection  with any  prepayment of Loans
     pursuant to this Section  3.01(a),  such prepayment shall not be applied to
     any Loans of a Defaulting Bank.

                  (b) In the event of a refusal  by a Bank to  consent to one or
more proposed changes, waivers,  discharges or terminations with respect to this
Agreement  which have been approved by the Required Banks as (and to the extent)
provided in Section  12.12(b),  the Borrower  may,  upon 5 Business  Days' prior
written  notice to the  Administrative  Agent at its Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Banks) repay all
Loans, together with accrued and unpaid interest,  Fees, and other amounts owing
to such Bank in  accordance  with,  and  subject to the  requirements  of,  said
Section  12.12(b)  so long as (i) in the case of the  repayment  of Loans of any
Bank  pursuant  to this  clause (b) the  Commitment  of such Bank is  terminated
concurrently  with such  repayment  pursuant  to Section  2.02(b) (at which time
Schedule I shall be deemed modified to reflect the changed Commitments) and (ii)
the  consents,  if any,  required  by Section  12.12(b) in  connection  with the
repayment pursuant to this clause (b) have been obtained.

                                      -10-

<PAGE>

                  3.02 Mandatory Repayments and Commitment  Reductions.  (a) (i)
On any day on which the sum of the aggregate outstanding principal amount of the
Loans made by Non-Defaulting Banks exceeds the Adjusted Total Commitment as then
in effect,  the Borrower  shall  prepay on such day all Loans of  Non-Defaulting
Banks in an amount equal to such excess.

                  (ii) On any day on which the aggregate  outstanding  principal
amount of the Loans made by any  Defaulting  Bank exceeds the Commitment of such
Defaulting  Bank,  the Borrower  shall prepay on such day  principal of Loans of
such Defaulting Bank in an amount equal to such excess.

                  (b)  In  addition  to  any  other   mandatory   repayments  or
commitment  reductions  pursuant to this Section  3.02, on each date on or after
the  Effective  Date  upon  which  the  Borrower  or  any  of  its  Wholly-Owned
Subsidiaries  receives any cash proceeds from any  incurrence by the Borrower or
any of its  Wholly-Owned  Subsidiaries of Indebtedness for borrowed money (other
than  Indebtedness  for  borrowed  money  permitted  to be incurred  pursuant to
Section 9.04 of the Existing Credit Agreement as in effect on the Effective Date
(except for (i) the  incurrence of New  Subordinated  Notes  pursuant to Section
9.04(vi) of the Existing Credit Agreement, the proceeds of which are required to
be applied as set forth in this Section 3.02(b) and (ii) Indebtedness of Snorkel
Elevating  Work Platforms  Limited  and/or Snorkel  Elevating Work Platforms Pty
Limited  under the Snorkel  Revolver,  the  proceeds of which are required to be
applied as set forth in this Section  3.02(b),  provided  that in no event shall
the Total  Commitment  be  reduced to less than  $20,000,000  as a result of the
entering into of the Snorkel Revolver)), an amount equal to 100% of the Net Debt
Proceeds of the  respective  incurrence  of  Indebtedness  shall be applied as a
mandatory  repayment of principal of  outstanding  Loans  (and/or,  if the Total
Commitment has not yet been  terminated,  as a mandatory  reduction to the Total
Commitment,  subject to the proviso of clause (ii) of this  Section  3.02(b)) in
accordance with the requirements of Sections 3.02(f) and (g).

                  (c)  In  addition  to  any  other   mandatory   repayments  or
commitment  reductions  pursuant to this Section  3.02, on each date on or after
the  Effective  Date  upon  which  the  Borrower  or  any  of  its  Wholly-Owned
Subsidiaries receives cash proceeds from any Asset Sale, an amount equal to 100%
of the Net Sale  Proceeds from the  respective  Asset Sale shall be applied as a
mandatory  repayment of principal of  outstanding  Loans  (and/or,  if the Total
Commitment has not yet been  terminated,  as a mandatory  reduction to the Total
Commitment) in accordance  with the  requirements  of Sections  3.02(f) and (g),
provided  that,  so long as no Default or Event of Default  then  exists,  up to
$2,000,000  in the  aggregate  in any fiscal  year of the  Borrower  of Net Sale
Proceeds from Asset Sales may be used or  contractually  committed to be used to
purchase  like  assets  pursuant  to  Section  9.07(b)  of the  Existing  Credit
Agreement  within 180 days following the date of the respective  Asset Sale (and
the Net Sale Proceeds  therefrom shall not be required to be applied on the date
of receipt of such Net Sale Proceeds  pursuant to this Section  3.02(c)) so long
as the Borrower delivers a certificate to the  Administrative  Agent on or prior
to such date stating that such Net Sale Proceeds shall be used or  contractually
committed to be used to purchase like assets within 180 days  following the date
of such Asset  Sale  (which  certificate  shall set forth the  estimates  of the
proceeds to be so expended) and provided further, that (1) if all or any portion
of such Net Sale  Proceeds are not so  reinvested in like assets within such 180
day period or  contractually  committed to be so reinvested  within such 180-day
period,  100% of such

                                      -11-

<PAGE>

remaining  portion shall be applied on the last day of such applicable period as
a mandatory  repayment of principal of  outstanding  Loans as provided  above in
this Section 3.02(c) without regard to the immediately preceding proviso and (2)
if all or any portion of such Net Sale  Proceeds  are not required to be applied
on the 180th  day  referred  to in  clause  (1)  above  because  such  amount is
contractually  committed to be used and subsequent to such date such contract is
terminated or expires  without such portion being so used,  then such  remaining
portion  shall be  applied  within ten days of the date of such  termination  or
expiration  as a  mandatory  repayment  of  principal  of  outstanding  Loans as
provided in this Section  3.02(c)  without regard to the  immediately  preceding
proviso.

                  (d) In addition to any other mandatory  repayments pursuant to
this Section  3.02,  on each Excess Cash Payment Date, an amount equal to 50% of
the Excess  Cash Flow for the  relevant  Excess  Cash  Payment  Period  shall be
applied as a mandatory  repayment of principal of outstanding Loans (and/or,  if
the Total  Commitment has not yet been terminated,  as a mandatory  reduction to
the Total  Commitment) in accordance with the  requirements of Sections  3.02(f)
and (g).

                  (e)  In  addition  to  any  other   mandatory   repayments  or
commitment  reductions pursuant to this Section 3.02, within five days following
each date on or after the  Effective  Date upon which the Borrower or any of its
Wholly-Owned  Subsidiaries receives any cash proceeds from any Recovery Event in
excess of $250,000 in the  aggregate in any fiscal year of the Borrower from all
Recovery Events,  an amount equal to 100% of the Net Insurance  Proceeds of such
Recovery  Event  shall be applied  as a  mandatory  repayment  of  principal  of
outstanding Loans (and/or,  if the Total Commitment has not yet been terminated,
as a  mandatory  reduction  to the  Total  Commitment)  in  accordance  with the
requirements of Sections  3.02(f) and (g),  provided that, so long as no Default
or Event of Default then exists,  such  proceeds  shall not be required to be so
applied on such date to the extent that the Borrower has delivered a certificate
to the Administrative  Agent on or prior to such date stating that such proceeds
shall be used or shall  be  contractually  committed  to be used to  replace  or
restore any  properties  or assets in respect of which such  proceeds  were paid
within  180 days  following  the date of the  receipt  of such  proceeds  (which
certificate  shall set forth the  estimates of the proceeds to be so  expended),
and  provided  further,  that (1) if all or any  portion  of such  proceeds  not
required  to be applied  to the  repayment  of  outstanding  Loans  (and/or as a
reduction to the Total Commitment) are not so used or contractually committed to
be used  within 180 days after the date of the  receipt of such  proceeds,  then
such remaining  portion not used or contractually  committed to be used shall be
applied on the date which is the 180th day after the date of the receipt of such
proceeds as a mandatory  repayment of principal of outstanding Loans as provided
above in this  Section  3.02(e)  without  regard  to the  immediately  preceding
proviso and (2) if all or any portion of such  proceeds  are not  required to be
applied on the 180th day referred to in clause (1) above  because such amount is
contractually  committed to be used and subsequent to such date such contract is
terminated or expires  without such portion being so used,  then such  remaining
portion  shall be  applied  within ten days of the date of such  termination  or
expiration  as a  mandatory  repayment  of  principal  of  outstanding  Loans as
provided in this Section  3.02(e)  without regard to the  immediately  preceding
proviso.

                                      -12-

<PAGE>

                  (f) With respect to each  repayment of Loans  required by this
Section  3.02,  the  Borrower may  designate  the Types of Loans which are to be
repaid  and,  in the  case  of  Eurodollar  Loans,  the  specific  Borrowing  or
Borrowings  pursuant to which made,  provided that: (i) repayments of Eurodollar
Loans  pursuant  to this  Section  3.02  may  only be made on the last day of an
Interest  Period  applicable  thereto unless all Eurodollar  Loans with Interest
Periods  ending on such date of required  repayment and all Base Rate Loans have
been paid in full; (ii) if any repayment of Eurodollar  Loans made pursuant to a
single Borrowing shall reduce the outstanding  Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum  Borrowing  Amount  applicable
thereto,  such  Borrowing  shall be  converted  at the end of the  then  current
Interest Period into a Borrowing of Base Rate Loans; and (iii) each repayment of
any Loans made  pursuant  to a  Borrowing  shall be applied  pro rata among such
Loans.  In the absence of a  designation  by the  Borrower as  described  in the
preceding sentence,  the Administrative  Agent shall, subject to the above, make
such designation in its sole discretion.

                  (g) Each amount required to be applied to repay Loans pursuant
to  Sections  3.02(b)  through  (e),  inclusive,  shall be  applied to repay the
outstanding principal amount of the Loans (with a corresponding reduction to the
Total Commitment  subject to the proviso of clause (ii) of Section 3.02(b)).  To
the extent the amount of any mandatory repayment exceeds the aggregate principal
amount of Loans then  outstanding,  such  excess  shall be applied to reduce the
Total Commitment subject to the proviso of clause (ii) of Section 3.02(b).

                  (h) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document,  all then outstanding  Loans shall be
repaid in full on the Maturity Date.

                  3.03  Method  and  Place  of  Payment.   Except  as  otherwise
specifically  provided  herein,  all payments  under this Agreement or under any
Note shall be made to the  Administrative  Agent for the  account of the Bank or
Banks entitled thereto not later than 12:30 p.m. (Eastern time) on the date when
due and shall be made in Dollars in immediately  available  funds at the Payment
Office of the Administrative Agent. Whenever any payment to be made hereunder or
under any Note shall be stated to be due on a day which is not a  Business  Day,
the due date thereof shall be extended to the next succeeding  Business Day and,
with respect to payments of  principal,  interest  shall be payable  during such
extension at the applicable rate immediately prior to such extension.

                  3.04  Net  Payments.(a)  All  payments  made  by the  Borrower
hereunder or under any Note will be made without  setoff,  counterclaim or other
defense.  Except as provided in Section 3.04(b),  all such payments will be made
free and clear of, and without  deduction  or  withholding  for,  any present or
future taxes, levies,  imposts,  duties,  fees,  assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding,  except as provided in the second succeeding  sentence,  any tax
imposed on or  measured by the net income or net profits of a Bank and any taxes
imposed solely on deposits or net assets of a Bank, in each case pursuant to the
laws of the  jurisdiction in which it is organized or the  jurisdiction in which
the principal office or applicable lending office of such Bank is located or any
subdivision  thereof  or  therein)  and  all  interest,   penalties  or  similar
liabilities with respect to such non-excluded

                                      -13-

<PAGE>

taxes, levies,  imposts,  duties,  fees,  assessments or other charges (all such
non-excluded taxes, levies, imposts,  duties, fees, assessments or other charges
being referred to  collectively  as  "NonExcluded  Taxes").  Except as otherwise
provided in Section 3.04(b),  if any NonExcluded Taxes are so levied or imposed,
the Borrower agrees to pay the full amount of such  NonExcluded  Taxes, and such
additional  amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or on
account of any NonExcluded  Taxes, will not be less than the amount provided for
herein or in such Note.  If any amounts  are payable in respect of  Non-Excluded
Taxes pursuant to the preceding sentence,  the Borrower agrees to reimburse each
Bank, upon the written request of such Bank, for taxes imposed on or measured by
the  net  income  or net  profits  of  such  Bank  pursuant  to the  laws of the
jurisdiction in which such Bank is organized or in which the principal office or
applicable  lending  office  of such  Bank is  located  or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which such
Bank is organized or in which the principal office or applicable  lending office
of such Bank is  located  and for any  withholding  of taxes as such Bank  shall
determine  are  payable  by, or  withheld  from,  such Bank,  in respect of such
amounts so paid to or on behalf of such Bank pursuant to the preceding  sentence
and in respect of any amounts paid to or on behalf of such Bank pursuant to this
sentence.  The Borrower will furnish to the Administrative  Agent within 45 days
after  the  date  the  payment  of any  NonExcluded  Taxes  is due  pursuant  to
applicable law certified  copies of tax receipts  evidencing such payment by the
Borrower.  The Borrower  agrees to indemnify and hold  harmless  each Bank,  and
reimburse such Bank upon its written request,  for the amount of any NonExcluded
Taxes so levied or imposed and paid by such Bank.

                  (b) Each Bank that is not a United States person (as such term
is defined  in  Section  7701(a)(30)  of the Code) for U.S.  Federal  income tax
purposes  agrees to deliver to the Borrower and the  Administrative  Agent on or
prior to the  Effective  Date,  or in the case of a Bank that is an  assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or 12.04
(unless the respective  Bank was already a Bank hereunder  immediately  prior to
such assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete  original signed copies of Internal  Revenue
Service  Form  4224 or 1001  (or  successor  forms)  certifying  to such  Bank's
entitlement  to a complete  exemption  from United States  withholding  tax with
respect to payments to be made under this  Agreement and under any Note, or (ii)
if the Bank is not a "bank"  within the meaning of Section  881(c)(3)(A)  of the
Code and  cannot  deliver  either  Internal  Revenue  Service  Form 1001 or 4224
pursuant to clause (i) above,  (x) a  certificate  substantially  in the form of
Exhibit C (any such certificate,  a "Section  3.04(b)(ii)  Certificate") and (y)
two accurate and complete  original  signed copies of Internal  Revenue  Service
Form W-8 (or successor form) certifying to such Bank's entitlement to a complete
exemption  from  United  States  withholding  tax with  respect to  payments  of
interest to be made under this  Agreement and under any Note. In addition,  each
Bank agrees  that from time to time after the  Effective  Date,  when a lapse in
time or change in circumstances renders the previous  certification  obsolete or
inaccurate  in any  material  respect,  it will,  promptly  upon  request by the
Borrower,  deliver to the Borrower and the Administrative Agent two new accurate
and complete  original  signed copies of Internal  Revenue  Service Form 4224 or
1001, or Form W-8 and a Section 3.04(b)(ii) Certificate, as the case may be, and
such  other  forms as may be  required  in order to  confirm  or  establish  the
entitlement  of such Bank to a continued  exemption  from or

                                      -14-

<PAGE>

reduction in United States  withholding  tax with respect to payments under this
Agreement  and any Note,  or it shall  immediately  notify the  Borrower and the
Administrative  Agent of its  inability to deliver any such Form or  Certificate
because a change in law or change in circumstance eliminates the availability to
the Bank of an  exemption  from United  States  withholding  tax with respect to
payments to be made under this  Agreement  or any Note,  in which case such Bank
shall not be required to deliver any such Form or  Certificate  pursuant to this
Section 3.04(b).  Notwithstanding  anything to the contrary contained in Section
3.04(a), but subject to Section 12.04(b), (x) the Borrower shall be entitled, to
the  extent it is  required  to do so by law,  to deduct or  withhold  income or
similar  taxes imposed by the United  States (or any  political  subdivision  or
taxing  authority  thereof or  therein)  from  interest,  Fees or other  amounts
payable  hereunder  for the  account  of any Bank  which is not a United  States
person (as such term is defined  in  Section  7701(a)(30)  of the Code) for U.S.
Federal income tax purposes to the extent that such Bank has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete exemption
from such deduction or  withholding  and (y) the Borrower shall not be obligated
pursuant to Section 3.04(a) hereof to gross-up  payments to be made to a Bank in
respect of income or similar taxes imposed by the United States if (I) such Bank
has not provided to the Borrower the Internal  Revenue Service Forms required to
be provided to the Borrower pursuant to this Section 3.04(b) or (II) in the case
of a payment,  other than interest, to a Bank described in clause (ii) above, to
the  extent  that  such  Forms  do  not  establish  a  complete  exemption  from
withholding of such taxes.

                  SECTION 4. Conditions  Precedent.  The obligation of each Bank
to make Loans on the Effective Date is subject at the time of the making of such
Loans to the satisfaction of the following conditions:

                  4.01 Execution of Agreement;  Notes.  The Effective Date shall
have occurred and there shall have been  delivered to the Agents for the account
of each of the Banks the appropriate Note executed by the Borrower, in each case
in the amount, maturity and otherwise as provided herein.

                  4.02 Officer's Certificate.  On the Effective Date, the Agents
shall have received a certificate, dated the Effective Date and signed on behalf
of the Borrower by the President or any Vice President of the Borrower,  stating
that all of the conditions in Sections  4.05,  4.06 and 5.01 have been satisfied
on such date.

                  4.03 Opinions of Counsel.  On the Effective  Date,  the Agents
shall have received from (i) Dickstein,  Shapiro,  Morin & Oshinsky LLP, counsel
to the Credit Parties,  an opinion addressed to the Agents and each of the Banks
and dated the  Effective  Date,  covering the matters set forth in Exhibit D and
such other matters incident to the transactions contemplated herein as any Agent
may reasonably  request and (ii) local counsel  (reasonably  satisfactory to the
Agents) opinions, each of which shall (x) be addressed to the Agents and each of
the Banks and dated the Effective Date, (y) be in form and substance  reasonably
satisfactory  to the  Agents  and  (z)  cover  the  perfection  of the  security
interests  granted  pursuant to the Security  Documents  and such other  matters
incident to the  transactions  contemplated  hereby as any Agent may  reasonably
request.

                                      -15-

<PAGE>

                  4.04  Corporate  Documents;   Proceedings;  etc.  (a)  On  the
Effective  Date,  the Agents shall have received a certificate  from each Credit
Party,  dated the Effective Date,  signed by the President or any Vice President
of  such  Credit  Party,  and  attested  to by the  Secretary  or any  Assistant
Secretary  of such  Credit  Party,  in the form of  Exhibit  E with  appropriate
insertions,  together  with  copies  of the  certificate  of  incorporation  (or
equivalent  organizational  document)  and by-laws of such Credit  Party and the
resolutions of such Credit Party referred to in such certificate,  and each such
certificate  of  incorporation  and by-laws shall be in the form provided to the
Agents  prior  to the  Effective  Date or in such  other  form as is  reasonably
acceptable  to the Agents,  and the foregoing  resolutions  shall be in form and
substance reasonably acceptable to the Agents.

                  (b) All  corporate and legal  proceedings  shall be reasonably
satisfactory  in form and  substance  to the Agents,  and the Agents  shall have
received  all  information  and copies of all  documents  and papers,  including
records  of  corporate  proceedings,   governmental  approvals,   good  standing
certificates and bring-down telegrams or facsimiles, if any, which any Agent may
have  requested  in  connection  therewith,  such  documents  and  papers  where
appropriate to be certified by proper corporate or governmental authorities.

                  4.05 Adverse  Change,  etc. On or prior to the Effective Date,
nothing  shall have occurred (and the Agents shall have become aware of no facts
or  conditions  not  previously  known)  which is  reasonably  likely  to have a
material adverse effect on the rights or remedies of the Banks or the Agents, or
on the ability of the Borrower or its Subsidiaries to perform their  obligations
to the Banks or which is reasonably  likely to have a materially  adverse effect
on  the  business,  property,  assets,  liabilities,   condition  (financial  or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.

                  4.06  Litigation.  On the Effective Date, no litigation by any
entity  (private  or  governmental)  shall be  pending  or  threatened  which is
reasonably likely to have a material adverse effect on the rights or remedies of
the Banks or the Agents,  or on the ability of the Borrower or its  Subsidiaries
to perform their  obligations to the Banks or which is reasonably likely to have
a materially  adverse  effect on the business,  property,  assets,  liabilities,
condition  (financial  or  otherwise)  or  prospects  of the  Borrower  and  its
Subsidiaries taken as a whole.

                  4.07 Amended and Restated Pledge  Agreement.  On the Effective
Date, each Credit Party shall have duly  authorized,  executed and delivered the
Amended and  Restated  Pledge  Agreement  in the form of Exhibit F (as  amended,
modified or  supplemented  from time to time,  the "Amended and Restated  Pledge
Agreement")  and shall  have  delivered  to the  Collateral  Agent,  as  Pledgee
thereunder,  all of the Pledged  Securities,  if any,  referred to therein  then
owned by such Credit  Party,  (x)  endorsed  in blank in the case of  promissory
notes constituting Pledged Securities and (y) together with executed and undated
stock powers in the case of capital stock constituting Pledged Securities.

                  4.08 Amended and Restated Security Agreement. On the Effective
Date, each Credit Party shall have duly  authorized,  executed and delivered the
Amended and Restated  Security  Agreement in the form of Exhibit G (as modified,
supplemented  or amended from time to

                                      -16-

<PAGE>

time, the "Amended and Restated Security Agreement") covering all of such Credit
Party's present and future Amended and Restated Security Agreement Collateral.

                  4.09  Subsidiaries  Guaranty.  On  the  Effective  Date,  each
Subsidiary  Guarantor  shall have duly  authorized,  executed and  delivered the
Subsidiaries  Guaranty  in the  form  of  Exhibit  H (as  amended,  modified  or
supplemented from time to time, the "Subsidiaries Guaranty").

                  4.10 Amended and Restated Mortgages;  Title Insurance; etc. On
the Effective Date, the Collateral Agent shall have received:

                    (i) fully executed  counterparts of the Amended and Restated
     Mortgages,  in form and substance  reasonably  satisfactory  to the Agents,
     which Amended and Restated  Mortgages shall cover the Mortgaged  Properties
     owned by the Credit Parties on the Effective Date as designated on Schedule
     III,  together with evidence that counterparts of such Amended and Restated
     Mortgages and amendments have been delivered to the title insurance company
     insuring the Lien of such Amended and Restated  Mortgages  for recording in
     all places to the extent  necessary  or, in the  reasonable  opinion of the
     Collateral Agent,  desirable, to effectively create a valid and enforceable
     first priority  mortgage lien on each such  Mortgaged  Property in favor of
     the  Collateral  Agent (or such other trustee as may be required or desired
     under local law) for the benefit of the Secured Creditors; and

                    (ii) endorsements, in form and substance satisfactory to the
     Agents, in respect of the Exisiting Mortgage Policies and issued by a title
     insurer reasonably satisfactory to the Agents (the "Endorsements") assuring
     the Collateral  Agent that the Amended and Restated  Mortgages (as amended)
     on such  Mortgaged  Properties  are valid and  enforceable  first  priority
     mortgage liens on the respective  Mortgaged  Properties,  free and clear of
     all  defects  and  encumbrances  except  Permitted  Encumbrances  and  such
     Endorsements   shall   otherwise  be  in  form  and  substance   reasonably
     satisfactory to the Agents.

                  4.11 Solvency Certificate. On the Effective Date, the Borrower
shall  have  delivered  to the  Agents a  solvency  certificate  from the  Chief
Financial Officer of the Borrower in the form of Exhibit I.

                  4.12 Fees, etc. On the Effective Date, the Borrower shall have
paid to the  Agents  and each  Bank all  costs,  fees and  expenses  (including,
without limitation, legal fees and expenses) payable to the Agents and such Bank
to the extent then due.

                  4.13 Non-U.S. Assets;  Financial Statements.  On the Effective
Date, the Borrower shall have delivered to the Agents:

                    (i)  Schedule IV showing the book value of all  receivables,
     inventory and fixed assets of the Borrower and its Subsidiaries  located or
     arising from operations outside of the United States; and

                                      -17-

<PAGE>


                    (ii) (x) the consolidated and  consolidating  balance sheets
     of the Borrower and its Subsidiaries as at June 30, 1999 and June 30, 1998,
     together with (y) the related consolidated and consolidating  statements of
     income,  showing  income by  division,  and the  related  consolidated  and
     consolidating  statements of retained earnings and statement of cash flows,
     in each case for the nine month  period  ending June 30, 1999 (and  setting
     forth comparative  figures for the related periods in the prior fiscal year
     of the Borrower).

                  SECTION 5.  Conditions  Precedent  to All Credit  Events.  The
obligation  of each Bank to make Loans  (including  Loans made on the  Effective
Date), is subject,  at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:

                  5.01 No Default;  Representations and Warranties.  At the time
of each such Credit Event and also after giving  effect  thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained  herein or in the other Credit  Documents shall be true and correct in
all material  respects with the same effect as though such  representations  and
warranties  had been made on the date of such Credit Event (it being  understood
and agreed that any  representation or warranty which by its terms is made as of
a  specified  date shall be  required  to be true and  correct  in all  material
respects only as of such specified date).

                  5.02  Notice of  Borrowing.  Prior to the making of each Loan,
the  Administrative  Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.03(a).

                  5.03 Total  Unutilized  Revolving  Loan  Commitment  Under the
Existing  Credit  Agreement.  At the time of the making of each Loan,  the Total
Unutilized  Revolving  Loan  Commitment,  as  defined  in  the  Existing  Credit
Agreement, shall be equal to zero.

                  The acceptance of the proceeds of each Loan shall constitute a
representation  and warranty by the Borrower to the Agents and each of the Banks
that all the conditions specified in Section 4 (with respect to Credit Events on
the Effective  Date) and in this Section 5 (with respect to Credit Events on and
after the Effective  Date) and  applicable to such Credit Event exist as of that
time. All of the Notes,  certificates,  legal  opinions and other  documents and
papers  referred  to in  Section  4 and in  this  Section  5,  unless  otherwise
specified,  shall be delivered to the Administrative  Agent at the Notice Office
for the account of each of the Banks and,  except for the Notes,  in  sufficient
counterparts  or copies for each of the Banks and shall be in form and substance
reasonably satisfactory to the Agents and the Required Banks.

                  SECTION 6.  Representations,  Warranties  and  Agreements.  In
order to induce  the Banks to enter into this  Agreement  and to make the Loans,
the Borrower makes the following representations, warranties and agreements, all
of which shall  survive the  execution  and delivery of this  Agreement  and the
Notes and the making of the Loans,  with the  occurrence of each Credit Event on
or after the  Effective  Date being deemed to  constitute a  representation  and
warranty  that the matters  specified  in this Section 6 are true and correct in
all material  respects on and as of the  Effective  Date and on the date of each
such Credit Event (it being  understood  and agreed that

                                      -18-

<PAGE>

any representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct only as of such specified date).

                  6.01 Corporate and Other Status. Each Credit Party and each of
its  Subsidiaries  (i) is a duly organized and validly  existing  corporation or
partnership,  as the  case  may  be,  in good  standing  under  the  laws of the
jurisdiction of its  organization,  (ii) has the corporate or partnership  power
and  authority  to own its  property  and assets and to transact the business in
which it is engaged and presently proposes to engage and (iii) is duly qualified
and is authorized  to do business and is in good  standing in each  jurisdiction
where the ownership,  leasing or operation of its property or the conduct of its
business  requires  such  qualifications  except for failures to be so qualified
which,  individually  or in the  aggregate,  could not reasonably be expected to
have a material adverse effect on the business,  operations,  property,  assets,
liabilities,  condition (financial or otherwise) or prospects of the Borrower or
the Borrower and its Subsidiaries taken as a whole.

                  6.02  Corporate  and Other  Power and  Authority.  Each Credit
Party has the corporate or partnership  power and authority to execute,  deliver
and perform the terms and provisions of each of the Credit Documents to which it
is party  and has  taken  all  necessary  corporate  or  partnership  action  to
authorize the execution,  delivery and  performance by it of each of such Credit
Documents.  Each Credit Party has duly executed and delivered each of the Credit
Documents to which it is party,  and each of such Credit  Documents  constitutes
its legal,  valid and binding  obligation  enforceable  in  accordance  with its
terms,  except to the extent that the  enforceability  thereof may be limited by
applicable bankruptcy, insolvency,  reorganization,  moratorium or other similar
laws  generally  affecting   creditors'  rights  and  by  equitable   principles
(regardless of whether enforcement is sought in equity or at law).

                  6.03  No  Violation.   Neither  the  execution,   delivery  or
performance by any Credit Party of the Credit  Documents to which it is a party,
nor compliance by it with the terms and provisions thereof,  (i) will contravene
any  provision  of any law,  statute,  rule or  regulation  or any order,  writ,
injunction  or decree of any court or  governmental  instrumentality,  (ii) will
conflict with or result in any breach of any of the terms, covenants, conditions
or provisions  of, or constitute a default  under,  or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except  pursuant
to the Security Documents) upon any of the property or assets of the Borrower or
any of its Subsidiaries pursuant to the terms of any indenture,  mortgage,  deed
of trust,  credit agreement or loan agreement,  or any other material agreement,
contract or instrument,  to which the Borrower or any of its  Subsidiaries  is a
party or by which it or any of its  property  or  assets is bound or to which it
may be  subject  or (iii) will  violate  any  provision  of the  certificate  of
incorporation,  by-laws or partnership  agreement (or equivalent  organizational
documents) of the Borrower or any of its Subsidiaries.

                  6.04  Approvals.   No  order,  consent,   approval,   license,
authorization  or  validation  of, or filing,  recording  or  registration  with
(except for those that have  otherwise  been obtained or made on or prior to the
Effective Date and which remain in full force and effect on the Effective  Date,
or to the  extent  not  required  to be  obtained  or  made on or  prior  to the
Effective  Date,  as will be obtained or made on or prior to the  required  date
therefor), or exemption by, any governmental or public body or authority, or any
subdivision  thereof,  is required to  authorize,  or is required in  connection
with, (i) the execution, delivery and performance of any Credit Document or (ii)
the legality,  validity,  binding  effect or  enforceability  of any such Credit

                                      -19-

<PAGE>

Document.

                  6.05 Financial  Statements;  Financial Condition;  Undisclosed
Liabilities;  Projections;  etc.  (a)  The  consolidated  balance  sheet  of the
Borrower and its  Subsidiaries  at September  30, 1998 and June 30, 1999 and the
related  consolidated  statements of  operations,  cash flows and  shareholders'
equity of the Borrower and its  Subsidiaries  for the fiscal year or  nine-month
period ended on such dates, respectively, copies of which have been furnished to
the Banks prior to the Effective Date,  present fairly the financial position of
the Borrower  and its  Subsidiaries  at the date of such balance  sheets and the
results of the operations of the Borrower and its  Subsidiaries  for the periods
covered thereby.  Except as previously  disclosed in writing to the agents under
the Existing  Credit  Agreement,  since  September  30, 1998,  there has been no
material  adverse  change  in  the  business,   operations,   property,  assets,
liabilities,  condition (financial or otherwise) or prospects of the Borrower or
the Borrower and its Subsidiaries taken as a whole.

                  (b) (i) On and as of the Effective Date, on a pro forma basis,
after giving effect to the execution, delivery and performance of this Agreement
and the  other  Credit  Documents,  and  the  consummation  of the  transactions
contemplated  herein and  therein  and to all  Indebtedness  incurred  and to be
incurred,  and Liens created by the Credit Parties in connection therewith,  (a)
the sum of the assets,  at a fair valuation,  of each of the Borrower on a stand
alone  basis and of the  Borrower  and its  Subsidiaries  taken as a whole  will
exceed  its  debts;  (b) each of the  Borrower  on a stand  alone  basis and the
Borrower  and its  Subsidiaries  taken as a whole has not  incurred and does not
intend to incur,  and does not believe that they will incur,  debts beyond their
ability to pay such debts as such debts mature;  and (c) each of the Borrower on
a stand alone basis and the Borrower and its Subsidiaries  taken as a whole will
have sufficient capital with which to conduct its business. For purposes of this
Section  6.05(b),  "debt" means any liability on a claim,  and "claim" means (i)
right  to  payment,  whether  or not  such  a  right  is  reduced  to  judgment,
liquidated,  unliquidated,  fixed,  contingent,  matured,  unmatured,  disputed,
undisputed,  legal,  equitable,  secured,  or  unsecured  or  (ii)  right  to an
equitable  remedy  for  breach of  performance  if such  breach  gives rise to a
payment,  whether  or not such  right  to an  equitable  remedy  is  reduced  to
judgment, fixed, contingent,  matured, unmatured,  disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances  existing at
such time,  represents  the amount that can  reasonably be expected to become an
actual or matured liability.

                  (c)  Except as fully  disclosed  in the  financial  statements
delivered  pursuant to Section  6.05(a) there were as of the  Effective  Date no
liabilities  or  obligations  with  respect  to  the  Borrower  or  any  of  its
Subsidiaries of any nature whatsoever (whether absolute,  accrued, contingent or
otherwise and whether or not due) which,  either  individually  or in aggregate,
could  reasonably  be  expected  to have a material  and  adverse  effect on the
Borrower and its  Subsidiaries  taken as a whole.  As of the Effective Date, the
Borrower does not know of any basis for the  assertion  against it or any of its
Subsidiaries of any liability or obligation of any nature whatsoever that is not
fully  disclosed  in the  financial  statements  delivered  pursuant  to Section
6.05(a) which,  either  individually  or in the aggregate,  could  reasonably be
expected to be material to the  Borrower or the  Borrower  and its  Subsidiaries
taken as a whole.

                                      -20-

<PAGE>

                  (d) On and as of the Effective Date, the Projections delivered
to the Agents and the Banks prior to the  Effective  Date have been  prepared in
good faith and are based on reasonable  assumptions.  On the Effective Date, the
Borrower believes that the Projections are reasonable,  it being understood that
the  Projections  include  assumptions  as to future  events  that are not to be
viewed as facts and that actual  results may differ from the  projected  results
and such differences may be material.

                  6.06  Litigation.  There are no actions,  suits or proceedings
pending or, to the best  knowledge of the Borrower,  threatened (i) with respect
to any Credit  Document or (ii) that are  reasonably  likely to  materially  and
adversely  affect  the  business,  operations,  property,  assets,  liabilities,
condition  (financial or otherwise) or prospects of the Borrower or the Borrower
and its Subsidiaries taken as a whole.

                  6.07 True and  Complete  Disclosure.  All factual  information
(taken as a whole)  furnished by any Credit Party in writing to any Agent or any
Bank (including,  without  limitation,  all information  contained in the Credit
Documents)  for  purposes of or in  connection  with this  Agreement,  the other
Credit Documents or any transaction  contemplated  herein or therein is, and all
other such factual information hereafter furnished by or on behalf of any Credit
Party in  writing  to any Agent or any Bank will be,  true and  accurate  in all
material respects on the date as of which such information is dated or certified
and not  incomplete  by  omitting  to state  any  fact  necessary  to make  such
information not misleading in any material  respect at such time in light of the
circumstances under which such information was provided.

                  6.08 Use of Proceeds; Margin Regulations.  (a) The proceeds of
all Loans  will be used (i) for the  Borrower's  and its  Subsidiaries'  general
corporate and working capital purposes and (ii) to make the scheduled  repayment
of loans under the Existing Credit Agreement due on August 31, 1999.

                  (b) No part of any Credit Event (or the proceeds thereof) will
be used to  purchase  or carry  any  Margin  Stock or to extend  credit  for the
purpose of purchasing  or carrying any Margin  Stock.  Neither the making of any
Loan nor the use of the proceeds  thereof nor the occurrence of any other Credit
Event will violate or be inconsistent  with the provisions of Regulation T, U or
X of the Board of Governors of the Federal Reserve System.

                  6.09 Tax Returns and  Payments.  Each of the Borrower and each
of its  Subsidiaries  has filed all  federal  income tax  returns  and all other
material tax returns,  domestic and foreign,  required to be filed by it and has
paid all  material  taxes and  assessments  payable by it which have become due,
except for those  contested  in good faith and  adequately  disclosed  and fully
provided for on the financial statements of the Borrower and its Subsidiaries in
accordance with generally accepted accounting principles.  The Borrower and each
of its Subsidiaries  have at all times paid, or have provided  adequate reserves
(in the good faith  judgment of the  management of the Borrower) for the payment
of, all federal,  state and foreign income taxes applicable for all prior fiscal
years and for the  current  fiscal year to date.  There is no  material  action,
suit,  proceeding,  investigation,  audit,  or  claim  now  pending  or,  to the
knowledge  of  the  Borrower  or  any of  its  Subsidiaries,  threatened  by any
authority   regarding  any  taxes  relating  to  the  Borrower  or  any  of  its
Subsidiaries.  Neither the Borrower nor any of its Subsidiaries has entered into
an

                                      -21-

<PAGE>


agreement  or waiver or been  requested  to enter  into an  agreement  or waiver
extending  any statute of  limitations  relating to the payment or collection of
taxes  of  the  Borrower  or  any  of  its  Subsidiaries,  or is  aware  of  any
circumstances that would cause the taxable years or other taxable periods of the
Borrower or any of its Subsidiaries not to be subject to the normally applicable
statute of limitations.

                  6.10 Compliance with ERISA. (i) Each Plan and to the knowledge
of the  Borrower  each  Multiemployer  Plan (and each related  trust,  insurance
contract  or fund) is in  substantial  compliance  with its  terms  and with all
applicable laws,  including,  without limitation,  ERISA and the Code; each Plan
and to the knowledge of the Borrower each  Multiemployer  Plan (and each related
trust,  if any) which is intended to be qualified  under  Section  401(a) of the
Code has received a  determination  letter from the Internal  Revenue Service to
the effect that it meets the  requirements  of Sections 401(a) and 501(a) of the
Code; no Reportable  Event has occurred with respect to a Plan; to the knowledge
of the Borrower,  no Multiemployer  Plan is insolvent or in  reorganization;  no
Plan has an Unfunded  Current  Liability;  no Plan and to the  knowledge  of the
Borrower  no  Multiemployer  Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding  deficiency,  within the meaning
of such  sections of the Code or ERISA,  or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the  meaning of Section  412 of the Code or Section  303 or 304 of ERISA;
all material  contributions  required to be made by the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate with respect to a Plan or a Multiemployer
Plan have been timely  made;  neither the  Borrower  nor any  Subsidiary  of the
Borrower nor any ERISA Affiliate has incurred any material liability  (including
any  indirect or  secondary  liability)  to or on account of a Plan  pursuant to
Section  409,  502(i),  502(l),  4062,  4063,  4064 or 4069 of ERISA or  Section
401(a)(29),  4971 or 4975 of the  Code or  expects  to incur  any such  material
liability  under any of the foregoing  sections with respect to any Plan; to the
knowledge  of the  Borrower  and its  Subsidiaries,  no  condition  exists which
presents a material  risk to the Borrower or any  Subsidiary  of the Borrower or
any ERISA Affiliate of incurring a material liability to or on account of a Plan
pursuant to the foregoing  provisions of ERISA and the Code; no proceedings have
been  instituted to terminate or appoint a trustee to administer  any Plan which
is subject to Title IV of ERISA; no action, suit, proceeding,  hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than  routine  claims for  benefits) is pending or, to
the knowledge of the Borrower and its Subsidiaries,  threatened; using actuarial
assumptions  and  computation  methods  consistent  with Part 1 of subtitle E of
Title  IV  of  ERISA,  the  aggregate   liabilities  of  the  Borrower  and  its
Subsidiaries and its ERISA Affiliates to all Multiemployer Plans in the event of
a complete withdrawal therefrom,  as of the close of the most recent fiscal year
of each such Plan ended prior to the date of this  Agreement and with respect to
fiscal years ended prior to the date of each Credit Event would not be material;
each  group  health  plan (as  defined  in  Section  607(1) of ERISA or  Section
4980B(g)(2)  of the  Code)  which  covers  or has  covered  employees  or former
employees of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
has at all times been operated in substantial  compliance with the provisions of
Part 6 of subtitle B of Title I of ERISA and Section  4980B of the Code; no lien
imposed under the Code or ERISA on the assets of the Borrower or any  Subsidiary
of the Borrower or any ERISA  Affiliate  exists or is likely to arise on account
of any Plan;  neither the  Borrower nor any  Subsidiary  of the Borrower nor any
ERISA Affiliate has incurred any material

                                      -22-

<PAGE>


liability  (including any indirect or secondary  liability)  under Sections 515,
4201,  4202 or 4212 of ERISA with  respect  to any  Multiemployer  Plan;  to the
knowledge of the Borrower, no condition exists which presents a material risk to
the  Borrower  or any  Subsidiary  of the  Borrower  or any ERISA  Affiliate  of
incurring a material liability to or on account of a Multiemployer Plan pursuant
to the foregoing  provisions of ERISA;  to the knowledge of the Borrower and its
Subsidiaries, no action, suit, proceeding,  hearing, audit or investigation with
respect to the  administration,  operation  or the  investment  of assets of any
Multiemployer   Plan  (other  than  routine  claims  for  benefits)  that  could
reasonably  be expected to be material to the  Borrower or the  Borrower and its
Subsidiaries taken as a whole is pending or threatened; and the Borrower and its
Subsidiaries do not maintain or contribute to any employee  welfare benefit plan
(as  defined  in Section  3(1) of ERISA),  which  provides  benefits  to retired
employees  or other former  employees  (other than as required by Section 601 of
ERISA) or any Plan or Multiemployer  Plan, the obligations with respect to which
could reasonably be expected to have a material adverse effect on the ability of
the Borrower or any of its Subsidiaries to perform their respective  obligations
under the Credit Documents.

                  (ii) To the  knowledge of the  Borrower and its  Subsidiaries,
each Foreign Pension Plan has been maintained in substantial compliance with its
terms and with the requirements of any and all applicable laws, statutes, rules,
regulations and orders and has been maintained, where required, in good standing
with applicable regulatory  authorities.  All material contributions required to
be made with respect to a Foreign  Pension  Plan have been timely made.  Neither
the Borrower nor any of its Subsidiaries has incurred any material obligation in
connection  with the termination of or withdrawal from any Foreign Pension Plan.
The Borrower and its  Subsidiaries  do not maintain or contribute to any Foreign
Pension Plan the obligations  with respect to which could reasonably be expected
to have a material adverse effect on the ability of the Borrower or the Borrower
and its  Subsidiaries  taken as a whole to perform their  obligations  under the
Credit Documents.

                  6.11 The Security Documents. (a) The provisions of the Amended
and  Restated  Security  Agreement  are  effective  to  create  in  favor of the
Collateral  Agent for the  benefit of the Secured  Creditors a legal,  valid and
enforceable  security  interest in all right,  title and  interest of the Credit
Parties party thereto in the Amended and Restated Security Agreement  Collateral
described  therein,  and the  Collateral  Agent,  for the benefit of the Secured
Creditors,  has a fully perfected lien on, and security  interest in, all right,
title  and  interest  in all of the  Amended  and  Restated  Security  Agreement
Collateral  described  therein,  subject to no other Liens other than  Permitted
Liens.  The recordation of the Assignment of Security  Interest in U.S.  Patents
and  Trademarks  in the form  attached  to the  Amended  and  Restated  Security
Agreement in the United States Patent and Trademark Office together with filings
on Form UCC-1 made pursuant to the Amended and Restated Security  Agreement will
create, as may be perfected by such filing and recordation, a perfected security
interest  granted to the Collateral  Agent in the trademarks and patents covered
by the  Amended and  Restated  Security  Agreement  and the  recordation  of the
Assignment of Security  Interest in U.S.  Copyrights in the form attached to the
Amended and Restated Security  Agreement with the United States Copyright Office
together  with  filings on Form UCC-1 made  pursuant to the Amended and Restated
Security  Agreement  will  create,  as may  be  perfected  by  such  filing  and
recordation,  a perfected  security  interest

                                      -23-

<PAGE>

granted to the  Collateral  Agent in the  copyrights  covered by the Amended and
Restated Security Agreement.

                  (b) The security  interests created in favor of the Collateral
Agent, as Pledgee,  for the benefit of the Secured Creditors,  under the Amended
and Restated  Pledge  Agreement  constitute  first priority  perfected  security
interests in the Pledged Securities described in the Amended and Restated Pledge
Agreement,  subject to no security  interests of any other Person. No filings or
recordings  are  required in order to perfect (or  maintain  the  perfection  or
priority of) the security  interests created in the Pledged Securities under the
Amended and Restated Pledge Agreement.

                  (c)  The  Amended  and  Restated  Mortgages  create,  for  the
obligations  purported to be secured thereby, a valid and enforceable  perfected
security  interest in and mortgage  lien on all of the  Mortgaged  Properties in
favor of the  Collateral  Agent (or such  other  trustee as may be  required  or
desired under local law) for the benefit of the Secured  Creditors,  superior to
and prior to the rights of all third persons (except that the security  interest
and mortgage  lien  created in the  Mortgaged  Properties  may be subject to the
Permitted  Encumbrances  related  thereto)  and subject to no other Liens (other
than Liens  permitted  under  Section  9.01 of the Existing  Credit  Agreement).
Schedule III contains a true and complete  list of each parcel of Real  Property
owned or leased by the Borrower and its  Subsidiaries on the Effective Date, and
the type of  interest  therein  held by the  Borrower  or such  Subsidiary.  The
Borrower and each of its Subsidiaries  have (i) good and marketable title to all
fee-owned  Real Property  free and clear of all Liens except those  described in
the first sentence of this  subsection (c) and (ii) valid leasehold title to all
Leaseholds.

                  6.12  Properties.  The Borrower  and each of its  Subsidiaries
have  good  and  marketable  title  to all  material  properties  owned by them,
including all material  property  reflected in the balance sheets referred to in
Section  6.05(a),  free and clear of all Liens,  other than Liens  permitted  by
Section 9.01 of the Existing Credit Agreement.

                  6.13  Capitalization.  On the Effective  Date,  the authorized
capital stock of the Borrower shall consist of (i) 100,000,000  shares of common
stock, $.01 par value per share, of which 14,262,000 shares of such common stock
are issued and outstanding and (ii) 1,500,000  shares of preferred  stock,  $.01
par value per value,  none of which shares of such preferred stock are issued or
outstanding.  All outstanding  shares of capital stock of the Borrower have been
duly and validly issued, are fully paid and nonassessable. Except for options or
warrants to purchase  shares of common stock of the  Borrower  held by employees
and  directors of the Borrower or any of its  Subsidiaries,  as of the Effective
Date, the Borrower does not have outstanding any securities  convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase,  or any options for the purchase of, or any agreement providing for
the issuance  (contingent or otherwise) of, or any calls,  commitments or claims
of any character relating to, its capital stock.

                  6.14 Subsidiaries.  As of the Effective Date, the Borrower has
no Subsidiaries other than those  Subsidiaries  listed on Schedule V. Schedule V
correctly sets forth, as of the

                                      -24-

<PAGE>

Effective Date, the percentage ownership (direct or indirect) of the Borrower in
each class of capital stock or other equity of each of its Subsidiaries and also
identifies the direct owner thereof.

                  6.15 Compliance  with Statutes,  etc. Each of the Borrower and
each  of  its  Subsidiaries  is in  compliance  with  all  applicable  statutes,
regulations  and orders  of, and all  applicable  restrictions  imposed  by, all
governmental  bodies,  domestic  or  foreign,  in respect of the  conduct of its
business  and the  ownership  of its property  (including  applicable  statutes,
regulations,  orders and restrictions  relating to  environmental  standards and
controls),  except  such  noncompliances  as could not,  individually  or in the
aggregate,  reasonably  be  expected  to have a material  adverse  effect on the
business,  operations,  property, assets,  liabilities,  condition (financial or
otherwise)  or prospects  of the  Borrower or the Borrower and its  Subsidiaries
taken as a whole.

                  6.16 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.

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

                  6.18 Environmental  Matters.  (a) The Borrower and each of its
Subsidiaries  have  complied  with,  and on the date of such Credit Event are in
compliance with, all applicable  Environmental  Laws and the requirements of any
permits issued under such  Environmental  Laws.  There are no pending or, to the
best  knowledge of the Borrower,  threatened  Environmental  Claims  against the
Borrower or any of its Subsidiaries (including any such claim arising out of the
ownership or operation  by the Borrower or any of its  Subsidiaries  of any Real
Property no longer owned or operated by the Borrower or any of its Subsidiaries)
or  any  Real  Property  owned  or  operated  by  the  Borrower  or  any  of its
Subsidiaries. There are no facts, circumstances,  conditions or occurrences with
respect to any Real  Property  owned or operated  by the  Borrower or any of its
Subsidiaries  (including  any Real  Property  formerly  owned or operated by the
Borrower  or any of its  Subsidiaries  but no longer  owned or  operated  by the
Borrower or any of its  Subsidiaries) or, to the best knowledge of the Borrower,
any  property  adjoining  or  adjacent  to any such  Real  Property  that  could
reasonably be expected (i) to form the basis of an  Environmental  Claim against
the Borrower or any of its  Subsidiaries  or any Real Property owned or operated
by the Borrower or any of its  Subsidiaries,  or (ii) to cause any Real Property
owned or operated by the  Borrower or any of its  Subsidiaries  to be subject to
any  restrictions on the ownership,  occupancy or  transferability  of such Real
Property  by  the  Borrower  or any of its  Subsidiaries  under  any  applicable
Environmental Law.

                  (b) Hazardous  Materials have not at any time been  generated,
used,  treated or stored on, or  transported to or from, any Real Property owned
or operated by the Borrower or any of its  Subsidiaries  where such  generation,
use,  treatment  or storage  has  violated  or could  reasonably  be expected to
violate any  Environmental  Law.  Hazardous  Materials have not at any time been
Released on or from any Real  Property  owned or operated by the Borrower or any
of

                                      -25-

<PAGE>

its Subsidiaries where such Release has violated or could reasonably be expected
to violate any applicable Environmental Law.

          (c) Notwithstanding anything to the contrary in this Section
6.18, the  representations  made in this Section 6.18 shall not be untrue unless
the  aggregate  effect of all  violations,  claims,  restrictions,  failures and
noncompliances of the types described above could reasonably be expected to have
a  material  adverse  effect  on the  business,  operations,  property,  assets,
liabilities,  condition (financial or otherwise) or prospects of the Borrower or
the Borrower and its Subsidiaries taken as a whole.

                  6.19 Labor  Relations.  Neither  the  Borrower  nor any of its
Subsidiaries  is engaged in any unfair labor  practice that could  reasonably be
expected to have a material  adverse  effect on the Borrower or the Borrower and
its  Subsidiaries  taken  as a  whole.  There is (i) no  unfair  labor  practice
complaint  pending  against the Borrower or any of its  Subsidiaries  or, to the
best knowledge of the Borrower or any of its  Subsidiaries,  threatened  against
any of them,  before the National  Labor  Relations  Board,  and no grievance or
arbitration  proceeding  arising  out  of or  under  any  collective  bargaining
agreement is so pending against the Borrower or any of its  Subsidiaries  or, to
the best  knowledge of the  Borrower,  threatened  against any of them,  (ii) no
strike, labor dispute,  slowdown or stoppage pending against the Borrower or any
of its  Subsidiaries  or, to the best  knowledge  of the  Borrower or any of its
Subsidiaries,  threatened  against the Borrower or any of its  Subsidiaries  and
(iii) no union  representation  question exists with respect to the employees of
the  Borrower or any of its  Subsidiaries,  except  (with  respect to any matter
specified in clause (i),  (ii) or (iii)  above,  either  individually  or in the
aggregate)  such as could not reasonably be expected to have a material  adverse
effect on the business,  operations,  property, assets,  liabilities,  condition
(financial or otherwise) or prospects of the Borrower or any of its Subsidiaries
and its Subsidiaries taken as a whole.

                  6.20 Patents,  Licenses,  Franchises and Formulas. Each of the
Borrower and each of its Subsidiaries owns all the patents, trademarks, permits,
service  marks,  trade  names,  copyrights,  licenses,  franchises,  proprietary
information  (including  but not  limited  to rights in  computer  programs  and
databases)  and  formulas,  or rights  with  respect to the  foregoing,  and has
obtained  assignments  of all  leases  and  other  rights  of  whatever  nature,
necessary for the present  conduct of its business,  without any known  conflict
with the rights of others which, or the failure to obtain which, as the case may
be, could  reasonably be expected to result in a material  adverse effect on the
business,  operations,  property, assets,  liabilities,  condition (financial or
otherwise)  or prospects  of the  Borrower or the Borrower and its  Subsidiaries
taken as a whole.

                  6.21 Indebtedness.  Schedule VI sets forth a true and complete
list of all Indebtedness  (including Contingent Obligations) of the Borrower and
its  Subsidiaries as of the Effective Date (excluding the Loans and Indebtedness
permitted  under  Section  9.04(iii)  of  the  Existing  Credit  Agreement,  the
"Existing  Indebtedness"),  in each  case  showing  the  name of the  respective
borrower  and any Credit  Party or any of its  Subsidiaries  which  directly  or
indirectly guaranteed such debt.

                  SECTION  7.   Affirmative   Covenants.   The  Borrower  hereby
covenants  and agrees that on and after the  Effective  Date and until the Total
Commitment has terminated and the Loans

                                      -26-

<PAGE>

and Notes,  together  with  interest,  Fees and all other  Obligations  incurred
hereunder and thereunder, are paid in full:

                  7.01  Incorporation by Reference.  The Borrower will, and will
cause each of its  Subsidiaries  to, comply with each of the covenants set forth
in Section 8 of the Existing  Credit  Agreement  (without  giving  effect to any
amendments,  modifications  or supplements  thereto  (including any  amendments,
modifications or supplements to the definitions in the Existing Credit Agreement
applicable to such covenants)  entered into after the Effective Date unless such
amendments,  modifications  or  supplements  are also agreed to by the  Required
Banks  hereunder) to the extent such covenants are applicable to the Borrower or
such Subsidiary,  each of which covenants  (together with all definitions in the
Existing Credit Agreement  applicable to such covenants) is incorporated  herein
by reference as if fully set forth herein in its entirety.

                  7.02  Additional  Information  Covenants.  The  Borrower  will
furnish to each Bank:

                  (a) Weekly  Financial  Statements.  Within two  Business  Days
after the end of each  calendar  week,  (i)  projections  of cash  flows for the
period  beginning  with the end of such  calendar week through and including the
Maturity  Date,  (ii) actual  cash flows for each of the four weeks  immediately
preceding  the end of such  calendar  week and (iii)  backlogs and  shipments by
product line as of the end of such calendar week.

                  (b) Monthly  Financial  Statements.  Within ten Business  Days
after the end of each calendar month, the consolidated and consolidating balance
sheet of the  Borrower  and its  Subsidiaries  as at the end of such month,  the
related consolidated and consolidating  statements of income,  showing income by
division, and the related consolidated and consolidating  statements of retained
earnings and statement of cash flows for such month.

                  SECTION 8. Negative  Covenants.  The Borrower hereby covenants
and agrees that on and after the Effective  Date and until the Total  Commitment
has  terminated and the Loans and Notes,  together with  interest,  Fees and all
other Obligations incurred hereunder and thereunder, are paid in full:

                  8.01  Incorporation by Reference.  The Borrower will, and will
cause each of its  Subsidiaries  to, comply with each of the covenants set forth
in Section 9 of the Existing  Credit  Agreement  (without  giving  effect to any
amendments,  modifications  or supplements  thereto  (including any  amendments,
modifications or supplements to the definitions in the Existing Credit Agreement
applicable to such covenants)  entered into after the Effective Date unless such
amendments,  modifications  or  supplements  are also agreed to by the  Required
Banks  hereunder) to the extent such covenants are applicable to the Borrower or
such Subsidiary,  each of which covenants  (together with all definitions in the
Existing Credit Agreement  applicable to such covenants) is incorporated  herein
by reference as if fully set forth herein in its entirety.

                  8.02 Bank Accounts. The Borrower will not, and will not permit
any of its  Subsidiaries  to, open any bank  accounts  without the prior written
consent of the Administrative Agent;  provided,  however, the Borrower or any of
its  Subsidiaries  may,  in the  aggregate,  open  up to two  bank  accounts  in
connection with the Snorkel Revolver.

                                      -27-

<PAGE>

                  SECTION 9. Events of Default.  Upon the  occurrence  of any of
the following specified events (each an "Event of Default"):

                  9.01  Payments.  The Borrower shall (i) default in the payment
when due of any  principal of any Loan or any Note,  or (ii)  default,  and such
default shall  continue for more than two Business Days, in the payment when due
of any  interest  on any Loan or Note or any  Fees or any  other  amounts  owing
hereunder or thereunder; or

                  9.02  Representations,  etc. Any  representation,  warranty or
statement made by any Credit Party herein or in any other Credit  Document or in
any  certificate  delivered to any Agent or any Bank pursuant  hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or

                  9.03 Covenants.  Any Credit Party shall (i) default in the due
performance or observance by it of any term,  covenant or agreement contained in
Section  8.01(f)(i),  8.08 or 8.11 of the Existing Credit Agreement or Section 9
of the  Existing  Credit  Agreement or (ii)  default in the due  performance  or
observance  by it of any other term,  covenant or  agreement  contained  in this
Agreement or any other Credit  Document  (other than those set forth in Sections
9.01 and 9.02) and such default  shall  continue  unremedied  for a period of 30
days after written notice  thereof to the  defaulting  party by any Agent or the
Required Banks; or

                  9.04 Default Under Other  Agreements.  (i) The Borrower or any
of its Subsidiaries shall (x) default in any payment of any Indebtedness  (other
than the  Notes)  beyond the period of grace or cure,  if any,  provided  in the
instrument or agreement under which such Indebtedness was created or (y) default
in the observance or  performance of any agreement or condition  relating to any
Indebtedness  (other than the Notes) or contained in any instrument or agreement
evidencing,  securing  or  relating  thereto,  or any other event shall occur or
condition  exist,  the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such  Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause  (determined  without regard
to whether any notice is  required,  but beyond the period of grace or cure,  if
any,  provided in the instrument or agreement under which such  Indebtedness was
created),  any such Indebtedness to become due prior to its stated maturity,  or
(ii) any  Indebtedness  (other  than the  Notes) of the  Borrower  or any of its
Subsidiaries  shall be declared  to be (or shall  become)  due and  payable,  or
required to be prepaid other than by a regularly scheduled required  prepayment,
prior to the stated maturity thereof, provided that it shall not be a Default or
an Event of Default  under this  Section  9.04  unless the  aggregate  principal
amount of all Indebtedness as described in preceding  clauses (i) and (ii) is at
least $2,000,000; or

                  9.05 Bankruptcy,  etc. The Borrower or any of its Subsidiaries
shall commence a voluntary case  concerning  itself under Title 11 of the United
States  Code  entitled  "Bankruptcy,"  as now or  hereafter  in  effect,  or any
successor  thereto (the "Bankruptcy  Code"); or an involuntary case is commenced
against  the  Borrower  or any of its  Subsidiaries,  and  the  petition  is not
controverted  within  15  days,  or is  not  dismissed  within  60  days,  after
commencement of the case; or a custodian (as defined in the Bankruptcy  Code) is
appointed for, or takes charge of, all or  substantially  all of the property of
the  Borrower  or  any  of  its  Subsidiaries,  or  the  Borrower  or any of its
Subsidiaries   commences  any  other   proceeding   under  any   reorganization,
arrangement,

                                      -28-

<PAGE>

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

                  9.06  ERISA.  (a) Any Plan shall fail to satisfy  the  minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such  standard or  extension  of
any  amortization  period is sought or granted  under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, any Plan or
Multiemployer  Plan which is  subject to Title IV of ERISA  shall have had or is
likely to have a trustee  appointed  to  administer  such Plan or  Multiemployer
Plan, any Plan or  Multiemployer  Plan which is subject to Title IV of ERISA is,
shall  have  been  or is  likely  to be  terminated  or to  be  the  subject  of
termination  proceedings under ERISA, any Plan or Multiemployer  Plan shall have
an Unfunded Current Liability,  a contribution  required to be made with respect
to a Plan, a  Multiemployer  Plan or a Foreign  Pension Plan has not been timely
made, the Borrower or any Subsidiary of the Borrower or any ERISA  Affiliate has
incurred  or is likely  to incur any  liability  to or on  account  of a Plan or
Multiemployer  Plan under Section 409,  502(i),  502(l),  515, 4062, 4063, 4064,
4069,  4201,  4204 or 4212 of ERISA or Section  401(a)(29),  4971 or 4975 of the
Code or on account of a group health plan (as defined in Section 607(1) of ERISA
or Section  4980B(g)(2) of the Code) under Section  4980B(a) of the Code, or the
Borrower or any  Subsidiary  of the  Borrower has incurred or is likely to incur
liabilities  pursuant to one or more employee  welfare benefit plans (as defined
in Section  3(1) of ERISA) that provide  benefits to retired  employees or other
former  employees  (other  than as required by Section 601 of ERISA) or Plans or
Foreign Pension Plans;  (b) there shall result from any such event or events the
imposition of a lien, the granting of a security  interest,  or a liability or a
material risk of incurring a liability;  and (c) such lien, security interest or
liability,  individually,  and/or in the aggregate, has had, or could reasonably
be expected to have,  a material  adverse  effect on the  business,  operations,
property, assets,  liabilities,  condition (financial or otherwise) or prospects
of the Borrower or the Borrower and its Subsidiaries taken as a whole; or

                  9.07 Security  Documents.  At any time after the execution and
delivery thereof,  any of the Security Documents shall cease to be in full force
and effect,  or shall cease to give the Collateral  Agent for the benefit of the
Secured  Creditors  the Liens,  rights,  powers and  privileges  purported to be
created thereby (including,  without  limitation,  a perfected security interest
in,  and Lien on,  all of the  Collateral,  in  favor of the  Collateral  Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 9.01 of the Existing  Credit  Agreement),  and subject to no other Liens
(except as permitted by Section 9.01 of the Existing Credit Agreement); or

                                      -29-

<PAGE>

                  9.08  Subsidiaries  Guaranty.  At any time after the execution
and delivery thereof,  the Subsidiaries  Guaranty or any provision thereof shall
cease to be in full  force or  effect  as to any  Subsidiary  Guarantor,  or any
Subsidiary  Guarantor  or any Person  acting by or on behalf of such  Subsidiary
Guarantor shall deny or disaffirm such Subsidiary Guarantor's  obligations under
the Subsidiaries  Guaranty or any Subsidiary  Guarantor shall default in the due
performance  or observance of any term,  covenant or agreement on its part to be
performed or observed pursuant to the Subsidiaries Guaranty; or

                  9.09  Judgments.  One or more  judgments  or decrees  shall be
entered against the Borrower or any Subsidiary of the Borrower  involving in the
aggregate for the Borrower and its  Subsidiaries  a liability (not paid or fully
covered by a reputable  and solvent  insurance  company) and such  judgments and
decrees  either  shall be final  and  non-appealable  or shall  not be  vacated,
discharged or stayed or bonded  pending  appeal for any period of 30 consecutive
days, and the aggregate amount of all such judgments exceeds $2,000,000; or

                  9.10 Change of Control. A Change of Control shall occur;

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing,  the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrower,  take any or all of
the following actions, without prejudice to the rights of any Agent, any Bank or
the holder of any Note to enforce its claims against any Credit Party (provided,
that, if an Event of Default  specified in Section 9.05 shall occur with respect
to the Borrower,  the result which would occur upon the giving of written notice
by the  Administrative  Agent as  specified  in clauses (i) and (ii) below shall
occur  automatically  without  the giving of any such  notice):  (i) declare the
Total  Commitment  terminated,  whereupon  all  Commitments  of each Bank  shall
forthwith  terminate  immediately and any Commitment  Commission shall forthwith
become due and payable  without any other  notice of any kind;  (ii) declare the
principal of and any accrued  interest in respect of all Loans and the Notes and
all Obligations  owing hereunder and thereunder to be,  whereupon the same shall
become, forthwith due and payable without presentment,  demand, protest or other
notice of any kind,  all of which are hereby  waived by each Credit  Party;  and
(iii)  enforce,  as Collateral  Agent,  all of the Liens and security  interests
created pursuant to the Security Documents.

                  SECTION 10. Definitions and Accounting Terms.

                  10.01 Defined Terms. As used in this Agreement,  the following
terms shall have the following  meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

                  "Adjusted  Consolidated  Cash  Income"  shall  mean,  for  any
period,  Consolidated Net Income for such period plus, without duplication,  the
sum of the amount of all net non-cash charges  (including,  without  limitation,
depreciation, amortization, deferred tax expense, non-cash interest expense) and
net non-cash losses which were included in arriving at  Consolidated  Net Income
for such period less the sum of the amount of all net non-cash  gains which were
included in arriving at Consolidated Net Income for such period.

                                      -30-

<PAGE>

                  "Adjusted Consolidated Working Capital" at any time shall mean
Consolidated   Current  Assets  (but  excluding  therefrom  all  cash  and  Cash
Equivalents) less Consolidated Current Liabilities at such time.

                  "Adjusted Total  Commitment"  shall mean at any time the Total
Commitment less the aggregate Commitments of all Defaulting Banks.

                  "Administrative Agent" shall mean First Union Investors, Inc.,
in its  capacity  as  Administrative  Agent for the Banks  hereunder,  and shall
include any successor to the Administrative  Agent appointed pursuant to Section
11.09.

                  "Affiliate" shall mean, with respect to any Person,  any other
Person  directly or indirectly  controlling,  controlled  by, or under direct or
indirect common control with,  such Person.  A Person shall be deemed to control
another Person if such Person  possesses,  directly or indirectly,  the power to
direct or cause the  direction  of the  management  and  policies  of such other
Person,  whether  through the  ownership  of voting  securities,  by contract or
otherwise.

                  "Agent"  shall mean and include the  Administrative  Agent and
the Syndication Agent.

                  "Agreement"  shall mean this Credit  Agreement,  as  modified,
supplemented,   amended,  restated  (including  any  amendment  and  restatement
hereof), extended, renewed, refinanced or replaced from time to time.

                  "Amended and Restated Mortgage" shall mean each mortgage, deed
to secure debt or deed of trust  pursuant  to which any Credit  Party shall have
granted to the Collateral Agent a mortgage lien on such Credit Party's Mortgaged
Property.

                  "Amended and Restated Pledge Agreement" shall have the meaning
provided in Section 4.07.

                  "Amended and Restated Pledge Agreement  Collateral" shall mean
all "Collateral" as defined in the Amended and Restated Pledge Agreement.

                  "Amended  and  Restated  Security  Agreement"  shall  have the
meaning provided in Section 4.08.

                  "Amended and Restated  Security  Agreement  Collateral"  shall
mean all "Collateral" as defined in the Amended and Restated Security Agreement.

                  "Applicable  Base Rate Margin" from and after the first day of
any  Applicable  Pricing Period (the "Start Date") to and including the last day
of such  Applicable  Pricing Period (the "End Date"),  shall mean the respective
percentage  per annum set forth in clause (A) - (F) below if, but only if, as of
the last day of the most recent fiscal quarter of the Borrower ended immediately
prior to such  Start Date (the "Test  Date") the  condition  in clause (A) - (F)
below is met:

                                      -31-

<PAGE>

                  (A) 2.000% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be greater than 3.50:1.0; or

                  (B) 1.750% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 3.50:1.0 but greater than 3.00:1.0; or

                  (C) 1.500% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 3.00:1.0 but greater than 2.50:1.0; or

                  (D) 1.250% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 2.50:1.0 but greater than 2.00:1.0; or

                  (E) 1.000% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 2.00:1.0 but greater than 1.50:1.0; or

                  (F) 0.750% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 1.5:1.0.

                  Notwithstanding  anything to the contrary  contained  above in
this  definition,  (a) for the  period  from the  Effective  Date to the date of
delivery  of the  financial  statements  and  related  certificates  pursuant to
Section  8.01(b) of the Existing  Credit  Agreement in respect of the Borrower's
fiscal year ending on September  30, 1999,  and (b) at any time when any Default
or Event of Default exists, the Applicable Base Rate Margin shall be 2.000%.

                  "Applicable  Commitment Commission  Percentage" from and after
any Start  Date to and  including  the  corresponding  End Date,  shall mean the
respective  percentage  per annum set forth in clause  (A) or (B) below if,  but
only if,  as of the Test Date for such  Start  Date the  condition  set forth in
clause (A) or (B) below is met:

                  (A) 0.500% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be greater than 1.50:1.00; or

                  (B) 0.375% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 1.50:1.00.

                  Notwithstanding  anything to the contrary  contained  above in
this  definition,  (a) for the  period  from the  Effective  Date to the date of
delivery  of the  financial  statements  and  related  certificates  pursuant to
Section  8.01(b) of the Existing  Credit  Agreement in respect of the

                                      -32-

<PAGE>

Borrower's fiscal year ending on September 30, 1999 and (b) at any time when any
Default  or  Event of  Default  exists,  the  Applicable  Commitment  Commission
Percentage shall be 0.500%.

                  "Applicable  Eurodollar  Margin" from and after any Start Date
to  and  including  the  corresponding  End  Date,  shall  mean  the  respective
percentage  per annum set forth in clause  (A)-(F)  below if, but only if, as of
the Test Date for such Start Date the condition in clause (A)-(F) below is met:

                  (A) 3.000% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be greater than 3.50:1.0; or

                  (B) 2.750% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 3.50:1.0 but greater than 3.00:1.0; or

                  (C) 2.500% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 3.00:1.0 but greater than 2.50:1.0; or

                  (D) 2.250% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 2.50:1.0 but greater than 2.00:1.0; or

                  (E) 2.000% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 2.00:1.0 but greater than 1.50:1.0; or

                  (F) 1.750% if, but only if, as of the Test Date for such Start
         Date,  the  Leverage  Ratio for the Test Period ended on such Test Date
         shall be equal to or less than 1.5:1.0.

                  Notwithstanding  anything to the contrary  contained  above in
this  definition,  (a) for the  period  from the  Effective  Date to the date of
delivery  of the  financial  statements  and  related  certificates  pursuant to
Section  8.01(b) of the Existing  Credit  Agreement in respect of the Borrower's
fiscal year ending on September 30, 1999 and (b) at any time when any Default or
Event of Default exists, the Applicable Eurodollar Margin shall be 3.000%.

                  "Applicable Pricing Period" shall mean each period which shall
commence  on a date five  Business  Days  after the date on which the  financial
statements  are  delivered  pursuant to Section  8.01(a) or (b) of the  Existing
Credit  Agreement  and  which  shall  end on the  earlier  of (i) the date  five
Business Days after the date of actual delivery of the next financial statements
pursuant to Section 8.01(a) or (b) of the Existing Credit Agreement and (ii) the
latest date on which the next financial  statements are required to be delivered
pursuant to Section  8.01(a) or (b) of the  Existing  Credit  Agreement  if such
financial statements have not been delivered on or prior to such date.

                                      -33-

<PAGE>

                  "Asset   Sale"   shall  mean  any  sale,   transfer  or  other
disposition by the Borrower or any of its Subsidiaries to any Person  (including
by  way  of  redemption  by  such  Person)  other  than  to  the  Borrower  or a
Wholly-Owned  Subsidiary  of the  Borrower  of  any  asset  (including,  without
limitation,  any capital stock or other  securities of, or equity  interests in,
another Person) of the Borrower or any of its Subsidiaries, other than any sale,
transfer or disposition permitted by Sections 9.02(ii),  (iii), (v), (vii), (xi)
and (xii) of the Existing Credit Agreement.

                  "Assignment and Assumption Agreement" shall mean an Assignment
and Assumption  Agreement  substantially in the form of Exhibit J (appropriately
completed).

                  "Bank" shall mean each Person listed on Schedule I, as well as
any  Person  which  becomes  a "Bank"  hereunder  pursuant  to  Section  1.13 or
12.04(b).

                  "Bank  Default" shall mean (i) the refusal (which has not been
retracted)  or the  failure  of a Bank  to make  available  its  portion  of any
Borrowing  or (ii) a Bank having  notified in writing  the  Borrower  and/or the
Administrative  Agent  that  such  Bank  does  not  intend  to  comply  with its
obligations under Section 1.01 or 1.04, in the case of either clause (i) or (ii)
as a result of any  takeover or control  (including,  without  limitation,  as a
result of the occurrence of any event of the type described in Section 9.05 with
respect to such Bank) of such Bank by any regulatory authority or agency.

                  "Bankruptcy  Code" shall have the meaning  provided in Section
9.05.

                  "Base Rate" at any time shall mean the higher of (i) 1/2 of 1%
in excess of the Federal Funds Rate and (ii) the Prime Lending Rate.

                  "Base Rate Loan"  shall  mean each Loan  designated  or deemed
designated  as such by the  Borrower  at the time of the  incurrence  thereof or
conversion thereto.

                  "Borrower"  shall  have  the  meaning  provided  in the  first
paragraph of this Agreement.

                  "Borrower's  Account"  shall  mean a  deposit  account  of the
Borrower  maintained with the Payment Office of the Administrative  Agent, which
is identified by the Borrower in the most recent Notice of Account  Designation,
substantially  in the form of Exhibit K hereto  delivered by the Borrower to the
Administrative  Agent as the Borrower's Account for receipt of proceeds of Loans
to the Borrower.

                  "Borrowing"  shall mean the borrowing of one Type of Loan from
all the Banks on a given date (or resulting  from a conversion or conversions on
such date)  having in the case of  Eurodollar  Loans the same  Interest  Period,
provided  that Base Rate Loans  incurred  pursuant to Section  1.10(b)  shall be
considered part of the related Borrowing of Eurodollar Loans.

                  "Business  Day" shall mean (i) for all purposes  other than as
covered by clause (ii) below, any day except Saturday,  Sunday and any day which
shall be in New York City, New York or Charlotte, North Carolina a legal holiday
or a day on which  banking  institutions  are  authorized  or required by law or
other  government  action to close  and (ii) with  respect  to all

                                      -34-

<PAGE>

notices and  determinations  in connection  with,  and payments of principal and
interest on,  Eurodollar  Loans,  any day which is a Business  Day  described in
clause (i) above and which is also a day for trading by and between banks in the
London interbank Eurodollar market.

                  "Calculation Period" shall mean the period of four consecutive
fiscal  quarters of the Borrower  last ended  before the date of the  respective
Permitted  Acquisition  which  requires  calculations  to be made on a Pro Forma
Basis.

                  "Capital Expenditures" shall mean, with respect to any Person,
all  expenditures  by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.

                  "Capitalized  Lease  Obligations" of any Person shall mean all
rental obligations which, under generally accepted accounting principles, are or
will be required to be  capitalized  on the books of such  Person,  in each case
taken at the amount thereof  accounted for as  indebtedness  in accordance  with
such principles.

                  "Cash   Equivalents"   shall  mean,  as  to  any  Person,  (i)
securities  issued or  directly  and fully  guaranteed  or insured by the United
States or any agency or  instrumentality  thereof  (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than one year from the date of acquisition,  (ii) Dollar denominated
time deposits and  certificates  of deposit of any  commercial  bank having,  or
which is the principal  banking  subsidiary of a bank holding company having,  a
long-term  unsecured debt rating of at least "A" or the equivalent  thereof from
Standard  & Poor's  Ratings  Services  or "A2" or the  equivalent  thereof  from
Moody's Investors  Service,  Inc. with maturities of not more than one year from
the date of acquisition by such Person, (iii) repurchase obligations with a term
of not more than seven days for underlying  securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (ii) above, (iv) commercial paper issued by any Person incorporated in
the United  States  rated at least A-1 or the  equivalent  thereof by Standard &
Poor's  Ratings  Services  or at least P1 or the  equivalent  thereof by Moody's
Investors  Service,  Inc. and in each case maturing not more than 270 days after
the  date of  acquisition  by such  Person,  (v)  asset-backed  certificates  of
participation  representing a fractional  undivided  interest in the assets of a
trust,  which  certificates are rated at least A-1 or the equivalent  thereof by
Standard & Poor's Rating  Services or at least P-1 or the equivalent  thereof by
Moody's  Investors  Service,  Inc.,  and (vi)  investments in money market funds
substantially  all of whose  assets are  comprised  of  securities  of the types
described in clauses (i) through (v) above.

                  "CERCLA" shall mean the Comprehensive  Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.

                  "Change  of  Control"  shall  mean (i) any  Person or  "group"
(within the meaning of Rules 13d-3 or 13d-5 under the  Securities  Exchange  Act
(as in effect on the Effective Date)),  other than the Permitted Holders,  shall
(A) have acquired  beneficial  ownership of 25% or more on a fully diluted basis
of the voting and/or  economic  interest in the Borrower's  capital stock or (B)

                                      -35-

<PAGE>

have  obtained the power  (whether or not  exercised) to elect a majority of the
Borrower's  directors or (ii) the Board of Directors of the Borrower shall cease
to consist of a majority of Continuing Directors.

                  "Co-Arrangers"  shall mean each of First Union Capital Markets
Corp. and MSSF in their respective capacities as Co-Arrangers.  The Co-Arrangers
shall incur no liabilities  and shall have no duties or  responsibilities  under
this Agreement or any other Credit Document in such capacity.

                  "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
amended from time to time, and the  regulations  promulgated  and rulings issued
thereunder.  Section references to the Code are to the Code, as in effect at the
date of this  Agreement and any  subsequent  provisions of the Code,  amendatory
thereof, supplemental thereto or substituted therefor.

                  "Collateral"   shall  mean  all  property   (whether  real  or
personal)  with  respect to which any security  interests  have been granted (or
purport to be granted)  pursuant to any Security  Document,  including,  without
limitation,  all Amended and Restated Pledge Agreement  Collateral,  all Amended
and Restated Security Agreement Collateral and the Mortgaged Properties.

                  "Collateral Agent" shall mean First Union National Bank acting
as  collateral  agent  for  the  Secured  Creditors  pursuant  to  the  Security
Documents.

                  "Commitment"  shall mean,  for each Bank, the amount set forth
opposite  such  Bank's  name in  Schedule I directly  below the column  entitled
"Commitment,"  as same may be (x) reduced from time to time pursuant to Sections
2.02, 2.03 and/or 9 or (y) adjusted from time to time as a result of assignments
to or from such Bank pursuant to Section 1.13 or 12.04(b).

                  "Commitment  Commission"  shall have the  meaning  provided in
Section 2.01.

                  "Consolidated  Current  Assets" shall mean,  at any time,  the
consolidated current assets of the Borrower and its Subsidiaries at such time.

                  "Consolidated  Current  Liabilities"  shall mean, at any time,
the  consolidated  current  liabilities of the Borrower and its  Subsidiaries at
such time, but excluding the current  portion of and accrued but unpaid interest
on any  Indebtedness  under this Agreement and any other long-term  Indebtedness
which would otherwise be included therein.

                  "Consolidated  EBIT" shall mean, for any period,  Consolidated
Net Income before  Consolidated  Interest Expense and before provision for taxes
for such  period and without  giving  effect (w) to any  extraordinary  gains or
losses, (x) to any gains or losses from sales of assets other than from sales of
inventory  sold in the  ordinary  course  of  business  and (y) to any  expenses
related  to or  incurred  by the  Borrower  in  connection  with  any  Permitted
Acquisition,  provided,  however, that with respect to any Permitted Acquisition
which is accounted for as a "purchase,"  for the  Calculation  Period  following
such  acquisition  Consolidated  EBIT shall include results of operations of the
company or assets so acquired  which  amounts shall be determined on a Pro Forma
Basis.

                                      -36-

<PAGE>

                  "Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT for such period,  adjusted by adding thereto the amount of all amortization
and depreciation  expense of the Borrower and its Subsidiaries that was deducted
in arriving at Consolidated EBIT for such period.

                  "Consolidated  Indebtedness"  shall  mean,  at any  time,  the
principal  amount of all  Indebtedness  of the Borrower and its  Subsidiaries at
such  time  determined  on  a  consolidated   basis  to  the  extent  that  such
Indebtedness  would  be  accounted  for as debt  in  accordance  with  generally
accepted accounting principles plus, without duplication, (i) the maximum amount
available to be drawn under all letters of credit  issued for the account of the
Borrower and its Subsidiaries and all unpaid drawings in respect of such letters
of credit, (ii) the principal amount of all bonds issued by the Borrower and its
Subsidiaries  in  connection  with  workers'  compensation  obligations,   lease
obligations  and  similar  obligations,  (iii)  all  Indebtedness  set  forth on
Schedule  V to the  extent  outstanding  at such time and (iv) the amount of all
Contingent  Obligations  of the Borrower and its  Subsidiaries  determined  on a
consolidated  basis in  respect  of  Indebtedness  of other  Persons of the type
described above in this definition.

                  "Consolidated  Interest  Expense"  shall mean, for any period,
the total consolidated interest expense of the Borrower and its Subsidiaries for
such  period  (calculated  without  regard  to any  limitations  on the  payment
thereof)  plus,   without   duplication,   that  portion  of  Capitalized  Lease
Obligations  of the  Borrower  and its  Subsidiaries  representing  the interest
factor for such period; provided that the amortization of fees and expenses with
respect  to  this  Agreement,   the  Indebtedness  incurred  hereunder  and  any
Indebtedness  incurred  under Section  9.04(vi) or (vii) of the Existing  Credit
Agreement  shall be excluded from  Consolidated  Interest  Expense to the extent
same would otherwise have been included therein.

                  "Consolidated  Net  Income"  shall  mean,  for any  Person and
period,  the net income (or loss) of such Person and its  Subsidiaries  for such
period,  determined  on a  consolidated  basis  (after  deduction  for  minority
interests) in accordance with generally accepted accounting principles, provided
that (i) in determining  Consolidated Net Income of the Borrower, the net income
(or loss) of any other Person  which is not a  Subsidiary  of the Borrower or is
accounted  for by the  Borrower  by the  equity  method of  accounting  shall be
included only to the extent of the payment of dividends or distributions by such
other Person to the Borrower or a Subsidiary thereof during such period and (ii)
the net income (or loss) of any other Person  acquired by such specified  Person
or a  Subsidiary  of such Person in a pooling of interests  transaction  for any
period prior to the date of such acquisition shall be excluded.

                  "Contingent  Obligation"  shall mean,  as to any  Person,  any
obligation of such Person as a result of such Person being a general  partner of
the  other  Person,   unless  the   underlying   obligation  is  expressly  made
non-recourse  as to such  general  partner,  and any  obligation  of such Person
guaranteeing or in effect  guaranteeing any Indebtedness,  leases,  dividends or
other  obligations  ("primary  obligations")  of any other Person (the  "primary
obligor") in any manner,  whether  directly or  indirectly,  including,  without
limitation,  any obligation of such Person,  whether or not  contingent,  (i) to
purchase any such primary  obligation  or any  property  constituting  direct or
indirect security therefor, (ii) to advance or supply funds (x) for the purchase
or payment of any such primary  obligation or (y) to maintain working capital or
equity

                                      -37-

<PAGE>

capital  of the  primary  obligor  or  otherwise  to  maintain  the net worth or
solvency  of the primary  obligor,  (iii) to purchase  property,  securities  or
services  primarily  for the purpose of assuring  the owner of any such  primary
obligation of the ability of the primary obligor to make payment of such primary
obligation  or (iv)  otherwise  to assure or hold  harmless  the  holder of such
primary obligation against loss in respect thereof; provided,  however, that the
term  Contingent  Obligation  shall not include  endorsements of instruments for
deposit or  collection  in the ordinary  course of  business.  The amount of any
Contingent  Obligation  shall be deemed to be an amount  equal to the  stated or
determinable  amount  of  the  primary  obligation  in  respect  of  which  such
Contingent  Obligation  is made or, if not stated or  determinable,  the maximum
reasonably  anticipated  liability in respect  thereof  (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.

                  "Continuing   Directors"  shall  mean  the  directors  of  the
Borrower on the Effective Date and each other director, if such other director's
nomination for election to the Board of Directors of the Borrower is recommended
by a majority of the then Continuing  Directors or is recommended by a committee
of the Board of Directors a majority of which is composed of the then Continuing
Directors.

                  "Credit  Documents"  shall mean this  Agreement and, after the
execution and delivery  thereof  pursuant to the terms of this  Agreement,  each
Note, the Subsidiaries Guaranty and each Security Document.

                  "Credit Event" shall mean the making of any Loan.

                  "Credit  Party" shall mean the  Borrower  and each  Subsidiary
Guarantor.

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

                  "Defaulting  Bank" shall mean any Bank with respect to which a
Bank Default is in effect.

                  "Determination  Date" shall have the  meaning  provided in the
definition of "Pro Forma Basis."

                  "Dividend"  with  respect to any  Person  shall mean that such
Person has  declared or paid a dividend or  returned  any equity  capital to its
stockholders or partners or authorized or made any other  distribution,  payment
or delivery of property  (other than common stock of such Person) or cash to its
stockholders or partners as such, or redeemed,  retired,  purchased or otherwise
acquired, directly or indirectly, for a consideration any shares of any class of
its  capital  stock or any  partnership  interests  outstanding  on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock), or set aside any funds for any of the foregoing purposes, or
shall have permitted any of its  Subsidiaries  to purchase or otherwise  acquire
for a  consideration  any  shares  of any  class  of the  capital  stock  or any
partnership  interests of such Person outstanding on or after the Effective Date
(or any  options or warrants  issued by such Person with  respect to its capital
stock).  Without limiting the foregoing,  "Dividends" with

                                      -38-

<PAGE>

respect to any Person  shall also  include all  payments  made or required to be
made by such Person with respect to any stock appreciation rights, plans, equity
incentive  or  achievement  plans or any similar  plans or setting  aside of any
funds for the foregoing purposes.

                  "Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.

                  "Domestic  Subsidiary"  shall  mean  each  Subsidiary  of  the
Borrower  incorporated  or  organized  in the  United  States  or any  State  or
territory thereof.

                  "Effective  Date" shall have the  meaning  provided in Section
12.10.

                  "Eligible  Transferee"  shall  mean and  include a  commercial
bank,  insurance  company,  financial  institution,  fund or other  Person which
regularly purchases interests in loans or extensions of credit of the types made
pursuant to this Agreement, any other Person which would constitute a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act as
in effect on the Effective  Date or other  "accredited  investor" (as defined in
Regulation D of the Securities Act).

                  "End Date" shall have the meaning  provided in the  definition
of Applicable Base Rate Margin.

                  "Endorsement" shall have the meaning provided in Section 4.10.

                  "Environmental  Claims" shall mean any and all administrative,
regulatory or judicial  actions,  suits,  demands,  demand letters,  directives,
claims,  liens,  notices  of  noncompliance  or  violation,   investigations  or
proceedings  relating in any way to any  Environmental Law or any permit issued,
or any approval given, under any such  Environmental Law (hereafter,  "Claims"),
including,  without  limitation,  (a) any  and all  Claims  by  governmental  or
regulatory authorities for enforcement,  cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable  Environmental  Law, and (b)
any  and  all  Claims  by  any  third  party  seeking   damages,   contribution,
indemnification,  cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.

                  "Environmental Law" shall mean any Federal,  state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, written policy
and rule of common law now or  hereafter  in effect and in each case as amended,
and  any  judicial  or  administrative  interpretation  thereof,  including  any
judicial or administrative  order,  consent decree or judgment,  relating to the
environment,  employee  health and  safety or  Hazardous  Materials,  including,
without  limitation,  CERCLA;  RCRA; the Federal Water Pollution Control Act, 33
U.S.C. ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et
seq.;  the Clean Air Act, 42 U.S.C.  ss. 7401 et seq.;  the Safe Drinking  Water
Act, 42 U.S.C.  ss. 3803 et seq.;  the Oil Pollution Act of 1990, 33 U.S.C.  ss.
2701 et seq.;  the  Emergency  Planning and the Community  Right-to-Know  Act of
1986, 42 U.S.C. ss. 11001 et seq.; the Hazardous Material Transportation Act, 49
U.S.C.  ss. 1801 et seq. and

                                      -39-

<PAGE>

the Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.; and any state
and local or foreign  counterparts or equivalents,  in each case as amended from
time to time.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974,  as amended  from time to time,  and the  regulations  promulgated  and
rulings  issued  thereunder.  Section  references  to ERISA are to ERISA,  as in
effect at the date of this  Agreement  and any  subsequent  provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.

                  "ERISA  Affiliate"  shall  mean each  person  (as  defined  in
Section 3(9) of ERISA) which  together  with the Borrower or a Subsidiary of the
Borrower would be deemed to be a "single employer" within the meaning of Section
414(b), (c), (m) or (o) of the Code.

                  "Eurodollar  Loan" shall mean each Loan  designated as such by
the Borrower at the time of the incurrence thereof or conversion thereto.

                  "Eurodollar  Rate" shall mean,  with respect to each  Interest
Period for a Eurodollar Loan, the London  Interbank  Offered Rate for borrowings
(rounded  upward to the nearest  1/16 of one percent) for deposits of Dollars in
minimum  amounts of at least the Minimum  Borrowing  Amount  applicable  to such
Eurodollar  Loan for a period  equivalent  to such period at or about 11:00 A.M.
(London time) on the second  Business Day before the first day of such period as
is  displayed  on Telerate  page 3750  (British  Bankers'  Association  Interest
Settlement  Rates)  (or such other  page as may  replace  such page 3750 on such
system,  provided  that if on  such  date no  such  rate  is so  displayed,  the
Eurodollar   Rate  for  such  period  shall  be  the  rate   determined  by  the
Administrative Agent to be the arithmetic average (rounded upward, if necessary,
to the nearest 1/16 of one  percent) of the rate per annum at which  deposits of
Dollars in an amount  approximately equal to the amount in relation to which the
Eurodollar  Rate is to be determined for a period  equivalent to such period are
being  offered by first class banks in the London  Interbank  Market at or about
11:00 A.M. (London time) on the second Business Day before the first day of such
period,  provided  further  that in each case the rate  obtained  above shall be
adjusted to take account of reserve  requirements  by dividing  such rate by the
Eurodollar Reserve Percentage (with such resulting rate to be rounded upward, if
necessary, to the nearest 1/100 of one percent).

                  "Eurodollar  Reserve  Percentage"  shall mean for any day, the
remainder  of one minus the  percentage  (expressed  as a  decimal  and  rounded
upwards, if necessary,  to the next higher 1/100th of 1%) which is in effect for
such day as  prescribed  by the Federal  Reserve  Board (or any  successor)  for
determining the maximum reserve  requirement  (including  without limitation any
basic,   supplemental   or  emergency   reserves)  in  respect  of  Eurocurrency
liabilities  or any  similar  category of  liabilities  for a member bank of the
Federal Reserve System in New York City.

                  "Event of Default" shall have the meaning  provided in Section
9.

                  "Excess Cash Flow" shall mean,  for any period,  the remainder
of (i) the sum of (a) Adjusted  Consolidated Cash Income for such period and (b)
the decrease,  if any, in Adjusted  Consolidated  Working Capital from the first
day of such period to the last day of such period,

                                      -40-

<PAGE>

minus (ii) the sum of (a) the amount of all  Capital  Expenditures,  made by the
Borrower and its Subsidiaries pursuant to Section 9.07(a) of the Existing Credit
Agreement  during such period,  (b) the aggregate  principal amount of permanent
principal  payments of  Indebtedness  for borrowed money of the Borrower and its
Subsidiaries  (other than repayments pursuant to which any other Indebtedness is
being refinanced with proceeds of Indebtedness, equity issuances, asset sales or
insurance proceeds,  and repayments of Loans,  provided that repayments of Loans
shall be deducted in determining  Excess Cash Flow if such  repayments were made
as a voluntary  prepayment  but, only to the extent  accompanied  by a voluntary
reduction to the Total Commitment)  during such period and (c) the increase,  if
any, in Adjusted  Consolidated Working Capital from the first day of such period
to the last day of such period.

                  "Excess  Cash Payment  Date" shall mean the date  occurring 90
days after the last day of each fiscal year of the Borrower  (beginning with its
fiscal year ending September 30, 1999).

                  "Excess Cash Payment  Period" shall mean,  with respect to the
repayment  required on each Excess Cash Payment Date, the immediately  preceding
fiscal year of the Borrower.

                  "Existing  Credit   Agreement"  shall  mean  the  Amended  and
Restated Credit Agreement,  dated as of November 17, 1997,  amended and restated
as of February 26, 1999, as further  amended,  modified or  supplemented  to the
date hereof, among the Borrower, various lending institutions party thereto from
time to time,  Morgan Stanley  Senior  Funding,  Inc., as Syndication  Agent and
Co-Arranger,  and  First  Union  National  Bank,  as  Administrative  Agent  and
Co-Arranger,  as  amended,  modified  or  supplemented  from  time  to  time  in
accordance with the terms hereof and thereof.

                  "Existing  Indebtedness"  shall have the  meaning  provided in
Section 6.21.

                  "Existing   Mortgage  Policy"  shall  mean  and  include  each
mortgagee  title  insurance  policy in respect of the Mortgaged  Properties  and
previously issued in connection with the Existing Credit Agreement.

                  "Federal Funds Rate" shall mean for any period,  a fluctuating
interest  rate equal for each day during such period to the weighted  average of
the rates on overnight  Federal Funds  transactions  with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next  preceding  Business Day) by the
Federal  Reserve Bank of New York,  or, if such rate is not so published for any
day which is a Business Day, the average of the  quotations for such day on such
transactions  received  by the  Administrative  Agent from three  Federal  Funds
brokers of recognized standing selected by the Administrative Agent.

                  "Fees" shall mean all amounts payable  pursuant to or referred
to in Section 2.01.

                  "Foreign  Pension Plan" shall mean any plan, fund  (including,
without   limitation,   any  superannuation   fund)  or  other  similar  program
established  or maintained  outside the United States of America by the Borrower
or any one or more of its Subsidiaries primarily for the benefit

                                      -41-

<PAGE>


of employees of the Borrower or such  Subsidiaries  residing  outside the United
States of America,  which  plan,  fund or other  similar  program  provides,  or
results  in,  retirement  income,  a  deferral  of  income in  contemplation  of
retirement or payments to be made upon termination of employment, and which plan
is not subject to ERISA or the Code.

                  "Foreign   Subsidiary"  shall  mean  each  Subsidiary  of  the
Borrower other than a Domestic Subsidiary.

                  "Hazardous   Materials"   shall  mean  (a)  any  petroleum  or
petroleum products, radioactive materials, asbestos in any form that is friable,
urea formaldehyde foam insulation,  transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated  biphenyls, and radon gas;
(b) any  chemicals,  materials  or  substances  defined  as or  included  in the
definition of "hazardous  substances," "hazardous waste," "hazardous materials,"
"extremely   hazardous   substances,"   "restricted   hazardous  waste,"  "toxic
substances,"  "toxic  pollutants,"  "contaminants," or "pollutants," or words of
similar  import,  under  any  applicable  Environmental  Law;  and (c) any other
chemical, material or substance, the Release of which is prohibited,  limited or
regulated by any governmental authority.

                  "Indebtedness"   shall  mean,   as  to  any  Person,   without
duplication,  (i) all  indebtedness  (including  principal,  interest,  fees and
charges) of such Person for borrowed money or for the deferred purchase price of
property or services,  (ii) the maximum  amount  available to be drawn under all
letters of credit issued for the account of such Person and all unpaid  drawings
in  respect  of such  letters of  credit,  (iii) all  Indebtedness  of the types
described  in clause (i),  (ii),  (iv),  (v),  (vi) or (vii) of this  definition
secured by any Lien on any property  owned by such  Person,  whether or not such
Indebtedness has been assumed by such Person (provided,  that, if the Person has
not assumed or otherwise  become  liable in respect of such  Indebtedness,  such
Indebtedness  shall be deemed to be in an amount  equal to the fair market value
of the property to which such Lien relates as  determined  in good faith by such
Person), (iv) the aggregate amount required to be capitalized under leases under
which such Person is the  lessee,  (v) all  obligations  of such person to pay a
specified  purchase  price for goods or  services,  whether or not  delivered or
accepted,  i.e.,  take-or-pay  and  similar  obligations,  (vi)  all  Contingent
Obligations  of such Person and (vii) all  obligations  under any Interest  Rate
Protection  Agreement,  any Other Hedging Agreement or under any similar type of
agreement.  Notwithstanding  the foregoing,  Indebtedness  shall not include (x)
trade payables and accrued  expenses  incurred by any Person in accordance  with
customary  practices  and in the ordinary  course of business of such Person and
(y) deferred compensation obligations of any Person.

                  "Interest  Determination Date" shall mean, with respect to any
Eurodollar  Loan,  the  second  Business  Day prior to the  commencement  of any
Interest Period relating to such Eurodollar Loan.

                  "Interest  Period" shall have the meaning  provided in Section
1.09.

                  "Interest Rate Protection  Agreement"  shall mean any interest
rate swap agreement,  interest rate cap agreement,  interest  collar  agreement,
interest rate hedging agreement or other similar agreement or arrangement.

                                      -42-

<PAGE>

                  "Investments"  shall have the meaning provided in Section 9.05
of the Existing Credit Agreement.

                  "Leaseholds" of any Person shall mean all the right, title and
interest  of such  Person  as  lessee or  licensee  in,  to and under  leases or
licenses of land, improvements and/or fixtures.

                  "Lending  Office"  shall mean,  with respect to any Bank,  any
office, branch, subsidiary or affiliate of such Bank.

                  "Leverage  Ratio"  shall mean,  at any time,  the ratio of (x)
Consolidated  Indebtedness at such time to (y) Consolidated  EBITDA for the then
most recently ended Test Period.

                  "Lien"  shall  mean  any  mortgage,   pledge,   hypothecation,
assignment,  deposit  arrangement,   encumbrance,  lien  (statutory  or  other),
preference,  priority  or  other  security  agreement  of  any  kind  or  nature
whatsoever (including,  without limitation,  any conditional sale or other title
retention  agreement,  any financing or similar  statement or notice filed under
the UCC or any other similar  recording or notice statute,  and any lease having
substantially the same effect as any of the foregoing).

                  "Loan" shall have the meaning provided in Section 1.01.

                  "Margin  Stock" shall have the meaning  provided in Regulation
U.

                  "Maturity Date" shall mean November 15, 1999.

                  "Minimum Borrowing Amount" shall mean $1,000,000.

                  "Mortgaged  Property"  shall mean (i) each Real Property owned
by any Credit Party and  designated as a Mortgaged  Property on Schedule III and
(ii) each Real Property  owned or leased by any Credit Party and designated as a
Mortgaged Property pursuant to Section 8.12 of the Existing Credit Agreement.

                  "MSSF" shall mean Morgan Stanley Senior Funding,  Inc., in its
individual capacity.

                  "Multiemployer  Plan"  shall mean a plan as defined in Section
4001(a)(3)  of ERISA with respect to which the Borrower,  any  Subsidiary of the
Borrower  or any ERISA  Affiliate  has an  obligation  to  contribute  to or any
liability.

                  "NAIC"  shall  mean  the  National  Association  of  Insurance
Commissioners.

                  "Net Debt Proceeds" shall mean, with respect to any incurrence
of  Indebtedness  for borrowed  money,  the cash proceeds  (net of  underwriting
discounts and  commissions,  commitment and other financing fees and other costs
associated  therewith)  received by the  respective  Person from the  respective
incurrence of such Indebtedness for borrowed money.

                                      -43-

<PAGE>

                  "Net  Insurance  Proceeds"  shall  mean,  with  respect to any
Recovery Event, the cash proceeds (net of costs and taxes incurred in connection
with such Recovery Event)  received by the respective  Person in connection with
the respective Recovery Event.

                  "Net Sale Proceeds"  shall mean, for any Asset Sale, the gross
cash proceeds  (including any cash received by way of deferred  payment pursuant
to a promissory  note,  receivable or otherwise,  but only as and when received)
received from such sale of assets, net of the costs of such sale (including fees
and commissions,  payments of unassumed  liabilities relating to the assets sold
and  required  payments of any  Indebtedness  (other than  Indebtedness  secured
pursuant to the Security Documents or any Indebtedness owed to the Borrower or a
Subsidiary  thereof) which is secured by the respective assets which were sold),
and the taxes paid or payable as a result of such Asset Sale.

                  "Non-Defaulting  Bank" shall mean and include  each Bank other
than a Defaulting Bank.

                  "Non-Excluded  Taxes"  shall  have  the  meaning  provided  in
Section 3.04(a).

                  "Note" shall have the meaning provided in Section 1.05(a).

                  "Notice of  Borrowing"  shall  have the  meaning  provided  in
Section 1.03(a).

                  "Notice of  Conversion"  shall have the  meaning  provided  in
Section 1.06.

                  "Notice  Office"  shall mean the office of the  Administrative
Agent  located at One First  Union  Center,  301 South  College  Street,  TW-10,
Charlotte,  NC 28288-0608,  Attention:  Syndication Services, with copies to 301
South College  Street,  DC-5,  Charlotte,  NC 28288-0737,  Attention:  Leveraged
Finance,  or  such  other  office  as the  Administrative  Agent  may  hereafter
designate in writing as such to the other parties hereto.

                  "Obligations"  shall mean all amounts owing to any Agent,  the
Collateral  Agent or any Bank  pursuant  to the terms of this  Agreement  or any
other Credit Document.

                  "Other  Creditor"  shall  have  the  meaning  provided  in the
Security Documents.

                  "Other  Hedging  Agreement"  shall mean any  foreign  exchange
contracts,  currency  swap  agreements,  commodity  agreements  or other similar
agreements  or  arrangements  designed to protect  against the  fluctuations  in
currency values.

                  "Payment  Office" shall mean the office of the  Administrative
Agent  located at One First  Union  Center,  301 South  College  Street,  TW-10,
Charlotte, NC 28288-0608,  Attention: Syndication Services, or such other office
as the  Administrative  Agent may hereafter  designate in writing as such to the
other parties hereto.

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

                                      -44-

<PAGE>

                  "Permitted  Acquisition"  shall have the  meaning  provided in
Section 9.02(ix) of the Existing Credit Agreement.

                  "Permitted  Encumbrance"  shall  mean,  with  respect  to  any
Mortgaged  Property,  such  exceptions  to title as are set  forth in the  title
insurance policy or title commitment delivered with respect thereto and accepted
by the Agents.

                  "Permitted  Holders" shall mean Harbor Group  Investments III,
L.P.,  Uniquip-HGI  Associates,  L.P., P. Enoch Stiff, Curtis Laetz, James Hook,
Philip Franklin, Paul Roblee and Robert Melin.

                  "Permitted  Liens" shall have the meaning  provided in Section
9.01 of the Existing Credit Agreement.

                  "Person"  shall  mean  any  individual,   partnership,   joint
venture,  firm,  corporation,  association,  limited liability company, trust or
other  enterprise  or any  government  or political  subdivision  or any agency,
department or instrumentality thereof.

                  "Plan"  shall mean any pension plan as defined in Section 3(2)
of ERISA,  other than a multiemployer  plan as defined in Section  4001(a)(3) of
ERISA,  which  is  maintained  or  contributed  to by (or to  which  there is an
obligation to contribute  of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate or with respect to which any such entity has liability.

                  "Pledged Notes" shall have the meaning provided in the Amended
and Restated Pledge Agreement.

                  "Pledged  Securities"  shall mean all "Pledged  Securities" as
defined in the Amended and Restated Pledge Agreement.

                  "Prime  Lending  Rate"  shall mean the rate which  First Union
National Bank  announces  from time to time as its prime lending rate, the Prime
Lending Rate to change when and as such prime  lending rate  changes.  The Prime
Lending Rate is a reference rate and does not  necessarily  represent the lowest
or best rate  actually  charged to any customer.  First Union  National Bank may
make commercial loans or other loans at rates of interest at, above or below the
Prime Lending Rate.

                  "Pro Forma  Basis" shall mean,  with respect to any  Permitted
Acquisition, the calculation of the consolidated results of the Borrower and its
Subsidiaries  otherwise  determined in accordance  with this Agreement as if the
respective Permitted  Acquisition (and all Indebtedness incurred to finance such
Permitted Acquisition, and all other Permitted Acquisitions, effected during the
respective  Calculation  Period  or  thereafter  and on or  prior to the date of
determination) (each such date, a "Determination Date") had been effected on the
first  day  of  the  respective  Calculation  Period;  provided  that  all  such
calculations  shall  be made on a basis  consistent  with  the  requirements  of
Regulation  S-X under the  Securities  Act and the  Securities  Exchange Act and
shall take into account the following assumptions:

                                      -45-

<PAGE>


                  (i)  interest   expense   attributable   to  interest  on  any
         Indebtedness  (whether  existing or being incurred)  bearing a floating
         interest rate shall be computed as if the rate in effect on the date of
         computation (taking into account any Interest Rate Protection Agreement
         applicable  to such  Indebtedness  if  such  Interest  Rate  Protection
         Agreement  has a  remaining  term in excess of 12 months)  had been the
         applicable rate for the entire period; and

                  (ii)  pro  forma  effect  shall  be  given  to  all  Permitted
         Acquisitions  (by  excluding  or  including,  as the case  may be,  the
         historical financial results for the respective  properties) that occur
         during such  Calculation  Period or  thereafter  and on or prior to the
         Determination  Date (including any Indebtedness  assumed or acquired in
         connection  therewith) as if they had occurred on the first day of such
         Calculation  Period,  in each case to the extent that the occurrence of
         any such event required the financial  covenants  contained in Sections
         9.08 through 9.10 of the Existing Credit  Agreement,  inclusive,  to be
         recalculated on a Pro Forma Basis.

                  "Projections"  shall  mean  the  projections  prepared  by the
Borrower and  delivered to the Agents prior to the  Effective  Date and attached
hereto as Schedule VII.

                  "Quarterly  Payment  Date"  shall mean each March 31, June 30,
September 30 and December 31 occurring after the Effective Date.

                  "RCRA" shall mean the Resource  Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C.ss. 6901 et seq. -- ----

                  "Real Property" of any Person shall mean all the right,  title
and interest of such Person in and to land, improvements and fixtures, including
Leaseholds.

                  "Recovery Event" shall mean the receipt by the Borrower or any
of its  Subsidiaries  of any cash  insurance  proceeds  or  condemnation  awards
payable (i) by reason of theft, loss, physical  destruction,  damage,  taking or
any other  similar  event with respect to any property or assets of the Borrower
or any of its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.03 of the Existing Credit Agreement.

                  "Register" shall have the meaning provided in Section 12.15.

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

                  "Regulation  T"  shall  mean  Regulation  T of  the  Board  of
Governors of the Federal  Reserve  System as from time to time in effect and any
successor to all or a portion thereof.

                  "Regulation  U"  shall  mean  Regulation  U of  the  Board  of
Governors of the Federal  Reserve  System as from time to time in effect and any
successor to all or a portion thereof.

                                      -46-

<PAGE>

                  "Regulation  X"  shall  mean  Regulation  X of  the  Board  of
Governors of the Federal  Reserve  System as from time to time in effect and any
successor to all or a portion thereof.

                  "Release"  shall mean the disposing,  discharging,  injecting,
spilling,  pumping, leaking, leaching,  dumping, emitting,  escaping,  emptying,
pouring  or  migrating,  into or upon any land or  water  or air,  or  otherwise
entering into the environment.

                  "Replaced  Bank"  shall have the  meaning  provided in Section
1.13.

                  "Replacement  Bank" shall have the meaning provided in Section
1.13.

                  "Reportable  Event"  shall mean an event  described in Section
4043(c)  of ERISA  with  respect  to a Plan that is subject to Title IV of ERISA
other than those  events as to which the 30-day  notice  period is waived  under
subsection .13, .14, .16, .18, .19 or .20 of PBGC Regulation Section 4043.

                  "Required  Banks" shall mean  Non-Defaulting  Banks the sum of
whose  outstanding  Commitments (or after the termination  thereof,  outstanding
Loans)  represent an amount  greater  than 50% of the sum of the Adjusted  Total
Commitment  (or  after  the  termination  thereof,  the  sum of the  then  total
outstanding Loans of Non-Defaulting Banks).

                  "SEC"  shall have the meaning  provided in Section  8.01(g) of
the Existing Credit Agreement.

                  "Section  3.04(b)(ii)  Certificate"  shall  have  the  meaning
provided in Section 3.04(b)(ii).

                  "Secured  Creditors" shall have the meaning assigned that term
in the respective Security Documents.

                  "Securities  Act" shall mean the  Securities  Act of 1933,  as
amended, and the rules and regulations promulgated thereunder.

                  "Securities  Exchange Act" shall mean the Securities  Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.

                  "Security Document" shall mean and include each of the Amended
and Restated Security  Agreement,  the Amended and Restated Pledge Agreement and
each  Amended and  Restated  Mortgage  and,  after the  execution  and  delivery
thereof, each Additional Security Document.

                  "Snorkel  Elevating Work Platforms Limited" shall mean Snorkel
Elevating Work Platforms Limited, a New Zealand corporation.

                  "Snorkel  Elevating  Work  Platforms  Pty Limited"  shall mean
Snorkel Elevating Work Platforms Pty Limited, an Australian corporation.

                                      -47-

<PAGE>

                  "Snorkel  Revolver" shall mean that certain  revolving  credit
facility  permitted  pursuant  to  Section  9.04(xiii)  of the  Existing  Credit
Agreement.

                  "Start Date" shall have the meaning provided in the definition
of Applicable Base Rate Margin.

                  "Subsidiaries  Guaranty"  shall have the  meaning  provided in
Section 4.09.

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

                  "Subsidiary  Guarantor" shall mean each Wholly-Owned  Domestic
Subsidiary  of the Borrower  and, to the extent  required by Section 8.13 of the
Existing Credit Agreement, each Wholly-Owned Foreign Subsidiary of the Borrower.

                  "Supermajority  Banks" shall mean Non-Defaulting Banks the sum
of whose outstanding Commitments (or after the termination thereof,  outstanding
Loans)  represent an amount  greater  than 80% of the sum of the Adjusted  Total
Commitment  (or  after  the  termination  thereof,  the  sum of the  then  total
outstanding Loans of Non-Defaulting Banks).

                  "Syndication  Agent"  shall  mean  MSSF,  in its  capacity  as
Syndication Agent and Co-Arranger for the Banks hereunder.

                  "Test Period" shall mean the period of four consecutive fiscal
quarters of the Borrower  then last ended (in each case taken as one  accounting
period).

                  "Total  Commitment"  shall mean,  at any time,  the sum of the
Commitments of each of the Banks.

                  "Total  Unutilized  Commitment"  shall mean,  at any time,  an
amount equal to the remainder of (x) the Total  Commitment then in effect,  less
(y) the aggregate principal amount of Loans then outstanding.

                  "Total  Unutilized  Revolving Loan Commitment"  shall have the
meaning provided in the Existing Credit Agreement.

                  "Type" shall mean the type of Loan  determined  with regard to
the interest  option  applicable  thereto,  i.e.,  whether a Base Rate Loan or a
Eurodollar Loan.

                  "UCC" shall mean the Uniform  Commercial  Code as from time to
time in effect in the relevant jurisdiction.

                                      -48-

<PAGE>

                  "Unfunded  Current  Liability"  of any  Plan  shall  mean  the
amount,  if any, by which the actuarial  present value of the  accumulated  plan
benefits under the Plan as of the close of its most recent plan year exceeds the
fair market value of the assets allocable thereto, each determined in accordance
with  Statement  of  Financial  Accounting  Standards  No.  87,  based  upon the
actuarial  assumptions  used by the  Plan's  actuary in the most  recent  annual
valuation of the Plan.

                  "United  States" and "U.S." shall each mean the United  States
of America.

                  "Unutilized Commitment" with respect to any Bank, at any time,
shall mean such Bank's  Commitment at such time less the  aggregate  outstanding
principal amount of Loans made by such Bank.

                  "U.S.  Internal  Revenue Service Forms" shall have the meaning
provided in Section 3.04(b).

                  "Wholly-Owned  Domestic  Subsidiary"  shall  mean,  as to  any
Person,  any  Wholly-Owned  Subsidiary  of  such  Person  which  is  a  Domestic
Subsidiary.

                  "Wholly-Owned  Foreign  Subsidiary"  shall  mean,  as  to  any
Person,  any  Wholly-Owned   Subsidiary  of  such  Person  which  is  a  Foreign
Subsidiary.

                  "Wholly-Owned  Subsidiary"  shall mean, as to any Person,  (i)
any corporation  100% of whose capital stock (other than  director's  qualifying
shares) is at the time  owned by such  Person  and/or  one or more  Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or  other  entity  in  which  such  Person  and/or  one  or  more   Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.

                  SECTION  11.  The  Administrative  Agent  and the  Syndication
Agent.

                  11.01  Appointment.  The Banks  hereby  designate  First Union
Investors,  Inc. as  Administrative  Agent to act as specified herein and in the
other Credit  Documents and First Union National Bank to act as Collateral Agent
herein and in the other Credit  Documents  (for  purposes of this Section 11 the
term  "Administrative  Agent" shall  include  First Union  National  Bank in its
capacity as Collateral  Agent).  The Banks hereby  designate MSSF as Syndication
Agent (for purposes of this Section 11, the term "Syndication  Agent" also shall
include MSSF in its capacity as Co-Arranger)  to act as specified  herein and in
the other Credit Documents.  Each Bank hereby irrevocably  authorizes,  and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably to
authorize,  the  Administrative  Agent  and the  Syndication  Agent to take such
action on its behalf under the  provisions of this  Agreement,  the other Credit
Documents and any other instruments and agreements referred to herein or therein
and to exercise such powers and to perform such duties  hereunder and thereunder
as are specifically delegated to or required of the Administrative Agent and the
Syndication  Agent by the terms  hereof and thereof and such other powers as are
reasonably  incidental  thereto.  The  Administrative  Agent and the Syndication
Agent may perform any of their  duties  hereunder  by or through its  respective
officers, directors, agents, employees or affiliates.

                                      -49-

<PAGE>

                  11.02 Nature of Duties.  Neither the Administrative  Agent nor
the  Syndication  Agent in their  capacity  as such  shall  have any  duties  or
responsibilities  except those  expressly set forth in this Agreement and in the
other Credit Documents.  Neither the Administrative Agent, the Syndication Agent
in  their  capacity  as such nor any of their  respective  officers,  directors,
agents,  employees or affiliates shall be liable for any action taken or omitted
by it or them  hereunder  or under any other  Credit  Document or in  connection
herewith or therewith, unless caused by its or their gross negligence or willful
misconduct.  The duties of the  Administrative  Agent and the Syndication  Agent
shall be mechanical and  administrative  in nature;  neither the  Administrative
Agent nor the  Syndication  Agent shall have by reason of this  Agreement or any
other  Credit  Document a fiduciary  relationship  in respect of any Bank or the
holder of any Note; and nothing in this Agreement or any other Credit  Document,
expressed or implied,  is intended to or shall be so construed as to impose upon
the Administrative  Agent or the Syndication Agent any obligations in respect of
this Agreement or any other Credit Document except as expressly set forth herein
or therein.

                  11.03 Lack of  Reliance  on the  Administrative  Agent and the
Syndication  Agent.  Independently and without reliance upon the  Administrative
Agent or the  Syndication  Agent,  each Bank and the holder of each Note, to the
extent it deems  appropriate,  has made and shall  continue  to make (i) its own
independent investigation of the financial condition and affairs of the Borrower
and its  Subsidiaries  in connection  with the making and the continuance of the
Loans and the taking or not taking of any action in connection herewith and (ii)
its own appraisal of the  creditworthiness  of the Borrower and its Subsidiaries
and, except as expressly provided in this Agreement,  neither the Administrative
Agent nor the Syndication  Agent shall have any duty or  responsibility,  either
initially  or on a  continuing  basis,  to provide any Bank or the holder of any
Note with any credit or other  information with respect thereto,  whether coming
into its  possession  before  the  making  of the  Loans or at any time or times
thereafter.  Neither the Administrative Agent nor the Syndication Agent shall be
responsible to any Bank or the holder of any Note for any recitals,  statements,
information,   representations   or  warranties   herein  or  in  any  document,
certificate  or  other  writing  delivered  in  connection  herewith  or for the
execution,  effectiveness,  genuineness, validity,  enforceability,  perfection,
collectibility,  priority or  sufficiency  of this Agreement or any other Credit
Document or the financial  condition of the Borrower or any of its  Subsidiaries
or be  required  to make  any  inquiry  concerning  either  the  performance  or
observance of any of the terms,  provisions  or conditions of this  Agreement or
any other Credit Document,  or the financial condition of the Borrower or any of
its Subsidiaries or the existence or possible  existence of any Default or Event
of Default.

                  11.04 Certain Rights of the Agents. If any Agent shall request
instructions  from  the  Required  Banks  with  respect  to any  act  or  action
(including failure to act) in connection with this Agreement or any other Credit
Document,  such Agent shall be entitled to refrain  from such act or taking such
action  unless and until such Agent shall have  received  instructions  from the
Required Banks; and such Agent shall not incur liability to any Person by reason
of so refraining.  Without limiting the foregoing,  no Bank or the holder of any
Note shall have any right of action whatsoever  against any Agent as a result of
such Agent acting or refraining from acting  hereunder or under any other Credit
Document in accordance with the instructions of the Required Banks.

                                      -50-

<PAGE>

                  11.05 Reliance.  The Administrative  Agent and the Syndication
Agent shall be entitled to rely, and shall be fully  protected in relying,  upon
any note, writing, resolution, notice, statement,  certificate,  telex, teletype
or  telecopier  message,  cablegram,  radiogram,  order  or  other  document  or
telephone  message  signed,  sent or made by any Person that the  Administrative
Agent or the  Syndication  Agent  believed to be the proper  Person,  and,  with
respect to all legal matters  pertaining to this  Agreement and any other Credit
Document  and its  duties  hereunder  and  thereunder,  upon  advice of  counsel
selected by the  Administrative  Agent or the Syndication Agent, as the case may
be.

                  11.06 Indemnification.  To the extent the Administrative Agent
or the  Syndication  Agent is not reimbursed and  indemnified by the Borrower or
any  of  its   Subsidiaries,   the  Banks  will   reimburse  and  indemnify  the
Administrative   Agent  and  the  Syndication  Agent,  in  proportion  to  their
respective  "percentages"  as used in determining  the Required  Banks,  for and
against  any and  all  liabilities,  obligations,  losses,  damages,  penalties,
claims, actions,  judgments, costs, expenses or disbursements of whatsoever kind
or  nature  which  may be  imposed  on,  asserted  against  or  incurred  by the
Administrative  Agent or the  Syndication  Agent in  performing  its  respective
duties hereunder or under any other Credit  Document,  in any way relating to or
arising out of this  Agreement or any other Credit  Document;  provided  that no
Bank shall be liable for any portion of such liabilities,  obligations,  losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
resulting  from the  Administrative  Agent's or the  Syndication  Agent's  gross
negligence or willful misconduct.

                  11.07 The  Administrative  Agent and the Syndication  Agent in
Their  Individual  Capacity.  With respect to its obligation to make Loans under
this Agreement,  the  Administrative  Agent and the Syndication Agent shall have
the rights and powers  specified  herein for a "Bank" and may  exercise the same
rights and powers as though it were not performing the duties specified  herein;
and the term "Banks,"  "Required Banks," "holders of Notes" or any similar terms
shall,   unless  the   context   clearly   otherwise   indicates,   include  the
Administrative Agent and the Syndication Agent in their individual capacity. The
Administrative  Agent and the Syndication  Agent and their affiliates may accept
deposits  from,  lend money to,  and  generally  engage in any kind of  banking,
investment  banking,  trust or other business  with, or provide debt  financing,
equity capital or other services (including financial advisory services) to, any
Credit Party or any  Affiliate  of any Credit Party (or any Person  engaged in a
similar business with any Credit Party or any Affiliate thereof) as if they were
not  performing  the duties  specified  herein,  and may  accept  fees and other
consideration  from any Credit  Party or any  Affiliate  of any Credit Party for
services in  connection  with this  Agreement and  otherwise  without  having to
account for the same to the Banks.

                  11.08  Holders.  Any Agent may deem and treat the payee of any
Note as the owner  thereof for all  purposes  hereof  unless and until a written
notice of the assignment,  transfer or endorsement  thereof, as the case may be,
shall have been filed with the Administrative  Agent. Any request,  authority or
consent of any Person  who,  at the time of making  such  request or giving such
authority or consent,  is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee,  assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.

                                      -51-

<PAGE>

                  11.09  Resignation  by  the   Administrative   Agent  and  the
Syndication Agent. (a) The Administrative Agent and/or the Syndication Agent may
resign  from the  performance  of all  their  respective  functions  and  duties
hereunder  and/or  under the  other  Credit  Documents  at any time by giving 15
Business Days' prior written notice to the Banks and the Borrower (provided that
no such notice  shall be required to be given to the Borrower if a Default or an
Event of Default of the type  described  in Section  9.05 exists with respect to
the Borrower). Such resignation,  in the case of the Administrative Agent, shall
take effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise  provided below, and such resignation,
in the case of the Syndication Agent, shall take effect immediately.

                  (b) Upon any such notice of resignation by the  Administrative
Agent,  the  Required  Banks  shall  appoint a  successor  Administrative  Agent
hereunder  or  thereunder  who  shall  be a  commercial  bank or  trust  company
reasonably  acceptable to the Borrower (it being  understood and agreed that any
Non-Defaulting Bank is deemed to be acceptable to the Borrower).

                  (c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative  Agent with the
consent of the Borrower  (which  consent shall not be  unreasonably  withheld or
delayed), shall then appoint a successor Administrative Agent who shall serve as
Administrative  Agent  hereunder or  thereunder  until such time, if any, as the
Required Banks appoint a successor Administrative Agent as provided above.

                  (d) If no successor  Administrative  Agent has been  appointed
pursuant  to clause (b) or (c) above by the 60th day after the date such  notice
of resignation was given by the  Administrative  Agent,  Administrative  Agent's
resignation  shall  become  effective  and the Required  Banks shall  thereafter
perform all the duties of the  Administrative  Agent hereunder  and/or under any
other Credit  Document  until such time, if any, as the Required Banks appoint a
successor Administrative Agent as provided above.

                  SECTION 12. Miscellaneous.

                  12.01  Payment of  Expenses,  etc.  The  Borrower  shall:  (i)
whether or not the transactions  herein  contemplated  are consummated,  pay all
reasonable  out-of-pocket  costs  and  expenses  (w) of the  Agents  (including,
without limitation, the reasonable fees and disbursements of White & Case and of
the Agents' local counsel and  consultants) in connection with the  preparation,
execution and delivery of this Agreement and the other Credit  Documents and the
documents  and  instruments  referred to herein and  therein,  (x) of the Agents
(including, without limitation, the reasonable fees and expenses of White & Case
LLP or any other  single law firm  retained by the Agents)  with  respect to any
amendment,  waiver or consent relating to this Agreement and/or the other Credit
Documents,  (y) of the Agents in connection with their syndication  efforts with
respect to this  Agreement and (z) of the Agents and, after the occurrence of an
Event of Default,  each of the Banks in connection  with the enforcement of this
Agreement  and the other Credit  Documents  and the  documents  and  instruments
referred to herein and therein (including,  without  limitation,  the reasonable
fees and disbursements of counsel for the Agents and, after the occurrence of an
Event of Default,  for each of the  Banks);  (ii) pay and hold each of the Banks
harmless from and against any and all present and future stamp, excise and other
similar

                                      -52-

<PAGE>

documentary  taxes with  respect to the  foregoing  matters and save each of the
Banks  harmless  from and against  any and all  liabilities  with  respect to or
resulting from any delay or omission  (other than to the extent  attributable to
such Bank) to pay such taxes;  and (iii) indemnify each Agent and each Bank, and
each of their respective  officers,  directors,  employees,  representatives and
agents  from and hold each of them  harmless  against  any and all  liabilities,
obligations (including removal or remedial actions), losses, damages, penalties,
claims, actions,  judgments, suits, costs, expenses and disbursements (including
reasonable  attorneys' and  consultants'  fees and  disbursements)  incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related  to, or by reason of, (a) any  investigation,  litigation  or
other  proceeding  (whether  or not any  Agent or any  Bank is a party  thereto)
related to the entering into and/or  performance  of this Agreement or any other
Credit  Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder  or the  consummation  of the  Transaction  or any other  transactions
contemplated  herein or in any other  Credit  Document or the exercise of any of
their rights or remedies  provided herein or in the other Credit  Documents,  or
(b) the actual or alleged  presence of Hazardous  Materials in the air,  surface
water or  groundwater or on the surface or subsurface of any Real Property owned
or at any  time  operated  by the  Borrower  or  any  of its  Subsidiaries,  the
generation, storage, transportation, handling or disposal of Hazardous Materials
at any location,  whether or not owned or operated by the Borrower or any of its
Subsidiaries,  the  non-compliance  of any Real Property with foreign,  federal,
state and local laws, regulations,  and ordinances (including applicable permits
thereunder) applicable to any Real Property, or any Environmental Claim asserted
against the Borrower,  any of its  Subsidiaries or any Real Property owned or at
any time operated by the Borrower or any of its Subsidiaries, including, in each
case, without  limitation,  the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation, litigation
or other proceeding (but excluding any losses,  liabilities,  claims, damages or
expenses to the extent incurred by reason of the gross negligence,  bad faith or
willful  misconduct  of the Person to be  indemnified).  To the extent  that the
undertaking  to indemnify,  pay or hold harmless any Agent or any Bank set forth
in the preceding  sentence may be  unenforceable  because it is violative of any
law or public policy,  the Borrower shall make the maximum  contribution  to the
payment  and  satisfaction  of  each of the  indemnified  liabilities  which  is
permissible under applicable law.

                  12.02  Right of  Setoff.  In  addition  to any  rights  now or
hereafter  granted  under  applicable  law  or  otherwise,  and  not  by  way of
limitation of any such rights, upon the occurrence of an Event of Default,  each
Bank is hereby  authorized (to the extent not  prohibited by applicable  law) at
any time or from time to time,  without  presentment,  demand,  protest or other
notice of any kind to the Borrower or to any other Person, any such notice being
hereby  expressly  waived,  to set off and to appropriate  and apply any and all
deposits  (general or special)  and any other  Indebtedness  at any time held or
owing by such Bank (including,  without limitation,  by branches and agencies of
such Bank  wherever  located)  to or for the credit or the account of any Credit
Party against and on account of the  Obligations  and  liabilities of the Credit
Parties  to such Bank  under  this  Agreement  or under any of the other  Credit
Documents, including, without limitation, all interests in Obligations purchased
by such Bank pursuant to Section 13.06(b), and all other claims of any nature or
description  arising out of or connected with this Agreement or any other Credit
Document,  irrespective  of  whether or not such Bank shall have made any demand
hereunder and although said Obligations,  liabilities or claims, or any of them,
shall be  contingent

                                      -53-

<PAGE>

or unmatured. Notwithstanding anything to the contrary contained in this Section
13.02,  no Bank  shall  exercise  any such right of  set-off  without  the prior
consent of the Agents or the Required Banks so long as the Obligations  shall be
secured  by any Real  Property  located  in the  State of  California,  it being
understood  and agreed,  however,  that this sentence is for the sole benefit of
the Banks and  (notwithstanding  anything to the  contrary  contained in Section
13.12) may be amended,  modified or waived in any respect by the Required  Banks
without the  requirement  of prior  notice to or consent by any Credit Party and
does not  constitute  a waiver of any right  against any Credit Party or against
any Collateral.

                  12.03 Notices.  Except as otherwise expressly provided herein,
all notices and other communications  provided for hereunder shall be in writing
(including  telegraphic,  telex,  telecopier or cable communication) and mailed,
telegraphed,  telexed, telecopied,  cabled or delivered: if to any Credit Party,
at the address  specified  opposite its signature below or in the other relevant
Credit Documents; if to any Bank, at its address specified on Schedule II; if to
the Syndication  Agent,  at the address  specified on Schedule II; and if to the
Administrative  Agent,  at its Notice Office;  or, as to any Credit Party or any
Agent,  at such other  address as shall be designated by such party in a written
notice to the other  parties  hereto and, as to each Bank, at such other address
as shall be designated by such Bank in a written  notice to the Borrower and the
Administrative  Agent. All such notices and  communications  shall, when mailed,
telegraphed,  telexed,  telecopied,  or cabled or sent by overnight courier,  be
effective when deposited in the mails, delivered to the telegraph company, cable
company  or  overnight  courier,  as the  case  may  be,  or sent  by  telex  or
telecopier,  except that notices and  communications  to any Agent or any Credit
Party shall not be effective until received by such Agent or such Credit Party.

                  12.04 Benefit of Agreement; Assignments;  Participations.  (a)
This  Agreement  shall be  binding  upon  and  inure  to the  benefit  of and be
enforceable  by the  respective  successors  and assigns of the parties  hereto;
provided,  however,  the  Borrower may not assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of the Banks
and, provided  further,  that,  although any Bank may transfer,  assign or grant
participations in its rights hereunder,  such Bank shall remain a "Bank" for all
purposes  hereunder  (and may not  transfer  or assign all or any portion of its
Commitments  hereunder except as provided in Sections 1.13 and 12.04(b)) and the
transferee,  assignee or participant, as the case may be, shall not constitute a
"Bank" hereunder and, provided further, that no Bank shall transfer or grant any
participation  under  which the  participant  shall have  rights to approve  any
amendment to or waiver of this Agreement or any other Credit  Document except to
the  extent  such  amendment  or waiver  would (i)  extend  the final  scheduled
maturity  of any Loan or Note in which such  participant  is  participating,  or
reduce  the rate or extend  the time of  payment  of  interest  or Fees  thereon
(except  in  connection  with a  waiver  of  applicability  of any  post-default
increase in interest rates) or reduce the principal amount thereof,  or increase
the amount of the  participant's  participation  over the amount thereof then in
effect (it being  understood that a waiver of any Default or Event of Default or
of a mandatory reduction in the Total Commitment,  shall not constitute a change
in the terms of such  participation,  and that an increase in any  Commitment or
Loan  shall  be  permitted  without  the  consent  of  any  participant  if  the
participant's  participation is not increased as a result thereof), (ii) consent
to the  assignment  or  transfer  by the  Borrower  of  any  of its  rights  and
obligations  under this Agreement or (iii) release all or  substantially  all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the

                                      -54-

<PAGE>

Loans hereunder in which such participant is  participating.  In the case of any
such  participation,  the  participant  shall  not have any  rights  under  this
Agreement or any of the other Credit Documents (the participant's rights against
such  Bank in  respect  of such  participation  to be  those  set  forth  in the
agreement  executed by such Bank in favor of the participant  relating  thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.

                  (b)  Notwithstanding  the  foregoing,  any  Bank  (or any Bank
together  with one or more  other  Banks) may (x) assign all or a portion of its
Commitments and related outstanding  Obligations hereunder to its parent company
and/or  any  affiliate  of such Bank which is at least 50% owned by such Bank or
its parent  company or to one or more Banks or (y) assign  all,  or if less than
all, a portion  equal to at least  $5,000,000 in the aggregate for the assigning
Bank or assigning Banks, of such Commitments and related outstanding Obligations
hereunder to one or more Eligible  Transferees,  each of which  assignees  shall
become a party to this  Agreement as a Bank by execution  of an  Assignment  and
Assumption Agreement, provided that, (i) at such time Schedule I shall be deemed
modified to reflect the  Commitments of such new Bank and of the existing Banks,
(ii) upon the surrender of the relevant  Notes by the  assigning  Bank (or, upon
such assigning Bank's  indemnifying the Borrower for any lost Note pursuant to a
customary indemnification agreement) new Notes will be issued, at the Borrower's
expense, to such new Bank and to the assigning Bank upon the request of such new
Bank or assigning Bank, such new Notes to be in conformity with the requirements
of Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised  Commitments (or outstanding  Term Loans, as the case may be), (iii)
the consent of the Agents shall be required in connection with any assignment to
an Eligible  Transferee pursuant to clause (y) above (which consent shall not be
unreasonably  withheld  or  delayed),  (iv) so long as no  Default  or  Event of
Default exists, the consent of the Borrower shall be required in connection with
any  assignment  to an Eligible  Transferee  pursuant to clause (y) above (which
consent  shall  not be  unreasonably  withheld  or  delayed,  provided  that the
Borrower may withhold its consent to a proposed  assignment  if such  assignment
would result in increased costs to the Borrower under Section 1.10 or 3.04), (v)
the Administrative Agent shall receive at the time of each such assignment, from
the assigning or assignee Bank, the payment of a  non-refundable  assignment fee
of $3,500  and (vi) no such  transfer  or  assignment  will be  effective  until
recorded by the Administrative  Agent on the Register pursuant to Section 12.15.
To the extent of any assignment pursuant to this Section 12.04(b), the assigning
Bank shall be relieved of its obligations hereunder with respect to its assigned
Commitments. At the time of each assignment pursuant to this Section 12.04(b) to
a Person which is not already a Bank  hereunder and which is not a United States
person (as such term is defined in Section  7701(a)(30) of the Code) for Federal
income tax purposes,  the respective  assignee Bank shall, to the extent legally
entitled to do so,  provide to the Borrower  the  appropriate  Internal  Revenue
Service Forms (and, if applicable, a Section 3.04(b) (ii) Certificate) described
in Section 3.04(b).  To the extent that an assignment of all or any portion of a
Bank's Commitments and related outstanding  Obligations pursuant to Section 1.13
or this  Section  12.04(b)  would,  at the time of such  assignment,  result  in
increased  costs  under  Section  1.10 or 3.04 from those  being  charged by the
respective assigning Bank prior to such assignment,  then the Borrower shall not
be obligated to pay such increased costs  (although the Borrower,  in accordance
with and pursuant to the other

                                      -55-

<PAGE>

provisions  of this  Agreement,  shall be obligated  to pay any other  increased
costs of the type described  above  resulting from changes after the date of the
respective assignment).

                  (c) Nothing in this  Agreement  shall  prevent or prohibit any
Bank from  pledging its Loans and Notes  hereunder to a Federal  Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.

                  12.05 No Waiver;  Remedies Cumulative.  No failure or delay on
the part of the  Administrative  Agent or the  Syndication  Agent or any Bank in
exercising  any right,  power or  privilege  hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit Party
and the Administrative Agent, the Syndication Agent or any Bank shall operate as
a waiver thereof;  nor shall any single or partial exercise of any right,  power
or privilege  hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right,  power or privilege
hereunder or thereunder.  The rights, powers and remedies herein or in any other
Credit  Document  expressly  provided are  cumulative  and not  exclusive of any
rights, powers or remedies which the Administrative Agent, the Syndication Agent
or any Bank would  otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other  circumstances  or  constitute a waiver of the rights of the
Administrative  Agent, the Syndication Agent or any Bank to any other or further
action in any circumstances without notice or demand.

                  12.06 Payments Pro Rata.  (a) Except as otherwise  provided in
this Agreement,  the Administrative Agent agrees that promptly after its receipt
of each payment from or on behalf of the Borrower in respect of any  Obligations
hereunder,  it shall  distribute  such payment to the Banks (other than any Bank
that has  consented in writing to waive its pro rata share of any such  payment)
pro rata based upon their  respective  shares,  if any, of the Obligations  with
respect to which such payment was received.

                  (b) Each of the Banks  agrees that,  if it should  receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by  counterclaim  or cross
action,  by  the  enforcement  of any  right  under  the  Credit  Documents,  or
otherwise),  which is applicable to the payment of the principal of, or interest
on,  the Loans or  Commitment  Commission,  of a sum which  with  respect to the
related sum or sums received by other Banks is in a greater  proportion than the
total of such  Obligation  then owed and due to such Bank  bears to the total of
such Obligation then owed and due to all of the Banks  immediately prior to such
receipt,  then such Bank  receiving  such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount; provided that if all
or any portion of such excess  amount is  thereafter  recovered  from such Bank,
such purchase  shall be rescinded and the purchase  price restored to the extent
of such recovery, but without interest.

                  (c) Notwithstanding anything to the contrary contained herein,
the  provisions of the preceding  Sections  12.06(a) and (b) shall be subject to
the express  provisions of this

                                      -56-

<PAGE>

Agreement  which  require,   or  permit,   differing  payments  to  be  made  to
Non-Defaulting Banks as opposed to Defaulting Banks.

                  12.07  Calculations;  Computations;  Accounting Terms. (a) The
financial  statements to be furnished to the Banks pursuant hereto shall be made
and prepared in accordance with generally accepted accounting  principles in the
United States  consistently  applied throughout the periods involved (except (i)
as set forth in the notes thereto,  (ii) for year-end adjustments in the case of
interim financial  statements and (iii) as otherwise disclosed in writing by the
Borrower to the Banks) and  consistent  with those used to prepare the September
30, 1998 historical  financial statements of the Borrower delivered to the Banks
pursuant to Section 6.05(a).

                  (b) All  computations of interest,  Commitment  Commission and
other Fees  hereunder,  shall be made on the basis of a year of 360 days for the
actual number of days elapsed.

                  12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL.  THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER  SHALL,  EXCEPT AS OTHERWISE
PROVIDED IN THE  MORTGAGES,  BE CONSTRUED IN ACCORDANCE  WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT  DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS  AGREEMENT OR ANY OTHER CREDIT  DOCUMENT,
THE  BORROWER  HEREBY  IRREVOCABLY  ACCEPTS  FOR  ITSELF  AND IN  RESPECT OF ITS
PROPERTY,  GENERALLY  AND  UNCONDITIONALLY,  THE  JURISDICTION  OF THE AFORESAID
COURTS.  THE BORROWER HEREBY FURTHER  IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER,  AND AGREES NOT TO PLEAD OR
CLAIM,  IN ANY LEGAL ACTION  PROCEEDING  WITH  RESPECT TO THIS  AGREEMENT OR ANY
OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE  AFOREMENTIONED  COURTS,  THAT SUCH
COURTS LACK  PERSONAL  JURISDICTION  OVER THE  BORROWER.  THE  BORROWER  FURTHER
IRREVOCABLY  CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH  ACTION OR  PROCEEDING  BY THE  MAILING OF COPIES  THEREOF BY
REGISTERED OR CERTIFIED MAIL,  POSTAGE  PREPAID,  TO THE BORROWER AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS  AND  FURTHER  IRREVOCABLY  WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING  COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING
HEREIN SHALL  AFFECT THE RIGHT OF ANY AGENT,  ANY BANK OR THE HOLDER OF ANY NOTE
TO SERVE  PROCESS IN ANY OTHER  MANNER  PERMITTED  BY LAW OR TO  COMMENCE  LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION.

                                      -57-

<PAGE>

                  (b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR  HEREAFTER  HAVE TO THE  LAYING  OF VENUE OF ANY OF THE  AFORESAID
ACTIONS OR  PROCEEDINGS  ARISING OUT OF OR IN CONNECTION  WITH THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT  BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE
AND HEREBY  FURTHER  IRREVOCABLY,  TO THE EXTENT  PERMITTED BY  APPLICABLE  LAW,
WAIVES AND  AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH  ACTION
OR  PROCEEDING  BROUGHT  IN ANY SUCH COURT HAS BEEN  BROUGHT IN AN  INCONVENIENT
FORUM.

                  (c) EACH OF THE PARTIES TO THIS AGREEMENT  HEREBY  IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING  OR  COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT,  THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                  12.09  Counterparts.  This  Agreement  may be  executed in any
number  of  counterparts  and  by  the  different  parties  hereto  on  separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts  executed  by all the  parties  hereto  shall  be  lodged  with the
Borrower and the Administrative Agent.

                  12.10 Effectiveness.  This Agreement shall become effective on
the date (the "Effective Date") on which the Borrower, the Administrative Agent,
the  Syndication  Agent and each of the Banks  shall have  signed a  counterpart
hereof (whether the same or different counterparts) and shall have delivered the
same to the  Administrative  Agent at its  Notice  Office or, in the case of the
Banks,  shall have given to the  Administrative  Agent telephonic  (confirmed in
writing),  written or telex notice  (actually  received) at such office that the
same has been  signed and mailed to it. The  Administrative  Agent will give the
Borrower and each Bank prompt  written notice of the occurrence of the Effective
Date.

                  12.11  Headings  Descriptive.  The  headings  of  the  several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.

                  12.12 Amendment or Waiver; etc. (a) Neither this Agreement nor
any other  Credit  Document  nor any terms  hereof or  thereof  may be  changed,
waived,  discharged  or  terminated  unless such  change,  waiver,  discharge or
termination is in writing signed by the respective  Credit Parties party thereto
and the  Required  Banks,  provided  that no such change,  waiver,  discharge or
termination  shall,  without the  consent of each Bank (other than a  Defaulting
Bank) (with  Obligations being directly affected in the case of following clause
(i)),  (i) extend the final  scheduled  maturity  of any Loan or Note beyond the
Maturity  Date,  or reduce  the rate of  interest  or Fees or extend the time of
payment of interest or Fees, or reduce the principal  amount thereof  (except to
the  extent  repaid  in  cash)  (it  being  understood  that  any  amendment  or
modification  to the  financial  definitions  in this  Agreement  or to  Section
12.07(a)  shall not  constitute  a reduction in the rate of interest or any Fees
for purposes of this clause (i)), (ii) release

                                      -58-

<PAGE>

all or substantially all of the Collateral  (except as expressly provided in the
Credit Documents) under all the Security  Documents,  (iii) release a Subsidiary
Guarantor from the Subsidiaries  Guaranty  (except as expressly  provided in the
Subsidiaries  Guaranty  or in  connection  with  the  sale  of  such  Subsidiary
Guarantor in accordance with the terms of this Agreement), (iv) amend, modify or
waive any provision of this Section 12.12,  (v) reduce the percentage  specified
in the definition of Required Banks (it being  understood that, with the consent
of the  Required  Banks,  additional  extensions  of  credit  pursuant  to  this
Agreement  may  be  included  in the  determination  of the  Required  Banks  on
substantially  the same basis as the extensions of  Commitments  are included on
the  Effective  Date) or (vi)  consent  to the  assignment  or  transfer  by the
Borrower of any of its rights and  obligations  under this  Agreement;  provided
further,  that no such  change,  waiver,  discharge  or  termination  shall  (1)
increase  the  Commitments  of any Bank over the amount  thereof  then in effect
without  the  consent  of  such  Bank  (it  being  understood  that  waivers  or
modifications of conditions precedent,  covenants, Defaults or Events of Default
or of a mandatory  reduction in the Total  Commitments  shall not  constitute an
increase of the  Commitment  of any Bank,  and that an increase in the available
portion of any  Commitment  of any Bank shall not  constitute an increase of the
Commitment of such Bank), (2) without the consent of each Agent,  amend,  modify
or waive any  provision of Section 11 or any other  provision as same relates to
the  rights or  obligations  of the  Agents,  (3)  without  the  consent  of the
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent, (4) without the consent of each Bank (other
than a Defaulting Bank (as defined in the Existing Credit Agreement)) under, and
as defined in, the Existing  Credit  Agreement,  provide  additional  extensions
credit to the Borrower  secured by any Liens on the  Collateral  superior to the
existing  Liens in favor of the  Collateral  Agent  on  behalf  of the  Existing
Secured Creditors (as defined in the respective  Security  Document) pursuant to
the Security  Documents  (as in effect on the  Effective  Date),  (5) extend the
Maturity Date without the consent of those Non-Defaulting Lenders (as defined in
the Existing Credit  Agreement)  constituting  the Required Banks under,  and as
defined, in the Existing Credit Agreement,  if the percentage "50%" contained in
the  definition  thereof was changed to  "66-2/3%"  or (6) except in cases where
additional  extensions  of  loans  are  being  afforded  substantially  the same
treatment  afforded to the Loans  pursuant to this  Agreement as  originally  in
effect,  without  the  consent of the  Supermajority  Banks  amend or modify the
definition  of  Supermajority  Banks or reduce the required  application  of any
prepayments or repayments (or commitment reductions) pursuant to Section 3.02.

                  (b) If,  in  connection  with  any  proposed  change,  waiver,
discharge  or  termination  to  any of  the  provisions  of  this  Agreement  as
contemplated  by clauses (i) through  (vi),  inclusive,  of the first proviso to
Section 12.12(a),  the consent of the Required Banks is obtained but the consent
of one or more of such other  Banks whose  consent is required is not  obtained,
then the  Borrower  shall have the right,  so long as all  non-consenting  Banks
whose individual  consent is required are treated as described in either clauses
(A) or (B) below, to either (A) replace each such  non-consenting  Bank or Banks
with one or more  Replacement  Banks  pursuant to Section 1.13 so long as at the
time of such  replacement,  each such  Replacement Bank consents to the proposed
change,  waiver,  discharge or termination or (B) terminate such  non-consenting
Bank's  Commitments  (if such  Bank's  consent  is  required  as a result of its
Commitments),  provided that,  unless the Commitments  that are terminated,  and
Loans repaid,  pursuant to preceding clause (B) are immediately replaced in full
at  such  time  through  the  addition  of  new  Banks  or the  increase  of

                                      -59-

<PAGE>

the  Commitments  and/or  outstanding  Loans of existing Banks (who in each case
must specifically  consent thereto),  then in the case of any action pursuant to
preceding clause (B) the Required Banks  (determined  after giving effect to the
proposed action) shall specifically consent thereto,  provided further,  that in
any event the Borrower shall not have the right to replace a Bank, terminate its
Commitments or repay its Loans solely as a result of the exercise of such Bank's
rights (and the  withholding  of any required  consent by such Bank) pursuant to
the second proviso to Section 12.12(a).

                  12.13 Survival.  All  indemnities set forth herein  including,
without limitation,  in Sections 1.10, 1.11, 3.04, 11.06 and 12.01 shall survive
the execution,  delivery and termination of this Agreement and the Notes and the
making  and  repayment  of the  Obligations.

                  12.14 Domicile of Loans.  Each Bank may transfer and carry its
Loans at, to or for the account of any of its Lending  Offices.  Notwithstanding
anything  to the  contrary  contained  herein,  to the extent that a transfer of
Loans pursuant to this Section 12.14 would, at the time of such transfer, result
in increased  costs under Section 1.10, 1.11 or 3.04 from those being charged by
the  respective  Bank prior to such  transfer,  then the  Borrower  shall not be
obligated to pay such increased  costs (although the Borrower shall be obligated
to pay any other  increased  costs of the type  described  above  resulting from
changes after the date of the respective transfer).

                  12.15   Register.   The   Borrower   hereby   designates   the
Administrative  Agent to serve as the Borrower's  agent,  solely for purposes of
this Section  12.15,  to maintain a register (the  "Register")  on which it will
record the name and address of each Bank, the  Commitments  from time to time of
each of the  Banks,  the Loans made by each of the Banks and each  repayment  in
respect of the principal  amount of the Loans of each Bank.  Failure to make any
such  recordation,  or any  error  in such  recordation  shall  not  affect  the
Borrower's  obligations in respect of such Loans.  With respect to any Bank, the
transfer of the Commitments of such Bank and the rights to the principal of, and
interest on, any Loan made pursuant to such  Commitments  shall not be effective
until such transfer is recorded on the Register maintained by the Administrative
Agent with respect to ownership of such  Commitments and Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitments
and Loans shall remain owing to the transferor.  The  registration of assignment
or transfer of all or part of any Commitments and Loans shall be recorded by the
Administrative   Agent  on  the  Register  only  upon  the   acceptance  by  the
Administrative  Agent  of a  properly  executed  and  delivered  Assignment  and
Assumption Agreement pursuant to Section 12.04(b).  Coincident with the delivery
of such an Assignment and Assumption  Agreement to the Administrative  Agent for
acceptance and  registration of assignment or transfer of all or part of a Loan,
or as soon  thereafter as  practicable,  the assigning or transferor  Bank shall
surrender the Note  evidencing such Loan, and thereupon one or more new Notes in
the  same  aggregate  principal  amount  shall be  issued  to the  assigning  or
transferor  Bank  and/or the new Bank.  The  Borrower  agrees to  indemnify  the
Administrative  Agent from and against any and all losses,  claims,  damages and
liabilities of whatsoever  nature which may be imposed on,  asserted  against or
incurred by the Agent in performing its duties under this Section 12.15.

                  12.16 Confidentiality. (a) Subject to the provisions of clause
(b) of this Section  12.16,  each Bank agrees that it will not disclose  without
the prior consent of the Borrower (other

                                      -60-

<PAGE>

than to its employees,  auditors,  advisors or counsel or to another Bank if the
Bank or such Bank's holding or parent company in its sole discretion  determines
that any such  party  should  have  access to such  information,  provided  such
Persons  shall be subject to the  provisions  of this Section  12.16 to the same
extent as such Bank) any information  with respect to the Borrower or any of its
Subsidiaries  which is now or in the future furnished pursuant to this Agreement
or any other  Credit  Document  and which is  designated  by the Borrower to the
Banks in writing as  confidential,  provided that any Bank may disclose any such
information  (a) as has become  generally  available to the public other than by
virtue of a breach of this Section  12.16(a) by the respective  Bank, (b) as may
be required or  reasonably  appropriate  in any report,  statement  or testimony
submitted to any municipal,  state or Federal regulatory body having or claiming
to have jurisdiction over such Bank or to the Federal Reserve Board, the Federal
Deposit Insurance Corporation, the NAIC or similar organizations (whether in the
United  States or  elsewhere)  or their  successors,  (c) as may be  required or
reasonably  appropriate  in respect to any summons or subpoena or in  connection
with any litigation,  (d) in order to comply with any law, order,  regulation or
ruling  applicable to such Bank, (e) to the Agents and (f) to any prospective or
actual transferee or participant in connection with any contemplated transfer or
participation of any of the Notes or Commitments or any interest therein by such
Bank and to any direct or indirect  contractual  counterparties in Interest Rate
Protection  Agreements  or Other  Hedging  Agreements  entered into by any Bank,
provided that such prospective transferee and each such contractual counterparty
agrees to be bound by the confidentiality  provisions  contained in this Section
12.16.

                  (b) The Borrower hereby acknowledges and agrees that each Bank
may share with any of its affiliates any information  related to the Borrower or
any of its Subsidiaries (including,  without limitation,  any nonpublic customer
information regarding the creditworthiness of the Borrower and its Subsidiaries,
provided such Persons  shall be subject to the  provisions of this Section 12.16
to the same extent as such Bank).

                  12.17 Limitation on Increased Costs.  Notwithstanding anything
to the contrary  contained in Section  1.10,  1.11 or 3.04,  unless a Bank gives
notice to the  Borrower  that it is  obligated  to pay an amount  under any such
Section  within  180 days  after the later of (x) the date such Bank  incurs the
respective  increased costs, Taxes, loss, expense or liability,  or reduction in
amounts received or receivable or reduction in return on capital or (y) the date
such Bank has actual  knowledge of its  incurrence of the  respective  increased
costs,  Taxes, loss, expense or liability,  or reductions in amounts received or
receivable  or  reduction  in return on  capital,  then such Bank  shall only be
entitled  to be  compensated  for such amount by the  Borrower  pursuant to said
Section 1.10, 1.11 or 3.04, as the case may be, to the extent the costs,  Taxes,
loss,  expense or liability,  or reduction in amounts  received or receivable or
reduction  in return on capital  are  incurred  or suffered on or after the date
which occurs 180 days prior to such Bank giving  notice to the Borrower  that it
is obligated to pay the respective  amounts  pursuant to said Section 1.10, 1.11
or 3.04, as the case may be. This Section 12.17 shall have no  applicability  to
any  Section of this  Agreement  or any other  Credit  Document  other than said
Sections 1.10, 1.11 and 3.04.

                                      * * *



                                      -61-

<PAGE>

                  IN WITNESS WHEREOF,  the parties hereto have caused their duly
authorized  officers to execute and deliver this  Agreement as of the date first
above written.


Address:

222 East Main Street                     OMNIQUIP INTERNATIONAL, INC.
Port Washington, Wisconsin 53074
Telephone No.:  (414) 268-8965
Telecopier No.:  (414) 268-3100          By  /s/ Thomas Breslin
Attention:  Vice President Finance and     -------------------------------------
            Chief Financial Officer        Title: Vice President Finance and
                                                  Chief Financial Officer


                                          MORGAN STANLEY SENIOR FUNDING,
                                            INC., Individually and as
                                            Syndication Agent and Co-Arranger



                                          By /s/ T. Morgan Edwards II
                                            ------------------------------------
                                            Title: Vice President



                                          FIRST UNION CAPITAL MARKETS CORP.,
                                            Individually and as Co-Arranger



                                          By /s/ Michael Doherty
                                            ------------------------------------
                                            Title: Managing Director



                                           FIRST UNION INVESTORS, INC.,
                                             Individually and as
                                             Administrative Agent



                                           By  /s/ Ted A. Gardner
                                             -----------------------------------
                                             Title: Senior Vice President



                                           BANK LEUMI USA



                                           By /s/ Shlomo Osher
                                             -----------------------------------
                                             Title: Senior Vice President -
                                                    Manager

<PAGE>

                                           FIRST BANK



                                           By /s/ Donald Williams
                                             -----------------------------------
                                             Title: Executive Vice President



                                           THE FIRST NATIONAL BANK OF CHICAGO



                                           By /s/ Jenny A. Gilpin
                                             -----------------------------------
                                             Title: Vice President



                                           THE FUJI BANK, LIMITED



                                           By /s/ Peter L. Chinnici
                                             -----------------------------------
                                             Title: Senior Vice President &
                                                    Group Head



                                           HARRIS TRUST AND SAVINGS BANK



                                           By /s/ George M. Dluby
                                             -----------------------------------
                                             Title: Vice President