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                                  $220,000,000

                               TERM LOAN AGREEMENT

                                      among

                            B&G FOODS HOLDINGS CORP.

                                B&G FOODS, INC.,
                                   as Borrower

                               The Several Lenders
                        from Time to Time Parties Hereto,

                              LEHMAN BROTHERS INC.,
                                   as Arranger

                              THE BANK OF NEW YORK,
                             as Documentation Agent

                             HELLER FINANCIAL, INC.,
                            as Co-Documentation Agent

                          LEHMAN COMMERCIAL PAPER INC.,
                              as Syndication Agent

                                       and

                          LEHMAN COMMERCIAL PAPER INC.,
                             as Administrative Agent


                           Dated as of March 15, 1999



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<PAGE>

                                TABLE OF CONTENTS


                                                                            Page

SECTION 1.  DEFINITIONS........................................................1
         1.1  Defined Terms....................................................1
         1.2  Other Definitional Provisions...................................25

SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS...................................26
         2.1  Term Loan Commitments...........................................26
         2.2  Procedure for Term Loan Borrowing...............................26
         2.3  Repayment of Term Loans.........................................26
         2.4  Repayment of Term Loans; Evidence of Debt.......................27
         2.5  Fees, etc. .....................................................28
         2.6  Optional Prepayments............................................28
         2.7  Mandatory Prepayments and Commitment Reductions.................29
         2.8  Conversion and Continuation Options.............................30
         2.9  Minimum Amounts and Maximum Number of Eurodollar Tranches.......30
         2.10  Interest Rates and Payment Dates...............................31
         2.11  Computation of Interest and Fees...............................31
         2.12  Inability to Determine Interest Rate...........................32
         2.13  Pro Rata Treatment and Payments................................32
         2.14  Requirements of Law............................................34
         2.15  Taxes..........................................................35
         2.16  Indemnity......................................................37
         2.17  Illegality.....................................................38
         2.18  Change of Lending Office.......................................38
         2.19  Substitution of Lenders........................................38

SECTION 3.  REPRESENTATIONS AND WARRANTIES....................................39
         3.1  Financial Condition.............................................39
         3.2  No Change.......................................................40
         3.3  Corporate Existence; Compliance with Law........................40
         3.4  Corporate Power; Authorization; Enforceable Obligations.........40
         3.5  No Legal Bar....................................................41
         3.6  No Material Litigation..........................................41
         3.7  No Default......................................................41
         3.8  Ownership of Property; Liens....................................41
         3.9  Intellectual Property...........................................41
         3.10  Taxes..........................................................41
         3.11  Federal Regulations............................................42
         3.12  Labor Matters..................................................42
         3.13  ERISA..........................................................42
         3.14  Investment Company Act; Other Regulations......................42
         3.15  Subsidiaries...................................................42
         3.16  Use of Proceeds................................................43
         3.17  Environmental Matters..........................................43
         3.18  Accuracy of Information, etc...................................44
         3.19  Security Documents.............................................44
         3.20  Solvency.......................................................45
         3.21  Senior Indebtedness............................................45

                                       i

<PAGE>

         3.22  Regulation H...................................................45
         3.23  Year 2000 Matters..............................................45

SECTION 4.  CONDITIONS PRECEDENT..............................................46
         4.1  Conditions to Term Loans........................................46

SECTION 5.  AFFIRMATIVE COVENANTS.............................................51
         5.1  Financial Statements............................................51
         5.2  Certificates; Other Information.................................51
         5.3  Payment of Obligations..........................................53
         5.4  Conduct of Business and Maintenance of Existence, etc. .........53
         5.5  Maintenance of Property; Insurance..............................53
         5.6  Inspection of Property; Books and Records; Discussions..........53
         5.7  Notices.........................................................54
         5.8  Environmental Laws..............................................54
         5.9  Interest Rate Protection........................................55
         5.10  Additional Collateral, etc.....................................55
         5.11  Further Assurances.............................................56

SECTION 6.  NEGATIVE COVENANTS................................................57
         6.1  Financial Condition Covenants...................................57
         6.2  Limitation on Indebtedness......................................61
         6.3  Limitation on Liens.............................................62
         6.4  Limitation on Fundamental Changes...............................63
         6.5  Limitation on Disposition of Property...........................63
         6.6  Limitation on Restricted Payments...............................64
         6.7  Limitation on Capital Expenditures..............................64
         6.8  Limitation on Investments.......................................65
         6.9  Limitation on Optional Payments and Modifications of 
                Debt Instruments, etc. .......................................66
         6.10  Limitation on Transactions with Affiliates.....................66
         6.11  Limitation on Sales and Leasebacks.............................66
         6.12  Limitation on Changes in Fiscal Periods........................67
         6.13  Limitation on Negative Pledge Clauses..........................67
         6.14  Limitation on Lines of Business................................67
         6.15  Limitation on Amendments to Acquisition Documentation..........67
         6.16  Limitation on Activities of Holdings...........................67
         6.17  Limitation on Withdrawal of Reinvestment Deferred Amount.......68

SECTION 7.  EVENTS OF DEFAULT.................................................68

SECTION 8.  THE AGENTS........................................................71
         8.1  Appointment.....................................................71
         8.2  Delegation of Duties............................................71
         8.3  Exculpatory Provisions..........................................71
         8.4  Reliance by Agents..............................................72
         8.5  Notice of Default...............................................72
         8.6  Non-Reliance on Agents and Other Lenders........................72
         8.7  Indemnification.................................................73
         8.8  Agent in Its Individual Capacity................................73
         8.9  Successor Agents................................................73
         8.10  Authorization to Release Liens; Other Actions Relating to 
               Security Documents.............................................74
         8.11  The Arranger, the Co-Documentation Agent and the 
               Documentation Agent............................................74

                                       ii

<PAGE>

SECTION 9.  MISCELLANEOUS.....................................................75
         9.1  Amendments and Waivers..........................................75
         9.2  Notices.........................................................76
         9.3  No Waiver; Cumulative Remedies..................................77
         9.4  Survival of Representations and Warranties......................78
         9.5  Payment of Expenses.............................................78
         9.6  Successors and Assigns; Participations and Assignments..........79
         9.7  Adjustments; Set-off............................................81
         9.8  Counterparts....................................................82
         9.9  Severability....................................................82
         9.10  Integration....................................................82
         9.11  GOVERNING LAW..................................................82
         9.12  Submission To Jurisdiction; Waivers............................82
         9.13  Acknowledgments................................................83
         9.14  Confidentiality................................................83
         9.15  Release of Collateral Security and Guarantee Obligations.......84
         9.16  Accounting Changes.............................................84
         9.17  Delivery of Lender Addenda.....................................84
         9.18  WAIVERS OF JURY TRIAL..........................................84



                                      iii

<PAGE>

ANNEXES:

A                     Pricing Grid for Tranche A Term Loans


SCHEDULES:

1.1                   Mortgaged Property
3.4                   Consents, Authorizations, Filings and Notices
3.9                   Intellectual Property Claims
3.15                  Subsidiaries
3.19(a)-1             UCC Filing Jurisdictions
3.19(a)-2             UCC Financing Statements to Remain on File
3.19(a)-3             UCC Financing Statements to be Terminated
3.19(b)               Mortgage Filing Jurisdictions
4.1(j)                Environmental Assessments
6.2(d)                Existing Indebtedness
6.3(f)                Existing Liens


EXHIBITS:

A                     Form of Guarantee and Collateral Agreement
B                     Form of Compliance Certificate
C                     Form of Closing Certificate
D                     Form of Mortgage
E                     Form of Assignment and Acceptance
F-1                   Form of Legal Opinion of Dechert, Price & Rhoads
F-2                   Form of Legal Opinion of Local Counsel
G                     Form of Term Note
H                     Form of Prepayment Option Notice
I                     Form of Exemption Certificate
J                     Form of Lender Addendum




                                       iv

<PAGE>


         TERM  LOAN  AGREEMENT,  dated as of March  15,  1999,  among  B&G FOODS
HOLDINGS CORP., a Delaware corporation ("Holdings"), B&G FOODS, INC., a Delaware
corporation (the "Borrower"), the several banks and other financial institutions
or entities from time to time parties to this Agreement (the "Lenders"),  LEHMAN
BROTHERS INC., as advisor, lead arranger and book manager (in such capacity, the
"Arranger"), THE BANK OF NEW YORK, as documentation agent (in such capacity, the
"Documentation  Agent"),  HELLER FINANCIAL,  INC., as co-documentation agent (in
such capacity, the "Co-Documentation  Agent"),  LEHMAN COMMERCIAL PAPER INC., as
syndication  agent (in such  capacity,  the  "Syndication  Agent"),  and  LEHMAN
COMMERCIAL  PAPER  INC.,  as  administrative   agent  (in  such  capacity,   the
"Administrative Agent").


                              W I T N E S S E T H:


         WHEREAS,  the  Borrower  wishes  to  establish  the  credit  facilities
described  below to provide a portion of the  financing  for (i) the  Borrower's
acquisition of the Heritage  Portfolio of Brands from The Pillsbury  Company and
(ii) the  refinancing of certain  existing  senior secured debt of the Borrower;
and

         WHEREAS,  the  Lenders  are  willing  to make  such  credit  facilities
available upon and subject to the terms and conditions hereinafter set forth;

         NOW,  THEREFORE,  in  consideration  of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:

                             SECTION 1. DEFINITIONS

         1.1 Defined Terms. As used in this Agreement,  the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

         "Acquired   Assets":   the  Transferred   Assets  (as  defined  in  the
    Acquisition Agreement).

         "Acquired  Property":  as defined  in the  definition  of  Consolidated
    EBITDA.

         "Acquisition":  the  acquisition  by the  Borrower,  or a wholly  owned
    Subsidiary  of  the  Borrower,  of  the  Acquired  Assets  pursuant  to  the
    Acquisition Agreement.

         "Acquisition Agreement":  the Asset and Stock Purchase Agreement, dated
    as of January 28,  1999,  among The  Pillsbury  Company,  the  Borrower  and
    others.

         "Acquisition  Documentation":  collectively,  the Acquisition Agreement
    and all schedules,  exhibits,  annexes and  amendments  thereto and all side
    letters  and  agreements  affecting  the terms  thereof or  entered  into in
    connection  therewith,  in each case, as amended,  supplemented or otherwise
    modified from time to time.


<PAGE>

         "Adjustment Date": as defined in the Pricing Grid.

         "Administrative Agent": as defined in the preamble hereto.

         "Affiliate":  as to any Person,  any other  Person  which,  directly or
    indirectly,  is in control of, is controlled  by, or is under common control
    with, such Person.  For purposes of this  definition,  "control" of a Person
    means the power,  directly or indirectly,  either to (a) vote 10% or more of
    the securities  having  ordinary  voting power for the election of directors
    (or persons  performing  similar  functions) of such Person or (b) direct or
    cause the direction of the management  and policies of such Person,  whether
    by contract or otherwise.

         "Agents":  the collective  reference to the  Documentation  Agent,  the
    Co-Documentation  Agent, the Syndication Agent and the Administrative Agent.
    "Aggregate  Exposure":  with  respect to any  Lender at any time,  an amount
    equal to (a) until the Closing Date,  the aggregate  amount of such Lender's
    Commitment  at such  time and (b)  thereafter,  the  aggregate  then  unpaid
    principal   amount  of  such  Lender's  Term  Loans.   

         "Aggregate Exposure Percentage" with respect to any Lender at any time,
    the ratio (expressed as a percentage) of such Lender's Aggregate Exposure at
    such  time  to  the  Aggregate   Exposure  of  all  Lenders  at  such  time.

         "Agreement":  this Term Loan  Agreement,  as amended,  supplemented  or
    otherwise modified from time to time.  

         "Applicable Margin": for each Type of Term Loan, the rate per annum set
    forth under the relevant column heading below:  

                                                   Base Rate      Eurodollar  
                                                     Loans          Loans
                                                   ---------      ----------

          Tranche A Term Loans                      2.125%          3.125%
          Tranche B Term Loans                      2.25%           3.25%

    provided,  that on and after the first  Adjustment  Date occurring after the
    completion  of two full fiscal  quarters of the  Borrower  after the Closing
    Date,  the  Applicable  Margin with  respect to Tranche A Term Loans will be
    determined pursuant to the Pricing Grid.

        "Approved Fund": with respect to any Lender that is a fund that invests
    in commercial  loans, any other fund that invests in commercial loans and is
    managed or
 
                                       2

<PAGE>

    advised by the same investment  advisor as such Lender or by an Affiliate of
    such investment advisor.

         "Arranger": as defined in the preamble hereto.

         "Asset  Sale":  any  Disposition  of  Property  or  series  of  related
    Dispositions of Property (excluding any such Disposition permitted by clause
    (a),  (b),  (c) or (d) of  Section  6.5)  which  yields  gross  proceeds  to
    Holdings,  the  Borrower or any of its  Subsidiaries  (valued at the initial
    principal  amount  thereof in the case of non-cash  proceeds  consisting  of
    notes or other debt  securities  and valued at fair market value in the case
    of other non-cash proceeds) in excess of $1,000,000.

         "Assignee": as defined in Section 9.6(c).

         "Assignment   and   Acceptance":   each   Assignment  and   Acceptance,
    substantially  in the form of Exhibit E, executed and delivered  pursuant to
    Section 9.6.

         "Assignor": as defined in Section 9.6(c).

         "Base  Rate":  for any  day,  a rate per  annum  (rounded  upwards,  if
    necessary,  to the next 1/16 of 1%) equal to the  greatest  of (a) the Prime
    Rate in effect on such day,  (b) the Base CD Rate in effect on such day plus
    1% and (c) the Federal Funds  Effective Rate in effect on such day plus 2 of
    1%. For  purposes  hereof:  "Prime Rate" shall mean the rate of interest per
    annum publicly  announced  from time to time by the Reference  Lender as its
    prime or base rate in effect at its  principal  office in New York City (the
    Prime Rate not being  intended to be the lowest rate of interest  charged by
    the Reference  Lender in connection  with  extensions of credit to debtors);
    "Base CD Rate" shall mean the sum of (a) the product of (i) the  Three-Month
    Secondary CD Rate and (ii) a fraction, the numerator of which is one and the
    denominator of which is one minus the C/D Reserve Percentage and (b) the C/D
    Assessment  Rate;  and  "Three-Month  Secondary CD Rate" shall mean, for any
    day,  the  secondary  market rate for  three-month  certificates  of deposit
    reported  as being in  effect  on such day (or,  if such day  shall not be a
    Business  Day, the next  preceding  Business  Day) by the Board  through the
    public  information  telephone line of the Federal  Reserve Bank of New York
    (which rate will, under the current  practices of the Board, be published in
    Federal Reserve Statistical Release H.15(519) during the week following such
    day),  or, if such rate  shall not be so  reported  on such day or such next
    preceding  Business Day, the average of the secondary market  quotations for
    three-month  certificates of deposit of major money center banks in New York
    City received at  approximately  10:00 A.M., New York City time, on such day
    (or, if such day shall not be a Business Day, on the next preceding Business
    Day) by the Reference Lender from three New York City negotiable certificate
    of deposit dealers of recognized  standing selected by it. Any change in the
    Base Rate due to a change in the Prime Rate, the Base CD Rate or the Federal
    Funds Effective Rate shall be effective as of the opening of business on the
    effective  day of such  change  in the Prime  Rate,  the Base CD Rate or the
    Federal Funds Effective Rate, respectively.

                                       3
<PAGE>

         "Base Rate Loans": Term Loans for which the applicable rate of interest
    is based upon the Base Rate.

         "Benefitted Lender": as defined in Section 9.7.

         "Board":  the Board of Governors of the Federal  Reserve  System of the
    United States (or any successor).

         "Borrower": as defined in the preamble hereto.

         "Business  Day":  (i) for all purposes  other than as covered by clause
    (ii)  below,  a day  other  than a  Saturday,  Sunday  or other day on which
    commercial banks in New York City are authorized or required by law to close
    and (ii) with respect to all notices and  determinations in connection with,
    and payments of principal and interest on,  Eurodollar  Loans, any day which
    is a  Business  Day  described  in  clause  (i) and  which is also a day for
    trading by and between banks in Dollar deposits in the interbank  eurodollar
    market.

         "Capital Expenditures": for any period, with respect to any Person, the
    aggregate of all  expenditures by such Person and its  Subsidiaries  for the
    acquisition  or leasing  (pursuant  to a capital  lease) of fixed or capital
    assets  or  additions  to  equipment  (including  replacements,  capitalized
    repairs and  improvements  during such period)  which should be  capitalized
    under  GAAP  on  a  consolidated  balance  sheet  of  such  Person  and  its
    Subsidiaries.

         "Capital Lease Obligations":  as to any Person, the obligations of such
    Person to pay rent or other amounts under any lease of (or other arrangement
    conveying  the right to use) real or  personal  property,  or a  combination
    thereof,  which  obligations are required to be classified and accounted for
    as capital leases on a balance sheet of such Person under GAAP, and, for the
    purposes of this Agreement, the amount of such obligations at any time shall
    be the capitalized amount thereof at such time determined in accordance with
    GAAP.

         "Capital Stock": any and all shares, interests, participations or other
    equivalents (however designated) of capital stock of a corporation,  any and
    all  equivalent  ownership  interests in a Person (other than a corporation)
    and  any  and  all  warrants,  rights  or  options  to  purchase  any of the
    foregoing. 

         "Cash  Equivalents":  (a) marketable direct  obligations  issued by, or
    unconditionally guaranteed by, the United States Government or issued by any
    agency thereof and backed by the full faith and credit of the United States,
    in each case  maturing  within  one year from the date of  acquisition;  (b)
    certificates  of  deposit,  time  deposits,   eurodollar  time  deposits  or
    overnight  bank  deposits  having  maturities of six months or less from the
    date of acquisition issued by any Lender or by any commercial bank organized
    under the laws of the United States of America or any state  thereof  having
    combined capital and surplus of not less than  $500,000,000;  (c) commercial
    paper of an

                                        4

<PAGE>

    issuer rated at least A-2 by Standard & Poor's Ratings  Services  ("S&P") or
    P-2  by  Moody's  Investors  Service,  Inc.  ("Moody's"),   or  carrying  an
    equivalent  rating by a nationally  recognized rating agency, if both of the
    two named rating  agencies  cease  publishing  ratings of  commercial  paper
    issuers  generally,  and  maturing  within  six  months  from  the  date  of
    acquisition;  (d) repurchase  obligations of any Lender or of any commercial
    bank satisfying the requirements of clause (b) of this definition,  having a
    term of not more than 30 days with  respect  to  securities  issued or fully
    guaranteed or insured by the United States  government;  (e) securities with
    maturities of one year or less from the date of acquisition  issued or fully
    guaranteed by any state,  commonwealth or territory of the United States, by
    any  political   subdivision   or  taxing   authority  of  any  such  state,
    commonwealth  or territory or by any foreign  government,  the securities of
    which  state,  commonwealth,   territory,   political  subdivision,   taxing
    authority or foreign government (as the case may be) are rated at least A by
    S&P or A by Moody's;  (f) securities  with  maturities of six months or less
    from the date of acquisition  backed by standby  letters of credit issued by
    any Lender or any commercial bank satisfying the  requirements of clause (b)
    of this  definition;  and (g) shares of money market mutual or similar funds
    which invest  exclusively in assets  satisfying the  requirements of clauses
    (a) through (f) of this  definition.  "C/D Assessment  Rate": for any day as
    applied to any Base Rate Loan, the annual  assessment rate in effect on such
    day that is payable by a member of the Bank Insurance Fund maintained by the
    Federal   Deposit   Insurance   Corporation   (the  "FDIC")   classified  as
    well-capitalized  and  within  supervisory  subgroup  "B"  (or a  comparable
    successor  assessment risk  classification)  within the meaning of 12 C.F.R.
    Section  327.4 (or any successor  provision) to the FDIC (or any  successor)
    for the FDIC's (or such  successor's)  insuring  time deposits at offices of
    such institution in the United States. "C/D Reserve Percentage": for any day
    as applied to any Base Rate Loan, that  percentage  (expressed as a decimal)
    which is in effect on such day, as prescribed by the Board,  for determining
    the maximum reserve requirement for a Depositary  Institution (as defined in
    Regulation  D of the Board as in effect from time to time) in respect of new
    non-personal  time deposits in Dollars having a maturity of 30 days or more.
    "Closing  Date":  the date on which the  conditions  precedent  set forth in
    Section  4.1 shall have been  satisfied,  which date shall be not later than
    March 15, 1999.  "Code":  the Internal Revenue Code of 1986, as amended from
    time to time.

         "Co-Documentation Agent": as defined in the preamble hereto.

         "Collateral":  all Property of the Loan Parties, now owned or hereafter
    acquired,  upon which a Lien is  purported  to be  created  by any  Security
    Document.

         "Commitment":  as to any  Lender,  the sum of the  Tranche  A Term Loan
    Commitment  of such  Lender and the Tranche B Term Loan  Commitment  of such
    Lender.

                                       5

<PAGE>

         "Commonly  Controlled Entity": an entity,  whether or not incorporated,
    which is under  common  control  with the  Borrower  within  the  meaning of
    Section  4001 of ERISA or is part of a group that  includes the Borrower and
    that is treated as a single employer under Section 414 of the Code.

         "Compliance Certificate":  a certificate duly executed by a Responsible
    Officer substantially in the form of Exhibit B.

         "Confidential  Information  Memorandum":  the Confidential  Information
    Memorandum dated February 1999 and furnished to the initial Lenders.

         "Consolidated  Current  Assets":  at any date,  all amounts (other than
    cash and Cash  Equivalents)  which would,  in  conformity  with GAAP, be set
    forth opposite the caption "total current assets" (or any like caption) on a
    consolidated  balance  sheet of the  Borrower and its  Subsidiaries  at such
    date.

         "Consolidated  Current  Liabilities":  at any date,  all  amounts  that
    would,  in conformity  with GAAP, be set forth  opposite the caption  "total
    current  liabilities" (or any like caption) on a consolidated  balance sheet
    of the Borrower and its  Subsidiaries  at such date,  but  excluding (a) the
    current portion of any Funded Debt of the Borrower and its  Subsidiaries and
    (b) without duplication of clause (a) above, all Indebtedness  consisting of
    Revolving Credit Loans and Swing Line Loans to the extent otherwise included
    therein.

         "Consolidated  EBITDA": of any Person for any period,  Consolidated Net
    Income of such Person and its  Subsidiaries  for such period  plus,  without
    duplication and to the extent reflected as a charge in the statement of such
    Consolidated Net Income for such period,  the sum of (a) income tax expense,
    (b)  Consolidated  Interest  Expense of such  Person  and its  Subsidiaries,
    amortization  or  writeoff  of debt  discount  and debt  issuance  costs and
    commissions,   discounts  and  other  fees  and  charges   associated   with
    Indebtedness, (c) depreciation and amortization expense, (d) amortization of
    intangibles  (including,  but not limited  to,  goodwill)  and  organization
    costs, (e) any  extraordinary,  unusual or non-recurring  expenses or losses
    (including,  whether or not  otherwise  includable as a separate item in the
    statement of such  Consolidated Net Income for such period,  losses on sales
    of assets  outside of the  ordinary  course of  business)  and (f) any other
    non-cash charges, and minus, to the extent included in the statement of such
    Consolidated  Net Income for such  period,  the sum of (a)  interest  income
    (except  to  the  extent  deducted  in  determining   Consolidated  Interest
    Expense),  (b) any extraordinary,  unusual or non-recurring  income or gains
    (including,  whether or not  otherwise  includable as a separate item in the
    statement  of such  Consolidated  Net Income for such  period,  gains on the
    sales of assets  outside of the  ordinary  course of  business)  and (c) any
    other non-cash income, all as determined on a consolidated basis;  provided,
    that for purposes of calculating Consolidated EBITDA of the Borrower and its
    Subsidiaries for any period,  (i) the  Consolidated  EBITDA of any Person or
    assets  (such  person or  assets an  "Acquired  Property")  acquired  by the
    Borrower or its Subsidiaries during such period shall be included

                                        6

<PAGE>

    on a pro forma  basis for such period  (assuming  the  consummation  of such
    acquisition  and  the  incurrence  or  assumption  of  any  Indebtedness  in
    connection  therewith  occurred  on the  first  day of such  period)  if the
    balance  sheet  of  such  Acquired  Property  as at the  end  of the  period
    preceding  the  acquisition  of  such  Acquired  Property  and  the  related
    consolidated statements of income and stockholders' equity and of cash flows
    for the period in respect of which  Consolidated  EBITDA is to be calculated
    (x) have  been  previously  provided  to the  Administrative  Agent  and the
    Lenders  and (y) either (1) have been  reported  on without a  qualification
    arising  out of the  scope of the  audit  by  independent  certified  public
    accountants  of  nationally  recognized  standing  or (2)  have  been  found
    acceptable by the Administrative  Agent, (ii) the Consolidated EBITDA of any
    assets  Disposed of by the Borrower or its  Subsidiaries  during such period
    shall be  excluded  for  such  period  (assuming  the  consummation  of such
    Disposition and the repayment of any  Indebtedness  in connection  therewith
    occurred  on the first day of such  period)  and  (iii) in  calculating  the
    amount of the Consolidated EBITDA of any Acquired Property to be included on
    a pro forma basis pursuant to the foregoing clause (i) of this proviso,  the
    pro forma expenses of the Acquired Property for the relevant period shall be
    determined in accordance with the Borrower's  customary practices consistent
    with the  methodology  reflected in the Pro Forma  Balance Sheet and related
    financial statements included in the Confidential Information Memorandum.

         "Consolidated  Fixed Charge Coverage Ratio":  for any period, the ratio
    of (a)  Consolidated  EBITDA of the Borrower and its  Subsidiaries  for such
    period  minus the  aggregate  amount  actually  paid by the Borrower and its
    Subsidiaries  in cash during such period on account of Capital  Expenditures
    to (b) Consolidated Fixed Charges for such period.

         "Consolidated  Fixed  Charges":   for  any  period,  the  sum  (without
    duplication) of (a)  Consolidated  Interest  Expense of the Borrower and its
    Subsidiaries  for such period payable in cash, (b) provision for cash income
    taxes made by the  Borrower  or any of its  Subsidiaries  on a  consolidated
    basis in respect of such period  (excluding cash taxes payable in respect of
    any gain  recognized in connection  with a  Disposition,  to the extent such
    taxes are paid with proceeds of such Disposition) and (c) scheduled payments
    made during  such  period on account of  principal  of  Indebtedness  of the
    Borrower or any of its Subsidiaries  (including scheduled principal payments
    in respect of the Term Loans).

         "Consolidated  Interest Coverage Ratio":  for any period,  the ratio of
    (a) Consolidated EBITDA of the Borrower and its Subsidiaries for such period
    to (b)  Consolidated  Interest  Expense of the Borrower and its Subsidiaries
    for such period payable in cash.

         "Consolidated  Interest  Expense":  of any Person for any  period,  (a)
    total  interest  expense  (including  that  attributable  to  Capital  Lease
    Obligations)  of such  Person  and its  Subsidiaries  for such  period  with
    respect to all outstanding  Indebtedness of such Person and its Subsidiaries
    (including,  without limitation,  all commissions,  discounts and other fees
    and  charges  owed by such  Person  with  respect  to  letters of credit and
    bankers'
 
                                       7

<PAGE>

    acceptance  financing and net costs of such Person under Hedge Agreements in
    respect of interest rates to the extent such net costs are allocable to such
    period in accordance  with GAAP) minus (b) the total interest income of such
    Person for such period,  determined in accordance  with GAAP;  provided that
    when the term "Consolidated  Interest Expense" is used in the calculation of
    the Consolidated  Interest Coverage Ratio or Consolidated Fixed Charge Ratio
    for any period,  Consolidated Interest Expense shall include, on a pro forma
    basis,   interest  expense  in  respect  of  any  Indebtedness  incurred  in
    connection with any  acquisition of an Acquired  Property during such period
    (assuming  incurrence of such  Indebtedness at the beginning of such period)
    and shall exclude, on a pro forma basis,  interest expense in respect of any
    Indebtedness  repaid in  connection  with a  Disposition  during such period
    (assuming repayment of such Indebtedness at the beginning of such period).

         "Consolidated Leverage Ratio": as at the last day of any period of four
    consecutive  fiscal quarters,  the ratio of (a)  Consolidated  Total Debt on
    such day to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for
    such period.

         "Consolidated  Net  Income":   of  any  Person  for  any  period,   the
    consolidated  net income (or loss) of such Person and its  Subsidiaries  for
    such period,  determined on a  consolidated  basis in accordance  with GAAP;
    provided,  that in calculating  Consolidated  Net Income of the Borrower and
    its consolidated  Subsidiaries  for any period,  there shall be excluded (a)
    the income (or deficit) of any Person accrued prior to the date it becomes a
    Subsidiary or is merged into or consolidated with the Borrower or any of its
    Subsidiaries,  (b) the  income (or  deficit)  of any  Person  (other  than a
    Subsidiary)  in  which  the  Borrower  or  any of  its  Subsidiaries  has an
    ownership  interest,  except to the extent  that any such income is actually
    received by the  Borrower or such  Subsidiary  in the form of  dividends  or
    similar  distributions and (c) the undistributed  earnings of any Subsidiary
    to the  extent  that the  declaration  or payment  of  dividends  or similar
    distributions  by such  Subsidiary is not at the time permitted by the terms
    of any  Contractual  Obligation  (other  than  under any Loan  Document)  or
    Requirement of Law applicable to such Subsidiary.

         "Consolidated  Senior Debt": all Consolidated Total Debt other than the
    Senior Subordinated Notes.

         "Consolidated  Senior Leverage Ratio": as of the last day of any period
    of four consecutive  fiscal quarters,  the ratio of (a) Consolidated  Senior
    Debt  on  such  day to (b)  Consolidated  EBITDA  of the  Borrower  and  its
    Subsidiaries for such period.

         "Consolidated  Total Debt": at any date, the aggregate principal amount
    of all  Funded  Debt of the  Borrower  and its  Subsidiaries  at such  date,
    determined on a consolidated  basis in accordance with GAAP;  provided that,
    for purposes of  calculating  the financial  ratios  referred to in Sections
    6.1(a)  and  (b) on any  date,  an  amount  equal  to the  then  outstanding
    aggregate Reinvestment Deferred Amount on such date may be deducted from the
    amount of Consolidated  Total Debt on such date so long as such Reinvestment
    Deferred  Amount  is on  deposit  in an  account  subject,  pursuant  to the

                                       8

<PAGE>

    Guarantee and Collateral Agreement,  to the sole dominion and control of the
    Administrative  Agent  for  the  ratable  benefit  of the  Lenders  and  the
    Revolving Credit Lenders (it being  understood that the foregoing  deduction
    shall not be made  when  calculating  the  Consolidated  Leverage  Ratio for
    purposes of determining the Applicable Margin).

         "Consolidated Working Capital": at any date, the excess of Consolidated
    Current Assets on such date over  Consolidated  Current  Liabilities on such
    date.

         "Contractual  Obligation":  as to  any  Person,  any  provision  of any
    security  issued by such  Person or of any  agreement,  instrument  or other
    undertaking  to which  such  Person  is a party or by which it or any of its
    Property is bound.

         "Control Investment Affiliate": as to any Person, any other Person that
    (a) directly or indirectly,  is in control of, is controlled by, or is under
    common  control  with,  such  Person  and (b) is  organized  by such  Person
    primarily  for the purpose of making  equity or debt  investments  in one or
    more companies. For purposes of this definition, "control" of a Person means
    the power,  directly or indirectly,  to direct or cause the direction of the
    management and policies of such Person whether by contract or otherwise.

         "Default": any of the events specified in Section 7, whether or not any
    requirement  for the giving of notice,  the lapse of time, or both, has been
    satisfied.

         "Derivatives Counterparty": as defined in Section 6.6.

         "Disposition":  with respect to any Property, any sale, lease, sale and
    leaseback,  assignment,  conveyance,  transfer or other disposition thereof;
    and the terms "Dispose" and "Disposed of" shall have correlative meanings.

         "Documentation Agent": as defined in the preamble hereto.

         "Dollars" and "$": lawful currency of the United States of America.

         "Domestic  Subsidiary":  any Subsidiary of the Borrower organized under
    the laws of any jurisdiction within the United States of America.

         "Environmental  Laws": any and all laws,  rules,  orders,  regulations,
    statutes,  ordinances,  enforceable  guidelines,  codes,  decrees,  or other
    legally enforceable requirements (including, without limitation, common law)
    of any international  authority,  foreign government,  the United States, or
    any state,  local,  municipal or other governmental  authority,  regulating,
    relating  to or  imposing  liability  or  standards  of  conduct  concerning
    protection of the  environment  or of human health,  or employee  health and
    safety, as has been, is now, or may at any time hereafter be, in effect.

                                       9
<PAGE>

         "Environmental  Permits":  any and all  permits,  licenses,  approvals,
    registrations,  notifications,  exemptions and other authorizations required
    under any Environmental Law.

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

         "Eurocurrency  Reserve  Requirements":  for  any  day as  applied  to a
    Eurodollar  Loan, the aggregate  (without  duplication) of the maximum rates
    (expressed as a decimal fraction) of reserve  requirements in effect on such
    day  (including,  without  limitation,  basic,  supplemental,  marginal  and
    emergency  reserves under any regulations of the Board or other Governmental
    Authority  having  jurisdiction  with respect  thereto) dealing with reserve
    requirements  prescribed for eurocurrency  funding (currently referred to as
    "Eurocurrency  Liabilities"  in  Regulation D of the Board)  maintained by a
    member bank of the Federal Reserve System.

         "Eurodollar  Base Rate":  with respect to each day during each Interest
    Period pertaining to a Eurodollar Loan, the rate per annum determined on the
    basis  of the rate  for  deposits  in  Dollars  for a  period  equal to such
    Interest  Period  commencing  on the  first  day  of  such  Interest  Period
    appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time,
    two Business  Days prior to the beginning of such  Interest  Period.  In the
    event that such rate does not appear on Page 3750 of the Telerate screen (or
    otherwise on such screen),  the "Eurodollar  Base Rate" for purposes of this
    definition  shall  be  determined  by  reference  to such  other  comparable
    publicly  available  service  for  displaying  eurodollar  rates  as  may be
    selected by the Administrative Agent.

         "Eurodollar Loans": Term Loans the rate of interest applicable to which
    is based upon the Eurodollar Rate.

         "Eurodollar Rate": with respect to each day during each Interest Period
    pertaining to a Eurodollar Loan, a rate per annum determined for such day in
    accordance with the following formula (rounded upward to the nearest 1/100th
    of 1%):

                              Eurodollar Base Rate
                      ------------------------------------
                    1.00 - Eurocurrency Reserve Requirements

         "Eurodollar Tranche":  the collective reference to Eurodollar Loans the
    then current Interest Periods with respect to all of which begin on the same
    date and end on the same later date  (whether or not such  Eurodollar  Loans
    shall originally have been made on the same day).

         "Event of Default":  any of the events specified in Section 7, provided
    that any requirement  for the giving of notice,  the lapse of time, or both,
    has been satisfied.

                                       10

<PAGE>

         "Excess Cash Flow": for any fiscal year of the Borrower, the excess, if
    any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
    such fiscal year, (ii) an amount equal to the amount of all non-cash charges
    (including  depreciation  and  amortization)  deducted  in  arriving at such
    Consolidated Net Income, (iii) decreases in Consolidated Working Capital for
    such fiscal year, (iv) an amount equal to the aggregate net non-cash loss on
    the Disposition of Property by the Borrower and its Subsidiaries during such
    fiscal  year  (other  than  sales of  inventory  in the  ordinary  course of
    business),  to the extent  deducted  in arriving  at such  Consolidated  Net
    Income and (v) the net increase during such fiscal year (if any) in deferred
    tax accounts of the Borrower over (b) the sum, without  duplication,  of (i)
    an amount equal to the amount of all non-cash  credits  included in arriving
    at such  Consolidated  Net Income,  (ii) the Specified  Capital  Expenditure
    Amount for such fiscal year,  (iii) the aggregate  amount of all prepayments
    of Revolving Credit Loans during such fiscal year to the extent accompanying
    permanent  optional  reductions of the Revolving Credit  Commitments and all
    optional  prepayments  of the Term Loans during such fiscal  year,  (iv) the
    aggregate  amount of all regularly  scheduled  principal  payments of Funded
    Debt (including, without limitation, the Term Loans) of the Borrower and its
    Subsidiaries  made  during  such  fiscal  year (other than in respect of any
    revolving credit facility to the extent there is not an equivalent permanent
    reduction in commitments thereunder),  (v) increases in Consolidated Working
    Capital for such fiscal  year,  (vi) an amount  equal to the  aggregate  net
    non-cash  gain  on the  Disposition  of  Property  by the  Borrower  and its
    Subsidiaries  during such fiscal year (other than sales of  inventory in the
    ordinary  course of  business),  to the extent  included in arriving at such
    Consolidated Net Income, (vii) an amount equal to the aggregate cash gain on
    the Disposition of Property by the Borrower and its Subsidiaries during such
    fiscal  year  (other  than  sales of  inventory  in the  ordinary  course of
    business)  to the extent (A) included in arriving at such  Consolidated  Net
    Income, and (B) included in any Reinvestment Deferred Amount or applied as a
    Capital  Expenditure during such fiscal year, (viii) the net decrease during
    such fiscal year (if any) in deferred tax accounts of the Borrower, (ix) the
    amount of cash  invested in Permitted  Acquisitions  during such fiscal year
    (excluding  any such Permitted  Acquisition to the extent  financed with the
    proceeds of Indebtedness or any  Reinvestment  Deferred  Amount) and (x) the
    Permitted Stock  Repurchase  Amount for such fiscal year (less the amount of
    proceeds of resales of stock  reinvested in the Borrower  during such fiscal
    year as  contemplated  by the  definition  of  "Permitted  Stock  Repurchase
    Amount" in this Section 1.1).

         "Excess Cash Flow Application Date": as defined in Section 2.7(c).

         "Excluded Foreign  Subsidiaries":  any Foreign Subsidiary in respect of
    which either (i) the pledge of all of the Capital  Stock of such  Subsidiary
    as  Collateral  or  (ii)  the   guaranteeing   by  such  Subsidiary  of  the
    Obligations,  would,  in the good faith judgment of the Borrower,  result in
    adverse tax consequences to the Borrower.

         "Facility":  each of (a) the  Tranche A Term Loan  Commitments  and the
    Tranche A Term Loans made  thereunder  (the "Tranche A Term Loan  Facility")
    and (b) the

                                       11

<PAGE>

    Tranche B Term Loan Commitments and the Tranche B Term Loans made thereunder
    (the "Tranche B Term Loan Facility").

         "Federal Funds Effective  Rate":  for any day, the weighted  average of
    the rates on  overnight  federal  funds  transactions  with  members  of the
    Federal  Reserve System  arranged by federal funds brokers,  as published on
    the next  succeeding  Business Day by the Federal  Reserve Bank of New York,
    or, if such rate is not so  published  for any day which is a Business  Day,
    the average of the quotations for the day of such  transactions  received by
    the Reference Lender from three federal funds brokers of recognized standing
    selected by it.

         "Foreign  Subsidiary":  any  Subsidiary  of the Borrower  that is not a
    Domestic Subsidiary.

         "Funded Debt": as to any Person, all Indebtedness of such Person of the
    types   described  in  clauses  (a)  through  (e)  of  the   definition   of
    "Indebtedness" in this Section.

         "Funding  Office":  the  office  specified  from  time  to  time by the
    Administrative Agent as its funding office by notice to the Borrower and the
    Lenders.

         "FY":  when used with a numerical year  designation,  means such fiscal
    year (i. e., FY 1999 means  fiscal  year  1999,  which ends on the  Saturday
    nearest to December 31, 1999; and "FQ1", "FQ2 ", "FQ3", and "FQ4", when used
    with a numerical year designation,  means the first, second, third or fourth
    fiscal quarters,  respectively,  of such fiscal year of the Borrower. (e.g.,
    FQ1 1999 means the first fiscal quarter of FY 1999).

         "GAAP":  generally accepted accounting  principles in the United States
    of America  as in effect  from time to time,  except  that for  purposes  of
    Section 6.1,  GAAP shall be  determined  on the basis of such  principles in
    effect on the date hereof and consistent  with those used in the preparation
    of the most  recent  audited  financial  statements  referred  to in Section
    3.1(b).

         "Governmental Authority":  any nation or government, any state or other
    political   subdivision   thereof  and  any  entity  exercising   executive,
    legislative,   judicial,   regulatory  or  administrative  functions  of  or
    pertaining to government.

         "Guarantee  and  Collateral  Agreement":  the Guarantee and  Collateral
    Agreement  to be executed and  delivered by Holdings,  the Borrower and each
    Subsidiary  Guarantor,  substantially  in the form of Exhibit A, as the same
    may be amended, supplemented or otherwise modified from time to time.

         "Guarantee  Obligation":  as to any Person (the "guaranteeing person"),
    any  obligation  of  (a)  the  guaranteeing  person  or (b)  another  Person
    (including,  without  limitation,  any bank  under any  letter of credit) to
    induce  the  creation  of  which  the  guaranteeing   person  has  issued  a
    reimbursement, counterindemnity or similar obligation,
  
                                       12

<PAGE>

    in either case  guaranteeing  or in effect  guaranteeing  any  Indebtedness,
    leases,  dividends or other  obligations (the "primary  obligations") of any
    other third Person (the "primary  obligor") in any manner,  whether directly
    or  indirectly,   including,  without  limitation,  any  obligation  of  the
    guaranteeing  person,  whether or not  contingent,  (i) to purchase any such
    primary obligation or any Property  constituting direct or indirect security
    therefor,  (ii) to advance or supply funds (1)_) for the purchase or payment
    of any such primary  obligation or (2) to maintain working capital or equity
    capital of the primary  obligor or  otherwise  to maintain  the net worth or
    solvency of the primary obligor,  (iii) to purchase Property,  securities or
    services primarily for the purpose of assuring the owner of any such primary
    obligation  of the  ability of the primary  obligor to make  payment of such
    primary obligation or (iv) otherwise to assure or hold harmless the owner of
    any such  primary  obligation  against  loss in respect  thereof;  provided,
    however,  that the term Guarantee  Obligation shall not include endorsements
    of instruments for deposit or collection in the ordinary course of business.
    The amount of any Guarantee  Obligation of any guaranteeing  person shall be
    deemed to be the lower of (a) an amount equal to the stated or  determinable
    amount  of the  primary  obligation  in  respect  of  which  such  Guarantee
    Obligation  is made and (b) the maximum  amount for which such  guaranteeing
    person may be liable pursuant to the terms of the instrument  embodying such
    Guarantee Obligation,  unless such primary obligation and the maximum amount
    for  which  such  guaranteeing  person  may be  liable  are  not  stated  or
    determinable, in which case the amount of such Guarantee Obligation shall be
    such  guaranteeing  person's  maximum  reasonably  anticipated  liability in
    respect thereof as determined by the Borrower in good faith.

         "Guarantors":  the collective  reference to Holdings and the Subsidiary
    Guarantors.

         "Hedge Agreements":  all interest rate swaps, caps or collar agreements
    or similar  arrangements  entered into by the  Borrower or its  Subsidiaries
    providing for protection against  fluctuations in interest rates or currency
    exchange  rates or the  exchange  of nominal  interest  obligations,  either
    generally or under specific contingencies.

         "Indebtedness": of any Person at any date, without duplication, (a) all
    indebtedness of such Person for borrowed money,  (b) all obligations of such
    Person for the deferred  purchase price of Property or services  (other than
    trade payables  incurred in the ordinary course of such Person's  business),
    (c) all obligations of such Person evidenced by notes, bonds,  debentures or
    other similar instruments, (d) all indebtedness created or arising under any
    conditional sale or other title retention agreement with respect to Property
    acquired by such Person  (even  though the rights and remedies of the seller
    or lender  under  such  agreement  in the event of  default  are  limited to
    repossession or sale of such Property), (e) all Capital Lease Obligations of
    such Person, (f) all obligations of such Person, contingent or otherwise, as
    an account party or applicant under acceptance,  letter of credit or similar
    facilities,  (g) all obligations of such Person, contingent or otherwise, to
    purchase, redeem, retire or otherwise acquire for value any Capital Stock of
    such  Person,  (h) all  Guarantee  Obligations  of such Person in respect of
    obligations  of the kind  referred to in clauses (a) through (g) above;  (i)
    all obligations of

                                       13

<PAGE>

    the kind  referred to in clauses  (a)  through (h) above  secured by (or for
    which the holder of such  obligation  has an existing  right,  contingent or
    otherwise,  to be  secured  by) any  Lien on  Property  (including,  without
    limitation,  accounts and contract rights) owned by such Person,  whether or
    not such  Person  has  assumed  or become  liable  for the  payment  of such
    obligation,  (j) for the purposes of Section 7(e) only,  all  obligations of
    such Person in respect of Hedge Agreements and (k) the liquidation  value of
    any preferred  Capital Stock of such Person or its Subsidiaries  held by any
    Person  other than such  Person and its Wholly  Owned  Subsidiaries  if such
    Preferred Capital Stock is mandatorily redeemable prior to the date which is
    91 days after the final scheduled maturity date of the Term Loans.

         "Indemnified Liabilities": as defined in Section 9.5.

         "Indemnitee": as defined in Section 9.5.

         "Insolvency":  with respect to any  Multiemployer  Plan,  the condition
    that such Plan is insolvent within the meaning of Section 4245 of ERISA.

         "Insolvent": pertaining to a condition of Insolvency.

         "Intellectual  Property":  the  collective  reference  to  all  rights,
    priorities and privileges relating to intellectual property, whether arising
    under United States, multinational or foreign laws or otherwise,  including,
    without  limitation,   copyrights,   copyright  licenses,   patents,  patent
    licenses,   trademarks,   trademark  licenses,   technology,   know-how  and
    processes, and all rights to sue at law or in equity for any infringement or
    other  impairment  thereof,  including the right to receive all proceeds and
    damages therefrom.

         "Interest  Payment Date": (a) as to any Base Rate Loan, the last day of
    each March, June,  September and December to occur while such Base Rate Loan
    is outstanding and the final maturity date of such Base Rate Loan, (b) as to
    any Eurodollar  Loan having an Interest  Period of three months or less, the
    last day of such Interest  Period,  (c) as to any Eurodollar  Loan having an
    Interest Period longer than three months, each day which is three months, or
    a whole multiple  thereof,  after the first day of such Interest  Period and
    the last day of such Interest  Period and (d) as to any Term Loan,  the date
    of any repayment or prepayment made in respect thereof.

         "Interest Period": as to any Eurodollar Loan, (a) initially, the period
    commencing  on the  borrowing or  conversion  date, as the case may be, with
    respect to such  Eurodollar  Loan and ending one,  two,  three or six months
    thereafter, as selected by the Borrower in its notice of borrowing or notice
    of  conversion,  as the case may be,  given with  respect  thereto;  and (b)
    thereafter,  each period  commencing  on the last day of the next  preceding
    Interest  Period  applicable  to such  Eurodollar  Loan and ending one, two,
    three or six months  thereafter,  as selected by the Borrower by irrevocable
    notice to the  Administrative  Agent not less than three Business Days prior
    to the last day of the then current Interest

                                       14

<PAGE>

    Period with respect thereto;  provided that, all of the foregoing provisions
    relating to Interest Periods are subject to the following:

              (i) if any Interest  Period would  otherwise  end on a day that is
         not a Business Day, such Interest  Period shall be extended to the next
         succeeding 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 immediately  preceding  Business
         Day;

              (ii) any Interest  Period that would  otherwise  extend beyond the
         date final  payment is due on the Tranche A Term Loans or the Tranche B
         Term  Loans,  as the  case  may be,  shall  end on such  due  date,  as
         applicable;

              (iii) any Interest  Period 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 a calendar month; and

              (iv) the  Borrower  shall  select  Interest  Periods  so as not to
         require  a payment  or  prepayment  of any  Eurodollar  Loan  during an
         Interest Period for such Eurodollar Loan.

         "Investments": as defined in Section 6.8.

         "Joint  Required  Lenders":  Lenders  and/or  Revolving  Credit Lenders
    holding  more than 60% of the sum of (a) the  undrawn  Commitments,  (b) the
    undrawn Revolving Credit Commitments, (c) the outstanding Term Loans and (d)
    the Total Revolving Extensions of Credit (as defined in the Revolving Credit
    Agreement).

         "Lehman  Entity":  any of Lehman  Commercial  Paper Inc.  or any of its
    affiliates (including Syndicated Loan Funding Trust).

         "Lender  Addendum":  with  respect  to any  initial  Lender,  a  Lender
    Addendum,  substantially  in the  form  of  Exhibit  J, to be  executed  and
    delivered by such Lender on the Closing Date as provided in Section 9.17.

         "Lenders": as defined in the preamble hereto.

         "Lien":  any  mortgage,  pledge,  hypothecation,   assignment,  deposit
    arrangement,  encumbrance,  lien  (statutory  or  other),  charge  or  other
    security interest or any preference, priority or other security agreement or
    preferential  arrangement  of any  kind  or  nature  whatsoever  (including,
    without limitation,  any conditional sale or other title retention agreement
    and any capital lease having  substantially  the same economic effect as any
    of the foregoing).

                                       15

<PAGE>

         "Loan  Documents":   this  Agreement,   the  Security  Documents,   the
    Syndication Letter and the Notes.

         "Loan  Parties":  Holdings,  the  Borrower and each  Subsidiary  of the
    Borrower which is a party to a Loan Document.

         "Majority Facility Lenders":  with respect to any Facility, the holders
    of more than 50% of the aggregate  unpaid principal amount of the Term Loans
    outstanding under such Facility.

         "Material  Adverse  Effect":  a  material  adverse  effect  on (a)  the
    enforceability  of  the  documents  entered  into  in  connection  with  the
    Acquisition,  (b) the business,  assets,  property,  condition (financial or
    otherwise)  or prospects of the  Borrower  and its  Subsidiaries  taken as a
    whole or (c) the validity or  enforceability of this Agreement or any of the
    other Loan  Documents or the rights or remedies of the Agents or the Lenders
    hereunder or thereunder.

         "Material  Environmental  Amount":  an amount or amounts payable by the
    Borrower  and/or  any of its  Subsidiaries,  in the  aggregate  in excess of
    $500,000  in respect of any one  occurrence,  for:  costs to comply with any
    Environmental Law; costs of any investigation,  and any remediation,  of any
    Material of  Environmental  Concern;  and compensatory  damages  (including,
    without limitation damages to natural resources),  punitive damages,  fines,
    and penalties pursuant to any Environmental Law.

         "Materials  of  Environmental   Concern":  any  gasoline  or  petroleum
    (including  crude  oil or  any  fraction  thereof)  or  petroleum  products,
    polychlorinated   biphenyls,    urea-formaldehyde   insulation,    asbestos,
    pollutants, contaminants,  radioactivity, and any other substances or forces
    of any  kind,  whether  or not any such  substance  or force is  defined  as
    hazardous or toxic under any Environmental  Law, that is regulated  pursuant
    to or could  reasonably  be  expected  to give rise to  liability  under any
    Environmental Law.

         "Mortgaged Properties":  the real properties listed on Schedule 1.1, as
    to which the  Administrative  Agent for the benefit of the Lenders  shall be
    granted a Lien pursuant to the Mortgages.

         "Mortgages":  each of the mortgages and deeds of trust made by any Loan
    Party in favor of, or for the benefit of, the  Administrative  Agent for the
    benefit of the  Lenders,  substantially  in the form of Exhibit D (with such
    changes thereto as shall be advisable  under the law of the  jurisdiction in
    which such mortgage or deed of trust is to be recorded),  as the same may be
    amended, supplemented or otherwise modified from time to time.

         "Multiemployer Plan": a Plan that is a multiemployer plan as defined in
    Section 4001(a)(3) of ERISA.

                                       16

<PAGE>

         "Nealson  Street   Property":   the  Mortgaged   Property  of  Bloch  &
    Guggenheimer, Inc. located at 202 Nealson Street in Hurlock, Maryland.

         "Net Cash  Proceeds":  (a) in  connection  with any  Asset  Sale or any
    Recovery  Event,  the  proceeds  thereof  in  the  form  of  cash  and  Cash
    Equivalents (including any such proceeds received by way of deferred payment
    of principal pursuant to a note or installment  receivable or purchase price
    adjustment  receivable or otherwise,  but only as and when received) of such
    Asset Sale or Recovery Event,  net of attorneys'  fees,  accountants'  fees,
    investment  banking fees, amounts required to be applied to the repayment of
    Indebtedness  secured by a Lien expressly  permitted  hereunder on any asset
    which is the  subject of such Asset Sale or Recovery  Event  (other than any
    Lien pursuant to a Security  Document) and other customary fees and expenses
    actually  incurred  in  connection  therewith  and  net  of  taxes  paid  or
    reasonably  estimated to be payable as a result  thereof  (after taking into
    account  any  available  tax  credits  or  deductions  and any  tax  sharing
    arrangements)  and (b) in  connection  with any  issuance  or sale of equity
    securities or debt securities or instruments or the incurrence of loans, the
    cash proceeds  received from such issuance or incurrence,  net of attorneys'
    fees, investment banking fees, accountants' fees, underwriting discounts and
    commissions  and other  customary  fees and  expenses  actually  incurred in
    connection therewith.

         "Non-Excluded Taxes": as defined in Section 2.15(a).

         "Non-U.S. Lender": as defined in Section 2.15(d).

         "Notes":  the  collective  reference to each  promissory  note, if any,
    evidencing Term Loans.

         "Obligations":  the unpaid  principal  of and  interest on  (including,
    without  limitation,  interest accruing after the maturity of the Term Loans
    and interest accruing after the filing of any petition in bankruptcy, or the
    commencement of any insolvency,  reorganization or like proceeding, relating
    to the Borrower,  whether or not a claim for  post-filing  or  post-petition
    interest  is  allowed  in such  proceeding)  the Term  Loans  and all  other
    obligations and liabilities of the Borrower to the  Administrative  Agent or
    to any Lender (or, in the case of Specified Hedge Agreements,  any affiliate
    of any Lender), whether direct or indirect,  absolute or contingent,  due or
    to become due, or now existing or hereafter incurred, which may arise under,
    out of, or in connection with, this Agreement,  any other Loan Document, any
    Specified Hedge Agreement or any other document made,  delivered or given in
    connection herewith or therewith, whether on account of principal, interest,
    reimbursement  obligations,  fees, indemnities,  costs, expenses (including,
    without  limitation,  all fees,  charges and disbursements of counsel to the
    Administrative  Agent or to any Lender  that are  required to be paid by the
    Borrower  pursuant hereto) or otherwise;  provided,  that (i) obligations of
    the Borrower or any Subsidiary  under any Specified Hedge Agreement shall be
    secured and guaranteed pursuant to the Security Documents only to the extent
    that,  and  for so  long  as,  the  other  Obligations  are so  secured  and
    guaranteed and (ii) any release of Collateral or guarantors

                                       17

<PAGE>

    effected in the manner  permitted  by this  Agreement  shall not require the
    consent of holders of obligations under Specified Hedge Agreements.

         "Other Taxes": any and all present or future stamp or documentary taxes
    or any other excise or property  taxes,  charges or similar  levies  arising
    from  any  payment  made  hereunder  or  from  the  execution,  delivery  or
    enforcement  of, or otherwise  with respect to, this  Agreement or any other
    Loan Document.

         "Participant": as defined in Section 9.6(b).

         "Payment  Office":  the  office  specified  from  time  to  time by the
    Administrative Agent as its payment office by notice to the Borrower and the
    Lenders.

         "PBGC": the Pension Benefit Guaranty  Corporation  established pursuant
    to Subtitle A of Title IV of ERISA (or any successor).

         "Permitted Acquisition":  any acquisition by the Borrower or any of its
    Subsidiaries of all of the Capital Stock of, or all or substantially  all of
    the assets  constituting  a business  unit of, any other  Person so long as,
    with  respect  to  any  such  acquisition,   the  following  conditions  are
    satisfied:

              (a) no  Default or Event of Default  shall  have  occurred  and be
         continuing or would result from such acquisition;

              (b) after giving effect to such acquisition, the Borrower shall be
         in pro  forma  compliance  with the  financial  covenants  set forth in
         Section 6.1;

              (c) such  acquisition  shall  be  consistent  with the  Borrower's
         stated  management  strategy as in effect on the Closing Date,  and the
         target of such  acquisition  shall be in the same or a similar  line of
         business as the Borrower and its Subsidiaries;

              (d) the aggregate  consideration  for such  acquisition  shall not
         exceed (i)  $20,000,000 if such  acquisition is consummated in FY 1999,
         (ii)  $30,000,000  if such  acquisition  is consummated in FY 2000, and
         (iii)  $40,000,000  if  such  acquisition  is  consummated  thereafter;
         provided,  that the foregoing  restrictions in this paragraph (d) shall
         not be applicable to any acquisition if the Consolidated Leverage Ratio
         would be less than or equal to 5.5 to 1.0 after giving pro forma effect
         to such  acquisition  as if it had  occurred  on the  first  day of the
         period measured by the Consolidated Leverage Ratio;

              (e) the  target of such  acquisition  either  (i)  shall  have had
         positive consolidated net income before interest,  taxes,  depreciation
         and amortization, determined in accordance with GAAP ("EBITDA") for the
         period of four consecutive fiscal quarters of such target most recently
         ended prior to the date of

                                       18

<PAGE>

         such acquisition,  or (ii) shall have had positive pro forma EBITDA for
         such period (such pro forma EBITDA to be determined in accordance  with
         the Borrower's  customary  practices  consistent  with the  methodology
         reflected  in  the  Pro  Forma  Balance  Sheet  and  related  financial
         statements included in the Confidential Information Memorandum);

              (f) the Borrower shall have performed reasonable and customary due
         diligence  with  respect to such  acquisition  and the target  thereof,
         including with respect to environmental matters;

              (g) the  Borrower  and/or  the  applicable  Subsidiary  shall have
         obtained all material  third party  consents and approvals  required in
         connection with such acquisition;

              (h)  environmental   audits,   pro  forma  financial   statements,
         appraisals,  if any,  accounting  reviews and  material  due  diligence
         reports  conducted by the  Borrower  with respect to the business to be
         acquired  shall have been  delivered to  Administrative  Agent not less
         than ten Business Days prior to consummation of such acquisition;

              (i) the  Borrower  shall have  reasonably  determined  that it has
         adequate liquidity available for working capital; and

              (j) substantially all of the assets so acquired are located in the
         United  States or Canada or, if such  acquisition  is  structured  as a
         purchase of stock,  the Person so acquired is organized  under the laws
         of a state of the United States,  and  substantially  all of the assets
         owned by such  Person  are  located  in the  United  States or  Canada;
         provided,  that (i) the  Borrower  may  acquire  the  stock of a Person
         organized  under the laws of a state of the United  States whose assets
         are  located,  in whole or in part,  in Puerto Rico or Canada,  if such
         Person becomes a Subsidiary Guarantor and grants a security interest in
         its assets as  contemplated  by Section  5.10 and (ii) the Borrower may
         acquire the stock of any Person organized under the laws of Puerto Rico
         or Canada, so long as the aggregate amount of investments made pursuant
         to this clause (ii),  together  with  Investments  made as permitted by
         Section 6.8(h), does not exceed $5,000,000.

         "Permitted  Investors":  the collective reference to the Sponsor, Bruce
    C. Bruckmann, Harold O. Rosser II, Stephen C. Sherrill, Donald Bruckmann, H.
    Virgil Sherrill,  Nancy Zweng, BCB Partnership,  NAZ Partnership and Paul D.
    Kaminski, and their respective Control Investment Affiliates.

         "Permitted Stock Repurchase Amount":  the amount of Restricted Payments
    made by the  Borrower  to Holdings  and  applied by  Holdings to  repurchase
    Capital  Stock of Holdings  from  officers and  employees of the Borrower in
    connection  with the death,  departure or  termination of employment of such
    officers and employees; provided, that

                                       19

<PAGE>

    (a) the  proceeds  of any  resale  of the  Capital  Stock so  purchased  are
    immediately  reinvested  in the common  equity of the  Borrower  and (b) the
    cumulative amount of such payments from and after the Closing Date, less the
    cumulative  amount of proceeds of such resales  reinvested  in the Borrower,
    shall not at any time exceed $5,000,000.

         "Person": an individual,  partnership,  corporation,  limited liability
    company,   business  trust,  joint  stock  company,  trust,   unincorporated
    association,  joint  venture,  Governmental  Authority  or other  entity  of
    whatever nature.

         "Plan": at a particular time, any employee benefit plan that is covered
    by ERISA and in  respect  of which the  Borrower  or a  Commonly  Controlled
    Entity is (or,  if such plan  were  terminated  at such  time,  would  under
    Section 4069 of ERISA be deemed to be) an  "employer"  as defined in Section
    3(5) of ERISA.

         "Prepayment Option Notice": as defined in Section 2.13(d).

         "Pricing Grid": the pricing grid attached hereto as Annex A.

         "Pro Forma Balance Sheet": as defined in Section 3.1(a).

         "Projections": as defined in Section 5.2(c).

         "Property":  any  right  or  interest  in or to  property  of any  kind
    whatsoever,  whether  real,  personal  or  mixed  and  whether  tangible  or
    intangible, including, without limitation, Capital Stock.

         "Recovery  Event":  any  settlement  of or  payment  in  respect of any
    property or casualty insurance claim or any condemnation proceeding relating
    to any asset of Holdings, the Borrower or any of its Subsidiaries.

         "Reference Lender": Bankers Trust Company.

         "Register": as defined in Section 9.6(d).

         "Regulation  U":  Regulation  U of the Board as in effect  from time to
    time.

         "Reimbursement  Obligations":   as  defined  in  the  Revolving  Credit
    Agreement.

         "Reinvestment Deferred Amount": with respect to any Reinvestment Event,
    the aggregate Net Cash Proceeds received by Holdings, the Borrower or any of
    its Subsidiaries in connection  therewith that are not applied to prepay the
    Term Loans  pursuant  to  Section  2.7(b) as a result of the  delivery  of a
    Reinvestment Notice.

         "Reinvestment  Event":  any Asset Sale or Recovery  Event in respect of
    which the Borrower has delivered a Reinvestment Notice.

                                       20

<PAGE>

         "Reinvestment  Notice":  a written  notice  executed  by a  Responsible
    Officer  stating  that no Default or Event of Default  has  occurred  and is
    continuing  and  that  the  Borrower   (directly  or  indirectly  through  a
    Subsidiary) intends and expects to use all or a specified portion of the Net
    Cash  Proceeds  of an Asset Sale or  Recovery  Event to  acquire,  repair or
    restore assets useful in the Borrower's or any Subsidiary's business.

         "Reinvestment  Prepayment  Amount":  with  respect to any  Reinvestment
    Event,  the  Reinvestment  Deferred Amount relating  thereto less any amount
    expended  prior to the  relevant  Reinvestment  Prepayment  Date to acquire,
    repair or  restore  assets  useful  in the  Borrower's  or any  Subsidiary's
    business.

         "Reinvestment Prepayment Date": with respect to any Reinvestment Event,
    the earlier of (a) the date occurring 270 days after such Reinvestment Event
    and (b) the date on which the  Borrower  shall  have  determined  not to, or
    shall have otherwise ceased to, acquire,  repair or restore assets useful in
    the Borrower's or any  Subsidiary's  business with all or any portion of the
    relevant Reinvestment Deferred Amount.

         "Reorganization": with respect to any Multiemployer Plan, the condition
    that such plan is in  reorganization  within the meaning of Section  4241 of
    ERISA.

         "Reportable  Event":  any of the events set forth in Section 4043(c) of
    ERISA,  other than those events as to which the thirty day notice  period is
    waived under  subsections  .27,  .28, .29, .30, .31, .32, .34 or .35 of PBGC
    Reg. Section 4043.

         "Required  Lenders":  at any time,  the holders of more than 50% of (a)
    until the Closing Date, the Commitments  and (b)  thereafter,  the aggregate
    unpaid principal amount of the Term Loans then outstanding.

         "Required Prepayment Lenders": the Majority Facility Lenders in respect
    of each Facility.

         "Requirement   of  Law":  as  to  any  Person,   the   Certificate   of
    Incorporation and By-Laws or other  organizational or governing documents of
    such Person, and any law, treaty,  rule or regulation or determination of an
    arbitrator  or a  court  or  other  Governmental  Authority,  in  each  case
    applicable to or binding upon such Person or any of its Property or to which
    such Person or any of its Property is subject.

         "Responsible Officer": the chief executive officer,  president or chief
    financial  officer  of the  Borrower,  but in any  event,  with  respect  to
    financial matters, the chief financial officer of the Borrower.

         "Restricted Payments": as defined in Section 6.6.

         "Revolving Credit Agreement":  the Revolving Credit Agreement, dated as
    of March 15, 1999,  among the Borrower,  the lenders named  therein,  Lehman
    Commercial

                                       21

<PAGE>

    Paper Inc., as administrative agent, and others, as the same may be amended,
    supplemented or otherwise modified from time to time.

         "Revolving  Credit  Commitment":  as  defined in the  Revolving  Credit
    Agreement.

         "Revolving  Credit  Facility":   the  credit  facility  made  available
    pursuant to the Revolving Credit Agreement.

         "Revolving  Credit  Lender":  each Lender (as defined in the  Revolving
    Credit Agreement).

         "Revolving Credit Loans": as defined in the Revolving Credit Agreement.

         "SEC": the Securities and Exchange Commission (or successors thereto or
    an analogous Governmental Authority).

         "Security  Documents":  the  collective  reference to the Guarantee and
    Collateral  Agreement,  the  Mortgages  and  all  other  security  documents
    hereafter  delivered  to the  Administrative  Agent  granting  a Lien on any
    Property of any Person to secure the obligations and liabilities of any Loan
    Party  under any Loan  Document  and of any Loan  Party (as  defined  in the
    Revolving  Credit  Agreement)  under any Loan  Document  (as  defined in the
    Revolving Credit Agreement).

         "Senior Subordinated Note Indenture": the Indenture, dated as of August
    11, 1997,  entered into by the Borrower and certain of its  Subsidiaries and
    The Bank of New York,  as Trustee,  in  connection  with the issuance of the
    Senior  Subordinated   Notes,   together  with  all  instruments  and  other
    agreements  entered into by the Borrower or such  Subsidiaries in connection
    therewith,  as the same may be amended,  supplemented or otherwise  modified
    from time to time in accordance with Section 6.9.

         "Senior  Subordinated  Notes":  the subordinated  notes of the Borrower
    issued  pursuant to the Senior  Subordinated  Note Indenture in the original
    aggregate principal amount of $120,000,000.

         "Single  Employer Plan": any Plan that is covered by Title IV of ERISA,
    but which is not a Multiemployer Plan.

         "Solvent":  when used with respect to any Person,  that, as of any date
    of determination, (a) the amount of the "present fair saleable value" of the
    assets of such  Person  will,  as of such  date,  exceed  the  amount of all
    "liabilities of such Person,  contingent or otherwise",  as of such date, as
    such quoted terms are determined in accordance with  applicable  federal and
    state laws governing  determinations  of the insolvency of debtors,  (b) the
    present fair  saleable  value of the assets of such Person will,  as of such
    date,  be greater than the amount that will be required to pay the liability
    of such Person on its debts as such debts become  absolute and matured,  (c)
    such Person will

                                       22

<PAGE>

    not have,  as of such date,  an  unreasonably  small  amount of capital with
    which to conduct its  business,  and (d) such Person will be able to pay its
    debts as they  mature.  For  purposes of this  definition,  (i) "debt" means
    liability  on a "claim",  and (ii)  "claim"  means any (x) right to payment,
    whether  or  not  such  a  right  is  reduced   to   judgment,   liquidated,
    unliquidated,  fixed, contingent,  matured, unmatured, disputed, undisputed,
    legal,  equitable,  secured or unsecured or (y) right to an equitable remedy
    for breach of  performance  if such breach gives rise to a right to payment,
    whether or not such  right to an  equitable  remedy is reduced to  judgment,
    fixed, contingent,  matured or unmatured,  disputed,  undisputed, secured or
    unsecured.

         "Specified  Capital  Expenditure  Amount":  for any  fiscal  year  (the
    "Calculation  Year"), an amount equal to the amount of Capital  Expenditures
    permitted by Section 6.7 to be made in the  Calculation  Year (including any
    amount carried over from the prior fiscal year), minus (b) the amount of any
    permitted Capital  Expenditures from the prior fiscal year which was carried
    over  into  the  Calculation  Year but not  actually  expended  for  Capital
    Expenditures in the Calculation Year.

         "Specified Change of Control":  a "Change of Control" as defined in the
    Senior Subordinated Note Indenture.

         "Specified  Hedge  Agreement":  any Hedge Agreement (a) entered into by
    (i) the  Borrower  or any of its  Subsidiaries  and (ii) any  Lender  or any
    affiliate thereof, as counterparty and (b) which has been designated by such
    Lender  and the  Borrower,  by  notice to the  Administrative  Agent and the
    Syndication Agent, as a Specified Hedge Agreement.

         "Sponsor": Bruckmann, Rosser, Sherill & Co., L.P.

         "Subsidiary":  as to any Person,  a corporation,  partnership,  limited
    liability  company  or  other  entity  of  which  shares  of  stock or other
    ownership  interests  having ordinary voting power (other than stock or such
    other ownership  interests having such power only by reason of the happening
    of a  contingency)  to elect a majority of the board of  directors  or other
    managers of such  corporation,  partnership  or other entity are at the time
    owned,  or the  management  of which is  otherwise  controlled,  directly or
    indirectly  through one or more  intermediaries,  or both,  by such  Person.
    Unless  otherwise  qualified,   all  references  to  a  "Subsidiary"  or  to
    "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
    of the Borrower.

         "Subsidiary Guarantor":  each Subsidiary of the Borrower other than any
    Excluded Foreign Subsidiary.

         "Swing Line Loans": as defined in the Revolving Credit Agreement.

         "Syndication Letter Agreement":  the letter agreement,  dated as of the
    date hereof, between the Borrower and the Syndication Agent and the Arranger
    relating to the

                                       23

<PAGE>

    syndication of the revolving  credit facility  provided for in the Revolving
    Credit Agreement and of the Term Loan Facilities.

         "Term Loan Facilities":  the collective reference to the Tranche A Term
    Loan Facility and the Tranche B Term Loan Facility.

         "Term Loans": the collective  reference to the Tranche A Term Loans and
    Tranche B Term Loans.

         "Tranche A Term Loan": as defined in Section 2.1.

         "Tranche A Term Loan Commitment":  as to any Lender,  the obligation of
    such Lender, if any, to make a Tranche A Term Loan to the Borrower hereunder
    in a  principal  amount not to exceed the amount set forth under the heading
    "Tranche A Term Loan  Commitment"  opposite such Lender's name on Schedule 1
    to the Lender Addendum  delivered by such Lender, or, as the case may be, in
    the Assignment  and Acceptance  pursuant to which such Lender became a party
    hereto,  as the same may be changed from time to time  pursuant to the terms
    hereof. The original aggregate amount of the Tranche A Term Loan Commitments
    is $70,000,000.

         "Tranche  A Term  Loan  Facility":  as  defined  in the  definition  of
    "Facility" in this Section 1.1.

         "Tranche A Term Loan  Lender":  each  Lender  that has a Tranche A Term
    Loan Commitment or is the holder a Tranche A Term Loan.

         "Tranche A Term Loan  Percentage":  as to Tranche A Term Loan Lender at
    any time, the percentage  which such Lender's Tranche A Term Loan Commitment
    then  constitutes of the aggregate  Tranche A Term Loan  Commitments (or, at
    any time  after  the  Closing  Date,  the  percentage  which  the  aggregate
    principal  amount of such  Lender's  Tranche  A Term  Loan then  outstanding
    constitutes  of the aggregate  principal  amount of the Tranche A Term Loans
    then outstanding).

         "Tranche B Term Loan": as defined in Section 2.1.

         "Tranche B Term Loan Commitment":  as to any Lender,  the obligation of
    such Lender, if any, to make a Tranche B Term Loan to the Borrower hereunder
    in a  principal  amount not to exceed the amount set forth under the heading
    "Tranche B Term Loan  Commitment"  opposite such Lender's name on Schedule 1
    to the Lender Addendum  delivered by such Lender, or, as the case may be, in
    the Assignment  and Acceptance  pursuant to which such Lender became a party
    hereto,  as the same may be changed from time to time  pursuant to the terms
    hereof. The original aggregate amount of the Tranche B Term Loan Commitments
    is $150,000,000.

                                       24

<PAGE>

         "Tranche  B Term  Loan  Facility":  as  defined  in the  definition  of
    "Facility" in this Section 1.1.

         "Tranche B Term Loan  Lender":  each  Lender  that has a Tranche B Term
    Loan Commitment or which is the holder of a Tranche B Term Loan.

         "Tranche B Term Loan  Percentage":  as to any  Lender at any time,  the
    percentage   which  such  Lender's  Tranche  B  Term  Loan  Commitment  then
    constitutes  of the aggregate  Tranche B Term Loan  Commitments  (or, at any
    time after the Closing Date,  the percentage  which the aggregate  principal
    amount of such Lender's Tranche B Term Loan then outstanding  constitutes of
    the   aggregate   principal   amount  of  the  Tranche  B  Term  Loans  then
    outstanding).

         "Transferee": as defined in Section 9.14.

         "Type":  as to any Term  Loan,  its  nature  as a Base  Rate  Loan or a
    Eurodollar Loan.

         "Wholly Owned  Subsidiary":  as to any Person,  any other Person all of
    the Capital Stock of which (other than directors' qualifying shares required
    by law) is owned by such Person  directly  and/or through other Wholly Owned
    Subsidiaries.

         "Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is a
    Wholly Owned Subsidiary of the Borrower.

         1.2 Other  Definitional  Provisions.  (a)  Unless  otherwise  specified
therein,  all terms defined in this  Agreement  shall have the defined  meanings
when used in the other Loan Documents or any  certificate or other document made
or delivered pursuant hereto or thereto.

         (b) As used herein and in the other Loan Documents, and any certificate
or other document made or delivered pursuant hereto or thereto, accounting terms
relating to Holdings,  the Borrower and its  Subsidiaries not defined in Section
1.1 and  accounting  terms  partly  defined  in Section  1.1,  to the extent not
defined, shall have the respective meanings given to them under GAAP.

         (c) The words  "hereof",  "herein" and "hereunder" and words of similar
import when used in this Agreement  shall refer to this Agreement as a whole and
not to any particular  provision of this  Agreement,  and Section,  Schedule and
Exhibit references are to this Agreement unless otherwise specified.

         (d) The  meanings  given  to terms  defined  herein  shall  be  equally
applicable to both the singular and plural forms of such terms.

                                       25

<PAGE>

                   SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

         2.1 Term Loan Commitments.  Subject to the terms and conditions hereof,
(a) each  Tranche A Term  Loan  Lender  severally  agrees to make a term loan (a
"Tranche A Term Loan") to the  Borrower on the Closing  Date in an amount not to
exceed the amount of the Tranche A Term Loan  Commitment  of such Lender and (b)
each Tranche B Term Loan Lender severally agrees to make a term loan (a "Tranche
B Term Loan") to the Borrower on the Closing Date in an amount not to exceed the
amount of the Tranche B Term Loan Commitment of such Lender.  The Term Loans may
from time to time be Eurodollar  Loans or Base Rate Loans,  as determined by the
Borrower and notified to the  Administrative  Agent in accordance  with Sections
2.2 and 2.8.

         2.2  Procedure  for Term Loan  Borrowing.  The Borrower  shall give the
Administrative  Agent  irrevocable  notice (which notice must be received by the
Administrative  Agent prior to 10:00 A.M.,  New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Lenders make the Term
Loans on the Closing Date and  specifying  the amount to be  borrowed.  The Term
Loans shall  initially  be Base Rate Loans and may be  converted  to  Eurodollar
Loans  after the Closing  Date  pursuant to Section  2.8.  Upon  receipt of such
notice the Administrative  Agent shall promptly notify each Lender thereof.  Not
later than 12:00 Noon, New York City time, on the Closing Date each Lender shall
make  available to the  Administrative  Agent at the Funding Office an amount in
immediately  available  funds equal to the Term Loan or Term Loans to be made by
such Lender. The  Administrative  Agent shall make available to the Borrower the
aggregate  of the amounts  made  available  to the  Administrative  Agent by the
Lenders in like funds.

         2.3  Repayment  of Term  Loans.  (a) The  Tranche  A Term  Loan of each
Tranche  A  Term  Loan  Lender   shall  mature  in  16   consecutive   quarterly
installments,  commencing on June 30, 2000,  each of which shall be in an amount
equal to such Lender's  Tranche A Term Loan Percentage  multiplied by the amount
set forth below opposite such installment:

         Installment                              Principal Amount
         -----------                              ----------------

         June 30, 2000                               $3,750,000
         September 30, 2000                           3,750,000
         December 31, 2000                            3,750,000
         March 31, 2001                               3,750,000
         June 30, 2001                                3,750,000
         September 30, 2001                           3,750,000
         December 31, 2001                            3,750,000
         March 31, 2002                               3,750,000
         June 30, 2002                                5,000,000
         September 30, 2002                           5,000,000
         December 31, 2002                            5,000,000
         March 31, 2003                               5,000,000
         June 30, 2003                                5,000,000

                                       26

<PAGE>

         September 30, 2003                           5,000,000
         December 31, 2003                            5,000,000
         March 31, 2004                               5,000,000

         (b) The Tranche B Term Loan of each  Tranche B Term Loan  Lender  shall
mature in 20 consecutive  quarterly  installments,  commencing on June 30, 2001,
each of which shall be in an amount equal to such  Lender's  Tranche B Term Loan
Percentage multiplied by the amount set forth below opposite such installment:

         Installment                              Principal Amount
         -----------                              ----------------

         June 30, 2001                              $   250,000
         September 30, 2001                             250,000
         December 31, 2001                              250,000
         March 31, 2002                                 250,000
         June 30, 2002                                  250,000
         September 30, 2002                             250,000
         December 31, 2002                              250,000
         March 31, 2003                                 250,000
         June 30, 2003                                  250,000
         September 30, 2003                             250,000
         December 31, 2003                              250,000
         March 31, 2004                                 250,000
         June 30, 2004                               18,000,000
         September 30, 2004                          18,000,000
         December 31, 2004                           18,000,000
         March 31, 2005                              18,000,000
         June 30, 2005                               18,750,000
         September 30, 2005                          18,750,000
         December 31, 2005                           18,750,000
         March 31, 2006                              18,750,000

         (c) In any event,  all unpaid  Obligations  in respect of the Tranche A
Term Loans and the  Tranche B Term  Loans  will be due and  payable on March 31,
2004 and March 31, 2006, respectively.

         2.4 Repayment of Term Loans;  Evidence of Debt. (a) The Borrower hereby
unconditionally  promises to pay to the Administrative  Agent for the account of
the appropriate  Lender the principal amount of each Term Loan of such Lender in
installments according to the amortization schedule set forth in Section 2.3 (or
on such earlier date on which the Term Loans become due and payable  pursuant to
Section 7). The  Borrower  hereby  further  agrees to pay interest on the unpaid
principal  amount of the Term Loans from time to time  outstanding from the date
hereof until  payment in full thereof at the rates per annum,  and on the dates,
set forth in Section 2.10.

                                       27

<PAGE>

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

         (c) The Administrative Agent, on behalf of the Borrower, shall maintain
the  Register  pursuant to Section  9.6(d),  and a  subaccount  therein for each
Lender,  in which  shall be  recorded  (i) the  amount  of each  Term  Loan made
hereunder  and any Note  evidencing  such Term Loan,  the Type  thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and  payable or to become due and payable  from the  Borrower to each Lender
hereunder  and (iii) both the amount of any sum  received by the  Administrative
Agent hereunder from the Borrower and each Lender's share thereof.

         (d) The entries  made in the  Register  and the accounts of each Lender
maintained  pursuant  to  Section  2.4(b)  shall,  to the  extent  permitted  by
applicable  law, be prima facie  evidence  of the  existence  and amounts of the
obligations  of the  Borrower  therein  recorded;  provided,  however,  that the
failure of any Lender or the  Administrative  Agent to maintain  the Register or
any such  account,  or any error  therein,  shall not in any  manner  affect the
obligation  of the Borrower to repay (with  applicable  interest) the Term Loans
made to such  Borrower  by such  Lender  in  accordance  with the  terms of this
Agreement.

         (e) The Borrower  agrees that,  upon the request to the  Administrative
Agent by any  Lender,  the  Borrower  will  execute and deliver to such Lender a
promissory  note of the  Borrower  evidencing  any Term  Loans  of such  Lender,
substantially  in the form of Exhibit G with  appropriate  insertions as to date
and  principal  amount;  provided  that  delivery  of such notes  shall not be a
condition precedent to the making of the Term Loans on the Closing Date.

         2.5 Fees, etc. (a) The Borrower agrees to pay to the Syndication  Agent
the fees in the amounts and on the dates previously  agreed to in writing by the
Borrower and the Syndication Agent.

         (b) The Borrower agrees to pay to the Administrative  Agent the fees in
the  amounts  and on the dates  from time to time  agreed to in  writing  by the
Borrower and the Administrative Agent.

         2.6  Optional  Prepayments.  (a) The  Borrower may at any time and from
time to time  prepay the Term  Loans,  in whole or in part,  without  premium or
penalty (except as otherwise provided herein), upon irrevocable notice delivered
to the  Administrative  Agent at least three  Business Days prior thereto in the
case of Eurodollar Loans and at least one Business Day prior thereto in the case
of Base Rate Loans, which notice shall specify the date and amount of prepayment
and whether the prepayment is of Eurodollar Loans or Base Rate Loans;  provided,
that if a  Eurodollar  Loan is prepaid on any day other than the last day of the
Interest  Period  applicable  thereto,  the Borrower  shall also pay any amounts
owing   pursuant  to  Section  2.16.   Upon  receipt  of  any  such  notice  the
Administrative  Agent shall promptly notify each relevant Lender thereof. If any
such  notice is given,  the amount  specified  in such  notice  shall be due and
                                       28

<PAGE>

payable on the date specified  therein,  together with accrued  interest to such
date on the amount  prepaid.  Partial  prepayments  of Term Loans shall be in an
aggregate  principal amount of $1,000,000 or a whole multiple thereof.  Optional
prepayments  of the Term Loans  shall be applied to the Tranche A Term Loans and
the Tranche B Term Loans  ratably  and to the  installments  thereof  ratably in
accordance with the then outstanding amounts thereof and may not be reborrowed.

         (b) All optional  prepayments  of principal in respect of the Tranche B
Term Loans  during  the two year  period  following  the  Closing  Date shall be
accompanied  by a prepayment  fee equal to (i) if such  prepayment is made on or
prior to the first  anniversary  of the  Closing  Date,  2% of the amount of the
principal  prepaid  and  (ii)  if  such  prepayment  is  made  after  the  first
anniversary of the Closing Date and on or prior to the second anniversary of the
Closing Date, 1% of the amount of the principal prepaid.  Any prepayment of Term
Loans in  connection  with a  refinancing  of the  Facilities  will be deemed to
constitute an optional prepayment.

         2.7 Mandatory  Prepayments  and Commitment  Reductions.  (a) Unless the
Required Prepayment Lenders shall otherwise agree, if any Capital Stock shall be
issued (excluding  Capital Stock of Holdings issued to Persons who are Permitted
Investors,  provided  that  prior to and after  giving  effect  to the  proposed
issuance, no Default or Event of Default shall have occurred and be continuing),
or Indebtedness  incurred, by Holdings,  the Borrower or any of its Subsidiaries
(excluding any Indebtedness incurred in accordance with Section 6.2 as in effect
on the date of this Agreement), an amount equal to the Net Cash Proceeds thereof
shall  be  applied  on the  date of  such  issuance  or  incurrence  toward  the
prepayment of the Term Loans.

         (b) Unless the Required Prepayment Lenders shall otherwise agree, if on
any date the Borrower or any of its Subsidiaries shall receive Net Cash Proceeds
from any Asset Sale or Recovery Event then,  unless a Reinvestment  Notice shall
be delivered in respect thereof, an amount equal to such Net Cash Proceeds shall
be applied on such date toward the prepayment of the Term Loans; provided, that,
notwithstanding the foregoing,  on each Reinvestment  Prepayment Date, an amount
equal  to the  Reinvestment  Prepayment  Amount  with  respect  to the  relevant
Reinvestment Event shall be applied toward the prepayment of the Term Loans.

         (c) Unless the Required  Prepayment  Lenders shall otherwise agree, if,
for any fiscal  year of the  Borrower  commencing  with the fiscal  year  ending
December 31, 1999,  there shall be Excess Cash Flow, the Borrower  shall, on the
relevant Excess Cash Flow  Application  Date, apply 50% of such Excess Cash Flow
toward the  prepayment of the Term Loans.  Each such  prepayment  and commitment
reduction  shall be made on a date (an "Excess Cash Flow  Application  Date") no
later  than five days after the  earlier of (i) the date on which the  financial
statements of the Borrower  referred to in Section  5.1(a),  for the fiscal year
with respect to which such  prepayment is made,  are required to be delivered to
the Lenders and (ii) the date such financial statements are actually delivered.

         (d)  Each  mandatory  prepayment  required  by this  Section  shall  be
allocated  among the Term Loan  Facilities  pro rata according to the respective
outstanding principal amounts of Term Loans under such Facilities and may not be
reborrowed.  Amounts to be applied in 
                                       29

<PAGE>

connection  with  prepayments  made  pursuant to this Section  shall be applied,
first, to Base Rate Loans and, second,  to Eurodollar  Loans. Each prepayment of
the Term Loans under this Section shall be  accompanied  by accrued  interest to
the date of such prepayment on the amount prepaid.

         2.8 Conversion  and  Continuation  Options.  (a) The Borrower may elect
from time to time to convert  Eurodollar  Loans to Base Rate Loans by giving the
Administrative  Agent at least two Business  Days' prior  irrevocable  notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest  Period with respect  thereto.  The Borrower
may elect from time to time to convert  Base Rate Loans to  Eurodollar  Loans by
giving the Administrative  Agent at least three Business Days' prior irrevocable
notice of such  election  (which  notice shall specify the length of the initial
Interest  Period  therefor);  provided that no Base Rate Loan under a particular
Facility may be converted  into a Eurodollar  Loan (i) when any Event of Default
has occurred and is continuing and the Administrative  Agent has or the Majority
Facility  Lenders in respect of such  Facility  have  determined in its or their
sole  discretion  not to permit such  conversions or (ii) after the date that is
one month prior to the final  scheduled  termination  or  maturity  date of such
Facility.  Upon  receipt  of any such  notice  the  Administrative  Agent  shall
promptly notify each relevant Lender thereof.

         (b) Any Eurodollar Loan may be continued as such upon the expiration of
the then current  Interest  Period with respect  thereto by the Borrower  giving
irrevocable  notice  to  the  Administrative   Agent,  in  accordance  with  the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next  Interest  Period to be  applicable  to such Term  Loans,
provided that no Eurodollar Loan under a particular Facility may be continued as
such (i) when any  Event of  Default  has  occurred  and is  continuing  and the
Administrative  Agent has or the  Majority  Facility  Lenders in respect of such
Facility  have  determined  in its or their sole  discretion  not to permit such
continuations  or (ii)  after  the date  that is one  month  prior to the  final
scheduled termination or maturity date of such Facility, and provided,  further,
that if the Borrower shall fail to give any required  notice as described  above
in this  paragraph  or if such  continuation  is not  permitted  pursuant to the
preceding proviso such Term Loans shall be automatically  converted to Base Rate
Loans on the last day of such then expiring Interest Period. Upon receipt of any
such notice the Administrative  Agent shall promptly notify each relevant Lender
thereof.

         2.9  Minimum  Amounts  and  Maximum  Number  of  Eurodollar   Tranches.
Notwithstanding  anything to the  contrary in this  Agreement,  all  borrowings,
conversions,   continuations  and  optional   prepayments  of  Eurodollar  Loans
hereunder and all  selections  of Interest  Periods  hereunder  shall be in such
amounts and be made pursuant to such  elections so that, (a) after giving effect
thereto,  the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar  Tranche  shall  be  equal  to  $5,000,000  or a  whole  multiple  of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar  Tranches shall
be outstanding at any one time.

                                       30

<PAGE>

         2.10 Interest Rates and Payment Dates.  (a) Each  Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the  Eurodollar  Rate  determined  for such day plus the
Applicable Margin.

         (b) Each Base Rate Loan shall bear  interest  at a rate per annum equal
to the Base Rate plus the Applicable Margin.

         (c) (i) If all or a portion  of the  principal  amount of any Term Loan
shall not be paid when due (whether at the stated  maturity,  by acceleration or
otherwise),  all outstanding  Term Loans shall bear interest at a rate per annum
that is equal to the rate that would otherwise be applicable thereto pursuant to
the foregoing provisions of this Section plus 2% and (ii) if all or a portion of
any  interest  payable on any Term Loan or any  commitment  fee or other  amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration  or  otherwise),  such overdue amount shall bear interest at a rate
per  annum  equal to the rate  then  applicable  to Base  Rate  Loans  under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
relate to a particular  Facility,  the rate then  applicable  to Base Rate Loans
under the  Revolving  Credit  Facility  plus 2%), in each case,  with respect to
clauses (i) and (ii) above,  from the date of such non-payment until such amount
is paid in full (after as well as before judgment).

         (d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest  accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.

         2.11  Computation  of  Interest  and  Fees.  (a)  Interest,   fees  and
commissions  payable  pursuant  hereto  shall be  calculated  on the  basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans  the rate of  interest  on which is  calculated  on the basis of the Prime
Rate, the interest  thereon shall be calculated on the basis of a 365- (or 366-,
as the case may be) day year for the actual  days  elapsed.  The  Administrative
Agent shall as soon as practicable  notify the Borrower and the relevant Lenders
of each determination of a Eurodollar Rate. Any change in the interest rate on a
Term Loan resulting from a change in the Base Rate or the  Eurocurrency  Reserve
Requirements  shall become effective as of the opening of business on the day on
which such change becomes effective.  The Administrative  Agent shall as soon as
practicable  notify the Borrower and the relevant  Lenders of the effective date
and the amount of each such change in interest rate.

         (b) Each determination of an interest rate by the Administrative  Agent
pursuant to any provision of this  Agreement  shall be conclusive and binding on
the   Borrower  and  the  Lenders  in  the  absence  of  manifest   error.   The
Administrative  Agent  shall,  at the  request of the  Borrower,  deliver to the
Borrower a statement showing the quotations used by the Administrative  Agent in
determining any interest rate pursuant to Section 2.11(a).

                                       31

<PAGE>

         2.12 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:

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

              (b) the  Administrative  Agent shall have received notice from the
         Majority  Facility Lenders in respect of the relevant Facility that the
         Eurodollar Rate determined or to be determined for such Interest Period
         will not  adequately  and fairly  reflect the cost to such  Lenders (as
         conclusively  certified by such Lenders) of making or maintaining their
         affected Term Loans during such Interest Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant  Lenders as soon as  practicable  thereafter.  If such
notice is given (x) any Eurodollar Loans under the relevant  Facility  requested
to be made on the first day of such  Interest  Period shall be made as Base Rate
Loans,  (y) any Term Loans under the  relevant  Facility  that were to have been
converted on the first day of such Interest Period to Eurodollar  Loans shall be
continued as Base Rate Loans and (z) any outstanding  Eurodollar Loans under the
relevant  Facility  shall be  converted,  on the  last  day of the then  current
Interest Period with respect thereto,  to Base Rate Loans. Until such notice has
been withdrawn by the  Administrative  Agent, no further  Eurodollar Loans under
the relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Term Loans under the relevant  Facility to  Eurodollar
Loans.

         2.13  Pro Rata  Treatment  and  Payments.  (a)  Each  borrowing  by the
Borrower from the Lenders  hereunder and any reduction of the Commitments of the
Lenders shall be made pro rata according to the  respective  Tranche A Term Loan
Percentages  or  Tranche  B Term  Loan  Percentages,  as the case may be, of the
relevant Lenders.  Each payment (other than prepayments) in respect of principal
or  interest  in respect  of the Term Loans and each  payment in respect of fees
payable  hereunder shall be applied to the amounts of such obligations  owing to
the Lenders pro rata according to the  respective  amounts then due and owing to
the Lenders.

         (b) Other than with respect to any substituted Lender in accordance
with Section 2.19, each payment  (including  each  prepayment) of the Term Loans
outstanding  under any Term Loan Facility shall be allocated among the Term Loan
Lenders  holding such Term Loans pro rata based on the principal  amount of such
Term  Loans  held by such  Term  Loan  Lenders,  and  shall  be  applied  to the
installments  of such Term  Loans pro rata  based on the  remaining  outstanding
principal  amount of such  installments.  Amounts prepaid on account of the Term
Loans may not be reborrowed.

         (c)  Notwithstanding  anything to the  contrary in Section  2.6, 2.7 or
2.13, so long as any Tranche A Term Loans are  outstanding,  each Tranche B Term
Loan Lender  may, at its option,  accept or decline any or all of the portion of
any optional  prepayment or mandatory  

                                       32

<PAGE>

payment applicable to the Tranche B Term Loans of such Lender; accordingly, with
respect to the amount of any  optional  prepayment  described  in Section 2.6 or
mandatory  prepayment  described  in Section 2.7 that is  allocated to Tranche B
Term Loans (such  amounts,  the "Tranche B Prepayment  Amount") at any time when
Tranche A Term Loans remain  outstanding,  the Borrower will, (i) in the case of
any optional  prepayment  which the Borrower  wishes to make,  not later than 10
Business  Days  prior to the date on which  the  Borrower  wishes  to make  such
optional prepayment, and (ii) in the case of any mandatory prepayment of Tranche
B Term Loans  required to be made  pursuant to Section  2.7, in lieu of applying
such  amount to the  prepayment  of Tranche B Term Loans as  provided in Section
2.7,  on the  date  specified  in  Section  2.7 for  such  prepayment,  give the
Administrative   Agent  telephonic   notice  (promptly   confirmed  in  writing)
requesting that the  Administrative  Agent prepare and provide to each Tranche B
Lender a notice (each,  a "Prepayment  Option  Notice") as described  below.  As
promptly as  practicable  after  receiving  such notice from the  Borrower,  the
Administrative  Agent  will send to each  Tranche B Lender a  Prepayment  Option
Notice,  which shall be in the form of Exhibit H, and shall  include an offer by
the Borrower to prepay on the date (each a "Prepayment Date") that is 5 Business
Days after the date of the Prepayment Option Notice,  the relevant Term Loans of
such Lender by an amount equal to the portion of the Prepayment Amount indicated
in such Lender's  Prepayment  Option Notice as being applicable to such Lender's
Tranche B Term Loans. On the Prepayment  Date, (i) the Borrower shall pay to the
Administrative  Agent the aggregate  amount  necessary to prepay that portion of
the  outstanding  relevant Term Loans in respect of which Tranche B Lenders have
accepted prepayment as described above (such Lenders, the "Accepting  Lenders"),
and such amount shall be applied to reduce the Tranche B Prepayment  Amounts, as
applicable,  with respect to each  Accepting  Lender and (ii) the Borrower shall
pay to the  Administrative  Agent an amount  equal to 100% of the portion of the
Tranche B Prepayment  Amount not  accepted by the  Accepting  Lenders,  and such
amount shall be applied to the prepayment of the Tranche A Term Loans.

         (d) All  payments  (including  prepayments)  to be made by the Borrower
hereunder,  whether on account of principal,  interest, fees or otherwise, shall
be made without  setoff or  counterclaim  and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders,  at the Payment  Office,  in Dollars and in  immediately
available funds. The Administrative  Agent shall distribute such payments to the
Lenders  promptly  upon  receipt  in like  funds  as  received.  If any  payment
hereunder (other than payments on the Eurodollar  Loans) becomes due and payable
on a day other than a Business  Day,  such payment shall be extended to the next
succeeding  Business  Day. If any payment on a  Eurodollar  Loan becomes due and
payable  on a day other than a  Business  Day,  the  maturity  thereof  shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately  preceding Business Day. In the case of
any  extension  of any  payment  of  principal  pursuant  to the  preceding  two
sentences,  interest thereon shall be payable at the then applicable rate during
such extension.

         (e) Unless the Administrative Agent shall have been notified in writing
by any Lender  prior to a  borrowing  that such  Lender will not make the amount
that  would   constitute   its  share  of  such   borrowing   available  to  the
Administrative Agent, the Administrative Agent may

                                       33

<PAGE>

assume that such Lender is making such amount  available  to the  Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption,  make
available to the  Borrower a  corresponding  amount.  If such amount is not made
available to the Administrative Agent by the required time on the borrowing date
therefor,  such Lender shall pay to the  Administrative  Agent, on demand,  such
amount with interest  thereon at a rate equal to the daily average Federal Funds
Effective  Rate for the period until such Lender  makes such amount  immediately
available to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts  owing under this  paragraph
shall be conclusive in the absence of manifest  error. If such Lender's share of
such borrowing is not made available to the Administrative  Agent by such Lender
within three Business Days of such  borrowing  date,  the  Administrative  Agent
shall also be entitled to recover such amount with interest  thereon at the rate
per annum applicable to Base Rate Loans under the relevant Facility,  on demand,
from the Borrower.

         (f) Unless the Administrative Agent shall have been notified in writing
by the Borrower  prior to the date of any payment being made  hereunder that the
Borrower  will  not  make  such  payment  to  the   Administrative   Agent,  the
Administrative  Agent may assume that the Borrower is making such  payment,  and
the  Administrative  Agent may, but shall not be required  to, in reliance  upon
such assumption,  make available to the Lenders their respective pro rata shares
of a  corresponding  amount.  If such payment is not made to the  Administrative
Agent by the Borrower  within three  Business  Days of such required  date,  the
Administrative  Agent shall be entitled to recover,  on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at a rate per annum equal to the daily average
Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights
of the Administrative Agent or any Lender against the Borrower.

         2.14  Requirements  of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive  (whether or not having the force of
law) from any central bank or other  Governmental  Authority made  subsequent to
the date hereof:

              (i) shall  subject  any  Lender to any tax of any kind  whatsoever
         with respect to this  Agreement or any  Eurodollar  Loan made by it, or
         change the basis of  taxation  of  payments  to such  Lender in respect
         thereof  (except for  Non-Excluded  Taxes  covered by Section  2.15 and
         changes in the rate of tax on the overall net income of such Lender);

              (ii) shall impose, modify or hold applicable any reserve,  special
         deposit, compulsory loan or similar requirement against assets held by,
         deposits or other liabilities in or for the account of, advances, loans
         or other extensions of credit by, or any other acquisition of funds by,
         any  office  of such  Lender  that  is not  otherwise  included  in the
         determination of the Eurodollar Rate hereunder; or

              (iii) shall impose on such Lender any other condition;

and the result of any of the  foregoing  is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining

                                       34

<PAGE>

Eurodollar  Loans,  or to reduce  any  amount  receivable  hereunder  in respect
thereof,  then, in any such case,  the Borrower  shall promptly pay such Lender,
upon its demand,  any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any  additional  amounts  pursuant to this Section,  it shall  promptly
notify the Borrower  (with a copy to the  Administrative  Agent) of the event by
reason of which it has become so entitled.

         (b) If any Lender  shall have  determined  that the  adoption of or any
change  in  any  Requirement  of  Law  regarding  capital  adequacy  or  in  the
interpretation  or  application  thereof  or  compliance  by such  Lender or any
corporation  controlling  such Lender with any  request or  directive  regarding
capital adequacy  (whether or not having the force of law) from any Governmental
Authority  made  subsequent to the date hereof shall have the effect of reducing
the  rate  of  return  on  such  Lender's  or such  corporation's  capital  as a
consequence of its obligations hereunder to a level below that which such Lender
or such  corporation  could  have  achieved  but for such  adoption,  change  or
compliance  (taking  into  consideration  such  Lender's  or such  corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be  material,  then from time to time,  after  submission  by such Lender to the
Borrower  (with  a copy  to  the  Administrative  Agent)  of a  written  request
therefor,  the  Borrower  shall pay to such  Lender  such  additional  amount or
amounts as will compensate such Lender or such corporation for such reduction.

         (c) A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender to the Borrower setting out in reasonable detail
the  method of  determination  of such  additional  amounts  (with a copy to the
Administrative  Agent) shall be conclusive in the absence of manifest error. The
obligations  of  the  Borrower  pursuant  to  this  Section  shall  survive  the
termination  of this  Agreement  and the payment of the Term Loans and all other
amounts payable hereunder.

         2.15 Taxes.  (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without  deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties,  charges,  fees,  deductions or withholdings,  now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income  taxes and  franchise  taxes  (imposed  in lieu of net income  taxes)
imposed on any Agent or any Lender as a result of a present or former connection
between  such Agent or such  Lender  and the  jurisdiction  of the  Governmental
Authority  imposing such tax or any political  subdivision  or taxing  authority
thereof or therein  (other  than any such  connection  arising  solely from such
Agent's or such Lender's having executed, delivered or performed its obligations
or received a payment  under,  or  enforced,  this  Agreement  or any other Loan
Document).  If any such non-excluded taxes, levies,  imposts,  duties,  charges,
fees,  deductions  or  withholdings  ("Non-Excluded  Taxes") are  required to be
withheld  from any  amounts  payable to any Agent or any Lender  hereunder,  the
amounts so payable to such Agent or such Lender shall be increased to the extent
necessary  to  yield  to  such  Agent  or  such  Lender  (after  payment  of all
Non-Excluded  Taxes and Other Taxes)  interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement,  provided,
however,  that the  Borrower  shall not be required to increase any such amounts
payable  to any  Lender  with  

                                       35

<PAGE>

respect to any  Non-Excluded  Taxes (i) that are  attributable  to such Lender's
failure to comply with the  requirements of paragraph (d) or (e) of this Section
or (ii) that are United States  withholding  taxes imposed on amounts payable to
such Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such  Lender's  assignor (if any) was  entitled,  at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to Section 2.15(a).

         (b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

         (c) Whenever any  Non-Excluded  Taxes or Other Taxes are payable by the
Borrower,  as promptly as possible  thereafter  the  Borrower  shall send to the
Administrative  Agent for the account of the  relevant  Agent or Lender,  as the
case may be, a certified copy of an original  official  receipt  received by the
Borrower showing payment thereof.  If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the  appropriate  taxing  authority or fails to
remit to the  Administrative  Agent  the  required  receipts  or other  required
documentary  evidence,  the Borrower shall  indemnify the Agents and the Lenders
for any incremental taxes,  interest or penalties that may become payable by any
Agent or any  Lender as a result of any such  failure.  The  agreements  in this
Section 2.15 shall survive the  termination of this Agreement and the payment of
the Term Loans and all other amounts payable hereunder.

         (d) Each  Lender (or  Transferee)  that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or  organized  in or under  the laws of the  United  States of  America  (or any
jurisdiction  thereof), or any estate or trust that is subject to federal income
taxation  regardless  of the source of its income (a  "Non-U.S.  Lender")  shall
deliver to the  Borrower  and the  Administrative  Agent (and,  in the case of a
Participant,  also to the Lender from which the related participation shall have
been purchased) two copies of either U.S.  Internal Revenue Service Form 1001 or
Form 4224,  or, in the case of a Non-U.S.  Lender  claiming  exemption from U.S.
federal  withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of  "portfolio  interest" a statement  substantially  in the form of
Exhibit I and a Form W-8,  or any  subsequent  versions  thereof  or  successors
thereto  properly  completed and duly executed by such Non-U.S.  Lender claiming
complete  exemption from, or a reduced rate of, U.S. federal  withholding tax on
all payments by the Borrower under this Agreement and the other Loan  Documents.
Such forms shall be delivered by each  Non-U.S.  Lender on or before the date it
becomes a party to this  Agreement  (or, in the case of any  Participant,  on or
before  the date such  Participant  purchases  the  related  participation).  In
addition,  each  Non-U.S.  Lender  shall  deliver such forms  promptly  upon the
obsolescence  or  invalidity of any form  previously  delivered by such Non-U.S.
Lender.  Each Non-U.S.  Lender shall promptly notify the Borrower at any time it
determines  that  it is no  longer  in a  position  to  provide  any  previously
delivered  certificate  to the  Borrower  (or any  other  form of  certification
adopted by the U.S. taxing  authorities for such purpose).  Notwithstanding  any
other  provision of this paragraph,  a Non-U.S.  Lender shall not be required to
deliver any form pursuant to this  paragraph  that such  Non-U.S.  Lender is not
legally able to deliver.

                                       36

<PAGE>

         (e) A Lender that is  entitled to an  exemption  from or  reduction  of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement  shall deliver to the Borrower (with a copy to the
Administrative  Agent),  at the time or times  prescribed by  applicable  law or
reasonably  requested by the  Borrower,  such  properly  completed  and executed
documentation  prescribed by  applicable  law as will permit such payments to be
made without  withholding  or at a reduced  rate,  provided  that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's reasonable judgment such completion,  execution or submission would not
materially prejudice the legal position of such Lender.

         (f) If the  Administrative  Agent or any  Lender  receives  a refund in
respect of Non-Excluded Taxes or Other Taxes paid by the Borrower,  which in the
good faith  judgment  of such  Lender is  allocable  to such  payment,  it shall
promptly pay such refund,  together  with any other amounts paid by the Borrower
in  connection  with such  refunded  Non-Excluded  Taxes or Other Taxes,  to the
Borrower, net of all out-of-pocket expenses of such Lender incurred in obtaining
such refund, provided, however, that the Borrower agrees to promptly return such
refund to the Administrative Agent or the applicable Lender, as the case may be,
if it receives notice from the  Administrative  Agent or applicable  Lender that
the Administrative Agent or such Lender is required to repay such refund.

         (g)  Notwithstanding  anything to the contrary in this Section,  if the
Internal Revenue Service  determines that a Lender is participating in a conduit
financing  arrangement  as  defined  in  Section  7701(i)  of the  Code  and the
regulations thereunder (a "Conduit Financing  Arrangement"),  then (i) any Taxes
that the Borrower is required to withhold  from payments to such Lender shall be
excluded from the definitions of "Non-Excluded Taxes" and (ii) such Lender shall
indemnify  the  Borrower in full for any and all Taxes for which the Borrower is
held  directly  liable under  Section 1461 of the Code by virtue of such Conduit
Financing Arrangement.  Each Lender represents that it is not participating in a
Conduit Financing Arrangement.

         2.16  Indemnity.  The Borrower  agrees to indemnify  each Lender and to
hold each Lender  harmless from any loss or expense that such Lender may sustain
or incur as a  consequence  of (a) default by the Borrower in making a borrowing
of,  conversion into or continuation of Eurodollar  Loans after the Borrower has
given a notice  requesting  the same in accordance  with the  provisions of this
Agreement,  (b)  default  by the  Borrower  in making any  prepayment  after the
Borrower has given a notice  thereof in accordance  with the  provisions of this
Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on
a day that is not the last day of an Interest Period with respect thereto.  Such
indemnification  may include an amount  equal to the excess,  if any, of (i) the
amount  of  interest  that  would  have  accrued  on the  amount so  prepaid  or
converted, or not so borrowed,  converted or continued,  for the period from the
date of such  prepayment or conversion or of such failure to borrow,  convert or
continue to the last day of such  Interest  Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such  failure) in each case at the  applicable  rate of interest for
such Term Loans provided for herein (excluding,  however,  the Applicable Margin
included  therein,  if any) over  (ii) the  amount of  interest  (as  

                                       37

<PAGE>

reasonably  determined by such Lender) that would have accrued to such Lender on
such  amount by placing  such  amount on deposit  for a  comparable  period with
leading  banks in the  interbank  eurodollar  market.  A  certificate  as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be  conclusive  in the  absence of manifest  error.  This  covenant  shall
survive the  termination of this Agreement and the payment of the Term Loans and
all other amounts payable hereunder.

         2.17 Illegality.  Notwithstanding  any other provision  herein,  if the
adoption of or any change in any Requirement of Law or in the  interpretation or
application  thereof  shall make it unlawful  for any Lender to make or maintain
Eurodollar  Loans as contemplated by this Agreement,  (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar  Loans shall forthwith be canceled and (b)
such Lender's Term Loans then outstanding as Eurodollar  Loans, if any, shall be
converted  automatically  to Base Rate Loans on the respective  last days of the
then  current  Interest  Periods  with respect to such Term Loans or within such
earlier period as required by law. If any such  conversion of a Eurodollar  Loan
occurs on a day which is not the last day of the then  current  Interest  Period
with respect  thereto,  the Borrower  shall pay to such Lender such amounts,  if
any, as may be required pursuant to Section 2.16.

         2.18  Change of Lending  Office.  Each  Lender  agrees  that,  upon the
occurrence of any event giving rise to the operation of Section 2.14, 2.15(a) or
2.17 with respect to such Lender,  it will,  if requested by the  Borrower,  use
reasonable efforts (subject to overall policy  considerations of such Lender) to
designate  another lending office for any Term Loans affected by such event with
the object of  avoiding  the  consequences  of such event;  provided,  that such
designation  is made on terms that, in the sole  judgment of such Lender,  cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage,  and provided,  further, that nothing in this Section shall affect
or postpone any of the  obligations  of the Borrower or the rights of any Lender
pursuant to Section 2.14, 2.15(a) or 2.17.

         2.19 Substitution of Lenders. Upon the receipt by the Borrower from any
Lender (an "Affected  Lender") of a claim under Section 2.14,  2.15 or 2.17, the
Borrower  may:  (a) request one more of the other  Lenders to acquire and assume
all or part of such Affected Lender's Term Loans and Commitment;  or (b) replace
such Affected  Lender by designating  another Lender or a financial  institution
that is willing to acquire such Term Loans and assume such Commitment;  provided
that (i) such replacement does not conflict with any Requirement of Law, (ii) no
Event of  Default  shall have  occurred  and be  continuing  at the time of such
replacement,  (iii)  the  Borrower  shall  repay  (or  the  replacement  bank or
institution shall purchase,  at par) all Term Loans,  accrued interest and other
amounts owing to such replaced Lender prior to the date of replacement, (iv) the
Borrower  shall be liable to such  replaced  Lender  under  Section  2.16 if any
Eurodollar  Loan owing to such replaced  Lender shall be prepaid (or  purchased)
other than on the last day of the  Interest  Period  relating  thereto,  (v) the
replacement  bank or institution,  if not already a Lender,  shall be reasonably
satisfactory  to the  Administrative  Agent,  (vi) the replaced  Lender shall be
obligated to make such  replacement  in accordance  with the  provisions of this
Section 9.6 (provided that the Borrower or replacement Lender shall be obligated
to pay the registration and processing fee) and (vii) the Borrower shall pay all

                                       38

<PAGE>

additional  amounts (if any) required pursuant to Section 2.14, 2.15 or 2.17, as
the case may be, to the extent such additional amounts were incurred on or prior
to the consummation of such replacement.


                    SECTION 3. REPRESENTATIONS AND WARRANTIES

         To induce the Agents and the Lenders to enter into this  Agreement  and
to make the Term Loans,  Holdings and the Borrower  hereby jointly and severally
represent and warrant to each Agent and each Lender that:

         3.1  Financial  Condition.  (a) The  unaudited  pro forma  consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at January 2,
1999  (including the notes thereto) (the "Pro Forma Balance  Sheet"),  copies of
which have  heretofore  been furnished to each Lender,  has been prepared giving
effect (as if such events had occurred on such date) to (i) the  consummation of
the Acquisition, (ii) the Term Loans to be made hereunder and the loans, if any,
to be made under the Revolving Credit Agreement on the Closing Date, and the use
of proceeds  thereof and (iii) the  payment of fees and  expenses in  connection
with the  foregoing.  The Pro Forma Balance Sheet has been prepared based on the
best information  available to the Borrower as of the date of delivery  thereof,
and presents  fairly on a pro forma basis the  estimated  financial  position of
Borrower and its consolidated  Subsidiaries as at January 2, 1999, assuming that
the events  specified in the  preceding  sentence had actually  occurred at such
date.

         (b) The  audited  consolidated  balance  sheets of the  Borrower  as at
December  28,  1996,  January  3, 1998 and  January  2,  1999,  and the  related
consolidated  statements  of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from KPMG
LLP, present fairly the consolidated  financial  condition of the Borrower as at
such date, and the  consolidated  results of its operations and its consolidated
cash  flows  for  the  respective   fiscal  years  then  ended.   The  unaudited
consolidated  balance sheet of Holdings as at December 31, 1998 presents  fairly
the  consolidated  financial  condition  of Holdings  as at such date.  All such
financial  statements,  including the related schedules and notes thereto,  have
been  prepared in  accordance  with GAAP  applied  consistently  throughout  the
periods involved (except as approved by the  aforementioned  firm of accountants
and disclosed therein).  Holdings, the Borrower and its Subsidiaries do not have
any material Guarantee  Obligations,  contingent liabilities and liabilities for
taxes,  or any  long-term  leases or unusual  forward or long-term  commitments,
including,  without  limitation,  any interest rate or foreign  currency swap or
exchange transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from  January 2, 1999 to and  including  the date hereof there
has been no  Disposition by the Borrower of any material part of its business or
Property.

         (c) The audited  consolidated  balance sheets of the Acquired Assets as
at September 30, 1997 and September 30, 1998, and the consolidated statements of
income  and of cash  flows  for the  fiscal  years  ended  September  30,  1996,
September 30, 1997 and September 30, 1998,  reported on by and accompanied by an
unqualified  report from KPMG LLP,  present  fairly

                                       39

<PAGE>

the consolidated financial condition of the Acquired Assets as at such date, and
the consolidated  results of their operations and their  consolidated cash flows
for the respective fiscal years then ended. The unaudited  consolidated  balance
sheets of the Acquired Assets as at January 3, 1998 and January 2, 1999, and the
related  unaudited  consolidated  statements  of income  and cash  flows for the
three-month  periods  ended  on such  dates,  present  fairly  the  consolidated
financial condition of the Acquired Assets as at such date, and the consolidated
results  of  their  operations  and  their   consolidated  cash  flows  for  the
three-month periods then ended (subject to normal year-end audit adjustments).

         3.2 No Change.  Since January 2, 1999 there has been no  development or
event that has had or could  reasonably  be expected to have a Material  Adverse
Effect.  Since  September 30, 1998,  there has been no development or event that
has had or could be reasonably be expected to have a material  adverse effect on
the Acquired Assets.

         3.3 Corporate  Existence;  Compliance  with Law. Each of Holdings,  the
Borrower and its  Subsidiaries  (a) is duly organized,  validly  existing and in
good standing under the laws of the  jurisdiction of its  organization,  (b) has
the corporate or business trust power and authority, and the legal right, to own
and operate  its  Property,  to lease the  Property it operates as lessee and to
conduct the business in which it is currently engaged,  (c) is duly qualified as
a foreign  corporation  or business trust and in good standing under the laws of
each  jurisdiction  where its  ownership,  lease or operation of Property or the
conduct of its business  requires  such  qualification  and (d) is in compliance
with  all  Requirements  of Law  except,  in the  case of each of the  foregoing
clauses (c) and (d), to the extent  that the failure to comply  therewith  could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

         3.4 Corporate Power; Authorization;  Enforceable Obligations. Each Loan
Party has the  corporate or business  trust power and  authority,  and the legal
right,  to make,  deliver and perform the Loan  Documents to which it is a party
and, in the case of the Borrower, to borrow hereunder. Each Loan Party has taken
all  necessary  corporate  action  to  authorize  the  execution,  delivery  and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower,  to  authorize  the  borrowings  on the terms and  conditions  of this
Agreement.  No consent or authorization  of, filing with, notice to or other act
by or in respect of, any Governmental  Authority or any other Person is required
in connection  with the  Acquisition  and the  borrowings  hereunder or with the
execution, delivery,  performance,  validity or enforceability of this Agreement
or any of the other Loan Documents, except (i) consents, authorizations, filings
and notices described in Schedule 3.4, which consents,  authorizations,  filings
and notices  have been  obtained or made and are in full force and effect,  (ii)
the filings referred to in Section 3.19 and (iii) consents,  notices and filings
which the failure to make or obtain could not  reasonably  be expected to have a
Material Adverse Effect. Each Loan Document has been duly executed and delivered
on behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute,  a legal,  valid and binding
obligation of each Loan Party party thereto,  enforceable against each such Loan
Party in accordance with its terms,  except as enforceability  may be limited by
applicable bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
affecting  the  enforcement  of  creditors'  

                                       40

<PAGE>

rights generally and by general  equitable  principles  (whether  enforcement is
sought by proceedings in equity or at law).

         3.5 No Legal Bar.  The  execution,  delivery  and  performance  of this
Agreement and the other Loan Documents,  the borrowings hereunder and the use of
the proceeds  thereof will not violate any Requirement of Law or any Contractual
Obligation  of Holdings,  the Borrower or any of its  Subsidiaries  and will not
result in, or require,  the creation or  imposition  of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
No Requirement of Law or  Contractual  Obligation  applicable to the Borrower or
any of its Subsidiaries  could reasonably be expected to have a Material Adverse
Effect.

         3.6 No Material Litigation. No litigation,  investigation or proceeding
of or before any  arbitrator  or  Governmental  Authority  is pending or, to the
knowledge of Holdings or the Borrower,  threatened by or against  Holdings,  the
Borrower  or  any  of its  Subsidiaries  or  against  any  of  their  respective
properties  or revenues (a) with respect to any of the Loan  Documents or any of
the transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.

         3.7  No  Default.  Neither  Holdings,  the  Borrower  nor  any  of  its
Subsidiaries  is in  default  under or with  respect  to any of its  Contractual
Obligations in any respect that could  reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.

         3.8 Ownership of Property;  Liens.  Each of Holdings,  the Borrower and
its Subsidiaries  has title in fee simple to, or a valid leasehold  interest in,
all its real  property,  subject  only to Liens and other  matters  permitted by
Section 6.3, and good title to, or a valid leasehold  interest in, all its other
Property,  and none of such  Property is subject to any Lien except as permitted
by Section 6.3.

         3.9  Intellectual  Property.  To the  knowledge  of  Holdings  and  the
Borrower,  Holdings,  the  Borrower  and each of its  Subsidiaries  owns,  or is
licensed to use,  all  Intellectual  Property  necessary  and  material  for the
conduct of its business as currently conducted. To the knowledge of Holdings and
the Borrower,  except as indicated on Schedule  3.9, no material  claim has been
asserted and is pending by any Person alleging that the use of any  Intellectual
Property  by  Holdings,  the  Borrower  and its  Subsidiaries  infringes  on the
intellectual  property  rights of any Person in any  material  respect  nor does
Holdings or the Borrower know of any valid basis for any such claim.

         3.10 Taxes. Each of Holdings, the Borrower and each of its Subsidiaries
has  filed or  caused to be filed all  Federal,  state  and other  material  tax
returns that are required to be filed and has paid all taxes shown to be due and
payable on said  returns  or on any  assessments  made  against it or any of its
Property and all other taxes,  fees or other charges imposed on it or any of its
Property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which 

                                       41

<PAGE>

reserves in  conformity  with GAAP have been  provided on the books of Holdings,
the  Borrower or its  Subsidiaries,  as the case may be);  and as of the Closing
Date no tax Lien has been filed,  and,  to the  knowledge  of  Holdings  and the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.

         3.11  Federal  Regulations.  No part of the  proceeds of any Term Loans
will be used for  "purchasing"  or  "carrying"  any  "margin  stock"  within the
respective  meanings of each of the quoted  terms under  Regulation U as now and
from time to time  hereafter  in effect or for any  purpose  that  violates  the
provisions of the  Regulations  of the Board.  If requested by any Lender or the
Administrative  Agent, the Borrower will furnish to the Administrative Agent and
each  Lender  a  statement  to the  foregoing  effect  in  conformity  with  the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.

         3.12  Labor  Matters.  There are no  strikes  or other  labor  disputes
against  Holdings,  the Borrower or any of its  Subsidiaries  pending or, to the
knowledge of Holdings or the Borrower,  threatened that  (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. Hours
worked by and payment  made to  employees  of  Holdings,  the  Borrower  and its
Subsidiaries  have not been in violation of the Fair Labor  Standards Act or any
other applicable Requirement of Law dealing with such matters that (individually
or in the  aggregate)  could  reasonably be expected to have a Material  Adverse
Effect. All payments due from Holdings,  the Borrower or any of its Subsidiaries
on account of employee health and welfare insurance that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect if not
paid have been paid or  accrued as a  liability  on the books of  Holdings,  the
Borrower or the relevant Subsidiary.

         3.13 ERISA.  Neither a  Reportable  Event nor an  "accumulated  funding
deficiency"  (within  the  meaning of Section  412 of the Code or Section 302 of
ERISA) has occurred during the five-year  period prior to the date on which this
representation  is made or deemed made with  respect to any Plan,  and each Plan
has complied in all material  respects with the  applicable  provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen,  during such  five-year  period.  The
present value of all accrued  benefits under each Single Employer Plan (based on
those  assumptions  used to fund  such  Plans)  did not,  as of the last  annual
valuation date prior to the date on which this  representation is made or deemed
made,  exceed the value of the  assets of such Plan  allocable  to such  accrued
benefits  by more  than  $1,000,000.  Neither  the  Borrower  nor  any  Commonly
Controlled Entity has at any time contributed to a Multiemployer Plan.

         3.14  Investment  Company Act; Other  Regulations.  No Loan Party is an
"investment  company",  or a company  "controlled"  by an "investment  company",
within the meaning of the  Investment  Company Act of 1940, as amended.  No Loan
Party is  subject  to  regulation  under  any  Requirement  of Law  (other  than
Regulation X of the Board) which limits its ability to incur Indebtedness.

         3.15  Subsidiaries.  (a)  The  Subsidiaries  listed  on  Schedule  3.15
constitute  all the  Subsidiaries  of the Borrower at the date hereof.  Schedule
3.15  sets  forth  as  of  the  Closing  Date  

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<PAGE>

the name and  jurisdiction of  incorporation  of each Subsidiary and, as to each
such Subsidiary, the percentage of each class of Capital Stock owned by any Loan
Party.

         (b) There are no outstanding  subscriptions,  options, warrants, calls,
rights or other  agreements or commitments  (other than stock options granted to
employees or directors and directors'  qualifying shares) of any nature relating
to any Capital Stock of the Borrower or any Subsidiary.

         3.16 Use of  Proceeds.  The proceeds of the Term Loans shall be used to
finance a portion of the Acquisition and to pay related fees and expenses and to
refinance certain existing Indebtedness of the Borrower.

         3.17  Environmental  Matters.  Other  than  exceptions  to  any  of the
following  that could not,  individually  and in the  aggregate,  reasonably  be
expected to have a Material Adverse Effect:

              (a) the  Borrower  and its  Subsidiaries:  (i) are, and within the
         period  of  all  applicable   statutes  of  limitation  have  been,  in
         compliance  with  all  applicable  Environmental  Laws;  (ii)  hold all
         Environmental  Permits  (each  of which is in full  force  and  effect)
         required for any of their current operations or for any property owned,
         leased, or otherwise operated by any of them; (iii) are, and within the
         period  of  all  applicable   statutes  of  limitation  have  been,  in
         compliance with all of their Environmental Permits; and (iv) reasonably
         believe  that:  each of  their  Environmental  Permits  will be  timely
         renewed and complied with; any  additional  Environmental  Permits that
         may be required  of any of them will be timely  obtained  and  complied
         with; and compliance with any  Environmental Law that is or is expected
         to  become  applicable  to any of them  will  be  timely  attained  and
         maintained.

              (b)  Materials  of  Environmental  Concern are not present at, on,
         under,  in, or about any real  property now or, to the knowledge of the
         Borrower and its  Subsidiaries,  formerly owned,  leased or operated by
         the Borrower or any of its  Subsidiaries,  or, to the  knowledge of the
         Borrower  and  its  Subsidiaries,  at any  other  location  (including,
         without  limitation,  any location to which Materials of  Environmental
         Concern  have  been  sent for  re-use or  recycling  or for  treatment,
         storage,  or disposal)  which could  reasonably be expected to (i) give
         rise to liability of the Borrower or any of its Subsidiaries  under any
         applicable  Environmental  Law or  otherwise  result  in  costs  to the
         Borrower  or  any of its  Subsidiaries,  or  (ii)  interfere  with  the
         Borrower's or any of its Subsidiaries' continued operations.

              (c) There is no judicial,  administrative,  or arbitral proceeding
         (including  any  notice of  violation  or alleged  violation)  under or
         relating to any  Environmental  Law to which the Borrower or any of its
         Subsidiaries  is, or to the  knowledge  of the  Borrower  or any of its
         Subsidiaries  will be,  named as a party  that is  pending  or,  to the
         knowledge of the Borrower or any of its Subsidiaries, threatened.

                                       43

<PAGE>

              (d) Neither the Borrower nor any of its  Subsidiaries has received
         any written  request for  information,  or been  notified  that it is a
         potentially   responsible  party  under  or  relating  to  the  federal
         Comprehensive Environmental Response,  Compensation,  and Liability Act
         or any similar  Environmental  Law, or with respect to any Materials of
         Environmental Concern.

              (e) Neither the Borrower nor any of its  Subsidiaries  has entered
         into or agreed to any consent  decree,  order,  or  settlement or other
         agreement,  or is subject to any  judgment,  decree,  or order or other
         agreement,  in any judicial,  administrative,  arbitral, or other forum
         for dispute resolution,  relating to compliance with or liability under
         any Environmental Law.

              (f) Neither the Borrower nor any of its  Subsidiaries  has assumed
         or  retained,  by  contract,  any  liabilities  of any  kind,  fixed or
         contingent,  known or  unknown,  under  any  Environmental  Law or with
         respect to any Material of Environmental Concern.

         3.18  Accuracy  of  Information,   etc.  No  statement  or  information
contained  in  this  Agreement,   any  other  Loan  Document,  the  Confidential
Information Memorandum or any other document, certificate or statement furnished
to the  Administrative  Agent or the Lenders or any of them,  by or on behalf of
any Loan Party for use in connection  with the  transactions  contemplated by or
pursuant to this Agreement or the other Loan Documents, contained as of the date
such  statement,  information,  document or certificate was so furnished (or, in
the  case of the  Confidential  Information  Memorandum,  as of the date of this
Agreement),  any  untrue  statement  of a  material  fact or  omitted to state a
material  fact  necessary in order to make the  statements  contained  herein or
therein not misleading.  The  projections  and pro forma  financial  information
contained in the materials  referenced above are based upon good faith estimates
and  assumptions  believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such financial information as
it relates to future events is not to be viewed as fact and that actual  results
during the period or periods  covered by such financial  information  may differ
from the  projected  results set forth therein by a material  amount.  As of the
date hereof,  the  representations  and warranties  contained in the Acquisition
Documentation  are true and correct in all material  respects.  There is no fact
known to any Loan Party that could  reasonably  be  expected  to have a Material
Adverse Effect that has not been expressly  disclosed  herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates  and statements  furnished to the Agents and the Lenders for use in
connection  with the  transactions  contemplated  hereby  and by the other  Loan
Documents or pursuant hereto or thereto.

         3.19 Security Documents.  (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders,  a legal,  valid and  enforceable  security  interest in the Collateral
described  therein  and  proceeds  thereof.  In the  case of the  Pledged  Stock
described in the Guarantee and Collateral Agreement, when any stock certificates
representing such Pledged Stock are delivered to the  Administrative  Agent, and
in the case of the other  Collateral  described in the Guarantee and  Collateral
Agreement,  when  financing  statements  in  appropriate  form are  filed in the
offices specified on Schedule 3.19(a)-1,  

                                       44

<PAGE>

(which financing  statements have been duly completed and executed and delivered
to the Administrative Agent) and such other filings as are specified on Schedule
3 to the Guarantee and Collateral Agreement (all of which filings have been duly
completed),  the Guarantee and  Collateral  Agreement  shall  constitute a fully
perfected  Lien on, and security  interest in, all right,  title and interest of
the Loan Parties in such  Collateral and the proceeds  thereof,  as security for
the Obligations (as defined in the Guarantee and Collateral Agreement),  in each
case prior and  superior in right to any other  Person  (except,  in the case of
Collateral other than Pledged Stock,  Liens permitted by Section 6.3).  Schedule
3.19(a)-2  lists each UCC Financing  Statement  that (i) names any Loan Party as
debtor and (ii) will remain on file after the Closing Date.  Schedule  3.19(a)-3
lists each UCC Financing  Statement  that (i) names any Loan Party as debtor and
(ii) will be terminated on or prior to the Closing Date;  and on or prior to the
Closing Date, the Borrower will have delivered to the  Administrative  Agent, or
caused to be filed,  duly completed UCC  termination  statements,  signed by the
relevant secured party, in respect of each such UCC Financing Statement.

         (b)  Each of the  Mortgages  is  effective  to  create  in favor of the
Administrative  Agent,  for the  benefit  of the  Lenders,  a legal,  valid  and
enforceable  Lien on the  Mortgaged  Properties  described  therein and proceeds
thereof,  and when the Mortgages are filed in the offices  specified on Schedule
3.19(b),  each such Mortgage  shall  constitute a fully  perfected  Lien on, and
security  interest in, all right,  title and interest of the Loan Parties in the
Mortgaged  Properties and the proceeds thereof,  as security for the Obligations
(as defined in the relevant Mortgage),  in each case prior and superior in right
to any  other  Person,  subject  only to Liens and other  matters  permitted  by
Section 6.3.

         3.20 Solvency.  The Borrower is, and the Borrower and its  Subsidiaries
on a consolidated  basis are, and after giving effect to the Acquisition and the
incurrence of all  Indebtedness  and  obligations  being  incurred in connection
herewith and therewith will be and will continue to be, Solvent.

         3.21  Senior   Indebtedness.   The   Obligations   constitute   "Senior
Indebtedness"  of the Borrower  under and as defined in the Senior  Subordinated
Note Indenture. The obligations of each Subsidiary Guarantor under the Guarantee
and Collateral  Agreement  constitute  "Guarantor  Senior  Indebtedness" of such
Subsidiary  Guarantor  under and as  defined  in the  Senior  Subordinated  Note
Indenture.

         3.22 Regulation H. No Mortgage encumbers improvements which are located
in an area  that has been  identified  by the  Secretary  of  Housing  and Urban
Development as an area having special flood hazards and in which flood insurance
has been made available under the National Flood  Insurance Act of 1968,  except
for the Mortgage to be recorded in Cumberland County,  Maine which encumbers the
B&M Baked Bean facility,  a small portion of the improvements of which lie in an
area of special flood hazard.

         3.23 Year 2000 Matters. Any reprogramming required to permit the proper
functioning,  in and  following  the year 2000,  of (i) the computer  systems of
Holdings and the Borrower and its  Subsidiaries  and (ii)  equipment  containing
embedded microchips  (including 

                                       45

<PAGE>

systems and  equipment  supplied by others or with which the systems of Holdings
and the Borrower  and its  Subsidiaries  interface)  and the testing of all such
systems and equipment,  as so reprogrammed,  will be completed by June 30, 1999.
The cost to Holdings and the Borrower and its Subsidiaries of such reprogramming
and  testing  and of the  reasonably  foreseeable  consequences  of year 2000 to
Holdings and the Borrower and its Subsidiaries  (including,  without limitation,
reprogramming  errors and the failure of others'  systems or equipment) will not
result in a Default,  an Event of Default or a Material  Adverse Effect.  Except
for such of the  reprogramming  referred to in the preceding  sentence as may be
necessary,  the computer and  management  information  systems of Holdings,  the
Borrower and its  Subsidiaries  are and,  with  ordinary  course  upgrading  and
maintenance,  will continue for the term of this Agreement to be,  sufficient to
permit Holdings and the Borrower and its  Subsidiaries to conduct their business
without Material Adverse Effect.

                         SECTION 4. CONDITIONS PRECEDENT

         4.1 Conditions to Term Loans.  The agreement of each Lender to make the
Term  Loan or Term  Loans  requested  to be  made by it on the  Closing  Date is
subject to the  satisfaction,  prior to or concurrently  with the making of such
Term Loans on the Closing Date, of the following conditions precedent:

         (a) Loan Documents.  The  Administrative  Agent shall have received (i)
    this  Agreement,  executed  and  delivered by a duly  authorized  officer of
    Holdings and the  Borrower,  (ii) the Guarantee  and  Collateral  Agreement,
    executed  and  delivered  by a duly  authorized  officer  of  Holdings,  the
    Borrower and each Subsidiary Guarantor and (iii) a Mortgage covering each of
    the properties  described on Schedule 1.1,  executed and delivered by a duly
    authorized officer of each party thereto.

         (b)  Acquisition,  etc.  The  following  transactions  shall  have been
    consummated, in each case on terms and conditions reasonably satisfactory to
    the Lenders:

              (i) Borrower  shall have  acquired  the  Acquired  Assets from The
         Pillsbury  Company  for a  purchase  price not  exceeding  $192,000,000
         pursuant to the  Acquisition  Documentation,  and no provision  thereof
         shall have been waived, amended, supplemented or otherwise modified.

              (ii) The Borrower shall have received additional cash equity in an
         amount at least equal to  $35,000,000  from Holdings  (which,  in turn,
         shall have  received  such  amount  from the Sponsor and or its Control
         Investment Affiliates).

         (c) Pro Forma Balance Sheet;  Financial  Statements.  The Lenders shall
    have  received  the Pro Forma  Balance  Sheet and the  financial  statements
    described in Section 3.1, all of which shall be reasonably satisfactory.

         (d) Approvals.  All governmental and third party approvals necessary in
    connection with the Acquisition,  the financing  contemplated hereby and the
    continuing
   
                                       46

<PAGE>

    operations of Holdings,  the Borrower and its  Subsidiaries  shall have been
    obtained  and be in full force and  effect  (other  than any such  approvals
    which,  if not  obtained,  would not have a Material  Adverse  Effect);  all
    applicable waiting periods shall have expired without any action being taken
    or threatened by any competent  authority which would  restrain,  prevent or
    otherwise  impose  adverse  conditions on the  Acquisition  or the financing
    thereof  (other  than any such  conditions  which  would not have a Material
    Adverse  Effect);  and  the  Administrative  Agent  shall  have  received  a
    certificate  of  a  Responsible  Officer  to  the  foregoing  effect,  which
    certificate  shall  also  either  (i)  certify  that no such  approvals  are
    required or (ii) have attached to it copies of any such required approvals.

         (e) Related  Agreements.  The Administrative  Agent shall have received
    (in a form reasonably satisfactory to the Administrative Agent), with a copy
    for each Lender,  true and correct  copies,  certified as to authenticity by
    the Borrower,  of the Acquisition Agreement and the Senior Subordinated Note
    Indenture  and such other  documents  or  instruments  as may be  reasonably
    requested by the Syndication Agent, including, without limitation, a copy of
    any debt instrument,  security agreement or other material contract to which
    the Loan Parties may be a party.

         (f) Fees.  The Lenders,  the  Syndication  Agent,  the Arranger and the
    Administrative  Agent shall have received all fees required to be paid,  and
    all expenses for which  invoices have been presented  (including  reasonable
    fees,  disbursements  and other  charges of counsel  to the  Agents),  on or
    before the Closing Date.  All such amounts will be paid with proceeds of the
    Term Loans made on the  Closing  Date and will be  reflected  in the funding
    instructions given by the Borrower to the Administrative  Agent on or before
    the Closing Date.

         (g)  Business  Plan.  The Lenders  shall have  received a  satisfactory
    business plan for fiscal years 1999-2006 and a satisfactory written analysis
    of the business and prospects of the Borrower and its  Subsidiaries  for the
    period from the Closing Date through the final maturity of the Term Loans.

         (h) Fixed Charge  Coverage Ratio As of the Closing Date, the Borrower's
    Fixed  Charge  Coverage  Ratio (as defined in the Senior  Subordinated  Note
    Indenture,  and  determined  in  accordance  with Section 4.09 of the Senior
    Subordinated  Note Indenture) shall not be less than 2.0 to 1.0. The Lenders
    shall  have  received  a  certificate  from  the  Borrower   containing  all
    information and calculations  necessary for determining  compliance with the
    foregoing requirement.

         (i) Lien  Searches.  The Lenders  shall have  received the results of a
    recent  lien  search  in each  relevant  jurisdiction  with  respect  to the
    Borrower and its Subsidiaries,  and such search shall reveal no liens on any
    of the assets of the Borrower or its Subsidiaries except for liens permitted
    by Section 6.3 or liens to be  discharged  on or prior to the  Closing  Date
    pursuant to documentation satisfactory to the Administrative Agent.

                                       47

<PAGE>

         (j) Environmental Matters. The Administrative Agent shall have received
    a written  environmental  assessment regarding the Portland,  Maine facility
    acquired in the  Acquisition,  prepared by Alden  Environmental  Management,
    Inc. in form, scope, and substance satisfactory to the Administrative Agent,
    together  with a letter from the  environmental  consultant  permitting  the
    Agents  and  the  Lenders  to  rely on the  environmental  assessment  as if
    addressed to and prepared for each of them. The  Administrative  Agent shall
    also have received the environmental assessments listed on Schedule 4.1(j).

         (k) Closing Certificate. The Administrative Agent shall have received a
    certificate of each Loan Party, dated the Closing Date, substantially in the
    form of Exhibit C, with appropriate insertions and attachments.

         (l) Legal Opinions.  The  Administrative  Agent shall have received the
    following executed legal opinions:

              (i) the legal opinion of Dechert,  Price & Rhoads,  counsel to the
         Borrower  and its  Subsidiaries,  substantially  in the form of Exhibit
         F-1;

              (ii) the legal  opinion of David E.  Schmitt,  Vice  President and
         General Counsel of Pillsbury North America, a division of The Pillsbury
         Company, delivered to the Borrower, accompanied by a reliance letter in
         favor of the Lenders; and

              (iii) the legal opinion of local counsel in each of Maine, Vermont
         and  Louisiana  and of such other  special and local  counsel as may be
         required by the Administrative Agent.

         Each such legal opinion shall cover such other matters  incident to the
         transactions contemplated by this Agreement as the Administrative Agent
         may reasonably require.

         (m) Pledged Stock;  Stock Power. The  Administrative  Agent shall have
    received the  certificates  representing the shares of Capital Stock pledged
    pursuant to the Guarantee and Collateral Agreement, together with an undated
    stock power for each such certificate executed in blank by a duly authorized
    officer of the pledgor thereof.

         (n) Filings,  Registrations and Recordings.  Each document  (including,
    without  limitation,   any  Uniform  Commercial  Code  financing  statement)
    required by the Security  Documents or under law or reasonably  requested by
    the  Administrative  Agent to be filed,  registered  or recorded in order to
    create in favor of the Administrative Agent, for the benefit of the Lenders,
    a perfected Lien on the Collateral described therein,  prior and superior in
    right to any  other  Person  (other  than  with  respect  to Liens and other
    matters  expressly  permitted by Section  6.3),  shall be in proper form for
    filing, registration or recordation.

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<PAGE>

         (o)  Title  Insurance;   Flood  Insurance.  (i)  If  requested  by  the
    Administrative Agent, the Administrative Agent shall have received,  and the
    title insurance  company issuing the policy referred to in clause (ii) below
    (the "Title  Insurance  Company")  shall have received,  maps or plats of an
    as-built  survey of the sites of the Mortgaged  Properties  certified to the
    Administrative   Agent  and  the  Title   Insurance   Company  in  a  manner
    satisfactory to them, dated a date satisfactory to the Administrative  Agent
    and the Title Insurance Company by an independent professional licensed land
    surveyor  satisfactory to the  Administrative  Agent and the Title Insurance
    Company,  which maps or plats and the  surveys on which they are based shall
    be made in accordance with the Minimum Standard Detail Requirements for Land
    Title  Surveys  jointly  established  and adopted by the American Land Title
    Association  and the American  Congress on Surveying  and Mapping in 1992 or
    any  subsequent  standards  jointly  adopted by such  bodies,  and,  without
    limiting the generality of the foregoing,  there shall be surveyed and shown
    on such maps, plats or surveys, to the extent required by the Administrative
    Agent, the following:  (A) the locations on such sites of all the buildings,
    structures  and other  improvements  and the  established  building  setback
    lines;  (B) the lines of streets  abutting the sites and width thereof;  (C)
    all access and other easements  appurtenant to the sites;  (D) all roadways,
    paths, driveways,  easements,  encroachments and overhanging projections and
    similar encumbrances affecting the sites, whether recorded,  apparent from a
    physical inspection of the sites or otherwise known to the surveyor; (E) any
    encroachments  on any  adjoining  property by the  building  structures  and
    improvements on the sites;  (F) if any site is described as being on a filed
    map,  a legend  relating  the  survey  to said map;  and (G) the flood  zone
    designations, if any, in which the Mortgaged Properties are located.

            (ii) The Administrative Agent shall have received in respect of each
    Mortgaged  Property a mortgagee's  title  insurance  policy (or policies) or
    marked up  unconditional  binder for such insurance.  Each such policy shall
    (A) be in an amount satisfactory to the Administrative  Agent; (B) be issued
    at ordinary  rates;  (C) insure that the Mortgage  insured thereby creates a
    valid first Lien on such  Mortgaged  Property  free and clear of all defects
    and encumbrances,  except as disclosed therein;  (D) name the Administrative
    Agent for the benefit of the Lenders as the  insured  thereunder;  (E) be in
    the form of ALTA Loan Policy - 1970  (Amended  10/17/70  and  10/17/84)  (or
    equivalent policies) to the extent the Title Insurance Company is willing to
    issue  the  same,  otherwise  in the  form of ALTA  Loan  Policy  - 1992 (or
    equivalent policies); (F) contain such endorsements and affirmative coverage
    as the  Administrative  Agent may  reasonably  request  and (G) be issued by
    title companies satisfactory to the Administrative Agent (including any such
    title  companies  acting as co-insurers or reinsurers,  at the option of the
    Administrative Agent). The Administrative Agent shall have received evidence
    satisfactory  to it that all  premiums in respect of each such  policy,  all
    charges for mortgage  recording tax, and all related expenses,  if any, have
    been paid.

            (iii) If requested by the  Administrative  Agent, the Administrative
    Agent shall have  received (A) a policy of flood  insurance  that (1) covers
    any parcel of improved real property that is encumbered by any Mortgage, (2)
    is written in an amount not less than the  outstanding  principal  amount of
    the indebtedness secured by such Mortgage that is

                                       49

<PAGE>

    reasonably  allocable to such real property or the maximum limit of coverage
    made  available  with respect to the  particular  type of property under the
    National Flood Insurance Act of 1968,  whichever is less, and (3) has a term
    ending  not later  than the  maturity  of the  Indebtedness  secured by such
    Mortgage  and (B)  confirmation  that the  Borrower  has received the notice
    required pursuant to Section 208(e)(3) of Regulation H of the Board.

            (iv) The  Administrative  Agent  shall  have  received a copy of all
    recorded  documents  referred to, or listed as  exceptions  to title in, the
    title policy or policies  referred to in clause (ii) above and a copy of all
    other material documents affecting the Mortgaged Properties.

         Notwithstanding  the  foregoing,  any items  described  in clauses  (i)
    through  (iv) of this  paragraph  (o) that  pertain  to the  Nealson  Street
    Property  and that are not  delivered on the Closing Date shall be delivered
    in accordance with Section 5.11(b).

         (p) Insurance.  The Administrative  Agent shall have received insurance
    certificates satisfying the requirements of Section 5.3 of the Guarantee and
    Collateral Agreement.

         (q)  Representations  and Warranties.  Each of the  representations and
    warranties  made by any Loan Party in or pursuant to this  Agreement  or any
    other Loan Document  shall be true and correct on and as of the Closing Date
    as if made on and as of such date.

         (r) No Default.  No Default or Event of Default shall have occurred and
    be  continuing on such date or after giving effect to the making of the Term
    Loans on the Closing Date.

         (s) Leverage Ratio. As of the Closing Date, the ratio of the Borrower's
    Consolidated Total Debt to the Borrower's pro forma Consolidated  EBITDA for
    the four  consecutive  fiscal quarters most recently ended (giving pro forma
    effect to the Acquisition as if it had been  consummated on the first day of
    such period,  with such adjustments as would be permissible under Regulation
    S-X of the Securities and Exchange Commission) shall not be greater than 5.5
    to  1.0  (subject  to  adjustment  for  changes  in  purchase  price  of the
    Acquisition and projected  increase in working  capital  associated with the
    Acquisition).  The  Lenders  shall  have  received  a  certificate  from the
    Borrower   containing  all  information  and   calculations   necessary  for
    determining compliance with the foregoing requirement.

         (t) Revolving  Credit Loans.  Concurrently  with the making of the Term
    Loans  on  the  Closing  Date,  the  Revolving  Credit  Lenders  shall  make
    available,  and the Borrower shall borrow and obtain, the initial extensions
    of credit provided for in the Revolving Credit Agreement.

                                       50

<PAGE>

                        SECTION 5. AFFIRMATIVE COVENANTS

         Holdings and the Borrower  hereby jointly and severally  agree that, so
long as the  Commitments  remain in  effect or any Term Loan or other  amount is
owing to any Lender or any Agent  hereunder,  each of Holdings  and the Borrower
shall and shall cause each of its Subsidiaries to:

         5.1 Financial Statements. Furnish to each Agent and each Lender:

         (a) as soon as available, but in any event within 90 days after the end
    of each fiscal  year of the  Borrower,  a copy of the  audited  consolidated
    balance sheet of the Borrower and its  consolidated  Subsidiaries  as at the
    end of such year and the related audited  consolidated  statements of income
    and of cash flows for such year,  setting forth in each case in  comparative
    form the figures as of the end of the previous  year,  reported on without a
    "going concern" or like qualification or exception, or qualification arising
    out of the  scope  of the  audit,  by  KPMG,  L.L.P.  or  other  independent
    certified public accountants of nationally recognized standing;

         (b) as soon as available, but in any event not later than 45 days after
    the end of each of the first three quarterly  periods of each fiscal year of
    the Borrower,  the unaudited  consolidated balance sheet of the Borrower and
    its consolidated  Subsidiaries as at the end of such quarter and the related
    unaudited  consolidated  statements  of  income  and of cash  flows for such
    quarter and the portion of the fiscal year through the end of such  quarter,
    setting forth in each case in comparative  form the figures as of the end of
    and for the  corresponding  period  in the  previous  year,  certified  by a
    Responsible Officer as being fairly stated in all material respects (subject
    to normal year-end audit adjustments); and

         (c) as soon as available, but in any event not later than 45 days after
    the end of each month  occurring  during each  fiscal  year of the  Borrower
    (other than the third,  sixth,  ninth and twelfth such month), the unaudited
    consolidated  balance sheets of the Borrower and its  Subsidiaries as at the
    end of such  month and the  related  unaudited  consolidated  statements  of
    income and of cash flows for such month and the  portion of the fiscal  year
    through the end of such  month,  setting  forth in each case in  comparative
    form the  figures as of the end of and for the  corresponding  period in the
    previous year,  certified by a Responsible Officer as being fairly stated in
    all material respects (subject to normal year-end audit adjustments);

all such  financial  statements  to be  complete  and  correct  in all  material
respects and to be prepared in  reasonable  detail and in  accordance  with GAAP
applied  consistently  throughout the periods  reflected  therein and with prior
periods (except as approved by such accountants or officer,  as the case may be,
and disclosed therein).

         5.2  Certificates;  Other  Information.  Furnish to each Agent and each
Lender, or, in the case of clause (h), to the relevant Lender:

                                       51

<PAGE>

         (a) concurrently with the delivery of the financial statements referred
    to in Section  5.1(a),  a certificate of the  independent  certified  public
    accountants  reporting on such financial  statements  stating that in making
    the examination  necessary therefor no knowledge was obtained of any Default
    or Event of Default, except as specified in such certificate;

         (b) concurrently with the delivery of any financial statements pursuant
    to Section 5.1, (i) a certificate of a Responsible  Officer stating that, to
    the best of such  Responsible  Officer's  knowledge,  each Loan Party during
    such  period  has  observed  or  performed  all of its  covenants  and other
    agreements,  and satisfied every condition,  contained in this Agreement and
    the other Loan Documents to which it is a party to be observed, performed or
    satisfied by it, and that such Responsible Officer has obtained no knowledge
    of any Default or Event of Default  except as specified in such  certificate
    and (ii) in the case of  quarterly  or annual  financial  statements,  (x) a
    Compliance Certificate containing all information and calculations necessary
    for determining  compliance by Holdings,  the Borrower and its  Subsidiaries
    with the provisions of this Agreement referred to therein as of the last day
    of the fiscal  quarter or fiscal year of the  Borrower,  as the case may be,
    and (y) to the extent not previously disclosed to the Administrative  Agent,
    a listing of any county or state  within  the United  States  where any Loan
    Party keeps inventory or equipment and of any Intellectual Property acquired
    by any Loan Party since the date of the most recent list delivered  pursuant
    to this  clause (y) (or,  in the case of the first  such list so  delivered,
    since the Closing Date);

         (c) as soon as available,  and in any event no later than 45 days after
    the end of each fiscal year of the Borrower, a detailed  consolidated budget
    for the following  fiscal year (including a projected  consolidated  balance
    sheet of the Borrower and its  Subsidiaries  as of the end of the  following
    fiscal year, and the related consolidated statements of projected cash flow,
    projected changes in financial position and projected income),  and, as soon
    as available,  significant revisions, if any, of such budget and projections
    with respect to such fiscal year (collectively,  the  "Projections"),  which
    Projections  shall  in  each  case  be  accompanied  by a  certificate  of a
    Responsible  Officer  stating that such  Projections are based on reasonable
    estimates, information and assumptions and that such Responsible Officer has
    no reason to believe that such  Projections  are  incorrect or misleading in
    any material respect;

         (d)  within  45  days  after  the  end of each  fiscal  quarter  of the
    Borrower, a narrative discussion and analysis of the financial condition and
    results of operations of the Borrower and its  Subsidiaries  for such fiscal
    quarter and for the period from the  beginning  of the then  current  fiscal
    year to the end of such  fiscal  quarter,  as compared to the portion of the
    Projections  covering  such  periods  and to the  comparable  periods of the
    previous year;

         (e) no later than 10 Business Days prior to the effectiveness  thereof,
    copies of substantially final drafts of any proposed amendment,  supplement,
    waiver or other modification with respect to the Acquisition Agreement;

                                       52

<PAGE>

         (f) within five days after the same are sent,  copies of all  financial
    statements and reports that Holdings or the Borrower sends to the holders of
    any class of its debt  securities or public equity  securities  and,  within
    five days after the same are filed,  copies of all financial  statements and
    reports that the Holdings or Borrower may make to, or file with, the SEC;

         (g) as soon as  possible  and in any event  within 5 days of  obtaining
    knowledge thereof: (i) a description of any development, event, or condition
    that,  individually or in the aggregate with other  developments,  events or
    conditions,  could  reasonably  be  expected to result in the payment by the
    Borrower and its Subsidiaries, in the aggregate, of a Material Environmental
    Amount;  and (ii) any notice that any  governmental  authority  may deny any
    application  for an  Environmental  Permit sought by, or revoke or refuse to
    renew any Environmental  Permit held by, the Borrower which could reasonably
    be expected to have a Material Adverse Effect; and

         (h) promptly,  such additional  financial and other  information as any
    Lender may from time to time reasonably request.

         5.3 Payment of Obligations.  Pay,  discharge or otherwise satisfy at or
before  maturity or before they become  delinquent,  as the case may be, all its
material  obligations  of whatever  nature,  except where the amount or validity
thereof is currently  being  contested in good faith by appropriate  proceedings
and reserves in conformity  with GAAP with respect thereto have been provided on
the books of Holdings, the Borrower or its Subsidiaries, as the case may be.

         5.4 Conduct of Business  and  Maintenance  of  Existence,  etc. (a) (i)
Preserve,  renew and keep in full force and effect its  corporate  existence and
(ii)  take  all  reasonable  action  to  maintain  all  rights,  privileges  and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise  permitted by Section 6.4 and except,  in the case of
clause (ii) above,  to the extent that failure to do so could not  reasonably be
expected to have a Material Adverse Effect;  and (b) comply with all Contractual
Obligations and  Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

         5.5  Maintenance  of  Property;  Insurance.  (a) Keep all  Property and
systems  useful  and  necessary  in its  business  in  good  working  order  and
condition,  ordinary wear and tear  excepted and (b) maintain  with  financially
sound and  reputable  insurance  companies  insurance  on all its Property in at
least such  amounts and against at least such risks (but  including in any event
public liability,  product  liability and business  interruption) as are usually
insured  against in the same general area by companies  engaged in the same or a
similar business.

         5.6 Inspection of Property;  Books and Records;  Discussions.  (a) Keep
proper books of records and account in which full,  true and correct  entries in
conformity  with GAAP and all  Requirements of Law shall be made of all dealings
and  transactions  in relation to its  business  and  activities  and (b) permit
representatives of any Lender upon reasonable notice to 

                                       53

<PAGE>

visit and inspect any of its  properties and examine and make abstracts from any
of its books and records at any  reasonable  time and as often as may reasonably
be desired and to discuss the business, operations, properties and financial and
other condition of Holdings, the Borrower and its Subsidiaries with officers and
employees  of  Holdings,   the  Borrower  and  its  Subsidiaries  and  with  its
independent certified public accountants.

         5.7 Notices.  Promptly give notice to the Administrative Agent and each
Lender of:

         (a) the occurrence of any Default or Event of Default;

         (b)  any  (i)  default  or  event  of  default  under  any  Contractual
    Obligation  of  Holdings,  the Borrower or any of its  Subsidiaries  or (ii)
    litigation,  investigation or proceeding which may exist at any time between
    Holdings,  the  Borrower  or any of its  Subsidiaries  and any  Governmental
    Authority,  that in either case, if not cured or if adversely determined, as
    the case may be,  could  reasonably  be expected to have a Material  Adverse
    Effect;

         (c) any litigation or proceeding  affecting  Holdings,  the Borrower or
    any of its  Subsidiaries  in which the amount involved is $1,000,000 or more
    and not covered by insurance  or in which  injunctive  or similar  relief is
    sought;

         (d) the following  events,  as soon as possible and in any event within
    30 days  after the  Borrower  knows or has reason to know  thereof:  (i) the
    occurrence  of any  Reportable  Event with respect to any Plan, a failure to
    make any required  contribution to a Plan, the creation of any Lien in favor
    of  the  PBGC  or a  Plan  or  any  withdrawal  from,  or  the  termination,
    Reorganization  or  Insolvency  of,  any  Multiemployer  Plan  or  (ii)  the
    institution  of proceedings or the taking of any other action by the PBGC or
    the Borrower or any Commonly  Controlled  Entity or any  Multiemployer  Plan
    with respect to the withdrawal from, or the termination,  Reorganization  or
    Insolvency  of,  any Plan  that in any  case  under  clause  (i) or (ii) may
    reasonably be expected to result in liability of more than $1,000,000;

         (e)  any  amendment  or  other  modification  of any  of the  documents
    described in Section 6.9; and

         (f) any  development  or  event  that has had or  could  reasonably  be
    expected to have a Material Adverse Effect.

Each notice  pursuant to this Section shall be  accompanied  by a statement of a
Responsible  Officer setting forth details of the occurrence referred to therein
and stating  what action  Holdings,  the  Borrower  or the  relevant  Subsidiary
proposes to take with respect thereto.

         5.8  Environmental  Laws. (a) Comply in all material respects with, and
ensure  compliance in all material  respects by all tenants and  subtenants,  if
any,  with,  all  applicable  

                                       54

<PAGE>

Environmental  Laws,  and obtain and comply in all  material  respects  with and
maintain,  and ensure that all tenants and  subtenants  obtain and comply in all
material  respects  with  and  maintain,   any  and  all  licenses,   approvals,
notifications,  registrations  or permits  required by applicable  Environmental
Laws.

         (b) Conduct and  complete  all  investigations,  studies,  sampling and
testing,   and  all  remedial,   removal  and  other  actions   required   under
Environmental  Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental  Authorities  regarding  Environmental
Laws, or contest such orders and directives by appropriate legal means.

         5.9 Interest Rate  Protection.  In the case of the Borrower,  within 60
days after the Closing Date, enter into Hedge Agreements to the extent necessary
to provide that at least 50% of the sum of the aggregate principal amount of the
Term  Loans and of the  Senior  Subordinated  Notes is subject to either a fixed
interest  rate or interest rate  protection  for a period of not less than three
years,  which  Hedge  Agreements  shall  have  terms and  conditions  reasonably
satisfactory to the Administrative Agent.

         5.10  Additional  Collateral,  etc.  (a) With  respect to any  Property
acquired  after the  Closing  Date by the  Borrower  or any of its  Subsidiaries
(other than (v) any leasehold  interests in real property,  (w) any Intellectual
Property  to the  extent  creation  of a  security  interest  therein  would  be
contractually  prohibited,  (x)  any  Property  described  in  paragraph  (b) or
paragraph  (c) of this  Section,  (y) any Property  subject to a Lien  expressly
permitted  by Section  6.3(g) and (z) Property  acquired by an Excluded  Foreign
Subsidiary)  as to  which  the  Administrative  Agent,  for the  benefit  of the
Lenders, does not have a perfected Lien, promptly (i) execute and deliver to the
Administrative  Agent such amendments to the Guarantee and Collateral  Agreement
or such other documents as the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such  Property  and (ii) take all actions  necessary or advisable to
grant to the  Administrative  Agent, for the benefit of the Lenders, a perfected
first priority security interest in such Property (subject to Liens permitted by
Section 6.3),  including without  limitation,  the filing of Uniform  Commercial
Code  financing  statements  in such  jurisdictions  as may be  required  by the
Guarantee  and  Collateral  Agreement  or by law or as may be  requested  by the
Administrative Agent.

         (b) With  respect to any fee  interest  in any real  property  having a
value (together with  improvements  thereof) of at least $250,000 acquired after
the Closing Date by the Borrower or any of its Subsidiaries (other than any such
real  property  owned  by an  Excluded  Foreign  Subsidiary  subject  to a  Lien
expressly permitted by Section 6.3(g)), promptly (i) execute and deliver a first
priority Mortgage in favor of the  Administrative  Agent, for the benefit of the
Lenders,  covering such real property,  (ii) if requested by the  Administrative
Agent,  provide  the  Lenders  with (x) title and  extended  coverage  insurance
covering such real property in an amount at least equal to the purchase price of
such real  estate as well as a current  ALTA  survey  thereof,  together  with a
surveyor's  certificate  and (y) any  consents or  estoppels  reasonably  deemed
necessary or  advisable  by the  Administrative  Agent in  connection  with such
mortgage  or deed  of  trust,  each  of the  foregoing  in  form  and  substance
reasonably  satisfactory to the  Administrative  Agent and (iii) if requested by
the Administrative  Agent,  deliver to the  Administrative  Agent 

                                       55

<PAGE>

legal opinions relating to the matters described above,  which opinions shall be
in  form  and  substance,  and  from  counsel,  reasonably  satisfactory  to the
Administrative Agent.

         (c) With respect to any new  Subsidiary of the Borrower  (other than an
Excluded Foreign  Subsidiary) created or acquired after the Closing Date (which,
for the purposes of this paragraph,  shall include any existing  Subsidiary that
ceases to be an  Excluded  Foreign  Subsidiary),  by the  Borrower or any of its
Subsidiaries,  promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems  necessary  or  advisable to grant to the  Administrative  Agent,  for the
benefit of the Lenders,  a perfected  first  priority  security  interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries,   (ii)  deliver  to  the  Administrative  Agent  the  certificates
representing  such Capital Stock,  together with undated stock powers, in blank,
executed  and  delivered  by a duly  authorized  officer of the Borrower or such
Subsidiary,  as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the  Guarantee  and  Collateral  Agreement and (B) to take such actions
reasonably  necessary or advisable to grant to the Administrative  Agent for the
benefit of the  Lenders a  perfected  first  priority  security  interest in the
Collateral  described in the Guarantee and Collateral  Agreement with respect to
such new Subsidiary (subject to Liens and other matters permitted by Section 6.3
and excluding leasehold interests in real property, and Intellectual Property to
the  extent  creation  of a security  interest  therein  would be  contractually
prohibited),  including,  without  limitation,  the filing of Uniform Commercial
Code  financing  statements  in such  jurisdictions  as may be  required  by the
Guarantee  and  Collateral  Agreement  or by law or as may be  requested  by the
Administrative Agent, and (iv) if requested by the Administrative Agent, deliver
to the  Administrative  Agent legal opinions  relating to the matters  described
above,  which  opinions  shall  be in form  and  substance,  and  from  counsel,
reasonably satisfactory to the Administrative Agent.

         (d) With  respect to any new  Excluded  Foreign  Subsidiary  created or
acquired  after the Closing  Date by the  Borrower  or any of its  Subsidiaries,
promptly (i) execute and deliver to the Administrative  Agent such amendments to
the  Guarantee  and  Collateral  Agreement  as the  Administrative  Agent  deems
necessary or advisable in order to grant to the  Administrative  Agent,  for the
benefit of the Lenders,  a perfected  first  priority  security  interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries  (provided  that in no  event  shall  more  than  65% of the  total
outstanding  Capital  Stock of any  such new  Subsidiary  be  required  to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock,  together with undated stock powers, in blank,  executed and
delivered by a duly authorized  officer of the Borrower or such  Subsidiary,  as
the case may be,  and take  such  other  action as may be  necessary  or, in the
opinion  of the  Administrative  Agent,  desirable  to  perfect  the Lien of the
Administrative  Agent  thereon,  and (iii) if  requested  by the  Administrative
Agent,  deliver to the  Administrative  Agent  legal  opinions  relating  to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.

         5.11 Further Assurances.  (a) From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all 

                                       56

<PAGE>

such  actions,  as the  Administrative  Agent may  reasonably  request,  for the
purposes of implementing  or  effectuating  the provisions of this Agreement and
the other Loan Documents,  or of more fully perfecting or renewing the rights of
the Administrative Agent and the Lenders with respect to the Collateral (or with
respect to any additions  thereto or  replacements  or proceeds  thereof or with
respect to any other  property or assets  hereafter  acquired by the Borrower or
any Subsidiary which may be deemed to be part of the Collateral) pursuant hereto
or thereto.  Upon the exercise by the Administrative  Agent or any Lender of any
power,  right,  privilege or remedy pursuant to this Agreement or the other Loan
Documents  which requires any consent,  approval,  recording,  qualification  or
authorization  of any  Governmental  Authority,  the  Borrower  will execute and
deliver,  or will  cause  the  execution  and  delivery  of,  all  applications,
certifications,   instruments   and  other   documents   and  papers   that  the
Administrative  Agent or such Lender may be required to obtain from the Borrower
or any of its Subsidiaries for such governmental consent,  approval,  recording,
qualification or authorization.

         (b) Within 30 days after the Closing Date,  the Borrower  shall deliver
to the  Administrative  Agent each item described in clauses (i) through (iv) of
Section 4.1(o) that pertains to the Nealson Street Property.

         (c) Within 15 days after the Closing Date,  the Borrower  shall deliver
to the  Administrative  Agent an  executed  legal  opinion  of local  counsel in
Maryland,  which  opinion  shall be in form and  substance  satisfactory  to the
Administrative Agent.


                          SECTION 6. NEGATIVE COVENANTS

         Holdings and the Borrower  hereby jointly and severally  agree that, so
long as the  Commitments  remain in  effect or any Term Loan or other  amount is
owing to any Lender or any Agent  hereunder,  the Borrower  shall not, and shall
not  permit  any of its  Subsidiaries  to,  and,  in the case of  Section  6.16,
Holdings shall not, directly or indirectly:

         6.1 Financial Condition Covenants.

         (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as at the last day of any  period of four  consecutive  fiscal  quarters  of the
Borrower  ending with any fiscal quarter set forth below to exceed the ratio set
forth below opposite such fiscal quarter:

                                                 Consolidated
         Fiscal Quarter                         Leverage Ratio
         --------------                         --------------

         FQ2  1999                                    6.25
         FQ3  1999                                    6.25
         FQ4  1999                                    6.25
         FQ1  2000                                    6.25
         FQ2  2000                                    6.00
         FQ3  2000                                    6.00
                                       57

<PAGE>

         FQ4  2000                                    5.75
         FQ1  2001                                    5.75
         FQ2  2001                                    5.50
         FQ3  2001                                    5.50
         FQ4  2001                                    5.25
         FQ1  2002                                    5.00
         FQ2  2002                                    5.00
         FQ3  2002                                    5.00
         FQ4  2002                                    4.75
         FQ1  2003                                    4.75
         FQ2  2003                                    4.50
         FQ3  2003                                    4.50
         FQ4  2003                                    4.25
         FQ1  2004                                    4.25
         FQ2  2004                                    4.00
         FQ3  2004                                    4.00
         FQ4  2004                                    4.00
         FQ1  2005                                    4.00
         FQ2  2005                                    4.00
         FQ3  2005                                    4.00
         FQ4  2005                                    4.00

         (b) Consolidated  Senior Leverage Ratio. Permit the Consolidated Senior
Leverage  Ratio as at the  last day of any  period  of four  consecutive  fiscal
quarters  of the  Borrower  ending  with any fiscal  quarter  set forth below to
exceed the ratio set forth below opposite such fiscal quarter:

                                                Consolidated Leverage
         Fiscal Quarter                            Senior Ratio  
         --------------                            ------------

         FQ2  1999                                    4.00
         FQ3  1999                                    4.00
         FQ4  1999                                    4.00
         FQ1  2000                                    4.00
         FQ2  2000                                    3.75
         FQ3  2000                                    3.75
         FQ4  2000                                    3.50
         FQ1  2001                                    3.50
         FQ2  2001                                    3.50
         FQ3  2001                                    3.25
         FQ4  2001                                    3.25
         FQ1  2002                                    3.00
         FQ2  2002                                    3.00
         FQ3  2002                                    2.75
         FQ4  2002                                    2.75
         
                                       58

<PAGE>

         FQ1  2003                                    2.75
         FQ2  2003                                    2.50
         FQ3  2003                                    2.50
         FQ4  2003                                    2.50
         FQ1  2004                                    2.50
         FQ2  2004                                    2.50
         FQ3  2004                                    2.50
         FQ4  2004                                    2.50
         FQ1  2005                                    2.50
         FQ2  2005                                    2.50
         FQ3  2005                                    2.50
         FQ4  2005                                    2.50

         (c)  Consolidated  Interest  Coverage  Ratio.  Permit the  Consolidated
Interest  Coverage Ratio for any period of four  consecutive  fiscal quarters of
the Borrower  ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:

                                             Consolidated Interest
         Fiscal Quarter                          Coverage Ratio    
         --------------                          -------------

         FQ2  1999                                    1.75
         FQ3  1999                                    1.75
         FQ4  1999                                    1.75
         FQ1  2000                                    1.75
         FQ2  2000                                    1.75
         FQ3  2000                                    1.75
         FQ4  2000                                    1.75
         FQ1  2001                                    2.00
         FQ2  2001                                    2.00
         FQ3  2001                                    2.00
         FQ4  2001                                    2.00
         FQ1  2002                                    2.00
         FQ2  2002                                    2.25
         FQ3  2002                                    2.25
         FQ4  2002                                    2.25
         FQ1  2003                                    2.25
         FQ2  2003                                    2.25
         FQ3  2003                                    2.50
         FQ4  2003                                    2.50
         FQ1  2004                                    2.50
         FQ2  2004                                    2.50
         FQ3  2004                                    2.50
         FQ4  2004                                    2.50
         FQ1  2005                                    2.50

                                       59

<PAGE>

         FQ2  2005                                    2.50
         FQ3  2005                                    2.50
         FQ4  2005                                    2.50

; provided,  that for the purposes of determining  the ratio described above for
the fiscal quarters of the Borrower ending June 30, 1999, September 30, 1999 and
December 31, 1999,  Consolidated  Interest Expense for the relevant period shall
be deemed to equal  Consolidated  Interest Expense for such fiscal quarter (and,
in the case of the latter two such determinations,  each previous fiscal quarter
commencing after the Closing Date) multiplied by 4, 2 and 4/3, respectively.

         (d) Consolidated  Fixed Charge Coverage Ratio.  Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four  consecutive  fiscal quarters
of the Borrower  ending with any fiscal  quarter set forth below to be less than
the ratio set forth below opposite such fiscal quarter:

                                               Consolidated Fixed
         Fiscal Quarter                       Charge Coverage Ratio
         --------------                       ---------------------

         FQ2  1999                                    1.00
         FQ3  1999                                    1.00
         FQ4  1999                                    1.00
         FQ1  2000                                    1.00
         FQ2  2000                                    1.00
         FQ3  2000                                    1.00
         FQ4  2000                                    1.00
         FQ1  2001                                    1.00
         FQ2  2001                                    1.00
         FQ3  2001                                    1.00
         FQ4  2001                                    1.00
         FQ1  2002                                    1.00
         FQ2  2002                                    1.00
         FQ3  2002                                    1.00
         FQ4  2002                                    1.00
         FQ1  2003                                    1.00
         FQ2  2003                                    1.00
         FQ3  2003                                    1.00
         FQ4  2003                                    1.00
         FQ1  2004                                    1.00
         FQ2  2004                                    1.00
         FQ3  2004                                    1.00
         FQ4  2004                                    1.00
         FQ1  2005                                    1.00
         FQ2  2005                                    1.00
         FQ3  2005                                    1.00
         FQ4  2005                                    1.00

                                       60

<PAGE>

; provided,  that for the purposes of determining  the ratio described above for
the fiscal quarters of the Borrower ending June 30, 1999, September 30, 1999 and
December 31, 1999,  Consolidated  Fixed Charges for the relevant period shall be
deemed to equal  Consolidated Fixed Charges for such fiscal quarter (and, in the
case of the  latter  two  such  determinations,  each  previous  fiscal  quarter
commencing after the Closing Date) multiplied by 4, 2 and 4/3, respectively.

         6.2  Limitation on  Indebtedness.  Create,  incur,  assume or suffer to
exist any Indebtedness, except:

         (a) Indebtedness of any Loan Party pursuant to any Loan Document;

         (b)  Indebtedness  of the Borrower to any  Subsidiary and of any Wholly
    Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;

         (c)  Indebtedness   (including,   without  limitation,   Capital  Lease
    Obligations)  secured by Liens  permitted by Section  6.3(g) in an aggregate
    principal amount not to exceed $5,000,000 at any one time outstanding;

         (d) Indebtedness  outstanding on the date hereof and listed on Schedule
    6.2(d) and any  refinancings,  refundings,  renewals or  extensions  thereof
    (without any increase in the principal  amount  thereof or any shortening of
    the maturity of any principal amount thereof);

         (e) Guarantee  Obligations  made in the ordinary  course of business by
    the Borrower or any of its  Subsidiaries  of  obligations of the Borrower or
    any Subsidiary Guarantor;

         (f)  Indebtedness  of the Borrower and the other Loan Parties under the
    Revolving Credit Agreement and any promissory notes issued thereunder;

         (g)  (i)  Indebtedness  of  the  Borrower  in  respect  of  the  Senior
    Subordinated   Notes  in  an  aggregate   principal  amount  not  to  exceed
    $120,000,000 and (ii) Guarantee  Obligations of any Subsidiary  Guarantor in
    respect of such Indebtedness;  provided that such Guarantee  Obligations are
    subordinated  to the  obligations  of such  Subsidiary  Guarantor  under the
    Guarantee and Collateral  Agreement to the same extent as the obligations of
    the Borrower in respect of the Senior Subordinated Notes are subordinated to
    the Obligations;

         (h)  Indebtedness  of the Borrower issued to sellers of assets acquired
    in a Permitted Acquisition;  provided, that (i) not more than $10,000,000 in
    aggregate  principal  amount of such  Indebtedness may be outstanding at any
    one time, (ii) such Indebtedness  shall provide for no payment of principal,
    and no  payment  of  interest  other  than  payments  in  kind,  to be  made
    thereunder  until the date which is 91 days after the final maturity date of
    the Term Loans and (iii) such Indebtedness shall be subordinated to 

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<PAGE>

    the Term Loans,  Revolving Credit Loans,  Swing Line Loans and Reimbursement
    Obligations  on  terms  and  conditions   reasonably   satisfactory  to  the
    Administrative Agent;

         (i)  Indebtedness   secured  by  Liens  permitted  by  Section  6.3(l);
    provided, that the aggregate principal amount of such Indebtedness, plus the
    aggregate  principal  amount of  Indebtedness  permitted by Section  6.2(c),
    shall not at any time exceed $10,000,000; and

         (j) other unsecured  Indebtedness,  not included in clauses (a) through
    (i) above, not to exceed $5,000,000 at any time outstanding.

         6.3 Limitation on Liens.  Create,  incur, assume or suffer to exist any
Lien upon any of its Property,  whether now owned or hereafter acquired,  except
for:

         (a) Liens for  taxes not yet due or which are being  contested  in good
    faith by  appropriate  proceedings,  provided  that  adequate  reserves with
    respect  thereto  are  maintained  on  the  books  of  the  Borrower  or its
    Subsidiaries, as the case may be, in conformity with GAAP;

         (b) carriers', warehousemen's,  mechanics', materialmen's, repairmen's,
    landlord's  or other like Liens  arising in the ordinary  course of business
    which  are not  overdue  for a period of more than 30 days or that are being
    contested in good faith by appropriate proceedings;

         (c) pledges or  deposits  in  connection  with  workers'  compensation,
    unemployment insurance and other social security legislation;

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

         (e) easements,  rights-of-way,  restrictions,  encroachments  (onto the
    Property or by improvements located on the Property, onto adjoining property
    or rights of way or onto easement areas) and other similar  encumbrances and
    title  defects  incurred in the  ordinary  course of business  that,  in the
    aggregate,  are not  substantial  in  amount  and  which  do not in any case
    materially  detract  from  the  value of the  Property  subject  thereto  or
    materially  interfere  with the  ordinary  conduct  of the  business  of the
    Borrower or any of its Subsidiaries;

         (f) Liens in  existence on the date hereof  listed on Schedule  6.3(f),
    securing  Indebtedness  permitted by Section  6.2(d),  provided that no such
    Lien is spread to cover any  additional  Property after the Closing Date and
    that the amount of Indebtedness secured thereby is not increased;

         (g) Liens securing Indebtedness of the Borrower or any other Subsidiary
    incurred  pursuant to Section 6.2(c) to finance the  acquisition of fixed or
    capital assets, provided 

                                       62

<PAGE>

    that (i) such Liens shall be created  substantially  simultaneously with the
    acquisition of such fixed or capital  assets,  (ii) such Liens do not at any
    time  encumber  any  Property  other  than  the  Property  financed  by such
    Indebtedness  and (iii) the amount of  Indebtedness  secured  thereby is not
    increased;

         (h) Liens created pursuant to the Security Documents;

         (i) any interest or title of a lessor  under any lease  entered into by
    the Borrower or any other  Subsidiary in the ordinary course of its business
    and covering only the assets so leased;

         (j) judgment liens which would not create any Event of Default;

         (k)  licenses  of  Intellectual  Property  in the  ordinary  course  of
    business;

         (l) liens on fixed  assets  existing at the time such fixed  assets are
    acquired  in  connection  with a  Permitted  Acquisition  and not created in
    contemplation thereof;

         (m) deposits in an aggregate  amount not to exceed $250,000 made in the
    ordinary course of business to secure liability insurance carriers; and

         (n)  Permitted  Exceptions  (as such term is defined in the  Mortgages)
    which, in the aggregate, could not reasonably be expected to have a Material
    Adverse Effect.

         6.4  Limitation  on  Fundamental   Changes.   Enter  into  any  merger,
consolidation  or  amalgamation,  or liquidate,  wind up or dissolve  itself (or
suffer any liquidation or dissolution),  or Dispose of all or substantially  all
of its Property or business, except that:

         (a) any  Subsidiary  may be  merged  or  consolidated  with or into the
    Borrower  (provided  that the Borrower  shall be the continuing or surviving
    corporation)  or with or into any Subsidiary  Guarantor  (provided that such
    Subsidiary Guarantor shall be the continuing or surviving corporation); and

         (b)  any  Subsidiary  may  Dispose  of any or all of its  assets  (upon
    voluntary  liquidation  or  otherwise)  to the  Borrower  or any  Subsidiary
    Guarantor.

         6.5  Limitation  on  Disposition  of  Property.  Dispose  of any of its
Property (including,  without limitation,  receivables and leasehold interests),
whether  now owned or  hereafter  acquired,  or, in the case of any  Subsidiary,
issue or sell any  shares  of such  Subsidiary's  Capital  Stock to any  Person,
except:

         (a) the  Disposition  of obsolete or worn out  property in the ordinary
    course of business;

         (b) the sale of inventory in the ordinary course of business;

                                       63

<PAGE>

         (c) Dispositions permitted by Section 6.4(b);

         (d) the  sale or  issuance  of any  Subsidiary's  Capital  Stock to the
    Borrower or any Subsidiary Guarantor;

         (e) the  Disposition of other assets in any fiscal year of the Borrower
    that contributed, in the aggregate, not more than 20% of Consolidated EBITDA
    for the  prior  fiscal  year;  provided,  that (i) in the case of each  such
    Disposition,  the  Borrower  shall  be in  pro  forma  compliance  with  the
    financial  covenants  set forth in Section 6.1 after  giving  effect to such
    Disposition  (determined on the  assumption  that such  Disposition  and the
    repayment of any Indebtedness  resulting therefrom had occurred on the first
    day of the relevant  period measured by such covenants) and (ii) in the case
    of any such  Disposition  yielding Net Cash  Proceeds of $1,000,000 or more,
    the Administrative  Agent shall have received a certificate of a Responsible
    Officer  to the  effect set forth in the  foregoing  clause (i) and  showing
    calculations thereof; and

         (f) any Disposition constituted by a Recovery Event, provided, that the
    requirements of Section 2.7(b) are complied with in connection therewith.

         6.6  Limitation  on  Restricted  Payments.  Declare or pay any dividend
(other than  dividends  payable solely in common stock of the Person making such
dividend)  on, or make any  payment  on  account  of, or set apart  assets for a
sinking or other  analogous  fund for,  the  purchase,  redemption,  defeasance,
retirement or other acquisition of, any Capital Stock of Holdings,  the Borrower
or any  Subsidiary,  whether  now or  hereafter  outstanding,  or make any other
distribution in respect thereof, either directly or indirectly,  whether in cash
or property or in obligations of Holdings,  the Borrower or any  Subsidiary,  or
enter into any derivatives or other transaction with any financial  institution,
commodities or stock exchange or  clearinghouse  (a "Derivatives  Counterparty")
obligating  Holdings,  the Borrower or any  Subsidiary  to make payments to such
Derivatives  Counterparty  as a result of any change in market value of any such
Capital  Stock  (collectively,  "Restricted  Payments"),  except  that  (i)  any
Subsidiary  may make  Restricted  Payments  to the  Borrower  or any  Subsidiary
Guarantor  and (ii) the Borrower may pay  dividends to Holdings (A) in an amount
not to exceed  $100,000 in any fiscal year to be used to pay corporate  overhead
expenses incurred in the ordinary course of business,  (B) in an amount equal to
the Permitted Stock Repurchase  Amount and (C) to permit  repurchase of Holdings
capital  stock from the Sponsor for resale to  management  and  employees of the
Borrower and its  Subsidiaries  so long as the proceeds  thereof are immediately
reinvested in the common equity of the Borrower.

         6.7  Limitation  on  Capital  Expenditures.  Make or commit to make any
Capital  Expenditure,  except (a) Capital  Expenditures  of the Borrower and its
Subsidiaries  in the ordinary  course of business not exceeding,  for any fiscal
year set forth below, the amount set forth below opposite such fiscal year:

                                       64

<PAGE>

         Fiscal Year                                  Amount
         -----------                                  ------

         1999                                       $5,500,000
         2000                                       $6,000,000
         2001                                       $6,500,000
         2002                                       $7,000,000
         2003                                       $7,000,000
         2004                                       $7,000,000
         2005                                       $7,000,000

provided,  that (i) any such amount referred to above, if not so expended in the
fiscal year for which it is permitted,  may be carried over for  expenditure  in
the next succeeding fiscal year, (ii) Capital Expenditures made pursuant to this
clause (a) during any fiscal  year shall be deemed  made,  first,  in respect of
amounts  permitted  for such  fiscal  year as  provided  in the table  above and
second,  in respect of amounts  carried over from the prior fiscal year pursuant
to  subclause  (i)  above and (iii) the  Borrower  may make  additional  Capital
Expenditures  during  FY 1999 in the form of  Capital  Lease  Obligations  in an
aggregate amount not exceeding  $500,000 and (b) Capital  Expenditures made with
the proceeds of any Reinvestment Deferred Amount.

         6.8 Limitation on  Investments.  Make any advance,  loan,  extension of
credit (by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes,  debentures or other debt securities of, or any
assets  constituting an ongoing  business from, or make any other investment in,
any other Person (all of the foregoing, "Investments"), except:

         (a) extensions of trade credit in the ordinary course of business;

         (b) investments in Cash Equivalents;

         (c)   Investments   arising  in  connection   with  the  incurrence  of
    Indebtedness permitted by Sections 6.2(b) and (e);

         (d) loans and advances to  employees  of Holdings,  the Borrower or any
    Subsidiaries of the Borrower in the ordinary course of business  (including,
    without limitation, for travel, entertainment and relocation expenses) in an
    aggregate  amount  for the  Borrower  and  its  Subsidiaries  not to  exceed
    $1,000,000 at any one time outstanding;

         (e) the Acquisition;

         (f) Permitted Acquisitions;

         (g)  Investments  (other  than  those  relating  to the  incurrence  of
    Indebtedness  permitted  by Section  6.8(c)) by the  Borrower  or any of its
    Subsidiaries in the Borrower or any Person that,  prior to such  investment,
    is a Subsidiary Guarantor; and

                                       65

<PAGE>

         (h) Investments in any Subsidiary organized under the laws of Canada in
    an  aggregate  amount  not to  exceed  $200,000  in any  fiscal  year of the
    Borrower;  provided that the aggregate amount of the Investments at any time
    outstanding  pursuant to this clause (h), together with the aggregate amount
    of  investments  made  pursuant  to  clause  (j)(ii)  of the  definition  of
    Permitted Acquisition, shall not exceed $5,000,000.

         6.9  Limitation  on  Optional   Payments  and   Modifications  of  Debt
Instruments,  etc. (a) Make or offer to make any optional or voluntary  payment,
prepayment,  repurchase or redemption of, or otherwise voluntarily or optionally
defease, the Senior Subordinated Notes, or segregate funds for any such payment,
prepayment,  repurchase,  redemption or defeasance, or enter into any derivative
or other transaction with any Derivatives  Counterparty  obligating the Borrower
or any Subsidiary to make payments to such Derivatives  Counterparty as a result
of any  change in market  value of the  Senior  Subordinated  Notes,  (b) amend,
modify or otherwise change, or consent or agree to any amendment,  modification,
waiver or other change to, any of the terms of the Senior  Subordinated Notes or
the  Senior   Subordinated  Note  Indenture  (other  than  any  such  amendment,
modification,  waiver or other  change  which (i) would  extend the  maturity or
reduce the amount of any payment of principal thereof, reduce the rate or extend
the date  for  payment  of  interest  thereon  or relax  any  covenant  or other
restriction  applicable to the Borrower or any of its Subsidiaries and (ii) does
not involve the payment of a consent fee), (c) designate any Indebtedness (other
than the Obligations) as "Designated  Senior  Indebtedness"  for the purposes of
the  Senior  Subordinated  Note  Indenture  or  (d)  amend  its  certificate  of
incorporation in any manner materially adverse to the Lenders.

         6.10  Limitation  on  Transactions  with  Affiliates.  Enter  into  any
transaction,  including,  without  limitation,  any  purchase,  sale,  lease  or
exchange  of  Property,  the  rendering  of any  service  or the  payment of any
management,  advisory or similar fees, with any Affiliate  (other than Holdings,
the  Borrower  or any  Subsidiary  Guarantor)  unless  such  transaction  is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of business
of the  Borrower or such  Subsidiary,  as the case may be, and (c) upon fair and
reasonable  terms no less favorable to the Borrower or such  Subsidiary,  as the
case may be, than it would obtain in a comparable arm's length  transaction with
a Person that is not an Affiliate.  Notwithstanding the foregoing, so long as no
Default or Event of Default  shall be in  existence,  (i) the  Borrower  and its
Subsidiaries may pay to the Sponsor and its Control  Investment  Affiliates fees
and  expenses  pursuant  to a  management  agreement  approved  by the  board of
directors of the Borrower in an aggregate amount not to exceed the lesser of (a)
1.0% of Consolidated  EBITDA for the period in respect of which such fees are to
be paid or (b) the  amount  permitted  to be paid  under the terms of the Senior
Subordinated  Note Indenture;  (ii) the Borrower may pay transaction fees to the
Sponsor or any affiliates thereof in connection with any Permitted  Acquisitions
made by a Loan  Party in an amount  not to  exceed  1% of the total  transaction
value of such Permitted Acquisitions; and (iii) the Borrower may pay transaction
fees,  in an  aggregate  amount  not to exceed  $2,220,000,  to the  Sponsor  in
connection  with the  Acquisition and the acquisition of the Polaner and related
brands on February 5, 1999.

         6.11  Limitation on Sales and  Leasebacks.  Enter into any  arrangement
with any Person  providing for the leasing by the Borrower or any  Subsidiary of
real or personal  property 

                                       66

<PAGE>

which  has  been  or is to be  sold  or  transferred  by the  Borrower  or  such
Subsidiary  to such Person or to any other Person to whom funds have been or are
to be  advanced  by such  Person  on the  security  of such  property  or rental
obligations of the Borrower or such Subsidiary.

         6.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of
the Borrower to end on a day other than the  Saturday  nearest to December 31 or
change the Borrower's method of determining fiscal quarters.

         6.13  Limitation on Negative  Pledge  Clauses.  Enter into or suffer to
exist or become  effective any agreement that prohibits or limits the ability of
the Borrower or any of its  Subsidiaries to create,  incur,  assume or suffer to
exist  any Lien  upon any of its  Property  or  revenues,  whether  now owned or
hereafter acquired,  to secure the Obligations or, in the case of any guarantor,
its  obligations  under the Guarantee and Collateral  Agreement,  other than (a)
this Agreement,  the Revolving Credit Agreement and the other Loan Documents and
(b)  any  agreements  governing  any  purchase  money  Liens  or  Capital  Lease
Obligations  otherwise  permitted  hereby (in which  case,  any  prohibition  or
limitation shall only be effective against the assets financed thereby).

         6.14 Limitation on Lines of Business.  Enter into any business,  either
directly or through any  Subsidiary,  except for those  businesses  in which the
Borrower and its  Subsidiaries  are engaged on the date of this Agreement (after
giving effect to the Acquisition) or that are reasonably related thereto.

         6.15 Limitation on Amendments to Acquisition Documentation.  (a) Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the indemnities  and licenses  furnished to the Borrower or any of
its  Subsidiaries  pursuant  to the  Acquisition  Documentation  such that after
giving effect  thereto such  indemnities  or licenses  shall be materially  less
favorable  to the  interests  of the Loan  Parties or the Lenders  with  respect
thereto or (b) otherwise  amend,  supplement  or otherwise  modify the terms and
conditions of the Acquisition  Documentation  except to the extent that any such
amendment, supplement or modification could not reasonably be expected to have a
Material Adverse Effect.

         6.16  Limitation on  Activities  of Holdings.  In the case of Holdings,
notwithstanding  anything to the  contrary in this  Agreement  or any other Loan
Document,  (a) conduct,  transact or otherwise  engage in, or commit to conduct,
transact or  otherwise  engage in, any business or  operations  other than those
incidental  to its  ownership  of the Capital  Stock of the Borrower and Capital
Stock of other  entities,  (b)  incur,  create,  assume  or  suffer to exist any
Indebtedness  or  other  liabilities  or  financial   obligations,   except  (i)
nonconsensual obligations imposed by operation of law, (ii) pursuant to the Loan
Documents to which it is a party,  (iii) obligations with respect to its Capital
Stock,  and (iv)  Indebtedness of Holdings issued to sellers of assets purchased
by Holdings or a Subsidiary of Holdings  (provided that (A) such Indebtedness is
subordinated  to the Term Loans,  Revolving  Credit Loans,  Swing Line Loans and
Reimbursement Obligations, (B) such Indebtedness shall provide for no payment of
principal,  and no payment of interest  other than  payments in kind, to be made
thereunder  until the date which is 91 days after the final maturity date of the
Term  Loans and (C) such  Indebtedness  shall  

                                       67

<PAGE>

have no covenants other than a covenant to pay principal and interest, covenants
not to make any  payment in respect of equity or junior debt prior to payment of
such Indebtedness,  and customary informational covenants, such as a covenant to
provide financial statements) or (c) own, lease, manage or otherwise operate any
properties or assets other than cash  equivalents and shares of Capital Stock of
the Borrower and other entities.

         6.17 Limitation on Withdrawal of Reinvestment  Deferred Amount.  To the
extent that the Borrower,  in calculating  Consolidated  Total Debt,  deducts an
amount  in  respect  of all or any  portion  of the then  outstanding  aggregate
Reinvestment Deferred Amount on deposit in an account subject to the Lien of the
Guarantee and  Collateral  Agreement,  withdraw any such funds from such account
unless,  before and after giving  effect to such  withdrawal,  (a) no Default or
Event of  Default  shall have  occurred  and be  continuing  and (b) each of the
representations  and  warranties  made by any Loan Party in or  pursuant to this
Agreement or any other Loan Document shall be true and correct on and as of such
date as if made on and as of such date.

                          SECTION 7. EVENTS OF DEFAULT

         If any of the following events shall occur and be continuing:

         (a) The Borrower  shall fail to pay any principal of any Term Loan when
    due in accordance  with the terms hereof;  or the Borrower shall fail to pay
    any  interest on any Term Loan,  or any other  amount  payable  hereunder or
    under any other Loan  Document,  within five days after any such interest or
    other amount becomes due in accordance with the terms hereof; or

         (b) Any  representation  or  warranty  made or deemed  made by any Loan
    Party  herein or in any other  Loan  Document  or that is  contained  in any
    certificate, document or financial or other statement furnished by it at any
    time under or in connection  with this  Agreement or any other Loan Document
    shall prove to have been inaccurate in any material  respect on or as of the
    date made or deemed made or furnished; or

         (c) (i) Any Loan Party shall default in the  observance or  performance
    of any  agreement  contained  in clause (i) or (ii) of Section  5.4(a) (with
    respect to Holdings and the Borrower only),  Section 5.7(a) or Section 6, or
    Section 5 of the Guarantee and  Collateral  Agreement,  or (ii) an "Event of
    Default"  under and as defined in any  Mortgage  shall have  occurred and be
    continuing; or

         (d) Any Loan Party shall default in the  observance or  performance  of
    any other  agreement  contained in this Agreement or any other Loan Document
    (other than as provided in paragraphs (a) through (c) of this Section),  and
    such default shall continue unremedied for a period of 30 days; or

         (e) Holdings, the Borrower or any of its Subsidiaries shall (i) default
    in making  any  payment of any  principal  of any  Indebtedness  (including,
    without limitation,  any Guarantee Obligation, but excluding the Term Loans)
    on the scheduled or original due

                                       68

<PAGE>

    date with  respect  thereto;  or (ii)  default in making any  payment of any
    interest  on any such  Indebtedness  beyond  the  period of  grace,  if any,
    provided in the instrument or agreement  under which such  Indebtedness  was
    created;  or (iii)  default in the  observance or  performance  of any other
    agreement or condition relating to any such Indebtedness or contained in any
    instrument or agreement  evidencing,  securing or relating  thereto,  or any
    other event shall occur or condition  exist,  the effect of which default or
    other event or condition is to cause, or to permit the holder or beneficiary
    of such  Indebtedness  (or a trustee  or agent on  behalf of such  holder or
    beneficiary)  to  cause,  with  the  giving  of  notice  if  required,  such
    Indebtedness  to become due prior to its stated  maturity or (in the case of
    any  such  Indebtedness  constituting  a  Guarantee  Obligation)  to  become
    payable;  provided,  that a default,  event or condition described in clause
    (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an
    Event of Default  unless,  at such  time,  one or more  defaults,  events or
    conditions  of the type  described  in clauses  (i),  (ii) and (iii) of this
    paragraph  (e)  shall  have  occurred  and be  continuing  with  respect  to
    Indebtedness  the  outstanding  principal  amount  of which  exceeds  in the
    aggregate $2,000,000; or

         (f)  (i)  Holdings,  the  Borrower  or any of  its  Subsidiaries  shall
    commence  any case,  proceeding  or other  action (A) under any  existing or
    future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
    insolvency,  reorganization  or relief of debtors,  seeking to have an order
    for  relief  entered  with  respect to it, or  seeking  to  adjudicate  it a
    bankrupt or insolvent, or seeking reorganization,  arrangement,  adjustment,
    winding-up,  liquidation,  dissolution,  composition  or other  relief  with
    respect  to it or its  debts,  or (B)  seeking  appointment  of a  receiver,
    trustee, custodian,  conservator or other similar official for it or for all
    or any substantial part of its assets,  or Holdings,  the Borrower or any of
    its  Subsidiaries  shall make a general  assignment  for the  benefit of its
    creditors;  or (ii) there shall be commenced against Holdings,  the Borrower
    or any of its Subsidiaries any case,  proceeding or other action of a nature
    referred  to in clause (i) above  that (A)  results in the entry of an order
    for  relief  or  any  such   adjudication  or  appointment  or  (B)  remains
    undismissed,  undischarged  or  unbonded  for a period of 60 days;  or (iii)
    there  shall be  commenced  against  Holdings,  the  Borrower  or any of its
    Subsidiaries  any case,  proceeding  or other action  seeking  issuance of a
    warrant of attachment,  execution,  distraint or similar process against all
    or any substantial  part of its assets that results in the entry of an order
    for any such relief that shall not have been vacated,  discharged, or stayed
    or bonded  pending  appeal  within 60 days from the entry  thereof;  or (iv)
    Holdings,  the Borrower or any of its Subsidiaries  shall take any action in
    furtherance  of, or indicating its consent to,  approval of, or acquiescence
    in, any of the acts set forth in clause (i),  (ii),  or (iii) above;  or (v)
    Holdings,  the Borrower or any of its  Subsidiaries  shall generally not, or
    shall be unable to, or shall  admit in  writing  its  inability  to, pay its
    debts as they become due; or

         (g) (i) Any Person shall  engage in any  "prohibited  transaction"  (as
    defined in Section 406 of ERISA or Section 4975 of the Code)  involving  any
    Plan, (ii) any "accumulated  funding  deficiency" (as defined in Section 302
    of ERISA),  whether or not waived,  shall exist with  respect to any Plan or
    any Lien in favor of the PBGC or a Plan  shall  arise on the  assets  of the
    Borrower or any Commonly Controlled Entity, (iii) a 

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    Reportable Event shall occur with respect to, or proceedings  shall commence
    to have a trustee appointed (or a trustee shall be appointed) to administer,
    or to  terminate,  any  Single  Employer  Plan,  which  Reportable  Event or
    commencement  of  proceedings  or  appointment  of  a  trustee  is,  in  the
    reasonable  opinion  of  the  Required  Lenders,  likely  to  result  in the
    termination of such Plan for purposes of Title IV of ERISA,  (iv) any Single
    Employer  Plan shall  terminate  for purposes of Title IV of ERISA,  (v) the
    Borrower or any  Commonly  Controlled  Entity  shall,  or in the  reasonable
    opinion  of the  Required  Lenders  is likely  to,  incur any  liability  in
    connection with a withdrawal from, or the Insolvency or Reorganization of, a
    Multiemployer  Plan or (vi) any other similar event or condition shall occur
    or exist  with  respect  to a Plan  other  than in the  ordinary  course  of
    business;  and in each case in clauses (i) through (vi) above, such event or
    condition, together with all other such events or conditions, if any, could,
    in the sole judgment of the Required Lenders, reasonably be expected to have
    a Material Adverse Effect; or

         (h) One or more judgments or decrees shall be entered against Holdings,
    the Borrower or any of its Subsidiaries involving for Holdings, the Borrower
    and its Subsidiaries taken as a whole a liability (not paid or fully covered
    by  insurance as to which the relevant  insurance  company has  acknowledged
    coverage) of $2,000,000 or more, and all such judgments or decrees shall not
    have been vacated,  discharged,  stayed or bonded  pending  appeal within 30
    days from the entry thereof; or

         (i) Any of the Security Documents shall cease, for any reason, to be in
    full force and effect,  or any Loan Party or any Affiliate of any Loan Party
    shall so assert, or any Lien created by any of the Security  Documents shall
    cease to be enforceable and of the same effect and priority  purported to be
    created thereby; or

         (j)  The  guarantee  contained  in  Section  2  of  the  Guarantee  and
    Collateral  Agreement shall cease,  for any reason,  to be in full force and
    effect or any Loan Party or any Affiliate of any Loan Party shall so assert;
    or

         (k) (i) The Permitted  Investors  shall cease to have the power to vote
    or direct the voting of securities  having a majority of the ordinary voting
    power for the  election  of  directors  of Holdings  (determined  on a fully
    diluted  basis);  (ii) the Permitted  Investors shall cease to own of record
    and  beneficially  at  least  51% of the  common  stock of  Holdings,  (iii)
    Holdings  shall  cease  to own and  control,  of  record  and  beneficially,
    directly,  100% of each class of  outstanding  Capital Stock of the Borrower
    free and clear of all Liens  (except  Liens  created  by the  Guarantee  and
    Collateral Agreement); or (iv) a Specified Change of Control shall occur; or

         (l) The  Senior  Subordinated  Notes or the  guarantees  thereof  shall
    cease, for any reason, to be validly  subordinated to the Obligations or the
    obligations of the Subsidiary  Guarantors under the Guarantee and Collateral
    Agreement,  as the case may be, as provided in the Senior  Subordinated Note
    Indenture,  or any Loan Party,  any Affiliate of any Loan Party, the trustee
    in respect of the Senior Subordinated Notes or the holders of

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    at least 25% in aggregate  principal amount of the Senior Subordinated Notes
    shall so assert;

then, and in any such event, (A) if such event is an Event of Default  specified
in clause  (i) or (ii) of  paragraph  (f) above with  respect  to the  Borrower,
automatically  the Commitments  shall  immediately  terminate and the Term Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such  event is any  other  Event of  Default,  either  or both of the
following actions may be taken:  with the consent of the Required  Lenders,  the
Administrative  Agent may,  or upon the  request of the  Required  Lenders,  the
Administrative  Agent shall,  by notice to the Borrower,  declare the Term Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement  and  the  other  Loan  Documents  to be due  and  payable  forthwith,
whereupon the same shall immediately become due and payable.

                             SECTION 8. THE AGENTS

         8.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Agents as the agents of such Lender under this  Agreement and the other Loan
Documents,  and each Lender irrevocably authorizes each Agent, in such capacity,
to take such action on its behalf under the provisions of this Agreement and the
other Loan  Documents and to exercise such powers and perform such duties as are
expressly  delegated to such Agent by the terms of this  Agreement and the other
Loan  Documents,  together with such other powers as are  reasonably  incidental
thereto.  Notwithstanding  any  provision  to the  contrary  elsewhere  in  this
Agreement,  no Agent  shall have any duties or  responsibilities,  except  those
expressly set forth herein, or 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 any Agent.

         8.2  Delegation  of Duties.  Each Agent may  execute  any of its duties
under this  Agreement  and the other  Loan  Documents  by or  through  agents or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining  to such  duties.  No  Agent  shall be  responsible  for the
negligence or misconduct of any agents or attorneys  in-fact selected by it with
reasonable care.

         8.3  Exculpatory  Provisions.  Neither  any  Agent  nor  any  of  their
respective  officers,   directors,   employees,  agents,   attorneys-in-fact  or
affiliates  shall be (i) liable for any action  lawfully  taken or omitted to be
taken by it or such Person  under or in  connection  with this  Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable  decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross  negligence or willful  misconduct)
or (ii)  responsible  in any  manner  to any of the  Lenders  for any  recitals,
statements,  representations or warranties made by any Loan Party or any officer
thereof  contained  in this  Agreement  or any  other  Loan  Document  or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in  connection  with,  this  Agreement or any

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other Loan  Document  or for the value,  validity,  effectiveness,  genuineness,
enforceability  or  sufficiency  of this Agreement or any other Loan Document or
for any  failure of any Loan Party a party  thereto to perform  its  obligations
hereunder or  thereunder.  The Agents shall not 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 Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.

         8.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any instrument, writing, resolution, notice,
consent,  certificate,  affidavit,  letter, telecopy, telex or teletype message,
statement,  order or other document or conversation believed by it to be genuine
and  correct  and to have  been  signed,  sent or made by the  proper  Person or
Persons and upon advice and  statements  of legal  counsel  (including,  without
limitation,  counsel to Holdings or the Loan Parties),  independent  accountants
and other  experts  selected  by such  Agent.  The Agents may deem and treat the
payee of any Note as the owner thereof for all purposes  unless a written notice
of assignment,  negotiation  or transfer  thereof shall have been filed with the
Administrative Agent. Each 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 Required  Lenders (or, if
so specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be  indemnified  to its  satisfaction  by the Lenders  against any and all
liability  and expense  (other than any  liability  or expense  arising from its
gross negligence or willful  misconduct) that may be incurred by it by reason of
taking or continuing  to take any such action.  Each Agent shall in all cases be
fully protected in acting,  or in refraining  from acting,  under this Agreement
and the other  Loan  Documents  in  accordance  with a request  of the  Required
Lenders (or, if so specified by this Agreement,  all Lenders),  and such request
and any action  taken or failure to act pursuant  thereto  shall be binding upon
all the Lenders and all future holders of the Term Loans.

         8.5 Notice of Default.  No Agent shall be deemed to have  knowledge  or
notice of the  occurrence  of any Default or Event of Default  hereunder  unless
such Agent has received notice from a Lender, Holdings or the Borrower referring
to this Agreement,  describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice,  the  Administrative  Agent shall give notice thereof to
the  Lenders.  The  Administrative  Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Lenders (or, if so specified by this  Agreement,  all  Lenders);  provided  that
unless and until the  Administrative  Agent shall have received such directions,
the  Administrative  Agent may (but shall not be obligated to) take such action,
or refrain  from taking such  action,  with  respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

         8.6  Non-Reliance  on Agents and Other Lenders.  Each Lender  expressly
acknowledges  that  neither  the  Agents nor any of their  respective  officers,
directors,  employees,  agents,  attorneys-in-fact  or affiliates  have made any
representations  or  warranties  to it and  that no act by any  Agent  hereafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party,  shall be deemed to constitute any representation or warranty by any
Agent  to any  Lender.  Each  Lender  represents  to the  Agents  that  it  has,
independently and without reliance upon any Agent or any other Lender, and based
on such  documents and  
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<PAGE>

information  as it  has  deemed  appropriate,  made  its  own  appraisal  of and
investigation  into the  business,  operations,  property,  financial  and other
condition and creditworthiness of the Loan Parties and their affiliates and made
its own decision to make its Term Loans hereunder and enter into this Agreement.
Each Lender also represents  that it will,  independently  and without  reliance
upon any Agent or any other Lender,  and based on such documents and information
as it shall  deem  appropriate  at the  time,  continue  to make its own  credit
analysis,  appraisals  and  decisions in taking or not taking  action under this
Agreement and the other Loan  Documents,  and to make such  investigation  as it
deems  necessary  to inform  itself as to the  business,  operations,  property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates.  Except for notices,  reports and other documents expressly required
to be furnished to the Lenders by the Administrative  Agent hereunder,  no Agent
shall have any duty or  responsibility  to provide any Lender with any credit or
other  information  concerning  the business,  operations,  property,  condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or any
affiliate of a Loan Party that may come into the possession of such Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates.

         8.7  Indemnification.  The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not  reimbursed  by  Holdings,  the Borrower and
without  limiting the obligation of Holdings or the Borrower to do so),  ratably
according to their respective  Aggregate  Exposure  Percentages in effect on the
date  on  which   indemnification   is  sought   under  this   Section  (or,  if
indemnification  is sought after the date upon which the Commitments  shall have
terminated  and the  Term  Loans  shall  have  been  paid in  full,  ratably  in
accordance with such Aggregate  Exposure  Percentages  immediately prior to such
date), from and against any and all liabilities,  obligations,  losses, damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (including, without limitation, at any time
following the payment of the Term Loans) be imposed on,  incurred by or asserted
against  such Agent in any way  relating to or arising out of, the  Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or  referred  to herein or therein or the  transactions  contemplated  hereby or
thereby or any action taken or omitted by such Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any  portion  of such  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments, suits, costs, expenses or disbursements that are found by a
final and  nonappealable  decision of a court of competent  jurisdiction to have
resulted  from  such  Agent's  gross  negligence  or  willful  misconduct.   The
agreements  in this Section  shall survive the payment of the Term Loans and all
other amounts payable hereunder.

         8.8 Agent in Its Individual Capacity. Each Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Loan Party as though such Agent were not an Agent.  With respect to its
Term  Loans made or renewed  by it,  each Agent  shall have the same  rights and
powers under this  Agreement and the other Loan  Documents as any Lender and may
exercise  the same as though it were not an Agent,  and the terms  "Lender"  and
"Lenders" shall include each Agent in its individual capacity.

         8.9  Successor  Agents.   The   Administrative   Agent  may  resign  as
Administrative  Agent  upon 10  days'  written  notice  to the  Lenders  and the
Borrower. If the Administrative Agent 

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shall resign as  Administrative  Agent under this  Agreement  and the other Loan
Documents,  then the  Required  Lenders  shall  appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall (unless an Event of
Default  under  Section 7(a) or Section 7(f) with respect to the Borrower  shall
have occurred and be continuing)  be subject to approval by the Borrower  (which
approval  shall  not  be  unreasonably  withheld  or  delayed),  whereupon  such
successor  agent  shall  succeed  to  the  rights,  powers  and  duties  of  the
Administrative  Agent,  and the term  "Administrative  Agent"  shall  mean  such
successor  agent effective upon such  appointment  and approval,  and the former
Administrative  Agent's rights,  powers and duties as Administrative Agent shall
be  terminated,  without  any other or  further  act or deed on the part of such
former  Administrative  Agent or any of the  parties  to this  Agreement  or any
holders of the Term Loans.  If no successor  agent has accepted  appointment  as
Administrative  Agent  by  the  date  that  is  10  days  following  a  retiring
Administrative  Agent's  notice  of  resignation,  the  retiring  Administrative
Agent's  resignation  shall  nevertheless  thereupon become  effective,  and the
Lenders shall assume and perform all of the duties of the  Administrative  Agent
hereunder  until such time, if any, as the Required  Lenders appoint a successor
agent as provided for above.  The Syndication  Agent may, at any time, by notice
to the  Lenders  and the  Administrative  Agent,  resign  as  Syndication  Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of the
Syndication Agent hereunder shall  automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the Syndication
Agent,  the  Administrative  Agent or any  Lender.  After any  retiring  Agent's
resignation  as Agent,  the  provisions  of this  Section  8 shall  inure to its
benefit as to any actions  taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.

         8.10 Authorization to Release Liens; Other Actions Relating to Security
Documents. (a) The Administrative Agent is hereby irrevocably authorized by each
of the Lenders to release any Lien  covering any Property of the Borrower or any
of its Subsidiaries  that is the subject of a Disposition  which is permitted by
this Agreement and the Revolving Credit Agreement or which has been consented to
in  accordance  with  Section  9.1 of  this  Agreement  and  Section  9.1 of the
Revolving Credit Agreement.

         (b) With  respect  to any action  under or in  respect of the  Security
Documents  that  the  provisions  of  this  Agreement   permit  or  require  the
Administrative  Agent to take only with the consent,  or upon the direction,  of
all of the  Lenders or the  Required  Lenders,  as the case may be, the  Lenders
acknowledge that the Administrative  Agent shall be required to take such action
only if such action is approved by the Joint Required Lenders.

         8.11 The Arranger,  the  Co-Documentation  Agent and the  Documentation
Agent. Each of the Arranger,  the Co-Documentation  Agent, and the Documentation
Agent,  in  their  respective  capacities  as  such,  shall  have no  duties  or
responsibilities,  and shall incur no  liability,  under this  Agreement and the
other Loan Documents.

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                            SECTION 9. MISCELLANEOUS

         9.1  Amendments  and Waivers.  Neither this Agreement or any other Loan
Document,  nor any terms  hereof or  thereof,  may be amended,  supplemented  or
modified except in accordance  with the provisions of this Section 9.1.  Subject
to the provisions of the immediately  following  sentence,  the Required Lenders
and each Loan  Party  party to the  relevant  Loan  Document  may,  or (with the
written consent of the Required Lenders) the Agents and each Loan Party party to
the  relevant  Loan  Document  may,  from time to time,  (a) enter into  written
amendments,  supplements or modifications hereto and to the other Loan Documents
(including  amendments  and  restatements  hereof or thereof) for the purpose of
adding any  provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the  Lenders  or of the Loan  Parties  hereunder  or
thereunder or (b) waive, on such terms and conditions as may be specified in the
instrument of waiver,  any of the  requirements  of this  Agreement or the other
Loan  Documents  or any  Default  or  Event  of  Default  and its  consequences;
provided,  however,  that no such waiver and no such  amendment,  supplement  or
modification  shall  (i)  forgive  the  principal  amount  or  extend  the final
scheduled  date of maturity of any Term Loan,  extend the scheduled  date of any
amortization  payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable  hereunder or extend the  scheduled  date of any payment
thereof,  or increase the amount or extend the expiration date of any Commitment
of any Lender, in each case without the consent of each Lender directly affected
thereby; (ii) amend, modify or waive any provision of this Section or reduce any
percentage   specified  in  the  definition  of  Required  Lenders  or  Required
Prepayment Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan Documents,
release  all  or  substantially   all  of  the  Collateral  or  release  all  or
substantially  all of the Guarantors from their guarantee  obligations under the
Guarantee  and  Collateral  Agreement,  in each case  without the consent of all
Lenders;  (iii) reduce the  percentage  specified in the  definition of Majority
Facility Lenders with respect to any Facility without the written consent of all
Lenders  under such  Facility;  (iv)  amend,  modify or waive any  provision  of
Section 8 without the consent of any Agent directly affected thereby; (v) amend,
modify or waive any provision of Section 2.13 without the consent of each Lender
directly affected  thereby;  or (vi) amend Section 2.6(b) or 2.13(c) without the
consent of the Majority  Facility  Lenders of the Tranche B Term Loan  Facility.
Notwithstanding  the  immediately  preceding  sentence,   the  parties  to  this
Agreement agree, for their own benefit and for the benefit of the parties to the
Revolving  Credit  Agreement,  that (i) the provisions of Sections 3, 5, 6 and 7
may be amended, supplemented or modified with, and only with, the consent of the
Borrower and the Joint  Required  Lenders  (whether or not the Required  Lenders
shall have consented  thereto) and compliance  with any of the  requirements  of
such  Sections (or any Default or Event of Default  resulting  from a failure by
the  Borrower to comply with such  requirements)  may be waived  with,  and only
with,  the consent of the Joint  Required  

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Lenders (whether or not the Required Lenders shall have consented thereto), (ii)
subject to the provisions of clause (iv) of this sentence, the provisions of the
Security Documents may be amended, supplemented or modified with, and only with,
the consent of each Loan Party that is a party  thereto  and the Joint  Required
Lenders (whether or not the Required  Lenders shall have consented  thereto) and
compliance  with any of the  requirements  of such  Sections  (or any Default or
Event of Default  resulting from a failure by any Loan Party to comply with such
requirements)  may be waived  with,  and only  with,  the  consent  of the Joint
Required  Lenders  (whether or not the  Required  Lenders  shall have  consented
thereto),  (iii) the definition of Joint Required  Lenders in Section 1.1 may be
amended or otherwise modified only with the consent of the Borrower, each Lender
and each Revolving Credit Lender,  (iv) any release of all or substantially  all
of the Collateral, and any release of all or substantially all of the Guarantors
from their guarantee  obligations under the Guarantee and Collateral  Agreement,
shall, in each case, be effected with, and only with, the consent of each Lender
and each Revolving Credit Lender,  (v) any amendment,  modification or waiver of
any provision of Section 2.7 may be effected with, and only with, the consent of
the  Borrower,  the Required  Prepayment  Lenders and Revolving  Credit  Lenders
holding  more  than  50%  of  the  aggregate  amount  of  the  Revolving  Credit
Commitments  then in effect (or, if the Revolving  Credit  Commitments have been
terminated,  the  Total  Revolving  Extensions  of  Credit  (as  defined  in the
Revolving   Credit   Agreement)  then   outstanding)  and  (vi)  any  amendment,
modification  or waiver in respect of any provision of this  Agreement  effected
pursuant  to this  sentence  must be  accompanied  by an  equivalent  amendment,
modification  or  waiver  in  respect  of  the  corresponding  provision  of the
Revolving  Credit  Agreement and (vii) this sentence may be amended or otherwise
modified only with the consent of the Borrower,  each Lender and each  Revolving
Credit  Lender.   Any  such  waiver  and  any  such  amendment,   supplement  or
modification  shall  apply  equally to each of the  Lenders and shall be binding
upon the Loan  Parties,  the Lenders,  the  Administrative  Agent and all future
holders of the Term Loans.  In the case of any  waiver,  the Loan  Parties,  the
Lenders and the Administrative  Agent shall be restored to their former position
and rights  hereunder  and under the other Loan  Documents,  and any  Default or
Event of Default waived shall be deemed to be cured and not  continuing;  but no
such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon. Any such waiver,  amendment,  supplement
or modification  shall be effected by a written instrument signed by the parties
required to sign pursuant to the foregoing provisions of this Section; provided,
that delivery of an executed  signature page of any such instrument by facsimile
transmission  shall be effective as delivery of a manually executed  counterpart
thereof.  For the avoidance of doubt,  this Agreement may be amended (or amended
and  restated)  with  the  written   consent  of  the  Required   Lenders,   the
Administrative  Agent and each Loan Party to each  relevant Loan Document (x) to
add one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time  outstanding  thereunder  and the accrued
interest and fees in respect thereof  (collectively,  the "Additional Extensions
of Credit") to share  ratably in the  benefits of this  Agreement  and the other
Loan Documents with the Term Loans and the accrued  interest and fees in respect
thereof  and (y) to  include  appropriately  the  Lenders  holding  such  credit
facilities in any determination of the Required Lenders and Required  Prepayment
Lenders;  provided,  however,  that  (A) no  such  amendment  shall  permit  the
Additional  Extensions of Credit to share ratably with or with preference to the
Term Loans in the  application of mandatory  prepayments  without the consent of
the  Required  Prepayment  Lenders,  (B) no Lender  shall be required to make or
participate in such Additional  Extensions of Credit without the consent of such
Lender in its sole  discretion  and (C) unless  each  Tranche B Term Loan Lender
shall  otherwise  agree,  the  applicable  margin with respect to the Additional
Extensions of Credit shall not exceed the  Applicable  Margin for Tranche B Term
Loans.

                  9.2 Notices. All notices,  requests and demands to or upon the
respective  parties  hereto to be effective  shall be in writing  (including  by
telecopy),  and, unless otherwise expressly provided herein,  shall be deemed to
have been duly given or made when delivered,  or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy 

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<PAGE>

notice, when received,  addressed (a) in the case of Holdings,  the Borrower and
the Agents,  as follows and (b) in the case of the  Lenders,  as set forth in an
administrative  questionnaire  delivered to the Administrative  Agent or, in the
case of a  Lender  which  becomes  a  party  to this  Agreement  pursuant  to an
Assignment and Acceptance,  in such Assignment and Acceptance or (c) in the case
of any party,  to such other address as such party may  hereafter  notify to the
other parties hereto:

         Holdings:                          B&G Foods Holding Corp.
                                            426 Eagle Rock Avenue
                                            Roseland, NJ 07068
                                            Attention:  Chief Financial Officer
                                            Telecopy: 973-228-7461
                                            Telephone: 973-228-2500

         The Borrower:                      B&G Foods, Inc.
                                            426 Eagle Rock Avenue
                                            Roseland, NJ 07068
                                            Attention:  Chief Financial Officer
                                            Telecopy: 973-228-7461
                                            Telephone: 973-228-2500

         The Syndication Agent:             Lehman Commercial Paper Inc.3 World
                                            Financial Center
                                            New York, New York 10285
                                            Attention:  Michael O'Brien
                                            Telecopy:  (212) 526-7691
                                            Telephone:  (212) 526-0437

         The Administrative Agent:          Lehman Commercial Paper Inc.3 World
                                            Financial Center
                                            New York, New York 10285
                                            Attention:  Michael O'Brien
                                            Telecopy:  (212) 526-7691
                                            Telephone:  (212) 526-0437


provided  that any  notice,  request  or  demand to or upon the any Agent or any
Lender shall not be effective until received.

         9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising,  on the part of the any Agent or any Lender,  any right,  remedy,
power or privilege  hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege  hereunder  preclude any other or further exercise thereof or
the  exercise  of any other  right,  remedy,  power or  privilege.  The  rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

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<PAGE>

         9.4 Survival of Representations and Warranties. All representations and
warranties  made  hereunder,  in the other Loan  Documents  and in any document,
certificate or statement  delivered  pursuant  hereto or in connection  herewith
shall survive the execution and delivery of this Agreement and the making of the
Term Loans and other extensions of credit hereunder.

         9.5 Payment of Expenses.  The  Borrower  agrees (a) to pay or reimburse
the Agents for all their reasonable out-of-pocket costs and expenses incurred in
connection  with the  syndication of the Facilities  (other than fees payable to
syndicate  members) and the  development,  preparation and execution of, and any
amendment,  supplement  or  modification  to, this  Agreement and the other Loan
Documents and any other documents prepared in connection  herewith or therewith,
and the  consummation  of the  transactions  contemplated  hereby  and  thereby,
including,  without limitation,  the reasonable fees and disbursements and other
charges of counsel to the  Administrative  Agent,  (b) to pay or reimburse  each
Lender and each Agent for all their costs and  expenses  incurred in  connection
with the enforcement or  preservation  of any rights under this  Agreement,  the
other  Loan  Documents  and  any  such  other  documents,   including,   without
limitation,  the fees and disbursements of counsel (including the allocated fees
and  disbursements  and other charges of in-house counsel) to each Lender and of
counsel to the Agents,  (c) to pay, and  indemnify and hold harmless each Lender
and each Agent  from,  any and all  recording  and  filing  fees and any and all
liabilities  with  respect  to, or  resulting  from any delay in paying,  stamp,
excise and other taxes, if any, which may be payable or determined to be payable
in  connection   with  the  execution  and  delivery  of,  or   consummation  or
administration  of any of the  transactions  contemplated  by, or any amendment,
supplement or modification  of, or any waiver or consent under or in respect of,
this Agreement,  the other Loan Documents and any such other documents,  and (d)
to pay,  and  indemnify  and  hold  harmless  each  Lender,  each  Agent,  their
respective  affiliates,  and their  respective  officers,  directors,  trustees,
employees, advisors, agents and controlling persons (each, an "Indemnitee") from
and  against,  any and all  other  liabilities,  obligations,  losses,  damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery,  enforcement,
performance and  administration of this Agreement,  the other Loan Documents and
any such other documents,  including,  without limitation,  any of the foregoing
relating  to the  use of  proceeds  of  the  Term  Loans  or the  violation  of,
noncompliance  with or liability under, any  Environmental Law applicable to the
operations of Holdings,  the  Borrower,  any of its  Subsidiaries  or any of the
Properties and the fees and  disbursements and other charges of legal counsel in
connection  with claims,  actions or proceedings  by any Indemnitee  against the
Borrower  hereunder  (all the  foregoing in this clause (d),  collectively,  the
"Indemnified Liabilities"), provided, that the Borrower shall have no obligation
hereunder to any  Indemnitee  with  respect to  Indemnified  Liabilities  to the
extent  such  Indemnified  Liabilities  are found by a final  and  nonappealable
decision of a court of competent  jurisdiction  to have  resulted from the gross
negligence  or willful  misconduct  of such  Indemnitee.  Without  limiting  the
foregoing,  and to the extent  permitted by applicable  law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries so to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands,  penalties, fines,
liabilities,  settlements,  damages,  costs and  expenses  of  whatever  kind or
nature,  under or related to Environmental  Laws, that any of them might have by
statute or otherwise against any indemnitee.  All amounts due under this Section
shall  be  payable  not  later  than  30 days  after  written  demand  therefor.
Statements  payable by the Borrower  pursuant to this Section 

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<PAGE>

shall be submitted to the  Borrower's  chief  financial  officer  (Telephone No.
973-228-2500) (Fax No.  973-228-7461),  at the address of the Borrower set forth
in  Section  9.2,  or to  such  other  Person  or  address  as may be  hereafter
designated  by the  Borrower  in a written  notice to the  Administrative  Agent
(which shall promptly notify each Lender).  The agreements in this Section shall
survive repayment of the Term Loans and all other amounts payable hereunder.

         9.6 Successors and Assigns;  Participations  and Assignments.  (a) This
Agreement  shall be  binding  upon and inure to the  benefit  of  Holdings,  the
Borrower,  the  Lenders,  the Agents,  all future  holders of the Term Loans and
their respective successors and assigns, except that the Borrower may not assign
or transfer any of its rights or obligations  under this  Agreement  without the
prior written consent of the Agents and each Lender.

         (b) Any Lender may, without the consent of the Borrower,  in accordance
with  applicable  law,  at  any  time  sell  to  one or  more  banks,  financial
institutions or other entities (each, a "Participant")  participating  interests
in any Term Loan owing to such  Lender,  any  Commitment  of such  Lender or any
other interest of such Lender  hereunder and under the other Loan Documents.  In
the  event  of any  such  sale by a  Lender  of a  participating  interest  to a
Participant, such Lender's obligations under this Agreement to the other parties
to this  Agreement  shall remain  unchanged,  such Lender  shall  remain  solely
responsible for the performance thereof,  such Lender shall remain the holder of
any such Term Loan for all  purposes  under  this  Agreement  and the other Loan
Documents,  and the Borrower  and the Agents  shall  continue to deal solely and
directly  with  such  Lender  in  connection   with  such  Lender's  rights  and
obligations under this Agreement and the other Loan Documents. In no event shall
any  Participant  under any such  participation  have any right to  approve  any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent  would reduce the principal of, or interest on, the Term Loans
or  any  fees  payable  hereunder,  release  all  or  substantially  all  of the
Collateral,  release  all or  substantially  all of the  Guarantors  from  their
guarantee obligations under the Guarantee and Collateral Agreement,  or postpone
the date of the final  maturity  of the Term  Loans,  in each case to the extent
subject to such  participation.  The Borrower agrees that if amounts outstanding
under this  Agreement  and the Term Loans are due or unpaid,  or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default,  each Participant  shall, to the maximum extent permitted by applicable
law,  be deemed to have the right of  setoff  in  respect  of its  participating
interest  in amounts  owing  under this  Agreement  to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
this Agreement,  provided that, in purchasing such participating  interest, such
Participant  shall be  deemed  to have  agreed  to share  with the  Lenders  the
proceeds  thereof as provided in Section  9.7(a) as fully as if it were a Lender
hereunder.  The Borrower also agrees that each Participant  shall be entitled to
the benefits of Sections 2.14,  2.15 and 2.16 with respect to its  participation
in the  Commitments  and the Term Loans  outstanding  from time to time as if it
were a Lender;  provided  that,  in the case of Section 2.15,  such  Participant
shall have complied with the requirements of said Section and provided, further,
that no Participant  shall be entitled to receive any greater amount pursuant to
any such Section than the transferor  Lender would have been entitled to receive
in respect of the amount of the  participation  transferred  by such  transferor
Lender to such Participant had no such transfer occurred.

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<PAGE>

         (c) Any Lender (an  "Assignor")  may, in accordance with applicable law
and upon written notice to the  Syndication  Agent, at any time and from time to
time  assign  to any  Lender  or any  affiliate  or  Approved  Fund  or  Control
Investment Affiliate thereof or, with the consent of the Borrower and the Agents
(which, in each case, shall not be unreasonably  withheld or delayed)  (provided
the consent of the Borrower need not be obtained with respect to any  assignment
of Term Loans), to an additional bank, financial institution or other entity (an
"Assignee") all or any part of its rights and  obligations  under this Agreement
pursuant to an  Assignment  and  Acceptance,  executed by such Assignee and such
Assignor  (and,  where the  consent of the  Borrower  or the Agents is  required
pursuant to the foregoing  provisions,  by the Borrower and such other  Persons)
and delivered to the  Administrative  Agent for its  acceptance and recording in
the Register;  provided that no such  assignment to an Assignee  (other than any
Lender or any  affiliate  or Approved  Fund  thereof)  shall be in an  aggregate
principal  amount  of  less  than  $5,000,000  (other  than  in the  case  of an
assignment  of  all  of a  Lender's  interests  under  this  Agreement),  unless
otherwise agreed by the Borrower,  the Syndication Agent and the  Administrative
Agent.  Any such assignment  need not be ratable as among the  Facilities.  Upon
such execution, delivery, acceptance and recording, from and after the effective
date determined  pursuant to such  Assignment and  Acceptance,  (x) the Assignee
thereunder  shall  be a  party  hereto  and,  to the  extent  provided  in  such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment  and/or Term Loans as set forth therein,  and (y) the Assignor
thereunder  shall, to the extent provided in such Assignment and Acceptance,  be
released  from its  obligations  under this  Agreement  (and,  in the case of an
Assignment and Acceptance  covering all of an Assignor's  rights and obligations
under this  Agreement,  such Assignor shall cease to be a party hereto except as
to  Sections  2.14,  2.15,  2.17 and 9.5 in respect of the period  prior to such
effective date).  Notwithstanding any provision of this Section,  the consent of
the Borrower  shall not be required for any  assignment  that occurs at any time
when any Event of Default shall have occurred and be continuing.

         (d) The Administrative Agent shall, on behalf of the Borrower, maintain
at its  address  referred  to in  Section  9.2 a copy  of  each  Assignment  and
Acceptance  delivered to it and a register (the  "Register") for the recordation
of the names and addresses of the Lenders and the  Commitment  of, and principal
amount of the Term Loans owing to, each Lender from time to time. The entries in
the Register  shall be  conclusive,  in the absence of manifest  error,  and the
Borrower, the Administrative Agent and the Lenders shall treat each Person whose
name is  recorded  in the  Register as the owner of the Term Loans and any Notes
evidencing the Term Loans recorded  therein for all purposes of this  Agreement.
Any  assignment of any Term Loan,  whether or not evidenced by a Note,  shall be
effective only upon  appropriate  entries with respect thereto being made in the
Register (and each Note shall expressly so provide).  Any assignment or transfer
of all or part of a Term Loan  evidenced  by a Note shall be  registered  on the
Register only upon surrender for  registration  of assignment or transfer of the
Note  evidencing such Term Loan,  accompanied by a duly executed  Assignment and
Acceptance;  thereupon  one or more new  Notes in the same  aggregate  principal
amount shall be issued to the  designated  Assignee,  and the old Notes shall be
returned by the  Administrative  Agent to the Borrower  marked  "canceled".  The
Register  shall be available for  inspection by the Borrower or any Lender (with
respect  to any entry  relating  to such  Lender's  Term  Loans) or Agent at any
reasonable time and from time to time upon reasonable prior notice.

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<PAGE>

         (e) Upon its receipt of an  Assignment  and  Acceptance  executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 9.6(c),  by each such other Person) together with payment
to the  Administrative  Agent of a  registration  and  processing  fee of $3,500
(except that no such  registration  and  processing  fee shall be payable (y) in
connection  with an  assignment  by or to Lehman  Commercial  Paper Inc.  or any
Affiliate thereof or (z) in the case of an Assignee which is already a Lender or
is an affiliate or Approved Fund of a Lender or a Person under common management
with a  Lender),  the  Administrative  Agent  shall  (i)  promptly  accept  such
Assignment and Acceptance  and (ii) on the effective  date  determined  pursuant
thereto record the information contained therein in the Register and give notice
of such acceptance and recordation to the Lenders,  the Agents and the Borrower.
On or prior to such  effective  date,  the  Borrower,  at its own expense,  upon
request,  shall execute and deliver to the Administrative Agent (in exchange for
the applicable  Notes of the assigning  Lender) a new Note or Notes to the order
of such Assignee in an amount equal to the applicable  Term Loans acquired by it
pursuant to such  Assignment  and  Acceptance  and, if the Assignor has retained
Term Loans, upon request, a new Note or Notes to the order of the Assignor in an
amount equal to the  applicable  Term Loans  retained by it hereunder.  Such new
Note or Notes shall be dated the Closing Date and shall otherwise be in the form
of the Note or Notes replaced thereby.

         (f) For avoidance of doubt,  the parties to this Agreement  acknowledge
that the  provisions of this Section  concerning  assignments  of Term Loans and
Notes  relate  only to  absolute  assignments  and that such  provisions  do not
prohibit assignments creating security interests, including, without limitation,
any  pledge or  assignment  by a Lender of any Term Loan or Note to any  Federal
Reserve Bank in accordance with applicable law.

         9.7 Adjustments;  Set-off. (a) Except to the extent that this Agreement
provides for  payments to be allocated to a particular  Lender or to the Lenders
under a  particular  Facility and except to the extent that Section 2.19 of this
Agreement  provides  for  payments  to a  substituted  Lender,  if any Lender (a
"Benefitted Lender") shall at any time receive any payment of all or part of the
Obligations  owing to it, or receive any collateral in respect thereof  (whether
voluntarily or involuntarily,  by set-off,  pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise),  in a greater  proportion
than any such payment to or collateral  received by any other Lender, if any, in
respect  of such  other  Lender's  Obligations,  such  Benefitted  Lender  shall
purchase  for cash  from the  other  Lenders a  participating  interest  in such
portion of each such other  Lender's  Obligations,  or shall  provide such other
Lenders with the benefits of any such collateral, as shall be necessary to cause
such  Benefitted  Lender  to  share  the  excess  payment  or  benefits  of such
collateral ratably with each of the Lenders;  provided,  however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded,  and the purchase price and
benefits returned, to the extent of such recovery, but without interest.

         (b) In addition to any rights and  remedies of the Lenders  provided by
law,  each Lender shall have the right,  without prior notice to Holdings or the
Borrower, any such notice being expressly waived by Holdings and the Borrower to
the extent permitted by applicable law, upon any amount becoming due and payable
by the Borrower  hereunder  (whether at the stated maturity,  by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits  (general or special,  time or demand,  provisional  or final),  in any
currency,  

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<PAGE>

and any other credits,  indebtedness or claims,  in any currency,  in
each case  whether  direct or  indirect,  absolute  or  contingent,  matured  or
unmatured,  at any time  held or owing by such  Lender  or any  branch or agency
thereof to or for the credit or the account of Holdings or the Borrower,  as the
case may be.  Each  Lender  agrees  promptly  to  notify  the  Borrower  and the
Administrative  Agent after any such setoff and application made by such Lender,
provided  that the failure to give such notice  shall not affect the validity of
such setoff and application.

         9.8 Counterparts.  This Agreement may be executed by one or more of the
parties to this  Agreement  on any number of separate  counterparts,  and all of
said counterparts  taken together shall be deemed to constitute one and the same
instrument.  Delivery  of an  executed  signature  page  of  this  Agreement  by
facsimile  transmission  shall be effective  as delivery of a manually  executed
counterpart  hereof.  A set of the  copies of this  Agreement  signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

         9.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

         9.10 Integration. This Agreement and the other Loan Documents represent
the entire agreement of Holdings, the Borrower, the Agents, the Arranger and the
Lenders with respect to the subject matter hereof and thereof,  and there are no
promises, undertakings, representations or warranties by the Arranger, any Agent
or any Lender  relative to subject  matter  hereof or thereof not  expressly set
forth or referred to herein or in the other Loan Documents.

         9.11 GOVERNING  LAW. THIS  AGREEMENT AND THE RIGHTS AND  OBLIGATIONS OF
THE  PARTIES  UNDER THIS  AGREEMENT  SHALL BE  GOVERNED  BY, AND  CONSTRUED  AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         9.12  Submission  To  Jurisdiction;  Waivers.  Each of Holdings and the
Borrower hereby irrevocably and unconditionally:

         (a)  submits  for  itself  and its  Property  in any  legal  action  or
proceeding  relating to this  Agreement and the other Loan Documents to which it
is a party,  or for  recognition  and  enforcement  of any  judgment  in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York,  the courts of the United States of America for the Southern  District
of New York, and appellate courts from any thereof;

         (b) consents that any such action or proceeding  may be brought in such
courts and waives any objection  that it may now or hereafter  have to the venue
of any such  action  or  proceeding  in any such  court or that  such  action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

         (c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by  registered  or certified  mail (or any
substantially  

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similar form of mail), postage prepaid, to Holdings or the Borrower, as the case
may be, at its  address  set forth in Section  9.2 or at such  other  address of
which the Administrative Agent shall have been notified pursuant thereto;

         (d) agrees that nothing herein shall affect the right to effect service
of process in any other manner  permitted by law or shall limit the right to sue
in any other jurisdiction; and

         (e) waives,  to the maximum  extent not prohibited by law, any right it
may have to claim or recover in any legal  action or  proceeding  referred to in
this Section any special, exemplary, punitive or consequential damages.

         9.13  Acknowledgments.   Each  of  Holdings  and  the  Borrower  hereby
acknowledges that:

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

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

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

         9.14 Confidentiality. Each of the Agents and the Lenders agrees to keep
confidential  all  non-public  information  provided  to it by  any  Loan  Party
pursuant  to  this   Agreement   that  is  designated  by  such  Loan  Party  as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such  information (a) to the Arranger,  any Agent, any other
Lender or any affiliate or Approved Fund of any thereof,  (b) to any Participant
or Assignee  (each, a  "Transferee")  or prospective  Transferee  that agrees to
comply  with  the  provisions  of  this  Section,  (c) to any of its  employees,
directors,  agents, attorneys,  accountants and other professional advisors, (d)
to  any  financial   institution  that  is  a  direct  or  indirect  contractual
counterparty in swap agreements or such contractual counterparty's  professional
advisor (so long as such  contractual  counterparty or  professional  advisor to
such  contractual  counterparty  agrees  to be bound by the  provisions  of this
Section),  (e)  upon  the  request  or  demand  of  any  Governmental  Authority
(including, without limitation, bank regulatory authorities) having jurisdiction
over  it,  (f) in  response  to any  order of any  court  or other  Governmental
Authority (including, without limitation, bank regulatory authorities) or as may
otherwise be required pursuant to any Requirement of Law, (g) in connection with
any litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this  Section,  (i) to the National  Association  of Insurance
Commissioners or any similar  organization or any nationally  recognized  rating
agency that requires access to information about a Lender's 

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<PAGE>

investment  portfolio in  connection  with  ratings  issued with respect to such
Lender or (j) in connection  with the exercise of any remedy  hereunder or under
any other Loan Document.

         9.15  Release  of  Collateral   Security  and  Guarantee   Obligations.
Notwithstanding  anything to the contrary  contained  herein or in the Guarantee
and Collateral Agreement, upon request of the Borrower, the Administrative Agent
shall  (without  notice to or vote or consent of any Lender) take action  having
the effect of releasing any Collateral and/or guarantee obligations provided for
in the  Guarantee  and  Collateral  Agreement to the extent  necessary to permit
consummation,  by the  relevant  Person  in  accordance  with the  terms of this
Agreement  and the other  Loan  Documents,  of any  transaction  not  prohibited
hereunder or under the Revolving Credit Agreement.

         9.16 Accounting  Changes. In the event that any "Accounting Change" (as
defined  below) shall occur and such change results in a change in the method of
calculation of financial covenants,  standards or terms in this Agreement,  then
the Borrower and the  Administrative  Agent agree to enter into  negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
Accounting  Changes with the desired result that the criteria for evaluating the
Borrower's  financial  condition shall be the same after such Accounting Changes
as if such  Accounting  Changes  had not been  made.  Until such time as such an
amendment  shall  have  been  executed  and  delivered  by  the  Borrower,   the
Administrative   Agent  and  the  Required  Lenders,  all  financial  covenants,
standards  and  terms in this  Agreement  shall  continue  to be  calculated  or
construed as if such Accounting Changes had not occurred.  "Accounting  Changes"
refers to changes in accounting  principles  required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board  of  the  American  Institute  of  Certified  Public  Accountants  or,  if
applicable, the SEC.

         9.17  Delivery of Lender  Addenda.  Each initial  Lender shall become a
party to this  Agreement  by  delivering  to the  Administrative  Agent  and the
Syndication  Agent a Lender Addendum duly executed by such Lender,  the Borrower
and each Agent.

         9.18 WAIVERS OF JURY TRIAL.  HOLDINGS, THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY  WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING  RELATING TO THIS  AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

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<PAGE>

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


                                            B&G FOODS HOLDINGS CORP.


                                            By: /s/ Robert Cantwell
                                               --------------------------------
                                               Name:  Robert Cantwell
                                               Title: Chief Financial Officer

                                            B&G FOODS, INC.


                                            By: /s/ Robert Cantwell
                                               --------------------------------
                                               Name:  Robert Cantwell
                                               Title: Chief Financial Officer

                                            LEHMAN BROTHERS INC.,
                                            as Arranger


                                            By: /s/ William Gallagher
                                               --------------------------------
                                               Name:  William Gallagher
                                               Title: Authorized Signatory

                                            LEHMAN COMMERCIAL PAPER INC., as
                                              Syndication Agent and as
                                              Administrative Agent


                                            By: /s/ William Gallagher
                                               --------------------------------
                                               Name:  William Gallagher
                                               Title: Authorized Signatory


                                           THE BANK OF NEW YORK,
                                            as Documentation Agent


                                           By: /s/ Vito Michael Ferrone
                                              ---------------------------------
                                              Name:  Vito Michael Ferrone
                                              Title: Vice President


                                       85

<PAGE>


                                           HELLER FINANCIAL, INC.,
                                            as Co-Documentation Agent


                                           By: /s/ Robert M. Reeg
                                              ---------------------------------
                                              Name:  Robert M. Reeg
                                              Title: Assistant Vice President


                                       86



<PAGE>

                                                                         Annex A
                                                                         -------

                    PRICING GRID FOR TRANCHE A TERM LOANS

<TABLE>
<CAPTION>
                <S>                           <C>                        <C>    

               -----------------------------------------------------------------------------------------
                Consolidated Leverage Ratio   Applicable Margin for      Applicable Margin for Base
                                              Eurodollar Loans           Rate Loans
               -----------------------------------------------------------------------------------------
               Greater than or equal to 4.75            3.125                        2.125
               to 1.00
               -----------------------------------------------------------------------------------------
               Less than 4.75 to 1.00, but              2.875                        1.875
               greater than or equal to 4.25
               to 1.00
               -----------------------------------------------------------------------------------------
               Less than 4.25 to 1.00, but              2.625                        1.625
               greater than or equal to 3.75
               to 1.00
               -----------------------------------------------------------------------------------------
               Less than 3.75 to 1.00, but              2.375                        1.375
               greater than 3.25 to 1.00
               -----------------------------------------------------------------------------------------
               Less than 3.25 to 1.00                   2.125                        1.125
               -----------------------------------------------------------------------------------------

</TABLE>


Changes in the Applicable  Margin with respect to Tranche A Term Loans resulting
from changes in the  Consolidated  Leverage Ratio shall become  effective on the
date (the "Adjustment Date") on which financial  statements are delivered to the
Lenders  pursuant  to Section  6.1 (but in any event not later than the 45th day
after the end of each of the first three  quarterly  periods of each fiscal year
or the 90th day after the end of each fiscal year, as the case may be) and shall
remain  in  effect  until  the  next  change  to be  effected  pursuant  to this
paragraph.  If any  financial  statements  referred  to above are not  delivered
within the time periods specified above,  then, until such financial  statements
are  delivered,  the  Consolidated  Leverage  Ratio as at the end of the  fiscal
period  that would have been  covered  thereby  shall for the  purposes  of this
Pricing Grid be deemed to be greater  than 4.75 to 1. In addition,  at all times
while  an  Event  of  Default  shall  have  occurred  and  be  continuing,   the
Consolidated  Leverage  Ratio  shall for the  purposes of this  Pricing  Grid be
deemed to be  greater  than 4.75 to 1. Each  determination  of the  Consolidated
Leverage  Ratio  pursuant to this Pricing Grid shall be made with respect to the
period of four consecutive  fiscal quarters of the Borrower ending at the end of
the period covered by the relevant financial statements.


<PAGE>

                                                                    SCHEDULE 1.1


                               MORTGAGED PROPERTY





<PAGE>

                                                                    SCHEDULE 3.4


                  CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES





<PAGE>

                                                                    SCHEDULE 3.9


                          INTELLECTUAL PROPERTY CLAIMS







<PAGE>

                                                                   SCHEDULE 3.15


                                  SUBSIDIARIES




<PAGE>

                                                              SCHEDULE 3.19(a)-1


                            UCC FILING JURISDICTIONS

                    Loan Party                  Filing Office
                    -----------                 -------------



                  [Borrower  to list name of each Loan Party which is a party to
any Security Document and each filing office in which a UCC financing  statement
must be filed in respect of such Loan Party and its collateral]



<PAGE>

                                                              SCHEDULE 3.19(a)-2


                   UCC FINANCING STATEMENTS TO REMAIN ON FILE






<PAGE>

                                                              SCHEDULE 3.19(a)-3


                    UCC FINANCING STATEMENTS TO BE TERMINATED





<PAGE>

                                                                SCHEDULE 3.19(b)


                          MORTGAGE FILING JURISDICTIONS






<PAGE>

                                                                 SCHEDULE 6.2(d)


                              EXISTING INDEBTEDNESS






<PAGE>

                                                                 SCHEDULE 6.3(f)


                                 EXISTING LIENS