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                                   $60,000,000

                           REVOLVING CREDIT 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...................................26

SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS; LETTERS OF CREDIT................26
         2.1  Revolving Credit Commitments; Swing Line Commitment.............26
         2.2  Procedure for Borrowing; Swing Line Loans; Refunding of Swing Line
                Loans........................................................ 27
         2.3  Repayment of Loans; Evidence of Debt............................29
         2.4  Commitment Fees, etc. ..........................................30
         2.5  Termination or Reduction of Revolving Credit Commitments........30
         2.6  Optional Prepayments............................................30
         2.7  Mandatory Prepayments and Commitment Reductions.................31
         2.8  Conversion and Continuation Options.............................32
         2.9  Minimum Amounts and Maximum Number of Eurodollar Tranches.......32
         2.10  Interest Rates and Payment Dates...............................33
         2.11  Computation of Interest and Fees...............................33
         2.12  Inability to Determine Interest Rate...........................34
         2.13  Pro Rata Treatment and Payments................................34
         2.14  Requirements of Law............................................35
         2.15  Taxes..........................................................36
         2.16  Indemnity......................................................38
         2.17  Illegality.....................................................39
         2.18  Change of Lending Office.......................................39
         2.19  Substitution of Lenders........................................39
         2.20  L/C Commitment.................................................40
         2.21  Procedure for Issuance of Letter of Credit.....................40
         2.22  Fees and Other Charges.........................................41
         2.23  L/C Participations.............................................41
         2.24  Reimbursement Obligation of the Borrower.......................42
         2.25  Obligations Absolute...........................................43
         2.26  Letter of Credit Payments......................................43
         2.27  Applications...................................................43
         2.28  Existing Guaranteed Letters of Credit..........................44

SECTION 3.  REPRESENTATIONS AND WARRANTIES....................................44
         3.1  Financial Condition.............................................44
         3.2  No Change.......................................................45
         3.3  Corporate Existence; Compliance with Law........................45
         3.4  Corporate Power; Authorization; Enforceable Obligations.........45
         3.5  No Legal Bar....................................................46
        
                                       i

<PAGE>

         3.6  No Material Litigation..........................................46
         3.7  No Default......................................................46
         3.8  Ownership of Property; Liens....................................46
         3.9  Intellectual Property...........................................46
         3.10  Taxes..........................................................46
         3.11  Federal Regulations............................................47
         3.12  Labor Matters..................................................47
         3.13  ERISA..........................................................47
         3.14  Investment Company Act; Other Regulations......................47
         3.15  Subsidiaries...................................................48
         3.16  Use of Proceeds................................................48
         3.17  Environmental Matters..........................................48
         3.18  Accuracy of Information, etc...................................49
         3.19  Security Documents.............................................50
         3.20  Solvency.......................................................50
         3.21  Senior Indebtedness............................................50
         3.22  Regulation H...................................................50
         3.23  Year 2000 Matters..............................................51

SECTION 4.  CONDITIONS PRECEDENT..............................................51
         4.1  Conditions to Initial Extension of Credit.......................51
         4.2  Conditions to Each Extension of Credit..........................55

SECTION 5.  AFFIRMATIVE COVENANTS.............................................56
         5.1  Financial Statements............................................56
         5.2  Certificates; Other Information.................................57
         5.3  Payment of Obligations..........................................58
         5.4  Conduct of Business and Maintenance of Existence, etc. .........58
         5.5  Maintenance of Property; Insurance..............................59
         5.6  Inspection of Property; Books and Records; Discussions..........59
         5.7  Notices.........................................................59
         5.8  Environmental Laws..............................................60
         5.9  Interest Rate Protection........................................60
         5.10  Additional Collateral, etc.....................................60
         5.11  Further Assurances.............................................62

SECTION 6.  NEGATIVE COVENANTS................................................63
         6.1  Financial Condition Covenants...................................63
         6.2  Limitation on Indebtedness......................................66
         6.3  Limitation on Liens.............................................67
         6.4  Limitation on Fundamental Changes...............................68
         6.5  Limitation on Disposition of Property...........................69
         6.6  Limitation on Restricted Payments...............................69
         6.7  Limitation on Capital Expenditures..............................70
         6.8  Limitation on Investments.......................................70

                                       ii

<PAGE>

         6.9  Limitation on Optional Payments and Modifications of Debt
                Instruments, etc. ............................................71
         6.10  Limitation on Transactions with Affiliates.....................71
         6.11  Limitation on Sales and Leasebacks.............................72
         6.12  Limitation on Changes in Fiscal Periods........................72
         6.13  Limitation on Negative Pledge Clauses..........................72
         6.14  Limitation on Lines of Business................................72
         6.15  Limitation on Amendments to Acquisition Documentation..........72
         6.16  Limitation on Activities of Holdings...........................72
         6.17  Limitation on Withdrawal of Reinvestment Deferred Amount.......73

SECTION 7.  EVENTS OF DEFAULT.................................................73

SECTION 8.  THE AGENTS........................................................77
         8.1  Appointment.....................................................77
         8.2  Delegation of Duties............................................77
         8.3  Exculpatory Provisions..........................................77
         8.4  Reliance by Agents..............................................77
         8.5  Notice of Default...............................................78
         8.6  Non-Reliance on Agents and Other Lenders........................78
         8.7  Indemnification.................................................79
         8.8  Agent in Its Individual Capacity................................79
         8.9  Successor Agents................................................79
         8.10  Authorization to Release Liens; Other Actions Relating to
                Security Documents............................................80
         8.11  The Arranger, the Co-Documentation Agent and the Documentation 
                Agent.........................................................80

SECTION 9.  MISCELLANEOUS.....................................................80
         9.1  Amendments and Waivers..........................................80
         9.2  Notices.........................................................82
         9.3  No Waiver; Cumulative Remedies..................................83
         9.4  Survival of Representations and Warranties......................83
         9.5  Payment of Expenses.............................................83
         9.6  Successors and Assigns; Participations and Assignments..........84
         9.7  Adjustments; Set-off............................................87
         9.8  Counterparts....................................................88
         9.9  Severability....................................................88
         9.10  Integration....................................................88
         9.11  GOVERNING LAW..................................................88
         9.12  Submission To Jurisdiction; Waivers............................88
         9.13  Acknowledgments................................................89
         9.14  Confidentiality................................................89
         9.15  Release of Collateral Security and Guarantee Obligations.......90
         9.16  Accounting Changes.............................................90
         9.17  Delivery of Lender Addenda.....................................90
         9.18  WAIVERS OF JURY TRIAL..........................................90

                                      iii

<PAGE>

ANNEXES:

A              Pricing Grid
B              Existing Guaranteed Letters of Credit
C              Existing Letters of Credit


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-1            Form of Revolving Credit Note
G-2            Form of Swing Line Note
H              Form of Exemption Certificate
I              Form of Lender Addendum


                                       iv

<PAGE>

         REVOLVING CREDIT 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 facility described
below to provide a portion of the  financing  for the  general  working  capital
needs of the Borrower and its Subsidiaries, including Permitted Acquisitions and
the refinancing of certain existing 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
    and, for purposes of Section 8, each Issuing Lender.

         "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
    Revolving Credit  Commitment at such time and (b) thereafter,  the amount of
    such  Lender's  Revolving  Credit  Commitment  then  in  effect  or,  if the
    Revolving  Credit  Commitments  have  been  terminated,  the  amount of such
    Lender's Revolving Extensions of Credit then outstanding.

         "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 Revolving Credit Agreement, as amended, supplemented
    or otherwise modified from time to time.

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

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

          Revolving Credit Loans                    2.125%             3.125%
          Swing Line Loans                          2.125%             N.A.

    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 will be determined pursuant to the Pricing Grid.

         "Application":  an application,  in such form as the applicable Issuing
    Lender may specify from time to time, requesting such Issuing Lender to open
    a Letter of Credit.

                                       2

<PAGE>

         "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 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).

         "Available Revolving Credit Commitment":  as to any Lender at any time,
    an amount equal to the excess, if any, of (a) such Lender's Revolving Credit
    Commitment  then in effect over (b) such  Lender's  Revolving  Extensions of
    Credit  then  outstanding;   provided,  that  in  calculating  any  Lender's
    Revolving  Extensions of Credit for the purpose of determining such Lender's
    Available  Revolving  Credit  Commitment  pursuant  to Section  2.4(a),  the
    aggregate  principal  amount of Swing Line Loans then  outstanding  shall be
    deemed to be zero.

         "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

                                       3

<PAGE>

    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.

         "Base Rate Loans":  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.

         "Borrowing  Date": any Business Day specified by the Borrower as a date
    on which the Borrower requests the relevant Lenders to make Loans hereunder.

         "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.

                                       4

<PAGE>

         "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 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.

                                       5

<PAGE>


         "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 Fee Rate": .60% per annum; 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  Commitment  Fee Rate
    will be determined pursuant to the Pricing Grid.

         "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
    the 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

                                       6

<PAGE>

    (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 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 

                                       7

<PAGE>


    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'  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.

                                       8

<PAGE>

         "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
    Guarantee and Collateral Agreement,  to the sole dominion and control of the
    Administrative  Agent for the  ratable  benefit of the  Lenders and the Term
    Loan 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.

                                       9

<PAGE>


         "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.

         "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":  Revolving  Credit  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%):

                                       10

<PAGE>

                              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.

         "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).

                                       11

<PAGE>


         "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.

         "Existing  Guaranteed Letters of Credit": the standby letters of credit
    issued by The Chase  Manhattan  Bank on behalf of the Borrower or any of its
    Subsidiaries  and  having  an  aggregate  stated  amount  of not  more  than
    $464,848,  all as more  particularly  described in Annex B,  drawings  under
    which  letters  of  credit  are  guaranteed  by Heller  pursuant  to the L/C
    Guarantee.

         "Existing Issuing Lender": Heller, as issuer of the Existing Letters of
    Credit and as guarantor of the Existing Guaranteed Letters of Credit.

         "Existing Letters of Credit":  the letters of credit described in Annex
    C.

         "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

                                       12

<PAGE>


    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,  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

                                       13

<PAGE>

    against  fluctuations  in interest  rates or currency  exchange rates or the
    exchange of nominal interest obligations, either generally or under specific
    contingencies.

         "Heller": Heller Financial, Inc.

         "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 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

                                       14

<PAGE>


    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 Eurodollar  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  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
         Revolving   Credit   Termination  Date  shall  end  on  such  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.

                                       15

<PAGE>

         "Issuing  Lender":  the Existing Issuing Lender and any Lender selected
    by the  Borrower,  with the  consent of such  Lender and the  Administrative
    Agent, to act as Issuing Lender,  in its capacity as issuer of any Letter of
    Credit.

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

         "L/C Commitment": $5,000,000.

         "L/C Fee Payment Date": the last day of each March, June, September and
    December and the last day of the Revolving Credit Commitment Period.

         "L/C Guarantee":  the Service and Letter of Credit Guaranty  Agreement,
    dated as of October 13, 1993 and as amended through the date hereof, between
    Heller and The Chase Manhattan Bank with respect to the Existing  Guaranteed
    Letters of Credit.

         "L/C  Obligations":  at any time, an amount equal to the sum of (a) the
    aggregate then undrawn and unexpired amount of the then outstanding  Letters
    of Credit and (b) the aggregate  amount of drawings  under Letters of Credit
    that have not then been reimbursed pursuant to Section 2.24.

         "L/C Participants":  the collective  reference to all the Lenders other
    than the relevant Issuing Lender.

         "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  I, 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.

         "Letters of Credit": as defined in Section 2.20(a).

         "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).

         "Loan": any loan made by any Lender pursuant to this Agreement.

                                       16

<PAGE>

         "Loan  Documents":  this  Agreement,  the  Applications,  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.

         "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.

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

                                       17

<PAGE>

         "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 Loans.

         "Obligations":  the unpaid  principal  of and  interest on  (including,
    without  limitation,  interest  accruing after the maturity of the Loans and
    Reimbursement  Obligations  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  Loans,  the   Reimbursement   Obligations  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, the
    Letters of Credit, 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
    effected in the manner  permitted  by this  Agreement  shall not require the
    consent of holders of obligations under Specified Hedge Agreements.

                                       18

<PAGE>

         "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 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

                                       19

<PAGE>


         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 (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

                                       20

<PAGE>


    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.

         "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.

         "Refunded Swing Line Loans": as defined in Section 2.2.

         "Refunding Date": as defined in Section 2.2.

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

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

         "Reimbursement Obligation": the obligation of the Borrower to reimburse
    the relevant Issuing Lender pursuant to Section 2.24 for amounts drawn under
    Letters of Credit.

         "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
    Loans and reduce the Revolving Credit Commitments pursuant to Section 2.7(b)
    as a result of the delivery of a Reinvestment Notice.

                                       21

<PAGE>


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

         "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 Total  Revolving  Credit  Commitments  and (b)
    thereafter, the Total Revolving Credit Commitments then in effect or, if the
    Revolving  Credit  Commitments  have been  terminated,  the Total  Revolving
    Extensions of Credit then outstanding.

         "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.

                                       22

<PAGE>

         "Revolving Credit Commitment": as to any Lender, the obligation of such
    Lender,  if any, to make Revolving  Credit Loans and issue or participate in
    Letters of Credit,  in an  aggregate  principal  and/or  face  amount not to
    exceed the amount set forth under the heading  "Revolving Credit 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 amount
    of the Total Revolving Credit Commitments is $60,000,000.

         "Revolving Credit Commitment Period": the period from and including the
    Closing Date to the Revolving Credit Termination Date.

         "Revolving Credit Loans": as defined in Section 2.1.

         "Revolving  Credit  Percentage":  as to any  Lender  at any  time,  the
    percentage which such Lender's  Revolving Credit Commitment then constitutes
    of the  Total  Revolving  Credit  Commitments  (or,  at any time  after  the
    Revolving  Credit   Commitments  shall  have  expired  or  terminated,   the
    percentage which the aggregate  principal amount of such Lender's  Revolving
    Credit Loans then outstanding  constitutes of the aggregate principal amount
    of the Revolving Credit Loans then outstanding).

         "Revolving Credit Termination Date": [March 15], 2004.

         "Revolving  Extensions  of  Credit":  as to any Lender at any time,  an
    amount  equal  to the  sum of (a)  the  aggregate  principal  amount  of all
    Revolving  Credit  Loans  made by such  Lender  then  outstanding,  (b) such
    Lender's Revolving Credit Percentage of the L/C Obligations then outstanding
    and (c) such Lender's Revolving Credit Percentage of the aggregate principal
    amount of Swing Line Loans then outstanding.

         "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 Term
    Loan  Agreement)  under  any Loan  Document  (as  defined  in the Term  Loan
    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.

                                       23

<PAGE>

         "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 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

                                       24

<PAGE>


    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  Commitment":  the  obligation  of the Swing Line Lender to
    make Swing Line Loans  pursuant  to Section  2.2 in an  aggregate  principal
    amount at any one time outstanding not to exceed $5,000,000.

         "Swing Line Lender":  Lehman  Commercial Paper Inc., in its capacity as
    the lender of Swing Line Loans.

         "Swing Line Loans": as defined in Section 2.1(b).

         "Swing Line Participation Amount": as defined in Section 2.2.

         "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 syndication of the revolving  credit  facility  provided for
    hereunder and of the Term Loan Facilities.

         "Term Loan Agreement":  the Term Loan Agreement,  dated as of March 15,
    1999, among the Borrower, the lenders named therein, Lehman Commercial Paper
    Inc.,  as  administrative  agent,  and  others,  as the same may be amended,
    supplemented or otherwise modified from time to time.

         "Term Loan Facilities":  the credit facilities made available  pursuant
    to the Term Loan Agreement.

         "Term  Loan  Lender":   each  Lender  (as  defined  in  the  Term  Loan
    Agreement).

         "Term Loans": as defined in the Term Loan Agreement.

         "Total Revolving Credit Commitments": at any time, the aggregate amount
    of the Revolving Credit Commitments then in effect.

         "Total  Revolving  Extensions  of Credit":  at any time,  the aggregate
    amount of the Revolving  Extensions of Credit of the Lenders  outstanding at
    such time.

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<PAGE>

         "Transferee": as defined in Section 9.14.

         "Type":  as to any 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.

          SECTION 2. AMOUNT AND TERMS OF COMMITMENTS; LETTERS OF CREDIT

              2.1  Revolving  Credit  Commitments;  Swing Line  Commitment.  (a)
Subject to the terms and conditions hereof, each Lender severally agrees to make
revolving credit loans  ("Revolving  Credit Loans") to the Borrower from time to
time during the Revolving  Credit  Commitment  Period in an aggregate  principal
amount at any one time outstanding  which, when added to such Lender's Revolving
Credit  Percentage of the L/C Obligations and Swing Line Loans then outstanding,
does not exceed the amount of such Lender's Revolving Credit Commitment.  During
the Revolving Credit Commitment Period the Borrower may use the Revolving Credit
Commitments  by borrowing,  prepaying the Revolving  Credit Loans in whole or in
part, and reborrowing,  all in accordance with the terms and conditions  hereof.
The  Revolving  Credit 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, provided that no Revolving Credit
Loan shall be made as a Eurodollar Loan after the day that is one month prior to
the Revolving Credit Termination Date.

                                       26

<PAGE>


         (b) Subject to the terms and conditions  hereof,  the Swing Line Lender
agrees to make  available  a portion of the credit  otherwise  available  to the
Borrower  under the Revolving  Credit  Commitments  from time to time during the
Revolving  Credit  Commitment  Period by making  swing line loans  ("Swing  Line
Loans") to the Borrower;  provided that (i) the  aggregate  principal  amount of
Swing  Line  Loans  outstanding  at any time  shall not  exceed  the Swing  Line
Commitment then in effect (notwithstanding that the Swing Line Loans outstanding
at any time,  when  aggregated  with the Swing Line Lender's  other  outstanding
Revolving Credit Loans  hereunder,  may exceed the Swing Line Commitment then in
effect) and (ii) the Borrower shall not request, and the Swing Line Lender shall
not make,  any Swing  Line Loan if,  after  giving  effect to the making of such
Swing  Line  Loan,  the  aggregate  amount  of the  Available  Revolving  Credit
Commitments  would be less than zero.  During the  Revolving  Credit  Commitment
Period,  the Borrower may use the Swing Line  Commitment by borrowing,  repaying
and reborrowing,  all in accordance with the terms and conditions hereof.  Swing
Line Loans shall be Base Rate Loans only.

         (c) The Borrower  shall repay all  outstanding  Loans on the  Revolving
Credit Termination Date.

         2.2 Procedure for Borrowing;  Swing Line Loans; Refunding of Swing Line
Loans.  (a) The Borrower may borrow  Revolving  Credit Loans under the Revolving
Credit Commitments during the Revolving Credit Commitment Period on any Business
Day, provided that the Borrower shall give the Administrative  Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 12:00
Noon,  New York  City  time,  (i) three  Business  Days  prior to the  requested
Borrowing Date, in the case of Eurodollar  Loans, or (ii) one Business Day prior
to the requested Borrowing Date, in the case of Base Rate Loans), specifying (A)
the amount and Type of Revolving Credit Loans to be borrowed,  (B) the requested
Borrowing  Date and (C) in the  case of  Eurodollar  Loans,  the  length  of the
initial Interest Period therefor. Any Revolving Credit Loans made on the Closing
Date shall initially be Base Rate Loans and may be converted to Eurodollar Loans
pursuant to Section 2.8. Each borrowing under the Revolving  Credit  Commitments
shall be in an amount equal to (x) in the case of Base Rate Loans, $1,000,000 or
a whole multiple thereof (or, if the then aggregate  Available  Revolving Credit
Commitments are less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar  Loans,  $1,000,000  or a whole  multiple  of  $1,000,000  in  excess
thereof,  provided,  that the Swing Line  Lender may  request,  on behalf of the
Borrower,  borrowings under the Revolving Credit Commitments which are Base Rate
Loans in other  amounts  pursuant to Section  2.2(c).  Upon  receipt of any such
notice from the Borrower,  the  Administrative  Agent shall promptly notify each
Lender  thereof.  Each Lender will make the amount of its pro rata share of each
borrowing of Revolving  Credit Loans available to the  Administrative  Agent for
the account of the Borrower at the Funding  Office prior to 12:00 Noon, New York
City time, on the Borrowing Date requested by the Borrower in funds  immediately
available  to the  Administrative  Agent.  Such  borrowing  will  then  be  made
available to the Borrower by the Administrative  Agent in like funds as received
by the Administrative Agent.

         (b) Whenever the Borrower desires that the Swing Line Lender make Swing
Line Loans it shall give the Swing Line  Lender  irrevocable  telephonic  notice
confirmed promptly in

                                       27

<PAGE>

writing (which  telephonic  notice must be received by the Swing Line Lender not
later  than 1:00 P.M.,  New York City time,  on the  proposed  Borrowing  Date),
specifying  (i) the amount to be borrowed and (ii) the requested  Borrowing Date
(which shall be a Business Day during the Revolving Credit  Commitment  Period).
Each borrowing  under the Swing Line  Commitment  shall be in an amount equal to
$100,000 or a whole multiple of $100,000 in excess thereof.  Not later than 3:00
P.M., New York City time, on the Borrowing Date specified in a notice in respect
of Swing  Line  Loans,  the  Swing  Line  Lender  shall  make  available  to the
Administrative  Agent at the Funding Office an amount in  immediately  available
funds  equal to the  amount of the Swing  Line Loan to be made by the Swing Line
Lender. The Administrative Agent shall make the proceeds of such Swing Line Loan
available to the Borrower on such Borrowing Date in immediately available funds.

         (c) The  Swing  Line  Lender,  at any time and from time to time in its
sole and  absolute  discretion  may,  on behalf of the  Borrower  (which  hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice  given by the Swing Line Lender no later than 12:00 Noon,  New York
City time, request each Lender to make, and each Lender hereby agrees to make, a
Revolving  Credit Loan,  in an amount equal to such  Lender's  Revolving  Credit
Percentage of the aggregate  amount of the Swing Line Loans (the "Refunded Swing
Line Loans")  outstanding  on the date of such  notice,  to repay the Swing Line
Lender.  Each  Lender  shall  make the  amount  of such  Revolving  Credit  Loan
available  to the  Administrative  Agent at the  Funding  Office in  immediately
available funds, not later than 10:00 A.M., New York City time, one Business Day
after the date of such notice. The proceeds of such Revolving Credit Loans shall
be  immediately  made  available by the  Administrative  Agent to the Swing Line
Lender for application by the Swing Line Lender to the repayment of the Refunded
Swing Line Loans.

         (d) If prior to the time a Revolving  Credit Loan would have  otherwise
been made  pursuant to Section  2.2(c),  one of the events  described in Section
7(f) shall have  occurred and be  continuing  with respect to the Borrower or if
for any  other  reason,  as  determined  by the  Swing  Line  Lender in its sole
discretion,  Revolving  Credit Loans may not be made as  contemplated by Section
2.2(c),  each Lender shall,  on the date such Revolving  Credit Loan was to have
been made pursuant to the notice  referred to in Section 2.2(c) (the  "Refunding
Date"),  purchase  for  cash an  undivided  participating  interest  in the then
outstanding  Swing Line Loans by paying to the Swing Line  Lender an amount (the
"Swing Line  Participation  Amount") equal to (i) such Lender's Revolving Credit
Percentage  times (ii) the sum of the aggregate  principal  amount of Swing Line
Loans then outstanding which were to have been repaid with such Revolving Credit
Loans.

         (e) Whenever, at any time after the Swing Line Lender has received from
any Lender such Lender's Swing Line Participation  Amount, the Swing Line Lender
receives  any payment on account of the Swing Line Loans,  the Swing Line Lender
will   distribute   to  such   Lender  its  Swing  Line   Participation   Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's  participating  interest was  outstanding and
funded and, in the case of  principal  and  interest  payments,  to reflect such
Lender's pro rata portion of such payment if such payment is not  sufficient  to
pay the principal of

                                       28

<PAGE>

and interest on all Swing Line Loans then due); provided,  however,  that in the
event that such  payment  received  by the Swing Line  Lender is  required to be
returned,  such Lender will return to the Swing Line Lender any portion  thereof
previously distributed to it by the Swing Line Lender.

         (f)  Each  Lender's  obligation  to make  the  Revolving  Credit  Loans
referred to in Section 2.2(c) and to purchase  participating  interests pursuant
to Section 2.2(d) shall be absolute and  unconditional and shall not be affected
by  any   circumstance,   including,   without   limitation,   (i)  any  setoff,
counterclaim,  recoupment,  defense  or other  right  which  such  Lender or the
Borrower  may have  against  the Swing Line  Lender,  the  Borrower or any other
Person  for any reason  whatsoever;  (ii) the  occurrence  or  continuance  of a
Default  or an Event of  Default  or the  failure  to  satisfy  any of the other
conditions  specified  in Section 4; (iii) any adverse  change in the  condition
(financial or otherwise) of the Borrower;  (iv) any breach of this  Agreement or
any other  Loan  Document  by the  Borrower,  any other  Loan Party or any other
Lender; or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.

         2.3  Repayment  of Loans;  Evidence of Debt.  (a) The  Borrower  hereby
unconditionally  promises to pay to the Administrative  Agent for the account of
the  appropriate  Lender the then unpaid  principal  amount of each Loan of such
Lender on the Revolving  Credit  Termination Date (or such earlier date on which
the Loans  become due and payable  pursuant to Section 7). The  Borrower  hereby
further agrees to pay interest on the unpaid  principal amount of the 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.

         (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 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 Loan made  hereunder
and any Note  evidencing  such 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  2.3(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 Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.

                                       29

<PAGE>

         (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 Revolving  Credit Loans or Swing
Line Loans,  as the case may be, of such Lender,  substantially  in the forms of
Exhibit G-1 and G-2,  respectively,  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 Loans on the Closing Date.

         2.4  Commitment  Fees,  etc.  (a)  The  Borrower  agrees  to pay to the
Administrative  Agent for the  account of each Lender a  commitment  fee for the
period  from and  including  the Closing  Date to the last day of the  Revolving
Credit  Commitment  Period,  computed at the  Commitment Fee Rate on the average
daily amount of the Available  Revolving Credit Commitment of such Lender during
the period for which payment is made,  payable  quarterly in arrears on the last
day of each March,  June,  September  and December and on the  Revolving  Credit
Termination  Date (or any earlier date of  termination  of the Revolving  Credit
Commitments),  commencing  on the  first of such  dates to occur  after the date
hereof.

         (b) 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.

         (c) 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.

         2.5  Termination  or  Reduction of Revolving  Credit  Commitments.  The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative  Agent (which shall promptly notify each Lender thereof),  to
terminate the Revolving Credit  Commitments or, from time to time, to reduce the
amount of the Revolving Credit Commitments; provided that no such termination or
reduction of Revolving  Credit  Commitments  shall be permitted if, after giving
effect thereto and to any prepayments of the Revolving Credit Loans and/or Swing
Line Loans made on the effective date thereof, the Total Revolving Extensions of
Credit would exceed the Total Revolving Credit  Commitments.  Any such reduction
shall be in an amount equal to  $1,000,000,  or a whole  multiple  thereof,  and
shall reduce permanently the Revolving Credit Commitments then in effect.

         2.6 Optional Prepayments. The Borrower may at any time and from time to
time prepay the Loans,  in whole or in part,  without  premium or penalty,  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 payable on the date specified  therein,  together with (except in the
case of  prepayments  of Base Rate Loans)  accrued  interest to such date on the

                                       30

<PAGE>

amount  prepaid.  Partial  prepayments of Revolving  Credit Loans shall be in an
aggregate  principal  amount of  $1,000,000  or a whole  multiple  thereof,  and
partial  prepayments  of Swing Line  Loans  shall be in an  aggregate  principal
amount of $100,000 or a whole multiple thereof.

         2.7 Mandatory  Prepayments  and Commitment  Reductions.  (a) Subject to
Section 2.7(d), 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 Loans and reduction of
the Revolving Credit Commitments.

         (b) Subject to Section  2.7(d),  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  Loans  and  the  reduction  of  the  Revolving  Credit
Commitments; 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 Loans and the reduction of the Revolving Credit Commitments.

         (c) Subject to Section 2.7(d),  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 Loans and
the reduction of the Revolving  Credit  Commitments.  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)  Notwithstanding  the  foregoing  paragraphs  (a),  (b) and (c), no
reduction  of  Revolving  Credit  Commitments  or  prepayment  of Loans shall be
required by this Section 2.7 until the Term Loans have been repaid in full.

         (e) Amounts to be applied in connection with  prepayments and Revolving
Credit  Commitment  reductions made pursuant to this Section shall be applied to
reduce permanently the Revolving Credit  Commitments.  Any such reduction of the
Revolving Credit Commitments shall be accompanied by prepayment of the Revolving
Credit  Loans  and/or  Swing Line Loans to the  extent,  if any,  that the Total
Revolving  Extensions of Credit exceed the amount of the Total Revolving  Credit
Commitments as so reduced  (provided that if the aggregate  principal  amount of
Loans then  outstanding  is less than the  amount of such  excess  (because  L/C
Obligations  constitute a portion thereof), the Borrower shall, to the extent of
the balance of such excess,

                                       31

<PAGE>

replace outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account established with the Administrative  Agent for the benefit of
the Lenders on terms and conditions satisfactory to the Administrative Agent and
the relevant  Issuing  Lender).  The amount of any  prepayment  pursuant to this
Section  shall be made  first,  to Base Rate Loans and,  second,  to  Eurodollar
Loans.  Each  prepayment of the Loans under this Section  (except in the case of
Base Rate Loans) 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 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 Required Lenders 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 Revolving Credit  Termination  Date. 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 Revolving Credit
Loans;  provided that no  Eurodollar  Loan may be continued as such (i) when any
Event of Default has occurred and is continuing and the Administrative Agent has
or the Required  Lenders 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
Revolving Credit Termination Date, 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
Revolving  Credit 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.

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<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 Loan or
Reimbursement  Obligations  shall not be paid when due  (whether  at the  stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations  (whether or not  overdue)  shall bear  interest at a rate per annum
that is equal to (x) in the case of Loans,  the rate  that  would  otherwise  be
applicable thereto pursuant to the foregoing  provisions of this Section plus 2%
and (y) in the case of  Reimbursement  Obligations,  the rate applicable to Base
Rate Loans plus 2%, and (ii) if all or a portion of any interest  payable on any
Loans and Reimbursement  Obligations  (whether or not overdue) 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 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
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).

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<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
    Required Lenders 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 Revolving Credit 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  requested to be made on the first day
of such  Interest  Period  shall be made as Base Rate Loans,  (y) any  Revolving
Credit Loans 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 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 shall be made or continued as such,  nor shall the Borrower have the right
to convert Revolving Credit Loans to Eurodollar Loans.

         2.13  Pro Rata  Treatment  and  Payments.  (a)  Each  borrowing  by the
Borrower of Revolving  Credit Loans hereunder and any reduction of the Revolving
Credit  Commitments  of the  Lenders  shall be made pro  rata  according  to the
respective Revolving Credit Percentages of the Lenders.  Other than with respect
to any  substituted  Lender in  accordance  with Section  2.19,  each payment in
respect of principal or interest in respect of the Revolving Credit Loans,  each
payment in respect of commitment 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. Each payment in respect of
Reimbursement  Obligations  in respect of any Letter of Credit  shall be made to
the Issuing Lender that issued such Letters of Credit.

         (b) 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

                                       34

<PAGE>

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.

         (c) 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 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.

         (d) 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,  any Letter of Credit,  any Application
         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);

                                       35

<PAGE>


              (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  Eurodollar  Loans or  issuing or  participating  in
Letters of  Credit,  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 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

                                       36

<PAGE>

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 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 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 H 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

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<PAGE>

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.

         (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

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<PAGE>

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  Revolving  Credit  Loans  provided  for  herein  (excluding,
however, the Applicable Margin included therein, if any) over (ii) the amount of
interest (as  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  Revolving
Credit 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  Revolving Credit 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 Revolving Credit
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 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  Loans,  Reimbursement  Obligations  and
Revolving Credit Commitment;  or (b) replace such Affected Lender by designating
another Lender or a financial  institution that is willing to acquire such Loans
and  Reimbursement  Obligations  and assume such  Revolving  Credit  Commitment;
provided that (i) such  replacement  does not conflict with any  Requirement  of
Law, (ii) no Event

                                       39

<PAGE>

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 Loans and  Reimbursement  Obligations,
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  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.

         2.20 L/C  Commitment.  (a) Subject to the terms and conditions  hereof,
each Issuing  Lender,  in reliance on the  agreements  of the other  Lenders set
forth in Section  2.23(a),  agrees to issue  letters of credit  (the  letters of
credit issued on and after the Closing Date,  together with the Existing Letters
of Credit and the  Existing  Guaranteed  Letters of  Credit,  collectively,  the
"Letters of Credit")  for the account of the Borrower on any Business Day during
the Revolving Credit Commitment Period in such form as may be approved from time
to time by such Issuing  Lender;  provided that no Issuing Lender shall have any
obligation  to issue any  Letter  of  Credit  if,  after  giving  effect to such
issuance,  (i) the L/C  Obligations  would exceed the L/C Commitment or (ii) the
aggregate  amount of the Available  Revolving Credit  Commitments  would be less
than zero.  Each Letter of Credit shall (i) be  denominated  in Dollars and (ii)
expire no later  than the  earlier of (x) the first  anniversary  of its date of
issuance  and (y) the date which is five  Business  Days prior to the  Revolving
Credit Termination Date, provided that any Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which shall
in no event extend beyond the date referred to in clause (y) above).

         (b) No  Issuing  Lender  shall at any time be  obligated  to issue  any
Letter of Credit  hereunder if such issuance  would conflict with, or cause such
Issuing  Lender or any L/C  Participant  to exceed  any limits  imposed  by, any
applicable Requirement of Law.

         2.21 Procedure for Issuance of Letter of Credit.  The Borrower may from
time to time  request  that an  Issuing  Lender  issue a  Letter  of  Credit  by
delivering to such Issuing Lender at its address for notices specified herein an
Application therefor,  completed to the reasonable  satisfaction of such Issuing
Lender, and such other certificates,  documents and other papers and information
as such Issuing Lender may reasonably request.  Upon receipt of any Application,
an Issuing Lender will process such Application and the certificates,  documents
and other  papers and  information  delivered to it in  connection  therewith in
accordance with its customary  procedures and shall promptly issue the Letter of
Credit  requested  thereby (but in no event shall any Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information  relating thereto) by issuing the original of such Letter
of Credit to the  beneficiary  thereof or as otherwise  may be agreed to by such
Issuing Lender and the Borrower. Promptly

                                       40

<PAGE>

after issuance by an Issuing  Lender of a Letter of Credit,  such Issuing Lender
shall  furnish a copy of such  Letter of Credit to the  Borrower.  Each  Issuing
Lender shall promptly furnish to the  Administrative  Agent, which shall in turn
promptly furnish to the Lenders, notice of the issuance of each Letter of Credit
issued by it (including the amount thereof).

         2.22 Fees and Other  Charges.  (a) The  Borrower  will pay a fee on the
aggregate  drawable amount of all  outstanding  Letters of Credit at a per annum
rate equal to the  Applicable  Margin then in effect with  respect to  Revolving
Credit Loans that are  Eurodollar  Loans,  shared  ratably among the Lenders and
payable  quarterly  in arrears on each L/C Fee Payment  Date after the  issuance
date.  In addition,  the Borrower  shall pay to each Issuing  Lender for its own
account a  fronting  fee on the  aggregate  drawable  amount of all  outstanding
Letters of Credit  issued by it in an amount to be agreed upon from time to time
between such Issuing  Lender and the Borrower,  payable  quarterly in arrears on
each L/C Fee Payment Date after the Issuance Date.

         (b) In  addition  to the  foregoing  fees,  the  Borrower  shall pay or
reimburse each Issuing  Lender for such normal and customary  costs and expenses
as are  incurred  or charged by such  Issuing  Lender in  issuing,  negotiating,
effecting  payment  under,  amending or  otherwise  administering  any Letter of
Credit.

         2.23 L/C Participations.  (a) Each Issuing Lender irrevocably agrees to
grant and hereby  grants to each L/C  Participant,  and, to induce each  Issuing
Lender to issue Letters of Credit  hereunder,  each L/C Participant  irrevocably
agrees to accept and purchase and hereby accepts and purchases from each Issuing
Lender,  on  the  terms  and  conditions   hereinafter   stated,  for  such  L/C
Participant's  own  account  and risk an  undivided  interest  equal to such L/C
Participant's  Revolving Credit Percentage in each Issuing Lender's  obligations
and rights under and in respect of each Letter of Credit  issued by such Issuing
Lender  hereunder  and the  amount of each  draft  paid by such  Issuing  Lender
thereunder.  Each L/C Participant  unconditionally  and irrevocably  agrees with
each Issuing  Lender that, if a draft is paid under any Letter of Credit by such
Issuing  Lender for which such Issuing  Lender is not  reimbursed in full by the
Borrower in accordance  with the terms of this  Agreement,  such L/C Participant
shall pay to such Issuing  Lender upon demand at such Issuing  Lender's  address
for notices specified herein an amount equal to such L/C Participant's Revolving
Credit Percentage of the amount of such draft, or any part thereof,  that is not
so reimbursed.

         (b) If any  amount  required  to be paid by any L/C  Participant  to an
Issuing  Lender  pursuant  to Section  2.23(a)  in  respect of any  unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit is
paid to such  Issuing  Lender  within  three  Business  Days after the date such
payment is due, such L/C Participant  shall pay to such Issuing Lender on demand
an amount equal to the product of (i) such amount,  times (ii) the daily average
Federal Funds  Effective Rate during the period from and including the date such
payment is required to the date on which such payment is  immediately  available
to such Issuing  Lender,  times (iii) a fraction  the  numerator of which is the
number of days that elapse  during such period and the  denominator  of which is
360. If any such amount required to be paid by any L/C  Participant  pursuant to
Section  2.23(a)  is not  made  available  to such  Issuing  Lender  by such L/C
Participant  within three Business Days after the date such payment is due, such
Issuing Lender shall be

                                       41

<PAGE>

entitled  to recover  from such L/C  Participant,  on demand,  such  amount with
interest thereon  calculated from such due date at the rate per annum applicable
to Base Rate Loans. A certificate  of such Issuing  Lender  submitted to any L/C
Participant  with respect to any such amounts  owing under this Section shall be
conclusive in the absence of manifest error.

         (c)  Whenever,  at any time  after an Issuing  Lender has made  payment
under any Letter of Credit and has  received  from any L/C  Participant  its pro
rata share of such  payment in  accordance  with Section  2.23(a),  such Issuing
Lender receives any payment  related to such Letter of Credit (whether  directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by such Issuing  Lender),  or any payment of interest on account  thereof,  such
Issuing  Lender  will  distribute  to such L/C  Participant  its pro rata  share
thereof; provided,  however, that in the event that any such payment received by
such Issuing  Lender  shall be required to be returned by such  Issuing  Lender,
such L/C  Participant  shall return to such Issuing  Lender the portion  thereof
previously distributed by such Issuing Lender to it.

         (d) Each Lender's obligation to purchase,  pursuant to Section 2.23(a),
such Lender's  Revolving Credit Percentage in each Issuing Lender's  obligations
and rights under and in respect of each Letter of Credit  issued by such Issuing
Lender hereunder shall be absolute and  unconditional  and shall not be affected
by  any   circumstance,   including,   without   limitation,   (i)  any  setoff,
counterclaim,  recoupment,  defense  or other  right  which  such  Lender or the
Borrower may have against such Issuing Lender,  the Borrower or any other Person
for any reason whatsoever; (ii) the occurrence or continuance of a Default or an
Event of Default or the failure to satisfy any of the other conditions specified
in Section 4; (iii) any adverse change in the condition (financial or otherwise)
of the Borrower; (iv) any breach of this Agreement or any other Loan Document by
the  Borrower,  any  other  Loan  Party or any  other  Lender;  or (v) any other
circumstance,  happening or event  whatsoever,  whether or not similar to any of
the foregoing.

         2.24 Reimbursement  Obligation of the Borrower.  The Borrower agrees to
reimburse each Issuing Lender on each date on which such Issuing Lender notifies
the  Borrower  of the date and amount of a draft  presented  under any Letter of
Credit and paid by such Issuing  Lender for the amount of (a) such draft so paid
and (b) any taxes,  fees,  charges or other costs or  expenses  incurred by such
Issuing  Lender in  connection  with such payment (the amounts  described in the
foregoing  clauses  (a) and (b) in respect  of any  drawing,  collectively,  the
"Payment Amount"). Each such payment shall be made to such Issuing Lender at its
address for notices  specified  herein in lawful  money of the United  States of
America and in immediately  available  funds.  Interest shall be payable on each
Payment Amount from the date of the applicable  drawing until payment in full at
the rate set forth in (i) until the second  Business Day  following  the date of
the applicable  drawing,  Section 2.10(b) and (ii) thereafter,  Section 2.10(c).
Each  drawing  under any  Letter of Credit  shall  (unless  an event of the type
described  in clause (i) or (ii) of Section  7(f)  shall  have  occurred  and be
continuing with respect to the Borrower,  in which case the procedures specified
in Section  2.23 for  funding by L/C  Participants  shall  apply)  constitute  a
request by the Borrower to the Administrative  Agent for a borrowing pursuant to
Section 2.2 of Base Rate Loans in the amount of such drawing. The Borrowing Date
with respect to such  borrowing  shall be the first date on which a borrowing of
Revolving Credit Loans

                                       42

<PAGE>

could be made, pursuant to Section 2.2, if the Administrative Agent had received
a notice of such  borrowing  at the time of such  drawing  under such  Letter of
Credit.

         2.25 Obligations  Absolute.  The Borrower's  obligations under Sections
2.20  through  2.26  shall  be  absolute  and  unconditional  under  any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the  Borrower  may have or have had  against any  Issuing  Lender,  any L/C
Participant,  any  beneficiary  of a Letter of Credit or any other  Person.  The
Borrower also agrees that each Issuing Lender and the L/C Participant  shall not
be responsible for, and the Borrower's  Reimbursement  Obligations under Section
2.24 shall not be affected by, among other things,  the validity or  genuineness
of documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid,  fraudulent or forged, or any dispute between or among
the Borrower and any  beneficiary  of any Letter of Credit or any other party to
which such Letter of Credit may be transferred  or any claims  whatsoever of the
Borrower  against  any  beneficiary  of  such  Letter  of  Credit  or  any  such
transferee.  No Issuing Lender or L/C Participant shall be liable for any error,
omission,  interruption  or delay in  transmission,  dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions 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 Issuing Lender.  The Borrower agrees that any action
taken or omitted by an Issuing Lender under or in connection  with any Letter of
Credit issued by it or the related  drafts or documents,  if done in the absence
of gross  negligence or willful  misconduct and in accordance with the standards
or care specified in the Uniform Commercial Code of the State of New York, shall
be binding on the Borrower and shall not result in any liability of such Issuing
Lender or any L/C Participant to the Borrower.

         2.26 Letter of Credit  Payments.  If any draft shall be  presented  for
payment under any Letter of Credit,  the relevant  Issuing Lender shall promptly
notify the Borrower of the date and amount thereof.  The  responsibility  of the
relevant  Issuing Lender to the Borrower in connection  with any draft presented
for payment under any Letter of Credit issued by such Issuing  Lender shall,  in
addition  to any payment  obligation  expressly  provided  for in such Letter of
Credit,  be limited to  determining  that the documents  (including  each draft)
delivered  under such Letter of Credit in connection  with such  presentment are
substantially in conformity with such Letter of Credit.

         2.27 Applications.  To the extent that any provision of any Application
related to any Letter of Credit is inconsistent  with the provisions of Sections
2.20 through  2.26,  the  provisions  of Sections 2.20 through 2.26 shall apply;
provided,  however,  that any term,  condition or  provision of any  Application
which is in addition  to, or the  subject  matter of which is not in, part of or
covered by, the provisions of Sections 2.20 through 2.26 shall not be considered
as being or deemed to be in conflict with or inconsistent with the provisions of
Sections 2.20 through 2.26.

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<PAGE>

         2.28 Existing  Guaranteed  Letters of Credit.  For purposes of Sections
2.20 through 2.26, the Existing  Guaranteed Letters of Credit shall be deemed to
be Letters of Credit  issued by Heller as Issuing  Lender,  and payments made by
Heller in respect of the L/C  Guarantee  shall be deemed to be payments  made by
Heller pursuant to any draft presented under such Existing Guaranteed Letters of
Credit.


                    SECTION 3. REPRESENTATIONS AND WARRANTIES

         To induce the Agents and the Lenders to enter into this  Agreement  and
to make the Loans and to issue or participate in Letters of Credit, 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 Loans to be made hereunder,  if any, and the loans to
be made under the Term Loan 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.

                                       44

<PAGE>


         (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 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 and obtain  other  extensions  of
credit  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 and
other  extensions of credit 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  and other  extensions of
credit  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

                                       45

<PAGE>

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'  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 issuance of Letters of Credit,  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

                                       46

<PAGE>

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  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 Loans and no
Letters of Credit 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

                                       47

<PAGE>

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  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  Loans  shall be used to
finance  working  capital  needs of the  Borrower  and its  Subsidiaries  in the
ordinary course of business, for Permitted Acquisitions and to refinance certain
existing  Indebtedness of the Borrower.  The Letters of Credit shall be used for
the working capital needs of the Borrower and its Subsidiaries.

         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.

                                       48

<PAGE>

              (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.

              (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.

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<PAGE>

         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,  (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

                                       50

<PAGE>

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 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 Initial  Extension of Credit.  The agreement of each
Lender to make its initial  extension of credit is subject to the  satisfaction,
prior to or  concurrently  with the  making of any  extensions  of credit 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).

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<PAGE>

         (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  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.

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<PAGE>

         (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.

         (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,

                                       53

<PAGE>

    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.

         (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

                                       54

<PAGE>

    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 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) 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.

         (r) Term Loans.  Concurrently with the making of the initial extensions
    of credit  hereunder on the Closing  Date,  the Term Loan Lenders shall make
    available,  and the Borrower shall borrow, the full amount of the Term Loans
    provided for in the Term Loan Agreement.

         4.2  Conditions  to Each  Extension  of Credit.  The  agreement of each
Lender to make any  extension  of credit  requested to be made by it on any date
(including, without

                                       55

<PAGE>

limitation,  its initial  extension of credit) is subject to the satisfaction of
the following conditions precedent:

         (a)  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 such date as if
    made on and as of such date.

         (b) 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
    extensions of credit requested to be made on such date.

Each  borrowing  by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a  representation  and warranty by the Borrower as of
the date of such  extension  of credit  that the  conditions  contained  in this
Section 4.2 have been satisfied.

                        SECTION 5. AFFIRMATIVE COVENANTS

         Holdings and the Borrower  hereby jointly and severally  agree that, so
long as the Revolving Credit  Commitments remain in effect, any Letter of Credit
remains  outstanding  or any 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

                                       56

<PAGE>

    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:

         (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

                                       57

<PAGE>

    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;

         (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

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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 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

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<PAGE>

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  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

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<PAGE>

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 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

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<PAGE>

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 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.

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<PAGE>

                          SECTION 6. NEGATIVE COVENANTS

         Holdings and the Borrower  hereby jointly and severally  agree that, so
long as the Revolving Credit  Commitments remain in effect, any Letter of Credit
remains  outstanding  or any 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
                      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


         (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

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<PAGE>

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
                      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

         (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

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<PAGE>

                      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

; 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

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<PAGE>

                      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

; 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
    Term Loan 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

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<PAGE>

    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 the Term
    Loans,   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

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<PAGE>

    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 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.

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         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;

         (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

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<PAGE>

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:


                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

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;

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<PAGE>

         (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

         (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

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<PAGE>

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 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 Term Loan 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)

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<PAGE>

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,  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 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  Loan or
    Reimbursement  Obligation when due in accordance  with the terms hereof;  or
    the  Borrower  shall fail to pay any  interest on any Loan or  Reimbursement
    Obligation,  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

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<PAGE>

         (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 Loans and
    Reimbursement  Obligations)  on the  scheduled  or  original  due 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

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<PAGE>

    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 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

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<PAGE>


    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 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 Revolving Credit  Commitments shall immediately  terminate and
the Loans hereunder (with accrued interest  thereon) and all other amounts owing
under  this  Agreement  and  the  other  Loan  Documents   (including,   without
limitation, all amounts of L/C Obligations,  whether or not the beneficiaries of
the then  outstanding  Letters of Credit  shall  have  presented  the  documents
required  thereunder) 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: (i) 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 Revolving Credit  Commitments to be
terminated   forthwith,   whereupon  the  Revolving  Credit   Commitments  shall
immediately  terminate;  and (ii) 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 Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement  and the other Loan  Documents  (including,  without  limitation,  all
amounts  of L/C  Obligations,  whether  or not  the  beneficiaries  of the  then
outstanding  Letters  of Credit  shall have  presented  the  documents  required
thereunder)  to  be  due  and  payable  forthwith,   whereupon  the  same  shall
immediately  become due and payable.  With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative  Agent an amount equal
to the aggregate  then undrawn and  unexpired  amount of such Letters of Credit.
Amounts  held  in  such  cash  collateral   account  shall  be  applied  by  the
Administrative  Agent to the  payment  of drafts  drawn  under  such  Letters of
Credit,  and the unused  portion  thereof after all such Letters of Credit shall
have expired or been fully drawn upon,  if any,  shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents.  After
all such  Letters of Credit  shall have  expired or been fully drawn  upon,  all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower  hereunder and under the other Loan Documents  shall have been paid
in full, the balance,  if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).

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                              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
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

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<PAGE>

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
Loans and L/C Obligations.

         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  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  Revolving  Credit  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

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<PAGE>

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 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 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 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
Loans made or renewed by it and with  respect to any Letter of Credit  issued or
participated  in 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 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 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

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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 Term Loan  Agreement or which has been  consented to in
accordance  with Section 9.1 of this  Agreement and Section 9.1 of the Term Loan
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 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.


                            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,

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<PAGE>

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 Loan or Reimbursement  Obligation, or 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 the  Revolving  Credit
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,  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)  amend,  modify or waive any  provision of Section 8 without the
consent of any Agent directly affected thereby;  (iv) amend, modify or waive any
provision of Section 2.13 without the consent of each Lender  directly  affected
thereby;  or (v) amend,  modify, or waive any provision of Sections 2.20 through
2.27 without the consent of the Issuing Lenders, or of Section 2.1(b) or Section
2.2(b)-(f)  without the consent of the Swing Line  Lender.  Notwithstanding  the
immediately  preceding sentence,  the parties to this Agreement agree, for their
own benefit and for the benefit of the parties to the Term Loan 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  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 Term Loan 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 Term Loan 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  Lenders,  the  holders of more than 50% of the
aggregate unpaid principal amount of the Tranche A Term Loans  outstanding under
the Term Loan Agreement and the holders of more than 50% of the aggregate unpaid
principal  amount of the  Tranche B Term Loans  outstanding  under the Term Loan
Agreement,  (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 Term Loan  Agreement and (vii) this sentence may
be amended or otherwise  modified  only with the consent of the  Borrower,  each
Lender  and each Term  Loan  Lender.  Any such  waiver  and any such  amendment,

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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 Loans and L/C Obligations.  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  Revolving
Extensions  of Credit 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;  provided,  however,  that (A) 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 (B) unless each
Term Loan  Lender  holding  Tranche B Term Loans  under the Term Loan  Agreement
shall  otherwise  agree,  the  applicable  margin with respect to the Additional
Extensions of Credit shall not exceed the  Applicable  Margin (as defined in the
Term Loan Agreement) for such 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 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

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         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

         Issuing Lender:                As notified by such Issuing Lender, the
                                        Administrative Agent and the Borrower

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.

         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
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 Revolving Credit  Commitments (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

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<PAGE>

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
Loans or the use of the  Letters of Credit 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  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 Revolving Credit 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,

                                       84

<PAGE>


the Agents, all future holders of the 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  Revolving  Credit  Loan  owing  to such  Lender,  the  Revolving  Credit
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 Revolving  Credit Loan or any  Reimbursement
Obligation 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 Loans or  Reimbursement
Obligations 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 Loans,  in each case to the extent subject
to such  participation.  The Borrower agrees that if amounts  outstanding  under
this  Agreement  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 Loans and Reimbursement  Obligations 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.

         (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,  the relevant
Issuing Lender and the Agents (which,  in each case,  shall not be  unreasonably
withheld or delayed),  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

                                       85

<PAGE>

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.  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 Revolving Credit Commitment and/or Loans and other interests 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 Revolving  Credit  Commitment
of, and principal  amount of the  Revolving  Extensions of Credit 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  Revolving  Extensions of Credit and any Notes  evidencing  the
Loans recorded therein for all purposes of this Agreement. Any assignment of any
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
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 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  Revolving  Extensions of Credit) or Agent at any reasonable  time
and from time to time upon reasonable prior notice.

         (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

                                       86

<PAGE>

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  Note of the
assigning Lender) a new Note to the order of such Assignee in an amount equal to
the Revolving Credit  Commitment  acquired by it pursuant to such Assignment and
Acceptance and, if the Assignor has retained a Revolving Credit Commitment, upon
request,  a new Note to the  order of the  Assignor  in an  amount  equal to the
Revolving  Credit  Commitment  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 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 Loan or Note to any Federal Reserve Bank
in accordance with applicable law.

         9.7 Adjustments; Set-off. (a) 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,  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.

                                       87

<PAGE>

         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 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;

                                       88

<PAGE>

         (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 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.

                                       89

<PAGE>

         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.

                                       90

<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


                                       91

<PAGE>


                                           HELLER FINANCIAL, INC.,
                                            as Co-Documentation Agent


                                           By: /s/
                                              ---------------------------------
                                              Name:
                                              Title:


                                       92

<PAGE>


                                                                        Annex A
                                                                        -------


           PRICING GRID FOR REVOLVING CREDIT LOANS AND COMMITMENT FEES

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

       -----------------------------------------------------------------------------------------------------
          Consolidated Leverage Ratio    Applicable Margin for        Applicable Margin   Commitment Fee
                                         Eurodollar Loans            for Base Rate Loans  Rate
       -----------------------------------------------------------------------------------------------------
       Greater than or equal to 4.75 to            3.125                    2.125                .60
       1.00
       -----------------------------------------------------------------------------------------------------
       Less than 4.75 to 1.00, but                 2.875                    1.875                .60
       greater than or equal to 4.25 to
       1.00
       -----------------------------------------------------------------------------------------------------
       Less than 4.25 to 1.00, but                 2.625                    1.625                .50
       greater than or equal to 3.75 to
       1.00
       -----------------------------------------------------------------------------------------------------
       Less than 3.75 to 1.00, but                 2.375                    1.375                .50
       greater than 3.25 to 1.00
       -----------------------------------------------------------------------------------------------------
       Less than 3.25 to 1.00                      2.125                    1.125                .50
       -----------------------------------------------------------------------------------------------------

</TABLE>


Changes in the Applicable  Margin with respect to Loans or in the Commitment Fee
Rate  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>

                                                                         Annex B
                                                                         -------


                      EXISTING GUARANTEED LETTERS OF CREDIT


<PAGE>

                                                                         Annex C
                                                                         -------


                           EXISTING LETTERS OF CREDIT




<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