TREND-LINES, INC.

                        BANKAMERICA BUSINESS CREDIT, INC.

                                     BINDER

--------------------------------------------------------------------------------
1.       Amended and Restated Loan and Security Agreement

2.       Amended and Restated Stock Pledge Agreement

3.       Trademark Security Agreement

<PAGE>
                AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

                          Dated as of February 23, 1999

                                      Among

                     THE FINANCIAL INSTITUTIONS NAMED HEREIN

                                 AS THE LENDERS

                                       and

                        BANKAMERICA BUSINESS CREDIT, INC.

                                  AS THE AGENT

                                       and

                                TREND-LINES, INC.
                                 POST TOOL, INC.

                                AS THE BORROWERS



<PAGE>



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

SECTION                                                                     PAGE
-------                                                                     ----

1.     DEFINITIONS.............................................................1

2.     LOANS AND LETTERS OF CREDIT............................................21
       2.1.     Total Facility................................................21
       2.2.     Revolving Loans...............................................21
       2.3.     Letters of Credit.............................................28

3.     INTEREST AND OTHER CHARGES.............................................33
       3.1.     Interest......................................................33
       3.2.     Conversion and Continuation Elections.........................34
       3.3.     Maximum Interest Rate.........................................35
       3.4.     Facility Fee..................................................36
       3.5.     Collateral Management Fee.....................................36
       3.6.     Additional Accommodation Fee..................................36
       3.7.     Letter of Credit Fee..........................................36

4.     PAYMENTS AND PREPAYMENTS...............................................36
       4.1.     Revolving Loans...............................................37
       4.2.     [Intentionally Left Blank]....................................37
       4.3.     [Intentionally Left Blank]....................................37
       4.4.     [Intentionally Left Blank]....................................37
       4.5.     Place and Form of Payments; Extension of Time.................37
       4.6.     Payments as Revolving Loans...................................37
       4.7.     Apportionment, Application and Reversal of Payments...........38
       4.8.     INDEMNITY FOR RETURNED PAYMENTS...............................38

5.     AGENT'S AND LENDER'S BOOKS AND RECORDS; MONTHLY STATEMENTS.............39

6.     TAXES, YIELD PROTECTION AND ILLEGALITY.................................39
       6.1.     Taxes.........................................................39
       6.2.     Illegality....................................................41
       6.3.     Increased Costs and Reduction of Return.......................42
       6.4.     Funding Losses................................................42
       6.5.     Inability to Determine Rates..................................43
       6.6.     Certificates of Lenders.......................................43
       6.7.     Survival......................................................43

7.     COLLATERAL.............................................................43
       7.1.     Grant of Security Interest....................................43


                                       i
<PAGE>

                                TABLE OF CONTENTS
                                -----------------
                                    (CONT'D)

SECTION                                                                     PAGE
-------                                                                     ----

       7.2.     Perfection and Protection of Security Interest................44
       7.3.     Location of Collateral........................................45
       7.4.     Title to, Liens on, and Sale and Use of Collateral............46
       7.5.     Appraisals....................................................46
       7.6.     Access and Examination........................................47
       7.7.     Insurance.....................................................47
       7.8.     Collateral Reporting..........................................48
       7.9.     [Intentionally Left Blank]....................................48
       7.10.    Collection of Accounts; Payments..............................49
       7.11.    Inventory.....................................................49
       7.12.    Equipment.....................................................50
       7.13.    Assigned Contracts............................................51
       7.14.    Documents, Instruments, and Chattel Paper.....................51
       7.15.    Right to Cure.................................................51
       7.16.    Power of Attorney.............................................51
       7.17.    The Agent's and Lender's Rights, Duties, and Liabilities......51

8.     BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES......................52
       8.1.     Books and Records.............................................52
       8.2.     Financial Information.........................................52
       8.3.     Notices to Lenders............................................54

9.     GENERAL WARRANTIES AND REPRESENTATIONS.................................55
       9.1.     Authorization, Validity, and Enforceability of this Agreement
                and the Loan Documents........................................56
       9.2.     Validity and Priority of Security Interest....................56
       9.3.     Organization and Qualification................................56
       9.4.     Corporate Name, Prior Transactions............................56
       9.5.     Subsidiaries and Affiliates...................................57
       9.6.     Financial Statements and Projections..........................57
       9.7.     Capitalization................................................57
       9.8.     Solvency......................................................57
       9.9.     Debt..........................................................57
       9.10.    Distributions.................................................58
       9.11.    Title to Property.............................................58
       9.12.    Adequate Assets...............................................58
       9.13.    Real Property, Leases.........................................58
       9.14.    Proprietary Rights............................................58
       9.15.    Trade Names and Terms of Sale.................................58


                                       ii
<PAGE>

                                TABLE OF CONTENTS
                                -----------------
                                    (CONT'D)

SECTION                                                                     PAGE
-------                                                                     ----

       9.16.    Litigation....................................................58
       9.17.    Restrictive Agreements........................................59
       9.18.    Labor Disputes................................................59
       9.19.    Environmental Laws............................................59
       9.20.    No Violation of Law...........................................60
       9.21.    No Default....................................................60
       9.22.    ERISA Compliance..............................................60
       9.23.    Taxes.........................................................61
       9.24.    Use of Proceeds...............................................61
       9.25.    Private Offerings.............................................61
       9.26.    Broker's Fees.................................................62
       9.27.    No Material Adverse Change....................................62
       9.28.    Disclosure....................................................62
       9.29.    Year 2000.....................................................62

10.    AFFIRMATIVE AND NEGATIVE COVENANTS.....................................62
       10.1.    Taxes and Other Obligations...................................62
       10.2.    Corporate Existence and Good Standing.........................62
       10.3.    Compliance with Law and Agreements............................63
       10.4.    Maintenance of Property and Insurance.........................63
       10.5.    Environmental Laws............................................63
       10.6.    ERISA.........................................................63
       10.7.    Mergers, Consolidations, Acquisitions, or Sales...............63
       10.8.    Distributions; Capital Changes................................64
       10.9.    Transactions Affecting Collateral or Obligations..............64
       10.10.   Guaranties....................................................64
       10.11.   Debt..........................................................64
       10.12.   Prepayment....................................................64
       10.13.   Transactions with Affiliates..................................64
       10.14.   [Intentionally Left Blank]....................................65
       10.15.   Business Conducted............................................65
       10.16.   Liens.........................................................65
       10.17.   Sale and Leaseback Transactions...............................65
       10.18.   New Subsidiaries..............................................65
       10.19.   Restricted Investments........................................65
       10.20.   Capital Expenditures..........................................65
       10.21.   [Intentionally Left Blank]....................................65
       10.22.   Interest Coverage Ratio.......................................65
       10.23.   [Intentionally Left Blank]....................................66



                                       iii
<PAGE>

                                TABLE OF CONTENTS
                                -----------------
                                    (CONT'D)

SECTION                                                                     PAGE
-------                                                                     ----

       10.24.   Intentionally Left Blank].....................................66
       10.25.   [Intentionally Left Blank]....................................66
       10.26.   New Store Openings............................................66
       10.27.   Adjusted Tangible Net Worth...................................66
       10.28.   Buy-Back of Common Stock......................................67
       10.29.   Post-Closing Matters..........................................67
       10.30.   Further Assurances............................................67

11.    CONDITIONS PRECEDENT...................................................68
       11.1.    Conditions Precedent to Effectiveness.........................68
                (a) Representations and Warranties; Covenants.................68
                (b) Delivery of Documents.....................................68
                (c) Fees......................................................68
                (d) Payment of Fees and Expenses..............................68
                (e) Required Approvals........................................68
                (f) No Material Adverse Change................................68
                (g) Proceedings...............................................68

       11.2.    Conditions Precedent to Each Loan.............................69

12.    DEFAULT; REMEDIES......................................................69
       12.1.    Events of Default.............................................69

13.    REMEDIES...............................................................71

14.    TERM AND TERMINATION...................................................73

15.    AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS............73
       15.1.    No Waivers; Cumulative Remedies...............................73
       15.2.    Amendments and Waivers........................................74
       15.3.    Assignments; Participations...................................74

16.    THE AGENT..............................................................76
       16.1.    Appointment and Authorization.................................76
       16.2.    Delegation of Duties..........................................77
       16.3.    Liability of Agent............................................77
       16.4.    Reliance by Agent.............................................78
       16.5.    Notice of Default.............................................78
       16.6.    Credit Decision...............................................78

                                       iv
<PAGE>

                                TABLE OF CONTENTS
                                -----------------
                                    (CONT'D)

SECTION                                                                     PAGE
-------                                                                     ----

       16.7.    Indemnification...............................................79
       16.8.    Agent in Individual Capacity..................................79
       16.9.    Successor Agent...............................................79
       16.10.   Withholding Tax...............................................80
       16.11.   [Intentionally Left Blank]....................................81
       16.12.   Collateral Matters............................................81
       16.13.   Restrictions on Actions by Lenders; Sharing of Payments.......82
       16.14.   Agency for Perfection.........................................83
       16.15.   Payments by Agent to Lenders..................................83
       16.16.   Concerning the Collateral and the Related Loan Documents......84
       16.17.   Field Audit and Examination Reports;
       16.18.   Relation Among Lenders........................................85

17.    MISCELLANEOUS..........................................................85
       17.1.    Cumulative Remedies; No Prior Recourse to Collateral..........85
       17.2.    No Implied Waivers............................................85
       17.3.    Severability..................................................86
       17.4.    Governing Law.................................................86
       17.5.    Consent to Jurisdiction and Venue; Service of Process.........86
       17.6.    Waiver of Jury Trial..........................................86
       17.7.    [Intentionally Left Blank]....................................86
       17.8.    Survival of Representations and Warranties....................86
       17.9.    Other Security and Guaranties.................................87
       17.10.   Fees and Expenses.............................................87
       17.11.   Notices.......................................................87
       17.12.   Indemnification...............................................89
       17.13.   Waiver of Notices.............................................90
       17.14.   Binding Effect; Assignment....................................90
       17.15.   Indemnity of the Agent and the Lenders by the Borrowers.......90
       17.16.   Counterparts..................................................90
       17.17.   Captions......................................................90
       17.18.   Right of Set-Off..............................................90
       17.19.   Participating Agent's Security Interests......................91
       17.20.   Joint and Several Liability...................................91




                                       v
<PAGE>



         LOAN AND SECURITY  AGREEMENT,  dated as of February  23,  1999,  by and
among the  financial  institutions  listed on the  signature  pages hereof (such
financial  institutions,  together with their respective successors and assigns,
are referred to hereinafter each  individually as a "Lender" and collectively as
the  "Lenders"),  BankAmerica  Business  Credit,  Inc.,  a Delaware  corporation
("BABC") with an office at 40 East 52nd Street, New York, New York, as agent for
the Lenders (in its capacity as agent, the "Agent"),  and  TREND-LINES,  INC., a
Massachusetts  corporation with offices at 135 American Legion Highway,  Revere,
Massachusetts ("Trend-Lines"),  and POST TOOL, INC., a Massachusetts corporation
with  offices at 135  American  Legion  Highway,  Revere,  Massachusetts  ("Post
Tool").

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

         WHEREAS,  the  Borrowers  and BABC are  parties to a Loan and  Security
Agreement dated as of July 3, 1996 and amended as of September 18, 1996, January
28, 1997,  June 16, 1997,  December 31, 1997,  July 31, 1998,  and September 30,
1998 (as so amended, the "Existing Agreement"); and

         WHEREAS,  the  Borrowers  and BABC  have  agreed to amend  further  the
Existing  Agreement  and certain other loan  documents  executed or entered into
pursuant  thereto by,  among other  things,  increasing  the amount of the total
facility  thereunder and adding  Transamerica  Business  Credit  Corporation and
Foothill Capital  Corporation,  as Lenders,  and, for the purpose of convenience
only, to restate in its entirety the Existing Agreement; and

         WHEREAS,  the  parties  hereto have  acknowledged  and agreed that this
Agreement  and the  transactions  contemplated  hereby are not  intended to be a
novation of the  indebtedness  of the  Borrowers  under the  Existing  Agreement
outstanding on the date hereof (the "Existing Debt");

         NOW,   THEREFORE,   in  consideration  of  the  mutual  conditions  and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged,  the Borrowers, the Lenders and the
Agent hereby agree as follows:

         1.       DEFINITIONS.  As used herein:

         "ACCOUNTS" means all of a Borrower's now owned or hereafter acquired or
arising accounts, and any other rights to payment for the sale or lease of goods
or rendition of services, whether or not they have been earned by performance.

         "ACCOUNT DEBTOR" means  each   Person obligated  in   any  way on or in
connection with an Account.

         "ADJUSTED  TANGIBLE  ASSETS"  means  all of  Trend-Lines'  assets  on a
consolidated basis except: (a) deferred assets, other than prepaid insurance and
prepaid taxes; (b) patents,


<PAGE>

copyrights,  trademarks,  trade names,  franchises,  goodwill, and other similar
intangibles;  (c)  Restricted  Investments;  (d)  unamortized  debt discount and
expense; (e) assets of Trend-Lines  constituting  Intercompany Accounts; and (f)
fixed assets to the extent of any write-up in the book value  thereof  resulting
from a revaluation effective after the Closing Date.

         "ADJUSTED  TANGIBLE NET WORTH" means,  at any date:  (a) the book value
(after deducting related depreciation,  obsolescence,  amortization,  valuation,
and other proper  reserves as determined  in accordance  with GAAP) at which the
assets of  Trend-Lines  and its  Subsidiaries  would be shown on a  consolidated
balance sheet of Trend-Lines at such date prepared in accordance  with GAAP less
(b) the amount at which Trend-Lines'  consolidated liabilities would be shown on
such balance sheet,  including as liabilities all reserves for contingencies and
other potential liabilities which in accordance with GAAP would be shown on such
balance sheet.

         "AFFILIATE" means, with respect to either Borrower: (a) a Person which,
directly or indirectly,  controls,  is controlled by, or is under common control
with, such Borrower;  (b) a Person which beneficially owns or holds, directly or
indirectly,  ten percent or more of any class of voting  stock of such  Borrower
(but  excluding  Robert  Fleming  Inc.,  the  Kaufmann  Fund,  Inc.,  Wellington
Management  Company,  LLP,  Dimensional Fund Advisors,  Inc., each an investment
company, investment advisor or similar financial institution,  and each of their
respective clients, funds and related entities (collectively, the "Institutional
Holders");  or (c) a Person in which  five  percent  of any class of the  voting
stock is beneficially  owned or held,  directly or indirectly,  by the Borrower.
The term control  (including the terms "controlled by" and "under common control
with") means the possession,  directly or indirectly,  of the power to direct or
cause the direction of the management and policies of the Person in question.

         "AGENT" means BankAmerica Business Credit, Inc., solely in its capacity
as agent for the Lenders, and any successor agent.

         "AGENT ADVANCES" has the meaning specified in SECTION 2.2.

         "AGENT'S LIENS" means the Liens in the Collateral granted to the Agent,
for the  ratable  benefit  of the  Lenders,  BABC,  and Agent  pursuant  to this
Agreement and the other Loan Documents.

         "AGENT-RELATED  PERSONS"  means  the  Agent  and any  successor  agent,
together  with  their  respective  Affiliates,  and  the  officers,   directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.

         "AGREEMENT" means this Loan and Security Agreement.

         "ANNIVERSARY DATE" means each anniversary of the Closing Date.

         "APPLICABLE  MARGIN" means (i) with respect to (a) Reference Rate Loans
and all other  obligations  (other  than LIBOR Rate Loans)  incurred  during any
period that the Borrowing



                                       2
<PAGE>

Base is 65% or lower,  three-quarters  of one percent  (0.75%) and (b) Reference
Rate Loans and all other  obligations  (other  than LIBOR Rate  Loans)  incurred
during any period that the Borrowing Base is in excess of 65%, three-quarters of
1% (0.75%) on the principal amount up to and including the Borrowing Base of 65%
and 2% (2.00%) on the principal  amount in excess of such Borrowing Base of 65%,
as applicable,  and (ii) with respect to LIBOR Rate Loans,  two and  one-quarter
percent  (2.25%);  provided,  however,  that,  if for  any  Rolling  Period  the
certificate  referred  to in SECTION  8.2(C)  relating  to such  Rolling  Period
indicates  that the Fixed Charges  Ratio is equal to or more than 1.0:1.0,  then
the "Applicable Margin" set forth in clauses (i)(a) and (ii) above for each type
of Loan outstanding during the Interest Adjustment Period immediately  following
such  Rolling  Period  (but only so long as no Event or Event of Default  exists
during such Interest Adjustment Period) shall be as set forth below:

             APPLICABLE MARGIN FOR            APPLICABLE MARGIN
             REFERENCE RATE LOANS             FOR LIBOR RATE LOANS
             --------------------             --------------------

                    0.5%                               2.0%

         "ASSIGNED   CONTRACTS"  means,   collectively,   all  of  the  relevant
Borrower's rights and remedies under, and all moneys and claims for money due or
to become due to such  Borrower  under,  any material  contracts and any and all
amendments,  supplements,  extensions, and renewals thereof, including,  without
limitation,  all rights and claims of such  Borrower now or hereafter  existing:
(a) under any insurance, indemnities, warranties, and guarantees provided for or
arising  out of or in  connection  with the  foregoing  agreements;  (b) for any
damages  arising out of or for breach or default under or in connection with the
foregoing agreements; (c) to all other amounts from time to time paid or payable
under or in  connection  with the  foregoing  agreements;  or (d) to exercise or
enforce any and all covenants, remedies, powers and privileges thereunder.

         "ASSIGNEE" has the meaning specified in SECTION 15.3(A).

         "ASSIGNMENT AND ACCEPTANCE" has the meaning specified in SECTION
15.3(A).

         "AVAILABILITY" means, at any time with respect to either Borrower:

         (a) the Sub-facility of such Borrower at such time; MINUS

         (b) the  sum of (i)  Outstanding  Credit to such Borrower at such time,
     (ii) reserves for accrued  interest on the  Obligations  of such  Borrower,
     (iii) the  Environmental  Compliance  Reserve for such  Borrower,  (iv) the
     Rental Reserve for such Borrower, (v) in the case of Trend-Lines, a reserve
     of $550,000 in connection with the Indemnification  Agreement, and (vi) all
     other  reserves  which the Lender  deems  necessary  in the exercise of its
     reasonable  credit  judgment to maintain  with  respect to such  Borrower's
     account,



                                       3
<PAGE>

     including,  without  limitation,  reserves for any amounts which the Lender
     may be obligated to pay in the future for the account of such Borrower.

         "BABC" means BankAmerica Business Credit, Inc.

         "BABC LOAN" and "BABC LOANS" have the   meaning specified  in   SECTION
2.2(H).

         "BANK OF AMERICA"  means Bank   of America  National  Trust and Savings
Association,  a National  Banking  Association, or any successor entity thereto.

         "BANKBOSTON" means BankBoston, N.A.

         "BANKBOSTON  LETTER  OF  CREDIT"  means a Letter  of  Credit  issued by
BankBoston and referred to in the Indemnification Agreement.

         "BORROWER" means either of Trend-Lines or Post Tool.

         "BORROWING" means a borrowing  hereunder  consisting of Revolving Loans
made on the same day by the Lenders to the Borrower (or by BABC in the case of a
Borrowing  funded  by BABC  Loans)  or by the  Agent in the case of a  Borrowing
consisting of an Agent Advance.

         "BORROWING BASE" means, with respect to either Borrower, (a) sixty-five
percent  (65%) of the value,  at the lower of cost (on a weighted  average  cost
basis) or market,  of all Eligible  Inventory of such Borrower PLUS, (b) without
duplication,  50% of the  undrawn  face  amount of Letters  of Credit  issued or
caused to be issued by the  Lender  for the  account  of such  Borrower  for the
purchase of goods which will become Eligible Inventory PROVIDED,  HOWEVER,  that
with respect to either Borrower,  within the period June 1, 1999 through October
31, 1999, the 65% advance rate under subclause (a) shall be increased to 70%.

         "BUSINESS DAY" means (a) any day that is not a Saturday,  Sunday,  or a
day on which  banks in New  York,  New York or San  Francisco,  California,  are
required  -or  permitted  to be closed,  and (b) with  respect  to all  notices,
determinations, fundings and payments in connection with the LIBOR Rate or LIBOR
Rate Loans, any day that is a Business Day pursuant to clause (a) above and that
is also a day on which  trading is carried on by and between banks in the London
interbank market.

         "CAPITAL ADEQUACY REGULATION" means any guideline, request or directive
of any  central  bank or other  Public  Authority,  or any  other  law,  rule or
regulation,  whether  or not having  the force of law,  in each case,  regarding
capital adequacy of any bank or of any corporation controlling a bank.



                                       4
<PAGE>

         "CAPITAL  EXPENDITURES"  means all  payments  due (whether or not paid)
during a Fiscal Year in respect of the cost of any fixed  asset or  improvement,
or replacement,  substitution,  or addition thereto,  which has a useful life of
more than one year, including,  without limitation,  those arising in connection
with the  direct or  indirect  acquisition  of such  assets by way of  increased
product or service charges or offset items or in connection with Capital Leases.

         "CAPITAL  LEASE"  means any lease of  Property by a Borrower  that,  in
accordance with GAAP, should be reflected as a liability on the balance sheet of
such Borrower.

         "CHANGE IN CONTROL"  means and shall be deemed to occur on the earliest
of, and upon any occurrence of, any of the following:

         (a)      Any  "person"  or "group"  (as such terms are used in Sections
                  13(d) and 14(d) of the  Securities  Exchange  Act of 1934,  as
                  amended from time to time,  (the "Exchange  Act"),  other than
                  the  Principal  Stockholders,  shall  become  the  "beneficial
                  owner" as defined in Rules 13d-3 and 13d-5 under the  Exchange
                  Act) of 50% or more of the voting stock of Trend-Lines;

         (b)      At  any  time   during  any   consecutive   two-year   period,
                  individuals  who at the  beginning of such period  constituted
                  the Board of Directors of  Trend-Lines  (together with any new
                  directors  whose  election by such Board of Directors or whose
                  nomination for election by the stockholders of Trend-Lines was
                  approved  by a vote  of 51% of the  directors  then  still  in
                  office who were  either  directors  at the  beginning  of such
                  period  or whose  election  or  nomination  for  election  was
                  previously  so approved)  cease for any reason to constitute a
                  majority  of the Board of  Directors  of  Trend-Lines  then in
                  office,  unless  Stanley  D.  Black  and any  designee  of the
                  Principal Stockholders are directors of Trend-Lines.

         "CLOSING DATE" means July 3, 1996.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COLLATERAL" has the meaning given to such term in Section 7.1.

         "COLLATERAL MANAGEMENT FEE" has the meaning specified in Section 3.5.

         "COMMITMENT" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "COMMITMENT" on the
signature pages of this Agreement or on the signature page of the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder in accordance
with the  provisions of SECTION 15.3,



                                       5
<PAGE>

as such  Commitment  may be adjusted  from time to time in  accordance  with the
provisions  of  SECTION  2.1  or  SECTION   15.3,   and   "COMMITMENTS"   means,
collectively, the aggregate amount of the commitments of all of the Lenders.

         "CONTAMINANT" means any waste,  pollutant,  hazardous substance,  toxic
substance,  hazardous  waste,  special  waste,  petroleum  or  petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or other substance or material,  the handling,  release, or possession
of  which is  regulated  to  protect  health,  safety,  or  environment,  or any
constituent of any such substance or waste.

         "CONVERSION/CONTINUATION  DATE" has the meaning given   to such term in
SECTION 3.2(B).

         "DEBT" means all  liabilities,  obligations and  indebtedness of either
Borrower to any Person, of any kind or nature, now or hereafter owing,  arising,
due or  payable,  howsoever  evidenced,  created,  incurred,  acquired or owing,
whether  primary,  secondary,   direct,  contingent,  fixed  or  otherwise,  and
including,  without limitation,  (a) such Borrower's liabilities and obligations
to trade creditors; (b) all Obligations;  (c) all Obligations and liabilities of
any Person  secured by any Lien on such  Borrower's  Property,  even though such
Borrower  shall not have  assumed  or become  liable  for the  payment  thereof;
PROVIDED,  HOWEVER,  that all such obligations and liabilities which are limited
in recourse to such Property shall be included in Debt only to the extent of the
book  value of such  Property  as would  be  shown  on a  balance  sheet of such
Borrower  prepared in accordance  with GAAP; (d) all  obligations or liabilities
created or arising  under any Capital Lease or  conditional  sale or other title
retention  agreement with respect to Property used or acquired by such Borrower,
even if the rights and remedies of the lessor,  seller or lender  thereunder are
limited to  repossession  of such  Property;  PROVIDED,  HOWEVER,  that all such
obligations and liabilities which are limited in recourse to such Property shall
be  included  in Debt only to the extent of the book value of such  Property  as
would be shown on a balance sheet of such Borrower  prepared in accordance  with
GAAP; (e) all accrued pension fund and other employee  benefit plan  obligations
and liabilities;  (f) all obligations and liabilities under Guaranties;  and (g)
deferred taxes.

         "DEFAULTING LENDER" has the meaning specified in SECTION 2.2(G)(II).

         "DISTRIBUTION" means, in respect of any corporation: (a) the payment or
making of any dividend or other  distribution  of Property in respect of capital
stock of such corporation, other than distributions in capital stock of the same
class;  or (b) the redemption or other  acquisition of any capital stock of such
corporation.

         "DOL" means  the United  States  Department of   Labor or any successor
department or agency.

         "DOLLAR" and "$" means dollars  in the  lawful  currency of the  United
States.



                                       6
<PAGE>

         "EBITDA" means, with respect to any   period of   Trend-Lines and   its
Subsidiaries, the sum of:

                  (i) the  net  income  (or net  loss)  of  Trend-Lines  and its
         Subsidiaries  (determined  in  accordance  with GAAP) for such  period,
         without giving effect to any GAAP extraordinary  gains or extraordinary
         losses   (including,   without   limitation,   any  store   closing  or
         restructuring expenses); plus (or minus)

                  (ii) to the extent that any of the items referred to in any of
         clauses  (A) through  (C) below were  deducted or added in  calculating
         such net income:

                         (A)   interest   expense   of   Trend-Lines   and   its
                    Subsidiaries for such period;

                         (B) federal and state income tax expense of Trend-Lines
                    and its Subsidiaries for such period; and

                         (C) the amount of all depreciation and amortization for
                    such period.

         "ELIGIBLE INVENTORY" means, with respect to either Borrower,  Inventory
of such Borrower,  valued at the lower of cost (on a first-in,  first-out basis)
or market,  that  constitutes raw materials or first quality  finished goods and
that:  (a) is owned by such Borrower and with respect to which such Borrower has
good and marketable title; (b) is not, in the Agent's reasonable  opinion,  slow
moving, excess, obsolete or unmerchantable;  (c) is located at Premises owned or
leased by a Borrower  or on  Premises  otherwise  reasonably  acceptable  to the
Agent; (d) is subject to the Agent's first priority perfected security interest;
(e) is not  work-in-process,  spare parts,  packaging  and  shipping  materials,
supplies, bill-and-hold Inventory, returned or defective Inventory, or Inventory
delivered to such Borrower on consignment; and (f) the Agent, in the exercise of
its reasonable discretion, deems eligible as the basis for Revolving Loans based
on such  collateral  and  credit  criteria  as the  Agent  may from time to time
establish, provided, however, that the Agent shall give the Borrower at least 10
days' written  notice prior to  establishing  such  additional  criteria and the
reason(s) therefor. There shall in any event be excluded from Eligible Inventory
(i) any goods  returned by a Borrower's  customers  that are  determined by such
Borrower or the Agent to be unsalable in the ordinary course of business or held
for return to vendors and (ii) goods in transit.  If any  Inventory  at any time
ceases to be Eligible Inventory,  such Inventory shall promptly be excluded from
the calculation of Eligible Inventory.

         "ENVIRONMENTAL  COMPLIANCE  RESERVE" means all reserves which the Agent
from time to time  establishes  for amounts that are  reasonably  required to be
expended in order for a Borrower and such Borrower's  operations and Property to
comply  with  Environmental  Laws or in order to correct any  violation  by such
Borrower or such Borrower's operations or Property of Environmental Laws.



                                       7
<PAGE>

         "ENVIRONMENTAL  LAWS" means all federal,  state and local laws,  rules,
regulations, ordinances, programs, permits, guidance, orders and consent decrees
relating to health,  safety,  hazardous  substances,  and environmental  matters
applicable to the relevant  Borrower's  business and facilities  (whether or not
owned by it).  Such laws and  regulations  include  but are not  limited  to the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., as
amended; the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq., as amended; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq., as amended; the Clean Water Act, 33 U.S.C.
Section 466 et seq., as amended; the Clean Air Act, 42 U.S.C. Section 7401 et
seq., as amended; state and federal lien and environmental cleanup programs; and
U.S. Department of Transportation regulations.

         "ENVIRONMENTAL  LIEN" means a Lien in favor of any Public Authority for
(a) any liability under any Environmental  Laws, or (b) damages arising from, or
costs incurred by such Public  Authority in response to, a Release or threatened
Release of a Contaminant into the environment.

         "EQUIPMENT"  means  all of each  Borrower's  now  owned  and  hereafter
acquired  machinery,  equipment,  furniture,  furnishings,  fixtures,  and other
tangible personal property (except  Inventory),  including,  without limitation,
data processing hardware and software,  motor vehicles,  aircraft,  dies, tools,
jigs, and office  equipment,  as well as all of such types of property leased by
such  Borrower  and all of such  Borrower's  rights and  interests  with respect
thereto under such leases (including,  without limitation, options to purchase);
together  with  all  present  and  future  additions  and  accessions   thereto,
replacements therefor,  component and auxiliary parts and supplies used or to be
used in connection therewith,  and all substitutes for any of the foregoing, and
all manuals, drawings, instructions, warranties and rights with respect thereto;
wherever any of the foregoing is located.

         "ERISA" means the Employee Retirement   Income Security Act of 1974, as
amended.

         "ERISA   AFFILIATE"  means  any  trade  or  business  (whether  or  not
incorporated)  under  common  control  with  Trend-Lines  within the  meaning of
Section 414(b) or Section 414(c) of the Code (and Sections 414(m) and (o) of the
Code for purposes of provisions relating to Section 412 of the Code).

         "ERISA  EVENT"  means,  with  respect  to  either  Borrower,  any ERISA
Affiliate or any Pension Plan,  the  occurrence of any of the  following:  (a) a
Reportable  Event;  (b) a withdrawal  by a  substantial  employer (as defined in
Section  4001(a)(12) of ERISA) subject to Section 4063 of ERISA; (c) a cessation
of operations  which is treated as a withdrawal  under Section 4062(e) of ERISA;
(d) a complete or partial  withdrawal  by such  Borrower or any ERISA  Affiliate
under  Section 4203 or Section 4205 of ERISA from a  Multiemployer  Plan;  (e) a
notification that a Multiemployer  Plan is in reorganization  under Section 4242
of ERISA; (f) the filing of a notice of intent to terminate a Pension Plan under
4041  of  ERISA;  (g) the  treatment  of an  amendment  of a  Pension  Plan as a
termination  under 4041 of ERISA;  (h) the termination



                                       8
<PAGE>

of a Multiemployer  Plan under Section 4041A of ERISA;  (i) the  commencement of
proceedings by the PBGC to terminate a Pension Plan under 4042 of ERISA;  (j) an
event or condition  which could  reasonably  be expected to  constitute  grounds
under  Section 4042 of ERISA for the  termination  of, or the  appointment  of a
trustee to  administer,  a Pension Plan; or (k) the  imposition of any liability
under Title IV of ERISA,  other than PBGC premiums due but not delinquent  under
Section 4007 of ERISA.

         "EVENT" means any event or condition which, with notice, the passage of
time,  the  happening  of any  other  condition  or  event,  or any  combination
thereof, would constitute an Event of Default.

         "EVENT OF DEFAULT" has the meaning specified in Section 12.1.

         "EXISTING  AGREEMENT"  shall  have the  meaning  set forth in the first
Whereas clause of this Agreement.

         "EXISTING  DEBT" means all Debt owing under or in  connection  with the
Existing Agreement.

         "FACILITY FEE" has the meaning specified in Section 3.4.

         "FEDERAL  FUNDS  RATE"  means,  for any day,  the rate set forth in the
weekly   statistical   release   designated  as  H.15(519),   or  any  successor
publication,  published by the Federal  Reserve Bank of New York  (including any
such successor,  "H.15(519)") on the preceding Business Day opposite the caption
"Federal  Funds  (Effective)";  or, if for any  relevant day such rate is not so
published on any such preceding  Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight  Federal funds  arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading  brokers of Federal funds  transactions in New
York City selected by the Agent.

         "FINANCIAL  STATEMENTS" means,  according to the context in which it is
used, the financial statements attached hereto as EXHIBIT B-1, and the pro forma
balance  sheet  attached  hereto  as  EXHIBIT  B-2 or any  financial  statements
required to be given to the Agent pursuant to SECTION  8.2(A),  SECTION  8.2(B),
and SECTION 8.2(C), or any combination thereof.

         "FISCAL YEAR" means the Borrowers' fiscal year for financial accounting
purposes. The current Fiscal Year of the Borrowers will end on March 1, 1999.

         "FIXED CHARGES RATIO" means,  for any Rolling  Period,  EBITDA for such
Rolling Period divided by the sum of Capital  Expenditures,  interest expense of
the  Borrowers,  federal  and state  income  tax  expense of the  Borrowers  and
principal payments which the Borrowers were required to make for borrowed money,
for such Rolling  Period  provided  that,  for the purposes of this  definition,
Capital  Expenditures  shall not include the first $1.1 million  expended by the
Borrowers for Warehouse MIS on and after the Closing Date.



                                       9
<PAGE>

         "FUNDING DATE" means the date on which a Borrowing occurs.

         "GAAP"  means at any  particular  time  generally  accepted  accounting
principles as in effect at such time.

         "GUARANTY" by any Person means all  obligations of such Person which in
any manner directly or indirectly guarantee or assure, or in effect guarantee or
assure,  the  payment or  performance  of any  indebtedness,  dividend  or other
obligation of any other Person (the "guaranteed  obligations"),  or to assure or
in effect  assure  the  holder of the  guaranteed  obligations  against  loss in
respect thereof,  including,  without limitation,  any such obligations incurred
through an agreement,  contingent or otherwise:  (a) to purchase the  guaranteed
obligations or any Property  constituting  security therefor;  (b) to advance or
supply funds for the  purchase or payment of the  guaranteed  obligations  or to
maintain a working  capital or other  balance sheet  condition;  or (c) to lease
Property  or to  purchase  any debt or equity  securities  or other  Property or
services.

         "INDEMNIFICATION  AGREEMENT" means the  Indemnification  Agreement made
and entered  into the 28th day of January,  1997 by and among  Trend-Lines,  the
Lender and BankBoston, as it may be amended,  supplemented,  waived or otherwise
modified from time to time.

         "INTERCOMPANY  ACCOUNTS"  means all  assets  and  liabilities,  however
arising,  which are due to a Borrower from, which are due from a Borrower to, or
which otherwise arise from any transaction by a Borrower with, any Affiliate.

         "INTEREST ADJUSTMENT DATE" means, with respect to any Rolling Period in
connection with the adjustment of the Applicable Margin:

         (i)      In the case of any Reference Rate Loan outstanding  during the
                  Interest Adjustment Period immediately  following such Rolling
                  Period:

                  (A)  the  first  day  of  the  calendar  month  in  which  the
                  certificate  relating to Fixed  Charges  Ratio  referred to in
                  SECTION  8.2(C) is delivered to the Agent with respect to such
                  Rolling Period, provided that such certificate is delivered no
                  later  than four  Business  Days  prior to the last day of the
                  month following such Rolling Period; or

                  (B) the first day of the calendar month following the month in
                  which such  certificate is delivered if it is delivered  later
                  than four Business Days prior to, but no later than,  the last
                  day of such month following such Rolling Period; or



                                       10
<PAGE>

                  (C) if such  certificate is not delivered  until after the end
                  of the month following such Rolling  Period,  the first day of
                  such month but the Applicable  Margin shall be  three-quarters
                  of one percent (0.75%),

                  provided,  that,  in  the  event  that,  with  respect  to any
                  calendar  month,   there  would  be  a  conflict  between  the
                  provisions  of  (A)  and  the  provisions  of (B)  above,  the
                  provisions  of (A) shall  prevail  with respect to such month;
                  and

         (ii) In the case of any LIBOR Rate Loan:

                  (A) the day such  certificate  is delivered  to the Agent,  if
                  such  certificate is delivered within 30 days after the end of
                  such Rolling Period; or

                  (B) if such  certificate is not delivered within such 30 days,
                  the previous  Interest  Adjustment  Date (that is, there is no
                  change in  Applicable  Margin based on Fixed Charges Ratio for
                  such Rolling Period).

         "INTEREST  ADJUSTMENT PERIOD" means a period commencing on any Interest
Adjustment Date and ending on the first day of the following month.

         "INTEREST  COVERAGE  RATIO"  means,  for any  period,  the ratio of (a)
EBITDA OVER (b) total interest expense during such period.

         "INTEREST  PERIOD"  means,  as to  any  LIBOR  Rate  Loan,  the  period
commencing  on the Funding  Date of such Loan or on the  Conversion/Continuation
Date on which a  Reference  Rate Loan is  converted  into a LIBOR Rate Loan or a
LIBOR Rate Loan is continued  as such a LIBOR Rate Loan,  and ending on the date
one,  two, or three months  thereafter as selected by the Borrower in its Notice
of Borrowing or Notice of Conversion/Continuation; provided, however, that:

               (i) if any Interest  Period would  otherwise end on a day that is
          not a Business  Day,  that  Interest  Period  shall be extended to the
          following Business Day unless the result of such extension would be to
          carry such Interest Period into another calendar month, in which event
          such Interest Period shall end on the preceding Business Day;

               (ii) any  Interest  Period  pertaining  to a LIBOR Rate Loan that
          begins on the last  Business Day of a calendar  month (or on a day for
          which there is no numerically  corresponding day in the calendar month
          at the end of such Interest Period) shall end on the last Business Day
          of the calendar month at the end of such Interest Period;



                                       11
<PAGE>

               (iii) there shall be no more than five different Interest Periods
          in effect at any one time; and

               (iv)  no  Interest   Period  shall   extend   beyond  the  Stated
          Termination Date or any renewal term.

         "INTEREST RATE" means each or any of the interest  rates, including the
default rate, set forth in SECTION 3.1(B)

         "INVENTORY"  means  all of each  Borrower's  now  owned  and  hereafter
acquired inventory,  goods, merchandise,  and other personal property,  wherever
located,  to be  furnished  under any  contract  of  service or held for sale or
lease, all raw materials,  work-in-process,  finished goods, returned goods, and
materials and supplies of any kind,  nature or description which are or might be
used or consumed in such  Borrower's  business  or used in  connection  with the
manufacture, packing, shipping, advertising, selling or finishing of such goods,
such merchandise and such other personal property, and all documents of title or
other documents representing them.

         "IRS" means the Internal Revenue Service or any successor agency.

         "LATEST  PROJECTIONS"  means:  (a) on the Closing  Date and  thereafter
until the Agent  receives  new  projections  pursuant  to  SECTION  8.2(J),  the
projections  of  the  Borrowers'   monthly  financial   condition,   results  of
operations,  and cash flow for the  one-year  period  ending  February 28, 2000,
attached  hereto as  EXHIBIT  B-3;  and (b)  thereafter,  the  projections  most
recently received by the Agent pursuant to SECTION 8.2(F);

         "LENDER" and "LENDERS" have the meanings  specified in the introductory
paragraph  hereof and shall include the Agent to the extent of any Agent Advance
outstanding and BABC to the extent of any BABC Loan  outstanding;  PROVIDED that
no such Agent  Advance or BABC Loan shall be taken into  account in  determining
any Lender's Pro Rata Share.

         "LETTER OF CREDIT" has the meaning specified in SECTION 2.3

         "LETTER OF CREDIT FEE" has the meaning specified in SECTION 3.7.

         "LIBOR INTEREST PAYMENT DATE" means, with respect to a LIBOR Rate Loan,
the last day of each Interest Period applicable to such Loan.

         "LIBOR INTEREST RATE DETERMINATION DATE" means each date of calculating
the LIBOR Rate for purposes of determining  the interest rate with respect to an
Interest Period.  The LIBOR Interest Rate  Determination Date for any LIBOR Rate
Loan  shall be the  second  Business  Day prior to the first day of the  related
Interest Period for such LIBOR Rate Loan.



                                       12
<PAGE>

         "LIBOR RATE" means, for any Interest Period, with respect to LIBOR Rate
Loans  comprising  part of the same  Borrowing,  the rate of interest  per annum
(rounded upward to the next 1/100th of 1.0%) determined as follows:

         LIBOR Rate =              LIBOR
                     ------------------------------------
                     1.00 - Eurodollar Reserve Percentage
Where,

         "EURODOLLAR  RESERVE  PERCENTAGE"  means  for any day for any  Interest
Period the maximum reserve percentage (expressed as a decimal, rounded upward to
the next  1/100th  of 1.0%) in effect  on such day  applicable  to the  relevant
Lender (whether or not applicable to such Lender) under regulations  issued from
time to time by the Federal  Reserve Board for  determining  the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve  requirement) with respect to Eurocurrency  funding  (currently
referred to as "Eurocurrency liabilities"); and

         "LIBOR"  means the rate of interest  per annum  (rounded  upward to the
next  1/16 of 1%)  notified  to the  Agent  by Bank of  America  as the  rate of
interest at which United States Dollar deposits in the approximate amount of the
Loan to be made or continued as, or converted into, a LIBOR Rate Loan and having
a  maturity  comparable  to such  Interest  Period  would be  offered by Bank of
America's  applicable  lending  office to major  banks in the  London  interbank
market at their request at approximately 11:00 a.m.
(London  time) two  Business  Days prior to the  commencement  of such  Interest
Period.

         "LIBOR  RATE  LOAN"  means a Loan  during  any period in which it bears
interest based on the LIBOR Rate.

         "LIBOR  REVOLVING  LOAN"  means a  Revolving  Loan during any period in
which it bears interest based on the LIBOR Rate.

         "LIEN" means: (a) any interest in Property  securing an obligation owed
to, or a claim by, a Person other than the owner of the  Property,  whether such
interest  is based on the common  law,  statute,  or  contract,  and  including,
without limitation,  a security interest,  charge, claim, or lien arising from a
mortgage, deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
arrangement, agreement, security agreement, conditional sale or trust receipt or
a lease,  consignment or bailment for security  purposes;  and (b) to the extent
not  included  under  clause  (a),  any  reservation,  exception,  encroachment,
easement, right-of-way,  covenant, condition,  restriction, lease or other title
exception or encumbrance affecting Property.

         "LOAN  ACCOUNT"  means the loan account of the Borrower,  which account
shall be maintained by the Agent.



                                       13
<PAGE>

         "LOAN AND LOANS" means all loans and  advances  provided for in SECTION
2. The terms Loans and Revolving Loans are used herein interchangeably.

         "LOAN  DOCUMENTS"  means  this  Agreement,  the  Amended  and  Restated
Trademark Security Agreements,  the Seabrook Mortgage,  the Amended and Restated
Stock Pledge Agreement, the Indemnification  Agreement and all other agreements,
instruments,  and documents heretofore,  now or hereafter evidencing,  securing,
guaranteeing  or otherwise  relating to the  Obligations,  the  Collateral,  the
Security Interest, or any other aspect of the transactions  contemplated by this
Agreement,  as any of them may be  amended,  supplemented,  waived or  otherwise
modified from time to time.

         "MAJORITY  LENDERS"  means at any time  Lenders  whose Pro Rata  Shares
aggregate more than 662/3% of the Commitments  or, if no Commitments  shall then
be in  effect,  Lenders  who hold more than  662/3% of the  aggregate  principal
amount of the Loans  then  outstanding  but shall in no event be fewer  than two
Lenders.

         "MORTGAGES"  means:  (a)  each  mortgage,   security   agreement,   and
assignments  of leases and rents between  either  Borrower and the Agent or BABC
and  delivered to the Agent;  (b) all other real property  mortgages,  leasehold
mortgages,  assignments  of leases,  mortgage  deeds,  deeds of trust,  deeds to
secure  debt,  security  agreements,  and other  similar  instruments  hereafter
entered into which provide the Agent a lien on or other  interest in any portion
of the Premises or which relate to any such lien or interest; and (c) any of the
foregoing as they may be amended,  supplemented,  waived or  otherwise  modified
from time to time.

         "MULTIEMPLOYER  PLAN" means a multiemployer  plan as defined in Section
4001(a)(3)  of ERISA to which  Trend-Lines  or any  ERISA  Affiliate  makes,  is
making,  made,  or was at any time  during the current  year or the  immediately
preceding six years obligated to make contributions.

         "NOTICE OF BORROWING" has the meaning specified in SECTION 2.2(B).

         "NOTICE OF CONVERSION/CONTINUATION"  has    the  meaning  specified in
SECTION 3.2(B).

         "OBLIGATIONS"   means  all   present   and  future   loans,   advances,
liabilities,  obligations,  covenants, duties, and Debt owing by either Borrower
to the Agent  and/or any Lender,  whether or not arising  under this  Agreement,
whether or not evidenced by any note, or other  instrument or document,  whether
arising from an extension of credit, opening of a letter of credit,  acceptance,
loan,  guaranty,  indemnification  or  otherwise,  whether  direct  or  indirect
(including,  without  limitation,  those acquired by assignment from others, and
any  participation  by the Lender in such  Borrower's  debts  owing to  others),
absolute or contingent, due or to become due, primary or secondary, as principal
or  guarantor,  and  including,   without  limitation,  all  interest,  charges,
expenses,  fees,  attorneys' fees, filing fees and other sums chargeable to such
Borrower hereunder, under another Loan Document, or under any other agreement or
instrument with the Lender.  "OBLIGATIONS"  includes,  without  limitation,  all
debts, liabilities, and obligations now



                                       14
<PAGE>

or hereafter owing from such Borrower to the Agent and/or any Lender under or in
connection with the Letters of Credit or the Indemnification Agreement.

         "OTHER TAXES" means any present or future stamp or documentary taxes or
any other excise or property  taxes,  charges or similar levies which arise from
any payment made hereunder or from the execution,  delivery or registration  of,
or otherwise with respect to, this Agreement or any other Loan Documents.

         "OUTSTANDING  CREDIT"  means,  at  any  time  with  respect  to  either
Borrower, the sum of (a) the aggregate outstanding principal amount of the Loans
at such time made to such Borrower plus (b) the aggregate  undrawn amount of all
outstanding  Letters  of Credit  at such time  issued  for the  account  of such
Borrower plus (c) the aggregate amount of all unpaid  reimbursement  obligations
of such  Borrower in respect of Letters of Credit issued for the account of such
Borrower.

         "PARTICIPANT  LENDER"  means any Person who shall have been granted the
right by any Lender to  participate  in the  financing  provided  by such Lender
under this Agreement,  and who shall have entered into a participation agreement
in form and substance satisfactory to the Lender.

         "PAYMENT  ACCOUNT"  means each  blocked  bank  account or bank  account
associated with a lock box,  established  pursuant to Section 7.10, to which the
funds of either Borrower  (including,  without limitation,  Proceeds of Accounts
and other Collateral) are deposited or credited,  and which is maintained in the
name of the  Agent  or such  Borrower,  as the  Agent  may  determine,  on terms
acceptable to the Agent.

         "PBGC" means the Pension  Benefit  Guaranty  Corporation  or any Person
succeeding to the functions thereof.

         "PENDING LOANS" means, at any time, the aggregate  principal  amount of
all Loans  requested in any  Notice(s) of Borrowing  received by the Agent which
have not yet been advanced.

         "PENSION  PLAN"  means a pension  plan (as  defined in Section  3(2) of
ERISA)  subject to Title IV of ERISA  which  Trend-Lines  or an ERISA  Affiliate
sponsors or maintains or to which it makes,  is making,  or is obligated to make
contributions or, in the case of a Multiemployer Plan, has made contributions at
any time during the current year or the immediately preceding six plan years.

         "PERMITTED  LIENS"  means:  (a) Liens for taxes not yet  delinquent  or
Liens for taxes in an amount  not to exceed  $100,000  being  contested  in good
faith by appropriate proceedings diligently pursued,  provided that a reserve or
other  appropriate  provision,  if any,  as shall be required by GAAP shall have
been made therefor on the  applicable  Financial  Statements  and that a stay of
enforcement  of any such Lien is in effect;  (b) Liens in favor of the



                                       15
<PAGE>

Agent  and  Lenders;  (c)  Liens  arising  by  operation  of  law  in  favor  of
warehousemen,  landlords, carriers, mechanics, materialmen,  laborers, employees
or suppliers,  incurred in the ordinary course of business of Trend-Lines or any
of its  Subsidiaries and not in connection with the borrowing of money, for sums
not yet  delinquent  or which are being  contested  in good  faith and by proper
proceedings  diligently  pursued,  provided that a reserve or other  appropriate
provision,  if any,  required  by GAAP  shall  have  been made  therefor  on the
applicable Financial Statements and a stay of enforcement of any such Lien is in
effect; (d) Liens in connection with worker's compensation or other unemployment
insurance incurred in the ordinary course of the relevant  Borrower's  business;
(e) Liens created by deposits of cash to secure  performance  of bids,  tenders,
leases  (to the extent  permitted  under this  Agreement),  or trade  contracts,
incurred in the ordinary course of business of the relevant  Borrower and not in
connection  with the  borrowing  of money;  (f) Liens  arising by reason of cash
deposit  for surety or appeal  bonds in the  ordinary  course of business of the
relevant  Borrower;  (g) Liens of or resulting  from any judgment or award,  the
time for the appeal or petition for  rehearing of which has not yet expired,  or
in respect of which the relevant Borrower is in good faith prosecuting an appeal
or proceeding for a review,  and in respect of which a stay of execution pending
such appeal or proceeding for review has been secured; (h) Liens with respect to
the real estate which are  exceptions  to the  commitments  for title  insurance
issued  in  connection  with the Mortgages,  as accepted by the Agent;  (i) with
respect to any Premises:  easements, rights of way, zoning and similar covenants
and restrictions and similar  encumbrances which customarily exist on properties
of corporations  engaged in similar  activities and similarly situated and which
in any event do not materially  interfere with or impair the use or operation of
the  Collateral  by the relevant  Borrower or the value of the Agent's  Security
Interest  therein,  or  materially  interfere  with the ordinary  conduct of the
business of the relevant Borrower; and (j) purchase money security interests and
liens of lessors  under  capital  leases to the extent that the  acquisition  or
lease of the underlying  asset was permitted  under SECTION 10.20,  the security
interest or lien only  encumbers the asset  purchased or leased,  and so long as
the security interest or lien only secures the purchase price of the asset.

         "PERSON" means any individual, sole proprietorship,  partnership, joint
venture,  trust,   unincorporated   organization,   limited  liability  company,
association, corporation, Public Authority, or other entity.

         "PLAN"  means an employee  benefit  plan (as defined in Section 3(3) of
ERISA)  which any  Borrower or any ERISA  Affiliate  sponsors or maintains or to
which any Borrower or any ERISA Affiliate  makes, is making,  or is obligated to
make contributions and includes any' Pension Plan.

         "PREMISES"  means the land  identified  by addresses  on SCHEDULE  9.13
together  with  all  buildings,  improvements,  and  fixtures  thereon  and  all
tenements, hereditaments, and appurtenances belonging or in any way appertaining
thereto, and which constitutes all of the real property in which either Borrower
has any interests on the Closing Date.



                                       16
<PAGE>

         "PRINCIPAL STOCKHOLDER" means   Stanley Black,   Emilia  F.  Black, his
spouse, or any of his or her respective Affiliates.

         "PROCEEDS"  means all products and proceeds of any Collateral,  and all
proceeds of such products and proceeds,  including, without limitation, all cash
and credit  balances,  all payments under any indemnity,  warranty,  or guaranty
payable with respect to any Collateral, all awards for taking by eminent domain,
all  proceeds  of fire or other  insurance,  and all money  and  other  Property
obtained as a result of any claims  against third parties or any legal action or
proceeding with respect to Collateral.

         "PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.

         "PROPRIETARY  RIGHTS"  means  all of  each  Borrower's  now  owned  and
hereafter arising or acquired:  licenses,  franchises,  permits, patents, patent
rights,   copyrights,   works  which  are  the  subject  matter  of  copyrights,
trademarks,  trade names,  trade styles,  patent and trademark  applications and
licenses and rights thereunder,  including,  without limitation,  those patents,
trademarks and copyrights set forth on SCHEDULE 9.14, and all other rights under
any  of  the  foregoing,   all  extensions,   renewals,   reissues,   divisions,
continuations, and continuations-in-part of any of the foregoing, and all rights
to sue for past,  present,  and  future  infringement  of any of the  foregoing;
inventions, trade secrets, formulae,  processes,  compounds,  drawings, designs,
blueprints,  surveys,  reports,  manuals,  and  operating  standards;  goodwill;
customer and other lists in whatever form  maintained;  and trade secret rights,
copyright rights, rights in works of authorship, and contract rights relating to
computer software programs, in whatever form created or maintained.

         "PRO RATA SHARE" means, with respect to a Lender, a fraction (expressed
as a  percentage),  the  numerator  of  which  is the  amount  of such  Lender's
Commitment and the  denominator of which is the sum of the amounts of all of the
Lenders'  Commitments,   or  if  no  Commitments  are  outstanding,  a  fraction
(expressed as a percentage), the numerator of which is the amount of Obligations
owed to such Lender and the denominator of which is the aggregate  amount of the
Obligations owed to the Lenders.

         "PUBLIC  AUTHORITY"  means the  government  of any country or sovereign
state, or of any state, province,  municipality,  or other political subdivision
thereof, or any department,  agency, public corporation or other instrumentality
of any of the foregoing.

         "RECEIVABLES"  means all of the  Borrower's  now  owned  and  hereafter
arising or acquired: Accounts (whether or not earned by performance), including,
without limitation,  Accounts owed to the Borrower by any of its Subsidiaries or
Affiliates,  together with all interest,  late  charges,  penalties,  collection
fees,  and other sums which  shall be due and  payable  in  connection  with any
Account;  proceeds of any letters of credit naming the Borrower as  beneficiary;
contract rights,  chattel paper,  instruments,  documents,  general  intangibles
(including, without limitation, choses in action, causes of action, tax refunds,
tax refund claims,



                                       17
<PAGE>

and Reversions and other amounts payable to the Borrower from or with respect to
any Plan) and all forms of obligations owing to the Borrower (including, without
limitation,  in  respect of loans,  advances,  and  extensions  of credit by the
Borrower to its Subsidiaries and Affiliates);  guarantees and other security for
any of the foregoing;  goods  represented  by or the sale,  lease or delivery of
which gave rise to any of the foregoing;  merchandise returned to or repossessed
by the Borrower and rights of stoppage in transit,  replevin,  and  reclamation;
and other rights or remedies of an unpaid vendor, lienor, or secured party.

         "REFERENCE  RATE" means the rate of interest  publicly  announced  from
time to time by Bank of America as its reference  rate. It is a rate set by Bank
of America  based upon various  factors  including  Bank of America's  costs and
desired return, general economic conditions, and other factors, and is used as a
reference point for pricing some loans. However, Bank of America may price loans
at, above, or below such announced rate. Any changes in the Reference Rate shall
take effect on the day specified in the public announcement of such change.

         "REFERENCE RATE LOANS" means the Reference Rate Revolving Loans.

         "REFERENCE  RATE  REVOLVING  LOANS"  means a Revolving  Loan during any
period in which it bears interest based on the Reference Rate.

         "RELEASE"  means  a  release,   spill,  emission,   leaking,   pumping,
injection, deposit, disposal,  discharge,  dispersal, leaching or migration of a
Contaminant  into the indoor or outdoor  environment  or into or out of any real
estate  or other  property,  including,  without  limitation,  the  movement  of
Contaminants  through or in the air, soil,  surface  water,  groundwater or real
estate or other property.

         "RENTAL  RESERVE",  with  respect to any lease of real estate by either
Borrower,  shall mean,  as of any date, an amount equal to the next three months
of Rental that would be payable by the relevant Borrower under such lease.

         "RENTAL"  means all payments  due from the lessee or sublessee  under a
lease,  including,  without  limitation,  basic rent,  percentage rent,  prepaid
taxes, utility and maintenance costs, and insurance premiums.

         "REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder,  other than any such event for which the
30-day notice  requirement under ERISA has been waived in regulations  issued by
the PBGC.

         "REQUIRED  LENDERS"  means at any time  Lenders  whose Pro Rata  Shares
aggregate more than 66 2/3 % of the Commitments or, if no Commitments shall then
be in effect,  Lenders  who hold more than 66 2/3 % of the  aggregate  principal
amount of the Loans then outstanding.

         "REQUIREMENT OF LAW" means any law (statutory or common),  treaty, rule
or regulation or determination of an arbitrator or of a Public Authority.



                                       18
<PAGE>

         "RESTRICTED INVESTMENT" means any acquisition of Property by a Borrower
or any of its  Subsidiaries in exchange for cash or other  Property,  whether in
the form of an acquisition of stock,  debt security,  or other  indebtedness  or
obligation,  or the purchase or  acquisition of any other  Property,  or a loan,
advance,  capital  contribution,  or  subscription,  except  acquisitions of the
following: (a) fixed assets to be used in the business of a Borrower, so long as
the  acquisition  costs  thereof  constitute  Capital   Expenditures   permitted
hereunder;  (b)  current  assets  arising  from  the  sale or  lease of goods or
rendition  of services  in the  ordinary  course of business of a Borrower;  (c)
direct  obligations of the United States of America,  or any agency thereof,  or
obligations  guaranteed  by the United  States of  America,  provided  that such
obligations  mature within one year from the date of  acquisition  thereof;  (d)
certificates  of deposit  maturing within one year from the date of acquisition,
bankers acceptances,  Eurodollar bank deposits,  or overnight bank deposits,  in
each case issued by,  created  by, or with,  a bank or trust  company  organized
under the laws of the United  States or any state  thereof  having  capital  and
surplus  aggregating  at least  $100,000,000;  (e)  commercial  paper  given the
highest rating by a national credit rating agency and maturing not more than 270
days from the date of creation thereof; and (f) Property made in connection with
the opening of new stores in accordance with SECTION 10.26.

         "REVERSIONS" means any funds which may become due to either Borrower in
connection with the termination of any Plan or other employee benefit plan.

         "REVOLVING LOANS" has the meaning specified in SECTION 2.2 and includes
each Agent Advance and BABC Loan.

         "ROLLING  PERIOD"  means each period of 12  consecutive  fiscal  months
ended March 1, 1997 and each fiscal month end thereafter.

         "SEABROOK MORTGAGE" means a Mortgage in form and substance satisfactory
to the  Agent on the  Seabrook  Premises,  as it may be  amended,  supplemented,
waived or otherwise modified from time to time.

         "SEABROOK  PREMISES"  shall mean the real estate   owned by Trend-Lines
located at 1 Batchelder  Road at Route 107 in Seabrook, New Hampshire.

         "SECURITY  INTEREST" means  collectively the Liens granted to the Agent
on behalf of the Lenders in the Collateral pursuant to this Agreement, the other
Loan Documents, or any other agreement or instrument.

         "SETTLEMENT"  AND "SETTLEMENT DATE"   have the   meanings specified  in
SECTION 2.2(J)(I).

         "SOLVENT" shall mean when used with respect to any Person that: (a) the
fair  value of all its  Property  is in excess of the total  amount of its debts
(including,  without limitation,  contingent liabilities); (b) it is able to pay
its debts as they mature;  (c) it does not



                                       19
<PAGE>

have  unreasonably  small capital for the business in which it is engaged or for
any business or  transaction  in which it is about to engage;  and (d) it is not
"insolvent" as such term is defined in Section 101(32) of the Bankruptcy Code.

         "STATED TERMINATION DATE" means December 31, 2001.

         "STOCK PLEDGE  AGREEMENT"  means the Amended and Restated  Stock Pledge
Agreement dated as of the date hereof between the Agent and  Trend-Lines,  as it
may be amended, supplemented, waived or otherwise modified from time to time.

         "SUB-FACILITY"  means, as of any date with respect to either  Borrower,
the lesser of (a) the  excess,  if any,  of (i) the Total  Facility on such date
over (ii) the  Outstanding  Credit of the other Borrower on such date or (b) the
Borrowing Base of such Borrower on such date.

         "SUBSIDIARY"   of  a  Person   means  any   corporation,   association,
partnership,  joint venture or other  business  entity of which more than 50% of
the voting stock or other equity  interests  (in the case of Persons  other than
corporations),  is owned or controlled  directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.  Unless
the context  otherwise  clearly  requires,  references  herein to a "Subsidiary"
refer to a Subsidiary of the relevant Borrower.

         "TAXES" means any and all present or future taxes, assessments, levies,
imposts, impositions,  deductions,  charges or withholdings, and all liabilities
with respect thereto,  excluding, in the case of each Lender and the Agent, such
taxes (including,  without  limitation,  income taxes or franchise taxes) as are
imposed on or measured by each Lender's or the Agent's,  as the case may be, net
income by the jurisdiction (or any political subdivision thereof) under the laws
of which such Lender or the Agent, as the case may be, is organized or maintains
a lending office.

         "TOTAL FACILITY" has the meaning specified in SECTION 2.1.

         "TRADEMARK   SECURITY   AGREEMENTS"  means  the  Amended  and  Restated
Trademark Security  Agreements,  each dated as of the date hereof,  executed and
delivered  by the  Borrowers  to the Agent to  evidence  and perfect the Agent's
Security  Interest in the Borrowers'  present and future  trademarks and related
licenses and rights,  as -it may be amended,  supplemented,  waived or otherwise
modified from time to time.

         "UCC" means the Uniform  Commercial Code (or any successor  statute) of
the State of New York or of any other  state the laws of which are  required  by
Section 9-103  thereof to be applied in connection  with the issue of perfection
of security interests.

         "UNUSED LINE AMOUNT" means $100,000,000.

         "UNUSED LINE FEE" has the meaning specified in Section 3.1(c).



                                       20
<PAGE>

         "WAREHOUSE MIS" means  management  information  systems to be used with
respect  to one or  more  warehouses;  whether  an  expenditure  constitutes  an
expenditure  for  such  a  system  shall.  be  determined  by the  Agent  in its
reasonable commercial discretion.

         ACCOUNTING  TERMS.  Any accounting  term used in this  Agreement  shall
have, unless otherwise  specifically  provided herein,  the meaning  customarily
given in accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
as consistently  applied and using the same method for inventory valuation as is
used in the preparation of the Financial Statements.

         OTHER TERMS.  All other  undefined  terms  contained in this  Agreement
shall, unless the context indicates otherwise, have the meanings provided for by
the UCC to the extent the same are used or defined therein. Wherever appropriate
in the context,  terms used herein in the singular also include the plural,  and
vice versa, and each masculine,  feminine,  or neuter pronoun shall also include
the other  genders.  Unless the  context  indicates  otherwise,  all section and
schedule  references  herein  are  to  Sections  hereof  and  Schedules  hereto,
respectively.

         2.       LOANS AND LETTERS OF CREDIT.

                  2.1.  TOTAL  FACILITY.   Subject  to  all  of  the  terms  and
conditions of this  Agreement,  the Lenders  severally agree to make available a
total  credit  facility  of up to  $100,000,000  in the  aggregate  (the  "TOTAL
FACILITY")  for the  Borrowers'  use from time to time  during  the term of this
Agreement.  The Total Facility shall be comprised of: a revolving line of credit
up to the limits of the Availability,  consisting of revolving loans and letters
of credit as described in SECTIONS 2.2 AND 2.3

                  2.2.     REVOLVING LOANS.

                           (a) Each Lender severally  agrees,  upon a Borrower's
request from time to time, to make revolving  loans (the  "REVOLVING  LOANS") to
such  Borrower  in amounts not to exceed  (except for BABC with  respect to BABC
Loans or Agent  Advances)  such Lender's Pro Rata Share of the  Availability  of
such Borrower.  The Lenders,  in their  discretion,  may elect to make Revolving
Loans or  participate  (as provided for in SECTION 2.3) in the credit support or
enhancement  provided  through  the Agent to the issuers of Letters of Credit in
excess of the  limits of the  Availability  for either  Borrower  on one or more
occasions, but, if they do so, neither the Agent nor the Lenders shall be deemed
thereby to have changed the limits of the Availability for either Borrower or to
be obligated to exceed the limits of the Availability for either Borrower on any
other  occasion.  If the sum of the  outstanding  Revolving  Loans,  the undrawn
amount of outstanding Letters of Credit and any unpaid reimbursement obligations
in respect of Letters of Credit exceeds the  Availability  (determined  for this
purpose as if the amount of the Revolving Loans were zero), then the Lenders may
refuse to make or otherwise restrict the making of Revolving Loans on such terms
as the Lenders  determine until such excess has been eliminated,  subject to the
Agent's  authority,  in its sole discretion,  to make Agent Advances pursuant to
the terms of SECTION  2.2(I).



                                       21
<PAGE>

A Borrower may request Revolving Loans either telephonically or in writing. Each
oral request for a Revolving Loan shall be conclusively presumed to be made by a
person  authorized  by such  Borrower to do so and the  crediting of a Revolving
Loan to such Borrower's  deposit  account,  or transmittal to such Person as the
Borrower  shall direct,  shall  conclusively  establish  the  obligation of such
Borrower to repay such Revolving Loan as provided herein.  The Agent will charge
all Revolving Loans to and other  Obligations of a Borrower to a loan account of
such Borrower maintained with the Agent. All fees, commissions, costs, expenses,
and other charges under or pursuant to the Loan Documents, and all payments made
and out-of-pocket  expenses incurred by the Agent and/or Lenders pursuant to the
Loan  Documents,  will be charged as  Revolving  Loans to such  Borrower's  loan
account as of the date due from such  Borrower  or the date paid or  incurred by
the Agent and/or Lenders, as the case may be.

                           (b)      PROCEDURE FOR BORROWING. (i) Each  Borrowing
shall be  made   upon a  Borrower's irrevocable  written notice delivered to the
Agent in the form of a Notice of Borrowing (which notice must be received by the
Agent prior to 11:00 a.m.  (New York City time) (1) four Business  Days prior to
the  requested  Funding  Date, in the case of LIBOR Rate Loans,  and  (2) on the
requested  Funding  Date,  in the case of Reference  Rate Loans, specifying:

                                    (A) the amount of the Borrowing;

                                    (B) the requested  Funding Date, which shall
be a Business Day;

                                    (C) whether the  Revolving  Loans  requested
are to be Reference Rate Revolving  Loans or LIBOR  Revolving  Loans;  provided,
however,  all  Revolving  Loans  requested  at a Borrowing  Base advance rate in
excess of 65%, shall be Reference Rate Loans; and

                                    (D) the duration of the  Interest  Period if
the requested  Revolving Loans are to be LIBOR Revolving Loans. If the Notice of
Borrowing fails to specify the duration of the Interest Period for any Borrowing
comprised  of LIBOR Rate Loans,  such  Interest  Period  shall be three  months;
provided,  however,  that,  with  respect  to the  Borrowings  to be made on the
Closing Date,  such  Borrowings  will consist of Reference Rate Revolving  Loans
only.

                                    (ii) After giving  effect to any  Borrowing,
there may not be more than five different Interest Periods in effect.

                                    (iii)  With   respect  to  any  request  for
Reference Rate Revolving Loans, in lieu of delivering the above-described Notice
of Borrowing a Borrower may give the Agent telephonic  notice of such request by
the required time, with such telephonic notice to be confirmed in writing within
24 hours of the giving of such  notice,  but the Agent shall be entitled to rely
on the telephonic notice in making such Revolving Loans.



                                       22
<PAGE>

                           (c)  RELIANCE  UPON  AUTHORITY.  On or  prior  to the
Effective Date (as hereinafter defined), and thereafter prior to any change with
respect to any of the  information  contained in the  following  clauses (i) and
(ii),  each Borrower shall deliver to the Agent a writing  setting forth (i) the
account  of the  Borrower  to which  the Agent is  authorized  to  transfer  the
proceeds of the Revolving Loans requested pursuant to this SECTION 2.2, and (ii)
the names of the persons authorized to request Revolving Loans on behalf of such
Borrower,  and shall  provide the Agent with a specimen  signature  of each such
person.  The Agent  shall be  entitled  to rely  conclusively  on such  person's
authority to request Revolving Loans on behalf of such Borrower, the proceeds of
which are to be  transferred  to any of the accounts  specified by such Borrower
pursuant to the immediately preceding sentence, until the Agent receives written
notice to the  contrary.  The Agent shall have no duty to verify the identity of
any individual  representing him or herself as one of the persons  authorized by
such Borrower to make such requests on its behalf.

                           (d) NO  LIABILITY.  The  Agent  shall  not  incur any
liability  to a Borrower  as a result of acting  upon any notice  referred to in
SECTIONS  2.2(B) AND (C),  which notice the Agent believes in good faith to have
been given by a person duly  authorized  by such  Borrower to request  Revolving
Loans on its behalf or for  otherwise  acting in good faith  under this  SECTION
2.2, and the crediting of Revolving Loans to the Borrower's deposit account,  or
transmittal  to such Person as such Borrower  shall direct,  shall  conclusively
establish  the  obligation  of such  Borrower to repay such  Revolving  Loans as
provided herein.

                           (e) NOTICE  IRREVOCABLE.  Any Notice of Borrowing (or
telephonic  notice in lieu  thereof)  made  pursuant to SECTION  2.2(B) shall be
irrevocable  and the  Borrower  shall be bound to  borrow  the  funds  requested
therein in accordance therewith.

                           (f) Agent's  Election.  Promptly  after  receipt of a
Notice of Borrowing (or telephonic  notice in lieu thereof)  pursuant to SECTION
2.2(B),  the Agent  shall  elect,  in its  discretion,  (i) to have the terms of
SECTION  2.2(G) apply to such  requested  Borrowing,  or (ii) to request BABC to
make a BABC Loan  pursuant  to the terms of SECTION  2.2(H) in the amount of the
requested  Borrowing;  PROVIDED,  HOWEVER,  that if BABC  declines  in its  sole
discretion to make a BABC Loan pursuant to SECTION 2.2(H), the Agent shall elect
to have the terms of SECTION 2.2(G) apply to such requested Borrowing.

                           (g) MAKING OF REVOLVING  LOANS. (i) In the event that
the  Agent  shall  elect to have the  terms of this  SECTION  2.2(A)  apply to a
requested  Borrowing as described in SECTION 2.2(F), then promptly after receipt
of a Notice of Borrowing or telephonic  notice pursuant to SECTION  2.2(B),  the
Agent shall notify the Lenders by telecopy,  telephone or other  similar form of
transmission, of the requested Borrowing. . Each Lender shall make the amount of
such Lender's Pro Rata Share of the requested  Borrowing  available to the Agent
in same day funds, to such account of the Agent as the Agent may designate,  not
later  than  2:00  p.m.  (New York City  time) on the  Funding  Date  applicable
thereto. After the Agent's receipt of the proceeds of such Revolving Loans, upon
satisfaction of the applicable conditions precedent set forth in SECTION 11, the
Agent  shall  make  the  proceeds  of  such  Revolving  Loans  available  to



                                       23
<PAGE>

the applicable  Borrower on the applicable Funding Date by transferring same day
funds equal to the proceeds of such  Revolving  Loans received by the Agent to a
general  operating  account  of such  Borrower,  designated  in  writing by such
Borrower;  PROVIDED,  HOWEVER, that the amount of Revolving Loans so made on any
date shall in no event exceed the Availability of such Borrower on such date.

                                    (ii) Unless the Agent receives notice from a
Lender on or prior to the Effective Date or, with respect to any Borrowing after
the  Effective  Date,  at  least  one  Business  Day  prior  to the date of such
Borrowing,  that  such  Lender  will not  make  available  as and when  required
hereunder to the Agent for the account of the applicable  Borrower the amount of
that  Lender's Pro Rata Share of the  Borrowing,  the Agent may assume that each
Lender has made such  amount  available  to the Agent in  immediately  available
funds on the Funding Date and the Agent may (but shall not be so  required),  in
reliance upon such  assumption,  make  available to such Borrower on such date a
corresponding  amount.  If and to the extent any Lender  shall not have made its
full amount available to the Agent in immediately  available funds and the Agent
in such  circumstances  has made  available to such Borrower  such amount,  that
Lender shall on the Business  Day  following  such Funding Date make such amount
available to the Agent,  together  with  interest at the Federal  Funds Rate for
each day during such period.  A notice of the Agent submitted to any Lender with
respect to amounts  owing  under this  subsection  shall be  conclusive,  absent
manifest error.  If such amount is so made available,  such payment to the Agent
shall constitute such Lender's Loan on the date of Borrowing for all purposes of
this  Agreement.  If such  amount  is not  made  available  to the  Agent on the
Business  Day  following  the Funding  Date,  the Agent will notify the relevant
Borrower of such failure to fund and,  upon demand by the Agent,  such  Borrower
shall  pay such  amount  to the Agent for the  Agent's  account,  together  with
interest  thereon for each day elapsed  since the date of such  Borrowing,  at a
rate per annum equal to the Interest  Rate  applicable  at the time to the Loans
comprising  such  Borrowing.  The  failure of any Lender to make any Loan on any
Funding  Date  (any  such  Lender,  prior  to the  cure of such  failure,  being
hereinafter  referred to as a "Defaulting  Lender")  shall not relieve any other
Lender of any  obligation  hereunder to make a Loan on such Funding Date, but no
Lender shall be responsible for the failure of any other Lender to make the Loan
to be made by such other Lender on any Funding Date.

                                    (iii) The Agent  shall not be  obligated  to
transfer to a Defaulting  Lender any payments made by such Borrower to the Agent
for the Defaulting  Lender's benefit;  nor shall a Defaulting Lender be entitled
to the sharing of any payments hereunder. Amounts payable to a Defaulting Lender
shall  instead be paid to or retained  by the Agent.  The Agent may hold and, in
its discretion,  re-lend to a Borrower the amount of all such payments  received
or retained by the Agent for the account of such Defaulting  Lender. Any amounts
so re-lent to a Borrower  shall for all purposes of this Agreement be treated as
if they were Revolving Loans, provided, however, that, for purposes of voting or
consenting  to matters with respect to the Loan  Documents and  determining  Pro
Rata  Shares,  such  Defaulting  Lender shall be deemed not to be a "Lender" and
such Lender's  Commitment  shall be deemed to be zero (-0-).  Until a Defaulting
Lender  cures its failure to fund its Pro Rata Share of any  Borrowing  (1) such
Defaulting  Lender  shall not be  entitled to any portion of the Unused Line Fee
and (2) the  Unused  Line Fee shall



                                       24
<PAGE>

accrue in favor of the  Lenders  which have  funded  their  respective  Pro Rata
Shares of such requested  Borrowing,  shall be allocated  among such  performing
Lenders ratably based upon their relative  Commitments,  and shall be calculated
based  upon the  average  amount  by which  the  aggregate  Commitments  of such
performing  Lenders  exceeds  the sum of  outstanding  Revolving  Loans  and the
undrawn face amount of all  outstanding  Letters of Credit.  This section  shall
remain  effective  with respect to such Lender until such time as the Defaulting
Lender  shall no longer  be in  default  of any of its  obligations  under  this
Agreement.  The terms of this  Section  shall not be  construed  to  increase or
otherwise  affect  the  Commitment  of any  Lender or to  relieve  or excuse the
performance by the Borrower of its duties and obligations hereunder.

                           (h) MAKING OF BABC LOANS.  (i) In the event the Agent
shall elect,  with the consent of BABC, to have the terms of this SECTION 2.2(H)
apply to a requested Borrowing as described in SECTION 2.2(F), BABC shall make a
Revolving  Loan in the amount of such  Borrowing  (any such  Revolving Loan made
solely by BABC  pursuant to this  SECTION  2.2(H)  being  referred to as a "BABC
Loan" and such Revolving  Loans being referred to  collectively as "BABC Loans")
available to a Borrower on the Funding Date  applicable  thereto by transferring
same day funds to a general  operating  account of such Borrower,  designated in
writing by such Borrower. Each BABC Loan is a Revolving Loan hereunder and shall
be subject to all the terms and conditions  applicable to other  Revolving Loans
except  that all  payments  thereon  shall be payable to BABC solely for its own
account (and for the account of the holder of any  participation  interest  with
respect to such  Revolving  Loan).  The Agent shall not request BABC to make any
BABC Loan if (i) the Agent shall have received  written  notice from any Lender,
or otherwise has actual knowledge, that one or more of the applicable conditions
precedent set forth in SECTION 11 will not be satisfied on the requested Funding
Date for the applicable Borrowing,  or (ii) the requested Borrowing would exceed
the Availability of such Borrower on such Funding Date. BABC shall not otherwise
be required to determine whether the applicable  conditions  precedent set forth
in SECTION 11 have been  satisfied or the requested  Borrowing  would exceed the
Availability  of the Borrower on the Funding Date  applicable  thereto  prior to
making, in its sole discretion, any BABC Loan. The Agent agrees that on any date
that BABC Loans exceed  $10,000,000,  the Agent shall request  Settlement of all
outstanding BABC Loans on the Business Day following such date.

                                    (ii) The BABC Loans  shall be secured by the
Collateral,  shall  constitute  Revolving Loans and Obligations  hereunder,  and
shall bear interest at the rate  applicable to the Revolving  Loans from time to
time.

                           (i) AGENT ADVANCES.  (i)  Subject  to the limitations
set forth in the provisos  contained in this SECTION 2.2(I), the Agent is hereby
authorized  by each  Borrower and the Lenders,  from time to time in the Agent's
sole discretion, (1) after the occurrence of an Event or an Event of Default, or
(2) at any time that any of the other applicable  conditions precedent set forth
in SECTION 11 have not been satisfied,  to make Revolving Loans to each Borrower
on behalf of the Lenders which the Agent, in its reasonable  business  judgment,
deems necessary or desirable (A) to preserve or protect the  Collateral,  or any
portion  thereof,  (B) to enhance the  likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (C)



                                       25
<PAGE>

to pay any other amount  chargeable to each such Borrower  pursuant to the terms
of this Agreement,  including,  without limitation,  costs, fees and expenses as
described in SECTION 17.10 (any of the advances described in this SECTION 2.2(I)
being hereinafter referred to as "Agent Advances");  PROVIDED, that the Majority
Lenders  may at any time  revoke the  Agent's  authorization  contained  in this
SECTION 2.2(I) to make Agent Advances,  any such revocation to be in writing and
to  become  effective  prospectively  upon  the  Agent's  receipt  thereof,  and
PROVIDED,  FURTHER,  that at no time shall the Agent make an Agent Advance in an
amount that would result in Availability at such time being exceeded.

                                    (ii) The Agent  Advances shall be secured by
the Collateral,  shall constitute Revolving Loans and Obligations hereunder, and
shall bear interest at the rate  applicable to the Revolving  Loans from time to
time. The Agent shall notify each Lender in writing of each such Agent Advance.

                           (j)  SETTLEMENT.  It is  agreed  that  each  Lender's
funded  portion of the Revolving  Loan is intended by the Lenders to be equal at
all times to such Lender's Pro Rata Share of the  outstanding  Revolving  Loans.
Notwithstanding  such  agreement,  the Agent,  BABC, and the other Lenders agree
(which  agreement  shall not be for the benefit of or enforceable by a Borrower)
that in order to facilitate the  administration  of this Agreement and the other
Loan Documents,  settlement among them as to the Revolving Loans, the BABC Loans
and the Agent Advances  shall take place on a periodic basis in accordance  with
the following provisions:

                                    (i)  The Agent  shall  request    settlement
("Settlement")   with the Lenders on a weekly basis, or on a more frequent basis
if so determined    by  the Agent, (1) on   behalf of BABC, with respect to each
outstanding BABC Loan,   (2) for itself, with respect to each Agent Advance, and
(3) with respect to collections received, in each case, by notifying the Lenders
of such requested Settlement   by telecopy,   telephone or other similar form of
transmission, of such  requested Settlement,   no later than 1:00 p.m. (New York
City time) on the  date    of such requested Settlement (the "Settlement Date").
Each Lender (other   than BABC, in the case of BABC Loans) shall make the amount
of such Lender's Pro Rata Share of the outstanding principal amount of the BABC
Loans and Agent Advances with respect to which Settlement is requested available
to the Agent, for itself or for the account of BABC, in same day funds, to such
account of the Agent as the Agent may   designate, not later than 4:00 p.m. (New
York City   time), on   the Settlement    Date applicable thereto, regardless of
whether the applicable   conditions  precedent set forth in SECTION 11 have then
been    satisfied.   Such   amounts made available to the Agent shall be applied
against   the amounts of the applicable BABC Loan or Agent Advance and, together
with the portion of such BABC Loan or Agent Advance representing BABC's Pro Rata
Share   thereof,   shall constitute Revolving Loans of such Lenders. If any such
amount is not made   available to the Agent by any Lender on the Settlement Date
applicable thereto, the Agent shall be entitled to recover such amount on demand
from such Lender   together with  interest thereon at the Federal Funds Rate for
the first three days from and after   the Settlement  Date and thereafter at the
Interest Rate then applicable to the Revolving Loans.



                                       26
<PAGE>

                                    (ii) Notwithstanding the foregoing, not more
than one Business Day after demand is made by the Agent (whether before or after
the  occurrence of an Event or an Event of Default and regardless of whether the
Agent has requested a Settlement  with respect to a BABC Loan or Agent Advance),
each other Lender shall  irrevocably  and  unconditionally  purchase and receive
from  BABC or the  Agent,  as  applicable,  without  recourse  or  warranty,  an
undivided  interest and  participation in such BABC Loan or Agent Advance to the
extent of such Lender's Pro Rata Share  thereof by paying to the Agent,  in same
day funds,  an amount equal to such Lender's Pro Rata Share of such BABC Loan or
Agent Advance.  If such amount is not in fact made available to the Agent by any
Lender,  the Agent shall be entitled to recover  such amount on demand from such
Lender  together with  interest  thereon at the Federal Funds Rate for the first
three (3) days from and after such demand and  thereafter  at the Interest  Rate
then applicable to the Revolving Loans.

                                    (iii)  From and after the date,  if any,  on
which any Lender purchases an undivided  interest and  participation in any BABC
Loan or Agent  Advance  pursuant  to  subsection  (ii)  above,  the Agent  shall
promptly distribute to such Lender at such address as such Lender may request in
writing,  such Lender's Pro Rata Share of all payments of principal and interest
and all  proceeds  of  Collateral  received by the Agent in respect of such BABC
Loan or Agent Advance.

                                    (iv) Between Settlement Dates, the Agent, to
the extent no Agent Advances or BABC Loans are outstanding, may pay over to BABC
any payments  received by the Agent,  which in accordance with the terms of this
Agreement  would  be  applied  to the  reduction  of the  Revolving  Loans,  for
application  to  BABC's  other  outstanding  Revolving  Loans.  If,  as  of  any
Settlement  Date,  collections  received  since the then  immediately  preceding
Settlement  Date have been applied to BABC's other  outstanding  Revolving Loans
other than to BABC Loans or Agent  Advances,  as  provided  for in the  previous
sentence,  BABC shall pay to the Agent for the  accounts of the  Lenders,  to be
applied to the outstanding  Revolving Loans of such Lenders, an amount such that
each Lender  shall,  upon receipt of such amount,  have,  as of such  Settlement
Date,  its Pro Rata Share of the  Revolving  Loans.  During  the period  between
Settlement  Dates,  BABC with  respect to BABC Loans,  the Agent with respect to
Agent  Advances,  and each Lender with respect to the Revolving Loans other than
BABC Loans and Agent  Advances,  shall be entitled to interest at the applicable
rate or rates payable under this Agreement on the actual average daily amount of
funds employed by BABC, the Agent and the other Lenders.

                           (k) NOTATION. The Agent shall record on its books the
principal amount of the Revolving Loans owing to each Lender, including the BABC
Loans owing to BABC,  and the Agent  Advances  owing to the Agent,  from time to
time. In addition,  each Lender is authorized,  at such Lender's option, to note
the date and amount of each payment or  prepayment of principal of such Lender's
Revolving Loans in its books and records, including computer records, such books
and records constituting rebuttably presumptive evidence, absent manifest error,
of the accuracy of the information contained therein.



                                       27
<PAGE>

                           (l)  LENDERS'  FAILURE TO PERFORM.  All Loans  (other
than BABC Loans and Agent Advances) shall be made by the Lenders  simultaneously
and in  accordance  with their Pro Rata  Shares.  It is  understood  that (a) no
Lender shall be  responsible  for any failure by any other Lender to perform its
obligation to make any Loans  hereunder,  nor shall any Commitment of any Lender
be  increased  or  decreased  as a result of any failure by any other  Lender to
perform its obligation to make any Loans hereunder, (b) no failure by any Lender
to perform its  obligation  to make any Loans  hereunder  shall excuse any other
Lender from its obligation to make any Loans hereunder,  and (c) the obligations
of each Lender hereunder shall be several, not joint and several.

                  2.3.  LETTERS  OF  CREDIT.   (a)  Subject  to  the  terms  and
conditions of this Agreement,  the Agent on behalf of the Lenders shall,  upon a
Borrower's  request from time to time,  cause  merchandise or standby letters of
credit to be issued  for such  Borrower's  account by Bank of America or another
issuer  reasonably  acceptable  to such  Borrower and the Agent (the "LETTERS OF
Credit"). The Agent will not cause to be issued any Letter of Credit if: (i) the
maximum  face  amount of the  requested  Letter of  Credit,  plus the  aggregate
undrawn face amount of all  outstanding  Letters of Credit and the maximum claim
(matured or unmatured) of BankBoston under the Indemnification  Agreement, would
exceed  $2,000,000;  (ii) the  maximum  face amount of the  requested  Letter of
Credit,  and all  commissions,  fees,  and charges due from such Borrower to the
Lender in connection with the opening  thereof,  would cause the Availability to
be exceeded at such time; or (iii) the  expiration  date of the Letter of Credit
would exceed the Stated  Termination Date or any renewal term or be greater than
(A) 12 months  from the date of  issuance  if such Letter of Credit is a standby
Letter of Credit or (B) 180 days  from the date of  issuance  if such  Letter of
Credit is a  merchandise  Letter  of  Credit.  All  payments  made and  expenses
incurred  by the Agent  and/or  Lenders  pursuant to or in  connection  with the
Letters  of Credit or the  Indemnification  Agreement  will be  charged  to such
Borrower's loan account as Reference Rate Loans.

                           (b) OTHER CONDITIONS. In addition to being subject to
the satisfaction of the applicable conditions precedent contained in SECTION 11,
the  obligation  of the  Agent to cause to be  issued  any  Letter  of Credit is
subject to the following  conditions precedent having been satisfied in a manner
satisfactory to the Agent:

                                    (1)  The   relevant   Borrower   shall  have
delivered to the proposed issuer of such Letter of Credit,  at such times and in
such manner as such proposed  issuer may  prescribe,  an application in form and
substance satisfactory to such proposed issuer and the Agent for the issuance of
the Letter of Credit and such other documents as may be required pursuant to the
terms thereof,  and the form and terms of the proposed Letter of Credit shall be
satisfactory to the Agent and such proposed issuer; and

                                    (2) As of the date of issuance,  no order of
any court,  arbitrator or Public  Authority shall purport by its terms to enjoin
or restrain money center banks  generally from issuing  letters of credit of the
type and in the amount of the  proposed  Letter of Credit,  and no law,  rule or
regulation  applicable  to  money  center  banks  generally  and no  request  or
directive



                                       28
<PAGE>

(whether  or not  having  the  force of law)  from  any  Public  Authority  with
jurisdiction  over money center banks generally shall prohibit,  or request that
the  proposed  issuer of such Letter of Credit  refrain  from,  the  issuance of
letters of credit generally or the issuance of such Letters of Credit.

                           (c) ISSUANCE OF LETTERS OF CREDIT.

                                    (1)  REQUEST  FOR  ISSUANCE.   The  relevant
Borrower  shall give the Agent two Business  Days' prior written  notice of such
Borrower's request for the issuance of a Letter of Credit.  Such notice shall be
irrevocable  and shall  specify the original face amount of the Letter of Credit
requested,  the effective  date (which date shall be a Business Day) of issuance
of such requested  Letter of Credit,  whether such Letter of Credit may be drawn
in a single or in  partial  draws,  the date on which such  requested  Letter of
Credit is to expire (which date shall be a Business  Day), the purpose for which
such  Letter of Credit is to be issued,  and the  beneficiary  of the  requested
Letter of Credit. Such Borrower shall attach to such notice the proposed form of
the Letter of Credit that the Agent is requested to cause to be issued.

                                    (2) NO  EXTENSIONS  OR AMENDMENT.  The Agent
shall not be  obligated  to cause any Letter of Credit to be extended or amended
unless the  requirements  of this  SECTION 2.3 are met as though a new Letter of
Credit were being requested and issued.

                                    (3) NOTICE OF Issuance.  On each  Settlement
Date the Agent shall give  notice to each Lender of the  issuance of all Letters
of Credit issued since the last Settlement Date.

                           (d) PAYMENTS PURSUANT TO LETTERS OF CREDIT.

                                    (1) PAYMENT OF LETTER OF CREDIT OBLIGATIONS.
The Borrowers agree to reimburse the issuer,  in the manner set forth in SECTION
2.3(D)(2) for any draw under any Letter of Credit or BankBoston Letter of Credit
and,  without  duplication,  the Agent for the account of the  Lenders  upon any
payment pursuant to any credit support  immediately upon demand,  and to pay the
issuer of the Letter of Credit or  BankBoston,  respectively,  the amount of all
other  obligations  and  other  amounts  payable  to  such  issuer  under  or in
connection with any Letter of Credit or BankBoston Letter of Credit  immediately
when due,  irrespective of any claim,  setoff,  defense or other right which the
Borrowers may have at any time against such issuer or any other Person.

                                    (2)   REFERENCE   RATE   LOANS  TO   SATISFY
REIMBURSEMENT OBLIGATIONS.  In the event that the issuer of any Letter of Credit
or BankBoston  honors a draw under such Letter of Credit or BankBoston Letter of
Credit,  respectively,  the Agent  shall,  upon  receiving  notice of such draw,
notify each Lender of such draw,  and each Lender shall  unconditionally  pay to
the Agent,  for the account of such issuer or the Agent,  as applicable,  as and
when  provided  hereinbelow,  an amount equal to such Lender's Pro Rata Share of
the amount of such draw in same day funds.  If the Agent so notifies the Lenders
prior to 1:00 p.m.  (New York City time) on any Business  Day, each Lender shall
make available to the Agent the relevant amount,  as provided in the immediately
preceding  sentence,  on such  Business Day.



                                       29
<PAGE>

Such amounts paid by the Lenders to the Agent shall  constitute  Revolving Loans
which shall be deemed to have been requested by the Borrower pursuant to SECTION
2.2.

                           (e) PARTICIPATIONS.

                                    (1) PURCHASE OF PARTICIPATIONS.  Immediately
upon issuance of any Letter of Credit in accordance  with SECTION  2.3(C),  each
Lender shall be deemed to have  irrevocably  and  unconditionally  purchased and
received without recourse or warranty,  an undivided  interest and participation
in the Letter of Credit provided  through the Agent to such issuer in connection
with the  issuance of such  Letter of Credit,  equal to such  Lender's  Pro Rata
Share  of  the  face  amount  of  such  Letter  of  Credit  (including,  without
limitation,  all  obligations  of the  Borrower  with respect  thereto,  and any
security therefor or guaranty pertaining thereto).

                                    (2)  SHARING  OF  REIMBURSEMENT   OBLIGATION
PAYMENTS.  Whenever  the Agent  receives a payment from a Borrower on account of
reimbursement obligations in respect of a Letter of Credit as to which the Agent
has  previously  received for the account of the issuer  thereof  payment from a
Lender  pursuant  to SECTION  2.3(D)(2),  the Agent shall  promptly  pay to such
Lender  such  Lender's  Pro Rata Share of such  payment  from such  Borrower  in
Dollars.  Each such  payment  shall be made by the Agent on the  Business Day on
which  the  Agent  receives  immediately  available  funds  paid to such  Person
pursuant to the immediately  preceding sentence,  if received prior to 4:00 p.m.
(New York City time) on such Business Day and  otherwise on the next  succeeding
Business Day.

                                    (3)  DOCUMENTATION.  Upon the request of any
Lender,  the Agent shall  furnish to such Lender copies of any Letter of Credit,
reimbursement  agreements executed in connection therewith,  application for any
Letter of Credit and credit support or enhancement provided through the Agent in
connection  with  the  issuance  of  any  Letter  of  Credit,   and  such  other
documentation as may reasonably be requested by such Lender.

                                    (4) OBLIGATIONS IRREVOCABLE. The obligations
of each  Lender to make  payments  to the Agent  with  respect  to any Letter of
Credit or with  respect to any credit  support  provided  through the Agent with
respect to a Letter of Credit,  and the  obligations  of the  Borrowers  to make
payments to the Agent, for the account of the Lenders, shall be irrevocable, not
subject  to  any  qualification  or  exception  whatsoever,  including,  without
limitation, any of the following circumstances:

                                             (i)  any   lack  of   validity   or
enforceability of this Agreement or any of the other Loan Documents;

                                             (ii) the existence  of  any  claim,
setoff,  defense or other right which the Borrowers may have at any time against
a  beneficiary  named in a Letter of Credit or any  transferee  of any Letter of
Credit (or any Person for whom any such  transferee may be acting),  any Lender,
the Agent, the issuer of such Letter of Credit, or any other Person,  whether in
connection  with  this  Agreement,   any  Letter  of  Credit,  the  transactions
contemplated  herein or any unrelated  transactions  (including  any  underlying



                                       30
<PAGE>

transactions between the Borrowers or any other Person and the beneficiary named
in any Letter of Credit);

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

                                             (iv) the surrender or impairment of
any security for the performance or observance of any of the terms of any of the
Loan Documents; or

                                             (v) the  occurrence of any Event or
Event of Default.

                           (f) RECOVERY OR  AVOIDANCE OF PAYMENTS.  In the event
any payment by or on behalf of a Borrower  received by the Agent with respect to
any  Letter  of  Credit  (or any  guaranty  by such  Borrower  or  reimbursement
obligation of such Borrower  relating  thereto) and  distributed by the Agent to
the Lenders on account of their respective  participations therein is thereafter
set  aside,  avoided  or  recovered  from  the  Agent  in  connection  with  any
receivership,  liquidation or bankruptcy  proceeding,  the Lenders  shall,  upon
demand by the Agent,  pay to the Agent their  respective Pro Rata Shares of such
amount set aside,  avoided or  recovered,  together  with  interest  at the rate
required to be paid by the Agent upon the, amount required to be repaid by it.

                           (g) COMPENSATION FOR LETTERS OF CREDIT.

                                    (1)  LETTER OF  CREDIT  FEE.  The  Borrowers
agree to pay to the Agent for the account of the  Lenders,  with respect to each
Letter of Credit,  the Letter of Credit Fee specified in, and in accordance with
the terms of SECTION 3.7

                                    (2) ISSUER FEES AND CHARGES.  The  Borrowers
shall pay to the issuer of any Letter of Credit, or to the Agent for the account
of the issuer of any such Letter of Credit,  solely for such  issuer's  account,
such fees and other  charges as are charged by such issuer for letters of credit
issued by such issuer,  including,  without  limitation,  its standard  fees for
issuing,  administering,  amending,  renewing,  paying and canceling  letters of
credit and all other  fees  associated  with  issuing  or  servicing  letters of
credit, as and when assessed.

                           (h) INDEMNIFICATION, EXONERATION; POWER OF ATTORNEY

                                    (1) INDEMNIFICATION.  In addition to amounts
payable as elsewhere provided in this SECTION 2.3, the Borrowers hereby agree to
protect,  indemnify,  pay and save the Lenders and the Agent  harmless  from and
against  any and all  claims,  demands,  liabilities,  damages,  losses,  costs,
charges and expenses (including, without limitation, reasonable attorneys' fees)
which any  Lender or the Agent  may  incur or be  subject  to as a  consequence,
direct or indirect, of (A) the issuance of any Letter of Credit or the provision
of any  credit  support  or  enhancement  in  connection  therewith  or (B)  the
Indemnification Agreement. The agreement in this Section 2.3(h)(1) shall survive
payments of all Obligations.



                                       31
<PAGE>

                                    (2) ASSUMPTION OF RISK BY THE BORROWERS.  As
among the Borrowers,  the Lenders, and the Agent, the Borrowers assume all risks
of the acts and  omissions of, or misuse of any of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit other than risks arising from
the gross  negligence  or willful  misconduct  of the  Lenders or the Agent.  In
furtherance  and not in limitation of the  foregoing,  the Lenders and the Agent
shall not be responsible  for: (A) the form,  validity,  sufficiency,  accuracy,
genuineness  or  legal  effect  of  any  document  submitted  by any  Person  in
connection with the  application for and issuance of and  presentation of drafts
with  respect to any of the Letters of Credit,  even if it should prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B)
the  validity or  sufficiency  of any  instrument  transferring  or assigning or
purporting  to transfer or assign any Letter of Credit or the rights or benefits
thereunder  or  proceeds  thereof,  in whole or in part,  which  may prove to be
invalid or ineffective for any reason; (C) the failure of the beneficiary of any
Letter of Credit to comply duly with  conditions  required in order to draw upon
such  Letter of  Credit;  (D)  errors,  omissions,  interruptions,  or delays in
transmission or delivery of any messages,  by mail, cable,  telegraph,  telex or
otherwise,  whether or not they be in cipher;  (E) errors in  interpretation  of
technical  terms;  (F) any loss or delay in the transmission or otherwise of any
document  required  in order to make a drawing  under any Letter of Credit or of
the proceeds thereof; (G) the misapplication by the beneficiary of any Letter of
Credit of the  proceeds of any drawing  under such Letter of Credit;  or (H) any
consequences arising from causes beyond the control of the Lenders or the Agent,
including,  without  limitation,  any  act  or  omission,  whether  rightful  or
wrongful, of any present or future DE JURE or DE FACTO Public Authority. None of
the  foregoing  shall  affect,  impair or prevent  the  vesting of any rights or
powers of the Agent or any Lender under this SECTION 2.3

                                    (3)   EXONERATION.    In   furtherance   and
extension, and not in limitation, of the specific provisions set forth above, no
action taken or omitted by the Agent or any Lender under or in  connection  with
any of the Letters of Credit or any related certificates, if taken or omitted in
the absence of gross  negligence or willful  misconduct,  shall put the Agent or
any Lender  under any  resulting  liability  to the  Borrowers  or  relieve  the
Borrowers of any of their obligations hereunder to any such Person.

                                    (4) POWER OF ATTORNEY.  In  connection  with
all Inventory  financed by Letters of Credit,  or a BankBoston Letter of Credit,
each  Borrower  hereby  appoints  the Agent,  or the Agent's  designee,  as such
Borrower's attorney,  with full power and authority:  (a) to sign and/or endorse
such  Borrower's  name upon any  warehouse or other  receipts;  (b) to sign such
Borrower's  name on bills of lading  and  other  negotiable  and  non-negotiable
documents;  (c) to  clear  Inventory  through  customs  in the  Agent's  or such
Borrower's name, and to sign and deliver to customs officials powers of attorney
in such Borrower's name for such purpose;  (d) to complete in such Borrower's or
the  Agent's  name,  any order,  sale,  or  transaction,  obtain  the  necessary
documents in connection  therewith and collect the proceeds thereof;  and (e) to
do such other acts and things as are  necessary  in order to enable the Agent to
obtain  possession of the Inventory  and to obtain  payment of the  Obligations.
Neither the Agent nor its designee, as such Borrower's attorney, shall be liable
for any acts or omissions,  nor for any error of judgment or mistakes of fact or
law.  This power,  being  coupled with an  interest,  is  irrevocable  until all
Obligations have been paid and satisfied.



                                       32
<PAGE>

                                    (5)  ACCOUNT  PARTY.  Each  Borrower  hereby
authorizes and directs any issuer of a Letter of Credit to name such Borrower as
the "account party" therein, to deliver to the Agent all instruments,  documents
and other writings and property received by the issuer pursuant to the Letter of
Credit, and to accept and rely upon the Agent's instructions and agreements with
respect to all matters  arising in  connection  with the Letter of Credit or the
application therefor.

                                    (6) CONTROL OF INVENTORY. In connection with
all  Inventory  financed by Letters of Credit or a BankBoston  Letter of Credit,
each Borrower shall, at the Agent's request,  instruct all suppliers,  carriers,
forwarders,  warehouses or others receiving or holding cash, checks,  Inventory,
documents or instruments in which the Agent holds a security interest to deliver
them to the Agent  and/or  subject to the Agent's  order and, if they shall come
into a Borrower's possession, such Borrower shall deliver them, upon request, to
the Agent in their  original  form.  Each  Borrower  shall also,  at the Agent's
request,  designate  the Agent as the consignee on all bills of lading and other
negotiable and non-negotiable documents.

                           (i)  CASH   COLLATERAL.   If,   notwithstanding   the
provisions of this SECTION 2.3and SECTION 14, any Letter of Credit or BankBoston
Letter of Credit is outstanding  upon the  termination of this  Agreement,  then
upon such  termination  each  Borrower  shall  deposit  with the  Agent,  at its
discretion, with respect to each Letter of Credit or BankBoston Letter of Credit
then outstanding,  cash in amounts necessary to reimburse the Agent for payments
made by the Agent and/or Lenders under such Letter of Credit or under any credit
support or enhancement provided through the Agent. Such deposit of cash shall be
held by the Agent as  security  for,  and to  provide  for the  payment  of, the
aggregate  undrawn  amount of such  Letters  of Credit or  BankBoston  Letter of
Credit remaining outstanding.

         3. INTEREST AND OTHER CHARGES.

                  3.1. INTEREST.

                           (a) All outstanding  Obligations  shall bear interest
on the unpaid  principal amount thereof  (including,  to the extent permitted by
law,  on  interest  thereon  not paid when due) from the date made until paid in
full in cash at a rate  determined  by  reference to the  Reference  Rate or the
LIBOR Rate and SECTION 3.1(A)(I) OR SECTION 3.1(A)(II),  as applicable,  but not
to exceed the Maximum Rate referred to in Section 3.3. Subject to the provisions
of  SECTION  3.2,  any of the Loans may be  converted  into,  or  continued  as,
Reference Rate Loans or LIBOR Rate Loans in the manner  provided in SECTION 3.2.
If at any time Loans are  outstanding  with respect to which notice has not been
delivered to the Agent in accordance with the terms of this Agreement specifying
the basis for determining the interest rate applicable thereto, then those Loans
shall be Reference  Rate Loans and shall bear  interest at a rate  determined by
reference to the  Reference  Rate until notice to the contrary has been given to
the Agent and such notice has become  effective.  Except as  otherwise  provided
herein, the Obligations shall bear interest as follows:



                                       33
<PAGE>

                                    (i) For all  Reference  Rate Loans and other
Obligations (other than LIBOR Rate Loans), at a fluctuating per annum rate equal
to the Reference Rate plus the Applicable Margin; and

                                    (ii)  For all  LIBOR  Rate  Loans,  at a per
annum rate for each Interest  Period  therefor  equal to the LIBOR Rate for such
Interest Period plus the Applicable Margin.

         Each change in the  Reference  Rate shall be  reflected in the interest
rate  described  in (i)  above  as of the  effective  date of such  change.  All
interest charges shall be computed on the basis of a year of 360 days and actual
days elapsed. All interest shall be payable to the Agent for the ratable account
of the Lenders on the first day of each month hereafter.

                           (b) If any Event or Event of  Default  occurs,  then,
from the date such Event or Event of Default  occurs  until it is cured,  or, if
not cured,  until all  Obligations are paid and performed in full, the Borrowers
shall pay interest on the unpaid principal  balances of the Revolving Loans at a
per annum rate 2 % greater than the rate of interest otherwise specified herein,
and the Letter of Credit Fee shall be increased to three and one-quarter percent
(3.25%) per annum.

                           (c) UNUSED LINE FEE.  For every month during the term
of this Agreement,  the Borrowers agree, jointly and severally, to pay the Agent
for the  ratable  account  of the  Lenders a fee (the  "UNUSED  LINE FEE") in an
amount  equal to  three-eighths  of one  percent  per annum,  MULTIPLIED  BY the
average daily amount by which the Unused Line Amount  exceeds the sum of (i) the
average daily  outstanding  amount of Revolving  Loans and (ii) the undrawn face
amount of all outstanding  Letters of Credit during such month,  with the unpaid
balance  calculated  for this  purpose by  applying  payments  immediately  upon
receipt.  Such a fee, if any,  shall be calculated on the basis of a year of 360
days and actual days  elapsed and shall be payable to the Agent on the first day
of each month with respect to the prior month.

                  3.2. CONVERSION AND CONTINUATION ELECTIONS.

                           (a) Either  Borrower  may, upon  irrevocable  written
notice to the Agent in accordance with SUBSECTION 3.2(B):

                                    (i) elect,  as of any  Business  Day, in the
         case of Reference Rate Loans (other than Reference Rate Loans made at a
         Borrowing Base advance rate in excess of 65%) to convert any such Loans
         (or any part thereof) into LIBOR Rate Loans; or

                                    (ii)  elect,  as of  the  last  day  of  any
         Interest Period  applicable  thereto,  to continue to maintain as LIBOR
         Rate  Loans any  LIBOR  Rate  Loans to such  Borrower  having  Interest
         Periods expiring on such day;

provided  that neither  Borrower may make such  election if any LIBOR Rate Loans
resulting  from such election  would be in an amount less than  $3,000,000 or an
integral multiple of $1,000,000



                                       34
<PAGE>

in excess thereof; PROVIDED FURTHER that, if at any time the aggregate amount of
LIBOR Rate Loans in respect of any Borrowing is reduced, by payment, prepayment,
or conversion of part thereof to be less than $1,000,000,  such LIBOR Rate Loans
shall  automatically  convert into Reference  Rate Loans,  and on and after such
date the right of such  Borrower  to continue  such Loans as, and  convert  such
Loans into, LIBOR Rate Loans, as the case may be, shall terminate.

                           (b) Such Borrower shall deliver a notice  ("Notice of
Conversion/Continuation")  to be received by the Agent not later than 11:00 a.m.
(New York City  time) at least  three  Business  Days in  advance of the date of
conversion or continuation (the "Conversion/Continuation Date") if the Loans are
to be converted into or continued as LIBOR Rate Loans, and specifying:

                                    (A)  the  proposed   Conversion/Continuation
Date;

                                    (B) the aggregate amount of Loans to be
converted or continued;

                                    (C) the  type of  Loans  resulting  from the
proposed conversion or continuation; and

                                    (D) the duration of the requested
Interest Period.

                           (c) If, upon the  expiration  of any Interest  Period
applicable  to LIBOR Rate  Loans,  the  relevant  Borrower  has failed to select
timely a new Interest Period to be applicable to such LIBOR Rate Loans or if any
Event or Event of Default then  exists,  such  Borrower  shall be deemed to have
elected to convert such LIBOR Rate Loans into Reference Rate Loans  effective as
of the expiration date of such Interest Period.

                           (d)  During  the  existence  of an  Event or Event of
Default,  neither  Borrower may elect to have a Loan converted into or continued
as a LIBOR Rate Loan.

                           (e)  After  giving   effect  to  any   conversion  or
continuation  of  Loans,  there may not be more  than  five  different  Interest
Periods in effect.

                           (f) The Agent will promptly notify each Lender of its
receipt   of  a  Notice  of   Conversion/Continuation.   All   conversions   and
continuations  shall be made  ratably  according to the  respective  outstanding
principal  amounts of the Loans with  respect to which the notice was given held
by each Lender.

                  3.3.  MAXIMUM  INTEREST  RATE.  In no event shall any interest
rate provided for hereunder  exceed the maximum rate  permissible  for corporate
borrowers under applicable law for loans of the type provided for hereunder (the
"Maximum Rate").  If, in any month,  any interest rate,  absent such limitation,
would have  exceeded the Maximum  Rate,  then the  interest  rate for that month
shall be the Maximum Rate,  and, if in future  months,  that interest rate would
otherwise be less than the Maximum Rate, then that interest rate shall remain at
the Maximum Rate until such time as the amount of interest paid hereunder equals
the  amount  of  interest  that



                                       35
<PAGE>

would have been paid if the same had not been  limited by the Maximum  Rate.  In
the event that,  upon payment in full of the  Obligations  under this Agreement,
the total  amount of interest  paid or accrued by a Borrower  under the terms of
this  Agreement is less than the total amount of interest  which would,  but for
this SECTION 3.3, have been paid or accrued if the interest rates  otherwise set
forth in this  Agreement  had at all times  been in effect,  then such  Borrower
shall, to the extent  permitted by applicable law, pay the Agent for the account
of the Lenders,  an amount equal to the difference between (a) the lesser of (i)
the amount of interest which would have been charged if the Maximum Rate had, at
all  times,  been in effect or (ii) the  amount of  interest  which  would  have
accrued had the interest  rates  otherwise set forth in this  Agreement,  at all
times,  been in effect and (b) the amount of interest  actually  paid or accrued
under this Agreement. In the event that a court determines that the Agent and/or
any Lender has received from a Borrower  interest and other charges hereunder in
excess of the Maximum Rate,  such excess shall be deemed received on account of,
and shall  automatically be applied to reduce,  the Obligations of such Borrower
other than  interest,  in the inverse  order of  maturity,  and, if there are no
Obligations  outstanding,  the Agent  and/or  such Lender  shall  refund to such
Borrower such excess.

                  3.4. FACILITY FEE. The Borrowers agree, jointly and severally,
to pay to the Agent,  for the account of the Lenders,  on the  Effective  Date a
facility fee in the amount of $175,000 (the "FACILITY FEE").

                  3.5. COLLATERAL MANAGEMENT FEE. The Borrowers agree to pay the
Agent,  solely for its own account,  on the Effective Date and January 1 of each
year thereafter,  a collateral  management fee ("Collateral  Management Fee") in
the amount  provided in the  Commitment  Letter  dated  February 10, 1999 by the
Agent to the Borrowers.

                  3.6. ADDITIONAL  ACCOMMODATION FEE. The Borrowers agree to pay
the Agent,  for the ratable account of the Lenders,  on June 1, 1999, a fee (the
"Additional  Accommodation  Fee") in the amount of  $400,000,  which  Additional
Accommodation Fee shall be fully earned by the Lenders on the Effective Date.

                  3.7.  LETTER OF CREDIT FEE. The Borrowers  agree,  jointly and
severally,  to pay to the Agent,  for the ratable account of the Lenders,  a fee
(the "Letter of Credit Fee") equal to one and  one-quarter  percent  (1.25%) per
annum of the  undrawn  face  amount  of each  Letter of  Credit  issued  for any
Borrower's  account at such Borrower's  request,  PLUS all out-of-pocket  costs,
fees and expenses  incurred by the Agent in connection with the application for,
issuance  of, or  amendment  to any  Letter of  Credit,  which  costs,  fees and
expenses could include a "fronting fee" required to be paid by the Agent to such
issuer for the assumption of the settlement risk in connection with the issuance
of such Letter of Credit.  The Letter of Credit Fee shall be payable  monthly in
arrears on the first day of each month  following any month in which a Letter of
Credit was issued and/or in which a Letter of Credit  remains  outstanding.  The
Letter of Credit Fee shall be  computed  on the basis of a 360-day  year for the
actual number of days elapsed.

         4. PAYMENTS AND PREPAYMENTS.



                                       36
<PAGE>

                  4.1.   REVOLVING   LOANS.   The  Borrowers   shall  repay  the
outstanding  principal  balance of the  Revolving  Loans,  plus all  accrued but
unpaid interest thereon,  upon the termination of this Agreement for any reason.
In addition, and without limiting the generality of the foregoing, the Borrowers
shall pay to the Agent,  for account of the  Lenders,  on demand,  the amount by
which the unpaid  principal  balance of the Revolving  Loans at any time exceeds
the  Availability at such time  (determined for this purpose as if the amount of
the Revolving Loans were zero).

                  4.2. [INTENTIONALLY LEFT BLANK].

                  4.3. [INTENTIONALLY LEFT BLANK].

                  4.4. [INTENTIONALLY LEFT BLANK].

                  4.5.  PLACE AND FORM OF PAYMENTS;  EXTENSION OF TIME.  (a) All
payments by the Borrowers of principal, interest, premium, and other sums due to
the Agent  and/or  Lenders  shall be made at the  Agent's  address  set forth in
SECTION  17.11  Except for  Proceeds  received  directly by the Agent,  all such
payments shall be made in immediately available funds. Subject to the provisions
set  forth  in the  definition  of  "Interest  Period",  if any  payment  by the
Borrowers of principal,  interest,  premium,  or other sum to be made  hereunder
becomes due and payable on a day other than a Business Day, the due date of such
payment  shall be  extended to the next  succeeding  Business  Day and  interest
thereon shall be payable at the applicable interest rate during such extension.

                           (b) Unless the Agent receives  notice from a Borrower
prior to the date on which any payment is due to the Lenders that such  Borrower
will not make such  payment in full as and when  required,  the Agent may assume
that such  Borrower  has made such  payment in full to the Agent on such date in
immediately available funds and the Agent may (but shall not be so required), in
reliance  upon such  assumption,  distribute  to each Lender on such due date an
amount  equal to the  amount  then due such  Lender.  If and to the  extent  the
Borrower has not made such payment in full to the Agent, each Lender shall repay
to the Agent on demand such amount  distributed  to such Lender,  together  with
interest  thereon  at the  Federal  Funds  Rate for each day from the date  such
amount is distributed to such Lender until the date repaid.

                  4.6.  PAYMENTS AS REVOLVING  LOANS. All payments of principal,
interest,  reimbursement obligations in connection with Letters of Credit, fees,
premiums and other sums payable hereunder,  including,  without limitation,  all
reimbursement  for expenses pursuant to SECTION 17.10, may, at the option of the
Agent, in its sole discretion, subject only to the terms of this SECTION 4.6, be
paid from the proceeds of Revolving Loans made hereunder, whether made following
a request by a Borrower  pursuant to SECTION 2.2 or a deemed request as provided
in this SECTION 4.6. The Borrower  hereby  irrevocably  authorizes  the Agent to
charge  the  Loan  Account  for  the  purpose  of  paying  principal,  interest,
reimbursement  obligations in connection with Letters of Credit,  fees, premiums
and other sums payable hereunder,  including,  without  limitation,  reimbursing
expenses  pursuant to SECTION  17.10,  and agrees that all such



                                       37
<PAGE>

amounts charged shall constitute Revolving Loans (including, without limitation,
BABC Loans and Agent  Advances),  that all such Revolving Loans so made shall be
deemed to have been requested by the Borrower  pursuant to SECTION 2.2, and that
the  Agent  may  charge  the  Loan  Account  for such  reimbursable  obligations
immediately  upon  their  becoming  due,  regardless  of  whether  the Agent has
received the payments from the Lenders required by SECTION 2.3(D)(2).

                  4.7.  APPORTIONMENT,  APPLICATION  AND  REVERSAL OF  PAYMENTS.
Aggregate principal and interest payments shall be apportioned ratably among the
Lenders  (according to the unpaid  principal  balance of the Loans to which such
payments  relate  held by each  Lender)  and  payments  of the  fees  shall,  as
applicable,  be  apportioned  ratably among the Lenders.  All payments  shall be
remitted  to the  Agent and all such  payments  not  relating  to  principal  or
interest of specific  Loans, or not  constituting  payment of specific fees, and
all  proceeds of Accounts or other  Collateral  received by the Agent,  shall be
applied, ratably, subject to the provisions of this Agreement, FIRST, to pay any
fees,  indemnities  or  expense  reimbursements  then due to the Agent  from the
Borrowers;  SECOND,  to pay any fees or expense  reimbursements  then due to the
Lenders  from the  Borrowers;  THIRD,  to pay  interest  due in  respect  of all
Revolving  Loans,  including BABC Loans and Agent  Advances;  FOURTH,  to pay or
prepay  principal of the BABC Loans and Agent Advances;  fifth, to pay or prepay
principal of the Revolving  Loans (other than BABC Loans and Agent Advances) and
unpaid reimbursement  obligations in respect of Letters of Credit; and sixth, to
the  payment  of any  other  Obligation  due to the  Agent or any  Lender by the
Borrowers. Notwithstanding anything to the contrary contained in this Agreement,
unless  so  directed  by the  Borrowers,  or  unless  an  Event  of  Default  is
outstanding,  neither the Agent nor any Lender shall apply any payments which it
receives to any LIBOR  Revolving Loan except (a) on the  expiration  date of the
Interest Period applicable to any such LIBOR Rate Loan, or (b) in the event, and
only to the  extent,  that there are no  outstanding  Reference  Rate  Revolving
Loans.  The Agent shall  promptly  distribute  to each  Lender,  pursuant to the
applicable wire transfer instructions received from each Lender in writing, such
funds  as it may be  entitled  to  receive,  subject  to a  Settlement  delay as
provided  for in  SECTION  2.2(J).  The Agent  and the  Lenders  shall  have the
continuing and exclusive right to apply and reverse and reapply any and all such
proceeds and payments to any portion of the Obligations.

                  4.8. INDEMNITY FOR RETURNED PAYMENTS. IF, AFTER RECEIPT OF ANY
PAYMENT  WHICH IS APPLIED TO THE PAYMENT OF ALL OR ANY PART OF THE  OBLIGATIONS,
THE AGENT OR ANY LENDER IS FOR ANY REASON COMPELLED TO SURRENDER SUCH PAYMENT TO
ANY PERSON BECAUSE SUCH PAYMENT IS INVALIDATED,  DECLARED FRAUDULENT, SET ASIDE,
DETERMINED TO BE VOID OR VOIDABLE AS A PREFERENCE, AN IMPERMISSIBLE SETOFF, OR A
DIVERSION OF TRUST FUNDS, OR FOR ANY OTHER REASON, THEN: THE OBLIGATIONS OR PART
THEREOF  INTENDED TO BE SATISFIED SHALL BE REVIVED AND CONTINUE,  THIS AGREEMENT
SHALL  CONTINUE IN FULL FORCE AS IF SUCH  PAYMENT  HAD NOT BEEN  RECEIVED BY THE
AGENT OR ANY LENDER,  AND THE  BORROWERS  SHALL BE LIABLE TO PAY TO THE AGENT OR
ANY  LENDER  AND HEREBY DO JOINTLY  AND  SEVERALLY  INDEMNIFY  THE AGENT AND THE
LENDERS  AND HOLD THE  AGENT AND THE  LENDERS  HARMLESS  FOR THE



                                       38
<PAGE>

AMOUNT OF SUCH PAYMENT SURRENDERED.  The provisions of this SECTION 4.8 shall be
and remain  effective  notwithstanding  any contrary  action which may have been
taken by the Agent or any Lender in  reliance  upon such  payment,  and any such
contrary  action so taken  shall be without  prejudice  to the  Agent's  and the
Lenders'  rights  under  this  Agreement  and  shall  be  deemed  to  have  been
conditioned  upon  such  payment  having  become  final  and  irrevocable.   The
provisions of this SECTION 4.8 shall survive the termination of this Agreement.

         5. AGENT'S AND LENDER'S  BOOKS AND RECORDS;  MONTHLY  STATEMENTS.  Each
Borrower agrees that the Agent's and each Lender's books and records showing the
Obligations and the  transactions  pursuant to this Agreement and the other Loan
Documents shall be admissible in any action or proceeding  arising therefrom and
shall  constitute  PRIMA  FACIE  proof  thereof,  irrespective  of  whether  any
Obligation is also evidenced by a promissory note or other instrument. The Agent
shall provide to Trend-Lines a monthly statement of Loans,  payments,  and other
transactions of the Borrowers  pursuant to this Agreement.  Such statement shall
be deemed  correct,  accurate,  and binding on the  Borrowers  and as an account
stated (except for reversals and  reapplications of payments made as provided in
SECTION  4.7  and  corrections  of  errors  discovered  by  the  Agent),  unless
Trend-Lines  notifies the Agent in writing to the contrary  within 30 days after
such  statement is rendered.  In the event a timely written notice of objections
is given by  Trend-Lines,  only the items to which  exception is expressly  made
will be considered to be disputed.

         6. TAXES, YIELD PROTECTION AND ILLEGALITY

                  6.1. TAXES.

                           (a) Any and all payments by a Borrower to each Lender
or the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without  deduction or withholding for, any Taxes. In addition,
the Borrowers shall pay all Other Taxes.

                           (b)  The  Borrowers   agree  to  indemnify  and  hold
harmless  each Lender and the Agent for the full amount of Taxes or Other  Taxes
(including,  without  limitation,  any  Taxes  or  Other  Taxes  imposed  by any
jurisdiction  on amounts  payable  under this Section) paid by the Lender or the
Agent and any liability  (including,  without limitation,  penalties,  interest,
additions  to tax, and  expenses)  arising  therefrom  or with respect  thereto,
whether or not such Taxes or Other  Taxes were  correctly  or legally  asserted.
Payment under this  indemnification  shall be made within 30 days after the date
the Lender or the Agent makes written demand therefor.

                           (c) If  any  Borrower  shall  be  required  by law to
deduct  or  withhold  any Taxes or Other  Taxes  from or in  respect  of any sum
payable hereunder to any Lender or the Agent, then:



                                       39
<PAGE>

                                    (i) the sum payable  shall be  increased  as
necessary  so  that  after  making  all  required  deductions  and  withholdings
(including,  without  limitation,  deductions  and  withholdings  applicable  to
additional sums payable under this Section) such Lender or the Agent receives an
amount  equal  to the sum it  would  have  received  had no such  deductions  or
withholdings been made;

                                    (ii)   such   Borrower   shall   make   such
deductions and withholdings;

                                    (iii)  such  Borrower  shall  pay  the  full
amount deducted or withheld to the relevant taxing  authority or other authority
in accordance with applicable law; and

                                    (iv) such  Borrower  shall  also pay to each
Lender or the Agent for the  account of such  Lender,  at the time  interest  is
paid, all  additional  amounts which the  respective  Lender  specifies as being
necessary to preserve the after-tax yield the Lender would have received if such
Taxes or Other Taxes had not been imposed.

                           (d) Within 30 days after the date of any payment by a
Borrower of Taxes or Other  Taxes,  such  Borrower  shall  furnish the Agent the
original or a certified copy of a receipt evidencing  payment thereof,  or other
evidence of payment satisfactory to the Agent.

                           (e) If a  Borrower  is  required  to  pay  additional
amounts to any Lender or the Agent  pursuant to subsection  (c) of this Section,
then such  Lender  shall  use  reasonable  efforts  (consistent  with  legal and
regulatory   restrictions),   including   reasonable   efforts   to  change  the
jurisdiction  of its lending  office,  so as to  eliminate  any such  additional
payment by such  Borrower  which may  thereafter  accrue,  if such change in the
judgment of such Lender is not otherwise disadvantageous to such Lender.

                           (f) Except as the Borrowers shall otherwise  consent,
each Lender hereby severally (but not jointly)  represents that under applicable
law and  treaties  in effect  on the date of this  Agreement  no  United  States
federal taxes will be required to be withheld by the Agent or the Borrowers with
respect to any payments to be made to such Lender in respect of this  Agreement.
Each Lender  which is a Lender on the date of this  Agreement  hereby  severally
(not jointly)  represents that it is  incorporated  under the laws of the United
States of America or a State  thereof  and is  lending  from an office  that is-
incorporated under the laws of the United States of America or a State hereof.

                           (g) Unless the Borrowers shall otherwise consent, if,
pursuant to SECTION 15.3 any interest in this Agreement or any Loan or Letter of
Credit  transferred  to any Assignee or Participant  (a  "Transferee")  which is
organized under the laws of any jurisdiction other than the United States or any
State thereof or which is lending from an office which is incorporated under the
laws of any  jurisdiction  other than the United  States of America or any State
thereof,  the transferor  Lender shall cause such Transferee,  concurrently with
the  effectiveness of such transfer,  (i) to represent to the transferor  Lender
(for the benefit of the


                                       40
<PAGE>

transferor  Lender,  the Agent and the Borrowers) that under  applicable law and
treaties  at the time in effect no Taxes will be  required to be withheld by the
Agent, the Borrowers or the transferor Lender with respect to any payments to be
made to such  Transferee  in respect of the Loans and other  amounts owing under
this  Agreement,  (ii) to furnish to the  transferor  Lender,  the Agent and the
Borrowers  either  U.S.  Internal  Revenue  Service  Form 4224 or U.S.  Internal
Revenue Service Form 1001, or any successor  applicable form, as the case may be
(wherein such  Transferee  claims  entitlement  to complete  exemption from U.S.
federal withholding tax on all interest payments hereunder), (iii) to agree (for
the benefit of the  transferor  Lender,  the Agent and the Borrowers) to provide
the transferor  Lender, the Agent and the Borrowers a new Form 4224 or Form 1001
upon  the  expiration  or  obsolescence  of any  previously  delivered  form and
comparable  statements in accordance  with  applicable U.S. laws and regulations
and  amendments  duly executed and completed by such  Transferee,  and to comply
from time to time with all applicable U.S. laws and  regulations  with regard to
such  withholding  tax  exemption  and (iv) to agree  (for  the  benefit  of the
transferor Lender, the Agent and the Borrowers) to be bound by the provisions of
SECTION 6.1 as if such Transferee were a Lender hereunder.

                           (h)  The  obligations  of the  Borrowers  under  this
Section 6.1 shall be joint and several.

                  6.2.  ILLEGALITY.  (a)  If  any  Lender  determines  that  the
introduction of any Requirement of Law, or any change in any Requirement of Law,
or in the  interpretation  or administration of any Requirement of Law, has made
it unlawful,  or that any central bank or other  Public  Authority  has asserted
that it is unlawful,  for such Lender or its  applicable  lending office to make
LIBOR Rate Loans, then, on notice thereof by Lender to the Borrowers through the
Agent, any obligation of that Lender to make LIBOR Rate Loans shall be suspended
until the Lender notifies the Agent and Borrowers that the circumstances  giving
rise to such determination no longer exists.

                           (b) If a Lender  determines  that it is  unlawful  to
maintain any LIBOR Rate Loan, the Borrowers shall,  upon their receipt of notice
of such fact and demand from the Lender  (with a copy to the  Agent),  prepay in
full such LIBOR Rate Loans then  outstanding,  together  with  interest  accrued
thereon and amounts  required  under SECTION 6.4,  either on the last day of the
Interest  Period thereof,  if the Lender may lawfully  continue to maintain such
LIBOR Rate Loans to such day,  or  immediately,  if the Lender may not  lawfully
continue  to  maintain  such LIBOR Rate Loan.  If a Borrower  is  required so to
prepay  any LIBOR Rate  Loan,  then,  concurrently  with such  prepayment,  such
Borrower shall borrow from the affected Lender, in the amount of such repayment,
a Reference Rate Loan.

                           (c)  Notwithstanding  any other provision  herein, if
the  introduction of any Requirement of Law, or any change in any Requirement of
Law, or in the  interpretation  or  administration of any Requirement of Law has
made it unlawful  for a Lender or its  applicable  lending  office to make LIBOR
Rate Loans, such Lender agrees to use reasonable efforts  (including  reasonable
efforts  to change  the  office in which it is  booking  the Loan) to avoid such



                                       41
<PAGE>

prohibition; PROVIDED, HOWEVER, that such efforts shall not cause the imposition
on such Lender of any  additional  costs or legal  regulatory  burdens deemed by
such  Lender  to  be  material  or  otherwise   deemed  by  such  Lender  to  be
disadvantageous to it or contrary to its policies.

                  6.3.  INCREASED  COSTS AND  REDUCTION  OF  RETURN.  (a) If any
Lender  determines  that, due to either (i) the introduction of or any change in
the  interpretation  of any law or  regulation  or (ii) the  compliance  by that
Lender  with any  guideline  or request  from any central  bank or other  Public
Authority  (whether or not having the force of law), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any LIBOR Rate Loans,  then the  Borrowers  shall be liable for,  and shall from
time to time,  upon demand (with a copy to the Agent),  pay to the Agent for the
account of such Lender,  such additional amounts as are sufficient to compensate
the Lender for such increased costs.

                           (b) If any Lender shall have  determined that (i) the
introduction of any Capital Adequacy Regulation,  (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital  Adequacy  Regulation by any central bank or other Public  Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Lender or any corporation  controlling the Lender with any Capital  Adequacy
Regulation,  affects or would affect the amount of capital, reserves, or special
deposits  required or expected to be maintained by the Lender or any corporation
controlling  the Lender and (taking  into  consideration  such  Lender's or such
corporation's  policies  with  respect to  capital  adequacy  and such  Lender's
desired return on capital) determines that the amount of such capital, reserves,
or special  deposits is  increased  as a  consequence  of its loans,  credits or
obligations  under  this  Agreement,  then,  upon  demand of such  Lender to the
Borrowers through the Agent, the Borrowers shall pay to the Lender, from time to
time as specified by the Lender, additional amounts sufficient to compensate the
Lender for such increase.  Notwithstanding the foregoing, all such amounts shall
be subject to the provisions of SECTION 3.3

                           (c)  The  obligations  of the  Borrowers  under  this
Section 6.3 shall be joint and several.

                  6.4. FUNDING LOSSES. Each Borrower shall reimburse each Lender
and hold each  Lender  harmless  from any loss or  expense  which the Lender may
sustain or incur as a  consequence  of: (a) the failure of such Borrower to make
on a timely basis any payment of principal of any LIBOR Rate Loan;

                           (b) the failure of such Borrower to borrow,  continue
or convert a Loan after such  Borrower  has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/Continuation;



                                       42
<PAGE>

                           (c)  the  prepayment  or  other  payment  (including,
without  limitation,  after acceleration  thereof) by such Borrower of any LIBOR
Rate Loan on a day that is not the last day of the relevant Interest Period;

including,  without  limitation,  any  such  loss or  expense  arising  from the
liquidation or  reemployment  of funds obtained by it to maintain its LIBOR Rate
Loans or from fees payable to terminate  the deposits from which such funds were
obtained.

                  6.5.  INABILITY TO DETERMINE  RATES.  If the Agent  determines
that for any reason  adequate and reasonable  means do not exist for determining
the LIBOR Rate for any  requested  Interest  Period  with  respect to a proposed
LIBOR Rate Loan, or that the LIBOR Rate for any requested  Interest  Period with
respect to a proposed LIBOR Rate Loan does not adequately and fairly reflect the
cost to the Lenders of funding such Loan,  the Agent will promptly so notify the
Borrowers and each Lender.  Thereafter, the obligation of the Lenders to make or
maintain LIBOR Rate Loans  hereunder  shall be suspended until the Agent revokes
such notice in writing.  Upon receipt of such notice,  the relevant Borrower may
revoke  any  Notice  of  Borrowing  or Notice  of  Conversion/Continuation  then
submitted by such  Borrower.  If such Borrower does not revoke such Notice,  the
Lenders shall make, convert or continue the Loans, as proposed by such Borrower,
in the amount specified in the applicable notice submitted by such Borrower, but
such Loans shall be made, converted or continued as Reference Rate Loans instead
of LIBOR Rate Loans.

                  6.6.    CERTIFICATES   OF   LENDERS.   Any   Lender   claiming
reimbursement or compensation under this Section 6 shall deliver to the Borrower
(with a copy to the Agent) a certificate  setting forth in reasonable detail the
amount payable to such Lender hereunder.

                  6.7. SURVIVAL. The agreements and obligations of the Borrowers
in this SECTION 6 shall survive the payment of all other Obligations.

         7. COLLATERAL.

                  7.1. GRANT OF SECURITY INTEREST.

                           (a) As security for the  Obligations,  each  Borrower
hereby grants to the Agent for the ratable benefit of the Agent and the Lenders,
a continuing  security  interest in, lien on, assignment of and right of set-off
against,  all of the following  property of such Borrower,  whether now owned or
existing or hereafter acquired or arising,  regardless of where located: (i) all
Receivables,  Inventory, Equipment, Assigned Contracts,  Proprietary Rights, and
Proceeds,  wherever  located and whether now  existing or  hereafter  arising or
acquired;  (ii) all  moneys,  securities  and other  property  and the  Proceeds
thereof,  now or  hereafter  held or received by, or in transit to, the Agent or
any  Lender  from or for  either  Borrower,  whether  for  safekeeping,  pledge,
custody, transmission,  collection or otherwise,  including, without limitation,
all of such Borrower's deposit accounts, credits, and balances with Agent or any
Lender and all claims of such  Borrower  against  the Agent or any Lender at any
time existing;  (iii) all of such Borrower's



                                       43
<PAGE>

deposit  accounts  with any  financial  institutions  with which  such  Borrower
maintains deposits;  and (iv) all books,  records and other Property relating to
or referring to any of the foregoing,  including, without limitation, all books,
records,  ledger cards,  data processing  records,  computer  software and other
property  and  general  intangibles  at any time  evidencing  or relating to the
Receivables,  Inventory,  Equipment,  Assigned  Contracts,  Proprietary  Rights,
Proceeds,  and other property referred to above (all of the foregoing,  together
with the real estate  covered by the Mortgages  and all other  property in which
the  Agent  or any  Lender  may at any  time be  granted  a Lien,  being  herein
collectively  referred to as the "COLLATERAL").  The Agent and the Lenders shall
have all of the rights of a secured party with respect to the  Collateral  under
the UCC and other applicable laws.

                           (b) As additional  security for the Obligations,  the
Borrower  shall  simultaneously  herewith  execute  and  deliver  to the Agent a
Mortgage satisfactory to the Agent on the Seabrook Premises.

                           (c) All  Obligations  shall be  secured by all of the
Collateral.  The  Borrower  agrees that the Agent and the Lenders  may, in their
sole  discretion,  (i) exchange,  waive, or release any of the Collateral,  (ii)
apply Collateral and direct the order or manner of sale thereof as the Agent and
the Lenders may determine, and (iii) settle,  compromise,  collect, or otherwise
liquidate any Collateral in any manner, all without affecting the Obligations or
the Agent and the  Lenders'  right to take any other  action with respect to any
other Collateral.

                  7.2.  PERFECTION  AND  PROTECTION OF SECURITY  INTEREST.  Each
Borrower shall, at its expense,  perform all steps requested by the Agent at any
time  to  perfect,  maintain,   protect,  and  enforce  the  Security  Interest,
including,  without limitation: (a) executing and recording of the Mortgages and
the  Trademark  Security  Agreements  and  executing  and  filing  financing  or
continuation   statements,   and  amendments  thereof,  in  form  and  substance
satisfactory to the Agent; (b) delivering to the Agent upon request the original
certificates  of title for motor  vehicles with the Security  Interest  properly
endorsed thereon;  (c) delivering to the Agent the originals of all instruments,
documents,  and  chattel  paper,  and all  other  Collateral  of which the Agent
determines  it should have  physical  possession in order to perfect and protect
the Security  Interest  therein,  duly endorsed or assigned to the Agent without
restriction;  (d)  delivering  to the  Agent  upon  request  warehouse  receipts
covering  any  portion of the  Collateral  located in  warehouses  and for which
negotiable  warehouse  receipts  are  issued;  (e)  placing  notations  on  such
Borrower's books of account to disclose the Security Interest; (f) executing and
delivering  to the Agent  upon  request a  security  agreement  relating  to the
Reversions in form and substance  satisfactory  to the Agent;  (g) delivering to
the Agent upon  request  all  letters of credit on which such  Borrower is named
beneficiary;  and (h)  taking  such  other  steps  as are  deemed  necessary  or
desirable  by the Agent to maintain and protect the  Security  Interest.  To the
extent  permitted  by  applicable  law,  the  Agent  may  file,  without  either
Borrower's  signature,  one or more financing statements disclosing the Security
Interest. The Borrowers agree that a carbon, photographic, photostatic, or other
reproduction  of this  Agreement or of a financing  statement is sufficient as a
financing  statement.  If any  Collateral  is at any time in the  possession  or
control of any  warehouseman,  any bailee or any of either  Borrower's agents or
processors,  then the



                                       44
<PAGE>

relevant Borrower shall notify the Agent thereof and shall notify such Person of
the Security interest in such Collateral and, upon the Agent's request, instruct
such Person to hold all such  Collateral for the Agent's  account subject to the
Agent's  instructions.  If at any time any Collateral is located on any Premises
that are not owned by either  Borrower,  then the Borrowers shall obtain written
waivers,  in form and substance  satisfactory  to the Agent,  of all present and
future Liens to which the owner or lessor or any  mortgagee of such Premises may
be entitled to assert against the  Collateral.  From time to time, the Borrowers
shall,  upon the  Agent's  request,  execute and  deliver  confirmatory  written
instruments  pledging to the Agent for the ratable  benefit of the Agent and the
Lenders the Collateral,  but neither Borrower's failure to do so shall affect or
limit  the  Security  Interest  or  the  Agent's  other  rights  in  and  to the
Collateral.  So long as this  Agreement  is in effect and until all  Obligations
have been fully  satisfied,  the Security  Interest shall continue in full force
and effect in all Collateral  (whether or not deemed eligible for the purpose of
calculating the Availability or as the basis for any advance, loan, extension of
credit, or other financial accommodation).

                  7.3.  LOCATION OF  COLLATERAL.  Each Borrower  represents  and
warrants to the Agent that:  (a)  SCHEDULE  7.3 hereto is a correct and complete
list of such Borrower's  chief executive  office,  the location of its books and
records, the locations of the Collateral,  and the locations of all of its other
places  of  business  and (b)  SCHEDULE  7.3  correctly  identifies  any of such
facilities  and locations that are not owned by such Borrower and sets forth the
names of the owners and  lessors or  sub-lessors  of,  and,  to the best of such
Borrower's  knowledge,  the holders of any  mortgages  on, such  facilities  and
locations.  Each  Borrower  covenants  and agrees that it will not  maintain any
Collateral  at any location  other than (a) those listed on SCHEDULE 7.3 and (b)
those with respect to which such  Borrower  has given  notice to the Agent,  has
executed any and all financing statements and other documents that the Agent has
required in connection  therewith,  and has filed same in the appropriate places
and within the time periods indicated by the Agent. Within 30 days after the end
of each month,  the Borrowers shall give the Agent written notice of the opening
of any new store, the closing of any store, and any other event that resulted in
a change of location of any Collateral, during the previous month.

                  7.4. TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL.  Each
Borrower  represents  and  warrants to the Agent and the Lenders with respect to
Collateral  owned by such Borrower that: (a) all Collateral is and will continue
to be owned by such Borrower free and clear of all Liens whatsoever,  except for
the Security  Interest and other Permitted Liens; (b) the Security Interest will
not be subject to any prior Lien  except for the Liens  described  in (b),  (c),
(e),  (f),  (h),  (i) and j) of the  definition  of  Permitted  Liens;  (c) such
Borrower will use, store,  and maintain such Collateral with all reasonable care
and will use such  Collateral  for lawful  purposes  only; and (d) such Borrower
will not, without the Agent's prior written approval, sell, lease, or dispose of
or permit the sale or  disposition  of such  Collateral or any portion  thereof,
except  for  sales of  Inventory  in the  ordinary  course  of  business  and as
permitted by SECTION 7.12 The inclusion of Proceeds in the Collateral  shall not
be deemed the Agent's consent to any sale or other disposition of the Collateral
except as expressly permitted herein.



                                       45
<PAGE>

                  7.5. APPRAISALS. Whenever an Event or Event of Default exists,
and at such  other  times  not more  frequently  than  once a year as the  Agent
requests,  each  Borrower  shall,  at its expense and upon the Agent's  request,
provide  the Lender  with  appraisals  or  updates  thereof of any or all of the
Collateral owned by such Borrower from an appraiser.

                  7.6. ACCESS AND EXAMINATION. (a) The Agent, accompanied by any
Lender which so elects,  may at all  reasonable  times have access to,  examine,
audit,  make extracts from or copies of and inspect either  Borrower's  records,
files,  and books of account and the Collateral and may discuss such  Borrower's
affairs  with such  Borrower's  officers and  management.  Such  Borrower  shall
deliver to the Agent any  instrument  necessary for the Agent to obtain  records
from any service bureau maintaining records for such Borrower. The Agent may, at
any time when an Event of Default exists and at either Borrower's expense,  make
copies of all of such Borrower's books and records,  or require such Borrower to
deliver such copies to the Agent.  The Agent may,  without expense to the Agent,
use such of  either  Borrower's  personnel,  supplies,  and  Premises  as may be
reasonably  necessary for  maintaining or enforcing the Security  Interest.  The
Agent shall have the right, at any time, in the Agent's name or in the name of a
nominee  of the  Agent,  to verify  the  validity,  amount  or any other  matter
relating to the Accounts, by mail, telephone, or otherwise.

                           (b)  Each  Borrower  agrees  that,  subject  to  such
Borrower's prior consent for uses other than in a traditional  tombstone,  which
consent shall not be unreasonably withheld or delayed, the Agent and each Lender
may use the  Borrower's  name in  advertising  and  promotional  material and in
conjunction  therewith  disclose the general terms of this Agreement.  The Agent
and each Lender agree to take normal and reasonable precautions and exercise due
care  to  maintain  the   confidentiality  of  all  information   identified  as
"confidential"  or "secret" by the  Borrower  and  provided to the Agent or such
Lender by or on behalf of the Borrower,  under this  Agreement or any other Loan
Document,  and  neither  the Agent nor such  Lender nor any of their  respective
Affiliates  shall use any such  information  other than in connection with or in
enforcement of this Agreement and the other Loan Documents, except to the extent
that such information (i) was or becomes generally available to the public other
than as a result  of  disclosure  by the  Agent or such  Lender,  or (ii) was or
becomes  available  oil a  nonconfidential  basis  from a source  other than the
Borrower,  provided that such source is not bound by a confidentiality agreement
with the Borrower known to the Agent or such Lender; PROVIDED, HOWEVER, that the
Agent and any  Lender  may  disclose  such  information  (1) at the  request  or
pursuant to any requirement of any Governmental  Authority to which the Agent or
such Lender is subject or in connection with an examination of the Agent or such
Lender by any such  Governmental  Authority;  (2)  pursuant to subpoena or other
court process;  (3) when required to do so in accordance  with the provisions of
any  applicable  requirement  of law; (4) to the extent  reasonably  required in
connection   with  any  litigation  or  proceeding   (including  any  bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may be
a party; (5) to the extent  reasonably  required in connection with the exercise
of any remedy hereunder or under any other Loan Document;  (6) to the Agent's or
such   Lender's   independent   auditors,   accountants,   attorneys  and  other
professional advisors, provided that such auditors,  accountants,  attorneys and
other advisors agree to keep such  information  confidential  to the same



                                       46
<PAGE>

extent required of the Agent and the Lenders hereunder;  (7) to any Affiliate of
the Agent or such Lender, or to any prospective Participating Lender or assignee
under any Assignment  and  Acceptance,  actual or potential,  provided that such
Affiliate,  prospective  Participating  Lender or  assignee  agrees to keep such
information  confidential  to the same  extent  required  of the  Agent  and the
Lenders hereunder;  and (8) as expressly  permitted under the terms of any other
document or agreement regarding confidentiality to which the Borrower is a party
or is a deemed a party with the Agent or such Lender.

                  7.7.  INSURANCE.  The  Borrowers  shall insure the  Collateral
against  loss or  damage  by  fire  with  extended  coverage,  theft,  burglary,
pilferage,  loss in transit,  and such other hazards as the Agent shall specify,
in  amounts,  under  policies  and by  insurers  acceptable  to the  Agent.  The
Borrowers  shall also maintain  flood  insurance for real estate  covered by the
Mortgages and for any Equipment  and Inventory  located on such real estate,  in
the event of a  designation  of the area in which  real  estate is  located as a
"FLOOD  PRONE" or a "FLOOD  RISK  AREA"  (hereinafter  "SFHA") as defined by the
Flood Disaster Protection Act of 1973, in an amount to be reasonably  determined
by the Agent, and shall comply with the additional  requirements of the National
Flood  Insurance  Program as set forth therein.  Upon the Agent's  request,  the
Borrowers  shall also maintain flood  insurance for such Inventory and Equipment
as is located at any time in an SFHA. The Borrowers  shall cause the Agent to be
named in each such  policy as a secured  party or  mortgagee  and loss  payee or
additional  insured,  in a  manner  acceptable  to the  Agent.  Each  policy  of
insurance  shall contain a clause or  endorsement  requiring the insurer to give
not  less  than 30 days'  prior  written  notice  to the  Agent in the  event of
cancellation of the policy for any reason whatsoever and a clause or endorsement
stating that the interest of the Agent shall not be impaired or  invalidated  by
any act or  neglect  of  either  Borrower  or the  owner of any  premises  where
Collateral  is located nor by the  occupation of such premises for purposes more
hazardous than are permitted by such policy.  The Borrowers  shall pay, upon the
Agent's request,  all fees incurred by the Agent to determine whether any of the
real estate and other Collateral is located in an SFHA. The Borrowers shall also
pay all  premiums  for such  insurance  when due and shall  deliver to the Agent
certificates of insurance and, if requested, photocopies of the policies. If the
Borrowers  fail to pay such fees or to procure  such  insurance  or the premiums
therefor when due, the Agent may (but shall not be required to) do so and charge
the costs thereof to either  Borrower's  loan account as a Reference  Rate Loan.
The  Borrowers  shall  promptly  notify  the  Agent  of  any  loss,  damage,  or
destruction to the Collateral or arising from its use, whether or not covered by
insurance.  The Agent is hereby  authorized  to collect all  insurance  proceeds
directly.  After deducting from such proceeds the expenses,  if any, incurred by
the Agent in the  collection  or  handling  thereof,  the  Agent may apply  such
proceeds  to the  reduction  of the  Obligations  in  such  order  as the  Agent
determines  or at the Agent's  option may permit or require the Borrowers to use
such money,  or any part  thereof,  to replace,  repair,  restore or rebuild the
Collateral in a diligent and  expeditious  manner with materials and workmanship
of  substantially  the same  quality  as  existed  before  the  loss,  damage or
destruction.

                  7.8.  COLLATERAL  REPORTING.  The Borrowers  shall provide the
Agent with the following  documents at the following times in form  satisfactory
to the Agent: (a) on a weekly basis as of the end of the Borrowers' fiscal week,
a report of the inventory balance (by location)



                                       47
<PAGE>

based on the  perpetual  inventory  reports  no later  than four  Business  Days
following the end of such fiscal week; (b) upon request,  monthly aged inventory
reports by category no later than the 10th day of the following  month; (c) upon
request,  monthly perpetual inventory reports; (d) upon request,  monthly agings
of accounts  payable no later than the 10th day of the following month; (e) upon
request,  copies of  purchase  orders,  invoices,  and  delivery  documents  for
Inventory and Equipment acquired by either Borrower;  (f) on or before the third
Business Day of each week, a Borrowing  Base  Certificate in the form of Exhibit
C, as of the last  Business Day of the prior week;  (g) such other reports as to
the  Collateral  as  the  Agent  shall  request  from  time  to  time;  and  (h)
certificates  of an  officer  of  the  relevant  Borrower  certifying  as to the
foregoing.  If any of a  Borrower's  records or reports  of the  Collateral  are
prepared  by  an  accounting  service  or  other  agent,  such  Borrower  hereby
authorizes such service or agent to deliver such records,  reports,  and related
documents to the Agent.

                  7.9. [INTENTIONALLY LEFT BLANK].

                  7.10. COLLECTION OF ACCOUNTS; PAYMENTS.

                           (a) Until the Agent  notifies  the  Borrowers  to the
contrary,  the  Borrowers  shall  make  collection  of all  Accounts  and  other
Collateral for the Agent, shall receive all payments as the Agent's trustee, and
shall immediately  deliver all payments to the Agent in their original form duly
endorsed  in blank or deposit  them into a Payment  Account  established  at the
Agent's request,  as the Agent may direct. If the Agent requests,  each Borrower
shall  establish  a lock-box  service  for  collections  of  Accounts  at a bank
mutually acceptable to the Agent and such Borrower and pursuant to documentation
satisfactory to the Agent. If such lockbox service is established, such Borrower
shall instruct all Account Debtors to make all payments  directly to the address
established  for such  service.  If,  notwithstanding  such  instructions,  such
Borrower  receives any Proceeds of Accounts,  it shall  receive such payments as
the Agent's trustee and shall immediately  deliver such payments to the Agent in
their  original  form  duly  endorsed  in blank or  deposit  them into a Payment
Account, as the Agent may direct. All collections  received in any such lock box
or Payment Account or directly by a Borrower or the Agent,  and all funds in any
Payment Account or other account to which such collections are deposited,  shall
be the sole property of the Agent and subject to the Agent's sole  control.  The
Agent or the  Agent's  designee  may,  at any  time,  notify  obligors  that the
Accounts have been assigned to the Agent and of the Security  Interest  therein,
collect  them  directly,  and charge the  collection  costs and  expenses to the
relevant  Borrower's loan account as a Revolving  Loan. At the Agent's  request,
the relevant  Borrower  shall execute and deliver to the Agent such documents as
the Agent  shall  require  to grant the Agent  access to any post  office box in
which collections of Accounts are received.

                           (b) If sales of  Inventory  are  made for  cash,  the
relevant  Borrower  shall  immediately  deliver  to the  Agent  or  cause  to be
deposited into a Payment Account the identical  checks,  cash, or other forms of
payment which such Borrower receives.



                                       48
<PAGE>

                           (c) All payments  received by the Agent on account of
Accounts or as Proceeds of other  Collateral shall be the Agent's sole property.
Collected  funds  received  in the Agent's  account by 1:00 p.m.  (New York City
time) on any day shall be credited to the  relevant  Borrower's  loan account on
such day.

                           (d) In  the  event  the  Borrowers  repay  all of the
Obligations  upon the termination of this Agreement or upon  acceleration of the
Obligations,  other than  through the Agent's  receipt of payments on account of
Accounts  or  Proceeds  of  other  Collateral,  such  payment  will be  credited
(conditional upon final collection) to the relevant  Borrower's loan account one
Business Day after the Agent's receipt thereof.

                  7.11.  INVENTORY.  The Borrowers  represent and warrant to the
Agent and the  Lenders  and agree  with the  Agent and  Lenders  that all of the
Inventory  is and  will be  held  for  sale  or  lease,  or to be  furnished  in
connection  with  the  rendition  of  services  in the  ordinary  course  of the
Borrowers'  respective business,  and is and will be fit for such purposes.  The
Borrowers  shall keep the Inventory in good and marketable  condition,  at their
own expense.  The Borrowers  shall not,  without  prior  written  consent of the
Agent, acquire or accept any Inventory on consignment or approval. The Borrowers
agree that all Inventory  will be produced in  accordance  with the Federal Fair
Labor Standards Act of 1938, as amended, and all rules, regulations,  and orders
thereunder.  Each Borrower shall maintain a perpetual inventory reporting system
at all times.  Each Borrower  shall conduct a physical count of the Inventory at
least once per Fiscal Year, and at such other times as the Agent  requests,  and
shall  promptly  supply  the Agent with a copy of such  count  accompanied  by a
report  of the  value of such  Inventory  (valued  at the  lower  of cost,  on a
first-in, first-out basis, or market value). Neither Borrower shall, without the
Agent's prior written consent, sell any Inventory on a bill-and-hold, guaranteed
sale, sale and return,  sale on approval,  consignment,  or other  repurchase or
return basis.

                  7.12.  EQUIPMENT.  The Borrowers  represent and warrant to the
Agent  that  all of the  Equipment  is and  will be used or held  for use in the
relevant  Borrower's  business  and is and  will be fit for such  purposes.  The
Borrowers shall keep and maintain the Equipment in good operating  condition and
repair   (ordinary  wear  and  tear  excepted)  and  shall  make  all  necessary
replacements  thereof.  The  Borrowers  shall  promptly  inform the Agent of any
material  additions to or deletions from the Equipment.  Neither  Borrower shall
permit any  Equipment  to become a fixture to real  property or an  accession to
other  personal  property,  unless the Agent has a valid,  perfected,  and first
priority  Security  Interest in such real or personal  property.  The  Borrowers
shall not,  without  the  Agent's  prior  written  consent,  alter or remove any
identifying symbol or number on the Equipment.  The Borrowers shall not, without
the Agent's prior written consent, sell, lease as a lessor, or otherwise dispose
of any of the Equipment,  other than in the ordinary course of business. Nothing
herein, however, shall preclude the Borrowers from selling obsolete, worn-out or
surplus  Equipment  no longer  necessary  or useful  in the  ordinary  course of
business as conducted by Borrowers or their Subsidiaries. No later than the 10th
day of each month (in  conjunction  with the collateral  reporting under SECTION
7.8),  the Borrowers



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<PAGE>

shall provide notice to the Agent as to any Equipment that was sold, leased as a
lessor or otherwise disposed of in the preceding month.

                  7.13.  ASSIGNED  CONTRACTS.  Each Borrower shall fully perform
all of its  obligations  under each of the Assigned  Contracts and shall enforce
all of its  rights  and  remedies  thereunder  as it  deems  appropriate  in its
business  judgment,  PROVIDED,  HOWEVER,  that neither  Borrower  shall take any
action or fail to take any action with  respect to the Assigned  Contracts  that
would result in a waiver or other loss of any  material  right or remedy of such
Borrower  thereunder.  Without  limiting the  generality of the  foregoing,  the
Borrowers  shall take all action  necessary or appropriate to permit,  and shall
not take  any  action  which  would  have  any  adverse  effect  upon,  the full
enforcement of all indemnification  rights under the Assigned Contracts.  Except
in the ordinary course of business,  neither Borrower shall, without the Agent's
and the Majority  Lenders' prior written  consent,  modify,  amend,  supplement,
compromise,  satisfy,  release, or discharge any of the Assigned Contracts,  any
collateral  securing the same,  any Person liable  directly or  indirectly  with
respect thereto,  or any agreement  relating to any of the Assigned Contracts or
the  collateral  therefor.  Each  Borrower  shall  notify the Agent in  writing,
promptly after such Borrower  becomes aware thereof,  of any event or fact which
could give rise to a claim by such Borrower for indemnification under any of the
Assigned  Contracts  and shall  diligently  pursue  such right and report to the
Agent on all further  developments  with respect  thereto.  Each Borrower  shall
remit directly to the Agent, for application to the Obligations in such order as
the Majority Lenders shall  determine,  all amounts received by such Borrower as
indemnification or otherwise pursuant to the Assigned  Contracts.  If a Borrower
shall fail after the  Agent's  demand to pursue  diligently  any right under the
Assigned Contracts, or if an Event of Default exists, then the Agent may, and at
the direction of the Majority Lenders,  shall directly enforce such right in its
own or such  Borrower's  name  and may  enter  into  such  settlements  or other
agreements  with  respect  thereto  as the  Agent or the  Majority  Lenders,  as
applicable,  shall determine.  All amounts thereby recovered by the Agent or any
Lender,  after  deducting  the Agent's or such  Lender's  costs and  expenses in
connection  therewith,  shall be applied to the Obligations in such order as the
Agent determines. In any suit, proceeding or action brought by the Agent for the
benefit of the Lenders under any Assigned  Contract for any sum owing thereunder
or to enforce any provision thereof,  the Borrowers shall indemnify and hold the
Agent and Lenders harmless from and against all expense, loss or damage suffered
by reason of any  defense,  setoff,  counterclaim,  recoupment,  or reduction of
liability  whatsoever  of the  obligor  thereunder  arising out of a breach by a
Borrower of any  obligation  thereunder  or arising out of any other  agreement,
indebtedness  or  liability  at any time owing from a Borrower to or in favor of
such obligor or its successors.  All such  obligations of such Borrower shall be
and remain  enforceable  only against such Borrower and shall not be enforceable
against the Agent or any Lender.  Notwithstanding  any  provision  hereof to the
contrary,  the Borrowers shall at all times remain liable to observe and perform
all of their respective duties and obligations under the Assigned  Contracts and
the Agent's or any  Lender's  exercise of any of its rights with  respect to the
Collateral  shall  not  release  either  Borrower  from any of such  duties  and
obligations.  Neither the Agent nor any Lender  shall be obligated to perform or
fulfill any of the Borrower's duties or obligations under the Assigned Contracts
or to make any  payment  thereunder  or to make any  inquiry as to the nature or
sufficiency  of  any  payment  or  Property



                                       50
<PAGE>

received  by it  thereunder  or the  sufficiency  of  performance  by any  party
thereunder, or to present or file any claim, or to take any action to collect or
enforce any performance or payment of any amounts due.

                  7.14. DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER. The Borrowers
represent  and warrant to the Agent and the  Lenders  that:  (a) all  documents,
instruments,   and  chattel  paper  describing,   evidencing,   or  constituting
Collateral,  and all  signatures  and  endorsements  thereon,  are  and  will be
complete,  valid,  and genuine;  and (b) all goods  evidenced by such documents,
instruments,  and chattel  paper are and will be owned by the relevant  Borrower
free and clear of all Liens other than Permitted Liens.

                  7.15. RIGHT TO CURE. The Agent may, in its sole discretion and
at any time, and shall, at the direction of the Majority Lenders, pay any amount
or do any act required of a Borrower hereunder to preserve, protect, maintain or
enforce the Obligations, the Collateral or the Security Interest, and which such
Borrower  fails to pay or do,  including,  without  limitation,  payment  of any
judgment against such Borrower, any insurance premium, any warehouse charge, any
finishing or processing charge, any landlord's claim, and any other Lien upon or
with respect to the  Collateral.  All  payments  that the Agent makes under this
Section 7.15 and all  out-of-pocket  costs and  expenses  that the Agent pays or
incurs in connection  with any action taken by it hereunder  shall be charged to
such Borrower's loan account as a Reference Rate Loan. Any payment made or other
action taken by the Agent under this SECTION 7.15 shall be without  prejudice to
any right to assert an Event of Default  hereunder and to proceed  thereafter as
herein provided.

                  7.16.  POWER OF ATTORNEY.  Each Borrower  hereby  appoints the
Agent and the Agent's designees as such Borrower's attorney,  with power: (a) to
endorse such Borrower's name on any checks, notes, acceptances, money orders, or
other  forms of payment or security  that come into the Agent's or any  Lender's
possession;  (b) to sign such Borrower's name on any invoice, bill of lading, or
other document of title relating to any Collateral, on drafts against customers,
on assignments of Accounts,  on notices of assignment,  financing statements and
other public  records,  on  verifications  of Accounts and on notices to Account
Debtors;  (c) to notify the post  office  authorities,  when an Event of Default
exists, to change the address for delivery of such Borrower's mail to an address
designated by the Agent and to receive,  open and dispose of all mail  addressed
to such Borrower; (d) to send requests for verification of Accounts to customers
or  Account  Debtors;  and (e) to do all  things  necessary  to  carry  out this
Agreement.  The Borrowers ratify and approve all acts of such attorney.  None of
the  Lenders  or the Agent nor their  attorneys  shall be liable for any acts or
omissions  or for any error of judgment  or mistake of fact or law.  This power,
being coupled with an interest,  is  irrevocable  until this  Agreement has been
terminated and the Obligations have been fully satisfied.

                  7.17.   THE  AGENT'S  AND   LENDER'S   RIGHTS,   DUTIES,   AND
LIABILITIES.  The Borrowers assume all responsibility and liability arising from
or relating to the use, sale, or other  disposition of the  Collateral.  Neither
the Agent or any Lender nor any of their  officers,  directors,  employees,  and
agents shall be liable or responsible  in any way for the  safekeeping



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<PAGE>

of any of the  Collateral,  for any act or  failure  to act with  respect to the
Collateral,  for any loss or damage  thereto,  for any  diminution  in the value
thereof,  or for any act of default  of any  warehouseman,  carrier,  forwarding
agency or other person whomsoever,  all of which shall be at the Borrowers' sole
risk. The  Obligations  shall not be affected by any failure of the Agent or any
Lender to take any steps to  perfect  the  Security  Interest  or to  collect or
realize  upon the  Collateral,  nor shall  loss of or  damage to the  Collateral
release either  Borrower from any of the  Obligations.  The Agent may (but shall
not be required to),  without notice to or consent from the Borrowers,  sue upon
or otherwise collect,  extend the time for payment of, modify or amend the terms
of, compromise or settle for cash,  credit,  or otherwise upon any terms,  grant
other indulgences,  extensions, renewals, compositions, or releases, and take or
omit to take any other  action  with  respect to the  Collateral,  any  security
therefor,  any agreement relating thereto,  any insurance applicable thereto, or
any  Person  liable  directly  or  indirectly  in  connection  with  any  of the
foregoing,  without  discharging  or otherwise  affecting  the  liability of the
Borrowers for the Obligations or under this Agreement or any other agreement now
or hereafter existing between the Agent and/or any Lender and either Borrower.

         8. BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES.

                  8.1. BOOKS AND RECORDS.  The Borrowers shall maintain,  at all
times,  correct and  complete  books,  records and  accounts in which  complete,
correct and timely entries are made of its  transactions in accordance with GAAP
consistent  with those applied in the  preparation of the Financial  Statements.
The Borrowers shall, by means of appropriate  entries,  reflect in such accounts
and in all Financial  Statements  proper  liabilities and reserves for all taxes
and proper  provision  for  depreciation  and  amortization  of Property and bad
debts,  all in accordance  with GAAP. The Borrowers  shall maintain at all times
books and records  pertaining to the Collateral in such detail,  form, and scope
as the Agent or any Lender shall reasonably require,  including, but not limited
to, records of: (a) all payments received and all credits and extensions granted
with respect to the Accounts; (b) the return, rejection, repossession,  stoppage
in transit,  loss,  damage,  or destruction of any Inventory;  and (c) all other
dealings affecting the Collateral.

                  8.2.  FINANCIAL  INFORMATION.  The  Borrowers  shall  promptly
furnish to the Lender or its agents all such financial  information as the Agent
or  any  Lender  shall  reasonably  request.  Without  limiting  the  foregoing,
Trend-Lines  and its  Subsidiaries  shall  furnish to the Agent,  in  sufficient
copies for distribution by the Agent to each Lender, in such detail as the Agent
or the Lenders shall request, the following:

                           (a) As soon as available,  but in any event not later
than 90 days after the close of each Fiscal Year, consolidated and consolidating
unaudited  balance  sheets,  and  statements  of income  and  expense,  retained
earnings,  and cash  flows  and  stockholders  equity  for  Trend-Lines  and its
consolidated  Subsidiaries  for such Fiscal  Year,  and the  accompanying  notes
thereto, setting forth in each case in comparative form figures for the previous
Fiscal Year, all in reasonable. detail, fairly presenting the financial position
and the results of operations of Trend-Lines and its  consolidated  Subsidiaries
as at the date  thereof  and for the Fiscal  Year then



                                       52
<PAGE>

ended,  and prepared in accordance with GAAP. Such statements  shall be examined
in accordance with generally accepted auditing standards by and accompanied by a
report  thereon  unqualified  as  to  scope  by  independent   certified  public
accountants selected by Trend-Lines and reasonably satisfactory to the Agent.

                           (b) As soon as available,  but in any event not later
than 45 days  after the  close of each  fiscal  quarter  other  than the  fourth
quarter of a Fiscal  Year,  consolidated  and  consolidating  unaudited  balance
sheets of Trend-Lines  and its  consolidated  Subsidiaries as at the end of such
quarter,  and consolidated and consolidating  unaudited statements of income and
expense and cash flows for Trend-Lines  and its  consolidated  Subsidiaries  for
such quarter and for the period from the beginning of the Fiscal Year to the end
of such quarter, together with the accompanying notes thereto, all in reasonable
detail,  fairly  presenting  the financial  position and results of operation of
Trend-Lines  and its  consolidated  Subsidiaries  as at the date thereof and for
such  periods,  prepared in  accordance  with GAAP  consistent  with the audited
Financial  Statements required pursuant to SECTION 8.2(A). Such statements shall
be  certified  to be correct by the chief  financial  or  accounting  officer of
Trend-Lines, subject to normal year-end adjustments.

                           (c) As soon as available,  but in any event not later
than  30  days  after  the end of each  month,  consolidated  and  consolidating
unaudited balance sheets of Trend-Lines and its consolidated  Subsidiaries as at
the end of such month, and consolidated and consolidating  unaudited  statements
of income and expenses for Trend-Lines  and its  consolidated  Subsidiaries  for
such month and for the period from the  beginning  of the Fiscal Year to the end
of such  month,  all in  reasonable  detail,  fairly  presenting  the  financial
position  and  results  of  operation  of  Trend-Lines   and  its   consolidated
Subsidiaries  as at the date  thereof  and for such  periods,  and  prepared  in
accordance with GAAP consistent with the audited Financial  Statements  required
pursuant to SECTION 8.2(A),  along with a calculation of the Fixed Charges Ratio
and the  Interest  Coverage  Ratio for the Rolling  Period as of such month end.
Such  statements  shall be  certified  to be correct by the chief  financial  or
accounting officer of Trend-Lines, subject to normal year-end adjustments.

                           (d) With  each of the  audited  Financial  Statements
delivered pursuant to SECTION 8.2(A), a certificate of the independent certified
public  accountants  that examined such  statements to the effect that they have
reviewed and are familiar with the Loan  Documents  and that, in examining  such
Financial  Statements,  they did not become aware of any fact or condition which
then  constituted  an Event  or Event of  Default,  except  for  those,  if any,
described in reasonable detail in such certificate.

                           (e) With each of the  annual  audited  and  quarterly
unaudited  Financial  Statements  delivered  pursuant to  SECTIONS  8.2(A) and a
certificate of the chief executive or chief financial officer of Trend-Lines (i)
setting forth in reasonable  detail the calculations  required to establish that
Trend-Lines  was in compliance  with its  covenants set forth in Sections  10.20
through 10.28 during the period covered in such Financial  Statements,  and (ii)
stating that, except as explained in reasonable detail in such certificate,  (A)
all of the  representations  and



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<PAGE>

warranties  of the  Borrowers  contained  in this  Agreement  and the other Loan
Documents are correct and complete as at the date of such certificate as if made
at such time, (B) no Event or Event of Default then exists or existed during the
period covered by such Financial  Statements and (iii)  describing and analyzing
in  reasonable  detail all material  trends,  changes and  developments  in such
Financial  Statements.  If such certificate  discloses that a representation  or
warranty IS not correct or complete, that a covenant has not been complied with,
or that an Event or Event of Default existed or exists,  such certificate  shall
set forth what action the  relevant  Borrower has taken or proposes to take with
respect thereto.

                           (f) No sooner  than 90 days and no later than 30 days
prior to the  beginning  of each Fiscal  Year,  consolidated  and  consolidating
projected  balance sheets,  statements of income and expense,  and statements of
cash flow for  Trend-Lines  and its  Subsidiaries  as at the end of and for each
month of such Fiscal Year.

                           (g)  Within  45 days  after  the  end of each  fiscal
quarter,   a  report  of  the  Capital   Expenditures  of  Trend-Lines  and  its
Subsidiaries  for such quarter and a statement of cash flow for  Trend-Lines and
its  Subsidiaries  for the period from the beginning of the then current  Fiscal
Year to the end of such  quarter,  prepared in accordance  with GAAP  consistent
with the audited Financial Statements required pursuant to SECTION 8.2(A).

                           (h) Promptly after their  preparation,  copies of any
and all proxy statements,  financial  statements,  and reports which Trend-Lines
makes available to its stockholders.

                           (i) Promptly after filing with the PBGC, DOL, or IRS,
a copy of each annual report or other reasonably material filing or notice filed
with respect to each Plan of Trend-Lines or any ERISA  Affiliate and,  within 10
days (in conjunction with its reporting under Section 7.8) after the end of each
month, a list of all other filings and notices so filed.

                           (j) Such  additional  information as the Agent and/or
any Lender may from time to time reasonably  request regarding the financial and
business   affairs  of  Trend-Lines  or  any  Subsidiary,   including,   without
limitation,  projections  of  future  operations  on  both  a  consolidated  and
consolidating basis.

                  8.3. NOTICES TO LENDERS.  The Borrowers shall notify the Agent
in writing of the following matters at the following times:

                           (a)  Promptly,  but  in no  event  later  than  three
Business  Days,  after  becoming aware of the existence of any Event or Event of
Default.

                           (b)  Promptly,  but  in no  event  later  than  three
Business  Days,  after  becoming aware that the holder of any capital stock of a
Borrower or of any Debt has given  notice or taken any action with  respect to a
claimed default.



                                       54
<PAGE>

                           (c)  Promptly,  but  in no  event  later  than  three
Business  Days,  after  becoming  aware  of any  material  adverse  change  in a
Borrower's   Property,   business,   operations,   or  condition  (financial  or
otherwise).

                           (d)  Promptly,  but  in no  event  later  than  three
Business Days, after becoming aware of any pending or threatened  action,  suit,
proceeding,  or  counterclaim  by any  Person,  or  any  pending  or  threatened
investigation  by a Public  Authority,  which could be projected  reasonably  to
result in the Borrowers,  either individually or collectively,  having to pay $1
million or more.

                           (e)  Promptly,  but  in no  event  later  than  three
Business Days,  after becoming aware of any pending or threatened  strike,  work
stoppage,  material unfair labor practice claim, or other material labor dispute
affecting a Borrower or any of its Subsidiaries.

                           (f)  Promptly,  but  in no  event  later  than  three
Business  Days,  after  becoming  aware of any  violation  of any law,  statute,
regulation,  or ordinance of a Public  Authority  applicable to a Borrower,  any
Subsidiary,  or their  respective  Properties which may materially and adversely
affect  the  Collateral,  the  repayment  of the  Obligations,  the Agent or any
Lender's rights under the Loan Documents,  or a Borrower's  Property,  business,
operations, or condition (financial or otherwise).

                           (g)  Promptly,  but  in no  event  later  than  three
Business  Days,  after  becoming  aware  of  any  violation  by  a  Borrower  of
Environmental  Laws or  immediately  upon  receipt of any  notice  that a Public
Authority has asserted that a Borrower is not in compliance  with  Environmental
Laws or that its compliance is being investigated.

                           (h) Thirty days prior to a  Borrower's  changing  its
name.

                           (i)  Promptly,  but  in no  event  later  than  three
Business  Days,  after  becoming  aware of any ERISA Event,  accompanied  by any
materials  required to be filed with the PBGC with respect thereto;  immediately
after a  Borrower's  receipt  of any notice  concerning  the  imposition  of any
withdrawal  liability  under  Section  4042 of  ERISA  with  respect  to a Plan;
immediately  upon the  establishment  of any  Pension  Plan not  existing at the
Closing Date or the  commencement of  contributions by a Borrower to any Pension
Plan to which such  Borrower  was not  contributing  at the  Closing  Date;  and
immediately upon becoming aware of any other event or condition regarding a Plan
or a  Borrower's  or an ERISA  Affiliate's  compliance  with  ERISA,  which  may
materially and adversely affect a Borrower's Property, business,  operations, or
condition (financial or otherwise).

Each notice  given  under this  SECTION 8.3 shall  describe  the subject  matter
thereof in  reasonable  detail and shall set forth the action that the  relevant
Borrower has taken or proposes to take with respect thereto.

         9. GENERAL WARRANTIES AND REPRESENTATIONS.



                                       55
<PAGE>

         The Borrowers jointly and severally  continuously warrant and represent
to the Agent and the lenders, at all times during the term of this Agreement and
until all Obligations have been satisfied,  that, except as hereafter  disclosed
to and accepted by the Agent and the Majority Lenders in writing:

                  9.1.  AUTHORIZATION,  VALIDITY,  AND  ENFORCEABILITY  OF  THIS
AGREEMENT AND THE LOAN  DOCUMENTS.  Each  Borrower has the  corporate  power and
authority  to execute,  deliver and perform  this  Agreement  and the other Loan
Documents,  to incur the Obligations,  and to grant the Security Interest.  Each
Borrower  has  taken  all  necessary   corporate  action   (including,   without
limitation,  obtaining approval of its stockholders) to authorize its execution,
delivery,  and  performance of this Agreement and the other Loan  Documents.  No
consent,  approval,  or  authorization  of, or  declaration  or filing with, any
Public Authority,  and no consent of any other Person, is required in connection
with each Borrower's execution,  delivery, and performance of this Agreement and
the other Loan Documents, except for those already duly obtained. This Agreement
and the other Loan  Documents  have been duly  executed  and  delivered  by each
Borrower  party  thereto  and each  constitutes  the  legal,  valid and  binding
obligation of such Borrower, enforceable against it in accordance with its terms
without defense, setoff, or counterclaim.  Each Borrower's execution,  delivery,
and  performance of this Agreement and such other Loan Documents do not and will
not conflict  with,  or  constitute  a violation  or breach of, or  constitute a
default  under,  or result in the  creation or  imposition  of any Lien upon the
Property of any Borrower or any of its  Subsidiaries  (except as contemplated by
this  Agreement and the other Loan  Documents) by reason of the terms of (a) any
mortgage,  lease,  agreement,  or instrument to which any Borrower or any of its
Subsidiaries  is a party or which is  binding  upon it, (b) any  judgment,  law,
statute,  rule or governmental  regulation applicable to such Borrower or any of
its  Subsidiaries,  or (c) the corporate  charter or By-Laws of such Borrower or
any of its Subsidiaries.

                  9.2.   VALIDITY  AND  PRIORITY  OF  SECURITY   INTEREST.   The
provisions of this Agreement, the Mortgages, and the other Loan Documents create
legal and  valid  Liens on all the  Collateral  in favor of the  Agent,  for the
ratable benefit of the Agent and the Lenders,  and, when the Mortgages have been
recorded in the places  indicated in SCHEDULE  9.2,  such Liens will  constitute
perfected and continuing  Liens on all the Collateral,  having priority over all
other Liens on the  Collateral  except for the  Permitted  Liens  identified  in
SECTION 7.4, securing the Obligations, and enforceable against each Borrower and
all third parties.

                  9.3.  ORGANIZATION AND  QUALIFICATION.  Each Borrower:  (a) is
duly  incorporated and organized and validly existing in good standing under the
laws of Massachusetts;  (b) is qualified to do business as a foreign corporation
and is in good  standing in each State in which  qualification  is  necessary in
order for it to own or lease its Property and conduct its business;  and (c) has
all  requisite  power and  authority  to  conduct  its  business  and to own its
Property.

                  9.4.  CORPORATE  NAME,  PRIOR  TRANSACTIONS.  Neither  of  the
Borrowers  has during the five years ending on the Closing Date been known by or
used any other  corporate or  fictitious  name, or been a party to any merger or
consolidation, or acquired all or substantially



                                       56
<PAGE>

all of the assets of any Person,  or  acquired  any of its  Property  out of the
ordinary course of business, except as set forth on SCHEDULE 9.4.

                  9.5.  SUBSIDIARIES  AND AFFILIATES.  SCHEDULE 9.5 is a correct
and complete list of the name and relationship to Trend-Lines of each and all of
Trend-Lines'  Subsidiaries  and other  Affiliates.  Each  Subsidiary is (a) duly
incorporated  and organized and validly existing in good standing under the laws
of its state of incorporation set forth on SCHEDULE 9.5, and (b) qualified to do
business as a foreign  corporation  and in good standing in the states set forth
opposite  its name on  SCHEDULE  9.5,  which are the only  states in which  such
qualification  is  necessary  in order for it to own or lease its  Property  and
conduct its business. Post Tool is a wholly-owned subsidiary of Trend-Lines.

                  9.6. FINANCIAL STATEMENTS AND PROJECTIONS.

                           (a)  Trend-Lines  has  delivered to the Agent and the
Lenders the audited  balance sheet and related  statements  of income,  retained
earnings,  cash flows, and changes in stockholders  equity for Trend-Lines as of
February 28, 1998 and for the Fiscal Year then ended,  accompanied by the report
thereon  of  Trend-Lines'  independent  certified  public  accountants,   Arthur
Andersen LLP.  Trend-Lines  has also  delivered to the Agent and the Lenders the
unaudited  balance  sheet and  related  statements  of income and cash flows for
Trend-Lines,  as at  January  2, 1999 and for the ten months  then  ended.  Such
financial  statements  are attached  hereto as EXHIBIT  B-4. All such  financial
statements have been prepared in accordance with GAAP and present accurately and
fairly  Trend-Lines'  financial position as at the dates thereof and its results
of operations for the periods then ended.

                           (b) The  Latest  Projections  represent  Trend-Lines'
best estimate of Trend-Lines'  future financial  performance for the periods set
forth  therein.  The Latest  Projections  have been prepared on the basis of the
assumptions  set  forth  therein,   which  Trend-Lines  believes  are  fair  and
reasonable in light of current and reasonably foreseeable business conditions.

                  9.7. CAPITALIZATION. The only Persons who own beneficially (as
such term is used under the securities laws of the United States) 10% or more of
any class of stock or the voting power of Trend-Lines  are Stanley Black and his
spouse,  together with certain  entities  controlled by Mr. Black and his spouse
and one or more of the Institutional Holders.  Trend-Lines owns beneficially and
of record 100% of all classes of stock of Post Tool.

                  9.8.  SOLVENCY.  Each  Borrower is Solvent  prior to and after
giving effect to the making of each  Revolving  Loan and the issuance of Letters
of Credit.

                  9.9.  DEBT.  Neither  Borrower  has any Debt,  except  (a) the
Obligations   (other  than  those  arising  under  or  in  connection  with  the
Indemnification  Agreement),  (b) Debt set  forth in the most  recent  Financial
Statements  delivered to the Agent, or the notes thereto, (c) trade payables and
other contractual  obligations  arising in the ordinary course of business since
the



                                       57
<PAGE>

date of such  Financial  Statements,  (d) Debt  incurred  since the date of such
Financial  Statements to finance Capital  Expenditures  permitted hereby and (e)
Indebtedness,  as such term is defined in the Indemnification Agreement (without
giving effect to any amendment to such definition after January 28, 1997), in an
amount not greater than $550,000.

                  9.10. DISTRIBUTIONS.  Since March 2, 1996, no Distribution has
been  declared,  paid,  or made upon or in respect of any capital stock or other
securities of Trend-Lines.

                  9.11.  TITLE TO  PROPERTY.  Except for  Property  which either
Borrower  leases,  each  Borrower  has good and  marketable  title in fee simple
(subject  to  Permitted  Liens)  to the  Premises  indicated  on  SCHEDULE  9.13
belonging to it and good,  indefeasible,  and  merchantable  title to all of its
other Property,  including, without limitation, the assets reflected on the most
recent Financial  Statements  delivered to the Agent and the Lenders,  except as
disposed of since the date thereof in the ordinary course of business.

                  9.12. ADEQUATE ASSETS. Each Borrower possesses adequate assets
for the conduct of its business.

                  9.13.  REAL PROPERTY,  LEASES.  SCHEDULE 9.13 is a correct and
complete  list of all real  property  owned by either  Borrower,  all leases and
subleases  of  real or  personal  property  by  either  Borrower  as  lessee  or
sublessee,  and all leases and subleases of real or personal  property by either
Borrower as lessor or sublessor.  Each of such leases and subleases is valid and
enforceable in accordance with its terms and is in full force and effect, and no
material default by any party to any such lease or sublease exists.

                  9.14.  PROPRIETARY  RIGHTS.  SCHEDULE  9.14 is a  correct  and
complete list of each  Borrower's  Proprietary  Rights.  None of the Proprietary
Rights is subject to any licensing  agreement or similar  arrangement  except as
set forth on SCHEDULE  9.14.  None of the  Proprietary  Rights  infringes  on or
conflicts  with any other  Person's  Property,  and no other  Person's  Property
infringes on or conflicts with the Proprietary  Rights.  The Proprietary  Rights
described  on SCHEDULE  9.14 as belonging  to a Borrower  constitute  all of the
Property of such type necessary to the current and anticipated future conduct of
such Borrower's business.

                  9.15. TRADE NAMES AND TERMS OF SALE. All trade names or styles
under which either Borrower will sell Inventory or create Accounts,  or to which
instruments  in payment of Accounts may be made payable,  are listed on SCHEDULE
9.15.

                  9.16. LITIGATION.  Except as set forth on SCHEDULE 9.16, there
is no pending or, to the best of either Borrower's knowledge, threatened action,
suit, proceeding,  or counterclaim by any Person, or investigation by any Public
Authority,  or any basis for any of the  foregoing,  which  may  materially  and
adversely  affect the Collateral,  the repayment of the  Obligations,  the Agent
and/or each  Lender's  rights  under the Loan  Documents,  or either  Borrower's
Property, business, operations, or condition (financial or otherwise).



                                       58
<PAGE>

                  9.17. RESTRICTIVE  AGREEMENTS.  Neither Borrower is a party to
any  contract  or  agreement,  and  neither is  subject to any  charter or other
corporate  restriction,  which  affects  such  Borrower's  ability  to  execute,
deliver,  and  perform the Loan  Documents  and repay the  Obligations  or which
materially and adversely affects such Borrower's Property, business, operations,
or condition (financial or otherwise).

                  9.18.  LABOR  DISPUTES.  Except as set forth on SCHEDULE 9.18:
(a) there is no collective bargaining agreement or other labor contract covering
employees of either Borrower or any of its Subsidiaries;  (b) no such collective
bargaining  agreement or other labor  contract is scheduled to expire during the
term of this Agreement;  (c) no union or other labor  organization is seeking to
organize,  or to be recognized as, a collective  bargaining unit of employees of
either Borrower or any of its Subsidiaries or for any similar  purpose;  and (d)
there is no pending or, to the best of either Borrower's  knowledge,  threatened
strike,  work stoppage,  material unfair labor practice claim, or other material
labor dispute against or affecting either Borrower or any of its Subsidiaries or
their respective employees.

                  9.19. ENVIRONMENTAL LAWS.

                           (a)  Each  Borrower  has  complied  in  all  material
respects with all  Environmental  Laws  applicable to its Premises and business,
and neither Borrower nor any of its present Premises or operations, nor its past
property or operations,  is subject to any  enforcement  order from or liability
agreement with any Public Authority or private Person  respecting (i) compliance
with  any  Environmental  Law or (ii) any  potential  liabilities  and  costs or
remedial action arising from the Release or threatened Release of a Contaminant.

                           (b) Each Borrower has obtained all permits  necessary
for its current  operations  under  Environmental  Laws, all such permits are in
good standing,  and each Borrower is in compliance in all material respects with
all terms and conditions of such permits.

                           (c)  Neither  Borrower,  nor,  to the  best  of  such
Borrower's knowledge, any of its predecessors in interest has stored, treated or
disposed of any hazardous waste on any Premises,  as defined  pursuant to 40 CFR
Part 261 or any equivalent Environmental Law.

                           (d)  Neither  Borrower  has,  received  any  summons,
complaint, order or similar written notice that it is
not currently in compliance  with, or that any Public Authority is investigating
its compliance  with, any  Environmental  Laws or that it is or may be liable to
any  other  Person  as  a  result  of  a  Release  or  threatened  Release  of a
Contaminant.

                           (e) None of the present or past  operations of either
Borrower is the subject of any investigation by any Public Authority  evaluating
whether  any  remedial  action is needed to respond  to a Release or  threatened
Release of a Contaminant.

                           (f)  There  is not  now,  nor to the  best of  either
Borrower's knowledge has there ever been, on or in the Premises:



                                       59
<PAGE>

                                    (i) any underground storage tanks or surface
impoundments,

                                    (ii) any asbestos containing material, or

                                    (iii) any polychlorinated  biphenyls (PCB's)
used in hydraulic oils, electrical transformers or other equipment.

                           (g) Neither  Borrower  has filed any notice under any
requirement of Environmental Law reporting a spill or accidental and unpermitted
release or discharge of a Contaminant into the environment.

                           (h)   Neither   Borrower   has   entered   into   any
negotiations  or  settlement  agreements  with any  Person  (including,  without
limitation,  the prior owner of its property)  imposing material  obligations or
liabilities on such Borrower with respect to any remedial  action in response to
the Release of a Contaminant or environmentally related claim.

                           (i) None of the products manufactured, distributed or
sold by either Borrower contains asbestos material.

                           (j)  No  Environmental   Lien  has  attached  to  any
Premises of either Borrower.

                  9.20. NO VIOLATION OF LAW. Neither Borrower is in violation of
any law, statute, regulation,  ordinance,  judgment, order, or decree applicable
to it which violation would in any respect  materially and adversely  affect the
Collateral,  the  repayment of the  Obligations,  the Agent and/or each Lender's
rights  under  the  Loan  Documents,  or  such  Borrower's  Property,  business,
operations, or condition (financial or otherwise).

                  9.21. NO DEFAULT.  Neither Borrower is in default with respect
to any  note,  indenture,  loan  agreement,  mortgage,  lease,  deed,  or  other
agreement  to which  such  Borrower  is a party or bound,  which  default  could
reasonably be expected to materially and adversely  affect the  Collateral,  the
repayment of the  Obligations,  the Agent and/or each Lender's  rights under the
Loan Documents, or such Borrower's Property, business,  operations, or condition
(financial or otherwise).

                  9.22. ERISA COMPLIANCE.

                           (a)  Each  Plan  is in  compliance  in  all  material
respects with the applicable provisions of ERISA, the Code and other federal- or
state law. Each Plan which is intended to qualify  under  Section  401(a) of the
Code has received a favorable determination letter from the IRS and, to the best
knowledge of  Trend-Lines,  nothing has  occurred  which would cause the loss of
such qualification. Each Borrower and each ERISA Affiliate has made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for



                                       60
<PAGE>

a funding waiver or an extension of any amortization  period pursuant to Section
412 of the Code has been made with respect to any Plan.

                           (b) There are no pending or, to the best knowledge of
the Borrowers,  threatened claims, actions or lawsuits, or actions by any Public
Authority,  with respect to any Plan which has resulted or could  reasonably  be
expected to result in a material adverse effect on either Borrower's business or
operations.  There  has  been no  prohibited  transaction  or  violation  of the
fiduciary  responsibility  rules with  respect to any Plan which has resulted or
could  reasonably be expected to result in a material  adverse  effect on either
Borrower's business or operations.

                           (c) (i) No ERISA Event has occurred or is  reasonably
expected to occur;  (ii) no Pension  Plan has any  unfunded  pension  liability;
(iii) neither a Borrower nor any ERISA  Affiliate  has  incurred,  or reasonably
expects to incur,  any  liability  under  Title IV of ERISA with  respect to any
Pension Plan (other than premiums due and not  delinquent  under Section 4007 of
ERISA);  (iv)  neither a  Borrower  nor any ERISA  Affiliate  has  incurred,  or
reasonably  expects to incur,  any liability  (and no event has occurred  which,
with the giving of notice  under  Section  4219 of ERISA,  would  result in such
liability)  under  Section  4201 or  Section  4243 of ERISA  with  respect  to a
Multiemployer  Plan;  and (v)  neither a Borrower  nor any ERISA  Affiliate  has
engaged in a  transaction  that  could  subject  any  Person to Section  4069 or
Section 4212(c) of ERISA.

                  9.23. TAXES. Each Borrower and its Subsidiaries have filed all
tax  returns  and other  reports  required  to be filed and have paid all Taxes,
assessments,  fees and other governmental charges levied or imposed upon them or
their properties, income or assets that are otherwise due and payable.

                  9.24. USE OF PROCEEDS.  None of the transactions  contemplated
in this Agreement (including,  without limitation,  the use of proceeds from the
Loans) will violate or result in the  violation  of Section 7 of the  Securities
Exchange Act of 1934, as amended,  or any regulations  issued pursuant  thereto,
including,  without  limitation,  Regulations  G,  T,  U and X of the  Board  of
Governors of the Federal Reserve System, 12 CFR, Chapter 11. Except as permitted
by Section 10.28,  (a) neither Borrower owns or intends to carry or purchase any
,'margin stock" within the meaning of said Regulation U or G and (b) none of the
proceeds of the loans will be used, directly or indirectly, to purchase or carry
(or  refinance  any  borrowing,  the  proceeds of which were used to purchase or
carry) any "security" within the meaning of the Securities Exchange Act of 1934,
as amended.

                  9.25.  PRIVATE  OFFERINGS.  Neither Borrower has,  directly or
indirectly,  offered  the  Loans for sale to,  or  solicited  offers to buy part
thereof from, or otherwise  approached or negotiated  with respect  thereto with
any prospective  purchaser  other than the Agent and the Lenders.  Each Borrower
hereby  agrees  that  neither it nor anyone  acting on its behalf has offered or
will offer the Loans or any part thereof or any similar  securities for issue or
sale to



                                       61
<PAGE>

or solicit  any offer to acquire  any of the same from anyone so as to bring the
issuance  thereof  within the  provisions of Section 5 of the  Securities Act of
1933, as amended.

                  9.26. BROKER'S FEES. No Person is entitled to any brokerage or
finder's fee with respect to the transactions described in this Agreement.

                  9.27. NO MATERIAL  ADVERSE CHANGE.  No material adverse change
has occurred in either Borrower's Property, business,  operations, or conditions
(financial or otherwise) since the date of the Financial Statements delivered to
the Agent and the Lenders.

                  9.28.  DISCLOSURE.  Neither this Agreement nor any document or
statement  furnished to the Agent by or on behalf of either  Borrower  hereunder
contains any untrue  statement of a material fact or omits to state any material
fact necessary in order to make the statements  contained herein or therein,  in
light of the circumstances under which they were made, not misleading.

                  9.29.  YEAR 2000.  On the basis of the  Borrowers'  review and
assessment of its systems and equipment,  Borrowers  reasonably believe that the
"Year 2000 problem"  (that is, the  inability of computers,  as well as embedded
microchips  in  non-computing   devices,  to  perform  properly   date-sensitive
functions  with respect to certain dates prior to and after  December 31, 1999),
including costs of remediation,  will not result in a material adverse change in
the  operations,  business,  properties,  condition or prospects  (financial  or
otherwise)  of  Borrowers.  Borrowers  will be fully  "Year 2000"  compliant  by
September 30, 1999.

         10. AFFIRMATIVE AND NEGATIVE COVENANTS.  The Borrowers covenant jointly
and severally  that, so long as any of the  Obligations  remains  outstanding or
this Agreement is in effect:

                  10.1. TAXES AND OTHER OBLIGATIONS. Trend-Lines and each of its
Subsidiaries shall: (a) file when due all tax returns and other reports which it
is required to file,  pay, or provide for the  payment,  when due, of all Taxes,
fees,  assessments  and  other  governmental  charges  against  it or  upon  its
Property,  income, and franchises,  make all required  withholding and other tax
deposits, and establish adequate reserves for the payment of all such items, and
shall provide to the Agent,  upon request,  satisfactory  evidence of its timely
compliance  with the  foregoing;  and (b) pay  when due all Debt  owed by it and
perform and discharge in a timely manner all other obligations undertaken by it;
PROVIDED,  HOWEVER,  that Trend-Lines and its Subsidiaries need not pay any tax,
fee, assessment, governmental charge, or Debt, or perform or discharge any other
obligation,  that it is  contesting  in good  faith by  appropriate  proceedings
diligently pursued.

                  10.2.  CORPORATE EXISTENCE AND GOOD STANDING.  Trend-Lines and
each  of its  Subsidiaries  shall  maintain  its  corporate  existence  and  its
qualification  and good standing in all states necessary to conduct its business
and own its  Property  and shall  obtain and  maintain



                                       62
<PAGE>

all licenses,  permits,  franchises and governmental authorizations necessary to
conduct its business and own its Property.

                  10.3. COMPLIANCE WITH LAW AND AGREEMENTS. Trend-Lines and each
of its Subsidiaries shall comply with the terms and provisions of each judgment,
law,  statute,  rule,  and  governmental  regulation  applicable  to it and each
contract,  mortgage, lien, lease, indenture,  order,  instrument,  agreement, or
document to which it is a party or by which it is bound.

                  10.4.  MAINTENANCE OF PROPERTY AND INSURANCE.  Trend-Lines and
each of its Subsidiaries  shall: (a) maintain all of its Property  necessary and
useful in its business in good operating condition and repair, ordinary wear and
tear excepted  (nothing  herein,  however,  shall  preclude the  Borrowers  from
selling obsolete, worn-out or surplus Equipment no longer necessary or useful in
the   ordinary   course  of  business  as   conducted   by  Borrowers  or  their
Subsidiaries);  and (b) in addition to the  insurance  required by SECTION  7.7,
maintain with financially sound and reputable insurers such other insurance with
respect to its Property and business  against  casualties and  contingencies  of
such types (including, without limitation, business interruption,  environmental
liability,  public liability,  product liability,  and larceny,  embezzlement or
other criminal misappropriation) and in such amounts as is customary for Persons
of  established  reputation  engaged  in the  same  or a  similar  business  and
similarly  situated,  naming the Agent,  at its request,  as additional  insured
under each such policy.

                  10.5.   ENVIRONMENTAL  LAWS.   Trend-Lines  and  each  of  its
Subsidiaries   shall   conduct  its  business  in  full   compliance   with  all
Environmental  Laws  applicable  to it,  including,  without  limitation,  those
relating to Trend-Lines'  generation,  handling,  use, storage,  and disposal of
hazardous  and toxic wastes and  substances.  Trend-Lines  shall take prompt and
appropriate action to respond to any non-compliance  with Environmental Laws and
shall  regularly  report to the Agent on such  response.  Without  limiting  the
generality  of the  foregoing,  whenever  a Borrower  gives  notice to the Agent
pursuant  to SECTION  8.3(G)  Trend-Lines  shall,  at the  Agent's  request  and
Trend-Lines' expense: (a) cause an independent environmental engineer acceptable
to the Agent to conduct such tests of the site where Trend-Lines'  noncompliance
or alleged  noncompliance  with  Environmental Laws has occurred and prepare and
deliver  to the  Agent a report  setting  forth the  results  of such  tests,  a
proposed plan for responding to any environmental  problems  described  therein,
and  an  estimate  of the  costs  thereof;  and  (b)  provide  to  the  Agent  a
supplemental  report of such  engineer  whenever the scope of the  environmental
problems, or Trend-Lines' response thereto or the estimated costs thereof, shall
change.

                  10.6.  ERISA.  Trend-Lines and each of its Subsidiaries  shall
cause each Plan,  which has been designated to be so, to be qualified within the
meaning of Section 401(a) of the Code and to be  administered in all respects in
compliance  with  Section  401(a)  of the  Code.  Trend-Lines  and  each  of its
Subsidiaries  shall  cause  each  Plan  to be  administered  in all  respect  in
compliance with ERISA.

                  10.7. MERGERS, CONSOLIDATIONS, ACQUISITIONS, OR SALES. Neither
Trend-Lines  nor any of its  Subsidiaries  shall enter into any  transaction  of
merger, reorganization,  or



                                       63
<PAGE>

consolidation,  or transfer, sell, assign, lease, or otherwise dispose of all or
any part of its Property,  or wind up, liquidate or dissolve, or agree to do any
of the foregoing, except, sales of inventory in the ordinary course of business,
sales obsolete,  worn-out or surplus  Equipment no longer necessary or useful in
the ordinary course of business as conducted by Borrowers or their Subsidiaries,
any  sale-leaseback  transaction  permitted  under Section 10. 17 below,  or any
other transaction specifically permitted under the terms of this Agreement.

                  10.8. DISTRIBUTIONS;  CAPITAL CHANGES. Neither Trend-Lines nor
any of its Subsidiaries  shall:  (a) directly or indirectly  declare or make, or
incur  any  liability  to  make,  any  Distribution,   except  Distributions  to
Trend-Lines by a Subsidiary wholly-owned by Trend-Lines;  or (b) make any change
in its capital  structure  which could  adversely  affect the  repayment  of the
Obligations.

                  10.9.   TRANSACTIONS   AFFECTING  COLLATERAL  OR  OBLIGATIONS.
Neither Trend-Lines nor any of its Subsidiaries shall enter into any transaction
which  materially  and adversely  affects the  Collateral  or either  Borrower's
ability to repay the Obligations.

                  10.10.   GUARANTIES.   Neither  Trend-Lines  nor  any  of  its
Subsidiaries  shall  make,  issue,  or  become  liable on any  Guaranty,  except
Guaranties in favor of the Lenders and endorsements of instruments for deposit.

                  10.11. DEBT.  Neither  Trend-Lines nor any of its Subsidiaries
shall incur or maintain any Debt,  other than: (a) the  Obligations  (other than
those arising under or in connection with the  Indemnification  Agreement);  (b)
trade payables and contractual  obligations to suppliers and customers  incurred
in the ordinary course of business;  (c) other Debt existing on the Closing Date
and  reflected  in the  Financial  Statements  attached as EXHIBIT  B-1; and (d)
Indebtedness,  as such term is defined in the Indemnification Agreement (without
giving effect to any amendment to such definition  after January 28, 1997) in an
amount not greater than $550,000.

                  10.12.   PREPAYMENT.   Neither  Trend-Lines  nor  any  of  its
Subsidiaries  shall  voluntarily  prepay  any Debt,  except the  Obligations  in
accordance with their terms.

                  10.13. TRANSACTIONS WITH AFFILIATES. Except as set forth below
or in Schedule 10.13,  neither  Trend-Lines nor any of its  Subsidiaries  shall:
sell, transfer,  distribute,  or pay any money or Property to any Affiliate,  or
lend or advance  money or  Property to any  Affiliate,  or invest in (by capital
contribution  or otherwise) or purchase or repurchase any stock or  indebtedness
or any  Property  of any  Affiliate,  or become  liable on any  Guaranty  of the
indebtedness,  dividends, or other obligations of any Affiliate. Notwithstanding
the  foregoing,  if  no  Event  of  Default  has  occurred  and  is  continuing,
Trend-Lines and its Subsidiaries  may engage in transactions  with Affiliates in
the ordinary course of business in amounts and upon terms fully disclosed to the
Agent and no less favorable to Trend-Lines or such  Subsidiary than would obtain
in a  comparable  arm's  length  transaction  with a third  party  who is not an
Affiliate.



                                       64
<PAGE>

                  10.14. [INTENTIONALLY LEFT BLANK].

                  10.15.  BUSINESS  CONDUCTED.  Trend-Lines and its Subsidiaries
shall not engage, directly or indirectly, in any line of business other than the
businesses in which the Borrower and its Subsidiaries are engaged on the Closing
Date.

                  10.16. LIENS.  Neither Trend-Lines nor any of its Subsidiaries
shall  create,  incur,  assume,  or permit to exist any Lien on any Property now
owned or hereafter acquired by any of them, except Permitted Liens.

                  10.17. SALE AND LEASEBACK  TRANSACTIONS.  Neither  Trend-Lines
nor any of its  Subsidiaries  shall,  directly  or  indirectly,  enter  into any
arrangement  with any Person  providing for Trend-Lines or a Subsidiary to lease
or rent Property that  Trend-Lines or a Subsidiary has or will sell or otherwise
transfer to such Person;  PROVIDED,  HOWEVER, that notwithstanding any provision
herein  to the  contrary,  the  Borrowers  may  enter  into  sale and  leaseback
transactions in the ordinary  course of the Borrowers'  business as conducted on
the Closing  Date with  respect to  Borrowers'  Equipment  which does not exceed
$6,000,000 in aggregate in any Fiscal Year.

                  10.18. NEW  SUBSIDIARIES.  Trend-Lines  shall not, directly or
indirectly,  organize  or acquire  any  Subsidiary  other  than those  listed on
SCHEDULE 10.18.

                  10.19. RESTRICTED INVESTMENTS.  Neither Trend-Lines nor any of
its  Subsidiaries  shall  make  any  Restricted   Investment.   10.20.   CAPITAL
EXPENDITURES.  Neither  Trend-Lines  nor any of its  Subsidiaries  shall make or
incur any Capital  Expenditure  if, after giving effect  thereto,  the aggregate
amount of all Capital  Expenditures by Trend-Lines and its  Subsidiaries  during
any Fiscal Year would exceed $6,000,000;  PROVIDED,  HOWEVER,  that, if all or a
portion of the amount of the amount of Capital Expenditures permitted during any
Fiscal Year is not  expended,  such amount may be expended  during the following
Fiscal Year.

                  10.21. [INTENTIONALLY LEFT BLANK].

                  10.22.  INTEREST  COVERAGE  RATIO.  For  the  fiscal  quarters
indicated below,  Trend-Lines on a consolidated basis shall maintain an Interest
Coverage  Ratio,  determined as of the last day of such fiscal  quarter,  of not
less than the amount set forth below:



                                       65
<PAGE>

                                                          RATIO
                                                          -----

         Two Fiscal Quarters ending February            2.00:1.00
         28, 1999

         Three Fiscal Quarters ending May 31,           2.00:1.00
         1999

                  Thereafter, Trend-Lines on a consolidated basis shall maintain
an Interest Coverage Ratio, determined as of the last day of each fiscal quarter
set forth below for the preceding four fiscal  quarters ending on such last day,
of not less than the amount set forth below:

         Second Quarter 1999 and each fiscal            2.00:1.00
         quarter thereafter

                  10.23. [INTENTIONALLY LEFT BLANK.

                  10.24. INTENTIONALLY LEFT BLANK.

                  10.25. [INTENTIONALLY LEFT BLANK.

                  10.26. NEW STORE OPENINGS.  Effective  October 1, 1998 and for
the balance of the Fiscal  Year ending  February  27,  1999,  or any Fiscal Year
thereafter,  the  Borrowers may only enter into new  commitments  to open, or in
connection  with  opening,  more  than 10 new  stores  if daily  average  unused
Availability  for the 30 consecutive  day period  immediately  prior to entering
into any such commitment exceeds $5,000,000; PROVIDED, HOWEVER, that (i) a store
relocated  to a new  location  shall not be treated as a new store for  purposes
hereof and (ii) amounts not yet spent under  commitments  relating to new stores
subject to this Section 10.26, shall be deducted in determining  compliance with
this Section 10.26.

                  10.27.   ADJUSTED   TANGIBLE  NET  WORTH.   Trend-Lines  on  a
consolidated basis shall maintain Adjusted Tangible Net Worth,  determined as of
the  last day of each  fiscal  quarter  indicated  below,  of not less  than the
following amounts:



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<PAGE>

              4th  Fiscal Quarter 1998                         $40,000,000
              1st  Fiscal Quarter 1999                         $40,000,000
              2nd  Fiscal Quarter 1999                         $41,000,000
              3rd  Fiscal Quarter 1999                         $41,000,000
              4th  Fiscal Quarter 1999 and each fiscal
                                  quarter thereafter           $42,000,000

                  10.28.   BUY-BACK  OF  COMMON   STOCK.   Notwithstanding   the
provisions of Sections 9.24,  10.8, and 10.19, at any time and from time to time
Trend-Lines  shall be permitted to  repurchase  or redeem stock (a  "buy-back"),
provided  that,  at the time of any such  buy-back,  (a) the  total  cost of all
buy-backs  from the Closing Date to the date of  completion of any such buy-back
shall not exceed $4,000,000, (b) no accounts payable by either Borrower shall be
more than 30 days  past  due,  (c) after  giving  effect to such  buy-back,  the
Borrowers' aggregate remaining  Availability is not less than $10,000,000 (d) no
Event or Event of  Default  shall  exist at the time of such  buy-back  or after
giving effect  thereto and (e)  Trend-Lines  shall have  provided  Agent with at
least three (and not more than five) days prior  written  notice,  which  notice
shall  include a statement as to the amount of such  buy-back,  the total of all
buy-backs  after giving  effect to such  buy-back,  a statement  that no account
payable  of the  Borrowers  is more  than 30 days  past due and that no Event or
Event of Default  exists as of the date thereof before or after giving effect to
such buy-back.

                  10.29.  POST-CLOSING  MATTERS.  Within  (i) 60 days  after the
Closing  Date,  the Agent shall have received with respect to each real property
on which  Inventory is located  against which  Inventory the relevant lessor may
assert a statutory, common law, or contractual lien (as reasonably determined by
the Agent),  (A) a copy of a current and legally valid,  binding and enforceable
lease  agreement  containing  a waiver  with  respect  to such  lien in form and
substance  satisfactory  to the  Agent or (B) a waiver  of such lien in form and
substance  satisfactory  to the Agent,  provided,  however,  that the failure of
either  Borrower to comply with this Section  10.29(i)  shall not  constitute an
Event  or  Event  of  Default  but the  Agent  may,  in its  sole  and  absolute
discretion,  establish a Rental  Reserve with  respect to the relevant  property
until  such time as the Agent  receives  such  waiver and (ii) 30 days after the
Closing Date the Agent shall have  received the Seabrook  Mortgage and a current
ALTA form of mortgage  title  insurance  policy from a company,  and in form and
substance,'  acceptable to the Agent, insuring the lien of the Seabrook Mortgage
as a first Lien on the  Seabrook  Premises in such  amounts and subject  only to
such  exceptions  and  exclusions  as are  acceptable  to the Agent and insuring
unconditionally  against all possible  contractors',  suppliers'  and mechanics'
lien  claims,  such  commitment  to  contain a complete  copy of each  easement,
restriction, limitation, or condition of title which is referred to therein that
burdens or benefits the Seabrook Premises.

                  10.30.  FURTHER  ASSURANCES.  The Borrowers  shall execute and
deliver, or cause to be executed and delivered,  to the Agent such documents and
agreements,  and shall take or



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<PAGE>

cause to be taken such actions,  as the Agent may, from time to time, request to
carry  out the  terms  and  conditions  of this  Agreement  and the  other  Loan
Documents.

         11. CONDITIONS PRECEDENT.

                  11.1.  CONDITIONS  PRECEDENT TO EFFECTIVENESS.  This Agreement
shall become effective when, and only when, the following  conditions  precedent
have  been  satisfied  in a manner  satisfactory  to the Agent  (the  "Effective
Date").

                           (a)  REPRESENTATIONS AND WARRANTIES;  COVENANTS.  The
Borrowers'  representations  and warranties  contained in this Agreement and the
other Loan Documents  shall be correct and complete and the Borrowers shall have
performed and complied with all covenants,  agreements, and conditions contained
herein and in the other Loan Documents which are required to have been performed
or complied with.

                           (b) DELIVERY OF DOCUMENTS.  The Borrowers  shall have
delivered, or caused to be delivered, to the Agent such documents,  instruments,
agreements,  financing  statements,  consents,  evidence of corporate authority,
certificates, landlord and/or mortgagee waivers, insurance certificates and loss
payee endorsements,  opinions of counsel and other writings and covenants as the
Agent shall request in connection herewith, duly executed by all parties thereto
other than the Agent,  and in form and substance  satisfactory  to the Agent and
its counsel.

                           (c) Fees.  The  Borrowers shall have paid in full the
Facility Fee and the Collateral Management Fee.

                           (d) PAYMENT OF FEES AND EXPENSES. The Borrowers shall
have  paid all fees and  expenses  of the  Lenders'  outside  counsel,  Harris &
Bar-Levav, and all other fees and expenses of the Lenders incurred in connection
with any of the Loan Documents and the transactions contemplated thereby.

                           (e) REQUIRED APPROVALS. The Agent shall have received
certified  copies of all consents or approvals of any Public  Authority or other
Person  which  the  Agent   determines  is  required  in  connection   with  the
transactions contemplated by this Agreement.

                           (f) NO  MATERIAL  ADVERSE  CHANGE.  There  shall have
occurred  no  material  adverse  change in  Trend-Lines'  business,  operations,
profits,  prospects or financial condition or in the Collateral since January 2,
1999,  and the Agent shall have received a  certificate  of  Trend-Lines'  chief
executive officer to such effect.

                           (g)  PROCEEDINGS.  All  proceedings  to be  taken  in
connection  with  the  transactions  contemplated  by  this  Agreement,  and all
documents contemplated in connection herewith, shall be satisfactory in form and
substance to the Lenders and their counsel.



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<PAGE>

         Execution  and  delivery to the Agent by a Lender of a  counterpart  of
this  Agreement  shall  be  deemed  confirmation  by such  Lender  that  (i) all
conditions   precedent  in  this  SECTION  11.1  have  been   fulfilled  to  the
satisfaction  of such  Lender and (ii) the  decision of such Lender to ' execute
and deliver to the Agent an executed  counterpart  of this Agreement was made by
such Lender  independently and without reliance on the Agent or any other Lender
as to the  satisfaction  of any  condition  precedent  set forth in this SECTION
11.1.

                  11.2. CONDITIONS PRECEDENT TO EACH LOAN. The obligation of the
Lenders to make each Loan or to provide for the issuance of any Letter of Credit
shall  be  subject  to the  conditions  precedent  that on the  date of any such
extension of credit the following  statements  shall be true, and the acceptance
by either  Borrower of any  extension  of credit  (except an Agent  Advance or a
deemed Loan under  Section  4.6) shall be deemed to be a statement to the effect
set forth in clauses (a) and (b),  with the same  effect as the  delivery to the
Agent and the Lenders of a certificate signed by the chief executive officer and
chief  financial  officer of  Trend-Lines,  dated the date of such  extension of
credit, stating that:

                           (a) The representations  and warranties  contained in
this Agreement and the other Loan Documents are correct in all material respects
on and as of the date of such  extension  of credit as though  made on and as of
such date,  except to the extent that the Agent has been notified by Trend-Lines
that any representation or warranty is not correct and the Majority Lenders have
explicitly  waived in writing  compliance with such  representation or warranty;
and

                           (b) No Event or Event of Default has  occurred and is
continuing or would result from such extension of credit.

         12. DEFAULT; REMEDIES.

                  12.1.  EVENTS  OF  DEFAULT.  It shall  constitute  an event of
default ("EVENT OF DEFAULT") if any one or more of the following shall occur for
any reason:

                           (a) failure to make payment of  principal,  interest,
fees or premium on any of the Obligations when due;

                           (b) any  representation  or  warranty  made or deemed
made by either Borrower in this Agreement,  any of the other Loan Documents, any
Financial  Statement,  or any  certificate  furnished by either  Borrower or any
Subsidiary  at any time to the Agent or any Lender  shall  prove to be untrue in
any material respect as of the date when made, deemed made, or furnished;

                           (c) the  Borrowers  shall (i) fail to comply with any
of the covenants set forth in Article 10 (other than Sections 10.1,  10.2, 10.3,
10.4,  10.5 or  10.6)  or  Article  8 or (ii)  fail to  comply  with  any of the
covenants set forth in Sections 10.1,  10.2,  10.5 or 10.6 if such



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<PAGE>

failure  shall have existed for more than 30 (or 10 days for Section 10.4) after
the date that such Borrower  discovers,  or reasonably  should have  discovered,
such  failure;  PROVIDED,  HOWEVER,  that,  to the extent  that any  covenant in
Section 8 specifies  the number of days within which a Borrower must comply with
any  reporting  requirement  therein,  such  failure  shall have existed for the
number of days specified in such covenant plus five days.

                           (d) except as  provided in Section  12.1(c),  default
shall  occur  in the  observance  or  performance  of any of the  covenants  and
agreements contained in this Agreement, the Mortgages, the other Loan Documents,
or any other agreement entered into at any time to which either Borrower and the
Lenders are a party, or if any such agreement or document shall terminate (other
than in accordance  with its terms or with the written  consent of the Agent and
the  Majority  Lenders)  or become  void or  unenforceable  without  the written
consent of the Agent and the Majority Lenders or any event of default as defined
therein shall occur.

                           (e)  default  shall  occur  in  the  payment  of  any
principal or interest on any  indebtedness  for  borrowed  money (other than the
Obligations) beyond any period of grace provided with respect thereto;

                           (f) Trend-Lines or any Subsidiary  shall:  (i) file a
voluntary  petition in bankruptcy  or file a voluntary  petition or an answer or
otherwise commence any action or proceeding seeking reorganization,  arrangement
or  readjustment  of its  debts  or for  any  other  relief  under  the  Federal
Bankruptcy Code, as amended,  or under any other bankruptcy or insolvency act or
law, state or federal, now or hereafter existing,  or consent to, approve of, or
acquiesce  in,  any such  petition,  action  or  proceeding;  (ii)  apply for or
acquiesce in the appointment of a receiver, assignee, liquidator,  sequestrator,
custodian,  trustee  or  similar  officer  for it or for all or any  part of its
Property;  (iii) make an  assignment  for the benefit of  creditors;  or (iv) be
unable generally to pay its debts as they become due;

                           (g) an  involuntary  petition  shall  be  filed or an
action or proceeding otherwise commenced seeking reorganization,  arrangement or
readjustment of Trend-Lines' or any  Subsidiary's  debts or for any other relief
under the Federal Bankruptcy Code, as amended,  or under any other bankruptcy or
insolvency  act or law,  state or federal,  now or  hereafter  existing and such
petition,  action or proceeding  shall not be dismissed within 60 days from such
filing or  commencement,  provided  that the Lenders shall have no obligation to
make any  Revolving  Loans or obtain any  Letters of Credit  during  such 60-day
grace period;

                           (h) a receiver, assignee,  liquidator,  sequestrator,
custodian,  trustee or similar  officer for Trend-Lines or any Subsidiary or for
all or any part of their Property shall be appointed involuntarily; or a warrant
of attachment,  execution or similar process shall be issued against any part of
the Property of  Trend-Lines  or any  Subsidiary  and such waiver,  execution or
process  shall not be released or fully bonded  within 30 days of its  issuance,
provided that the Lenders  shall have no obligation to make any Revolving  Loans
or obtain any Letters of Credit during such 30-day grace period;



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<PAGE>

                           (i)  Trend-Lines  or  any  Subsidiary  shall  file  a
certificate of dissolution  under  applicable  state law or shall be liquidated,
dissolved or wound-up or shall commence or have commenced  against it any action
or proceeding  for  dissolution,  winding-up or  liquidation,  or shall take any
corporate action in furtherance thereof;

                           (j)  all  or  any  part  of the  Property  of  either
Borrower shall be nationalized,  expropriated or condemned,  seized or otherwise
appropriated, or custody or control of such Property or of either Borrower shall
be assumed by any Public Authority or any court of competent jurisdiction at the
instance of any Public Authority, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in effect;

                           (k)  any  guaranty  of  the   Obligations   shall  be
terminated, revoked or declared void or invalid;

                           (l) one or more final  judgments  for the  payment of
money  aggregating  in excess of $500,000  (whether or not covered by insurance)
shall be rendered against  Trend-Lines or any Subsidiary and Trend-Lines or such
Subsidiary  shall  fail to  discharge  the same  within 30 days from the date of
notice of entry thereof or to appeal therefrom;

                           (m) any loss,  theft,  damage or  destruction  of any
item or items of Collateral  occurs which: (i) materially and adversely  affects
the operation of either Borrower's business or (ii) is material in amount and is
not adequately covered by insurance;

                           (n) Trend-Lines shall cease to own 100% of the voting
stock of Post Tool or any person other than Stanley Black,  Emilia F. Black, his
spouse,  and his or her  respective  Affiliates  shall  own more than 50% of the
voting stock of  Trend-Lines or have the power to control (such term  having the
meaning  given  to it in the  definition  of  Affiliate  herein)  the  Board  of
Directors of  Trend-Lines.  (o) any event or condition shall occur or exist with
respect  to a Plan that  could,  in the  Agent's  reasonable  judgment,  subject
Trend-Lines or any Subsidiary to any tax,  penalty or liability under ERISA, the
Code or  otherwise  which  in the  aggregate  is  material  in  relation  to the
business,  operations,  Property  or  financial  or other  condition  of  either
Borrower; or

                           (p)  there  occurs  any  material  adverse  change in
either Borrower's  Property,  business,  operations,  or condition (financial or
otherwise).

                  13. REMEDIES. If an Event of Default exists, the Agent may, in
its discretion,  and shall, at the direction of the Majority Lenders,  do one or
more of the following at any time or times and in any order,  without  notice to
or demand on the Borrower:  (i) reduce the Total Facility,  or the advance rates
against Eligible Inventory used in computing the Availability,  or reduce one or
more of the other elements used in computing the Availability; (ii) restrict the
amount of or refuse to make  Revolving  Loans;  and (iii)  restrict or refuse to
arrange for or



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<PAGE>

provide Letters of Credit.  If an Event of Default  exists,  the Agent shall, at
the  direction  of the Majority  Lenders,  do one or more of the  following,  in
addition to the actions  described  in the  preceding  sentence,  at any time or
times  and in any  order,  without  notice to or  demand  on the  Borrower:  (a)
terminate the Commitments and this Agreement; (b) declare any or all Obligations
to be immediately due and payable;  PROVIDED,  HOWEVER, that upon the occurrence
of any Event of Default  described  in  SECTIONS  12.1(F),  12.1(G),  12.1(H) OR
12.1(I),  the Commitments  shall  automatically  and immediately  expire and all
Obligations  shall  automatically  become  immediately  due and payable  without
notice or demand of any kind; and (c) pursue its other rights and remedies under
the Loan Documents and applicable law.

                           (a) If an  Event of  Default  exists:  (i) the  Agent
shall have for the benefit of the  Lenders,  in addition to all other  rights of
the Agent and Lenders, the rights and remedies of a secured party under the UCC;
(ii) the Agent may, at any time,  take  possession of the Collateral and keep it
on either Borrower's premises,  at no cost to Agent, or remove any part of it to
such other place or places as the Agent may desire,  or a Borrower  shall,  upon
the Agent's demand, at such Borrower's cost, assemble the Collateral and make it
available to the Agent at a place reasonably  convenient to the Agent; and (iii)
the Agent may sell and deliver any  Collateral at public or private  sales,  for
cash, upon credit or otherwise,  at such prices and upon such terms as the Agent
deems  advisable,  in its  sole  discretion,  and  may,  if the  Agent  deems it
reasonable, postpone or adjourn any sale of the Collateral by an announcement at
the time and place of sale or of such postponed or adjourned sale without giving
a new  notice of sale.  Without in any way  requiring  notice to be given in the
following  manner,  the  Borrowers  agree  that any notice by the Agent of sale,
disposition  or other  intended  action  hereunder  or in  connection  herewith,
whether required by the UCC or otherwise,  shall constitute reasonable notice to
the relevant  Borrower if such notice is mailed by registered or certified mail,
return receipt requested,  postage prepaid,  or is delivered  personally against
receipt,  at least  five days  prior to such  action to the  Borrower's  address
specified in or pursuant to SECTION  17.11.  If any  Collateral is sold on terms
other than payment in full at the time of sale, no credit shall be given against
the  Obligations  until the Agent or the Lenders  receives  payment,  and if the
buyer defaults in payment,  the Agent may resell the Collateral  without further
notice to either  Borrower.  In the event the Agent seeks to take  possession of
all  or any  portion  of the  Collateral  by  judicial  process,  the  Borrowers
irrevocably  waive: (a) the posting of any bond, surety or security with respect
thereto which might otherwise be required;  (b) any demand for possession  prior
to the commencement of any suit or action to recover the Collateral; and (c) any
requirement  that the Agent retain  possession and not dispose of any Collateral
until after trial or, final judgment.  The Borrowers agree that the Agent has no
obligation to preserve  rights to the  Collateral or marshal any  Collateral for
the benefit of any Person.  The Agent is hereby granted a license or other right
to use, without charge, each Borrower's labels, patents, copyrights, name, trade
secrets,  trade  names,  trademarks,  and  advertising  matter,  or any  similar
property,  in completing  production of,  advertising or selling any Collateral,
and each Borrower's rights under all licenses and all franchise agreements shall
inure to the Agent's benefit. The proceeds of sale shall be applied first to all
expenses of sale, including, without limitation,  attorneys' fees and second, in
whatever order the Agent elects,  to all Obligations.  The Agent will return any
excess to relevant



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Borrower  or such other  Person as shall be  legally  entitled  thereto  and the
Borrowers shall remain liable for any deficiency.

                           (b) If an  Event of  Default  occurs,  the  Borrowers
hereby  waive (i) all rights to notice and hearing  prior to the exercise by the
Agent of the Agent's rights to repossess the Collateral without judicial process
or to replevy, attach or levy upon the Collateral without notice or hearing, and
(ii) all rights of set-off and counterclaim against Agent.

                           (c) If the Agent  terminates  this  Agreement upon an
Event  of  Default,   the  Borrower  shall  pay  the  Agent,   immediately  upon
termination,  an early  termination  penalty equal to the early  termination fee
that  would  have been  payable  under  SECTION  14 if this  Agreement  had been
terminated on that date pursuant to the Borrowers election.

         14. TERM AND  TERMINATION.  This  Agreement  shall expire on the Stated
Termination Date unless terminated or automatically extended as provided in this
Section. This Agreement shall automatically be renewed thereafter for successive
one-year terms, unless this Agreement is terminated as provided below. The Agent
and the  Borrowers  shall have the right to terminate  this  Agreement,  without
premium or penalty,  at the end of the initial term or at the end of any renewal
term by giving the other  written  notice not less than 60 days prior to the end
of such term by registered or certified  mail.  The Borrowers may also terminate
this  Agreement  at any time during its initial term or any  successive  renewal
term if: (a) they give the Agent 60 days' prior written notice of termination by
registered or certified mail; and (b) they pay and perform all Obligations on or
prior to the effective  date of  termination.  The Agent may also terminate this
Agreement  without  notice upon an Event of Default.  Upon the effective date of
termination of this Agreement for any reason  whatsoever,  all Obligations shall
become  immediately due and payable and the Borrowers shall immediately  arrange
for the cancellation of Letters of Credit and BankBoston  Letters of Credit then
outstanding.  Notwithstanding  the  termination  of this  Agreement,  until  all
Obligations  are paid and  performed  in full,  the Agent  shall  retain all its
rights  and  remedies  hereunder  (including,  without  limitation,  in all then
existing and after-arising Collateral).

         15. AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS

                  15.1. NO WAIVERS; CUMULATIVE REMEDIES. No failure by the Agent
or any Lender to exercise any right,  remedy,  or option under this Agreement or
any present or future supplement  thereto,  or in any other agreement between or
among the Borrower and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same,  will operate as a waiver  thereof.  No waiver by
the Agent or any Lender will be effective unless it is in writing, and then only
to the extent specifically  stated. No waiver by the Agent or the Lenders on any
occasion  shall  affect  or  diminish  the  Agent's  and  each  Lender's  rights
thereafter  to require  strict  performance  by the Borrower of any provision of
this  Agreement.  The Agent's and each Lender's rights under this Agreement will
be cumulative  and not exclusive of any other right or remedy which the Agent or
any Under may have.



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<PAGE>

                  15.2.  AMENDMENTS  AND WAIVERS.  No amendment or waiver of any
provision  of this  Agreement  or any other Loan  Document,  and no consent with
respect to any departure by the Borrower  therefrom,  shall be effective  unless
the same shall be in writing and signed by the Majority Lenders (or by the Agent
at the written  request of the  Majority  Lenders) and the Borrower and then any
such waiver or consent shall be effective only in the specific  instance and for
the specific purpose for which given;  PROVIDED,  HOWEVER,  that no such waiver,
amendment, or consent shall, unless in writing and signed by all the Lenders and
the Borrower and acknowledged by the Agent, do any of the following:

                           (a) increase or extend the Commitment of any Lender;

                           (b)   postpone  or  delay  any  date  fixed  by  this
Agreement  or any other Loan  Document for any payment of  principal,  interest,
fees or other amounts due to the Lenders (or any of them) hereunder or under any
other Loan Document;

                           (c) reduce the  principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable  hereunder or
under any other Loan Document;

                           (d) change the  percentage of the  Commitments  or of
the  aggregate  unpaid  principal  amount of the Loans which is required for the
Lenders or any of them to take any action hereunder;

                           (e) increase any of the  percentages set forth in the
definition of Availability, Borrowing Base and Sub-facility;

                           (f)  amend  this  Section  or  any  provision  of the
Agreement providing for consent or other action by all Lenders;

                           (g) release  Collateral  other than as  permitted  by
SECTION 16.12;

                           (h) change the  definitions of "Majority  Lenders" or
"Required Lenders";

and, PROVIDED  FURTHER,  that no amendment,  waiver or consent shall,  unless in
writing and signed by the Agent,  affect the rights or duties of the Agent under
this Agreement or any other Loan Document.

                  15.3. ASSIGNMENTS; PARTICIPATIONS.

                           (a) Any Lender may,  with the written  consent of the
Agent,  assign and delegate to one or more  assignees  (provided that no written
consent of the Agent shall be required in  connection  with any  assignment  and
delegation by a Lender to an Affiliate of such Lender) (each an "ASSIGNEE") all,
or any ratable part of all, of the Loans,  the  Commitments and the other rights
and obligations of such Lender hereunder, in a minimum amount of $10,000,000 or,
if less, the entire amount of such Lender's Commitment;  PROVIDED, HOWEVER,



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that the Borrower  and the Agent may  continue to deal solely and directly  with
such Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions, addresses
and related  information with respect to the Assignee,  shall have been given to
the Borrower and the Agent by such Lender and the Assignee; (ii) such Lender and
its Assignee  shall have  delivered to the Borrower and the Agent an  Assignment
and Acceptance in the form of EXHIBIT D ("ASSIGNMENT AND  ACCEPTANCE")  together
with any Note or Notes subject to such  assignment and (iii) the assignor Lender
or Assignee has paid to the Agent a processing fee in the amount of $3,000.

                           (b) From and after  the date that the Agent  notifies
the assignor  Lender that it has received an executed  Assignment and Acceptance
and payment of the above-referenced  processing fee, (i) the Assignee thereunder
shall  be a party  hereto  and,  to the  extent  that  rights  and  obligations,
including,  but not  limited to, the  obligation  to  participate  in Letters of
Credit and Credit  Support have been assigned to it pursuant to such  Assignment
and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents,  and (ii) the assignor  Lender  shall,  to the extent that rights and
obligations  hereunder and under the other Loan  Documents have been assigned by
it pursuant to such  Assignment  and  Acceptance,  relinquish  its rights and be
released  from  its  obligations  under  this  Agreement  (and in the case of an
Assignment and Acceptance  covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).

                           (c) By executing and  delivering  an  Assignment  and
Acceptance,  the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows:  (1) other
than as provided in such Assignment and Acceptance,  such assigning Lender makes
no representation or warranty and assumes no responsibility  with respect to any
statements,  warranties or  representations  made in or in connection  with this
Agreement or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency  or value of this  Agreement  or any other Loan  Document  furnished
pursuant hereto;  (2) such assigning Lender makes no  representation or warranty
and assumes no  responsibility  with respect to the  financial  condition of the
Borrower  or  the  performance  or  observance  by  the  Borrower  of any of its
obligations under this Agreement or any other Loan Document  furnished  pursuant
hereto;  (3)  such  Assignee  confirms  that  it has  received  a copy  of  this
Agreement,  together with such other  documents and information as it has deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment and  Acceptance;  (4) such Assignee will,  independently  and without
reliance upon the Agent,  -such assigning Lender or any other Lender,  and based
on such  documents and  information  as it shall deem  appropriate  at the time,
continue to make its own credit  decisions in taking or not taking  action under
this Agreement; (5) such Assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise  such powers under this  Agreement
as are delegated to the Agent by the terms hereof,  together with such powers as
are reasonably  incidental  thereto;  and (6) such Assignee  agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.



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<PAGE>

                           (d) Within  five  Business  Days after its receipt of
notice by the Agent that it has received an executed  Assignment  and Acceptance
and payment of the processing fee, the Borrower shall execute and deliver to the
Agent, new Notes evidencing such Assignee's  assigned Loans and, if the assignor
Lender has retained a portion of its Loans and its Commitment, replacement Notes
in the principal amount of the Loans retained by the assignor Lender (such Notes
to be in exchange  for,  but not in payment of, the Notes held by such  Lender).
Immediately  upon each  Assignee's  making its  processing fee payment under the
Assignment and  Acceptance,  this Agreement shall be deemed to be amended to the
extent,  but only to the  extent,  necessary  to  reflect  the  addition  of the
Assignee and the resulting adjustment of the Commitments arising therefrom.  The
Commitment  allocated  to each  Assignee  shall reduce such  Commitments  of the
assigning Lender PRO TANTO.

                           (e) Any  Lender  may at any time  sell to one or more
commercial banks, financial institutions, or other Persons not Affiliates of the
Borrower (a "PARTICIPANT")  participating interests in any Loans, the Commitment
of that Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents;  PROVIDED,  HOWEVER,  that (i) the
originating  Lender's  obligations  under this Agreement shall remain unchanged,
(ii) the originating  Lender shall remain solely responsible for the performance
of such  obligations,  (iii) the Borrower  and the Agent shall  continue to deal
solely  and  directly  with  the  originating  Lender  in  connection  with  the
originating  Lender's rights and obligations  under this Agreement and the other
Loan  Documents,  and (iv) no Lender shall  transfer or grant any  participating
interest under which the  Participant has rights to approve any amendment to, or
any  consent  or waiver  with  respect  to,  this  Agreement  or any other  Loan
Document,  and all amounts payable by the Borrower hereunder shall be determined
as if such  Lender  had not sold such  participation;  except  that,  if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant  shall be deemed to have the right of set-off in respect of its
participating  interest in amounts owing under this Agreement to the same extent
and  subject  to the  same  limitation  as if the  amount  of its  participating
interest were owing directly to it as a Lender under this Agreement.

                           (f)  Notwithstanding  any  other  provision  in  this
Agreement,  any Lender may at any time create a security interest in, or pledge,
all or any portion of its rights  under and interest in this  Agreement  and any
Note  held  by it in  favor  of any  Federal  Reserve  Bank in  accordance  with
Regulation A of the FRB or U.S. Treasury  Regulation 31 CFR  Section203.14,  and
such Federal  Reserve  Bank may enforce such pledge or security  interest in any
manner permitted under applicable law.

         16. THE AGENT

                  16.1.  APPOINTMENT  AND  AUTHORIZATION.   Each  Lender  hereby
designates and appoints  BankAmerica  Business  Credit,  Inc. as the Agent under
this Agreement and the other Loan  Documents and each Lender hereby  irrevocably
authorizes  the Agent to take such action on its behalf under the  provisions of
this  Agreement  and each other Loan  Document  and to



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<PAGE>

exercise such powers and perform such duties as are expressly delegated to it by
the terms of this  Agreement  or any other  Loan  Document,  together  with such
powers as are reasonably  incidental thereto. The Agent agrees to act as such on
the express  conditions  contained  in this SECTION 16. The  provisions  of this
SECTION  16 are  solely for the  benefit  of the Agent and the  Lenders  and the
Borrower  shall  have no  rights  as a  third  party  beneficiary  of any of the
provisions  contained  herein.  Notwithstanding  any  provision  to the contrary
contained  elsewhere in this Agreement or in any other Loan Document,  the Agent
shall not have any duties or responsibilities,  except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities,  duties,
obligations or  liabilities  shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.  Without  limiting the generality
of the foregoing  sentence,  the use of the term "agent" in this  Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express)  obligations  arising under agency  doctrine of any applicable law.
Instead,  such term is used merely as a matter of market custom, and is intended
to create or reflect only an  administrative  relationship  between  independent
contracting  parties.  Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole  discretion with respect to exercising
or refraining from exercising any  discretionary  rights or taking or refraining
from taking any actions which the Agent is expressly  entitled to take or assert
under  this  Agreement  and  the  other  Loan  Documents,   including,   without
limitation, (a) the determination of the applicability of ineligibility criteria
with respect to the  calculation  of the  Availability,  (b) the making of Agent
Advances  pursuant to SECTION 2.2(I),  and (c) the exercise of remedies pursuant
to SECTION 13, and any action so taken or not taken shall be deemed consented to
by the Lenders.

                  16.2.  DELEGATION OF DUTIES.  The Agent may execute any of its
duties  under this  Agreement or any other Loan  Document by or through  agents,
employees  or  attorneys-in-fact  and shall be  entitled  to  advice of  counsel
concerning  all  matters  pertaining  to such  duties.  The  Agent  shall not be
responsible  for the  negligence or misconduct of any agent or  attorney-in-fact
that it selects as long as such  selection was made without gross  negligence or
willful misconduct.

                  16.3.  LIABILITY OF AGENT. None of the  Agent-Related  Persons
shall (i) be liable for any  action  taken or omitted to be taken by any of them
under or in  connection  with this  Agreement or any other Loan  Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct),  or (ii) be responsible in any manner to any of the Lenders for any
recital,  statement,  representation  or  warranty  made by the  Borrower or any
Subsidiary or Affiliate of the Borrower,  or any officer  thereof,  contained in
this Agreement or in any other Loan  Document,  or in any  certificate,  report,
statement or other  document  referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness,  genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document,  or for any failure of the Borrower or any
other  party to any Loan  Document  to  perform  its  obligations  hereunder  or
thereunder.  No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the  observance  or  performance  of any of the
agreements  contained  in, or  conditions  of, this



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<PAGE>

Agreement or any other Loan  Document,  or to inspect the  properties,  books or
records of the Borrower or any of the Borrower's Subsidiaries or Affiliates.

                  16.4.  RELIANCE  BY AGENT.  (a) The Agent shall be entitled to
rely,  and shall be fully  protected in relying,  upon any writing,  resolution,
notice, consent,  certificate,  affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it to
be  genuine  and  correct  and to have been  signed,  sent or made by the proper
Person or Persons,  and upon advice and  statements of legal counsel  (including
counsel to the Borrower),  independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in failing or refusing to take any
action  under this  Agreement or any other Loan  Document  unless it shall first
receive  such  advice  or  concurrence  of  the  Majority  Lenders  as it  deems
appropriate  and,  if it so  requests,  it  shall  first be  indemnified  to its
satisfaction  by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully  protected in acting,  or in  refraining  from
acting,  under this  Agreement or any other Loan Document in  accordance  with a
request or consent of the Majority Lenders and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Lenders.

                           (b) For purposes of determining  compliance  with the
conditions  specified  in SECTION  11.1,  each  Lender  that has  executed  this
Agreement  shall be deemed to have  consented to,  approved or accepted or to be
satisfied  with,  each document or other matter either sent by the Agent to such
Lender  for  consent,  approval,   acceptance  or'  satisfaction,   or  required
thereunder to be consented to or approved by or acceptable  or  satisfactory  to
the Lender.

                  16.5. NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the  occurrence of any Event or Event of Default,  except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the  Lenders,  unless the Agent shall
have  received  written  notice from a Lender or the Borrower  referring to this
Agreement,  describing  such Event or Event of  Default  and  stating  that such
notice is a "notice  of  default."  The Agent  will  notify  the  Lenders of its
receipt of any such  notice.  The Agent shall take such  action with  respect to
such Event or Event of Default as may be requested  by the  Majority  Lenders in
accordance with SECTION 13; PROVIDED,  HOWEVER,  that unless and until the Agent
has received  any such  request,  the Agent may (but shall not be obligated  to)
take such action, or refrain from taking such action, with respect to such Event
or Event of Default as it shall deem advisable.

                  16.6. CREDIT DECISION.  Each Lender  acknowledges that none of
the  Agent-Related  Persons has made any  representation  or warranty to it, and
that no act by the Agent hereinafter taken,  including any review of the affairs
of  the  Borrower  and  its  Affiliates,  shall  be  deemed  to  constitute  any
representation  or warranty  by any  Agent-Related  Person to any  Lender.  Each
Lender  represents to the Agent that it has,  independently and without reliance
upon any Agent-Related  Person and based on such documents and information as it
has deemed  appropriate,  made its own appraisal of and  investigation  into the
business,  prospects,  operations,  property,  financial and other condition and
creditworthiness  of the Borrower and its  Affiliates,



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<PAGE>

and  all  applicable  bank   regulatory   laws  relating  to  the   transactions
contemplated  hereby, and made its own decision to enter into this Agreement and
to extend  credit to the  Borrower.  Each Lender also  represents  that it will,
independently  and without reliance upon any  Agent-Related  Person and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit analysis,  appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such  investigations  as it deems necessary to inform itself as to the business,
prospects,   operations,   property,   financial   and   other   condition   and
creditworthiness of the Borrower and its Affiliates. Except for notices, reports
and other documents  expressly herein required to be furnished to the Lenders by
the Agent,  the Agent shall not have any duty or  responsibility  to provide any
Lender with any credit or other information concerning the business,  prospects,
operations,  property,  financial and other condition or creditworthiness of the
Borrower and its  Affiliates  which may come into the  possession  of any of the
Agent-Related Persons.

                  16.7.   INDEMNIFICATION.   Whether  or  not  the  transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related  Persons  (to the  extent  not  reimbursed  by or on behalf of the
Borrower  and without  limiting  the  obligation  of the Borrower to do so), pro
rata,  from and  against  any and all  Indemnified  Liabilities  as such term is
defined in SECTION 17.12; PROVIDED,  HOWEVER, that no Lender shall be liable for
the  payment to the  Agent-Related  Persons of any  portion of such  Indemnified
Liabilities  resulting  solely from such  Person's  gross  negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its ratable share of any costs or  out-of-pocket  expenses
(including  Attorney  Costs)  incurred  by the  Agent  in  connection  with  the
preparation,  execution, delivery,  administration,  modification,  amendment or
enforcement (whether through  negotiations,  legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities  under, this Agreement,
any other Loan Document,  or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower.  The  undertaking  in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.

                  16.8.  AGENT IN INDIVIDUAL  CAPACITY.  BABC and its Affiliates
may make loans to, issue letters of credit for the account of,  accept  deposits
from,  acquire equity  interests in and generally engage in any kind of banking,
trust, financial advisory,  underwriting or other business with the Borrower and
its  Subsidiaries and Affiliates as though BABC were not the Agent hereunder and
without  notice to or consent of the  Lenders.  The  Lenders  acknowledge  that,
pursuant to such  activities,  BABC or its  Affiliates  may receive  information
regarding  the Borrower or its  Affiliates  (including  information  that may be
subject  to  confidentiality  obligations  in  favor  of the  Borrower  or  such
Subsidiary)  and  acknowledge  that the Agent  shall be under no  obligation  to
provide such  information to them..  With respect to its Loans,  BABC shall have
the same  rights and powers  under this  Agreement  as any other  Lender and may
exercise  the same as though it were not the Agent,  and the terms  "Lender" and
"Lenders" include BABC in its individual capacity.



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<PAGE>

                  16.9.  SUCCESSOR  AGENT. The Agent may resign as Agent upon 30
days' notice to the Lenders and the Borrower. In the event BABC sells all of its
Commitments and Revolving Loans as part of a sale, transfer or other disposition
by BABC of substantially  all of its loan portfolio,  BABC shall resign as Agent
and such purchaser or transferee shall become the successor Agent hereunder.  If
the Agent resigns under this Agreement,  subject to the proviso in the preceding
sentence,  the Majority Lenders shall appoint from among the Lenders a successor
agent for the Lenders. If no successor agent is appointed prior to the effective
date of the resignation of the Agent,  the Agent may appoint,  after  consulting
with the Lenders and the  Borrower,  a successor  agent from among the  Lenders.
Upon the  acceptance  of its  appointment  as successor  agent  hereunder,  such
successor  agent  shall  succeed  to all the  rights,  powers  and duties of the
retiring  Agent and the term  "Agent"  shall mean such  successor  agent and the
retiring  Agent's  appointment,  powers and duties as Agent shall be terminated.
After any retiring  Agent's  resignation  hereunder as Agent,  the provisions of
this SECTION 16 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this  Agreement.  If no successor  agent
has  accepted  appointment  as Agent by the date  which is 30 days  following  a
retiring Agent's notice of resignation,  the retiring Agent's  resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Agent hereunder  until such time, if any, as the Majority  Lenders
appoint a successor agent as provided for above.  Notwithstanding  any provision
in this  Agreement  to the  contrary,  (i)  BABC  may  assign  or  transfer  its
Commitments  and Revolving  Loans and other  interests to Bank of America,  (ii)
Bank of America may become  successor agent under this  Agreement,  and (iii) in
the event that BABC  assigns all of its Loans to an  Affiliate,  such  Affiliate
shall automatically become the successor agent hereunder upon the effective date
of such  assignment,  in each case,  without  the  consent of the  Lenders,  the
Majority Lenders or the Borrowers.

                  16.10.  WITHHOLDING  TAX.  (a) If  any  Lender  is a  "foreign
corporation,  partnership  or trust"  within  the  meaning  of the Code and such
Lender claims  exemption  from, or a reduction  of, U.S.  withholding  tax under
Sections  1441 or 1442 of the Code,  such Lender agrees with and in favor of the
Agent, to deliver to the Agent:

                                    (i) if such Lender claims an exemption from,
or a reduction of,  withholding  tax under a United States tax treaty,  properly
completed IRS Forms 1001 and W-8 before the payment of any interest in the first
calendar  year and before the payment of any  interest in each third  succeeding
calendar year during which interest may be paid under this Agreement;

                                    (ii) if such  Lender  claims  that  interest
paid under this Agreement is exempt from United States  withholding  tax because
it is  effectively  connected  with a United  States  trade or  business of such
Lender,  two  properly completed and executed copies of IRS Form 4224 before the
payment of any  interest is due in the first  taxable year of such Lender and in
each  succeeding  taxable year of such Lender during which  interest may be paid
under this Agreement, and IRS Form W-9; and



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<PAGE>

                                    (iii)  such  other  form or  forms as may be
required  under the Code or other laws of the United  States as a  condition  to
exemption from, or reduction of, United States withholding tax.

Such Lender agrees to promptly  notify the Agent of any change in  circumstances
which would modify or render invalid any claimed exemption or reduction.

                           (b) If any Lender claims exemption from, or reduction
of,  withholding tax under a United States tax treaty by providing IRS Form 1001
and  such  Lender  sells,  assigns,  grants a  participation  in,  or  otherwise
transfers all or part of the  Obligations  of the Borrower to such Lender,  such
Lender  agrees to notify  the Agent of the  percentage  amount in which it is no
longer the beneficial  owner of  Obligations of the Borrower to such Lender.  To
the extent of such  percentage  amount,  the Agent will treat such  Lender's IRS
Form 1001 as no longer valid.

                           (c) If any  Lender  claiming  exemption  from  United
States  withholding  tax by filing IRS Form 4224 with the Agent sells,  assigns,
grants a participation in, or otherwise transfers all or part of the Obligations
of  the  Borrower  to  such  Lender,   such  Lender  agrees  to  undertake  sole
responsibility  for complying with the withholding tax  requirements  imposed by
Sections 1441 and 1442 of the Code.

                           (d) If any Lender is entitled  to a reduction  in the
applicable  withholding tax, the Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable  withholding tax after taking
into account such  reduction.  If the forms or other  documentation  required by
subsection  (a) of this Section are not  delivered to the Agent,  then the Agent
may withhold from any interest  payment to such Lender not providing  such forms
or other documentation an amount equivalent to the applicable withholding tax.

                           (e) If the IRS or any other Governmental Authority of
the United States or other  jurisdiction  asserts a claim that the Agent did not
properly  withhold  tax from  amounts  paid to or for the  account of any Lender
(because the appropriate form was not delivered,  was not properly executed,  or
because  such  Lender  failed to notify  the Agent of a change in  circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other  reason)  such Lender shall  indemnify  the Agent fully for all
-amounts  paid,  directly  or  indirectly,  by the  Agent  as tax or  otherwise,
including  penalties  and  interest,  and  including  any taxes  imposed  by any
jurisdiction  on the amounts  payable to the Agent under this Section,  together
with all costs and expenses  (including  Attorney Costs).  The obligation of the
Lenders under this  subsection  shall survive the payment of all Obligations and
the resignation or replacement of the Agent.

                  16.11. [INTENTIONALLY LEFT BLANK.

                  16.12. COLLATERAL MATTERS.



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<PAGE>

                           (a) The  Lenders  hereby  irrevocably  authorize  the
Agent,  at its option and in its sole  discretion,  to release any Agent's  Lien
upon any Collateral (i) upon the  termination of the Commitments and payment and
satisfaction in full by the Borrower of all Loans and reimbursement  obligations
in respect of Letters of Credit and Credit  Support,  and the termination of all
outstanding  Letters of Credit (whether or not any of such  obligations are due)
and all other Obligations;  (ii) constituting property being sold or disposed of
if the Borrower  certifies to the Agent that the sale or  disposition is made in
compliance  with SECTION 10.7 (and the Agent may rely  conclusively  on any such
certificate,  without further inquiry); (iii) constituting property in which the
Borrower  owned no  interest  at the time  the Lien was  granted  or at any time
thereafter;  or (iv) constituting  property leased to the Borrower under a lease
which has  expired or been  terminated  in a  transaction  permitted  under this
Agreement.  Except as  provided  above,  the Agent will not  release  any of the
Agent's Liens without the prior written  authorization of the Lenders;  PROVIDED
that the Agent may, in its  discretion,  release the Agent's Liens on Collateral
valued in the  aggregate  not in excess of  $5,000,000  in any  one-year  period
without the prior  written  authorization  of the  Lenders.  Upon request by the
Agent or the  Borrower  at any time,  the  Lenders  will  confirm in writing the
Agent's authority to release any Agent's Liens upon particular types or items of
Collateral pursuant to this SECTION 16.12.

                           (b) If  authorized,  and upon at least five  Business
Days'  prior  written  request by the  Borrower,  the Agent shall (and is hereby
irrevocably  authorized  by the  Lenders to) execute  such  documents  as may be
necessary  to evidence  the release of the Agent's  Liens upon such  Collateral;
PROVIDED,  HOWEVER, that (i) the Agent shall not be required to execute any such
document on terms  which,  in the  Agent's  opinion,  would  expose the Agent to
liability  or create any  obligation  or entail any  consequence  other than the
release of such Liens without recourse or warranty,  and (ii) such release shall
not in any  manner  discharge,  affect or impair  the  Obligations  or any Liens
(other than those expressly being released) upon (or obligations of the Borrower
in respect  of) all  interests  retained  by the  Borrower,  including  (without
limitation)  the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.

                           (c) The Agent shall have no obligation  whatsoever to
any of the  Lenders  to  assure  that the  Collateral  exists or is owned by the
Borrower or is cared for,  protected or insured or has been encumbered,  or that
the Agent's  Liens have been  properly  or  sufficiently  or  lawfully  created,
perfected,  protected or enforced or are entitled to any particular priority, or
to  exercise  at all or in any  particular  manner  or  under  any duty of care,
disclosure  or  fidelity,  or  to  continue  exercising,   any  of  the  rights,
authorities  and powers granted or available to the Agent pursuant to any of the
Loan  Documents,  it  being  understood  and  agreed  that  in  respect  of  the
Collateral,  or any act, omission or event related thereto, the Agent may act in
any manner it may deem appropriate, in its sole discretion given the Agent's own
interest in the  Collateral  in its  capacity as one of the Lenders and that the
Agent shall have no other duty or liability  whatsoever  to any Lender as to any
of the foregoing.

                  16.13.   RESTRICTIONS  ON  ACTIONS  BY  LENDERS;   SHARING  OF
PAYMENTS.  (a) Each of the Lenders agrees that it shall not, without the express
consent of all Lenders, and that it shall, to the extent it is lawfully entitled
to do so, upon the request of all Lenders, set off against the



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Obligations, any amounts owing by such Lender to the Borrower or any accounts of
the Borrower now or hereafter  maintained with such Lender.  Each of the Lenders
further agrees that it shall not, unless specifically  requested to do so by the
Agent,  take or cause to be taken any  action to enforce  its rights  under this
Agreement  or  against  the  Borrower,   including,   without  limitation,   the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.

                           (b) If at any time or times any Lender shall  receive
(i) by payment, foreclosure,  setoff or otherwise, any proceeds of Collateral or
any  payments  with  respect to the  Obligations  of the Borrower to such Lender
arising  under,  or relating  to, this  Agreement  or the other Loan  Documents,
except for any such proceeds or payments  received by such Lender from the Agent
pursuant  to the terms of this  Agreement,  or (ii)  payments  from the Agent in
excess of such Lender's ratable portion of all such distributions by the -Agent,
such Lender  shall  promptly (1) turn the same over to the Agent,  in kind,  and
with such endorsements as may be required to negotiate the same to the Agent, or
in same day funds, as applicable,  for the account of all of the Lenders and for
application to the Obligations in accordance  with the applicable  provisions of
this  Agreement,  or (2) purchase,  without  recourse or warranty,  an undivided
interest and  participation in the Obligations owed to the other Lenders so that
such excess payment  received  shall be applied  ratably as among the Lenders in
accordance with their Pro Rata Shares; PROVIDED, HOWEVER, that if all or part of
such excess  payment  received by the purchasing  party is thereafter  recovered
from it,  those  purchases of  participations  shall be rescinded in whole or in
part,  as  applicable,  and the  applicable  portion of the purchase  price paid
therefor shall be returned to such purchasing party, but without interest except
to the  extent  that  such  purchasing  party is  required  to pay  interest  in
connection with the recovery of the excess payment.

                  16.14. AGENCY FOR PERFECTION. Each Lender hereby appoints each
other  Lender as agent for the  purpose  of  perfecting  the  Lenders'  security
interest  in  assets  which,  in  accordance  with  Article  9 of the UCC can be
perfected  only by  possession.  Should any Lender (other than the Agent) obtain
possession of any such  Collateral,  such Lender shall notify the Agent thereof,
and, promptly upon the Agent's request therefor shall deliver such Collateral to
the Agent or in accordance with the Agent's instructions.

                  16.15.  PAYMENTS BY AGENT TO LENDERS.  All payments to be made
by the Agent to the Lenders  shall be made by bank wire  transfer  'or  internal
transfer of immediately available funds to:

if to BABC:

         Bank:    Bank of America NT&SA
                  1850 Gateway Blvd
                  Concord, CA 94520
                  ABA Number:       121000358
                  Account Number:   12353-03848



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<PAGE>

                  Account Name:     BankAmerica Business Credit, Inc.
                  Attention:        Sergio Marin
                  Reference:        Trend-Lines

if to Foothill Capital Corporation:

         Bank:    The Chase Manhattan Bank
                  New York, New York
                  Account Number:   323-266193
                  ABA Number:       021000021
                  Credit:           Foothill Capital Corporation
                  Reference:        Trend-Lines

if to Transamerica Business Credit Corporation:

         Bank:    First National Bank of Chicago
                  Account Number:   52-97184
                  ABA Number:       071000013
                  Account Name:     Transamerica Business Credit Corp.
                  Attention:        R. Bizzaro
                  Reference:        Trend-Lines

or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent.  Concurrently with each such payment,
the  Agent  shall  identify  whether  such  payment  (or  any  portion  thereof)
represents principal,  premium or interest on the Revolving Loans, Term Loans or
otherwise.

                  16.16.   CONCERNING   THE  COLLATERAL  AND  THE  RELATED  LOAN
DOCUMENTS.  Each  Lender  authorizes  and  directs  the Agent to enter into this
Agreement  and the other Loan  Documents  relating  to the  Collateral,  for the
ratable benefit of the Agent and the Lenders. Each Lender agrees that any action
taken by the Agent,  Majority  Lenders or Required  Lenders,  as applicable,  in
accordance with the terms of this Agreement or the other Loan Documents relating
to the Collateral,  and the exercise by the Agent, the Majority Lenders,  or the
Required Lenders, as applicable, of their respective powers set forth therein or
herein,  together with such other powers that are reasonably incidental thereto,
shall be binding upon all of the Lenders.

                  16.17.  FIELD AUDIT AND  EXAMINATION  REPORTS;  DISCLAIMER  BY
LENDERS. By signing this Agreement, each Lender:

                           (a) is  deemed  to  have  requested  that  the  Agent
furnish such Lender,  promptly after it becomes available,  a copy of each field
audit or  examination  report  (each a  "Report"  and  collectively,  "Reports")
prepared by the Agent;



                                       84
<PAGE>

                           (b) expressly  agrees and  acknowledges  that neither
BABC nor the Agent (i) makes any  representation  or warranty as to the accuracy
of any  Report,  or (ii) shall be liable for any  information  contained  in any
Report;

                           (c)  expressly  agrees  and  acknowledges   that  the
Reports are not  comprehensive  audits or examinations,  that the Agent or other
party performing any audit or examination will inspect only specific information
regarding the Borrower and will rely significantly upon the Borrower's books and
records, as well as on representations of the Borrower's personnel;

                           (d)  agrees  to keep  all  Reports  confidential  and
strictly for its internal use, and not to distribute except to its participants,
or use any Report in any other manner; and

                           (e)  without  limiting  the  generality  of any other
indemnification  provision contained in this Agreement,  agrees: (i) to hold the
Agent and any such other Lender  preparing a Report harmless from any action the
indemnifying  Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that  the  indemnifying  Lender  has made or may  make to the  Borrower,  or the
indemnifying  Lender's  participation in, or the indemnifying  Lender's purchase
of, a loan or loans of the Borrower; and (ii) to pay and protect, and indemnify,
defend and hold the Agent and any such other Lender  preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses and
other amounts  (including,  without  limitation  attorney costs) incurred by the
Agent and any such other  Lender  preparing  a Report as the direct or  indirect
result of any third  parties who might obtain all or part of any Report  through
the indemnifying Lender.

                  16.18. RELATION AMONG LENDERS. The Lenders are not partners or
co-venturers,  and no Lender  shall be liable for the acts or  omissions  of, or
(except as otherwise  set forth herein in case of the Agent)  authorized  to act
for, any other Lender.

         17. MISCELLANEOUS.

                  17.1.  CUMULATIVE  REMEDIES;  NO PRIOR RECOURSE TO Collateral.
The enumeration  herein of the Agent's rights and remedies is not intended to be
exclusive,  and such  rights and  remedies  are in addition to and not by way of
limitation of any other rights or remedies that the Agent may have under the UCC
or other applicable law. The Agent shall have the right, in its sole discretion,
to determine  which rights and remedies are to be exercised  and in which order.
The  exercise  of one right or remedy  shall not  preclude  the  exercise of any
others,  all of which shall be cumulative.  The Agent may,  without  limitation,
proceed  directly  against  the  Borrowers  or  either  of them to  collect  the
Obligations without any prior recourse to the Collateral.

                  17.2.  NO  IMPLIED  WAIVERS.  No act,  failure or delay by the
Agent shall constitute a waiver of any of its rights and remedies.  No single or
partial waiver by the Agent of any provision of this Agreement or any other Loan
Document,  or of breach or default  hereunder or



                                       85
<PAGE>

thereunder, or of any right or remedy which the Agent may have, shall operate as
a waiver of any other provision, breach, default, right or remedy or of the same
provision,  breach,  default, right or remedy on a future occasion. No waiver by
the  Agent  shall  affect  its  rights to  require  strict  performance  of this
Agreement.

                  17.3.  SEVERABILITY.  If any provision of this Agreement shall
be prohibited or invalid, under applicable law, it shall be in effective only to
such extent, without invalidating the remainder of this Agreement.

                  17.4.  GOVERNING LAW. This  Agreement  shall be deemed to have
been made in the State of New York and shall be governed by and  interpreted  in
accordance with the laws of such state, except that no doctrine of choice of law
shall be used to apply the laws of any other state or jurisdiction.

                  17.5.  CONSENT TO JURISDICTION AND VENUE;  SERVICE OF Process.
The  Borrower  agrees  that,  in  addition  to any  other  courts  that may have
jurisdiction  under  applicable  laws,  any action or  proceeding  to enforce or
arising  out  of  this  Agreement  or any of the  other  Loan  Documents  may be
commenced in the Supreme Court of the State of New York for New York County,  or
in the United States  District Court for the Southern  District of New York, and
the Borrowers  consent and submit in advance to such jurisdiction and agree that
venue will be proper in such courts on any such  matter.  The  Borrowers  hereby
waive  personal  service  of  process  and agree  that a summons  and  complaint
commencing an action or  proceeding  in any such court shall be properly  served
and shall confer personal jurisdiction if served by registered or certified mail
to the  Borrowers.  Should a  Borrower  fail to appear or  answer  any  summons,
complaint, process or papers so served within 30 days after the mailing or other
service  thereof,  such  Borrower  shall be  deemed in  default  and an order or
judgment  may be entered  against it as demanded or prayed for in such  summons,
complaint,  process  or papers.  The  choice of forum set forth in this  section
shall not be deemed to preclude the enforcement of any judgment obtained in such
forum,  or the taking of any action under this Agreement to enforce the same, in
any appropriate jurisdiction.

                  17.6.  WAIVER OF JURY TRIAL. EACH BORROWER HEREBY WAIVES TRIAL
BY JURY,  RIGHTS  OF  SETOFF,  AND THE  RIGHT  TO  IMPOSE  COUNTERCLAIMS  IN ANY
LITIGATION IN ANY COURT WITH RESPECT TO, IN  CONNECTION  WITH, OR ARISING OUT OF
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL,  OR
ANY INSTRUMENT OR DOCUMENT  DELIVERED  PURSUANT HERETO OR THERETO,  OR ANY OTHER
CLAIM OR DISPUTE HOWSOEVER ARISING,  BETWEEN SUCH BORROWER AND THE LENDERS. EACH
BORROWER CONFIRMS THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.

                  17.7. [INTENTIONALLY LEFT BLANK].



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<PAGE>

                  17.8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  All of each
Borrower's  representations  and warranties  contained in this  Agreement  shall
survive  the  execution,  delivery,  and  acceptance  thereof  by  the  parties,
notwithstanding any investigation by the Agent or the Lender or their respective
agents.

                  17.9.  OTHER SECURITY AND GUARANTIES.  The Agent may,  without
notice or demand and without affecting either Borrower's  obligations hereunder,
from time to time: (a) take from any Person and hold collateral  (other than the
Collateral)  for the payment of all or any part of the Obligations and exchange,
enforce or release such -collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or  substitute  any such  endorser or  guarantor,  or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations,  or any other Person in any way obligated to pay all or
any part of the Obligations.

                  17.10. FEES AND EXPENSES. The Borrowers shall pay to the Agent
for its benefit on demand all costs and  expenses  that the Agent pays or incurs
in connection with the negotiation, preparation,  consummation,  administration,
enforcement,  and  termination of this  Agreement and the other Loan  Documents,
including,   without  limitation:   (a)  attorneys'  and  paralegal's  fees  and
disbursements  of  counsel  to  the  Agent  (including,  without  limitation,  a
reasonable  estimate of the allocable cost of in-house  counsel and staff) ; (b)
costs and expenses,  including,  without limitation,  attorneys' and paralegals'
fees and disbursements (including,  without limitation, a reasonable estimate of
the allocable cost of in-house counsel and staff) for any amendment, supplement,
waiver, consent, or subsequent closing in connection with the Loan Documents and
the transactions  contemplated thereby; (c) costs and expenses of lien and title
searches and title  insurance;  (d) Taxes,  fees and other charges for recording
the mortgages, filing financing statements and continuations,  and other actions
to perfect,  protect,  and  continue  the  Security  Interest;  (e) sums paid or
incurred to pay any amount or take any action  required of either Borrower under
the Loan  Documents  that  such  Borrower  fails to pay or  take;  (f)  costs of
appraisals, inspections, and verifications of the Collateral, including, without
limitation,  travel,  lodging, and meals together with an allocated charge equal
to its then  customary  per them fee  (currently  $750) per day for each auditor
employed by the Lender for  inspections  of the  Collateral  and the  Borrower's
operations;  (g) costs and  expenses of  forwarding  loan  proceeds,  collecting
checks and other items of payment,  and  establishing  and  maintaining  Payment
Accounts and lock boxes; (h) costs and expenses of preserving and protecting the
Collateral;  and  (i)  costs  and  expenses,   including,   without  limitation,
attorneys'  and  paralegals'   fees  and   disbursements   (including,   without
limitation,  a reasonable estimate of the allocable cost of in-house counsel and
staff)  paid or  incurred  to obtain  payment of the  Obligations,  enforce  the
Security Interest, sell or otherwise realize upon the Collateral,  and otherwise
enforce the  provisions of the Loan  Documents,  or to defend any claims made or
threatened  against  the Agent of any  Lender  arising  out of the  transactions
contemplated  hereby  (including,  without  limitation,   preparations  for  and
consultations concerning any such matters). The foregoing shall not be construed
to limit any other provisions of the Loan Documents regarding costs and expenses
to be paid by the  Borrowers.  All of the foregoing  costs and expenses shall be
charged to the relevant Borrower's loan account as Reference Rate Loans.



                                       87
<PAGE>

                  17.11.  NOTICES.  Except as  otherwise  provided  herein,  all
notices,  demands,  and requests that either party is required or elects to give
to the other shall be in writing, shall be delivered personally against receipt,
or sent by recognized  overnight  courier  services,  or mailed by registered or
certified  mail,  return  receipt  requested,  postage  prepaid,  and  shall  be
addressed to the party to be notified as follows:

         If to the Lender:          BankAmerica Business Credit, Inc.
                                    40 East 52nd Street
                                    New York, New York 10022
                                    Attention: Division Manager

         with a copy to:            Bank of America NT&SA, Legal Department
                                    335 Madison Avenue
                                    New York, New York 10017
                                    Attention: Jerry M. Saccone

                                               -and-

                                    Harris & Bar-Levav
                                    One Battery Park Plaza, 27th Floor
                                    New York, New York 10004
                                    Attention: Homer L. Harris

         If to Trend-Lines:         Trend-Lines, Inc.
                                    135 American Legion Highway
                                    Revere, MA 02151
                                    Attention: Chief Financial Officer

         with a copy to:            Robinson & Cole LLP
                                    One Boston Place
                                    Boston, MA 02108-4404
                                    Attention: David A. Garbus, Esq.

         If to Post Tool:           Post Tool, Inc.
                                    135 American Legion Highway
                                    Revere, MA 02151
                                    Attention: Chief Financial Officer

         with a copy to:            Robinson & Cole LLP
                                    One Boston Place
                                    Boston, MA 02108-4404
                                    Attention: David A. Garbus, Esq.



                                       88
<PAGE>

or to such other  address as each party may designate for itself by like notice.
Any such  notice,  demand,  or request  shall be deemed  given when  received if
personally  delivered or sent by  overnight  courier,  or when  deposited in the
United States mails, postage paid, if sent by registered or certified mail.


                  17.12.  INDEMNIFICATION.  EACH  BORROWER  HEREBY  INDEMNIFIES,
DEFENDS AND HOLDS EACH LENDER, AND ITS DIRECTORS,  OFFICERS,  AGENTS,  EMPLOYEES
AND  COUNSEL,  HARMLESS  FROM AND AGAINST ANY AND ALL LOSSES,  CLAIMS,  DAMAGES,
LIABILITIES, DEFICIENCIES, JUDGMENTS, PENALTIES OR EXPENSES IMPOSED ON, INCURRED
BY OR ASSERTED AGAINST ANY OF THEM,  WHETHER DIRECT,  INDIRECT OR CONSEQUENTIAL,
ARISING  OUT OF OR BY  REASON  OF ANY  LITIGATION,  INVESTIGATIONS,  CLAIMS,  OR
PROCEEDINGS (WHETHER BASED ON ANY FEDERAL, STATE OR LOCAL LAWS OR OTHER STATUTES
OR REGULATIONS,  INCLUDING, WITHOUT LIMITATION,  SECURITIES,  ENVIRONMENTAL,  OR
COMMERCIAL LAWS AND REGULATIONS,  UNDER COMMON LAW OR AT EQUITY,  OR IN CONTRACT
OR  OTHERWISE)  COMMENCED  OR  THREATENED,  WHICH ARISE OUT OF OR ARE IN ANY WAY
BASED  UPON THE  NEGOTIATION,  PREPARATION,  EXECUTION,  DELIVERY,  ENFORCEMENT,
PERFORMANCE OR ADMINISTRATION OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY
UNDERTAKING OR PROCEEDING RELATED TO ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY
OR ANY ACT, OMISSION TO ACT, EVENT OR TRANSACTION  RELATED OR ATTENDANT THERETO,
INCLUDING, WITHOUT LIMITATION,  AMOUNTS PAID IN SETTLEMENT, COURT COSTS, AND THE
FEES AND EXPENSES OF COUNSEL  REASONABLY  INCURRED IN  CONNECTION  WITH ANY SUCH
LITIGATION,  INVESTIGATION,  CLAIM OR PROCEEDING AND FURTHER INCLUDING,  WITHOUT
LIMITATION,  ALL LOSSES, DAMAGES (INCLUDING,  WITHOUT LIMITATION,  CONSEQUENTIAL
DAMAGES),  EXPENSES OR LIABILITIES  SUSTAINED BY THE LENDERS IN CONNECTION  WITH
ANY ENVIRONMENTAL INSPECTION, MONITORING, SAMPLING, OR CLEANUP OF THE ENCUMBERED
REAL ESTATE REQUIRED OR MANDATED BY ANY ENVIRONMENTAL LAW (ALL OF THE FOREGOING,
COLLECTIVELY,  THE "INDEMNIFIED  LIABILITIES");  PROVIDED, HOWEVER, THAT NEITHER
BORROWER  SHALL  INDEMNIFY  THE  LENDERS  OR ITS  DIRECTORS,  OFFICERS,  AGENTS,
EMPLOYEES AND COUNSEL FROM SUCH  INDEMNIFIED  LIABILITIES  RESULTING  FROM THEIR
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  Without limiting the foregoing,  if, by
reason of any suit or proceeding of any kind,  nature, or description  against a
Borrower,  or by a Borrower or any other party  against the Agent,  which in the
Agent's sole  discretion  makes it  advisable  for the Agent to seek counsel for
protection and preservation of its liens and security  assets,  or to defend its
own interest,  such expenses and counsel fees shall be allowed to the Agent.  To
the extent that the undertaking to indemnify, pay and hold harmless set forth in
this SECTION  17.12 may be  unenforceable  because it is violative of any law or
public policy, the Borrowers shall contribute the maximum portion which they are
permitted  to  pay  and  satisfy  under  applicable  law,  to  the  payment  and
satisfaction  of all



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<PAGE>

indemnified matters incurred by Agent. The foregoing indemnity shall survive the
payment of the Obligations  and the  termination of this  Agreement.  All of the
foregoing costs and expenses shall be part of the Obligations and secured by the
Collateral.

                  17.13. WAIVER OF NOTICES.  Unless otherwise expressly provided
herein,  the  Borrowers  waive  presentment,  protest  and  notice  of demand or
dishonor and protest as to any instrument,  as well as any and all other notices
to which they might otherwise be entitled.  No notice to or demand on a Borrower
which the Agent or any Lender may elect to give shall entitle either Borrower to
any or further notice or demand in the same, similar or other circumstances.

                  17.14.  BINDING  EFFECT;  ASSIGNMENT.  The  provisions of this
Agreement  shall be  binding  upon and inure to the  benefit  of the  respective
representatives,  successors  and  assigns  of  the  parties  hereto;  provided,
however,  that no interest herein may be assigned by either Borrower without the
prior written  consent of the Agent and each Lender.  The rights and benefits of
the such persons  hereunder  shall,  if the Agent so agrees,  inure to any party
acquiring any interest in the Obligations or any part thereof.

                  17.15.   INDEMNITY  OF  THE  AGENT  AND  THE  LENDERS  BY  THE
BORROWERS.  This  Agreement is intended by the  Borrowers and the Agent and each
Lender to be the final,  complete,  and  exclusive  expression  of the agreement
among  them.  This  Agreement  supersedes  any and  all  prior  oral or  written
agreements  relating to the subject matter hereof and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no oral agreements between the parties.  No modification,  rescission,
waiver,  release, or amendment of any provision of this Agreement shall be made,
except by a written  agreement  signed by the  Borrowers  and a duly  authorized
officer of the Agent and each Lender.

                  17.16.  COUNTERPARTS.  This  Agreement  may be executed in any
number  of  counterparts,  and  by the  Agent  and  the  Borrowers  in  separate
counterparts,  each of  which  shall  be an  original,  but all of  which  shall
together constitute one and the same agreement.

                  17.17.  CAPTIONS. The captions contained in this Agreement are
for  convenience  only,  are  without  substantive  meaning  and  should  not be
construed to modify, enlarge, or restrict any provision.

                  17.18.  RIGHT OF  SET-OFF.  In  addition'  to any  rights  and
remedies  of the Lenders  provided by law, if an Event of Default  exists or the
Loans have been accelerated, each Lender is authorized at any time and from time
to time,  without prior notice to the Borrower,  any such notice being waived by
the  Borrower to the fullest  extent  permitted by law, to set off and apply any
and all deposits  (general or special time or demand,  provisional  or final) at
any time held by, and other indebtedness at any time owing by, such Lender to or
for the credit or the account of the  Borrower  against any and all  Obligations
owing to such Lender, now or hereafter existing,  irrespective of whether or not
the Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such  Obligations  may be  contingent  or unmatured.  Each
Lender  agrees  promptly  to notify the  Borrower  and the Agent  after any such



                                       90
<PAGE>

set-off and application made by such Lender; PROVIDED, HOWEVER, that the failure
to  give  such  notice  shall  not  affect  the  validity  of such  set-off  and
application.  NOTWITHSTANDING THE FOREGOING,  NO LENDER SHALL EXERCISE ANY RIGHT
OF SET-OFF,  BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT  ACCOUNT OR PROPERTY
OF THE BORROWER  HELD OR  MAINTAINED  BY SUCH LENDER  WITHOUT THE PRIOR  WRITTEN
UNANIMOUS CONSENT OF THE LENDERS.

                  17.19.  PARTICIPATING  AGENT'S SECURITY  INTERESTS.  The Agent
may,  without  notice  to or  consent  by  the  Borrowers,  grant  one  or  more
participations in the Loans to Participating  Agents.  If a Participating  Agent
shall at any time with the Borrowers'  knowledge  participate  with the Agent in
the Loans, the Borrowers hereby grant to such Participating Agent, and the Agent
and such Participating  Agent shall have and are hereby given, a continuing lien
on and  security  interest in any money,  securities  and other  property of the
Borrowers in the custody or possession of the  Participating  Agent,  including,
without  limitation,  the right of setoff,  to the  extent of the  Participating
Agent's participation in the Obligations,  and such Participating Agent shall be
deemed  to have the same  right of setoff  to the  extent of such  Participating
Agent's  participation in the Obligations  under this Agreement as it would have
if it were a direct lender.

                  17.20.  JOINT AND  SEVERAL  LIABILITY.  The  liability  of the
Borrowers for all of the  Obligations  shall be joint and several  regardless of
which Borrower  actually  receives loans or other extensions of credit hereunder
or the amount of such loans  received or the manner in which the Agent  accounts
for such  loans or other  extensions  of credit on its books and  records.  Each
Borrower's  Obligations with respect to Revolving Loans made to it or Letters of
Credit issued for its account,  and related fees,  costs and expenses,  and each
Borrower's Obligations arising as a result of the joint and several liability of
the  Borrowers  hereunder,  with  respect to  Revolving  Loans made to the other
Borrower  hereunder  or  Letters of Credit  issued for the  account of the other
Borrower hereunder, together with the related fees, costs and expenses, shall be
separate and distinct obligations,  all of which are primary obligations of each
Borrower.

         Each  Borrower's  Obligations  arising  as a result  of the  joint  and
several  liability  of the  Borrowers  hereunder  with respect to loans or other
extensions of credit made to the other Borrower  hereunder shall, to the fullest
extent  permitted by law, be  unconditional  irrespective of (i) the validity of
enforceability,  avoidance  or  subordination  of the  Obligations  of the other
Borrower or of any promissory note or other document  evidencing all of any part
of the  Obligations  of the other  Borrower,  (ii) the absence of any attempt to
collect the Obligations  from the other Borrower,  any other  guarantor,  or any
other security therefor, or the absence of any other action to enforce the same,
(iii) the waiver, consent, extension,  forbearance or granting of any indulgence
by the Agent with respect to any  provision  of any  instrument  evidencing  the
Obligations of the other Borrower,  or any part thereof,  or any other agreement
now or hereafter executed by the other Borrower and delivered to the Agent, (iv)
the failure by the Agent to take any steps to perfect and  maintain its security
interest in, or to preserve its rights to, any  security or  collateral  for the
Obligations of the other Borrower,  (v) the Agent's election,  in any proceeding
instituted under the Bankruptcy  Code, of the application of Section  1111(b)(2)
of the Bankruptcy  Code,  (vi) any borrowing or grant of a security  interest by
the other Borrower, as



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debtor-in-possession  under  Section  364  of the  Bankruptcy  Code,  (vii)  the
disallowance of all or any portion of the Agent's  claim(s) for repayment of the
Obligations of the other  Borrower under Section 502 of the Bankruptcy  Code, or
(viii)  any other  circumstance  which  might  constitute  a legal or  equitable
discharge or defense of a guarantor or of the other Borrower.

         Each Borrower (the "First Borrower") hereby  irrevocably agrees that it
will not bring any  "claims"  (as  defined in Section  101(5) of the  Bankruptcy
Code) against the other  Borrower to which the First Borrower is or would at any
time be otherwise  entitled by virtue of its obligations under this Agreement or
under any of the Loan Documents,  including,  without  limitation,  any right of
subrogation  (whether  contractual,  under Section 509 of the Bankruptcy Code or
otherwise),  reimbursement,  contribution,  exoneration  or other  similar right
against the other Borrower until such time as all of the  Obligations  have been
satisfied in full and this Agreement  shall have  terminated in accordance  with
its terms.

         Upon any Event of Default, the Agent may, at its sole election, proceed
directly and at once,  without  notice,  against either  Borrower to collect and
recover  the full  amount,  or any  portion of the  Obligations,  without  first
proceeding  against  the other  Borrower  or any other  Person,  or against  any
security or collateral for the  Obligations.  Each Borrower  consents and agrees
that the Agent shall be under no  obligation  to marshall any assets in favor of
such Borrower or against or in payment of any or all of the Obligations.

                         [SIGNATURES ON FOLLOWING PAGE]





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<PAGE>


         IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.

                                        "BORROWERS"

                                        TREND-LINES, INC.


                                        By:
                                           -----------------------------
                                             Name:  STAN BLACK
                                             Title: CEO

                                        POST TOOL, INC.


                                        By:
                                           -----------------------------
                                             Name:  STAN BLACK
                                             Title: CEO

                                        "AGENT"

                                        BANKAMERICA BUSINESS CREDIT, INC.,
                                        as the Agent


                                        By:
                                           -----------------------------
                                             Name:  William J. Wilson
                                             Title: Sr. Account Executive

                                        "LENDERS"

Commitment: $50,000,000                 BANKAMERICA BUSINESS CREDIT, INC., as a
                                        Lender


                                        By:
                                           -----------------------------
                                             Name:  William J. Wilson
                                             Title: Sr. Account Executive

Commitment: $25,000,000                 FOOTHILL CAPITAL CORPORATION


                                        By:
                                           -----------------------------
                                             Name:  TODD R. NAKAMOTO
                                             Title: V.P.



                                       93
<PAGE>

Commitment: $25,000,000                 TRANSAMERICA BUSINESS CREDIT CORPORATION


                                        By:
                                           -----------------------------
                                             Name:  Michael S. Burns
                                             Title: Sr. Vice Pres.


                                       94
<PAGE>


                                    EXHIBIT D

                  [FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
                  ---------------------------------------------

         This  ASSIGNMENT  AND  ACCEPTANCE   AGREEMENT  (this   "ASSIGNMENT  AND
ACCEPTANCE")   dated   as   of   ________________,   199__   is   made   between
____________________ (the "ASSIGNOR") and (the "ASSIGNEE").

                                    RECITALS

         WHEREAS,  the  Assignor is party to that  certain  Amended and Restated
Loan and Security Agreement dated as of ___________,  199__ (as amended, amended
and restated,  modified,  supplemented or renewed, the "CREDIT AGREEMENT") among
Trend-Lines,  Inc. and Post Tool,  Inc., each a Massachusetts  corporation  (the
"Borrowers"), the several financial institutions from time to time party thereto
(including the Assignor, the "Lenders "), and BankAmerica Business Credit, Inc.,
as agent  for the  Lenders  (the  "AGENT").  Any  terms  defined  in the  Credit
Agreement and not defined in this  Assignment  and Acceptance are used herein as
defined in the Credit Agreement;

         WHEREAS,  as provided  under the Credit  Agreement,  the  Assignor  has
committed  to  making  Loans  (the  "COMMITTED  LOANS")  to the  Borrower  in an
aggregate amount not to exceed $___________ (the "COMMITMENT");

         WHEREAS,  the  Assignor  has  made  Committed  Loans  in the  aggregate
principal amount of $_______________ to the Borrower;

         WHEREAS,  [the  Assignor has acquired a  participation  in its pro rata
share of the  Lenders'  liabilities  under  Letters  of Credit  in an  aggregate
principal  amount of  $_____________  (the "L/C  OBLIGATIONS")]  [no  Letters of
Credit are outstanding under the Credit Agreement]; and

         WHEREAS,  the Assignor  wishes to assign to the Assignee  [part of the]
[all]  rights and  obligations  of the  Assignor  under the Credit  Agreement in
respect of its Commitment,  together with a corresponding portion of each of its
outstanding  Committed  Loans  and  L/C  Obligations,  in  an  amount  equal  to
$___________ (the "ASSIGNED  AMOUNT") on the terms and subject to the conditions
set forth herein and the Assignee wishes to accept assignment of such rights and
to assume such  obligations  from the Assignor on such terms and subject to such
conditions;

         NOW,  THEREFORE,  in  consideration  of the  foregoing  and the  mutual
agreements contained herein, the parties hereto agree as follows:



                                      D-1
<PAGE>

     1.   ASSIGNMENT AND ACCEPTANCE.

          (a)  Subject  to the  terms  and  conditions  of this  Assignment  and
Acceptance,  the  (i)  Assignor  hereby  sells,  transfers  and  assigns  to the
Assignee,  and (ii) the Assignee hereby  purchases,  assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and  Acceptance)  ___% (the  "ASSIGNEE'S  PERCENTAGE
SHARE") of (A) the  Commitment,  the Committed  Loans and the L/C Obligations of
the Assignor and (B) all related rights, benefits, obligations,  liabilities and
indemnities  of the Assignor under and in connection  with the Credit  Agreement
and the Loan Documents.

          (b) With effect on and after the Effective Date (as defined in Section
5 hereof),  the Assignee shall be a party to the Credit Agreement and succeed to
all of the rights and be obligated to perform all of the obligations of a Lender
under   the   Credit   Agreement,    including   the   requirements   concerning
confidentiality  and the payment of  indemnification,  with a  Commitment  in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform in
accordance  with their  terms all of the  obligations  which by the terms of the
Credit  Agreement  are  required to be  performed  by it as a Lender.  It is the
intent of the parties  hereto that the Commitment of the Assignor  shall,  as of
the Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations  under
the Credit  Agreement  to the extent such  obligations  have been assumed by the
Assignee;  provided, however, the Assignor shall not relinquish its rights under
Sections ___ and ___ of the Credit Agreement to the extent such rights relate to
the time prior to the Effective Date.

          (c) After giving effect to the  assignment  and  assumption  set forth
herein, on the Effective Date the Assignee's Commitment will be $_______.

          (d) After giving effect to the  assignment  and  assumption  set forth
herein, on the Effective Date the Assignor's Commitment will be $_______.

     2.   PAYMENTS.

          (a)  As   consideration   for  the  sale,   assignment   and  transfer
contemplated in Section 1 hereof,  the Assignee shall pay to the Assignor on the
Effective  Date in  immediately  available  funds an amount equal to $_________,
representing  the  Assignee's  Pro Rata  Share of the  principal  amount  of all
Committed Loans.

          (b) The Assignee  further  agrees to pay to the Agent a processing fee
in the amount specified in Section 15.3(a) of the Credit Agreement.



                                      D-2
<PAGE>

     3.   REALLOCATION OF PAYMENTS.

     Any interest,  fees and other  payments  accrued to the Effective Date with
respect to the Commitment,  and Committed Loans and L/C Obligations shall be for
the account of the Assignor.  Any interest,  fees and other payments  accrued on
and after the  Effective  Date with respect to the Assigned  Amount shall be for
the account of the Assignee.  Each of the Assignor and the Assignee  agrees that
it will hold in trust for the other party any  interest,  fees and other amounts
which it may  receive  to which  the other  party is  entitled  pursuant  to the
preceding  sentence  and pay to the other  party any  such amounts  which it may
receive promptly upon receipt.

     4.   INDEPENDENT CREDIT DECISION.

     The  Assignee  (a)  acknowledges  that it has received a copy of the Credit
Agreement and the Schedules  and Exhibits  thereto,  together with copies of the
most recent financial  statements of the Borrower,  and such other documents and
information  as it has  deemed  appropriate  to make its own  credit  and  legal
analysis  and decision to enter into this  Assignment  and  Acceptance;  and (b)
agrees that it will  independently  and without reliance upon the Assignor,  the
Agent or any other  Lender and based on such  documents  and  information  as it
shall deem  appropriate  at the time,  continue to make its own credit and legal
decisions in taking or not taking action under the Credit Agreement.

     5.   EFFECTIVE DATE: NOTICES.

          (a) As between the Assignor and the Assignee,  the effective  date for
this  Assignment  and  Acceptance  shall be  __________,  199__ (the  "EFFECTIVE
DATE");  PROVIDED that the following conditions precedent have been satisfied on
or before the Effective Date:

               i) this Assignment and Acceptance shall be executed and delivered
by the Assignor and the Assignee;

               [ii)  the  consent  of  the  Agent   required  for  an  effective
assignment  of the Assigned  Amount by the  Assignor to the Assignee  shall have
been duly  obtained  and shall be in full force and  effect as of the  Effective
Date;]

               iii) the  Assignee  shall pay to the  Assignor all amounts due to
the Assignor under this Assignment and Acceptance;

               iv) the  Assignee  shall have  complied  with Section 13.3 of the
Credit Agreement;

               v) the  processing  fee referred to in Section 2(b) hereof and in
Section 15.3(a) of the Credit Agreement shall have been paid to the Agent; and



                                      D-3
<PAGE>

          (b)  Promptly   following  the  execution  of  this   Assignment   and
Acceptance,  the  Assignor  shall  deliver to the  Borrower  and the Agent,  for
acknowledgment  by the Agent, a Notice of Assignment in the form attached hereto
as Schedule 1.

     [6.  AGENT. [INCLUDE ONLY IF ASSIGNOR IS AGENT]

          (a) The Assignee  hereby  appoints and authorizes the Assignor to take
such action as agent on its behalf and to exercise  such powers under the Credit
Agreement as are delegated to the Agent by the Lenders  pursuant to the terms of
the Credit Agreement.

          (b) The  Assignee  shall assume no duties or  obligations  held by the
Assignor in its capacity as Agent under the Credit Agreement.]

     7.   WITHHOLDING TAX.

     The Assignee (a) represents  and warrants to the Lender,  the Agent and the
Borrower  that under  applicable  law and treaties no tax will be required to be
withheld by the Agent,  the  Borrower or the Lender with respect to any payments
to be made to the Assignee hereunder,  (b) agrees to furnish (if it is organized
under the laws of any  jurisdiction  other than the  United  States or any State
thereof) to the Assignor,  the Agent and the Borrower prior to the time that the
Agent or the Borrower is required to make any payment of principal,  interest or
fees hereunder,  duplicate  executed  originals of either U.S.  Internal Revenue
Service  Form 4224 or U.S.  Internal  Revenue  Service  Form 1001  (wherein  the
Assignee claims  entitlement to the benefits of a tax treaty that provides for a
complete  exemption  from U.S.  federal income  withholding  tax on all payments
hereunder) or any successor  applicable  form, as the case may be, and agrees to
provide  new  Forms  4224 or 1001 upon the  expiration  or  obsolescence  of any
previously delivered form or comparable statements in accordance with applicable
U.S. law and regulations and amendments thereto,  duly executed and completed by
the Assignee, (c) agrees to comply with all applicable U.S. laws and regulations
with regard to such  withholding tax exemption and (d) agrees to be bound by the
provisions  of Section 6.1 of the Credit  Agreement  as if the  Assignee  were a
Lender thereunder.

     8.   REPRESENTATIONS AND WARRANTIES.

          (a) The Assignor  represents and warrants that (i) it is the legal and
beneficial  owner of the interest  being  assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse  claim;  (ii) it is duly
organized and existing and it has the full power and authority to take,  and has
taken,  all  action  necessary  to  execute  and  deliver  this  Assignment  and
Acceptance  and any other  documents  required  or  permitted  to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder;  (iii) no notices to, or consents,  authorizations or
approvals of, any Person are required (other than any already given or obtained)
for  its  due  execution,  delivery  and  performance  of  this  Assignment  and
Acceptance,  and apart from any agreements or  undertakings  or filings required
by the Credit Agreement, no further action by, or notice to, or filing with, any
Person is



                                      D-4
<PAGE>

required  of it for such  execution,  delivery  or  performance;  and (iv)  this
Assignment  and  Acceptance  has been  duly  executed  and  delivered  by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against  the  Assignor  in  accordance  with the terms  hereof,  subject,  as to
enforcement,  to bankruptcy,  insolvency,  moratorium,  reorganization and other
laws of general  application  relating to or affecting  creditors' rights and to
general equitable principles.

          (b) The Assignor  makes no  representation  or warranty and assumes no
responsibility  with respect to any  statements,  warranties or  representations
made in or in connection with the Credit  Agreement or the execution,  legality,
validity,  enforceability,  genuineness,  sufficiency  or  value  of the  Credit
Agreement or any other instrument or document  furnished  pursuant thereto.  The
Assignor makes no  representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency,  financial condition or statements
of the Borrower, or the performance or observance by the Borrower, of any of its
respective  obligations  under the Credit  Agreement or any other  instrument or
document furnished in connection therewith.

          (c) The Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and  authority  to take,  and has taken,  all
action  necessary to execute and deliver this  Assignment and Acceptance and any
other  documents  required or  permitted  to be executed or  delivered  by it in
connection with this  Assignment and Acceptance,  and to fulfill its obligations
hereunder;  (ii) no notices to, or consents,  authorizations or approval of, any
Person are  required  (other than any  already  given or  obtained)  for its due
execution, delivery and performance of this Assignment and Acceptance; and apart
from any agreements or undertakings or filings required by the Credit Agreement,
no further action by, or notice to, or filing with, any Person is required of it
for such  execution,  delivery or  performance;  and (iii) this  Assignment  and
Acceptance has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of the Assignee,  enforceable  against the Assignee
in accordance with the terms hereof, subject, as to enforcement,  to bankruptcy,
insolvency,  moratorium,  reorganization  and other laws of general  application
relating to or affecting creditors' rights and to general equitable principles.

     9.   FURTHER ASSURANCES.

     The Assignor and the Assignee each hereby agree to execute and deliver such
other  instruments,  and take such other action,  as either party may reasonably
request in connection with the transactions  contemplated by this Assignment and
Acceptance,  including  the  delivery  of any  notices  or  other  documents  or
instruments  to the Borrower or the Agent,  which may be required in  connection
with the assignment and assumption contemplated hereby.

     10.  MISCELLANEOUS.

          (a) Any  amendment or waiver of any provision of this  Assignment  and
Acceptance  shall be in writing and signed by the parties hereto.  No failure or
delay by either



                                      D-5
<PAGE>

party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver  thereof  and any  waiver of any  breach of the  provisions  of this
Assignment and Acceptance shall be without  prejudice to any rights with respect
to any other or further breach thereof.

          (b) All payments made  hereunder  shall be made without any set-off or
counterclaim.

          (c) The  Assignor  and the  Assignee  shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution and
performance of this Assignment and Acceptance.

          (d) This  Assignment  and  Acceptance may be executed in any number of
counterparts  and all of such  counterparts  taken  together  shall be deemed to
constitute one and the same instrument.

          (e) THIS ASSIGNMENT AND ACCEPTANCE  SHALL BE GOVERNED BY AND CONSTRUED
IN  ACCORDANCE  WITH THE LAW OF THE  STATE OF NEW  YORK.  The  Assignor  and the
Assignee each irrevocably submits to the non-exclusive jurisdiction of any State
or Federal court sitting in New York over any suit, action or proceeding arising
out of or relating to this Assignment and Acceptance and irrevocably agrees that
all claims in respect of such action or proceeding  may be heard and  determined
in such New York  state or Federal  court.  Each  party to this  Assignment  and
Acceptance hereby  irrevocably  waives, to the fullest extent it may effectively
do so, the defense of an inconvenient forum to the maintenance of such action or
proceeding.

          (f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY  KNOWINGLY,  VOLUNTARILY
AND  INTENTIONALLY  WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON,  OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE,  THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT,  COURSE OF DEALING,  OR STATEMENTS (WHETHER
ORAL OR WRITTEN).



                                      D-6
<PAGE>

         IN WITNESS  WHEREOF,  the Assignor  and the  Assignee  have caused this
Assignment and Acceptance to be executed and delivered by their duly  authorized
officers as of the date first above written.

                                                     [ASSIGNOR]

                                        By:_____________________________________
                                           Name:________________________________
                                           Title:_______________________________


                                        By:_____________________________________
                                           Name:________________________________
                                           Title:_______________________________

                                           Address:_____________________________
                                                   _____________________________


                                                     [ASSIGNEE]


                                        By:_____________________________________
                                           Name:________________________________
                                           Title:_______________________________


                                        By:_____________________________________
                                           Name:________________________________
                                           Title:_______________________________

                                           Address:_____________________________
                                                   _____________________________




                                      D-7
<PAGE>

                SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE AGREEMENT

                       NOTICE OF ASSIGNMENT AND ACCEPTANCE
                       -----------------------------------

                                             ______________, 19__

BankAmerica Business Credit, Inc.
40 East 52nd Street
New York, NY 10022
Attn:______________

Re:      Trend-Lines, Inc.
         Post Tool, Inc.
         135 American Legion Highway
         Revere, Massachusetts 02151

         ATTENTION: Chief Financial Officer

Ladies and Gentlemen:

         We refer to the Amended and Restated Loan and Security  Agreement dated
as of __________, 199_ (as amended, amended and restated, modified, supplemented
or renewed from time to time the "CREDIT AGREEMENT") among Trend-Lines, Inc. and
Post  Tool,  Inc.  (the  "BORROWERS"),  the  Lenders  referred  to  therein  and
BankAmerica Business Credit, Inc., as agent for the Lenders (the "AGENT").
Terms defined in the Credit Agreement are used herein as therein defined.

         1. We hereby  give you notice  of, and  request  your  consent  to, the
assignment by (the "ASSIGNOR") to (the "ASSIGNEE") of ____% of the right,  title
and interest of the Assignor in and to the Credit Agreement (including,  without
limitation,  the  right,  title  and  interest  of  the  Assignor  in and to the
Commitments of the Assignor,  all outstanding Loans made by the Assignor and the
Assignor's participation in the Letters of Credit pursuant to the Assignment and
Acceptance  Agreement  attached  hereto (the  "ASSIGNMENT AND  ACCEPTANCE").  We
understand and agree that the Assignor's Commitment,  as of ____________,  19__,
is



                                      S1-1
<PAGE>

$____________,  the aggregate amount of its outstanding  Loans is $____________,
and its participation in L/C Obligations is $__________.

         2. The Assignee agrees that, upon receiving the consent of the Agent to
such assignment, the Assignee will be bound by the terms of the Credit Agreement
as fully and to the same extent as if the  Assignee  were the Lender  originally
holding such interest in the Credit Agreement.

         3. The following administrative details apply to the Assignee:

                  (A)      Notice Address:______________________________________
                           Assignee name:_______________________________________
                           Address:_____________________________________________
                                   _____________________________________________
                           Attention:___________________________________________
                           Telephone:  (___)_______________________
                           Telecopier: (___)_______________________
                           Telex (Answerback):_____________________

                  (B)      Payment Instructions:

                           Account No.:_________________________________________
                                       At:______________________________________
                                          ______________________________________

                           Reference:___________________________________________
                           Attention:___________________________________________

         4. You are entitled to rely upon the  representations,  warranties  and
covenants of each of the Assignor and Assignee  contained in the  Assignment and
Acceptance.



                                      S1-2
<PAGE>

         IN WITNESS  WHEREOF,  the Assignor  and the  Assignee  have caused this
Notice of  Assignment  and  Acceptance to be executed by their  respective  duly
authorized officials, officers or agents as of the date first above mentioned.

                                        Very truly yours,


                                        [NAME OF ASSIGNOR]


                                        By:_____________________________
                                           Name:
                                           Title:


                                        [NAME OF ASSIGNEE]


                                        By:_____________________________
                                           Name:
                                           Title:

ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO:

BANKAMERICA BUSINESS CREDIT, INC,
AS AGENT


BY:_____________________________
   NAME:
   TITLE:

                                      S1-3
<PAGE>

                           List of Exhibits/Schedules
                           --------------------------


Exhibit A        Permitted Liens

Exhibit B        Financial Statements and Projections

                 -- Exhibit B-1         Financial Statements

                 -- Exhibit B-2         Proforma Financial Statements

                 -- Exhibit B-3         Projections

                 -- Exhibit B-4         First Quarter Financials

Exhibit C        Borrowing Base Certificate

Exhibit D        [Form of Assignment and Acceptance Agreements]

Schedule 7.3     Locations of Borrowers

Schedule 9.2     Jurisdictions in Which to Record Mortgages

Schedule 9.4     Names of Borrowers and Trade Styles

Schedule 9.5     Subsidiaries and Affiliates and states of incorporation and
                 qualification

Schedule 9.13    Real Estate-Owned and Leased

Schedule 9.14    Proprietary Rights Collateral (patents, trademarks, and
                 copyrights)

Schedule 9.15    Trade Names

Schedule 9.16    Litigation

Schedule 9.18    Labor Disputes

Schedule 9.19    Environmental Laws

Schedule 9.22    ERISA Compliance

Schedule 10.18   New Subsidiaries

<PAGE>
                   AMENDED AND RESTATED STOCK PLEDGE AGREEMENT


                            DATED:__________, 199_


     BANKAMERICA BUSINESS CREDIT INC., as Agent for itself and certain other
secured parties, with an office at 40 East 52nd Street, New York, New York 10022
("Secured Party"), and Trend-Lines, Inc., a Massachusetts corporation with an
office at 135 America Legion Highway, Revere, MA 02151 ("Pledgor"), hereby agree
as follows:

     1. SECURITY INTEREST. In consideration of any loan, advance, or other
extension of credit heretofore or hereafter made by Secured Party to, or for the
account or benefit of, Pledgor or Post Tool, Inc., a Massachusetts corporation
("Post Tool"), and as security for the Obligations (as hereinafter defined),
Pledgor hereby pledges, transfers and assigns to Secured Party and grants to
Secured Party a security interest (the "Security Interest") in the following
described personal property, in all increases or profits received therefrom, in
all substitutions therefor, and in all Proceeds thereof in any form
("Collateral"):

5,000 shares of common stock, par value $.0l per share, of Post Tool (Stock
Certificate No. 2).

     2. OBLIGATIONS. The Collateral secures payment of any and all debts,
liabilities, and obligations ("Obligations") of the Pledgor and/or Post Tool to
the Secured Party, including, without limitation, Obligations arising under this
Agreement, whether now existing or hereafter incurred, including, without
limitation, all interest provided in any instrument, document, or agreement
(including, without limitation, this Agreement) which accrues on any Obligations
until payment of such Obligations in full.

     3. REPRESENTATIONS AND WARRANTEES OF PLEDGOR. Pledgor represents and
warrants and, so long as this Agreement is in effect, shall be deemed
continuously to represent and warrant that: (a) each Instrument and Document
constituting Collateral is genuine and in all respects what it purports to be;
(b) Pledgor is the owner of the Collateral free of all security interests or
other encumbrances, except under this Agreement; and (c) Pledgor is authorized
to enter into this Agreement; this Agreement is the legal, valid, and binding
obligation of Pledgor, enforceable in accordance with its terms; and Pledgor's
execution, delivery, and performance of this Agreement do not conflict with or
violate any law, regulation, order, judgment, rule or agreement to which Pledgor
is a party or by which Pledgor is bound.

<PAGE>

     4. IRREVOCABLE PROXY. Pledgor irrevocably constitutes and appoints Secured
Party, whether or not the Collateral has been transferred into the name of
Secured Party or its nominee, as Pledgor's proxy with full power, in the same
manner, to the same extent and with the same effect as if Pledgor were to do the
same: (a) to attend all meetings of stockholders of Post Tool held from the date
hereof and to vote the Collateral at such meeting in such manner as Secured
Party shall, in its sole discretion, deem appropriate, including, without
limitation, in favor of the liquidation of Post Tool; (b) to consent, in the
sole discretion of Secured Party, to any and all action by or with respect to
Post Tool for which the consent of the stockholders of Post Tool is or may be
necessary or appropriate; and (c) without limitation, to do all things which
Pledgor can or could do as a stockholder of Post Tool, giving to Secured Party
full power of substitution and revocation; provided, however, that this proxy
shall not be exercisable by Secured Party and Pledgor alone shall have the
foregoing powers (whether or not the Collateral has been transferred into the
name of the Secured Party or its nominee) until either (i) all or any part of
the Obligations have been declared by Secured Party to be, or have become,
immediately due and payable as provided in paragraph 9(b) hereof, or (ii) demand
for payment has been made respecting any of the Obligations which are payable on
demand (the date on which either of the foregoing occurs being referred to
hereinafter as the "Maturity Date"); provided, further, that Secured Party may
at its option, upon notice to Pledgor, elect to postpone having this proxy
become exercisable notwithstanding the occurrence of any event described in this
sentence which would otherwise cause this proxy to become exercisable. This
proxy shall terminate when this Security Agreement is no longer in full force
and effect as hereinafter provided. Pledgor hereby revokes any proxy or proxies
heretofore given by Pledgor to any person or persons whatsoever and agrees not
to give any other proxies in derogation hereof until this Security Agreement is
no longer in full force and effect as hereinafter provided.

     5. COVENANTS OF PLEDGOR. So long as this Agreement is in effect, Pledgor:
(a) will defend the Collateral against the claims and demands of all other
parties; will keep the Collateral free from all security interests or other
encumbrances, except under this Agreement; and will not sell, transfer, assign,
deliver or otherwise dispose of any Collateral or any interest therein without
the prior written consent of Secured Party; (b) will notify Secured Party
promptly in writing of any change in Pledgor's address; (c) in connection
herewith, will execute and deliver to Secured Party such financing statements,
assignments and other documents and do such other things relating to the
Collateral and the Security Interest as Secured Party may request, and pay all
costs of lien searches and filing financing statements, assignments and other
documents in all public offices requested by Secured Party; and (d) will pay or
reimburse Secured Party for all taxes, assessments and other charges of every
nature which may be imposed, levied or assessed against the Collateral.

     6. REGISTERED HOLDER OF COLLATERAL. Pledgor authorizes Secured Party to
transfer the Collateral or any part thereof into its own name or that of its
nominee so that Secured Party or its nominee may appear of record as the sole
owner thereof; provided, however, that, prior to the Maturity Date, Secured
Party shall deliver promptly to Pledgor all notices, statements or other
communications received by it or its nominee as such registered owner and, upon
demand and receipt of payment of necessary expenses thereof, shall give to
Pledgor or its designee a proxy or proxies to vote and take all action with
respect to such Collateral. On and after the Maturity Date, Pledgor waives all
rights to be advised of or to receive any notices, statements or communications
received by Secured Party or its nominees as such record owner and agrees that
no proxy or proxies given by Secured Party to Pledgor or its designee as
aforesaid shall thereafter be effective.


<PAGE>

7. DIVIDENDS AND OTHER INCOME FROM COLLATERAL.

          (a) Pledgor reserves the right to receive all dividends and other
income from the Collateral that is paid prior to the Maturity Date, and, if
Secured Party receives any such dividends or other income prior to such date,
Secured Party shall pay the same promptly to Pledgor.

          (b) On and after the Maturity Date, Pledgor shall not demand or
receive any dividends or other income from the Collateral that is paid or
becomes payable on or after such date (regardless of when the same shall have
accrued), and, if Pledgor receives any such dividends or other income without
any demand by it, the same shall be held by Pledgor in trust for Secured Party
in the same medium in which received, shall not be commingled with any assets of
Pledgor and shall be delivered immediately to Secured Party in the form
received, properly endorsed to permit collection. Secured Party may apply the
net cash receipts from such dividends or other income to payment of any of the
Obligations provided that Secured Party shall account for and pay over to
Pledgor any such dividends or other income remaining after payment in full of
the Obligations.

8. INCREASES, PROFITS, PAYMENTS OR DISTRIBUTIONS.

          (a) Both prior to and on and after the Maturity Date, Pledgor
authorizes Secured Party: (i) to receive any increase in or profits on the
Collateral (including, without limitation, any stock issued as a result of any
stock split or dividend, any capital distribution, and the like) and to hold the
same as part of the Collateral; and (ii) to receive any payment or distribution
on the collateral upon redemption by, or dissolution and liquidation of, Post
Tool; to surrender the Collateral or any part thereof in exchange therefor; and
to hold the net cash receipts from any such payment or distribution as part of
the Collateral.

          (b) If Pledgor receives such increases, profits, payments or
distributions, Pledgor will receive and deliver the same promptly to Secured
Party on the same terms and  conditions set forth in paragraph  7(b) hereof
respecting  dividends or other income, to be held by Secured Party as part of
the Collateral.

9. EVENTS OF DEFAULT.

          (a) Any of the following events or conditions shall constitute an
event of default hereunder: (i) Pledgor fails to pay or perform any of the
Obligations when due in accordance with their terms; (b) any event occurs or
state of facts arises or exists which has or may have a material adverse effect
on the Collateral or the Security Interest, and Pledgor fails to remedy such
situation to Secured Party's satisfaction within 10 days after written demand by
Secured Party or, if such remedy cannot reasonably be completed within such
10-day period, Pledgor fails to commence during such period and thereafter to
pursue as diligently and as expeditiously as possible all steps necessary to
complete such remedy; (c) Pledgor commences, has commenced against it, or
acquiesces in the commencement of any action or proceeding in bankruptcy or
seeking reorganization, arrangement, readjustment of debts, or any other relief
under the United States Bankruptcy Code, as amended, or under any other
bankruptcy or insolvency law, state or federal, now or hereafter existing,
whether or not an order for relief has been entered therein; or (d) Pledgor
applies for or acquiesces in the appointment of, or has appointed against it, a
receiver, custodian, trustee, sequestrator, or similar officer for it or the
Collateral or all or substantially all of its property.

<PAGE>

          (b) All Obligations not payable on demand shall be immediately due and
payable without demand or notice of any kind upon the happening of one or more
events of default under paragraph 9(a) hereof. The provisions of this paragraph
are not intended in any way to affect any rights of Secured Party with respect
to any Obligations which may now or hereafter be payable on demand.

          (c) Secured Party's rights and remedies with respect to the Collateral
shall be those of a secured party under the Uniform Commercial Code and under
any other applicable law, as the same may from time to time be in effect, in
addition to those rights granted herein and in any other agreement now or
hereafter in effect between Pledgor and Secured Party.

          (d) Without in any way requiring notice to be given in the following
time and manner, Pledgor agrees that any notice by Secured Party of sale,
disposition or other intended action hereunder or in connection herewith,
whether required by the Uniform Commercial Code or otherwise, shall constitute
reasonable notice to Pledgor if such notice is mailed by regular or certified
mail, postage prepaid, at least ten days prior to such action, to Pledgor's
address set forth above or as specified in writing to Secured Party as the
address to which notices shall be given to Pledgor.

          (e) Pledgor agrees to pay on demand all costs and expenses incurred by
Secured Party in enforcing this Agreement, in realizing upon or protecting any
Collateral and in enforcing and collecting any Obligations or any guaranty
thereof, including, without limitation, if Secured Party retains counsel for
advice, suit, appeal, insolvency or other proceedings under the federal
Bankruptcy Code or otherwise, or for any of the above purposes, the reasonable
attorneys' fees incurred by Secured Party. Payment of all moneys hereunder is
secured by the Collateral, as well as by all other property serving as security
for the Obligations. The attorneys' fees billed to Secured Party at its
counsel's regular hourly rates are rebuttably presumed to be reasonable for all
purposes.

10. MISCELLANEOUS.

          (a) Pledgor authorizes Secured Party, without notice or demand and
without affecting Pledgor's obligations hereunder, from time to time: (i) to
renew, extend, increase, accelerate or otherwise change the time for payment of,
the terms of, or the interest on, the Obligations or any part thereof; (ii) to
take from any party and hold collateral (other than the Collateral) for the
payment of the Obligations or any part thereof, and to exchange, enforce or
release such collateral or any part thereof; (iii) to accept and hold any
endorsement or guaranty of payment of the Obligations or any part thereof and to
release or substitute any such indorser or guarantor, or any party who has given
any security interest in any other collateral as security for the payment of the
Obligations or any part thereof, or any other party in any way obligated to pay
the Obligations or any part thereof; and (iv) to direct the order or manner of
the disposition of the Collateral and any and all other collateral and the
enforcement of any and all endorsement and guaranties relating to the
Obligations or any part thereof as Secured Party, in its sole discretion, may
determine.

<PAGE>

          (b) Pledgor hereby appoints Secured Party as Pledgor's attorney-in-
fact (without requiring Secured Party) to perform all acts which Secured Party
deems appropriate to perfect and continue its interests hereunder in the
Collateral and to protect, preserve and realize upon the Collateral. Pledgor
further appoints Secured Party as Pledgor's attorney-in-fact to execute such
orders and receipts for payment of the Collateral as Secured Party deems
appropriate in its sole discretion. These powers of attorney are coupled with an
interest and shall be irrevocable. Pledgor rectifies and approves all acts of
such attorney, and Secured Party shall not be liable for any acts or omissions
nor any error of judgment or mistake of fact or law other than resulting from
its willful misconduct. Secured Party may notify Post Tool of the Security
Interest. Subject to the terms of this Agreement, Secured Party may demand,
collect, and sue on the Collateral (in either its or Pledgor's name, at Secured
Party's sole option), and enforce, compromise, settle, or discharge the
Collateral, without discharging the Obligations or any part thereof and whether
or not any such action results in the imposition of any penalty. Pledgor
authorizes and directs Post Tool to make any payments requested by Secured Party
as Secured Party may direct and hereby releases Post Tool from any liability to
Pledgor for making such payments.

          (c) Upon Pledgor's failure to perform any of its duties hereunder,
Secured Party may, but shall not be obligated to, perform any or all such
duties, and Pledgor shall pay an amount equal to the cost thereof to Secured
Party on demand by Secured Party. Payment of all moneys hereunder shall be
secured by the Collateral, as well as by all other property serving as security
for the Obligations.

          (d) No course of dealing between Pledgor and Secured Party and no
delay or omission by Secured Party in exercising any right or remedy hereunder
or with respect to any Obligations shall operate as a waiver thereof or of any
other right or remedy, and no single or partial exercise thereof shall preclude
any other or further exercise thereof or the exercise of any other right or
remedy. Secured Party may remedy any default by Pledgor hereunder or with
respect to any Obligations in any reasonable manner without waiving the default
remedied and without waiving any other prior or subsequent default by Pledgor.
All rights and remedies of Secured Party hereunder are cumulative.

          (e) Secured Party shall have no obligation to take, and Pledgor shall
have the sole responsibility for taking, any and all steps to preserve rights
against any and all prior parties to any Instrument constituting Collateral,
whether or not in Secured Party's possession. Secured Party shall not be
responsible for loss or damage resulting from Secured Party's failure to enforce
or collect any such Collateral or to collect any moneys due or to become due
hereunder. Pledgor waives protest or any Instrument constituting Collateral at
any time held by Secured Party on which such Pledgor is in any way liable and
waives notice of any other action taken by Secured Party.

          (f) The rights and benefits of Secured Party hereunder shall, if
Secured Party so directs, inure to any party acquiring any interest in the
Obligations or any part thereof.

          (g) "Secured Party" and "Pledgor" as used herein shall include the
heirs, executors or administrators, or successors or assigns, of those parties.

<PAGE>

          (h) No modification, rescission, waiver, release or amendment of any
provision of this Agreement shall be made except by a written agreement
subscribed by Pledgor and Secured Party.

          (i) This Agreement and the transaction evidenced hereby shall be
governed by, and construed and enforced under, the laws of the State of New
York, as the same may from time to time be in effect.

          (j) All defined terms, unless otherwise defined in this Agreement,
shall have the definitions set forth in the Uniform Commercial Code adopted in
New York, as the same may from time to time be in effect.

          (k) This Agreement is and is intended to be a continuing Agreement,
and shall remain in full force and effect until all Obligations have been paid
and performed in full and so long as the Guaranty is in effect.

          (l) Pledgor waives trial by jury and the right to assert defenses,
setoffs, and counterclaims (other than compulsory counterclaims) in any action
or proceeding in any court arising on, out of, under, by virtue of, or in any
way relating to this Agreement or the transactions contemplated hereby. Pledgor
confirms that the foregoing waiver is informed and voluntary. Pledgor agrees
that, in addition to any other courts that may have jurisdiction under
applicable law and rules, the Supreme Court of the State of New York, in the
County of New York, and the United States District Court for the Southern
District of New York have jurisdiction to hear and determine any claims or
disputes pertaining directly or indirectly to this Agreement or to any matter
arising herefrom. Pledgor expressly submits and consents, in advance, to such
jurisdiction in any action or proceeding in such courts, agrees that venue will
be proper in such courts for all such matters, and waives personal service of
the summons and complaint or other process or papers issued therein. Pledgor
agrees that service of such summons or complaint or other process or papers may
be made by registered or certified mail (return receipt requested) addressed to
Pledgor's address as set forth above or as specified in writing to Secured Party
as the address to which notices shall be given to Pledgor.

          (m) If, after receipt of any payment of all or any part of the
Obligations, Secured Party is for any reason compelled to surrender such payment
to any person or entity, because such payment is determined to be void or
voidable as a preference, impermissible set off, or a diversion of trust funds,
or for any other reason, this Agreement and the Obligations intended to be paid
by such payment shall be reinstated, if necessary, and shall continue in full
force notwithstanding any contrary action which may have been taken by Secured
Party in reliance upon such payment, and any such contrary action so taken shall
be without prejudice to Secured Party's rights under this Agreement and shall be
deemed to have been conditioned upon such payment having become final and
irrevocable.

<PAGE>

               (n) Without limiting any other right of Secured Party, whenever
any event of default exists or any Obligations are otherwise due and payable
(whether or not it has been so declared), Secured Party at its sole election may
set off against the Obligations any and all moneys then or thereafter owed to
Pledgor by Secured Party or any affiliate in any capacity, including, without
limitation, the Collateral and all deposit and other accounts and all funds of
Pledgor on deposit with or in the possession or control of Secured Party or any
affiliate, whether or not the indebtedness or the obligation to pay such moneys
owed by Secured Party or such affiliate is then due, and Secured Party shall be
deemed to have exercised such right of set-off immediately at the time of such
election even though any charge therefor is made or entered on Secured Party's
records subsequent thereto.

                                            TREND-LINES, INC.


                                            By:
                                               Name:
                                               Title:


Accepted at _________, __________
this ____ day of __________, 199_

BANKAMERICA BUSINESS CREDIT, INC., as Agent


By:
   Name:
   Title:
<PAGE>
                AMENDED AND RESTATED TRADEMARK SECURITY AGREEMENT


         THIS AMENDED AND RESTATED TRADEMARK  SECURITY AGREEMENT  ("Agreement"),
dated as of ______________,  199_, is entered into between TREND-LINES,  INC., a
Massachusetts corporation (the "Debtor"), and BankAmerica Business Credit, Inc.,
as Agent for itself (in such  capacity,  the "Agent") and certain  other secured
parties, in light of the following:

         A. The  Agent,  the  Debtor  and Post Tool,  Inc.  ("Post  Tool")  are,
contemporaneously herewith, entering into that certain Amended and Restated Loan
and Security  Agreement  Dated as of the Date Hereof Among the Agent and certain
other secured parties, the Debtor and Post Tool (the "Loan Agreement") and other
instruments,  documents and agreements  contemplated  thereby or related thereto
(collectively, together with the Loan Agreement, the "Loan Documents"); and

         B. The Debtor is the owner of certain intellectual property, identified
below,  in which the  Debtor is  granting a  security  interest  to the Agent on
behalf of itself and certain other secured parties.

         NOW,  THEREFORE,  in consideration  of the mutual promises,  covenants,
conditions,  representations, and warranties hereinafter set forth and for other
good and valuable consideration, the parties hereto mutually agree as follows:

         1. DEFINITIONS AND CONSTRUCTION.

              (a)  DEFINITIONS.  The following terms, as used in this Agreement,
have the following meanings:

                   "CODE" means the New York Uniform Commercial Code, as amended
and supplemented from time to time, and any successor statute.

                   "COLLATERAL" means:

                        (i) Each of the marks,  rights and  interests  which are
capable of identifying the source or designating the origin of goods or services
which are presently, or in the future may be, owned, created, or acquired by the
Debtor, in whole or in part, and all rights with respect thereto  throughout the
world, including, without limitation:

                             (A) all trademarks,  service marks, designs, logos,
indicia, trade names, corporate names, company names, business names, fictitious
business  names,  trade  styles,  trade dress,  and other words,  terms,  names,
symbols, devices, business identifiers, and any combination thereof;

<PAGE>

                             (B) all rights to renew and extend such rights and,
to the extent not  otherwise  included,  all payments  under  insurance,  or any
indemnity,  warranty,  or  guaranty  payable  by  reason of loss of damage to or
otherwise with respect to Collateral; and

                             (C) all  associated  goodwill  of the  business  in
which the mark is used;

                        (ii) All of the Debtor's right,  title,  and interest in
and to the  registrations  of and  applications  for marks listed on Schedule A,
attached  hereto,  as the  same  may be  updated  hereafter  from  time to time,
together  (in each case) with all  associated  goodwill of the business in which
the mark is used;

                        (iii) All of the Debtor's  right to register marks under
any state,  federal,  or foreign  trademark law or regulation  and to apply for,
renew, and extend the  registrations and rights  thereunder,  the right (without
obligation) to sue or bring  opposition or cancellation  proceedings in the name
of the  Debtor  or in the name of the  Agent  for  past,  present,  future,  and
anticipated infringements and dilutions of such marks, registrations, and rights
and all rights (but not obligations)  corresponding thereto in the United States
and any foreign country, and the associated goodwill;

                        (iv) All general intangibles  relating to the foregoing;
and

                        (v)  All  proceeds  of any  and  all  of  the  foregoing
(including,  without limitation,  license royalties and proceeds of infringement
suits) and, to the extent not otherwise included,  all payments under insurance,
or any indemnity,  warranty,  or guaranty payable by reason of loss or damage to
or otherwise with respect to the Collateral.

                   "OBLIGATIONS"   means  all  obligations,   liabilities,   and
indebtedness of the Debtor to the Agent, whether direct, indirect, liquidated or
contingent,  and whether arising under this Agreement,  the Loan Agreement,  any
other of the Loan Documents, or otherwise,  including,  without limitation,  all
costs and expenses described in Section 10(i) hereof.

              (b)  CONSTRUCTION.  Unless the context of this  Agreement  clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural,  and the term "including" is not limiting.  The
words "hereof," "herein,"  "hereby,"  "hereunder," and other similar terms refer
to  this  Agreement  as a  whole  and not to any  particular  provision  of this
Agreement.  Any initially  capitalized  terms used but not defined  herein shall
have the meaning set forth in the Loan Agreement. Any reference herein to any of
the Loan Documents  includes any and all  alterations,  amendments,  extensions,
modifications,  renewals,  or  supplements  thereto or thereof,  as  applicable.
Neither  this  Agreement  nor any  uncertainty  or  ambiguity  herein  shall  be
construed or resolved against the Agent or the Debtor, whether under any rule of
construction or otherwise.  On the contrary, this Agreement has been reviewed by
the Debtor,  the Agent, and their respective  counsel and shall be construed and
interpreted  according  to the  ordinary  meaning  of the  words  used  so as to
accomplish fairly the purposes and intentions of the Agent and the Debtor.


<PAGE>

         2. GRANT OF SECURITY INTEREST.  The Debtor hereby grants to the Agent a
first-priority  security  interest in, and conditionally  assigns,  but does not
transfer title to the Agent to, all of the Debtor's right,  title,  and interest
in and to the Collateral to secure the Obligations.

         3.  REPRESENTATIONS,   WARRANTIES  AND  COVENANTS.  The  Debtor  hereby
represents, warrants, and covenants that:

              (a) A true and  complete  schedule  setting  forth all federal and
state  registrations  of marks  owned by the  Debtor,  together  with a  summary
description  and full  information in respect of the filing or issuance  thereof
and expiration dates, is set forth on Schedule A;

              (b) Each of the  marks  and  registrations  of marks is valid  and
enforceable,  and the Debtor is not  presently  aware of any past,  present,  or
prospective  claim by any  third  party  that any of the  marks  is  invalid  or
unenforceable  or that the use of any  marks  violates  the  rights of any third
person, or of any basis for any such claims except as set forth on Schedule A;

              (c) Except as set forth on Schedule B attached hereto,  the Debtor
is the sole and exclusive owner of the entire and unencumbered right, title, and
interest in and to each of the marks, and mark registrations,  free and clear of
any liens, charges, and encumbrances,  including,  without limitation,  pledges,
assignments, licenses, shop rights, and covenants by the Debtor not to sue third
persons;

              (d) The Debtor has used and will continue to use proper  statutory
notice in connection with its use of each of the registered marks;

              (e) The  Debtor  has  used  and will  continue  to use  consistent
standards  of high  quality  (which may be  consistent  with the  Debtor's  past
practices)  in the sale and delivery of products and services  sold or delivered
under or in connection with the marks, including,  without limitation and to the
extent  applicable,  in the  operation  and  maintenance  of  its  merchandising
operations, and will continue to maintain the validity of the marks;

              (f) Except for the filing of a financing  statement with the Clerk
of the Commonwealth of  Massachusetts  and filings with the United States Patent
and  Trademark  Office  necessary  to perfect  the  security  interests  created
hereunder with respect to domestic trademarks,  no authorization,  approval,  or
other  action  by,  and no  notice  to or  filing  with,  any U.S.  governmental
authority or regulatory  body is required  either for the grant by the Debtor of
the security interest hereunder or for the execution,  delivery,  or performance
of this  Agreement by the Debtor or for the perfection of or the exercise by the
Agent of its rights hereunder in and to the Collateral in the United States.

         4.  AFTER-ACQUIRED  TRADEMARK  RIGHTS.  If the Debtor  shall  obtain or
create  rights  to any  new  marks,  the  provisions  of  this  Agreement  shall
automatically  apply thereto.  The Debtor shall give prompt notice in writing to
the Agent with respect to any such new marks, and to the renewal or extension of
any  registration  of a mark.  The Debtor  shall bear any  expenses  incurred in
connection with future registrations of marks.


<PAGE>

         5. LITIGATION AND PROCEEDINGS. The Debtor shall commence and diligently
prosecute in its own name,  as the real party in interest,  for its own benefit,
and at its own expense, such suits, administrative proceedings, or other actions
for  infringement  or other damages as are in its reasonable  business  judgment
necessary to protect the  Collateral.  The Debtor shall provide to the Agent any
information with respect thereto requested by the Agent. The Agent shall provide
at the Debtor's  expense all necessary  cooperation in connection  with any such
suits,  proceedings,  or actions,  including,  without limitation,  joining as a
necessary  party  provided  that the Debtor is not  responsible  for the Agent's
attorneys' fees if the Agent voluntarily  chooses to become a party to any suit.
Following the Debtor's becoming aware thereof, the Debtor shall notify the Agent
of the  institution of, or any adverse  determination  in, any proceeding in the
United States Patent and  Trademark  Office,  or any United  States,  state,  or
foreign court regarding the Debtor's claim of ownership in any of the marks, the
Debtor's  right to apply for the same,  or its right to keep and  maintain  such
ownership and rights in the marks.

         6. POWER OF  ATTORNEY.  The Debtor  grants the Agent power of attorney,
having  the full  authority,  and in the place of, the Debtor and in the name of
the  Debtor,  from time to time  following  an Event of Default  (as  defined in
Section 8 hereof)  and in the  -Agent's  discretion  following  such an Event of
Default and after five days' written notice to the Agent, to take any action and
to execute any  instrument  which the Agent may deem  necessary  or advisable to
accomplish the purposes of this Agreement, including, without limitation:

              (a) To endorse the Debtor's name on all  applications,  documents,
papers,  and  instruments  necessary  for  the  Agent  to  use or  maintain  the
Collateral;

              (b) To ask, demand, collect, sue for, recover,  impound,  receive,
and give  acquittance  and  receipts  for money due or to become due under or in
respect of any of the Collateral;

              (c) To file  any  claims  or take  any  action  or  institute  any
proceedings that the Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce the Agent's rights with respect to
any of the Collateral and to assign, pledge, convey, or otherwise transfer title
in or dispose of the Collateral to any person.

         7. RIGHT TO INSPECT.  The Debtor  grants to the Agent and its employees
and  agents  the  right  to visit  the  Debtor's  plants  and  facilities  which
manufacture, inspect, or store products sold under any of the trademarks, and to
inspect the products and quality control records  relating thereto at reasonable
times  during  regular  business  hours  or as  otherwise  provided  in the Loan
Agreement.

         8. EVENT OF DEFAULT.  Any of the following  events shall be an Event of
Default:

              (a) An  Event  of  Default  shall  occur  as  defined  in the Loan
Agreement;

              (b) Any representation or warranty made herein by the Debtor or in
any  document  furnished  to the Lender by the Debtor  under this  Agreement  is
incorrect in any


<PAGE>

material respect when made or when reaffirmed and such  misrepresentation  shall
have a material adverse effect on the Debtor's business; and

              (c)  The  Debtor  fails  to  observe  or  perform  any   covenant,
condition,  or  agreement  to be  observed  or  performed  pursuant to the terms
hereof.

         9. SPECIFIC REMEDIES.  Upon the occurrence of any Event of Default, the
Agent shall have, in addition to other rights given by law or in this Agreement,
the Loan  Agreement,  or in any  other  Loan  Document,  all of the  rights  and
remedies  with  respect to the  Collateral  of a secured  party  under the Code,
including, without limitation, the following:

              (a) The Agent may notify  licensees  to make  royalty  payments on
license agreements directly to the Agent;

              (b)  The  Agent  may  sell,  license,   franchise  or  assign  the
Collateral  at  public or  private  sale for such  amounts,  and at such time or
times, as the Agent deems advisable,  provided that it is done in a commercially
reasonable  manner.  Any requirement of reasonable  notice of any disposition of
the  Collateral  shall be satisfied if such notice is sent to the Debtor 10 days
prior to such disposition. The Debtor shall be credited with the net proceeds of
such sale only when they are  actually  received  by the  Agent,  and the Debtor
shall continue to be liable for any deficiency remaining after the Collateral is
sold or collected. If the sale is to be a public sale, the Agent shall also give
notice of the time and place by  publishing  a notice  one time at least 10 days
before the date of the sale in a newspaper of general  circulation in the county
in which the sale is to be held; and

              (c) To the maximum extent  permitted by applicable  law, the Agent
may be the  purchaser  of any or all of the  Collateral  at any public  sale and
shall be entitled,  for the purpose of bidding and making  settlement or payment
of the  purchase  price for all or any  portion  of the  Collateral  sold at any
public sale, to use and apply all or any part of the  Obligations as a credit on
account of the  purchase  price of any  Collateral  payable by the Agent at such
sale and the  Obligations  shall  be  deemed  satisfied  to the  extent  of such
application.

         10. GENERAL PROVISIONS.

              (a)  EFFECTIVENESS  OF THIS  AGREEMENT.  This  Agreement  shall be
binding  and deemed  effective  when  executed  by the Debtor and  accepted  and
executed by the Agent.

              (b) CUMULATIVE  REMEDIES:  NO PRIOR  RECOURSE TO  COLLATERAL.  The
enumeration  herein of the Agent's  rights and  remedies  is not  intended to be
exclusive,  provided that it is done in a commercially  reasonable  manner,  and
such rights and remedies are in addition to and not by way of  limitation of any
other rights or remedies that the Agent may have under the Loan  Agreement,  the
Code or other  applicable  law.  The Agent  shall  have the  right,  in its sole
discretion,  to determine  which rights and remedies are to be exercised  and in
which order. The exercise of one right or remedy shall not preclude the exercise
of any others, all of which shall be cumulative.


<PAGE>

              (c) NO IMPLIED  WAIVERS.  No act,  failure,  Or delay by the Agent
shall  constitute  a waiver  of any of its  rights  and  remedies.  No single or
partial waiver by the Agent of any provision of this Agreement or any other Loan
Document, or of a breach or default hereunder or thereunder,  or of any right or
remedy  which  the  Agent  may  have,  shall  operate  as a waiver  of any other
provision,  breach, default, right, or remedy or of the same provision,  breach,
default,  right,  or remedy on a future  occasion.  No waiver by the Agent shall
affect its rights to require strict performance of this Agreement.

              (d)  SEVERABILITY.  If any  provision of this  Agreement  shall be
prohibited,  or invalid, under applicable law, such provision shall be effective
only to such extent, without invalidating the remainder of this Agreement.

              (e)  GOVERNING  LAW. This  Agreement  shall be deemed to have been
made in the  State of New  York and  shall be  governed  by and  interpreted  in
accordance with the laws of such State, except that no doctrine of choice of law
shall be used to apply the laws of any other state or jurisdiction.

              (f) CONSENT TO  JURISDICTION  AND VENUE;  SERVICE OF PROCESS.  The
Debtor agrees that,  in addition to any other courts that may have  jurisdiction
under  applicable laws or rules,  any action or proceeding to enforce or arising
out of this  Agreement or any of the other Loan Documents to which it is a party
may be commenced in the United States  District Court for the Southern  District
of New York,  consents and submits in advance to such  jurisdiction,  and agrees
that venue will be proper in such court on any such  matter.  The Debtor  hereby
waives  personal  service of process  and agrees  that a summons  and  complaint
commencing an action or  proceeding in any such courts shall be properly  served
and shall confer personal jurisdiction if served by registered or certified mail
to the Debtor, or as otherwise  provided by the laws of the State of New York or
the United  States.  The choice of forum set forth in this section  shall not be
deemed to preclude the  enforcement of any judgment  obtained in such forum,  or
the  taking of any action  under this  Agreement  to  enforce  the same,  in any
appropriate jurisdiction.

              (g)  WAIVER OF JURY  TRIAL.,  ETC.  THE  DEBTOR AND THE AGENT EACH
HEREBY  WAIVES TRIAL BY JURY IN ANY  LITIGATION IN ANY COURT WITH RESPECT TO, IN
CONNECTION  WITH, OR ARISING OUT OF, THIS  AGREEMENT,  THE  OBLIGATIONS,  OR THE
COLLATERAL,  OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT HERETO. THE DEBTOR
AND THE AGENT EACH CONFIRMS  THAT THE FOREGOING  WAIVERS ARE INFORMED AND FREELY
MADE.

              (h)  SURVIVAL  OF  REPRESENTATIONS  AND  WARRANTIES.  All  of  the
Debtor's  representations  and  warranties  contained in this  Agreement,  shall
survive  the  execution,  delivery,  and  acceptance  thereof  by  the  parties,
notwithstanding any investigation by the Lenders or their agents.

              (i) FEES AND EXPENSES. The Debtor shall pay to the Agent on demand
all  reasonable  costs and expenses  that the Agent pays or incurs in connection
with the  enforcement  and  termination of this  Agreement,  including,  without
limitation:  (i) reasonable attorneys' and paralegals' fees and disbursements of
counsel to the Agent (including, without limitation, the


<PAGE>

allocated fees and costs of the Agent's in-house  counsel and paralegals);  (ii)
costs and expenses  (including,  Without limitation,  reasonable  attorneys' and
paralegals' fees and disbursements (including, without limitation, the allocated
fees  and  costs  of the  Agent's  in-house  counsel  and  paralegals))  for any
amendment, supplement, waiver, consent, or subsequent closing in connection with
this  Agreement  and the  transactions  contemplated  hereby;  (iii)  costs  and
expenses of lien searches;  (iv) taxes,  fees, and other charges for filing this
Agreement  at the United  States  Patent  and  Trademark  Office,  or for filing
financing statements, and continuations,  and other actions to perfect, protect,
and continue the security interest created hereunder;  (v) sums paid or incurred
to pay any amount or take any action  required of the Debtor  under Us Agreement
that the Debtor fails to pay or take;  (vi) after the  occurrence of an Event of
Default, the costs and expenses of preserving and protecting the Collateral; and
(vii) costs and expenses (including,  without limitation,  reasonable attorneys'
and paralegals'  fees and  disbursements  (including,  without  limitation,  the
allocated fees and costs of the Agent's in-house  counsel and paralegals))  paid
or  incurred  to  enforce  the  security  interest  created  hereunder,  sell or
otherwise  realize upon the Collateral,  and otherwise enforce the provisions of
this  Agreement,  or to defend any claims made or  threatened  against the Agent
arising  out  of  the  transactions  contemplated  hereby  (including,   without
limitation, preparations for the consultations concerning any such matters). The
foregoing shall not be construed to limit any other provisions of this Agreement
regarding  costs and expenses to be paid by the Debtor.  The parties  agree that
reasonable  attorneys' and paralegals'  fees and costs incurred in enforcing any
judgment  are  recoverable  as a  separate  item in  addition  to fees and costs
incurred  in  obtaining  the  judgment  and that the  recovery  of  postjudgment
reasonable  attorneys' and paralegals' fees and costs is intended to survive any
judgment and is not to be deemed merged into any judgment.

              (j) NOTICES.  Except as otherwise  provided  herein,  all notices,
demands  and  requests  that  either  party is required or elects to give to the
other shall be in writing and shall be  governed  by the  provisions  of Section
15.11 of the Loan Agreement.

              (k) BINDING EFFECT;  ASSIGNMENT.  The provisions of this Agreement
shall  be   binding   upon  and  inure  to  the   benefit   of  the   respective
representatives,  successors  and  assigns  of  the  parties  hereto;  PROVIDED,
HOWEVER, that no interest herein may be assigned by the Debtor without the prior
written  consent of the Agent other than to a parent or subsidiary  corporation.
The rights and benefits of the Agent  hereunder  shall,  if the Agent so agrees,
inure  to any  party  acquiring  any  interest  in the  Obligations  or any part
thereof.

              (l) MODIFICATION. This Agreement is intended by the Debtor and the
Agent to be the final,  complete,  and  exclusive  expression  of the  agreement
between them respecting the subject matter hereof. This Agreement supersedes any
and all prior oral or written agreements  relating to the subject matter hereof.
No modification,  rescission,  waiver, release, or amendment of any provision of
this Agreement shall be made, except by a written agreement signed by the Debtor
and a duly authorized officer of the Agent.

              (m) COUNTERPARTS.  This Agreement may be executed in any number of
counterparts and by the Agent and the Debtor in separate  counterparts,  each of
which shall be an original,  but all of which shall together  constitute one and
the same agreement.


<PAGE>

              (n)  CAPTIONS.  The captions  contained in this  Agreement are for
convenience only, are without substantive  meaning,  and should not be construed
to modify, enlarge or restrict any provision.

              (o) TERMINATION BY AGENT.  After termination of the Loan Agreement
and  when  the  Agent  has  received  payment  and  performance  in  full of all
Obligations,  the Agent shall execute and deliver to the Debtor a termination or
terminations  of all of the  security  interests,  in form  suitable for filing,
granted by the Debtor hereunder.

         IN WITNESS  WHEREOF,  the parties have executed  this  Agreement on the
date first written above.

                                       TREND-LINES, INC.
                                         a Massachusetts corporation

                                       By:
                                          --------------------------------------
                                             Name:  Stan Black
                                             Title: CEO


                                       BANKAMERICA BUSINESS CREDIT, INC.
                                         a Delaware corporation


                                       By:
                                          --------------------------------------
                                             Name:  William J. Wilson
                                             Title: Sr. Account Executive


<PAGE>



STATE OF MASSACHUSETTS     )
                           )   ss.:
COUNTY OF SUFFOLK          )


         On the 24 day of  February,  1999,  before me  personally  came Stanley
Black,  to me known,  who,  being by me duly  sworn,  did depose and say that he
resides  at 20  Lincoln  House  Avenue,  Swampscott,  MA;  that he is the CEO of
Trend-Lines,  Inc.,  the  corporation  described in and which executed the above
instrument;  and that he  signed  his  name  thereto  by  order of the  board of
directors of said corporation.

                                                      THERESA MONGEON
                                                       Notary Public
                                         My Commission Expires December 21, 2001


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




STATE OF NEW YORK          )
                           )       ss.:
COUNTY OF NEW YORK         )


         On the 27th day of February, 1999, before me personally came William J.
Wilson,  to me known,  who,  being by me duly sworn,  did depose and say that he
resides at ____________________________; that he is the Sr. Account Executive of
BankAmerica  Business  Credit,  Inc.,  the  corporation  described  in and which
executed the above  instrument;  and that he signed his name thereto by order of
the board of directors of said corporation.


                                         ---------------------------------------
                                                       Notary Public
                                                    GIROLAMO M. SACCONE
                                             Notary Public, State of New York
                                                      No. 02SA5036939
                                                Qualified in Nassau County
                                           Commission Expires December 12, 2000



<PAGE>


                                   Schedule A

                                   Trademarks

                                            Registration           Registration
Trademark                                      Number                  Date
---------                                    ----------              --------
Golf Express                                 1,278,735               10/27/92

CARB-TECH                                    1,737,995               12/08/92

Honors                                       1,778,948               06/29/93

Honors                                       1,804,596               11/16/93

Honors                                       1,815,027               01/04/94


<PAGE>


                                   Schedule B

                Third Party Rights With Respect To The Trademarks

None.
<PAGE>
                AMENDED AND RESTATED TRADEMARK SECURITY AGREEMENT


     THIS AMENDED AND RESTATED TRADEMARK SECURITY AGREEMENT ("Agreement"), dated
as of __________, 199_, is entered into between POST TOOL, INC., a Massachusetts
corporation (the "Debtor"), and BankAmerica Business Credit, Inc., as Agent for
itself (in such capacity, the "Agent") and certain other secured parties, in
light of the following:

     A. The Agent, the Debtor and Trend Lines, Inc. ("Trend Lines") are,
contemporaneously herewith, entering into that certain Amended and Restated Loan
and Security Agreement Dated as of the Date Hereof Among the Agent and certain
other secured parties, the Debtor and Trend Lines (the "Loan Agreement") and
other instruments, documents and agreements contemplated thereby or related
thereto (collectively, together with the Loan Agreement, the "Loan Documents");
and

     B. The Debtor is the owner of certain intellectual property, identified
below, in which the Debtor is granting a security interest to the Agent on
behalf of itself and certain other secured parties.

     NOW, THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth and for other
good and valuable consideration, the parties hereto mutually agree as follows:

     1. Definitions and Construction.

          (a) Definitions. The following terms, as used in this Agreement, have
the following meanings:

               "Code" means the New York Uniform Commercial Code, as amended and
supplemented from time to time, and any successor statute.

               "Collateral" means:

                    (i) Each of the marks, rights and interests which are
capable of identifying the source or designating the origin of goods or services
which are presently, or in the future may be, owned, created, or acquired by the
Debtor, in whole or in part, and all rights with respect thereto throughout the
world, including, without limitation:

                         (A) all trademarks, service marks, designs, logos,
indicia, trade names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, and other words, terms, names,
symbols, devices, business identifiers, and any combination thereof;

<PAGE>

                         (B) all rights to renew and extend such rights and, to
the extent not otherwise included, all payments under insurance, or any
indemnity, warranty, or guaranty payable by reason of loss of damage to or
otherwise with respect to Collateral; and

                         (C) all associated goodwill of the business in which
the mark is used;

                    (ii) All of the Debtor's right, title, and interest in and
to the registrations of and applications for marks listed on Schedule A,
attached hereto, as the same may be updated hereafter from time to time,
together (in each case) with all associated goodwill of the business in which
the mark is used;

                    (iii) All of the Debtor's right to register marks under any
state, federal, or foreign trademark law or regulation and to apply for, renew,
and extend the registrations and rights thereunder, the right (without
obligation) to sue or bring opposition or cancellation proceedings in the name
of the Debtor or in the name of the Agent for past, present, future, and
anticipated infringements and dilutions of such marks, registrations, and rights
and all rights (but not obligations) corresponding thereto in the United States
and any foreign country, and the associated goodwill;

                    (iv) All general intangibles relating to the foregoing; and

                    (v) All proceeds of any and all of the foregoing (including,
without limitation, license royalties and proceeds of infringement suits) and,
to the extent not otherwise included, all payments under insurance, or any
indemnity, warranty, or guaranty payable by reason of loss or damage to or
otherwise with respect to the Collateral.

               "Obligations" means all obligations, liabilities, and
indebtedness of the Debtor to the Agent, whether direct, indirect, liquidated or
contingent, and whether arising under this Agreement, the Loan Agreement, any
other of the Loan Documents, or otherwise, including, without limitation, all
costs and expenses described in Section 10(i) hereof.

               (b) Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, and the term "including" is not limiting. The
words "hereof," "herein," "hereby," "hereunder," and other similar terms refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Any initially capitalized terms used but not defined herein shall
have the meaning set forth in the Loan Agreement. Any reference herein to any of
the Loan Documents includes any and all alterations, amendments, extensions,
modifications, renewals, or supplements thereto or thereof, as applicable.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against the Agent or the Debtor, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by
the Debtor, the Agent, and their respective counsel and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of the Agent and the Debtor.

<PAGE>

     2. Grant of Security Interest. The Debtor hereby grants to the Agent a
first-priority security interest in, and conditionally assigns, but does not
transfer title to the Agent to, all of the Debtor's right, title, and interest
in and to the Collateral to secure the Obligations.

     3. Representations, Warranties and Covenants. The Debtor hereby represents,
warrants, and covenants that:

          (a) A true and complete schedule setting forth all federal and state
registrations of marks owned by the Debtor, together with a summary description
and full information in respect of the filing or issuance thereof and expiration
dates, is set forth on Schedule A;

          (b) Each of the marks and registrations of marks is valid and
enforceable, and the Debtor is not presently aware of any past, present, or
prospective claim by any third party that any of the marks is invalid or
unenforceable or that the use of any marks violates the rights of any third
person, or of any basis for any such claims except as set forth on Schedule A;

          (c) Except as set forth on Schedule B attached hereto, the Debtor is
the sole and exclusive owner of the entire and unencumbered right, title, and
interest in and to each of the marks, and mark registrations, free and clear of
any liens, charges, and encumbrances, including, without limitation, pledges,
assignments, licenses, shop rights, and covenants by the Debtor not to sue third
persons;

          (d) The Debtor has used and will continue to use proper statutory
notice in connection with its use of each of the registered marks;

          (e) The Debtor has used and will continue to use consistent standards
of high quality (which may be consistent with the Debtor's past practices) in
the sale and delivery of products and services sold or delivered under or in
connection with the marks, including, without limitation and to the extent
applicable, in the operation and maintenance of its merchandising operations,
and will continue to maintain the validity of the marks;

          (f) Except for the filing of a financing statement with the Clerk of
the Commonwealth of Massachusetts and filings with the United States Patent and
Trademark Office necessary to perfect the security interests created hereunder
with respect to domestic trademarks, no authorization, approval, or other action
by, a and no notice to or filing with, any U.S. governmental authority or
regulatory body is required either for the grant by the Debtor of the security
interest hereunder or for the execution, delivery, or performance of this
Agreement by the Debtor or for the perfection of or the exercise by the Agent of
its rights hereunder in and to the Collateral in the United States.

     4. After-Acquired Trademark Rights. If the Debtor shall obtain or create
rights to any new marks, the provisions of this Agreement shall automatically
apply thereto. The Debtor shall give prompt notice in writing to the Agent with
respect to any such new marks, and to the renewal or extension of any
registration of a mark. The Debtor shall bear any expenses incurred in
connection with future registrations of marks.

<PAGE>

     5. Litigation and Proceedings. The Debtor shall commence and diligently
prosecute in its own name, as the real party in interest, for its own benefit,
and at its own expense, such suits, administrative proceedings, or other actions
for infringement or other damages as are in its reasonable business judgment
necessary to protect the Collateral. The Debtor shall provide to the Agent any
information with respect thereto requested by the Agent. The Agent shall provide
at the Debtor's expense all necessary cooperation in connection with any such
suits, proceedings, or actions, including, without limitation, joining as a
necessary party provided that the Debtor is not responsible for the Agent's
attorneys' fees if the Agent voluntarily chooses to become a party to any suit.
Following the Debtor's becoming aware thereof, the Debtor shall notify the Agent
of the institution of, or any adverse determination in, any proceeding in the
United States Patent and Trademark Office, or any United States, state, or
foreign court regarding the Debtor's claim of ownership in any of the marks, the
Debtor's right to apply for the same, or its right to keep and maintain such
ownership and rights in the marks.

     6. Power of Attorney. The Debtor grants the Agent power of attorney, having
the full authority, and in the place of, the Debtor and in the name of the
Debtor, from time to time following an Event of Default (as defined in Section 8
hereof) and in the Agent's discretion following such an Event of Default and
after five days' written notice to the Agent, to take any action and to execute
any instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:

          (a) To endorse the Debtor's name on all applications, documents,
papers, and instruments necessary for the Agent to use or maintain the
Collateral;

          (b) To ask, demand, collect, sue for, recover, impound, receive, and
give acquittance and receipts for money due or to become due under or in respect
of any of the Collateral;

          (c) To file any claims or take any action or institute any proceedings
that the Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the Agent's rights with respect to any of the
Collateral and to assign, pledge, convey, or otherwise transfer title in or
dispose of the Collateral to any person.

     7. Right to Inspect. The Debtor grants to the Agent and its employees and
agents the right to visit the Debtor's plants and facilities which manufacture,
inspect, or store products sold under any of the trademarks, and to inspect the
products and quality control records relating thereto at reasonable times during
regular business hours or as otherwise provided in the Loan Agreement.

     8. Event of Default. Any of the following events shall be an Event of
Default:

          (a) An Event of Default shall occur as defined in the Loan Agreement;

          (b) Any representation or warranty made herein by the Debtor or in any
document furnished to the Lender by the Debtor under this Agreement is incorrect
in any material respect when made or when reaffirmed and such misrepresentation
shall have a material adverse effect on the Debtor's business; and

<PAGE>

          (c) The Debtor fails to observe or perform any covenant, condition, or
agreement to be observed or performed pursuant to the terms hereof.

     9. Specific Remedies. Upon the occurrence of any Event of Default, the
Agent shall have, in addition to other rights given by law or in this Agreement,
the Loan Agreement, or in any other Loan Document, all of the rights and
remedies with respect to the Collateral of a secured party under the Code,
including, without limitation, the following:

          (a) The Agent may notify licensees to make royalty payments on license
agreements directly to the Agent;

          (b) The Agent may sell, license, franchise or assign the Collateral at
public or private sale for such amounts, and at such time or times, as the Agent
deems advisable, provided that it is done in a commercially reasonable manner.
Any requirement of reasonable notice of any disposition of the Collateral shall
be satisfied if such notice is sent to the Debtor 10 days prior to such
disposition. The Debtor shall be credited with the net proceeds of such sale
only when they are actually received by the Agent, and the Debtor shall continue
to be liable for any deficiency remaining after the Collateral is sold or
collected. If the sale is to be a public sale, the Agent shall also give notice
of the time and place by publishing a notice one time at least 10 days before
the date of the sale in a newspaper of general circulation in the county in
which the sale is to be held; and

          (c) To the maximum extent permitted by applicable law, the Agent may
be the purchaser of any or all of the Collateral at any public sale and shall be
entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold at any public sale,
to use and apply all or any part of the Obligations as a credit on account of
the purchase price of any Collateral payable by the Agent at such sale and the
Obligations shall be deemed satisfied to the extent of such application.

     10. General Provisions.

          (a) Effectiveness of This Agreement. This Agreement shall be binding
and deemed effective when executed by the Debtor and accepted and executed by
the Agent.

          (b) Cumulative Remedies: No Prior Recourse to Collateral. The
enumeration herein of the Agent's rights and remedies is not intended to be
exclusive, provided that it is done in a commercially reasonable manner, and
such rights and remedies are in addition to and not by way of limitation of any
other rights or remedies that the Agent may have under the Loan Agreement, the
Code or other applicable law. The Agent shall have the right, in its sole
discretion, to determine which rights and remedies are to be exercised and in
which order. The exercise of one right or remedy shall not preclude the exercise
of any others, all of which shall be cumulative.

<PAGE>

          (c) No Implied Waivers. No act, failure, or delay by the Agent shall
constitute a waiver of any of its rights and remedies. No single or partial
waiver by the Agent of any provision of this Agreement or any other Loan
Document, or of a breach or default hereunder or thereunder, or of any right or
remedy which the Agent may have, shall operate as a waiver of any other
provision, breach, default, right, or remedy or of the same provision, breach,
default, right, or remedy on a future occasion. No waiver by the Agent shall
affect its rights to require strict performance of this Agreement.

          (d) Severability. If any provision of this Agreement shall be
prohibited, or invalid, under applicable law, such provision shall be effective
only to such extent, without invalidating the remainder of this Agreement.

          (e) Governing Law. This Agreement shall be deemed to have been made in
the State of New York and shall be governed by and interpreted in accordance
with the laws of such State, except that no doctrine of choice of law shall be
used to apply the laws of any other state or jurisdiction.

          (f) Consent to Jurisdiction and Venue; Service of Process. The Debtor
agrees that, in addition to any other courts that may have jurisdiction under
applicable laws or rules, any action or proceeding to enforce or arising out of
this Agreement or any of the other Loan Documents to which it is a party may be
commenced in the United States District Court for the Southern District of New
York, consents and submits in advance to such jurisdiction, and agrees that
venue will be proper in such court on any such matter. The Debtor hereby waives
personal service of process and agrees that a summons and complaint commencing
an action or proceeding in any such courts shall be properly served and shall
confer personal jurisdiction if served by registered or certified mail to the
Debtor, or as otherwise provided by the laws of the State of New York or the
United States. The choice of forum set forth in this section shall not be deemed
to preclude the enforcement of any judgment obtained in such forum, or the
taking of any action under this Agreement to enforce the same, in any
appropriate jurisdiction.

          (g) Waiver of Jury Trial, Etc. THE DEBTOR AND THE AGENT EACH HEREBY
WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF, THIS AGREEMENT, THE OBLIGATIONS, OR THE
COLLATERAL, OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT HERETO. THE DEBTOR
AND THE AGENT EACH CONFIRMS THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY
MADE.

          (h) Survival of Representations and Warranties. All of the Debtor's
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding any
investigation by the Lenders or their agents.


<PAGE>

          (i) Fees and Expenses. The Debtor shall pay to the Agent on demand all
reasonable costs and expenses that the Agent pays or incurs in connection with
the enforcement and termination of this Agreement, including, without
limitation: (i) reasonable attorneys' and paralegals' fees and disbursements of
counsel to the Agent (including, without limitation, the allocated fees and
costs of the Agent's in-house counsel and paralegals); (ii) costs and expenses
(including, without limitation, reasonable attorneys' and paralegals' fees and
disbursements (including, without limitation, the allocated fees and costs of
the Agent's in-house counsel and paralegals) for an, amendment, supplement,
waiver, consent, or subsequent closing in connection with this Agreement and the
transactions contemplated hereby; (iii) costs and expenses of lien searches;
(iv) taxes, fees, and other charges for filing this Agreement at the United
States Patent and Trademark Office, or for filing financing statements, and '
continuations, and other actions to perfect, protect, and continue the security
interest created hereunder; (v) sums paid or incurred to pay any amount or take
any action required of the Debtor under this Agreement that the Debtor fails to
pay or take; (vi) after the occurrence of an Event of Default, the costs and
expenses of preserving and protecting the Collateral; and (vii) costs and
expenses (including, without limitation, reasonable attorneys' and paralegals'
fees and disbursements (including, without limitation, the allocated fees and
costs of the Agent's in-house counsel and paralegals)) paid or incurred to
enforce the security interest created hereunder, sell or otherwise realize upon
the Collateral, and otherwise enforce the provisions of this Agreement, or to
defend any claims made or threatened against the Agent arising out of the
transactions contemplated hereby (including, without limitation, preparations
for the consultations concerning any such matters). The foregoing shall not be
construed to limit any other provisions of this Agreement regarding costs and
expenses to be paid by the Debtor. The parties agree that reasonable attorneys'
and paralegals' fees and costs incurred in enforcing any judgment are
recoverable as a separate item in addition to fees and costs incurred in
obtaining the judgment and that the recovery of postjudgment reasonable
attorneys' and paralegals' fees and costs is intended to survive any judgment
and is not to be deemed merged into any judgment.

          (j) Notices. Except as otherwise provided herein, all notices,
demands and requests that either party is required or elects to give to the
other shall be in writing and shall be governed by the provisions of Section
15.11 of the Loan Agreement.

          (k) Binding Effect; Assignment. The provisions of this Agreement shall
be binding upon and inure to the benefit of the respective representatives,
successors and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by the Debtor without the prior written consent
of the Agent other than to a parent or subsidiary corporation. The rights and
benefits of the Agent hereunder shall, if the Agent so agrees, inure to any
party acquiring any interest in the Obligations or any part thereof.

          (l) Modification. This Agreement is intended by the Debtor and the
Agent to be the final, complete, and exclusive expression of the agreement
between them respecting the subject matter hereof. This Agreement supersedes any
and all prior oral or written agreements relating to the subject matter hereof.
No modification, rescission, waiver, release, or amendment of any provision of
this Agreement shall be made, except by a written agreement signed by the Debtor
and a duly authorized officer of the Agent.

          (m) Counterparts. This Agreement may be executed in any number of
counterparts and by the Agent and the Debtor in separate counterparts, each of
which shall be an original, but all of which shall together constitute one and
the same agreement.

<PAGE>


          (n) Captions. The captions contained in this Agreement are for
convenience only, are without substantive meaning, and should not be construed
to modify, enlarge or restrict any provision.

          (o) Termination By Agent. After termination of the Loan Agreement and
when the Agent has received payment and performance in full of all Obligations,
the Agent shall execute and deliver to the Debtor a termination or terminations
of all of the security interests, in form suitable for filing, granted by the
Debtor hereunder.

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.

                                         POST TOOL, INC.,
                                           a Massachusetts corporation


                                         By:
                                              Name: Stanley Black
                                              Title: Chief Executive Officer


                                         BANKAMERICA BUSINESS CREDIT, INC.,
                                           a Delaware corporation


                                         By:
                                              Name: William J. Wilson
                                              Title: Sr. Account Executive

<PAGE>

STATE OF  MA                        )
                                    )       ss.:
COUNTY OF Suffolk                   )


     On the 24    day of February  1999, before me personally came
Stanley Black, to me known, who, being by me duly sworn, did depose and say
that he resides at 20 Lincoln House Avenue Swampscott, MA; that he
is the CEO    of Post Tool, Inc., the corporation described in and
which executed the above instrument; and that he signed his name thereto by
order of the board of directors of said corporation.




                                         Notary Public
                                         My Commission Expires December 21, 2001



STATE OF NEW YORK                   )
                                    )       ss.:
COUNTY OF NEW YORK                  )


     On the ____ day of _________, 199_, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he resides at ____________________________; that he is the ________________
of BankAmerica Business Credit, Inc., the corporation described in and which
executed the above instrument; and that he signed his name thereto by order of
the board of directors of said corporation.



                                         Notary Public

<PAGE>

STATE OF                            )
                                    )       ss.:
COUNTY OF                           )


     On the ____ day of _________, 199_, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he resides at __________________________________________________; that he
is the ________________ of Post Tool, Inc., the corporation described in and
which executed the above instrument; and that he signed his name thereto by
order of the board of directors of said corporation.




                                         Notary Public




STATE OF NEW YORK                   )
                                    )       ss.:
COUNTY OF NEW YORK                  )


     On the 27th day of February, 1999, before me personally came
William J. Wilson, to me known, who, being by me duly sworn, did depose and say
that he resides at ______________________; that he is the Sr. Account Executive
of BankAmerica Business Credit, Inc., the corporation described in and which
executed the above instrument; and that he signed his name thereto by order of
the board of directors of said corporation.




                                        Notary Public State of New York
                                          No 02SA5036939
                                        Qualified in Nassau County
                                        Commission Expires December 12, 2000

<PAGE>

                                   Schedule A

                                   Trademarks

                                                   Registration  Registration
Trademark                                          Number:       Date:

Woodworkers Warehouse (& design)                   1,983,739     7/2/96
Woodworkers Warehouse (& design)                   1,988,103     7/23/96
Woodworkers Warehouse (& design)                   1,986,737     7/16/96
Woodworkers Warehouse (& design)                   1,544,938     6/20/89
Trend-Lines (& design)                             1,553,312     8/22/89
Trend-Lines Woodworking Tools & Supplies
(& design)                                         1,556,257     9/12/89
Golf Day                                           1,226,392     2/8/83
Vulcan (& design)                                    795,106     8/31/65
Vulcan (& design)                                    795,166     8/31/65
Vulcan (& design)                                    795,455     10/12/65
Vulcan (& design)                                    797,935     10/20/65
Post Tool Today's Tool Leader (& design)           1,673,748     1/28/92


<PAGE>

                                   Schedule B

                Third Party Rights With Respect To The Trademarks

None.