CREDIT AGREEMENT


                                   dated as of


                                  May 11, 1998


                                      among


                             THE TOPPS COMPANY, INC.


                            The Lenders Party Hereto


                                       and


                            THE CHASE MANHATTAN BANK,
                                    as Agent


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                                TABLE OF CONTENTS


                                                                        Page No.


ARTICLE I  ................................................................... 1
               SECTION 1.01. Defined Terms. .................................. 1
               SECTION 1.02. Classification of Loans and Borrowings. ........ 18
               SECTION 1.03. Terms Generally. ............................... 18
               SECTION 1.04. Accounting Terms; GAAP.  ....................... 18

ARTICLE II .................................................................. 18
               SECTION 2.01. Commitments. ................................... 18
               SECTION 2.02. Loans and Borrowings. .......................... 19

               SECTION 2.03. Requests for Borrowings. ....................... 19
               SECTION 2.04. [This Section intentionally left blank.] ....... 20
               SECTION 2.05. Letters of Credit. ............................. 20
               SECTION 2.06. Funding of Borrowings. ......................... 24
               SECTION 2.07. Interest Elections. ............................ 25
               SECTION 2.08. Termination  and  Reduction  of  Commitments ... 26
               SECTION 2.09. Repayment of Loans;  Evidence of Debt. ......... 26
               SECTION 2.10. Amortization of Term Loans. .................... 27
               SECTION 2.11. Prepayment of Loans. ........................... 28
               SECTION 2.12. Fees. .......................................... 29
               SECTION 2.13. Interest. ...................................... 30
               SECTION 2.14. Alternate Rate of Interest. .................... 31
               SECTION 2.15. Increased Costs. ............................... 31
               SECTION 2.16. Break Funding Payments. ........................ 32
               SECTION 2.17. Taxes. ......................................... 33
               SECTION 2.18. Payments Generally; Pro Rata Treatment;
                             Sharing of Set-offs. ........................... 34
               SECTION 2.19. Mitigation Obligations; Replacement of Lenders.. 35

ARTICLE III ................................................................. 36
               SECTION 3.01. Organization; Powers. .......................... 36
               SECTION 3.02. Authorization; Enforceability. ................. 36
               SECTION 3.03. Governmental Approvals; No Conflicts. .......... 36
               SECTION 3.04. Financial Condition; No Material Adverse Change. 37
               SECTION 3.05. Properties. .................................... 37
               SECTION 3.06. Litigation and Environmental Matters. .......... 38
               SECTION 3.07. Compliance with Laws and Agreements. ........... 38
               SECTION 3.08. Investment and Holding Company Status. ......... 38

                                       i

<PAGE>
               SECTION 3.09. Taxes. ......................................... 38
               SECTION 3.10. ERISA. ......................................... 39
               SECTION 3.11. Disclosure. .................................... 39
               SECTION 3.12. Subsidiaries and Affiliates. ................... 39
               SECTION 3.13. Insurance. ..................................... 39
               SECTION 3.14. Labor Matters. ................................. 40
               SECTION 3.15. Solvency. ...................................... 40
               SECTION 3.16. No Default. .................................... 40
               SECTION 3.17. Place of Business. ............................. 40
               SECTION 3.18. Year 2000. ..................................... 40
               SECTION 3.19. Federal Reserve Regulations. ................... 41

ARTICLE IV .................................................................. 41
               SECTION 4.01. Effective Date. ................................ 41
               SECTION 4.02. Each Credit Event. ............................. 43

ARTICLE V ................................................................... 44
               SECTION 5.01. Financial Statements and Other Information. .... 44
               SECTION 5.02. Notices of Material Events. .................... 46
               SECTION 5.03. Information Regarding Collateral. .............. 46
               SECTION 5.04. Existence; Conduct of Business. ................ 47
               SECTION 5.05. Payment of Obligations. ........................ 48
               SECTION 5.06. Maintenance of Properties. ..................... 48
               SECTION 5.07. Insurance. ..................................... 48
               SECTION 5.08. [This Section intentionally left blank.] ....... 49
               SECTION 5.09. Books and Records; Inspection and Audit Rights.. 49
               SECTION 5.10. Compliance with Laws. .......................... 49
               SECTION 5.11. Notice of  Discharge  of  Hazardous  Material
                             or Environmental Complaint. .................... 49
               SECTION 5.12. Environmental Compliance. ...................... 49
               SECTION 5.13. Use of Proceeds and Letters of Credit. ......... 50
               SECTION 5.14. Additional Subsidiaries. ....................... 50
               SECTION 5.15. Further Assurances. ............................ 50
               SECTION 5.16. Interest Rate Protection. ...................... 50

ARTICLE VI .................................................................. 51
               SECTION 6.01. Indebtedness; Certain Equity Securities. ....... 51
               SECTION 6.02. Liens. ......................................... 52
               SECTION 6.03. Fundamental Changes. ........................... 53
               SECTION 6.04. Investments,   Loans,  Advances,
                             Guarantees and Acquisitions. ................... 53
               SECTION 6.05. Asset Sales. ................................... 54
               SECTION 6.06. Hedging Agreements. ............................ 55
               SECTION 6.07. Restricted Payments; Certain Payments
                             of Indebtedness. ............................... 55
               SECTION 6.08. Transactions with Affiliates ................... 56

                                       ii
<PAGE>
               SECTION 6.09. Restrictive Agreements. ........................ 56
               SECTION 6.10. Amendment of Material Documents. ............... 57
               SECTION 6.11. Limitations on Sales and Leasebacks. ........... 57
               SECTION 6.12. Fiscal Year. ................................... 57
               SECTION 6.13. Consolidated Leverage Ratio. ................... 57
               SECTION 6.14. Consolidated Fixed Charge Ratio. ............... 57
               SECTION 6.15. Consolidated Net Worth. ........................ 58
               SECTION 6.16. Consolidated Net Loss. ......................... 58
               SECTION 6.17. EBITDA. ........................................ 58
               SECTION 6.18. Cumulative EBITDA. ............................. 58
               SECTION 6.19. Capital Expenditures. .......................... 59

ARTICLE VII ................................................................. 59
               SECTION 7.01. Events of Default. ............................. 59

ARTICLE VIII ................................................................ 61

ARTICLE IX .................................................................. 63
                          
               SECTION 9.01. Notices. ....................................... 63
               SECTION 9.02. Waivers; Amendments. ........................... 64
               SECTION 9.03. Expenses; Indemnity; Damage Waiver. ............ 65
               SECTION 9.04. Successors and Assigns. ........................ 66
               SECTION 9.05. Survival. ...................................... 68
               SECTION 9.06. Counterparts; Integration; Effectiveness. ...... 69
               SECTION 9.07. Severability. .................................. 69
               SECTION 9.08. Right of Setoff. ............................... 69
               SECTION 9.09. Governing Law; Jurisdiction; Consent
                             to Service of Process. ......................... 69
               SECTION 9.10. WAIVER OF JURY TRIAL. .......................... 70
               SECTION 9.11. Headings. ...................................... 70
               SECTION 9.12. Confidentiality. ............................... 70
               SECTION 9.13. Interest Rate Limitation. ...................... 71

SCHEDULES

Schedule 2.01 -- Commitments
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 5.04 -- Material License
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.09 -- Existing Restrictions

                                      iii
<PAGE>

EXHIBITS

Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Borrower's Counsel
Exhibit B-2 -- Form of Opinion of Borrower's U.K. Counsel
Exhibit C -- Form of Perfection Certificate
Exhibit D -- Form of Pledge Agreement
Exhibit E -- Form of Trademark Security Agreement
Exhibit F -- Form of Compliance Certificate
Exhibit G -- Form of Topps SA Guaranty









                                       iv
<PAGE>



                    CREDIT  AGREEMENT  dated as of May 11, 1998,
               among THE TOPPS  COMPANY,  INC., a Delaware
               corporation (the "Borrower"), the LENDERS party hereto (the
               "Lenders"), and THE CHASE MANHATTAN BANK, as Agent 
               (in such capacity, the "Agent").

                              W I T N E S S E T H:

     WHEREAS,  the Borrower has requested that the Lenders make available to the
Borrower  a term loan  facility  in the  principal  amount of  $24,950,000,  the
proceeds of which are to be used to refinance all amounts  outstanding under the
Nationsbank Facility (as hereinafter defined) and a revolving credit facility of
up to $9,450,000, the proceeds of which are to be used as set forth herein; and

               WHEREAS,  the Lenders are willing to make such loans available to
the Borrower upon the terms and conditions set forth herein.

               NOW  THEREFORE,  the  Borrower,  the Lenders and the Agent hereby
agree as follows:


                                    ARTICLE I

                                   Definitions

               Section  1.01.  Defined  Terms.  As used in this  Agreement,  the
following terms have the meanings specified below:

               "ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing,  are bearing interest
at a rate determined by reference to the Alternate Base Rate.

               "Adjusted  LIBO  Rate"  means,  with  respect  to any  Eurodollar
Borrowing for any Interest Period,  an interest rate per annum (rounded upwards,
if  necessary,  to the next  1/100 of 1%)  equal to  (a) the  LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.

               "Administrative    Questionnaire"    means   an    Administrative
Questionnaire in a form supplied by the Agent.

               "Affiliate"  means, with respect to a specified  Person,  another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.

               "Agent"  means The  Chase  Manhattan  Bank,  in its  capacity  as
administrative and collateral agent for the Lenders hereunder.

               "Alternate Base Rate" means,  for any day, a rate per annum equal
to the  greatest  of (a) the Prime  Rate in effect on such day,  (b) the Base CD

<PAGE>

Rate in effect on such day plus 1% and (c) the Federal Funds  Effective  Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate  Base Rate due to
a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective  from and including the effective  date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.

               "Applicable  Percentage"  means,  with  respect to any  Revolving
Lender,  the percentage of the total Revolving  Commitments  represented by such
Lender's Revolving  Commitment.  If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.

               "Applicable  Rate"  means,  for any day (a) with  respect  to any
Eurodollar  Loan,  2.75% per annum,  or (b) with respect to the commitment  fees
payable hereunder, 1/2 of 1% per annum.

               "Assessment  Rate" means, for any day, the annual assessment rate
in effect on such day that is  payable  by a member of the Bank  Insurance  Fund
classified  as  "well-capitalized"  and within  supervisory  subgroup  "B" (or a
comparable  successor  risk  classification)  within  the  meaning  of 12 C.F.R.
Part 327  (or  any  successor   provision)  to  the  Federal  Deposit  Insurance
Corporation  for insurance by such  Corporation of time deposits made in dollars
at the  offices of such  member in the  United  States;  provided  that if, as a
result of any change in any law, rule or regulation, it is no longer possible to
determine the Assessment  Rate as aforesaid,  then the Assessment  Rate shall be
such annual rate as shall be determined by the Agent to be representative of the
cost of such insurance to the Lenders.

               "Assignment  and  Acceptance"  means an assignment and acceptance
entered  into by a Lender and an  assignee  (with the consent of any party whose
consent is required by Section 9.04),  and accepted by the Agent, in the form of
Exhibit A or any other form approved by the Agent.

               "Bank of Scotland Debt" means the  Indebtedness  owing to Bank of
Scotland by Topps Europe Limited and Topps U.K. Limited pursuant to that certain
Multi Option Facilities Agreement, dated as of January 7, 1994 (as amended).

               "Base CD Rate" means the sum of (a) the Three-Month  Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.

               "Board"  means  the Board of  Governors  of the  Federal  Reserve
System of the United States of America.

               "Borrower" means The Topps Company, Inc., a Delaware corporation.

               "Borrowing"  means  (a) Loans of the same  Class and Type,  made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect.

                                       2
<PAGE>

               "Borrowing  Request"  means  a  request  by  the  Borrower  for a
Borrowing in accordance with Section 2.03.

               "Business  Day" means any day that is not a  Saturday,  Sunday or
other day on which  commercial banks in New York City are authorized or required
by law  to  remain  closed;  provided  that,  when  used  in  connection  with a
Eurodollar  Loan,  the term  "Business  Day" shall also exclude any day on which
banks are not open for  dealings  in dollar  deposits  in the  London  interbank
market.

               "Capital Expenditures" means, for any period, without duplication
(a)  the   additions  to  property,   plant  and  equipment  and  other  capital
expenditures  of the Borrower  and its  consolidated  Subsidiaries  that are (or
would be) set forth in a  consolidated  statement  of cash flows of the Borrower
for  such  period  prepared  in  accordance  with  GAAP  and (b)  Capital  Lease
Obligations  incurred by the Borrower and its consolidated  Subsidiaries  during
such period, excluding, however, the amount of any Capital Expenditures paid for
with proceeds of casualty insurance as evidenced in writing and submitted to the
Agent.

               "Capital Lease  Obligations"  of any Person means 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 the  amount of such  obligations  shall be the  capitalized  amount  thereof
determined in accordance with GAAP.

               "Capitalized  Leases" means leases which constitute Capital Lease
Obligations.

               "Change  in  Control"  means (a) the  acquisition  of  ownership,
directly  or  indirectly,  beneficially  or of  record,  by any  Person or group
(within the meaning of the Securities  Exchange Act of 1934 and the rules of the
Securities and Exchange  Commission  thereunder as in effect on the date hereof)
of shares  representing  more than 20% of the  aggregate  ordinary  voting power
represented by the issued and outstanding capital stock of the Borrower;  or (b)
occupation  of a majority of the seats (other than vacant seats) on the board of
directors of the Borrower by Persons who were neither (i) nominated by the board
of directors of the Borrower nor (ii) appointed by directors so nominated.

               "Change  in Law"  means  (a) the  adoption  of any  law,  rule or
regulation after the date of this Agreement,  (b) any change in any law, rule or
regulation or in the  interpretation or application  thereof by any Governmental
Authority  after the date of this  Agreement or (c)  compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.15(b),  by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding  company,  if any)
with any request,  guideline  or  directive  (whether or not having the force of
law)  of any  Governmental  Authority  made or  issued  after  the  date of this
Agreement.

               "Class", when used in reference to any Loan or Borrowing,  refers
to whether such Loan,  or the Loans  comprising  such  Borrowing,  are Revolving
Loans or Term Loans,  and, when used in reference to any  Commitment,  refers to
whether such Commitment is a Revolving Commitment or Term Loan Commitment.

                                       3
<PAGE>

               "Code" means the Internal  Revenue Code of 1986,  as amended from
time to time.

                                                                           
               "Collateral"  means  any  and  all  "Collateral"  and  "Trademark
Collateral" as defined in any applicable Security Document.

               "Commitment"   means  a   Revolving   Commitment   or  Term  Loan
Commitment, or any combination thereof (as the context requires).

               "Consolidated  Fixed Charge Ratio" means,  on any date, the ratio
of (i) the sum of Normalized  EBITDA minus  unfinanced  Capital  Expenditures to
(ii) current  portion of long term debt (as per GAAP) plus interest  expense (as
certified  by a  Financial  Officer  on a  quarterly  basis).  For  purposes  of
calculating  Consolidated  Fixed Charge  Ratio,  Normalized  EBITDA,  unfinanced
Capital  Expenditures and interest expense shall be measured for the four fiscal
quarter period ending on the date such ratio is being tested.

               "Consolidated  Leverage  Ratio" means,  on any date, the ratio of
(i) the sum of outstanding  Consolidated  Senior  Liabilities  plus  Capitalized
Leases plus  Standby  Letters of Credit to (ii)  Normalized  EBITDA for the four
quarter period ending on such date.

               "Consolidated  Net Income"  means,  for any period of computation
thereof, the gross revenues from operations of the Borrower and its Subsidiaries
(including  payments  received  by the  Borrower  and  its  Subsidiaries  of (i)
interest  income,  and (ii)  dividends  and  distributions  made in the ordinary
course of their businesses by Persons in which investment is permitted  pursuant
to this Agreement and not related to an extraordinary  event) less all operating
and non-operating expenses (not related to extraordinary events) of the Borrower
and its Subsidiaries including taxes on income, all determined on a consolidated
basis in accordance with GAAP applied on a consistent basis.

               "Consolidated Net Worth" means at any time as of which the amount
thereof is to be determined,  Consolidated  Shareholders'  Equity minus (without
duplication  of deductions  in respect of items already  deducted in arriving at
surplus and retained earnings) all reserves (other than contingency reserves not
allocated to any particular purpose),  including without limitation reserves for
depreciation,  depletion,  amortization,  obsolescence,  deferred  income taxes,
insurance and inventory  valuation all as determined on a consolidated  basis in
accordance with GAAP applied on a consistent basis;

               "Consolidated   Senior  Liabilities"  means,  on  any  date,  all
Indebtedness  for Money  Borrowed  of the  Borrower  and its  Subsidiaries,  all
determined on a consolidated basis.

               "Consolidated Shareholders' Equity" means at any time as of which
the amount thereof is to be  determined,  the sum of the following in respect of
the  Borrower  and its  Subsidiaries  (determined  on a  consolidated  basis and
excluding  intercompany  items among the Borrower and its  Subsidiaries  and any
upward  adjustment  after the Effective Date due to revaluation of assets):  (i)
the  amount of issued and  outstanding  share  capital,  plus (ii) the amount of
additional  paid-in  capital and retained  income (or, in the case of a deficit,
minus the amount of such deficit), plus (iii) the amount of any foreign currency

                                       4
<PAGE>

translation adjustment (if positive,  or, if negative,  minus the amount of such
translation  adjustment)  minus (iv) the amount of any  treasury  stock,  all as
determined in accordance with GAAP applied on a consistent basis.

               "Contract Notification Date"means the date which is 30 days prior
to (x) the date that any Material License will, by its own terms, expire, or (y)
the date the Borrower intends to terminate any Material License.

               "Control"  means the possession,  directly or indirectly,  of the
power to  direct or cause the  direction  of the  management  or  policies  of a
Person,  whether  through the ability to exercise  voting power,  by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.

               "Cumulative  EBITDA"  means  EBITDA for the four  quarter  period
ending on the last day of the  fiscal  quarter  for which  Cumulative  EBITDA is
being  tested  provided,  that (i) for the fiscal  quarter  ending on August 29,
1998,  Cumulative  EBITDA  shall be measured for the two fiscal  quarter  period
ending on such date and (ii) for the fiscal quarter ending on November 28, 1998,
Cumulative  EBITDA shall be measured for the three fiscal  quarter period ending
on such date.

               "Default" means any event or condition which constitutes an Event
of Default or which upon  notice,  lapse of time or both would,  unless cured or
waived, become an Event of Default.

               "Disclosed Matters" means the actions,  suits and proceedings and
the environmental matters disclosed in Schedule 3.06.

               "Documentary  Letter of  Credit"  means a  documentary  letter of
credit in form and substance customarily issued by the Issuing Bank from time to
time.

               "Documentary Letter of Credit  Outstandings"  means, at any time,
the sum of (i) the aggregate undrawn stated amount of all Documentary Letters of
Credit  then  outstanding  plus  (ii)  all  amounts   theretofore   drawn  under
Documentary Letters of Credit and not then reimbursed.

               "dollars" or "$" refers to lawful  money of the United  States of
America.

               "EBITDA" means,  for any period,  Consolidated Net Income (or net
loss) of the Borrower and its  subsidiaries  for such period plus the sum of (i)
depreciation  expense,  (ii)  amortization  expense,  (iii) net total income tax
expense and (iv)  interest  expense (as  certified  by a Financial  Officer on a
quarterly  basis) for such period,  all  determined on a  consolidated  basis in
accordance with GAAP applied on a consistent basis.

               "Effective Date" means the date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

               "Eligible  Assignee"  means (i) a  commercial  bank having  total
assets in excess of $250,000,000 and being governed by the Board; (ii) a finance

                                       5
<PAGE>

company,  insurance company or other financial institution or fund acceptable to
the Agent which in the ordinary  course of business  extends  credit of the type
evidenced by this Agreement and has total assets in excess of  $100,000,000  and
being governed by the Board, and if not so governed, acceptable to the Borrower,
whose consent shall not be unreasonably  withheld; and (iii) any other financial
institution  satisfactory  to both the Borrower and the Agent;  provided that no
such  entity  that is  organized  under the laws of a  jurisdiction  outside the
United States shall be an Eligible Assignee unless such entity shall, if legally
able to do so, prior to the immediately following due date of any payment by the
Borrower  hereunder,  deliver to the Borrower  such  certificates,  documents or
other evidence,  as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W-8 or W-9 and (B) Internal
Revenue Service Form 1001 or Form 4224 and any other certificate or statement of
exemption  required  by  Treasury  Regulation  Section  1.1441-1,   1.1441-4  or
1.1441-6(c) or any subsequent  version thereof or successors  thereto,  properly
completed and duly executed by such entity establishing that such payment is (i)
not subject to United States Federal withholding tax under the Code because such
payment is  effectively  connected with the conduct by such entity of a trade or
business in the United  States or (ii)  totally  exempt  from the United  States
Federal withholding tax.

               "Environmental Laws" means all laws, rules,  regulations,  codes,
ordinances,  orders,  decrees,  judgments,   injunctions,   notices  or  binding
agreements  issued,  promulgated or entered into by any Governmental  Authority,
relating in any way to the  environment,  preservation or reclamation of natural
resources,  the  management,  release or  threatened  release  of any  Hazardous
Material or to environmental protection matters.

               "Environmental  Liability"  means any  liability,  contingent  or
otherwise   (including  any  liability  for  damages,   costs  of  environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly  or  indirectly  resulting  from or  based  upon  (a) violation  of any
Environmental Law, (b) the generation, use, handling,  transportation,  storage,
treatment or disposal of any Hazardous Materials,  (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract,  agreement or other consensual  arrangement
pursuant to which  liability  is assumed or imposed  with  respect to any of the
foregoing.

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

               "ERISA  Affiliate"  means any trade or  business  (whether or not
incorporated) that, together with the Borrower,  is treated as a single employer
under  Section 414(b)  or (c) of the Code or, solely for purposes of Section 302
of ERISA and  Section  412 of the Code,  is treated as a single  employer  under
Section 414 of the Code.

               "ERISA Event" means  (a) any  "reportable  event",  as defined in
Section 4043  of ERISA or the  regulations  issued  thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an  "accumulated  funding  deficiency" (as
defined in  Section 412  of the Code or  Section 302  of ERISA),  whether or not
waived;  (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an  application  for a waiver of the minimum  funding  standard with
respect to any Plan;  (d) the  incurrence  by the  Borrower  or any of its ERISA

                                       6
<PAGE>

Affiliates  of any  liability  under  Title IV  of  ERISA  with  respect  to the
termination of any Plan;  (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan  administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer  any Plan; (f)
the  incurrence by the Borrower or any of its ERISA  Affiliates of any liability
with  respect  to  the  withdrawal  or  partial  withdrawal  from  any  Plan  or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice concerning the imposition of Withdrawal  Liability or a determination
that  a  Multiemployer   Plan  is,  or  is  expected  to  be,  insolvent  or  in
reorganization, within the meaning of Title IV of ERISA.

               "Eurodollar",  when used in reference  to any Loan or  Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.

               "Event  of  Default"  has the  meaning  assigned  to such term in
Article VII.

               "Excluded  Taxes" means,  with respect to the Agent,  any Lender,
the  Issuing  Bank or any other  recipient  of any  payment  to be made by or on
account of any  obligation  of the Borrower  hereunder,  (a) income or franchise
taxes  imposed  on (or  measured  by) its  income,  profits,  or  capital by any
Governmental  Authority,  or by the  jurisdiction  under the laws of which  such
recipient is organized  or in which its  principal  office is located or, in the
case of any Lender, in which its applicable  lending office is located,  (b) any
branch  profits taxes imposed by the United States of America or any similar tax
imposed by any other  jurisdiction  in which the  Borrower is located and (c) in
the case of a Foreign  Lender  (other than an assignee  pursuant to a request by
the Borrower  under Section  2.19(b)),  any  withholding  tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending  office) or is attributable
to such Foreign Lender's  failure to comply with Section 2.17(e),  except to the
extent that such Foreign Lender (or its assignor,  if any) was entitled,  at the
time  of  designation  of a new  lending  office  (or  assignment),  to  receive
additional  amounts  from the  Borrower  with  respect to such  withholding  tax
pursuant to Section 2.17(a).

               "Federal Funds Effective  Rate" means,  for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) 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 that is a Business Day, the average (rounded  upwards,  if
necessary,  to the  next  1/100 of 1%) of the  quotations  for such day for such
transactions  received  by  the  Agent  from  three  Federal  funds  brokers  of
recognized standing selected by it.

               "Financial Officer" means the chief financial officer,  principal
accounting officer, treasurer or controller of the Borrower.

               "Financing  Transactions"  means  the  execution,   delivery  and
performance by the Borrower of the Loan Documents,  the borrowing of Loans,  the
use of the proceeds thereof and the issuance of Letters of Credit hereunder.

                                       7
<PAGE>

               "Foreign  Lender"  means any Lender that is  organized  under the
laws of a  jurisdiction  other than that in which the  Borrower is located.  For
purposes of this  definition,  the United States of America,  each State thereof
and  the  District  of  Columbia   shall  be  deemed  to   constitute  a  single
jurisdiction.

               "Foreign Subsidiary" means any Subsidiary that is organized under
the laws of a jurisdiction  other than the United States of America or any State
thereof or the District of Columbia.

               "GAAP" means  generally  accepted  accounting  principles  in the
United States of America.

               "Governmental  Authority"  means  the  government  of the  United
States of  America,  any  other  nation or any  political  subdivision  thereof,
whether state or local, and any agency, authority,  instrumentality,  regulatory
body,  court,  central bank or other entity exercising  executive,  legislative,
judicial,  taxing,  regulatory  or  administrative  powers  or  functions  of or
pertaining to government.

               "Guarantee"  of or by any  Person  (the  "guarantor")  means  any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of  guaranteeing  any  Indebtedness  or other  obligation of any
other  Person  (the  "primary  obligor")  in any  manner,  whether  directly  or
indirectly,  and including any obligation of the guarantor,  direct or indirect,
(a) to  purchase or pay (or advance or supply  funds for the purchase or payment
of) such  Indebtedness  or other  obligation  or to  purchase  (or to advance or
supply funds for the purchase of) any security for the payment  thereof,  (b) to
purchase or lease  property,  securities or services for the purpose of assuring
the owner of such  Indebtedness  or other  obligation  of the  payment  thereof,
(c) to maintain working capital, equity capital or any other financial statement
condition  or  liquidity  of the  primary  obligor so as to enable  the  primary
obligor to pay such  Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty  issued to support such
Indebtedness or obligation;  provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.

               "Hazardous   Materials"   means  all  explosive  or   radioactive
substances  or wastes and all  hazardous  or toxic  substances,  wastes or other
pollutants,  including petroleum or petroleum distillates,  asbestos or asbestos
containing  materials,  polychlorinated  biphenyls,  radon  gas,  infectious  or
medical  wastes  and all other  substances  or wastes  of any  nature  regulated
pursuant to any Environmental Law.

               "Hedging Agreement" means any interest rate protection agreement,
foreign currency  exchange  agreement,  commodity price protection  agreement or
other interest or currency exchange rate or commodity price hedging arrangement.

               "Indebtedness" of any Person means, without duplication,  (a) all
obligations of such Person for borrowed  money or advances of any kind,  (b) all
obligations  of such Person  evidenced  by bonds,  debentures,  notes or similar
instruments,  (c) all obligations of such Person upon which interest charges are
customarily paid,  (d) all  obligations of such Person under conditional sale or

                                       8
<PAGE>

other title retention  agreements  relating to property acquired by such Person,
(e) all  obligations of such Person in respect of the deferred purchase price of
property  or  services  (excluding  current  accounts  payable  incurred  in the
ordinary course of business),  (f) all Indebtedness of others secured by (or for
which the holder of such  Indebtedness  has an  existing  right,  contingent  or
otherwise,  to be secured  by) any Lien on  property  owned or  acquired by such
Person,  whether  or not the  Indebtedness  secured  thereby  has been  assumed,
(g) all  Guarantees by such Person of  Indebtedness  of others,  (h) all Capital
Lease Obligations of such Person, (i) all obligations,  contingent or otherwise,
of such  Person as an account  party in respect of letters of credit and letters
of guaranty and (j) all obligations,  contingent or otherwise, of such Person in
respect of bankers'  acceptances.  The  Indebtedness of any Person shall include
the  Indebtedness  of any other entity  (including any partnership in which such
Person is a general  partner) to the extent such Person is liable  therefor as a
result of such Person's  ownership  interest in or other  relationship with such
entity,  except to the extent the terms of such  Indebtedness  provide that such
Person is not liable therefor.

               "Indebtedness  for Money Borrowed" means for any Person,  without
duplication,  all Indebtedness in respect of money borrowed,  including  without
limitation,  all  Capitalized  Leases  and the  deferred  purchase  price of any
property or asset,  evidenced by a promissory note,  bond,  debenture or similar
written  obligation for the payment of money, other than trade payables incurred
in the ordinary course of business.

               "Indemnified Taxes" means Taxes other than Excluded Taxes.

               "Intercompany   Debt"  means   loans,   advances  and  any  other
extensions of credit made by the Borrower to any of its Subsidiaries.

               "Intercompany  Notes" means all promissory notes,  instruments or
other  written  indicia  of  an  obligation  by  any  Subsidiary  to  repay  any
Intercompany Debt owing to the Borrower.

               "Interest  Election  Request"  means a request by the Borrower to
convert or continue a Revolving  Borrowing or Term Borrowing in accordance  with
Section 2.07.

               "Interest  Payment Date" means (a) with  respect to any ABR Loan,
the first day of each month and (b) with  respect to any  Eurodollar  Loan,  the
last day of the Interest  Period  applicable to the Borrowing of which such Loan
is a part and, in the case of a Eurodollar  Borrowing with an Interest Period of
more  than  three  months'  duration,  each  day  prior  to the last day of such
Interest  Period that occurs at intervals of three  months'  duration  after the
first day of such Interest Period.

               "Interest Period" means with respect to any Eurodollar Borrowing,
the  period  commencing  on  the  date  of  such  Borrowing  and  ending  on the
numerically  corresponding  day in the calendar month that is one, two, three or
six months  (or,  with  the  consent  of each  Lender,  nine or  twelve  months)
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business  Day,  such  Interest  Period  shall be
extended  to the next  succeeding  Business  Day  unless  such  next  succeeding
Business Day would fall in the next calendar  month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period

                                       9
<PAGE>

that  commences on the last  Business  Day of a calendar  month (or on a day for
which there is no  numerically  corresponding  day in the last calendar month of
such  Interest  Period)  shall end on the last Business Day of the last calendar
month of such  Interest  Period.  For purposes  hereof,  the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the  effective  date of the most recent  conversion or  continuation  of such
Borrowing.

               "Issuing Bank" means The Chase Manhattan Bank, in its capacity as
the issuer of Letters of Credit  hereunder,  and its successors in such capacity
as provided in Section 2.05(i). The Issuing Bank may, in its discretion, arrange
for one or more  Letters  of Credit to be issued by  Affiliates  of the  Issuing
Bank,  in which case the term "Issuing  Bank" shall  include any such  Affiliate
with respect to Letters of Credit issued by such Affiliate.

               "LC  Disbursement"  means  a  payment  made by the  Issuing  Bank
pursuant to a Letter of Credit.

               "LC Exposure"  means,  at any time,  the aggregate  amount of all
Documentary  Letter  of Credit  Outstandings  and all  Standby  Letter of Credit
Outstandings.  The LC Exposure of any Revolving  Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

               "Lenders" means the Persons listed on Schedule 2.01 and any other
Person  that shall have become a party  hereto  pursuant  to an  Assignment  and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.

               "Letter of Credit" means any letter of credit issued  pursuant to
this Agreement,  which Letter of Credit shall be a Documentary  Letter of Credit
(including the Topps SA Letters of Credit) or a Standby Letter of Credit.

               "LIBO Rate" means,  with respect to any Eurodollar  Borrowing for
any Interest  Period,  the rate  appearing on Page 3750 of the Dow Jones Service
(or on any successor or substitute page of such Service,  or any successor to or
substitute  for such  Service,  providing  rate  quotations  comparable to those
currently provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing  quotations of interest rates  applicable
to dollar deposits in the London interbank market) at approximately  11:00 a.m.,
London  time,  two  Business  Days prior to the  commencement  of such  Interest
Period,  as the rate for  dollar  deposits  with a maturity  comparable  to such
Interest  Period.  In the event that such rate is not available at such time for
any reason,  then the "LIBO Rate" with respect to such Eurodollar  Borrowing for
such  Interest  Period shall be the rate at which dollar  deposits of $5,000,000
and for a  maturity  comparable  to such  Interest  Period  are  offered  by the
principal  London  office of the  Agent in  immediately  available  funds in the
London interbank market at approximately  11:00 a.m.,  London time, two Business
Days prior to the commencement of such Interest Period.

               "Lien" means, with respect to any asset,  (a) any mortgage,  deed
of trust, lien, pledge, hypothecation,  encumbrance, charge or security interest
in, on or of such  asset,  (b) the  interest  of a vendor or a lessor  under any
conditional sale agreement,  capital lease or title retention  agreement (or any
financing  lease having  substantially  the same  economic  effect as any of the

                                       10
<PAGE>

foregoing)  relating  to such  asset  and  (c) in  the case of  securities,  any
purchase  option,  call or similar  right of a third party with  respect to such
securities.

               "Loan Documents" means this Agreement, the Security Documents and
any other instrument or agreement executed and delivered in connection  herewith
or therewith.

               "Loans"  means  the loans  made by the  Lenders  to the  Borrower
pursuant to this Agreement.

               "Margin  Stock" means  "Margin  Stock" as that term is defined in
Regulation U of the Board.

               "Material  Adverse  Effect"  means a material  adverse  effect on
(a) the business,  assets,  operations or condition,  financial or otherwise, of
the  Borrower  and the  Subsidiaries  taken as a whole,  (b) the  ability of the
Borrower to perform any of its  obligations  under any Loan  Document or (c) the
validity  or  enforceability  of any Loan  Document or the rights of or benefits
available to the Lenders under any Loan Document.

               "Material  Indebtedness" means Indebtedness (other than the Loans
and  Letters of  Credit),  or  obligations  in  respect  of one or more  Hedging
Agreements,  of any one or more of the  Borrower and its  Subsidiaries,  in each
case with a principal amount  outstanding of at least $750,000.  For purposes of
determining Material Indebtedness,  the "principal amount" of the obligations of
the Borrower or any  Subsidiary in respect of any Hedging  Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting  agreements)
that the  Borrower or such  Subsidiary  would be required to pay if such Hedging
Agreement were terminated at such time.

               "Material Licenses" shall mean the licenses set forth on Schedule
5.04.


               "Moody's" means Moody's Investors Service, Inc.

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

               Nationsbank  Facility"  means the term loan and revolving  credit
facility  made  available  to the  Borrower  pursuant  to  that  certain  Credit
Agreement,  dated  as  of  June  30,  1995,  as  amended,  among  the  Borrower,
Nationsbank,  National  Association  (Carolinas),  as agent,  Chemical  Bank, as
documentation agent and the lenders party thereto.

               "Negative  Contribution"  shall  mean,  if  negative,  the number
obtained by subtracting from revenues  anticipated to be generated in respect of
any Material  License the direct costs  attributable  such Material License in a
manner consistent with historical applications.

               "Net  Proceeds"  means,  with  respect  to any event (a) the cash
proceeds  received  in respect  of such event  including  any cash  received  in
respect of any non-cash proceeds,  but only as and when received, net of (b) the
sum of (i) all reasonable fees and  out-of-pocket  expenses paid by the Borrower
and the Subsidiaries to third parties (other than Affiliates) in connection with

                                       11
<PAGE>

such event,  (ii) in the case of a sale or other  disposition  of an asset,  the
amount of all payments  required to be made by the Borrower and the Subsidiaries
as a result of such event to repay  Indebtedness  (other than Loans)  secured by
such asset or  otherwise  subject to  mandatory  prepayment  as a result of such
event,  and (iii) the amount of all taxes paid (or  reasonably  estimated  to be
payable) by the  Borrower and the  Subsidiaries,  and the amount of any reserves
established by the Borrower and the Subsidiaries to fund contingent  liabilities
reasonably estimated to be payable, in each case during the year that such event
occurred or the next succeeding year and that are directly  attributable to such
event (as determined reasonably and in good faith by the chief financial officer
of the Borrower).

               "Normalized  EBITDA"  means,  for any  period,  Consolidated  Net
Income (or net loss) of the Borrower and its  Subsidiaries  for such period plus
the sum of (i) depreciation expense, (ii) amortization expense,  (iii) net total
income tax  expense  and (iv)  interest  expense  (as  certified  by a Financial
Officer on a quarterly basis) for such period,  all determined on a consolidated
basis in accordance with GAAP applied on a consistent  basis;  provided that for
purposes of calculating  Normalized  EBITDA for fiscal  quarters  ending May 30,
1997,  November  28,  1997  and  February  28,  1998,  there  shall  be added to
Consolidated  Net  Income  (or net  loss)  for  such  quarters  the  amounts  of
$2,853,000,   $3,044,000  and  $10,646,000,   respectively,   which  arise  from
extraordinary losses or non-cash charges, as the case may be.

               "Obligations"  means the  collective  reference to (i) the unpaid
principal of and interest on the Loans and all other obligations and liabilities
of the  Borrower  to the Agent or any  Lender  (including,  without  limitation,
interest accruing at the then-applicable rate provided herein after the maturity
of the Loans and interest accruing at the  then-applicable  rate provided herein
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),  whether  direct or  indirect,  absolute or  contingent,  due or to
become due, now existing or hereafter incurred, that may arise under, out of, or
in connection  with this  Agreement,  the other Loan  Documents,  the Letters of
Credit (including,  without  limitation,  the Topps SA Letters of Credit) or any
other  documents made,  delivered or given in connection  herewith or therewith,
whether on account of  principal,  interest,  reimbursement  obligations,  fees,
indemnities,  costs, expenses or otherwise (including,  without limitation,  all
fees and  disbursements of counsel to the Agent or the Lenders that are required
to be paid by the  Borrower  or any  Subsidiary  pursuant  to the  terms of this
Agreement or any other Loan Document) and (ii) all  obligations  and liabilities
of the Borrower to any Lender or any  affiliate of a Lender,  whether  direct or
indirect,  absolute  or  contingent,  due or to  become  due,  now  existing  or
hereafter  incurred,  that may arise under,  out of, or in  connection  with any
Hedging  Agreement or any other document made,  delivered or given in connection
therewith.

               "Other  Taxes"  means  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  under  any Loan  Document  or from the
execution,  delivery or  enforcement  of, or otherwise with respect to, any Loan
Document, but Other Taxes shall not include Excluded Taxes.

               "PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any  successor  entity  performing  similar  functions.

                                       12
<PAGE>

               "Perfection  Certificate"  means  a  certificate  in the  form of
Exhibit C or any other form approved by the Agent.

               "Permitted Encumbrances" means:

               (a) Liens  imposed  by law for taxes  that are not yet due or are
        being contested in compliance with Section 5.05;

               (b)   carriers',   warehousemen's,   mechanics',   materialmen's,
        repairmen's and other like Liens imposed by law, arising in the ordinary
        course of business and securing obligations that are not overdue by more
        than 30 days or are being contested in compliance with Section 5.05;

               (c) pledges and deposits made in the ordinary  course of business
        in compliance  with workers'  compensation,  unemployment  insurance and
        other social security laws or regulations;

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

               (e) judgment liens in respect of judgments that do not constitute
        an Event of Default under clause (k) of Article VII; and

               (f) easements,  zoning  restrictions,  rights-of-way  and similar
        encumbrances on real property  imposed by law or arising in the ordinary
        course of business  that do not secure any monetary  obligations  and do
        not  materially  detract  from the  value of the  affected  property  or
        interfere  with the ordinary  conduct of business of the Borrower or any
        Subsidiary;

provided  that the term  "Permitted  Encumbrances"  shall not  include  any Lien
securing Indebtedness.

               "Permitted Investments" means:

               (a) direct  obligations  of, or obligations  the principal of and
        interest on which are  unconditionally  guaranteed by, the United States
        of America (or by any agency thereof to the extent such  obligations are
        backed by the full faith and credit of the United States of America), in
        each case maturing within one year from the date of acquisition thereof;

               (b) investments in commercial paper maturing within 270 days from
        the date of acquisition thereof and having, at such date of acquisition,
        the highest credit rating obtainable from S&P or from Moody's;

               (c) investments in certificates of deposit,  banker's acceptances
        and time deposits  maturing within 180 days from the date of acquisition
        thereof issued or guaranteed by or placed with, and money market deposit

                                       13
<PAGE>

        accounts  issued or offered by, any  domestic  office of any  commercial
        bank  organized  under the laws of the  United  States of America or any
        State  thereof  which has a combined  capital and surplus and  undivided
        profits of not less than $500,000,000;

               (d) fully collateralized repurchase agreements with a term of not
        more  than 30 days for  securities  described  in  clause  (a) above and
        entered  into  with a  financial  institution  satisfying  the  criteria
        described in clause (c) above;

               (e) shares of mutual funds which invest in obligations  described
        in  paragraphs  (a) through (d) above,  the shares of which mutual funds
        are at all times rated "AAA" by S&P; and

               (f)  shares of "money  market  funds" of  financial  institutions
        rated A or better by S&P or A2 or better by  Moody's  and  shares of the
        Strong Municipal Money Market Fund.

               "Person" means any natural person, corporation, limited liability
company, trust, joint venture, association,  company, partnership,  Governmental
Authority or other entity.

               "Plan"  means any  employee  pension  benefit  plan (other than a
Multiemployer   Plan)  subject  to  the  provisions  of  Title IV  of  ERISA  or
Section 412  of the Code or  Section 302  of ERISA,  and in respect of which the
Borrower  or any ERISA  Affiliate  is (or, if such plan were  terminated,  would
under  Section 4069  of ERISA be  deemed  to be) an  "employer"  as  defined  in
Section 3(5) of ERISA.

               "Pledge  Agreement" means the Pledge  Agreement,  dated as of the
Effective Date, between the Borrower and the Agent, substantially in the form of
Exhibit D.

               "Prepayment  Event"  means the  issuance  by the  Borrower or any
Subsidiary  of any equity  securities,  or the  receipt by the  Borrower  or any
Subsidiary of any capital  contribution,  other than any such issuance of equity
securities to, or receipt of any such capital contribution from, the Borrower or
a Subsidiary.

               "Prime  Rate"  means  the rate of  interest  per  annum  publicly
announced  from time to time by The Chase  Manhattan  Bank as its prime  rate in
effect at its principal  office in New York City;  each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.

               "Register" has the meaning set forth in Section 9.04.

               "Related  Parties" means,  with respect to any specified  Person,
such Person's  Affiliates and the  respective  directors,  officers,  employees,
agents and advisors of such Person and such Person's Affiliates.

               "Required  Lenders" means, at any time,  Lenders having Revolving
Exposures,  Term Loans and unused  Commitments  representing at least 66-2/3% of
the sum of the total  Revolving  Exposures,  outstanding  Term  Loans and unused
Commitments at such time.

                                       14
<PAGE>

               "Restricted  Payment"  means any  dividend or other  distribution
(whether in cash,  securities or other  property)  with respect to any shares of
any class of capital  stock of the  Borrower or any  Subsidiary,  or any payment
(whether in cash,  securities or other property),  including any sinking fund or
similar   deposit,   on  account  of  the  purchase,   redemption,   retirement,
acquisition,  cancelation  or termination of any such shares of capital stock of
the Borrower or any Subsidiary or any option,  warrant or other right to acquire
any such shares of capital stock of the Borrower or any Subsidiary.

               "Revolving   Availability  Period"  means  the  period  from  and
including  the  Effective  Date to but  excluding  the earlier of the  Revolving
Maturity Date and the date of termination of the Revolving Commitments.

               "Revolving  Commitment"  means, with respect to each Lender,  the
commitment,  if any,  of such  Lender to make  Revolving  Loans  and to  acquire
participations  in  Letters  of  Credit   hereunder,   expressed  as  an  amount
representing the maximum  aggregate amount of such Lender's  Revolving  Exposure
hereunder,  as such  commitment may be (a) reduced from time to time pursuant to
Section  2.08  and (b)  reduced  or  increased  from  time to time  pursuant  to
assignments  by or to such Lender  pursuant to Section 9.04.  The amount of each
Lender's  Revolving  Commitment  is  set  forth  on  Schedule  2.01,  or in  the
Assignment and  Acceptance  pursuant to which such Lender shall have assumed its
Revolving  Commitment,  as  applicable.  The  aggregate  amount of the  Lenders'
Revolving Commitments is $9,450,000.

               "Revolving Direct Borrowing Maximum Amount" means $6,000,000.

               "Revolving  Exposure"  means,  with  respect to any Lender at any
time, the sum of the  outstanding  principal  amount of such Lender's  Revolving
Loans and its LC Exposure at such time.

               "Revolving Lender" means a Lender with a Revolving Commitment or,
if the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.

               "Revolving  Loan"  means a Loan made  pursuant  to clause  (b) of
Section 2.01.

               "Revolving Maturity Date" means July 6, 2000.

               "S&P" means Standard & Poor's.

               "Security  Documents" means the Pledge  Agreement,  the Trademark
Security  Agreement  and each other  security  agreement or other  instrument or
document  executed and delivered  pursuant to Section 5.14 or 5.15 to secure any
of the Obligations.

               "Standby  Letter of Credit" shall mean a standby letter of credit
in form and substance  customarily  issued by the Issuing Bank from time to time
and in form and  substance  acceptable  to the  Agent and the  Issuing  Bank and
issued  for such  purposes  for which the  Borrower  has  historically  obtained
standby  letters  of  credit,  or for  such  other  purposes  as are  reasonably
acceptable to the Agent and the Issuing Bank.

                                       15
<PAGE>

               "Standby Letter of Credit  Outstandings" shall mean, at any time,
the sum of (i) the aggregate  undrawn  stated  amount of all Standby  Letters of
Credit then  outstanding plus (ii) all amounts  theretofore  drawn under Standby
Letters of Credit and not then reimbursed.

               "Statutory  Reserve  Rate"  means  a  fraction  (expressed  as  a
decimal),  the numerator of which is the number one and the denominator of which
is the  number  one minus  the  aggregate  of the  maximum  reserve  percentages
(including any marginal,  special, emergency or supplemental reserves) expressed
as a decimal  established  by the Board to which the Agent is  subject  (a) with
respect to the Base CD Rate,  for new  negotiable  nonpersonal  time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Adjusted LIBO Rate, for eurocurrency  funding (currently
referred to as  "Eurocurrency  Liabilities" in Regulation D of the Board).  Such
reserve  percentages shall include those imposed pursuant to such  Regulation D.
Eurodollar  Loans shall be deemed to constitute  eurocurrency  funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions  or  offsets  that may be  available  from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

               "subsidiary"  means, with respect to any Person (the "parent") at
any date, any corporation,  limited liability company, partnership,  association
or other  entity the accounts of which would be  consolidated  with those of the
parent in the  parent's  consolidated  financial  statements  if such  financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership,  association or other
entity (a) of which securities or other ownership  interests  representing  more
than 50% of the equity or more than 50% of the ordinary  voting power or, in the
case of a partnership,  more than 50% of the general partnership  interests are,
as of such date,  owned,  controlled  or held,  or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

               "Subsidiary" means any subsidiary of the Borrower.

               "Taxes"  means  any and all  present  or  future  taxes,  levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.

               "Term Loan"  means a Loan made  pursuant to clause (a) of Section
2.01.

               "Term Loan Commitment"  means,  with respect to each Lender,  the
commitment,  if  any,  of  such  Lender  to make a Term  Loan  hereunder  on the
Effective Date, expressed as an amount representing the maximum principal amount
of the Term Loan to be made by such Lender hereunder,  as such commitment may be
(a)  reduced  from time to time  pursuant  to  Section  2.08 and (b)  reduced or
increased  from  time to  time  pursuant  to  assignments  by or to such  Lender
pursuant  to  Section  9.04.  The  initial  amount  of each  Lender's  Term Loan
Commitment is set forth on  Schedule 2.01,  or in the  Assignment and Acceptance
pursuant to which such Lender  shall have assumed its Term Loan  Commitment,  as
applicable.  The  aggregate  amount of the  Lenders'  Term Loan  Commitments  is
$24,950,000. 

                                       16
<PAGE>

               "Term Loan Lender" means a Lender with a Term Loan  Commitment or
an outstanding Term Loan.

               "Term Loan Maturity Date" means July 6, 2000.

               "Three-Month Secondary CD Rate" means, 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 is not a Business Day, the next preceding  Business
Day) by the Board through the public  information  telephone line of the Federal
Reserve Bank of New York  (which rate will,  under the current  practices of the
Board, be published in Federal Reserve Statistical  Release H.15(519) during the
week following such day) or, if such rate is not 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 is not a Business Day, on the next preceding Business Day) by the Agent
from three  negotiable  certificate  of deposit  dealers of recognized  standing
selected by it.

               "Topps SA" shall  mean  Topps  Latin  America  SA, a  corporation
organized under the laws of Uruguay.

               "Topps SA Guaranty" means the Guaranty, dated as of the Effective
Date,  between the Borrower and the Agent,  substantially in the form of Exhibit
G.

               "Topps SA Letters of Credit" means Documentary  Letters of Credit
issued for the account of Topps SA for the benefit of its vendors, reimbursement
obligations in respect of which are guaranteed by the Borrower.

               "Topps SA Letter of Credit  Outstandings" means, at any time, the
sum of (i) the aggregate undrawn stated amount of all Topps SA Letters of Credit
then outstanding plus (ii) all amounts  theretofore drawn under Topps SA Letters
of Credit and not then reimbursed.

               "Trademark  Security  Agreement"  means  the  Trademark  Security
Agreement,  dated as of the Effective Date,  between the Borrower and the Agent,
substantially in the form of Exhibit E.

               "Traveler Letter of Credit" shall mean a Standby Letter of Credit
issued under this Agreement in favor of The Travelers Company.

               "Type",  when used in reference to any Loan or Borrowing,  refers
to whether the rate of interest on such Loan,  or on the Loans  comprising  such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.

               "Ulster Bank Debt" means the Indebtedness owing to Ulster Bank by
Topps Ireland Limited, as described in items a. through f. of Section 6.04(g).

               "Withdrawal Liability" means liability to a Multiemployer Plan as
a result of a complete or partial  withdrawal from such  Multiemployer  Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.

                                       17
<PAGE>

               Section  1.02.  Classification  of  Loans  and  Borrowings.   For
purposes of this  Agreement,  Loans may be  classified  and referred to by Class
(e.g., a "Revolving  Loan") or by Type (e.g.,  a "Eurodollar  Loan") or by Class
and  Type  (e.g.,  a  "Eurodollar  Revolving  Loan").  Borrowings  also  may  be
classified and referred to by Class (e.g.,  a "Revolving  Borrowing") or by Type
(e.g.,  a  "Eurodollar  Borrowing")  or by Class and Type (e.g.,  a  "Eurodollar
Revolving Borrowing").

               Section 1.03.  Terms  Generally.  The definitions of terms herein
shall  apply  equally to the  singular  and plural  forms of the terms  defined.
Whenever the context may require,  any pronoun shall  include the  corresponding
masculine,  feminine  and neuter  forms.  The words  "include",  "includes"  and
"including"  shall be deemed to be followed by the phrase "without  limitation".
The word "will"  shall be  construed  to have the same meaning and effect as the
word "shall".  Unless the context  requires  otherwise (a) any  definition of or
reference  to any  agreement,  instrument  or  other  document  herein  shall be
construed as referring to such  agreement,  instrument or other document as from
time to  time  amended,  supplemented  or  otherwise  modified  (subject  to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any  reference  herein to any Person  shall be  construed  to  include  such
Person's  successors  and  assigns,   (c)  the  words  "herein",   "hereof"  and
"hereunder",  and words of similar  import,  shall be construed to refer to this
Agreement in its entirety and not to any particular  provision  hereof,  (d) all
references  herein  to  Articles,  Sections,  Exhibits  and  Schedules  shall be
construed to refer to Articles and Sections of, and Exhibits and  Schedules  to,
this  Agreement and (e) the words "asset" and  "property"  shall be construed to
have the same  meaning  and  effect  and to  refer to any and all  tangible  and
intangible  assets and  properties,  including  cash,  securities,  accounts and
contract rights.

               Section  1.04.   Accounting  Terms;  GAAP.  Except  as  otherwise
expressly  provided herein, all terms of an accounting or financial nature shall
be construed in accordance  with GAAP, as in effect from time to time;  provided
that, if the Borrower notifies the Agent that the Borrower requests an amendment
to any provision  hereof to eliminate the effect of any change  occurring  after
the date hereof in GAAP or in the  application  thereof on the operation of such
provision  (or if the Agent  notifies  the Borrower  that the  Required  Lenders
request an amendment to any provision  hereof for such  purpose),  regardless of
whether any such  notice is given  before or after such change in GAAP or in the
application  thereof,  then such provision  shall be interpreted on the basis of
GAAP as in effect and applied  immediately  before such change shall have become
effective until such notice shall have been withdrawn or such provision  amended
in accordance herewith.

                                   ARTICLE II

                                   The Credits

               Section 2.01.  Commitments.  Subject to the terms and  conditions
set forth herein,  each Lender agrees (a) to make a Term Loan to the Borrower on
the Effective Date in a principal amount not exceeding its Term Loan Commitment,
and (b) to make  Revolving  Loans to the  Borrower  from time to time during the
Revolving  Availability  Period in an aggregate  principal  amount that will not
result in (i) such Lender's Revolving Exposure exceeding such Lender's Revolving
Commitment or (ii) the aggregate  amount of all  Revolving  Loans  exceeding the

                                       18
<PAGE>

Revolving  Direct  Borrowing  Maximum  Amount.  Within the foregoing  limits and
subject to the terms and conditions  set forth herein,  the Borrower may borrow,
prepay and reborrow Revolving Loans. Amounts repaid in respect of Term Loans may
not be reborrowed.

               Section 2.02.  Loans and Borrowings.  (a) Each Loan shall be made
as part of a  Borrowing  consisting  of Loans of the same Class and Type made by
the Lenders  ratably in  accordance  with their  respective  Commitments  of the
applicable Class. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder;  provided
that  the  Commitments  of the  Lenders  are  several  and no  Lender  shall  be
responsible for any other Lender's failure to make Loans as required.

               (b)Subject to  Section 2.14,  each  Revolving  Borrowing and Term
Borrowing  shall be comprised  entirely of ABR Loans or Eurodollar  Loans as the
Borrower may request in accordance herewith.  Each Lender at its option may make
any  Eurodollar  Loan by causing any domestic or foreign  branch or Affiliate of
such Lender to make such Loan;  provided  that any exercise of such option shall
not affect the obligation of the Borrower to repay such Loan in accordance  with
the terms of this Agreement.

               (c)  At  the   commencement  of  each  Interest  Period  for  any
Eurodollar Borrowing,  such Borrowing shall be in an aggregate amount that is an
integral  multiple of $100,000  and not less than  $1,000,000.  At the time that
each ABR Revolving  Borrowing is made,  such Borrowing  shall be in an aggregate
amount that is an integral  multiple of $100,000  and not less than  $1,000,000;
provided that an ABR Revolving  Borrowing may be in an aggregate  amount that is
equal to the entire unused balance of the total Revolving Commitments or that is
required to finance the  reimbursement  of an LC Disbursement as contemplated by
Section  2.05(e).  Borrowings of more than one Type and Class may be outstanding
at the same time.

               (d)Notwithstanding  any other  provision of this  Agreement,  the
Borrower  shall not be entitled to request,  or to elect to convert or continue,
any Borrowing if the Interest  Period  requested with respect  thereto would end
after the Revolving Maturity Date or the Term Loan Maturity Date, as applicable.

               Section  2.03.  Requests for  Borrowings.  To request a Revolving
Borrowing,  the Borrower shall notify the Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing,  not later than 11:00 a.m., New York City
time,  three  Business Days before the date of the proposed  Borrowing or (b) in
the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of the proposed  Borrowing;  provided that any such
notice of an ABR  Revolving  Borrowing  to finance  the  reimbursement  of an LC
Disbursement  as  contemplated  by  Section 2.05(e)  may be given not later than
10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such
telephonic  Borrowing  Request  shall be  irrevocable  and  shall  be  confirmed
promptly  by hand  delivery  or  telecopy  to the Agent of a  written  Borrowing
Request in a form  approved by the Agent and signed by the  Borrower.  Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:

               (i) the aggregate amount of such Borrowing;

                                       19
<PAGE>

               (ii) the date of such Borrowing, which shall be a Business Day;

               (iii)  whether  such  Borrowing  is to be an ABR  Borrowing  or a
Eurodollar Borrowing;

               (iv) in the case of a Eurodollar Borrowing,  the initial Interest
Period to be applicable  thereto,  which shall be a period  contemplated  by the
definition of the term "Interest Period"; and

               (v) the  location and number of the  Borrower's  account to which
funds are to be disbursed,  which shall comply with the  requirements of Section
2.06.

               If no election as to the Type of Borrowing is specified, then the
requested  Borrowing  shall  be an  ABR  Borrowing.  If no  Interest  Period  is
specified with respect to any requested Eurodollar Revolving Borrowing, then the
Borrower  shall be deemed to have  selected  an  Interest  Period of one month's
duration.  Promptly  following receipt of a Borrowing Request in accordance with
this Section,  the Agent shall advise each Lender of the details  thereof and of
the amount of such Lender's Loan to be made as part of the requested Borrowing.

               Section 2.04. [This Section intentionally left blank.]

               Section 2.05. Letters of Credit.(a) General. Subject to the terms
and  conditions  set forth  herein,  the  Borrower  may request the  issuance of
Documentary Letters of Credit (including Topps SA Letters of Credit) and Standby
Letters of Credit for its own  account  and for the  account of Topps SA (in the
case of the Topps SA Letters of Credit), in a form reasonably  acceptable to the
Agent  and the  Issuing  Bank,  at any  time and from  time to time  during  the
Revolving  Availability  Period. In the event of any  inconsistency  between the
terms and  conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit,  the terms and conditions of this Agreement shall control.  The Borrower
shall not be obligated  under any such letter of credit  application  or related
documents to provide collateral to the Issuing Bank other than (x) that which is
required to be provided under this  Agreement or (y) a security  interest in the
goods in respect of which such letter of credit is being issued.

               (b) Notice of Issuance,  Amendment,  Renewal, Extension;  Certain
Conditions.  To request the  issuance  of a Letter of Credit (or the  amendment,
renewal or extension of an  outstanding  Letter of Credit),  the Borrower  shall
hand  deliver  or  telecopy  (or  transmit  by  electronic   communication,   if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Agent  (reasonably  in advance of the  requested  date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended,  renewed or extended,
and  specifying  the date of issuance,  amendment,  renewal or extension  (which
shall be a Business  Day),  the date on which such Letter of Credit is to expire
(which  shall comply with  paragraph (c)  of this  Section),  the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit.  If requested by the Issuing  Bank,  the Borrower also shall submit a

                                       20
<PAGE>

letter of credit  application on the Issuing Bank's  standard form in connection
with any request for a Letter of Credit.  The  Borrower  shall not be  obligated
under any such  letter of credit  application  or related  documents  to provide
collateral  to the  Issuing  Bank other than (x) that  which is  required  to be
provided under this Agreement or (y) a security interest in the goods in respect
of which  such  letter of credit is being  issued.  A Letter of Credit  shall be
issued,  amended,  renewed or extended  only if (and upon  issuance,  amendment,
renewal or extension  of each Letter of Credit the  Borrower  shall be deemed to
represent and warrant that),  after giving effect to such  issuance,  amendment,
renewal or extension (i) the Documentary Letter of Credit Outstandings shall not
exceed  $4,500,000,  (ii) the Standby  Letter of Credit  Outstandings  shall not
exceed  $700,000,  (iii) the Topps SA  Letter of Credit  Outstandings  shall not
exceed $2,000,000,  and (iv) the total Revolving  Exposures shall not exceed the
total Revolving Commitments.

               (c)  Expiration  Date.  Each  Letter  of  Credit  other  than the
Traveler  Letter of Credit  shall expire at or prior to the close of business on
the  earlier of (i) the  date one year  after the date of the  issuance  of such
Letter of Credit (or, in the case of any renewal or extension thereof,  one year
after such renewal or  extension)  and (ii) the  date that is five Business Days
prior to the Revolving Maturity Date. The Traveler Letter of Credit shall expire
at or prior to the close of business July 24, 2003.

               (d) Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit  increasing the amount  thereof) and without any
further action on the part of the Issuing Bank or the Lenders,  the Issuing Bank
hereby  grants  to each  Revolving  Lender,  and each  Revolving  Lender  hereby
acquires from the Issuing Bank, a  participation  in such Letter of Credit equal
to such Lender's  Applicable  Percentage of the aggregate amount available to be
drawn under such Letter of Credit.  In  consideration  and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Agent, for the account of the Issuing Bank, such Lender's  Applicable
Percentage of each LC  Disbursement  made by the Issuing Bank and not reimbursed
by the Borrower on the date due as provided in paragraph (e) of this Section, or
of any  reimbursement  payment  required to be refunded to the  Borrower for any
reason.  Each  Lender  acknowledges  and agrees that its  obligation  to acquire
participations  pursuant  to this  paragraph  in respect of Letters of Credit is
absolute  and  unconditional  and  shall  not be  affected  by any  circumstance
whatsoever,  including  any  amendment,  renewal or  extension  of any Letter of
Credit  or  the  occurrence  and  continuance  of  a  Default  or  reduction  or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

               (e)  Reimbursement.  If  the  Issuing  Bank  shall  make  any  LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC  Disbursement  by paying to the Agent an amount equal to such LC Disbursement
not  later  than  12:00  noon,  New York  City  time,  on the date  that such LC
Disbursement  is made,  if the Borrower  shall have  received  notice of such LC
Disbursement  prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been  received by the  Borrower  prior to such time on such date,
then not later than 12:00 noon, New York City time, on (i) the Business Day that
the Borrower  receives  such notice,  if such notice is received  prior to 10:00
a.m.,  New York City  time,  on the day of  receipt,  or (ii) the  Business  Day
immediately  following the day that the Borrower  receives such notice,  if such
notice is not received  prior to such time on the day of receipt;  provided that
the Borrower  may,  subject to the  conditions  to borrowing  set forth  herein,

                                       21
<PAGE>

request in  accordance  with Section 2.03 that such payment be financed  with an
ABR Revolving  Borrowing in an equivalent amount and, to the extent so financed,
the Borrower's  obligation to make such payment shall be discharged and replaced
by the  resulting ABR Revolving  Borrowing.  If the Borrower  fails to make such
payment when due, the Agent shall notify each Revolving Lender of the applicable
LC  Disbursement,  the payment then due from the Borrower in respect thereof and
such Lender's Applicable Percentage thereof.  Promptly following receipt of such
notice,  each Revolving Lender shall pay to the Agent its Applicable  Percentage
of the  payment  then due from the  Borrower,  in the same manner as provided in
Section 2.06 with respect to Loans made by such Lender (and  Section 2.06  shall
apply,  mutatis mutandis,  to the payment obligations of the Revolving Lenders),
and the Agent shall  promptly pay to the Issuing Bank the amounts so received by
it from the Revolving  Lenders.  Promptly  following receipt by the Agent of any
payment from the Borrower pursuant to this paragraph, the Agent shall distribute
such payment to the Issuing Bank or, to the extent that  Revolving  Lenders have
made payments  pursuant to this paragraph to reimburse the Issuing Bank, then to
such Lenders and the Issuing  Bank as their  interests  may appear.  Any payment
made by a Revolving  Lender  pursuant to this paragraph to reimburse the Issuing
Bank for any LC  Disbursement  (other than the funding of ABR Revolving Loans as
contemplated  above)  shall not  constitute  a Loan and shall  not  relieve  the
Borrower of its obligation to reimburse such LC Disbursement.

               (f) Obligations Absolute.  The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional  and  irrevocable,  and shall be performed  strictly in accordance
with the terms of this Agreement under any and all circumstances  whatsoever and
irrespective  of (i) any lack of  validity  or  enforceability  of any Letter of
Credit or this Agreement,  or any term or provision  therein,  (ii) any draft or
other  document  presented  under a  Letter  of  Credit  proving  to be  forged,
fraudulent  or invalid in any respect or any  statement  therein being untrue or
inaccurate  in any respect,  (iii) payment by the Issuing Bank under a Letter of
Credit  against  presentation  of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever,  whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Agent,  the Lenders nor the Issuing Bank, nor any of their Related  Parties,
shall have any liability or  responsibility  by reason of or in connection  with
the  issuance  or  transfer of any Letter of Credit or any payment or failure to
make any payment thereunder  (irrespective of any of the circumstances  referred
to in the preceding sentence),  or any error,  omission,  interruption,  loss or
delay in  transmission or delivery of any draft,  notice or other  communication
under or relating to any Letter of Credit  (including  any document  required to
make a drawing  thereunder),  any error in  interpretation of technical terms or
any  consequence  arising  from causes  beyond the control of the Issuing  Bank;
provided  that the  foregoing  shall not be construed to excuse the Issuing Bank
from  liability to the Borrower to the extent of any direct  damages (as opposed
to  consequential  damages,  claims in respect of which are hereby waived by the
Borrower to the extent  permitted by  applicable  law)  suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise care when  determining
whether  drafts and other  documents  presented  under a Letter of Credit comply
with the terms thereof.  The parties hereto expressly agree that, in the absence
of gross  negligence  or wilful  misconduct  on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall

                                       22
<PAGE>

be deemed to have exercised care in each such  determination.  In furtherance of
the foregoing and without  limiting the  generality  thereof,  the parties agree
that,  with respect to documents  presented  which appear on their face to be in
substantial  compliance  with the terms of a Letter of Credit,  the Issuing Bank
may, in its sole discretion,  either accept and make payment upon such documents
without  responsibility for further  investigation,  regardless of any notice or
information  to the  contrary,  or refuse to accept and make  payment  upon such
documents if such documents are not in strict  compliance with the terms of such
Letter of Credit.

               (g)  Disbursement  Procedures.  The Issuing Bank shall,  promptly
following its receipt thereof,  examine all documents  purporting to represent a
demand for payment  under a Letter of Credit.  The Issuing  Bank shall  promptly
notify the Agent and the Borrower by telephone  (confirmed  by telecopy) of such
demand for payment  and  whether  the  Issuing  Bank has made or will make an LC
Disbursement  thereunder;  provided  that any failure to give or delay in giving
such notice shall not relieve the Borrower of its  obligation  to reimburse  the
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

               (h)  Interim  Interest.  If the  Issuing  Bank  shall make any LC
Disbursement,  then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC  Disbursement  is made, the unpaid amount thereof shall
bear interest,  for each day from and including the date such LC Disbursement is
made  to  but  excluding  the  date  that  the  Borrower   reimburses   such  LC
Disbursement,  at the rate per annum then  applicable  to ABR  Revolving  Loans;
provided that, if the Borrower fails to reimburse such LC Disbursement  when due
pursuant to  paragraph (e)  of this Section,  then Section  2.13(c) shall apply.
Interest  accrued  pursuant  to this  paragraph  shall be for the account of the
Issuing Bank,  except that interest  accrued on and after the date of payment by
any Revolving  Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing  Bank  shall be for the  account  of such  Lender to the  extent of such
payment.

               (i)  Replacement  of the Issuing  Bank.  The Issuing  Bank may be
replaced at any time by written  agreement  among the Borrower,  the Agent,  the
replaced Issuing Bank and the successor Issuing Bank. The Agent shall notify the
Lenders  of any  such  replacement  of the  Issuing  Bank.  At the time any such
replacement  shall  become  effective,  the  Borrower  shall pay all unpaid fees
accrued  for the  account  of the  replaced  Issuing  Bank  pursuant  to Section
2.12(b).  From and after the  effective  date of any such  replacement,  (i) the
successor  Issuing Bank shall have all the rights and obligations of the Issuing
Bank  under  this  Agreement  with  respect  to  Letters  of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all  previous  Issuing  Banks,  as the  context  shall  require.  After  the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall  continue to have all the rights and  obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.

               (j)  Cash  Collateralization.  Subject  to the  provision  of the
following  sentence,  the Borrower  shall,  on or before the Revolving  Maturity
Date, deposit in an account with the Agent, in the name of the Agent and for the
benefit  of the  Lenders,  an amount in cash equal to 105% of the sum of (i) the
aggregate  undrawn stated amount of the Traveler  Letter of Credit plus (ii) all

                                       23
<PAGE>

amounts  theretofore  drawn  under the  Traveler  Letter of Credit  and not then
reimbursed plus (iii) any accrued and unpaid interest  thereon.  If any Event of
Default  shall occur and be  continuing,  on the  Business Day that the Borrower
receives  notice from the Agent or the Required  Lenders (or, if the maturity of
the Loans has been accelerated,  Revolving Lenders with LC Exposure representing
greater  than 66-2/3% of the total LC  Exposure)  demanding  the deposit of cash
collateral  pursuant to this paragraph,  the Borrower shall deposit in such cash
collateral  account,  an amount in cash equal to 105% of the LC  Exposure  as of
such date plus any  accrued  and  unpaid  interest  thereon;  provided  that the
obligation to deposit such cash collateral shall become  effective  immediately,
and such deposit shall become  immediately  due and payable,  without  demand or
other  notice of any kind,  upon the  occurrence  of any Event of  Default  with
respect to the Borrower  described in clause (h)  or (i) of Section  7.01.  Each
such  deposit  shall be held by the  Agent as  collateral  for the  payment  and
performance of the obligations of the Borrower under this  Agreement.  The Agent
shall have  exclusive  dominion and control,  including the  exclusive  right of
withdrawal,  over such account. Other than any interest earned on the investment
of such  deposits,  which  investments  shall  be made at the  option  and  sole
discretion of the Agent and at the  Borrower's  risk and expense,  such deposits
shall not bear interest.  Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the Agent
to  reimburse  the Issuing Bank for LC  Disbursements  for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the  reimbursement  obligations  of the  Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been  accelerated  (but subject to the
consent of Revolving Lenders with LC Exposure  representing greater than 66-2/3%
of the total LC  Exposure),  be  applied  to satisfy  other  obligations  of the
Borrower under this Agreement.  If the Borrower is required to provide an amount
of cash  collateral  hereunder  as a  result  of the  occurrence  of an Event of
Default,  such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three Business Days after all Events of Default have been
cured or waived. It is expressly agreed that amounts deposited into such account
in respect of the Traveler  Letter of Credit  shall remain on deposit  after the
termination  of  this  Agreement  so  long  as such  letter  of  credit  remains
outstanding,  and to the extent  that such  funds  have not been  applied to the
Borrower's  obligations,  shall  be  returned  to  the  Borrower  following  the
expiration of such letter of credit or the return thereof,  in each case without
the same having been drawn.

               Section 2.06.  Funding of Borrowings.  (a) Each Lender shall make
each  Loan to be made by it  hereunder  on the  proposed  date  thereof  by wire
transfer of  immediately  available  funds by 12:00 noon, New York City time, to
the  account of the Agent most  recently  designated  by it for such  purpose by
notice to the Lenders.  The Agent will make such Loans available to the Borrower
by promptly  crediting the amounts so received,  in like funds, to an account of
the Borrower  maintained  with the Agent in New York City and  designated by the
Borrower in the applicable Borrowing Request;  provided that ABR Revolving Loans
made to finance the  reimbursement  of an LC Disbursement as provided in Section
2.05(e) shall be remitted by the Agent to the Issuing Bank.

               (b) Unless the Agent  shall have  received  notice  from a Lender
prior to the  proposed  date of any  Borrowing  that such  Lender  will not make
available  to the Agent such  Lender's  share of such  Borrowing,  the Agent may
assume that such Lender has made such share available on such date in accordance
with  paragraph (a) of this Section and may, in reliance  upon such  assumption,

                                       24
<PAGE>

make  available  to the Borrower a  corresponding  amount.  In such event,  if a
Lender has not in fact made its share of the applicable  Borrowing  available to
the Agent, then the applicable Lender and the Borrower severally agree to pay to
the Agent forthwith on demand such  corresponding  amount with interest thereon,
for each day from and  including  the date such amount is made  available to the
Borrower to but excluding  the date of payment to the Agent,  at (i) in the case
of such  Lender,  the greater of the  Federal  Funds  Effective  Rate and a rate
determined by the Agent in accordance  with banking  industry rules on interbank
compensation  or (ii) in the case of the Borrower,  the interest rate applicable
to the Loans so funded by the  Agent.  If such  Lender  pays such  amount to the
Agent,  then such amount shall  constitute  such  Lender's Loan included in such
Borrowing.

               SECTION 2.07 INTEREST ELECTIONS (a) Each Revolving  Borrowing and
Term  Borrowing  initially  shall be of the  Type  specified  in the  applicable
Borrowing  Request  and, in the case of a  Eurodollar  Borrowing,  shall have an
initial Interest Period as specified in such Borrowing Request.  Thereafter, the
Borrower may elect to convert such  Borrowing to a different Type or to continue
such  Borrowing and, in the case of a Eurodollar  Borrowing,  may elect Interest
Periods  therefor,  all as  provided in this  Section.  The  Borrower  may elect
different options with respect to different portions of the affected  Borrowing,
in which case each such  portion  shall be allocated  ratably  among the Lenders
holding the Loans comprising such Borrowing,  and the Loans comprising each such
portion shall be considered a separate Borrowing.

               (b) To make an election  pursuant to this  Section,  the Borrower
shall  notify  the  Agent of such  election  by  telephone  by the  time  that a
Borrowing  Request  would be required  under  Section 2.03 if the Borrower  were
requesting a Revolving  Borrowing of the Type resulting from such election to be
made on the  effective  date of such  election.  Each such  telephonic  Interest
Election  Request shall be irrevocable  and shall be confirmed  promptly by hand
delivery or telecopy to the Agent of a written  Interest  Election  Request in a
form approved by the Agent and signed by the Borrower.

               (c) Each telephonic and written  Interest  Election Request shall
specify the following  information in compliance with Section 2.02 and paragraph
(f) of this Section:

               (i) the Borrowing to which such Interest Election Request applies
        and, if  different  options are being  elected with respect to different
        portions thereof, the portions thereof to be allocated to each resulting
        Borrowing  (in which case the  information  to be specified  pursuant to
        clauses  (iii) and (iv)  below  shall be  specified  for each  resulting
        Borrowing);

               (ii) the  effective  date of the election  made  pursuant to such
        Interest Election Request, which shall be a Business Day;

               (iii) whether the  resulting  Borrowing is to be an ABR Borrowing
        or a Eurodollar Borrowing; and

               (iv) if the resulting  Borrowing is a Eurodollar  Borrowing,  the
        Interest  Period to be  applicable  thereto  after giving effect to such
        election,  which shall be a period contemplated by the definition of the
        term "Interest Period".

                                       25
<PAGE>

               If any such  Interest  Election  Request  requests  a  Eurodollar
Borrowing but does not specify an Interest  Period,  then the Borrower  shall be
deemed to have selected an Interest Period of one month's duration.

               (d) Promptly  following  receipt of an Interest Election Request,
the Agent shall advise each Lender of the details  thereof and of such  Lender's
portion of each resulting Borrowing.

               (e) If the Borrower fails to deliver a timely  Interest  Election
Request with respect to a Eurodollar  Borrowing prior to the end of the Interest
Period  applicable  thereto,  then,  unless such Borrowing is repaid as provided
herein,  at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of
Default has  occurred  and is  continuing  and the Agent,  at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar  Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted  to an ABR  Borrowing  at the end of the  Interest  Period  applicable
thereto.

               SECTION 2.08. Termination and Reduction of Commitments.(a) Unless
previously  terminated,  (i) the Term Loan  Commitments  shall terminate at 5:00
p.m.,  New York  City  time,  on the  Effective  Date  and  (ii)  the  Revolving
Commitments shall terminate on the Revolving Maturity Date.

               (b) The Borrower may at any time terminate,  or from time to time
reduce,  the  Commitments of any Class;  provided that (i) each reduction of the
Commitments  of any Class shall be in an amount that is an integral  multiple of
$100,000 and not less than  $1,000,000 and (ii) the Borrower shall not terminate
or reduce the Revolving  Commitments  if, after giving effect to any  concurrent
prepayment of the Revolving  Loans in accordance  with Section 2.11,  the sum of
the Revolving Exposures would exceed the total Revolving Commitments.

               (c) The  Borrower  shall  notify  the  Agent of any  election  to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three  Business  Days  prior  to the  effective  date  of  such  termination  or
reduction,  specifying  such election and the effective  date thereof.  Promptly
following  receipt of any  notice,  the Agent  shall  advise the  Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be  irrevocable;  provided that a notice of  termination  of the Revolving
Commitments  delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Borrower (by notice to the Agent on or prior to the  specified
effective date) if such condition is not satisfied. Any termination or reduction
of the  Commitments  of any Class  shall be  permanent.  Each  reduction  of the
Commitments  of any Class shall be made ratably  among the Lenders in accordance
with their respective Commitments of such Class.

               SECTION  2.09.  Repayment  of Loans;  Evidence  of Debt.  (a) The
Borrower hereby unconditionally promises to pay (i) to the Agent for the account
of each Lender the then unpaid  principal  amount of each Revolving Loan of such

                                       26
<PAGE>

Lender on the  Revolving  Maturity Date and (ii) to the Agent for the account of
each Lender the then unpaid principal amount of each Term Loan of such Lender as
provided in Section 2.10.

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

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

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

               (e) Any Lender may request  that Loans of any Class made by it be
evidenced by a promissory  note.  In such event,  the  Borrower  shall  prepare,
execute  and deliver to such Lender a  promissory  note  payable to the order of
such Lender (or, if requested by such Lender,  to such Lender and its registered
assigns) and in a form approved by the Agent. Thereafter, the Loans evidenced by
such promissory note and interest  thereon shall at all times  (including  after
assignment  pursuant to Section 9.04) be represented  by one or more  promissory
notes in such form payable to the order of the payee named  therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

               SECTION  2.10.   Amortization  of  Term  Loans.  (a)  Subject  to
adjustment  pursuant to paragraph (c) of this Section,  the Borrower shall repay
Term Borrowings on each date set forth below in the aggregate  principal  amount
set forth opposite such date:

                                       27
<PAGE>

                  Date                               Amount

                  June 1, 1998                       $1,666,666.66
                  July 1, 1998                       $  833,333.33
                  August 1, 1998                     $  833,333.33
                  September 1, 1998                  $  833,333.33
                  October 1, 1998                    $  833,333.33
                  November 1, 1998                   $  833,333.33
                  December 1, 1998                   $  833,333.33
                  January 1, 1999                    $  833,333.33
                  February 1, 1999                   $  833,333.33
                  March 1, 1999                      $  833,333.33
                  April 1, 1999                      $  833,333.33
                  May 1, 1999                        $  833,333.33
                  June 1, 1999                       $  833,333.33
                  July 1, 1999                       $  833,333.33
                  August 1, 1999                     $1,041,666.68
                  September 1, 1999                  $1,041,666.68
                  October 1, 1999                    $1,041,666.68
                  November 1, 1999                   $1,041,666.68
                  December 1, 1999                   $1,041,666.68
                  January 1, 2000                    $1,041,666.68
                  February 1, 2000                   $1,041,666.68
                  March 1, 2000                      $1,041,666.68
                  April 1, 2000                      $1,041,666.68
                  May 1, 2000                        $1,041,666.68
                  June 1, 2000                       $1,041,666.68
                  July 6, 2000                       $  991,666.57

               (b) To the extent not  previously  paid,  Term Loans shall be due
and payable on the Term Loan Maturity Date.

               (c) Any prepayment of a Term Borrowing shall be applied to reduce
the subsequent  scheduled  repayments of the Term Borrowings to be made pursuant
to this Section in reverse chronological order.

SECTION 2.11.  Prepayment of Loans. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part,  subject
to the requirements of this Section.

               (b) Subject to the proviso set forth  below,  in the event and on
each occasion that any Net Proceeds are received by or on behalf of the Borrower
or any  Subsidiary  in respect of any  Prepayment  Event,  the  Borrower  shall,
immediately  after such Net Proceeds are received,  prepay Term Borrowings in an
aggregate  amount  equal to the  amount by which all such Net  Proceeds  arising
during the term of this Agreement exceeds  $5,000,000 in the manner specified in
Section 2.10(c).

                                       28
<PAGE>

               (c) Prior to any optional or mandatory  prepayment  of Borrowings
hereunder,  the Borrower  shall select the Borrowing or Borrowings to be prepaid
and shall specify such  selection in the notice of such  prepayment  pursuant to
paragraph (d)  of this Section;  provided that each  prepayment of Borrowings of
any Class  shall be applied to prepay ABR  Borrowings  of such Class  before any
other Borrowings of such Class.

               (d) The Borrower  shall notify the Agent by telephone  (confirmed
by telecopy) of any  prepayment  hereunder  (i) in the case of  prepayment  of a
Eurodollar Revolving  Borrowing,  not later than 11:00 a.m., New York City time,
three  Business  Days  before  the  date of  prepayment  or (ii) in the  case of
prepayment of an ABR Revolving  Borrowing,  not later than 11:00 a.m.,  New York
City time,  one  Business  Day before the date of  prepayment.  Each such notice
shall be irrevocable and shall specify the prepayment date, the principal amount
of each  Borrowing  or  portion  thereof  to be  prepaid  and,  in the case of a
mandatory  prepayment,  a reasonably detailed  calculation of the amount of such
prepayment;  provided  that,  if a notice  of  optional  prepayment  is given in
connection with a conditional notice of termination of the Revolving Commitments
as contemplated by  Section 2.08,  then such notice of prepayment may be revoked
if such  notice of  termination  is revoked  in  accordance  with  Section 2.08.
Promptly  following  receipt  of any such  notice,  the Agent  shall  advise the
Lenders of the contents thereof.  Each partial prepayment of any Borrowing shall
be in the  amount  of  $500,000  and  $100,000  increments  thereof,  except  as
necessary to apply fully the  required  amount of a mandatory  prepayment.  Each
prepayment of a Borrowing  shall be applied ratably to the Loans included in the
prepaid  Borrowing.  Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.13.

               SECTION 2.12.  Fees. (a) The Borrower  agrees to pay to the Agent
for the  account of each Lender a  commitment  fee,  which  shall  accrue at the
Applicable Rate on the average daily unused amount of each Revolving  Commitment
of such Lender during the period from and  including  the Effective  Date to but
excluding the date on which such Commitment terminates.  Accrued commitment fees
shall  be  payable  in  arrears  on the last day of May,  August,  November  and
February  of each  year  and on the  date on  which  the  Revolving  Commitments
terminate, commencing on the first such date to occur after the date hereof. All
commitment  fees shall be  computed on the basis of a year of 360 days and shall
be payable for the actual  number of days elapsed  (including  the first day but
excluding the last day). For purposes of computing  commitment fees, a Revolving
Commitment  of a  Lender  shall  be  deemed  to be  used  to the  extent  of the
outstanding Revolving Loans and LC Exposure of such Lender.

               (b) The  Borrower  agrees to pay to the Agent for the  account of
each Revolving Lender a participation fee with respect to its  participations in
Letters of Credit,  which shall  accrue at a per annum rate equal to one quarter
of one percent  (0.25%) on the face amount of Documentary  Letters of Credit and
two and three quarters  percent  (2.75%) per annum on the face amount of Standby
Letters of Credit during the period from and including the Effective Date to but
excluding  the later of the date on which  such  Lender's  Revolving  Commitment
terminates and the date on which such Lender ceases to have any LC Exposure.  In
addition  to the  fees in the  nature  of  those  referred  to in the  preceding
sentence  (without  duplication),  the Borrower agrees to pay the Issuing Bank's
standard fees with respect to the issuance,  amendment,  renewal or extension of
any Letter of Credit or processing of drawings  thereunder.  Participation  fees
accrued through and including the last day of May, August, November and February

                                       29
<PAGE>

of each year shall be payable on the third Business Day following such last day,
commencing  on the first such date to occur after the Effective  Date;  provided
that all  such  fees  shall  be  payable  on the  date on  which  the  Revolving
Commitments  terminate  and any such fees  accruing  after the date on which the
Revolving  Commitments  terminate  shall be payable  on  demand.  Any other fees
payable to the Issuing Bank pursuant to this  paragraph  shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).

               (c) The Borrower agrees to pay to the Agent, for its own account,
fees payable in the amounts and at the times separately  agreed upon between the
Borrower and the Agent.

               (d) All fees payable hereunder shall be paid on the dates due, in
immediately  available  funds, to the Agent (or to the Issuing Bank, in the case
of fees  payable to it) for  distribution,  in the case of  commitment  fees and
participation  fees,  to the Lenders  entitled  thereto.  Fees paid shall not be
refundable under any circumstances.

               SECTION   2.13.   Interest.   (a)  The  Loans   comprising   each
ABR Borrowing shall bear interest at the Alternate Base Rate.

               (b) The Loans  comprising  each  Eurodollar  Borrowing shall bear
interest at the Adjusted  LIBO Rate for the  Interest  Period in effect for such
Borrowing plus the Applicable Rate.

               (c)  Notwithstanding  the  foregoing,  if  any  principal  of  or
interest  on any  Loan  or any  fee or  other  amount  payable  by the  Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise,  such  overdue  amount shall bear  interest,  after as well as before
judgment,  at a rate per annum equal to (i) in the case of overdue  principal of
any Loan, 2% plus the rate otherwise  applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
plus the rate  applicable to ABR Revolving Loans as provided in paragraph (a) of
this Section.

               (d) Accrued  interest on each Loan shall be payable in arrears on
each  Interest  Payment Date for such Loan and, in the case of Revolving  Loans,
upon  termination  of the  Revolving  Commitments;  provided  that (i)  interest
accrued  pursuant to paragraph  (c) of this Section  shall be payable on demand,
(ii) in the event of any  repayment  or  prepayment  of any Loan  (other  than a
prepayment  of an  ABR  Revolving  Loan  prior  to  the  end  of  the  Revolving
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such  repayment or  prepayment  and (iii) in the
event of any conversion of any  Eurodollar  Loan prior to the end of the current
Interest Period therefor,  accrued interest on such Loan shall be payable on the
effective date of such conversion.

               (e) All  interest  hereunder  shall be computed on the basis of a
year of 360 days,  except that  interest  computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual  number of days elapsed  (including
the first day but excluding the last day). The applicable Alternate Base Rate or

                                       30
<PAGE>

Adjusted  LIBO Rate shall be  determined  by the Agent,  and such  determination
shall be conclusive absent manifest error.

               SECTION  2.14.  ALternate  Rate  of  Interest.  If  prior  to the
commencement of any Interest Period for a Eurodollar Borrowing:

               (a) the Agent determines (which determination shall be conclusive
        absent manifest  error) that adequate and reasonable  means do not exist
        for ascertaining the Adjusted LIBO Rate for such Interest Period; or

               (b) the  Agent  is  advised  by the  Required  Lenders  that  the
        Adjusted  LIBO Rate for such  Interest  Period will not  adequately  and
        fairly  reflect  the cost to such  Lenders  (or  Lender)  of  making  or
        maintaining  their Loans (or its Loan)  included in such  Borrowing  for
        such Interest Period;

then the Agent  shall give  notice  thereof to the  Borrower  and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such
notice no longer  exist,  (i) any Interest  Election  Request that  requests the
conversion  of any  Borrowing  to,  or  continuation  of  any  Borrowing  as,  a
Eurodollar  Borrowing  shall be  ineffective  and (ii) if any Borrowing  Request
requests  a  Eurodollar  Borrowing,  such  Borrowing  shall  be  made  as an ABR
Borrowing.

               SECTION 2.15. Increased Costs. (a) If any Change in Law shall:

               (i)  impose,  modify  or deem  applicable  any  reserve,  special
        deposit or similar  requirement  against assets of, deposits with or for
        the  account  of, or credit  extended  by, any Lender  (except  any such
        reserve requirement  reflected in the Adjusted LIBO Rate) or the Issuing
        Bank; or

               (ii)  impose on any  Lender  or the  Issuing  Bank or the  London
        interbank  market  any  other  condition  affecting  this  Agreement  or
        Eurodollar  Loans  made  by such  Lender  or any  Letter  of  Credit  or
        participation therein;

and the result of any of the  foregoing  shall be to  increase  the cost to such
Lender of making or  maintaining  any  Eurodollar  Loan (or of  maintaining  its
obligation  to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum  received  or  receivable  by such Lender or the
Issuing Bank hereunder (whether of principal,  interest or otherwise),  then the
Borrower  will pay to such Lender or the Issuing  Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.

               (b) If any Lender or the Issuing Bank  determines that any Change
in Law regarding  capital  requirements has or would have the effect of reducing
the rate of return on such  Lender's  or the  Issuing  Bank's  capital or on the
capital of such Lender's or the Issuing  Bank's  holding  company,  if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender,  or the Letters of Credit  issued by the Issuing
Bank,  to a level  below  that  which such  Lender or the  Issuing  Bank or such

                                       31
<PAGE>

Lender's or the Issuing Bank's holding  company could have achieved but for such
Change in Law (taking into  consideration  such  Lender's or the Issuing  Bank's
policies and the policies of such Lender's or the Issuing Bank's holding company
with respect to capital adequacy),  then from time to time the Borrower will pay
to such Lender or the Issuing Bank, as the case may be, such  additional  amount
or amounts as will  compensate  such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's holding company for any such reduction suffered.

               (c) A  certificate  of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be  conclusive  absent
manifest  error.  The Borrower shall pay such Lender or the Issuing Bank, as the
case may be,  the amount  shown as due on any such  certificate  within  10 days
after receipt thereof.

               (d)  Failure  or delay on the part of any  Lender or the  Issuing
Bank to demand  compensation  pursuant to this  Section  shall not  constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
provided  that the Borrower  shall not be required to compensate a Lender or the
Issuing Bank  pursuant to this  Section for any  increased  costs or  reductions
incurred  more than 270 days prior to the date that such  Lender or the  Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation  therefor;  provided further that, if the Change
in Law giving rise to such increased  costs or reductions is  retroactive,  then
the 270-day period  referred to above shall be extended to include the period of
retroactive effect thereof.

               SECTION  2.16.  Break Funding  Payments.  In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest  Period  applicable  thereto  (including  as a  result  of an  Event of
Default),  (b) the Borrower's election to convert a Borrowing of any Class to or
continue a Borrowing of any Class as a Eurodollar Borrowing which results in the
Interest Period therefor  commencing before and ending after a date on which any
principal  of the Loans of such  Class is to be repaid  and the  payment of such
principal during such interest period, (c) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period  applicable  thereto,  (d) the
failure to borrow,  convert,  continue or prepay any Revolving Loan or Term Loan
on the date specified in any notice  delivered  pursuant  hereto  (regardless of
whether  such  notice may be revoked  under  Section  2.11(d)  and is revoked in
accordance  therewith),  or (e) the assignment of any Eurodollar Loan other than
on the last day of the  Interest  Period  applicable  thereto  as a result  of a
request by the Borrower  pursuant to Section 2.19,  then, in any such event, the
Borrower  shall   compensate   each  Lender  for  the  loss,  cost  and  expense
attributable  to such event (and in the case of clause (b) above,  the  Borrower
will make such compensation on the applicable  principal repayment date). In the
case of a  Eurodollar  Loan,  such loss,  cost or expense to any Lender shall be
deemed to include an amount  determined by such Lender to be the excess, if any,
of (i) the amount of interest  which would have accrued on the principal  amount
of such Loan had such event not  occurred,  at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current  Interest Period therefor (or, in the case of a
failure to borrow,  convert or continue, for the period that would have been the
Interest  Period for such Loan),  over (ii) the amount of  interest  which would

                                       32
<PAGE>

accrue on such principal  amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period,  for dollar
deposits of a  comparable  amount and period from other banks in the  eurodollar
market.  A  certificate  of any Lender  setting forth any amount or amounts that
such Lender is entitled to receive  pursuant to this Section  shall be delivered
to the Borrower and shall be  conclusive  absent  manifest  error.  The Borrower
shall pay such Lender the amount shown as due on any such certificate  within 10
days after receipt thereof.

               SECTION 2.17. Taxes. (a) Any and all payments by or on account of
any obligation of the Borrower  hereunder or under any other Loan Document shall
be made free and clear of and without  deduction  for any  Indemnified  Taxes or
Other  Taxes;  provided  that if the  Borrower  shall be  required to deduct any
Indemnified  Taxes or Other Taxes from such  payments,  then (i) the sum payable
shall be increased  as  necessary  so that after making all required  deductions
(including  deductions applicable to additional sums payable under this Section)
the Agent,  Lender or Issuing Bank (as the case may be) receives an amount equal
to the sum it would have  received had no such  deductions  been made,  (ii) the
Borrower shall make such  deductions  and (iii) the  Borrower shall pay the full
amount  deducted to the  relevant  Governmental  Authority  in  accordance  with
applicable law.

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

               (c) The Borrower shall  indemnify the Agent,  each Lender and the
Issuing Bank, within 10 days after written demand therefor,  for the full amount
of any  Indemnified  Taxes or Other Taxes paid by the Agent,  such Lender or the
Issuing  Bank,  as the case may be, on or with  respect to any  payment by or on
account of any  obligation  of the  Borrower  hereunder  or under any other Loan
Document  (including  Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties,  interest
and reasonable  expenses arising  therefrom or with respect thereto,  whether or
not such  Indemnified  Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental  Authority. A certificate as to the amount
of such  payment  or  liability  delivered  to the  Borrower  by a Lender or the
Issuing  Bank, or by the Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.

               (d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental  Authority,  the Borrower shall
deliver to the Agent the  original  or a certified  copy of a receipt  issued by
such  Governmental  Authority  evidencing  such  payment,  a copy of the  return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Agent.

               (e) Any Foreign  Lender that is entitled to an exemption  from or
reduction  of  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 Agent),  at the time or times  prescribed  by  applicable  law, such
properly  completed and executed  documentation  prescribed by applicable law or
reasonably  requested  by the  Borrower as will permit such  payments to be made
without  withholding  or at a reduced  rate.  

                                       33
<PAGE>

               SECTION 2.18. Payments Generally; Pro Rata Treatment;  Sharing of
Setoffs.  (a) The  Borrower  shall make each  payment  required to be made by it
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements,  or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately  available funds, without set-off or counterclaim.  Any
amounts  received  after  such time on any date may,  in the  discretion  of the
Agent, be deemed to have been received on the next  succeeding  Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Agent at its offices at 1 Pierrepont Plaza,  Brooklyn, New York, except payments
to be made directly to the Issuing Bank as expressly  provided herein and except
that  payments  pursuant to  Sections  2.15,  2.16,  2.17 and 9.03 shall be made
directly to the Persons  entitled  thereto and  payments  pursuant to other Loan
Documents  shall be made to the  Persons  specified  therein.  The  Agent  shall
distribute any such payments  received by it for the account of any other Person
to the appropriate  recipient promptly following receipt thereof. If any payment
under any Loan  Document  shall be due on a day that is not a Business  Day, the
date for payment shall be extended to the next succeeding  Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such  extension.  All payments  under each Loan Document  shall be
made in dollars.

               (b)  If at  any  time  insufficient  funds  are  received  by and
available to the Agent to pay fully all amounts of  principal,  unreimbursed  LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first,  towards  payment of interest  and fees then due  hereunder,  ratably
among the parties  entitled  thereto in accordance  with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder,  ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

               (c) If any Lender shall,  by  exercising  any right of set-off or
counterclaim  or  otherwise,  obtain  payment in respect of any  principal of or
interest  on any of its  Revolving  Loans,  Term Loans or  participations  in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Revolving Loans, Term Loans and participations in
LC Disbursements  and accrued  interest thereon than the proportion  received by
any other  Lender,  then the Lender  receiving  such  greater  proportion  shall
purchase (for cash at face value)  participations  in the Revolving Loans,  Term
Loans and  participations  in LC  Disbursements  of other  Lenders to the extent
necessary  so that the  benefit  of all such  payments  shall be  shared  by the
Lenders  ratably in  accordance  with the  aggregate  amount of principal of and
accrued   interest  on  their  respective   Revolving  Loans,   Term  Loans  and
participations in LC Disbursements; provided that (i) if any such participations
are  purchased  and all or any  portion of the payment  giving  rise  thereto is
recovered,  such  participations  shall  be  rescinded  and the  purchase  price
restored  to the  extent  of such  recovery,  without  interest,  and  (ii)  the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower  pursuant to and in  accordance  with the express  terms of this
Agreement  or  any  payment  obtained  by a  Lender  as  consideration  for  the
assignment of or sale of a participation  in any of its Loans or  participations
in LC Disbursements  to any assignee or participant,  other than to the Borrower
or any  Subsidiary  or  Affiliate  thereof (as to which the  provisions  of this
paragraph shall apply).  The Borrower  consents to the foregoing and agrees,  to

                                       34
<PAGE>

the  extent it may  effectively  do so under  applicable  law,  that any  Lender
acquiring a participation  pursuant to the foregoing  arrangements  may exercise
against the  Borrower  rights of set-off and  counterclaim  with respect to such
participation  as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

               (d) Unless the Agent shall have received notice from the Borrower
prior to the date on which any  payment  is due to the Agent for the  account of
the Lenders or the Issuing Bank  hereunder  that the Borrower will not make such
payment,  the Agent may assume that the  Borrower  has made such payment on such
date  in  accordance  herewith  and  may,  in  reliance  upon  such  assumption,
distribute  to the Lenders or the Issuing  Bank,  as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the  Lenders or the Issuing  Bank,  as the case may be,  severally  agrees to
repay to the Agent  forthwith on demand the amount so distributed to such Lender
or Issuing Bank with interest thereon,  for each day from and including the date
such amount is  distributed  to it to but  excluding  the date of payment to the
Agent,  at the greater of the Federal Funds Effective Rate and a rate determined
by  the  Agent  in  accordance   with  banking   industry   rules  on  interbank
compensation.

               (e) If any Lender  shall fail to make any payment  required to be
made by it pursuant to Section 2.05(d) or (e), 2.06(b), 2.18(d) or 9.03(c), then
the  Agent  may,  in its  discretion  (notwithstanding  any  contrary  provision
hereof),  apply any amounts thereafter  received by the Agent for the account of
such Lender to satisfy such Lender's  obligations  under such Sections until all
such unsatisfied obligations are fully paid.

               SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a)
If any Lender requests  compensation under  Section 2.15,  or if the Borrower is
required  to pay  any  additional  amount  to  any  Lender  or any  Governmental
Authority  for the  account of any Lender  pursuant to  Section 2.17,  then such
Lender shall use reasonable  efforts to designate a different lending office for
funding or booking its Loans  hereunder or to assign its rights and  obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender,  such  designation or assignment  (i) would  eliminate or reduce
amounts  payable  pursuant to Section  2.15 or 2.17,  as the case may be, in the
future  and (ii)  would not  subject  such  Lender to any  unreimbursed  cost or
expense and would not otherwise be  disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

               (b) If any Lender requests compensation under Section 2.15, or if
the  Borrower  is  required  to pay any  additional  amount to any Lender or any
Governmental  Authority for the account of any Lender  pursuant to Section 2.17,
or if any Lender  defaults in its obligation to fund Loans  hereunder,  then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Agent,  require  such  Lender to  assign  and  delegate,  without  recourse  (in
accordance with and subject to the restrictions contained in Section 9.04),  all
its interests,  rights and obligations  under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior  written  consent of the Agent (and,  if a Revolving  Commitment  is being
assigned,  the Issuing Bank),  which consent shall not unreasonably be withheld,
(ii)  such  Lender  shall  have  received  payment  of an  amount  equal  to the
outstanding  principal  of its Loans  and  participations  in LC  Disbursements,

                                       35
<PAGE>

accrued  interest  thereon,  accrued  fees and all other  amounts  payable to it
hereunder,  from the assignee (to the extent of such  outstanding  principal and
accrued  interest and fees) or the  Borrower (in the case of all other  amounts)
and  (iii) in  the  case of any  such  assignment  resulting  from a  claim  for
compensation  under  Section 2.15  or payments  required to be made  pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments.  A Lender  shall  not be  required  to make any  such  assignment  and
delegation  if,  prior  thereto,  as a result  of a  waiver  by such  Lender  or
otherwise,  the circumstances  entitling the Borrower to require such assignment
and delegation cease to apply.

                                   ARTICLE III

                         Representations and Warranties

            The Borrower represents and warrants to the Lenders that:

               SECTION 3.01. Organization;  Powers. Each of the Borrower and its
Subsidiaries is duly organized,  validly existing and in good standing under the
laws of the  jurisdiction  of its  organization,  has all  requisite  power  and
authority  to carry on its  business  as now  conducted  and,  except  where the
failure to do so,  individually  or in the  aggregate,  could not  reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good  standing  in, every  jurisdiction  where such  qualification  is
required.

               SECTION  3.02.  Authorization;   Enforceability.   The  Financing
Transactions  to be entered  into by the  Borrower  are  within  the  Borrower's
corporate  powers and have been duly authorized by all necessary  corporate and,
if required,  stockholder  action.  This  Agreement  has been duly  executed and
delivered by the Borrower and constitutes, and each other Loan Document to which
the Borrower is to be a party, when executed and delivered by the Borrower, will
constitute,  a legal, valid and binding obligation of the Borrower,  enforceable
in  accordance  with its terms,  subject to applicable  bankruptcy,  insolvency,
reorganization,  moratorium or other laws affecting  creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.

               SECTION 3.03. Governmental Approvals; No Conflicts. The Financing
Transactions  (a) do not require any consent or  approval  of,  registration  or
filing with, or any other action by, any Governmental Authority,  except such as
have been  obtained or made and are in full force and effect and except  filings
necessary  to  perfect  Liens  created  under the Loan  Documents,  (b) will not
violate  any  applicable  law or  regulation  or the  charter,  by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any of
its  Subsidiaries or its assets,  or give rise to a right  thereunder to require
any payment to be made by the Borrower or any of its Subsidiaries,  and (d) will
not  result  in the  creation  or  imposition  of any  Lien on any  asset of the
Borrower  or any of its  Subsidiaries,  except  Liens  created  under  the  Loan
Documents.

                                       36
<PAGE>

               SECTION 3.04.  Financial  Condition;  No Material Adverse Change.
(a) The Borrower has heretofore  furnished to the Lenders its  consolidated  and
consolidating  balance sheet and statements of income,  stockholders  equity and
cash flows (i) as of and for the fiscal  years  ended March 2, 1996 and March 1,
1997, (A) in the case of the consolidated financials,  reported on by Deloitte &
Touche,  L.L.P.,  independent  public  accountants  and  (B) in the  case of the
consolidating  financials,  certified by the Borrower's chief financial officer,
and (ii) as of and for the fiscal quarters ended May 30, 1997, November 28, 1997
and February 28, 1998, (A) in the case of the consolidated financials,  reviewed
by Deloitte & Touche, L.L.P., independent public accountants and (B) in the case
of  consolidating  financials,  certified  by  the  Borrower's  chief  financial
officer. Such financial statements present fairly, in all material respects, the
financial  position and results of operations and cash flows of the Borrower and
its  consolidated  Subsidiaries  as of  such  dates  and  for  such  periods  in
accordance with GAAP,  subject to year-end audit  adjustments in the case of the
statements referred to in clause (ii) above.

               (b) Except as disclosed in the financial  statements  referred to
above or the notes  thereto and except for the Disclosed  Matters,  after giving
effect to the Financing  Transactions,  none of the Borrower or its Subsidiaries
has,  as  of  the  Effective  Date,  any  material  Indebtedness  or  contingent
liabilities, unusual long-term commitments or unrealized losses.

               (c) Since February 28, 1998,  there has been no material  adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole.

               SECTION  3.05.  Properties.  (a)  Each  of the  Borrower  and its
Subsidiaries  has good title to, or valid  leasehold  interests in, all its real
and  personal  property  material  to  its  business,  subject  to  no  transfer
restrictions  or Liens of any kind (other  than as set forth on Schedule  6.02),
except  for minor  defects in title that do not  interfere  with its  ability to
conduct its business as currently  conducted or to utilize such  properties  for
their intended purposes.

               (b)  Each  of the  Borrower  and  its  Subsidiaries  owns,  or is
licensed  to use,  all  trademarks,  tradenames,  copyrights,  patents and other
intellectual  property  material  to its  business,  and the use  thereof by the
Borrower and its  Subsidiaries  does not  infringe  upon the rights of any other
Person,  except  for  any  such  infringements  that,  individually  or  in  the
aggregate,  could not  reasonably  be expected  to result in a Material  Adverse
Effect.

               (c)  Schedule  3.05 sets forth the address of each real  property
that is owned or leased by the  Borrower  or any of its  Subsidiaries  as of the
Effective Date after giving effect to the Financing Transactions.

               (d) Neither the Borrower nor its  Subsidiaries  is a party to any
contract,  agreement,  lease or  instrument  the  performance  of which,  either
unconditionally or upon the happening of an event, will result in or require the
creation  of a Lien  on  any  assets  of the  Borrower  or its  Subsidiaries  or
otherwise  result in a violation of this Agreement  other than the Liens granted
to the Agent as provided for in this Agreement and the other Loan Documents.

                                       37
<PAGE>

               SECTION 3.06. Litigation and Environmental Matters. (a) There are
no actions,  suits or proceedings  by or before any  arbitrator or  Governmental
Authority  pending  against or, to the  knowledge  of the  Borrower,  threatened
against or  affecting  the Borrower or any of its  Subsidiaries  (i) as to which
there is a  reasonable  likelihood  of an  adverse  determination  and that,  if
adversely  determined,  could  reasonably  be expected,  individually  or in the
aggregate,  to result in a Material  Adverse  Effect  (other than the  Disclosed
Matters)  or (ii)  that  involve  any of the  Loan  Documents  or the  Financing
Transactions.

               (b) Except for the  Disclosed  Matters and except with respect to
any other matters that,  individually or in the aggregate,  could not reasonably
be expected to result in a Material Adverse Effect, neither the Borrower nor any
of its  Subsidiaries (i) has failed to comply with any  Environmental  Law or to
obtain,  maintain or comply with any permit,  license or other approval required
under any  Environmental  Law,  (ii) has  become  subject  to any  Environmental
Liability,  (iii)  has  received  notice  of  any  claim  with  respect  to  any
Environmental  Liability  or (iv)  knows  of any  basis  for  any  Environmental
Liability.

               (c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate,  has
resulted in, or  materially  increased  the  likelihood  of, a Material  Adverse
Effect.

               SECTION 3.07.  Compliance with Laws and  Agreements.  Each of the
Borrower and its  Subsidiaries is in compliance  with all laws,  regulations and
orders of any  Governmental  Authority  applicable to it or its property and all
indentures,  agreements and other  instruments  binding upon it or its property,
except where the failure to do so,  individually or in the aggregate,  could not
reasonably  be  expected  to result in a Material  Adverse  Effect.  Neither the
Borrower nor any subsidiary is (a) a party to any judgment, order, decree or any
agreement or instrument  or subject to  restrictions  which could  reasonably be
likely to have a Material  Adverse Effect or to materially  adversely affect the
ability of the Borrower to observe the covenants and agreements contained herein
or any  other  Loan,  or (b)  in  default  in  the  performance,  observance  or
fulfillment of any of the obligations,  covenants or conditions contained in any
agreement or  instrument  to which it is a party,  which  default has, or if not
remedied within any applicable  grace period could reasonably be likely to have,
a Material  Adverse Effect or to materially  adversely affect the ability of the
Borrower to observe the covenants and agreements  contained  herein or any other
Loan Document.

               SECTION 3.08. Investment and Holding Company Status.  Neither the
Borrower  nor any of its  Subsidiaries  is  (a) an  "investment  company"  or an
"affiliated  Person"  of, or  "promoter"  or  "principal  underwriter"  for,  an
"investment  company,"  as  defined  in, or  subject to  regulation  under,  the
Investment  Company  Act of 1940 or (b) a "holding  company"  as defined  in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.

               SECTION 3.09.  Taxes.  Each of the Borrower and its  Subsidiaries
has timely  filed or caused to be filed all Tax returns and reports  required to
have been  filed and has paid or  caused to be paid all Taxes  required  to have
been paid by it,  except  (a) Taxes  that are being  contested  in good faith by
appropriate  proceedings  and for  which the  Borrower  or such  Subsidiary,  as
applicable,  has set aside on its books  adequate  reserves or (b) to the extent

                                       38
<PAGE>

that the  failure  to do so could  not  reasonably  be  expected  to result in a
Material Adverse Effect.  Each of the Borrower and its Subsidiaries has paid, or
has provided adequate  reserves for the payment of, all material Federal,  state
and foreign  income  taxes  applicable  for all prior  fiscal  years and for the
current fiscal year to the date hereof.

               SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a  Material  Adverse  Effect.  The  present  value of all  accumulated
benefit  obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial  Accounting  Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts,  exceed by more
than  $3,000,000  the fair  market  value of the  assets of such  Plan,  and the
present value of all accumulated  benefit  obligations of all underfunded  Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards  No. 87)  did  not,  as of the  date  of  the  most  recent  financial
statements  reflecting  such amounts,  exceed by more than  $3,000,000  the fair
market value of the assets of all such underfunded Plans.

               SECTION  3.11.  Disclosure.  The  Borrower  has  disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
the Borrower or any of its Subsidiaries is subject,  and all other matters known
to any of them,  that,  individually  or in the aggregate,  could  reasonably be
expected to result in a Material Adverse Effect. None of the reports,  financial
statements,  certificates or other information  furnished by or on behalf of the
Borrower to the Agent or any Lender in connection  with the  negotiation of this
Agreement or any other Loan Document or delivered  hereunder or  thereunder  (as
modified  or  supplemented  by other  information  so  furnished)  contains  any
material  misstatement  of fact or omits to state any material fact necessary to
make the statements  therein, in the light of the circumstances under which they
were made, not misleading;  provided that,  with respect to projected  financial
information,  the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

               SECTION 3.12.  Subsidiaries  and  Affiliates.  Schedule 3.12 sets
forth as of the Effective  Date the name of, and the  ownership  interest of the
Borrower in, each Subsidiary and each Affiliate of the Borrower. The outstanding
shares or other equity interests of each such Subsidiary and each Affiliate have
been duly  authorized and validly  issued and are fully paid and  nonassessable;
and the Borrower and each such  subsidiary owns  beneficially  and of record all
the shares and other interests it is listed as owning in Schedule 3.12, free and
clear of any Lien.  Schedule  II to the  Pledge  Agreement  sets forth as of the
Effective  Date a complete  description of all  Intercompany  Notes owned by the
Borrower.  The  Borrower  owns  beneficially  and legally all such  Intercompany
Notes, free and clear of any Lien.

               SECTION 3.13.  Insurance.  Schedule 3.13 sets forth a description
of all insurance maintained by or on behalf of the Borrower and its Subsidiaries
as of the Effective  Date. As of the Effective  Date, all premiums in respect of
such insurance have been paid.

                                       39
<PAGE>

               SECTION 3.14. Labor Matters. As of the Effective Date, except for
the Disclosed  Matters,  none of the employees of the Borrower or any Subsidiary
is subject to any  collective  bargaining  agreement  and there are no  strikes,
lockouts or slowdowns against the Borrower or any Subsidiary  pending or, to the
knowledge  of the  Borrower,  threatened  that are  reasonably  likely to have a
Material  Adverse Effect.  The hours worked by and payments made to employees of
the Borrower  and the  Subsidiaries  have not been in material  violation of the
Fair  Labor  Standards  Act or any other  applicable  Federal,  state,  local or
foreign  law  dealing  with  such  matters  except to the  extent  that any such
violation  could not  reasonably  be  expected  to result in a Material  Adverse
Effect.  All payments due from the Borrower or any Subsidiary,  or for which any
claim may be made  against the Borrower or any  Subsidiary,  on account of wages
and employee health and welfare insurance and other benefits,  have been paid or
accrued as a  liability  on the books of the  Borrower or such  Subsidiary.  The
consummation  of the Financing  Transactions  will not give rise to any right of
termination  or  right  of  renegotiation  on the part of any  union  under  any
collective bargaining agreement to which the Borrower or any Subsidiary is bound
that is reasonably likely to have a Material Adverse Effect.

               SECTION 3.15. Solvency. Immediately after the consummation of the
Financing  Transactions to occur on the Effective Date and immediately following
the making of each Loan made on the  Effective  Date and after giving  effect to
the application of the proceeds of such Loans,  (a) the fair value of the assets
of the Borrower,  at a fair  valuation,  will exceed its debts and  liabilities,
subordinated,  contingent or otherwise;  (b) the present fair saleable  value of
the  property  of the  Borrower  will be greater  than the  amount  that will be
required  to pay the  probable  liability  of its debts  and other  liabilities,
subordinated,  contingent  or  otherwise,  as such  debts and other  liabilities
become absolute and matured;  (c) the Borrower will be able to pay its debts and
liabilities,   subordinated,   contingent  or  otherwise,   as  such  debts  and
liabilities  become  absolute  and matured;  and (d) the Borrower  will not have
unreasonably  small  capital  with which to conduct the  business in which it is
engaged as such  business  is now  conducted  and is  proposed  to be  conducted
following the Effective Date.

               SECTION 3.16. No Default.  As of the date hereof,  there does not
exist any Default or Event of Default hereunder.

               SECTION  3.17.  Place of  Business.  As of the date  hereof,  the
Borrower has no office, mailing address or other place of business in the United
Kingdom.

               SECTION 3.18. Year 2000. Any reprogramming required to permit the
proper  functioning,  in and  following  the year  2000,  of (i) the  Borrower's
computer systems and (ii) equipment  containing embedded  microchips  (including
systems  and  equipment  supplied  by others or with  which  Borrower's  systems
interface)  and  the  testing  of  all  such  systems  and   equipment,   as  so
reprogrammed,  will be substantially  completed by February 28, 1999,  except to
the extent the failure to do so is not reasonably likely to result in a Material
Adverse Effect.  The cost to the Borrower of such  reprogramming and testing and
of the  reasonably  foreseeable  consequences  of  year  2000  to  the  Borrower
(including, without limitation,  reprogramming errors and the failure of others'
systems or equipment) will not result in a 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 the

                                       40
<PAGE>

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 the Borrower to conduct its business without Material Adverse Effect.

               SECTION 3.19.  Federal Reserve  Regulations.  The Borrower is not
engaged principally,  or as one of its important activities,  in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.


                                   ARTICLE IV

                                   Conditions

               SECTION 4.01.  Effective  Date. The obligations of the Lenders to
make Loans and of the Issuing Bank to issue  Letters of Credit  hereunder  shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):

               (a) The Agent (or its  counsel)  shall  have  received  from each
        party hereto either (i) a counterpart of this Agreement signed on behalf
        of such party or (ii) written evidence  satisfactory to the Agent (which
        may include  telecopy  transmission  of a signed  signature page of this
        Agreement) that such party has signed a counterpart of this Agreement.

               (b) The Agent  shall have  received a favorable  written  opinion
        (addressed to the Agent and the Lenders and dated the Effective Date) of
        (i) Willkie Farr & Gallagher, counsel for the Borrower, substantially in
        the form of Exhibit B-1 and (ii) Simmons & Simmons, special U.K. counsel
        to the Borrower, substantially in the form of Exhibit B-2, covering such
        matters  relating to the Borrower,  the Loan  Documents or the Financing
        Transactions  as the Required  Lenders  shall  reasonably  request.  The
        Borrower hereby requests such counsel to deliver such opinions.

               (c) The Agent shall have received such documents and certificates
        as the Agent or its  counsel  may  reasonably  request  relating  to the
        organization,   existence  and  good  standing  of  the  Borrower,   the
        authorization of the Financing  Transactions and any other legal matters
        relating  to  the  Borrower,   the  Loan   Documents  or  the  Financing
        Transactions,  all in form and substance  satisfactory  to the Agent and
        its counsel.

               (d) The  Agent  shall  have  received  a  certificate,  dated the
        Effective  Date and  signed  by the  President,  a Vice  President  or a
        Financial  Officer  of the  Borrower,  confirming  compliance  with  the
        conditions set forth in paragraphs (a) and (b) of Section 4.02.

               (e) The Agent shall have  received all fees and other amounts due
        and payable on or prior to the Effective Date, including,  to the extent
        invoiced,   reimbursement  or  payment  of  all  out-of-pocket  expenses
        required to be reimbursed or paid by the Borrower hereunder or under any
        other Loan Document.

                                       41
<PAGE>

               (f) The Agent shall have received  counterparts  of the Trademark
        Security  Agreement  and the  Pledge  Agreement  signed on behalf of the
        Borrower, together with the following:

               (i) stock certificates or bearer share warrants  representing 65%
        of the outstanding shares of capital stock of Topps Europe Limited as of
        the Effective Date after giving effect to the Financing Transactions and
        stock  powers and  instruments  of  transfer,  endorsed  in blank,  with
        respect to such stock certificates or bearer share warrants;

               (ii) all documents and instruments,  including Uniform Commercial
        Code financing  statements,  required by law or reasonably  requested by
        the Agent to be filed,  registered  or recorded to create or perfect the
        Liens intended to be created under the Security Documents;

               (iii) the duly endorsed  original of all  instruments  evidencing
        loans and advances made by the Borrower to any  Subsidiary to the extent
        such  instruments  do  not  cause  the  earnings  and  profits  of  such
        Subsidiary to be deemed to be a  distribution  to the Borrower  under 26
        U.S.C.S. Sec. 956; and

               (iv) a completed Perfection  Certificate dated the Effective Date
        and signed by an executive officer or Financial Officer of the Borrower,
        together  with  all  attachments  contemplated  thereby,  including  the
        results  of a search  of the  Uniform  Commercial  Code (or  equivalent)
        filings  made  with  respect  to  the  Borrower  in  the   jurisdictions
        contemplated  by the Perfection  Certificate  and a search of the United
        States  Patent and  Trademark  Office  with  respect  to the  Borrower's
        intellectual property and copies of the financing statements (or similar
        documents)   disclosed  by  such   searches   and  evidence   reasonably
        satisfactory  to the Agent that the Liens  indicated  by such  financing
        statements (or similar  documents) are permitted by Section 6.02 or have
        been released.

               (g) The Agent shall have  received  evidence  satisfactory  to it
        that the insurance required by Section 5.07 is in effect.

               (h) The  Borrower  and the  Subsidiaries  shall have  granted the
        Agent access to and the right to inspect all  reports,  audits and other
        internal  information of the Borrower and the  Subsidiaries  relating to
        environmental  matters,  and any third  party  verification  of  certain
        matters relating to compliance with  environmental  laws and regulations
        requested  by the  Agent,  and the  Agent  shall be  satisfied  that the
        Borrower and the Subsidiaries are in compliance in all material respects
        with all applicable  environmental laws and regulations and be satisfied
        with the costs of maintaining such compliance.

               (i) All consents and  approvals  required to be obtained from any
        Governmental   Authority  or  other  Person  as  shall  be  required  to
        consummate  the  transactions   contemplated   hereby  shall  have  been
        obtained, and all applicable

                                       42
<PAGE>

        waiting  periods and appeal  periods  shall have  expired,  in each case
        without the imposition of any burdensome conditions.

               (j) The Lenders  shall have  received  (i)  audited  consolidated
        financial statements of the Borrower for the fiscal years ended March 2,
        1996  and  March  1,  1997,  (ii)  if  available,  satisfactory  audited
        consolidated  financial  statements  of the Borrower for the fiscal year
        ended  February  28,  1998  and  (iii)  satisfactory   reviewed  interim
        consolidated  financial  statements  of the Borrower for each  quarterly
        period ended subsequent to the date of the latest  financial  statements
        delivered pursuant to clauses (i) and (ii) of this paragraph as to which
        such financial statements are available and (iv) unaudited consolidating
        financial statements for all statements above.

               (k) The Agent  shall be  satisfied  with the nature and amount of
        all  Indebtedness  of the  Borrower  and  its  Subsidiaries,  including,
        without limitation,  the Bank of Scotland Debt and the Ulster Bank Debt,
        and  the  Borrower  shall  have  provided  to the  Agent  copies  of all
        operative documents in connection with the Bank of Scotland Debt and the
        Ulster Bank Debt.

               (l) All amounts outstanding under the Nationsbank  Facility shall
        have  been  fully  and  finally  paid  and  satisfied  in  full  and all
        promissory notes, credit agreements,  reimbursement agreements and other
        documents  executed in  connection  therewith,  and any Liens granted to
        secure  payment  and  performance   thereof,   have  been  cancelled  or
        terminated, as appropriate.

               (m)  The  Agent  shall  have  received   such  other   documents,
        instruments, certificates and opinions as are customary for transactions
        of this  type or as the  Agent  may  reasonably  request,  and  shall be
        satisfied with such other conditions as it may reasonably require.

The Agent shall notify the Borrower and the Lenders of the Effective  Date,  and
such notice shall be conclusive and binding.  Notwithstanding the foregoing, the
obligations  of the  Lenders  to make  Loans  and of the  Issuing  Bank to issue
Letters  of Credit  hereunder  shall not  become  effective  unless  each of the
foregoing  conditions  is satisfied  (or waived  pursuant to Section 9.02) at or
prior to 3:00 p.m.,  New York City time, on May 31, 1998 (and, in the event such
conditions are not so satisfied or waived,  the  Commitments  shall terminate at
such time).

               SECTION 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing,  and of the Issuing Bank to issue,
amend,  renew or extend any Letter of Credit,  is subject to the satisfaction of
the following conditions:

               (a) The  representations and warranties of the Borrower set forth
        in the Loan Documents shall be true and correct on and as of the date of
        such Borrowing or the date of issuance,  amendment, renewal or extension
        of such  Letter of Credit,  as  applicable,  except to the  extent  they
        expressly relate to an earlier date (it being understood that references

                                       43
<PAGE>

        to a specific date, to "the date hereof" and to "the Effective Date" are
        not repeated as of the date of such Borrowing).

               (b) At the time of and  immediately  after giving  effect to such
        Borrowing  or the  issuance,  amendment,  renewal or  extension  of such
        Letter of Credit,  as applicable,  no Default shall have occurred and be
        continuing.

Each Revolving  Borrowing shall be accompanied by a certificate,  dated the date
of the  Borrowing  Request,  signed  by the  President,  a Vice  President  or a
Financial  Officer of the Borrower as to the matters specified in paragraphs (a)
and (b) of this Section.

                                    ARTICLE V

                              Affirmative Covenants

               Until the  Commitments  have expired or been  terminated  and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC  Disbursements  shall have been  reimbursed,  the Borrower  covenants and
agrees with the Lenders that:

               SECTION 5.01.  Financial  Statements and Other  Information.  The
Borrower  will  furnish  to  the  Agent  and  each  Lender:tatements  and  Other
Information.

               (a)  within  90 days  after  the end of each  fiscal  year of the

        Borrower,  its audited consolidated and unaudited  consolidating balance
        sheet and related  statements of  operations,  stockholders'  equity and
        cash  flows as of the end of and for such  year,  setting  forth in each
        case in comparative  form the figures for the previous  fiscal year, (i)
        in the case of the audited consolidated  financial statements,  reported
        on by Deloitte & Touche,  L.L.P. or other independent public accountants
        of  recognized  national  standing  (without a "going  concern"  or like
        qualification or exception and without any qualification or exception as
        to the  scope  of such  audit)  and  (ii) in the  case of the  unaudited
        consolidating  financial  statements,  certified by the Borrower's chief
        financial  officer,  to the  effect  that  such  consolidated  financial
        statements  present  fairly  in  all  material  respects  the  financial
        condition and results of operations of the Borrower and its consolidated
        Subsidiaries   on  a   consolidated   basis  in  accordance   with  GAAP
        consistently applied;

               (b)  within  45 days  after  the end of each of the  first  three
        fiscal  quarters of each fiscal year of the Borrower,  its  consolidated
        and  consolidating  balance sheet and related  statements of operations,
        stockholders' equity and cash flows as of the end of and for such fiscal
        quarter and the then elapsed  portion of the fiscal year,  setting forth
        in each  case in  comparative  form the  figures  for the  corresponding
        period or periods of (or,  in the case of the balance  sheet,  as of the
        end of) the previous  fiscal year,  (i) in the case of the  consolidated
        financial  statements,  reviewed by Deloitte & Touche,  L.L.P.  or other
        independent public accountants of recognized  national standing and (ii)
        in  the  case  of  the  unaudited  consolidating  financial  statements,
        certified by the Borrower's chief financial officer as presenting fairly
        in  all  material  respects  the  financial  condition  and  results  of
        operations  of the  Borrower  and  its  consolidated  Subsidiaries  on a

                                       44
<PAGE>

        consolidated basis in accordance with GAAP consistently applied, subject
        to normal year-end audit adjustments;

               (c) concurrently with any delivery of financial  statements under
        clause (a) or (b) above,  a  certificate  of a Financial  Officer of the
        Borrower,  substantially  in the form of  Exhibit F (or such  other form
        reasonably  satisfactory  to the Agent)  (i) certifying  as to whether a
        Default has  occurred  and, if a Default has  occurred,  specifying  the
        details  thereof  and any  action  taken or  proposed  to be taken  with
        respect thereto,  (ii) setting  forth reasonably  detailed  calculations
        demonstrating   compliance   with   Sections 6.13   through   6.19   and
        (iii) stating  whether any change in GAAP or in the application  thereof
        has  occurred  since  the  date  of  the  Borrower's  audited  financial
        statements  referred  to in  Section 3.04  and,  if any such  change has
        occurred,  specifying  the  effect  of  such  change  on  the  financial
        statements accompanying such certificate;

               (d) concurrently with any delivery of financial  statements under
clause  (a) above,  a certificate of the  accounting  firm that reported on such
financial  statements  stating whether they obtained knowledge during the course
of  their  examination  of  such  financial  statements  of any  Default  (which
certificate  may be  limited  to the  extent  required  by  accounting  rules or
guidelines);

               (e) (i) within 7 days after the end of each fiscal  month,  (a) a
        schedule  setting forth gross sales by business segment for the previous
        fiscal  month and for the  portion of the fiscal  year ended on the last
        day of such fiscal month and cash  balances by subsidiary as of the last
        day of such fiscal month,  and setting forth in each case in comparative
        form the figures for the corresponding month of the previous fiscal year
        and  corresponding  portion of the previous fiscal year, and; (b) a list
        of any Intercompany Notes delivered during such fiscal quarter; and

               (ii)  within  45 days  after  the end of each  fiscal  quarter  a
        schedule  setting  forth the  results  of  operations  of each  business
        segment as of the end of such fiscal  quarter and for the portion of the
        fiscal year ended on the last day of such fiscal quarter,  setting forth
        in each  case in  comparative  form the  figures  for the  corresponding
        period  or  periods  of the  previous  fiscal  year,  together  with  an
        explanation of all material variances from such comparative figures.

               (f) within six months of the Effective  Date,  projected  balance
sheets,  projected  statements  of operations  and projected  statements of cash
flows (which  projections shall be on a quarterly basis for fiscal year 1999 and
on an annual  basis for fiscal year 2000 and fiscal year 2001),  which shall set
forth, among other things, the Borrower's  projected gross sales,  projected net
sales and projected  results of operations of each domestic business segment and
each  Foreign  Subsidiary,  for the Borrower  and its  Subsidiaries  in form and
content  consistent with  Borrower's  official plan as presented to its Board of
Directors;

               (g) (i) by March 1 of each calendar year preliminary  projections
        on a quarterly basis for the upcoming fiscal year, and (ii) concurrently
        with the  Borrower's  presentation  of same to its  board  of  directors
        during  each  year,  final  projections  on a  quarterly  basis  for the

                                       45
<PAGE>

        upcoming  fiscal year, in each case setting forth the items described in
        clause (f) above;

               (h)  promptly  upon  any  revision  of   projections   previously
        delivered to the Agent or the projections referred to in clauses (f) and
        (g) above, such revised projected balance sheets,  projected  statements
        of operations and projected statements of cash flows with an explanation
        of all  material  variances  to the profit and loss  statement  from the
        projections as they existed prior to such revision;

               (i) promptly after the same become publicly available,  copies of
        all periodic and other reports,  proxy  statements  and other  materials
        filed by the Borrower or any Subsidiary with the Securities and Exchange
        Commission,  or any Governmental  Authority  succeeding to any or all of
        the  functions  of said  Commission,  or with  any  national  securities
        exchange, or distributed by the Borrower to its shareholders  generally,
        as the case may be; and

               (j)  promptly   following  any  request   therefor,   such  other
        information  regarding the  operations,  business  affairs and financial
        condition  of the Borrower or any  Subsidiary,  or  compliance  with the
        terms of any Loan  Document,  as the Agent or any Lender may  reasonably
        request.

               SECTION  5.02.  Notices of Material  Events.  The  Borrower  will
furnish to the Agent and each Lender prompt written notice of the following:

               (a) the occurrence of any Default;

               (b) the filing or commencement of any action,  suit or proceeding
        by or  before  any  arbitrator  or  Governmental  Authority  against  or
        affecting  the  Borrower or any  Affiliate  thereof  that,  if adversely
        determined, could reasonably be expected to result in a Material Adverse
        Effect;

               (c) the  occurrence  of any ERISA Event  that,  alone or together
        with any other ERISA  Events that have  occurred,  could  reasonably  be
        expected to result in liability of the Borrower and its  Subsidiaries in
        an aggregate amount exceeding $750,000; and

               (d) any other development that results in, or could reasonably be
        expected to result in, a Material Adverse Effect.

Each notice  delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or  development  requiring such notice and any action taken
or proposed to be taken with respect thereto.

               SECTION 5.03. Information Regarding Collateral.  (a) The Borrower
will  furnish  to the  Agent  prompt  written  notice of any  change  (i) in the
Borrower's  corporate  name or in any  trade  name  used to  identify  it in the
conduct of its  business  or in the  ownership  of its  properties,  (ii) in the
location of the  Borrower's  chief  executive  office,  its  principal  place of

                                       46
<PAGE>

business,  any  office  in  which it  maintains  books or  records  relating  to
Collateral owned by it or any office or facility at which Collateral owned by it
is located  (including  the  establishment  of any such new office or facility),
(iii)  in  the  Borrower's  identity  or  corporate  structure  or  (iv)  in the
Borrower's  Federal Taxpayer  Identification  Number. The Borrower agrees not to
effect or permit any change  referred to in the  preceding  sentence  unless all
filings have been made under the Uniform  Commercial  Code or otherwise that are
required in order for the Agent to continue at all times  following  such change
to have a valid,  legal and perfected  security  interest in all the Collateral.
The Borrower also agrees promptly to notify the Agent if any material portion of
the Collateral is damaged or destroyed.

               (b)  Each  year,  at the time of  delivery  of  annual  financial
statements  with respect to the preceding  fiscal year pursuant to clause (a) of
Section  5.01,  the  Borrower  shall  deliver  to the Agent a  certificate  of a
Financial  Officer of the Borrower (i) setting  forth the  information  required
pursuant to Sections 1 and 2 of the Perfection  Certificate  or confirming  that
there has been no change in such  information  since the date of the  Perfection
Certificate  delivered  on the  Effective  Date or the date of the  most  recent
certificate  delivered  pursuant to this  Section and (ii)  certifying  that all
Uniform  Commercial Code financing  statements  (including  fixture filings,  as
applicable) or other appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a description of the
Collateral  have been filed of record in each  governmental,  municipal or other
appropriate office in each jurisdiction  identified pursuant to clause (i) above
to the extent necessary to protect and perfect the security  interests under the
Security  Documents  for a period of not less  than 18 months  after the date of
such  certificate  (except as noted  therein  with  respect to any  continuation
statements to be filed within such period).

               SECTION 5.04. Existence;  Conduct of Business. The Borrower will,
and will  cause each of its  Subsidiaries  to, do or cause to be done all things
necessary  to  preserve,  renew and keep in full  force and effect (a) its legal
existence  and  (b)  the  rights,  licenses,  permits,  privileges,  franchises,
patents,  copyrights,  trademarks  and trade  names  which are  material  to the
conduct of its business taken, in case of the Borrower,  individually and in the
case of any Subsidiary,  as a whole with the other  Subsidiaries;  provided that
the  foregoing  shall not prohibit  any merger,  consolidation,  liquidation  or
dissolution permitted under Section 6.03;  provided,  further, that the Borrower
shall be permitted to terminate,  or allow to lapse, any Material License in the
exercise of its reasonable business judgment to the extent that the Borrower (a)
provides  written  notice on the Contract  Notification  Date that such Material
License  will  terminate  or may be  terminated,  or  allowed  to lapse  without
renewal,  (b) if requested by the Agent,  advises the Agent of the status of any
negotiations  which may be transpiring  in respect of such Material  License and
(c)  furnishes to the Agent either of the  following 30 days  following the date
that such Material License terminates or is allowed to lapse:

               (i)  projected  consolidated  statement  of  operations  for  the
                    Borrower and its  Subsidiaries  which  reflect  that,  after
                    giving effect to the  termination  or lapse of such Material
                    License,  the  Borrower  will  be  in  compliance  with  the
                    financial  covenants  set forth in  Article VI of the Credit
                    Agreement for the next succeeding four fiscal quarters, such
                    projections to be certified by a Financial Officer, prepared
                    in good  faith and in  accordance  with  GAAP to the  extent
                    applicable; or

                                       47
<PAGE>

               (ii) an  analysis  prepared  by the  Borrower's  chief  financial
                    officer  which  analysis   demonstrates  to  the  reasonable
                    satisfaction  of the Agent  that the terms of such  Material
                    License  would have  given  rise to a Negative  Contribution
                    with  respect  to such  Material  License  for the next four
                    fiscal   quarters   after  giving  effect  to  (x)  existing
                    contractual  terms which would have taken effect during such
                    fiscal  quarters or (y) the terms which the  licensor  under
                    such Material License advised in writing that it required in
                    order to renew such  Material  License which was expiring by
                    its own terms.

               SECTION 5.05.  Payment and  Obligations.  The Borrower  will, and
will  cause  each  of its  Subsidiaries  to,  pay  its  Indebtedness  and  other
obligations  (for which the failure to pay would  constitute an Event of Default
under Section 7.01(f)), including Tax liabilities,  before the same shall become
delinquent  or in default,  except where (a) the  validity or amount  thereof is
being  contested in good faith by appropriate  proceedings,  (b) the Borrower or
such  Subsidiary  has set  aside on its books  adequate  reserves  with  respect
thereto  in  accordance  with  GAAP,  (c)  such  contest  effectively   suspends
collection of the contested  obligation and the enforcement of any Lien securing
such  obligation and (d) the failure to make payment  pending such contest could
not reasonably be expected to result in a Material Adverse Effect.

               SECTION 5.06.  Maintenance of Properties.  The Borrower will, and
will  cause each of its  Subsidiaries  to,  keep and  maintain  or  replace  all
property  material to the  conduct of its  business  in good  working  order and
condition, ordinary wear and tear excepted.

               SECTION 5.07.  Insurance.  (a) The Borrower  will, and will cause
each of its  Subsidiaries to,  maintain,  with  financially  sound and reputable
insurance companies:

               (i) fire and extended coverage  insurance,  on a replacement cost
        basis,  with respect to all personal  property and  improvements to real
        property, in such amounts as are customarily  maintained by companies in
        the same or similar business operating in the same or similar locations;

               (ii) commercial  general  liability  insurance against claims for
        bodily injury,  death or property  damage  occurring  upon,  about or in
        connection with the use of any properties owned,  occupied or controlled
        by it, providing  coverage on an occurrence basis with a combined single
        limit of not less than  $10,000,000  and  including  the broad  form CGL
        endorsement;

               (iii) business interruption  insurance,  insuring against loss of
        gross  earnings for a period of not less than 12 months arising from any
        risks or  occurrences  required to be covered by  insurance  pursuant to
        clause (i) above; and

               (iv) such other insurance as may be required by law.

Deductibles or  self-insured  retention  shall not exceed  $500,000 for fire and
extended coverage policies, $1,000,000 for commercial general liability policies
or 30 days for business interruption policies.

                                       48
<PAGE>

               (b) Each such  policy  referred to in this  paragraph  also shall
provide that it shall not be canceled, materially modified or not renewed (i) by
reason of nonpayment of premium except upon not less than 10 days' prior written
notice  thereof by the insurer to the Agent  (giving the Agent the right to cure
defaults in the payment of premiums)  or (ii) for any other  reason  except upon
not less than 30 days' prior written notice thereof by the insurer to the Agent.
The Borrower shall deliver to the Agent, prior to the cancellation, modification
or  nonrenewal  of any  such  policy  of  insurance,  a  copy  of a  renewal  or
replacement  policy  (or  other  evidence  of  renewal  of a  policy  previously
delivered to the Agent)  together  with  evidence  satisfactory  to the Agent of
payment of the premium therefor.

               SECTION 5.08. [This Section intentionally left blank.]

               SECTION 5.09. Books and Records; Inspection and Audit Rights. The
Borrower will, and will cause each of its  Subsidiaries to, keep proper books of
record and  account in which  full,  true and  correct  entries  are made of all
dealings  and  transactions  in relation to its  business  and  activities.  The
Borrower  will,  and  will  cause  each  of  its  Subsidiaries  to,  permit  any
representatives  designated by the Agent or any Lender,  upon  reasonable  prior
notice,  to visit and inspect its properties,  to examine and make extracts from
its books and records,  and to discuss its affairs,  finances and condition with
its officers and independent  accountants,  all at such reasonable  times and as
often as reasonably requested.

               SECTION 5.10.  Compliance  with Laws. The Borrower will, and will
cause each of its Subsidiaries to, comply with all laws, rules,  regulations and
orders of any Governmental  Authority  applicable to it or its property,  except
where  the  failure  to do so,  individually  or in  the  aggregate,  could  not
reasonably be expected to result in a Material Adverse Effect.

               SECTION  5.11.  Notice of  Discharge  of  Hazardous  Material  or
Environmental  Complaint.  The  Borrower  will,  and  will  cause  each  of  its
Subsidiaries  to,  promptly  provide to the Agent true,  accurate  and  complete
copies  of any and all  notices,  complaints,  orders,  directives,  claims,  or
citations  received  by the  Borrower  or any  Subsidiary  relating  to any  (a)
violation  or  alleged  violation  by  the  Borrower  or any  Subsidiary  of any
applicable Environmental Laws; (b) release or threatened release by the Borrower
or any  Subsidiary,  or at any  facility  or  property  owned or operated by the
Borrower or any Subsidiary,  of any Hazardous  Material,  except where occurring
legally; or (c) liability or alleged liability of the Borrower or any Subsidiary
for the costs of cleaning up,  removing,  remediating or responding to a release
of Hazardous Materials.

               SECTION 5.12.  Environmental  Compliance.  If the Borrower or any
Subsidiary shall receive letter, notice, complaint,  order, directive,  claim or
citation  alleging  that  the  Borrower  or  any  Subsidiary  has  violated  any
Environmental  Law  or is  liable  for  the  costs  of  cleaning  up,  removing,
remediating  or  responding  to a release of Hazardous  Materials,  the Borrower
shall,  within the time period permitted by the applicable  Environmental Law or
the Governmental  Authority  responsible for enforcing such  Environmental  Law,
remove or remedy, or cause the applicable  Subsidiary to remove or remedy,  such
violation or release or satisfy such  liability,  except where the failure to do
so is not reasonably likely to result in a Material Adverse Effect or unless the
applicability of the Environmental  Law, the fact of such violation or liability

                                       49
<PAGE>

or what is required to remove or remedy such violation is being contested by the
Borrower or the  applicable  Subsidiary by  appropriate  proceedings  diligently
conducted and all reserves with respect  thereto as may be required  under GAAP,
if any, have been made.

               SECTION 5.13. Use of Proceeds and Letters of Credit. The proceeds
of the Term Loans will be used only for the repayment of amounts owing under the
Nationsbank Facility.  The proceeds of the Revolving Loans and Letters of Credit
will be used for general  working  capital needs of the Borrower and to guaranty
the  payment  of  workers'  compensation  insurance  in the  ordinary  course of
business.  No part of the proceeds of any Loan will be used, whether directly or
indirectly,  (i) to purchase or carry Margin Stock or to extend credit to others
for the purpose of purchasing or carrying Margin Stock or to refund indebtedness
originally  incurred  for such  purpose,  or (ii) for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations G, U and
X.

               SECTION  5.14.   Additional   Subsidiaries.   If  any  additional
Subsidiary  is formed or acquired  after the Effective  Date,  the Borrower will
notify the Agent and the Lenders  thereof and the Borrower  will,  to the extent
such Subsidiary is formed in the United States,  cause such Subsidiary to become
a guarantor of the Obligations  hereunder  within three Business Days after such
Subsidiary is formed or acquired.

               SECTION 5.15. Further  Assurances.  (a) The Borrower will execute
any and all further documents, financing statements, agreements and instruments,
and take all such  further  actions  (including  the  filing  and  recording  of
financing  statements,  fixture  filings,  mortgages,  deeds of trust  and other
documents),  which may be required under any applicable  law, or which the Agent
or the Required Lenders may reasonably  request,  to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens  created  or  intended  to be  created by the  Security  Documents  or the
validity or priority of any such Lien,  all at the expense of the Borrower.  The
Borrower  also agrees to provide to the Agent,  from time to time upon  request,
evidence reasonably  satisfactory to the Agent as to the perfection and priority
of the Liens created or intended to be created by the Security Documents.

               (b)  If  any  material   trademarks,   tradenames  or  any  other
intellectual  property  are acquired by the Borrower  after the  Effective  Date
(other than assets  constituting  Collateral  under the Security  Documents that
become subject to the Lien of the Security Documents upon acquisition  thereof),
the Borrower will notify the Agent and the Lenders thereof, and, if requested by
the Agent or the Required  Lenders,  the  Borrower  will cause such assets to be
subjected to a Lien securing the Obligations and will take such actions as shall
be  necessary  or  reasonably  requested  by the Agent to grant and perfect such
Liens,  including actions described in paragraph (a) of this Section, all at the
expense of the Borrower.

               SECTION   5.16.   Interest  Rate   Protection.   As  promptly  as
practicable,  and in any event  within 60 days  after the  Effective  Date,  the
Borrower will enter into,  and  thereafter for a period of not less than 2 years
will maintain in effect, one or more interest rate protection agreements on such
terms and with such parties as shall be  reasonably  satisfactory  to the Agent,
the effect of which shall be to fix or limit the  interest  cost to the Borrower

                                       50
<PAGE>

with respect to at least  $10,000,000  initially  (but which may be reduced from
time to time to an  amount  not  less  than  one  half of the  then  outstanding
principal amount of the Term Loan) of the notional value of the Term Loans.

                                    ARTICLE VI

                               Negative Covenants

               Until  the  Commitments   have  expired  or  terminated  and  the
principal of and interest on each Loan and all fees payable  hereunder have been
paid in full and all Letters of Credit  have  expired or  terminated  and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:

               SECTION 6.01.  Indebtedness;  Certain Equity  Securities.(a)  The
Borrower will not, and will not permit any Subsidiary to, create,  incur, assume
or permit to exist any Indebtedness, except:

               (i) Indebtedness created under the Loan Documents;

               (ii) Hedging Agreements allowed pursuant to Section 6.06;

               (iii)  Indebtedness  existing on the date hereof and set forth in
        Schedule 6.01 and extensions,  renewals,  modifications and replacements
        of any such Indebtedness that do not increase the outstanding  principal
        amount thereof or increase,  above a rate deemed commercially reasonable
        by the Borrower,  the interest  rate payable  thereon from that existing
        immediately prior to such extension, renewal or refinancing;

               (iv)  Indebtedness  of the Borrower to any  Subsidiary and of any
        Subsidiary  to the Borrower or another  Subsidiary;  provided  that such
        Indebtedness shall be subject to Section 6.04;

               (v) Guarantees by the Borrower of  Indebtedness of any Subsidiary
        and by any  Subsidiary of  Indebtedness  of the Borrower;  provided that
        such Guarantees shall be subject to Section 6.04;

               (vi)  Indebtedness  of the  Borrower or any  Subsidiary  incurred
        solely for the purpose of financing  the  acquisition,  construction  or
        improvement  of any fixed or capital  assets,  including  Capital  Lease
        Obligations  and  any  Indebtedness   assumed  in  connection  with  the
        acquisition  of any such  assets or secured by a Lien on any such assets
        prior  to  the  acquisition  thereof,   and  extensions,   renewals  and
        replacements  of  any  such   Indebtedness  that  do  not  increase  the
        outstanding  principal  amount thereof or result in an earlier  maturity
        date or decreased weighted average life thereof;  provided that (A) such
        Indebtedness  is  incurred  prior  to  or  within  90  days  after  such
        acquisition or the completion of such  construction  or improvement  and
        (B) the aggregate  principal  amount of  Indebtedness  permitted by this
        clause  (vi)  shall not exceed 95% of the  amount  allowed  for  Capital
        Expenditures  pursuant  to  Section  6.19;  

                                       51
<PAGE>

               (vii)  trade  payables  in  the  ordinary   course  of  business,
        endorsements  for  collection  or  deposit  in the  ordinary  course  of
        business,  surplus and retained earnings,  lease obligations (other than
        pursuant to Capitalized Leases),  reserves for deferred income taxes and
        investment  credits,  other deferred credits and reserves,  and deferred
        compensation obligations; and

               (viii) additional Indebtedness not to exceed $100,000 outstanding
        at any time.

               (b) The Borrower will not, and will not permit any Subsidiary to,
issue any preferred  stock or be or become  liable in respect of any  obligation
(contingent or otherwise) to purchase, redeem, retire, acquire or make any other
payment  in  respect  of any  shares of  capital  stock of the  Borrower  or any
Subsidiary  or any option,  warrant or other right to acquire any such shares of
capital  stock.  Nothing in this  paragraph  shall  prohibit the  Borrower  from
granting stock options to officers,  directors,  employees and consultants of or
to the  Borrower or from issuing  common stock of the Borrower  pursuant to such
options.

               SECTION 6.02.  Liens.  The Borrower will not, and will not permit
any  Subsidiary  to,  create,  incur,  assume or permit to exist any Lien on any
property or asset now owned or  hereafter  acquired by it, or assign or sell any
income or revenues (including  accounts  receivable) or rights in respect of any
thereof, except:

               (i) Liens created under the Loan Documents;

               (ii) Permitted Encumbrances;

               (iii) any Lien on any  property  or asset of the  Borrower or any
        Subsidiary  existing on the date hereof and set forth in Schedule  6.02;
        provided  that (i) such Lien  shall not apply to any other  property  or
        asset of the Borrower or any  Subsidiary and (ii) such Lien shall secure
        only those obligations which it secures on the date hereof; and

               (iv) Liens on fixed or capital  assets  acquired,  constructed or
        improved  by the  Borrower  or any  Subsidiary;  provided  that (A) such
        security  interests  secure  Indebtedness  permitted  by clause  (vi) of
        Section  6.01(a),  (B)  such  security  interests  and the  Indebtedness
        secured  thereby  are  incurred  prior to or within 90 days  after  such
        acquisition or the completion of such  construction or improvement,  (C)
        the  Indebtedness  secured  thereby  does not  exceed 95% of the cost of
        acquiring,  constructing  or improving  such fixed or capital assets and
        (D) such  security  interests  shall not apply to any other  property or
        assets of the Borrower or any Subsidiary.

               (v)  Liens  on  property  of the  Borrower  shipped  under  or in
        connection  with  Documentary  Letters  of Credit  permitted  under this
        Agreement (if such Liens are in favor of the issuer of such  Documentary
        Letters of Credit)  and all  property  of the  Borrower in the actual or
        constructive  possession of the Issuing Bank with respect to Documentary
        Letters of Credit,  other than property held in a fiduciary  capacity of
        such Issuing Bank.

                                       52
<PAGE>

               SECTION 6.03. Fundamental Changes. (a) The Borrower will not, and
will not permit any  Subsidiary  to,  merge into or  consolidate  with any other
Person,  or permit  any other  Person to merge into or  consolidate  with it, or
liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect  thereto no Default shall have occurred and be continuing  (i) any
Subsidiary may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation,  (ii) any Subsidiary may merge into any Subsidiary in
a  transaction  in which  the  surviving  entity is a  Subsidiary  and (iii) any
Subsidiary  may  liquidate or dissolve if the Borrower  determines in good faith
that such  liquidation  or  dissolution is in the best interests of the Borrower
and is not  materially  disadvantageous  to the Lenders;  provided that any such
merger  involving a Person  that is not a wholly  owned  Subsidiary  immediately
prior  to  such  merger  shall  not  be  permitted   unless  also  permitted  by
Section 6.04.

               (b) The  Borrower  will  not,  and  will  not  permit  any of its
Subsidiaries  to,  engage to any  material  extent in any  business  other  than
businesses  of the type  conducted by the Borrower and its  Subsidiaries  on the
date of execution of this Agreement and businesses reasonably related thereto.

               SECTION  6.04.  Investments,   Loans,  Advances,  Guarantees  and
Acquisitions. The Borrower will not, and will not permit any of its Subsidiaries
to, purchase,  hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned  Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option,  warrant or
other  right to acquire  any of the  foregoing)  of, make or permit to exist any
loans or advances to,  Guarantee any  obligations of, or make or permit to exist
any  investment  or any other  interest  in, any other  Person,  or  purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:

               (a) Permitted Investments;

               (b)  investments  existing  on the date  hereof  and set forth on
        Schedule  6.04,  to the extent such  investments  would not be permitted
        under any other clause of this Section;

               (c)  (i)  investments  by  the  Borrower  in  the  equity  of its
        Subsidiaries and (ii) investments, loans and advances by Subsidiaries in
        and to other  Subsidiaries;  provided  that any such  shares of  capital
        stock held by the  Borrower  in Topps  Europe  Limited  shall be pledged
        pursuant to the Pledge Agreement (subject to the limitations  applicable
        to  common  stock  of a  Foreign  Subsidiary  referred  to in  therein);
        provided,  further,  that the  aggregate  amount of  investments  by the
        Borrower in its Subsidiaries shall not at any time exceed $3,000,000;

               (d)  Intercompany  Debt evidenced by Intercompany  Notes owing to
        the Borrower in an aggregate  principal amount not to exceed  $3,000,000
        at any one time;

               (e)  Intercompany  Debt not evidenced by  Intercompany  Notes but
        which is  reflected  on the books and  records of the  Borrower  and its
        Subsidiaries in an aggregate  outstanding principal amount not to exceed
        $15,000,000 at any one time;

                                       53
<PAGE>

               (f) a guaranty by the Borrower  under the Topps SA Guaranty in an
        amount not in excess of $2,000,000;

               (g)  an  unsecured  guaranty  by  the  Borrower  of  each  of the
        following unsecured  obligations of Topps Ireland Limited to a financial
        institution:

                    a. Overdraft facility up to 500,000 Irish pounds;

                    b. Letter of credit facility up to $3,450,000 (U.S.);

                    c. 70,000 Irish pound guarantee to the Department of
                       Agriculture;

                    d. 20,000 Swiss Franc guarantee to Messrs. Gordernd in
                       respect of the importation of goods into Switzerland;

                    e. 2,000,000 Irish pound forward currency hedging facility;
                       and

                    f. 58,000 Sterling  pound  guarantee in favor  of VAG
                       Finance Limited.

               ; provided that (i) the maximum amount of each unsecured separate
               credit facility extended by such financial institution may not be
               increased  and (ii) the aggregate  amount of all such  guaranties
               shall not exceed $7,200,000;

               (h)  investments  received in connection  with the  bankruptcy or
        reorganization  of, or settlement  of  delinquent  accounts and disputes
        with,  customers and suppliers,  in each case in the ordinary  course of
        business; and

               (i) loans and advances to officers,  directors  and  employees in
        the  ordinary  course  of  business  (including  to  finance  relocation
        expenses) not to exceed $100,000 at any one time outstanding.

               (j) an unsecured guaranty by the Borrower of the Bank of Scotland
        Debt in an amount not to exceed 1,500,000 British pounds.

               SECTION  6.05.  Asset Sales.  The Borrower will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease or otherwise dispose of
any asset,  including any capital stock, nor will the Borrower permit any of its
Subsidiaries  to issue  any  additional  shares  of its  capital  stock or other
ownership interest in such Subsidiary, except:

               (a) sales of inventory,  used,  surplus or obsolete equipment and
        Permitted Investments in the ordinary course of business;

                                       54
<PAGE>

               (b) the granting of licenses in trademarks or other  intellectual
        property owned by the Borrower or any of its Subsidiaries  provided that
        any such licenses  granted by the Borrower shall be subject to the terms
        of the Trademark Security Agreement;

               (c)  sales,  transfers  and  dispositions  to the  Borrower  or a
        Subsidiary;  provided  that any such sales,  transfers  or  dispositions
        shall be made in compliance with Section 6.08;

               (d) a sale of the  Plant  and  equipment  owned by Topps  Ireland
                Limited located in Cork, Ireland;

               (e) a sale of the equipment from the Borrower's  Plant located in
                Duryea, Pennsylvania;

               (f) sales,  transfers  and  dispositions  of assets  (other  than
        capital  stock of a  Subsidiary)  that are not  permitted  by any  other
        clause of this Section; provided that the aggregate fair market value of
        all assets sold,  transferred or otherwise  disposed of in reliance upon
        this clause (f) shall not exceed  $500,000 during any fiscal year of the
        Borrower; and

               (g) sales and transfers of assets  between and among the Borrower
        and the  Subsidiaries not to exceed $750,000 in the aggregate during the
        term of the Loans.

provided that (i) all sales, transfers,  leases and other dispositions permitted
hereby shall be made for fair value and (ii) substantially all the consideration
for such distributions shall be cash consideration.

               SECTION 6.06. Hedging Agreements. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any Hedging  Agreement,  other
than (a) Hedging Agreements  required by Section 5.16 and (b) Hedging Agreements
entered  into in the ordinary  course of business to hedge or mitigate  risks to
which the Borrower or any  Subsidiary  is exposed in the conduct of its business
or the  management of its  liabilities  in an aggregate  notional  amount not to
exceed $54,000,000.

               SECTION   6.07.   Restricted   Payments;   Certain   Payments  of
Indebtedness.  (a) The Borrower will not, and will not permit any Subsidiary to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment,  except (i) the Borrower may declare and pay dividends  with respect to
its capital stock payable solely in additional  shares of its common stock, (ii)
Subsidiaries may declare and pay dividends ratably with respect to their capital
stock,  and (iii) the  Borrower  may make  Restricted  Payments,  not  exceeding
$250,000 during any fiscal year, pursuant to and in accordance with stock option
plans or other benefit plans for  management or employees or  consultants of the
Borrower and its Subsidiaries.

               (b) The Borrower will not, and will not permit any Subsidiary to,
make or agree to pay or make,  directly  or  indirectly,  any  payment  or other

                                       55
<PAGE>

distribution  (whether in cash securities or other property) of or in respect of
principal  of  or  interest  on  any  Indebtedness,  or  any  payment  or  other
distribution  (whether in cash,  securities  or other  property),  including any
sinking  fund or  similar  deposit,  on  account  of the  purchase,  redemption,
retirement,  acquisition,  cancellation  or  termination  of  any  Indebtedness,
except:

               (i) payment of Indebtedness created under the Loan Documents;

               (ii)  payment  of  regularly  scheduled  interest  and  principal
        payments  as and  when  due in  respect  of any  Indebtedness  permitted
        hereunder;

               (iii)  refinancings of  Indebtedness  to the extent  permitted by
        Section 6.01; and

               (iv) payment of secured Indebtedness that becomes due as a result
        of the  voluntary  sale or transfer of the  property or assets  securing
        such Indebtedness.

               SECTION 6.08. Transactions with Affiliates.The Borrower will not,
and will not permit any  Subsidiary  to, sell,  lease or otherwise  transfer any
property or assets to, or purchase,  lease or otherwise  acquire any property or
assets from,  or otherwise  engage in any other  transactions  with,  any of its
Subsidiaries,  except (a)  transactions  in the ordinary course of business that
are at prices and on terms and  conditions not less favorable to the Borrower or
such Subsidiary  than could be obtained on an arm's-length  basis from unrelated
third  parties,  (b) any Restricted  Payment  permitted by Section 6.07, (c) the
transactions  described in Section  6.04 and (d)  transactions  permitted  under
Section 6.05(g).

               SECTION 6.09. Restrictive Agreements.  The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly,  enter into, incur or
permit to exist any agreement or other arrangement that prohibits,  restricts or
imposes any condition  upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other  distributions  with
respect to any shares of its capital stock or to make or repay loans or advances
to the  Borrower or any other  Subsidiary  or to Guarantee  Indebtedness  of the
Borrower or any other  Subsidiary;  provided  that (i) the  foregoing  shall not
apply to  restrictions  and  conditions  imposed by law or by any Loan Document,
(ii) the foregoing  shall not apply to restrictions  and conditions  existing on
the date hereof identified on Schedule 6.09 (but shall apply to any extension or
renewal of, or any  amendment or  modification  expanding the scope of, any such
restriction  or  condition  other  than  any  extension,   renewal,   amendment,
modification  or  refinancing  of the  obligations  of Topps Ireland  Limited to
Ulster  Bank  which  such  obligations  shall not  exceed  $7.2  million  in the
aggregate),  (iii) the foregoing shall not apply to customary  restrictions  and
conditions  contained in agreements relating to the sale of a Subsidiary pending
such  sale,  provided  such  restrictions  and  conditions  apply  only  to  the
Subsidiary that is to be sold and such sale is permitted hereunder,  (iv) clause
(a) of the foregoing shall not apply to  restrictions  or conditions  imposed by
any agreement  relating to secured  Indebtedness  permitted by this Agreement if
such  restrictions  or conditions  apply only to the property or assets securing
such  Indebtedness  and (v)  clause  (a) of the  foregoing  shall  not  apply to
customary provisions in leases restricting the assignment thereof.

                                       56
<PAGE>

               SECTION 6.10. Ammendment of Material Documents. The Borrower will
not, and will not permit any  Subsidiary  to, amend,  modify or waive any of its
rights under its certificate of incorporation,  by-laws or other  organizational
documents if the same is reasonably  likely to have a Material  Adverse  Effect,
would  result in an Event of Default  under any of the Loan  Documents  or would
otherwise be adverse to the  interests or rights of the Lenders or determined by
the Lenders in their sole discretion.

               SECTION 6.11.  Limitations on Sales and Leasebacks.  The Borrower
will not, and will not permit any Subsidiary to, 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 any  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 any Subsidiary; provided, however, that
nothing in this Section 6.11 shall prevent the Borrower or any  Subsidiary  from
selling the plant and equipment located in Cork, Ireland and leasing back office
space located in such plant and related equipment.

               SECTION  6.12.  Fiscal Year.  The Borrower will not, and will not
permit any Subsidiary to, change its fiscal year.

               SECTION 6.13.  Consolidated Leverage Ratio. The Borrower will not
permit  Consolidated  Leverage  Ratio on the dates set forth below to be greater
than the amount specified opposite such dates:

--------------------------------------------------------------------------------
Fiscal Quarter Ending                            Consolidated Leverage Ratio
--------------------------------------------------------------------------------
February 28, 1998                                2.16 to 1
--------------------------------------------------------------------------------
May 30, 1998                                     3.85 to 1
--------------------------------------------------------------------------------
August 29, 1998                                  2.03 to 1
--------------------------------------------------------------------------------
November 28, 1998                                1.20 to 1
--------------------------------------------------------------------------------
February 27, 1999 and the last day of each       1.60 to 1
quarter thereafter
--------------------------------------------------------------------------------

               SECTION 6.14.  Consolidated Fixed Charge Ratio. The Borrower will
not permit  Consolidated  Fixed  Charge Ratio on the dates set forth below to be
less than the amount specified opposite such dates:

--------------------------------------------------------------------------------
Fiscal Quarter Ending                            Consolidated Fixed Charge Ratio
--------------------------------------------------------------------------------
February 28, 1998                                1.16 to 1
--------------------------------------------------------------------------------
May 30, 1998                                     0.49 to 1
--------------------------------------------------------------------------------
August 29, 1998                                  0.94 to 1
--------------------------------------------------------------------------------

                                       57
<PAGE>

November 28, 1998                                1.46 to 1
--------------------------------------------------------------------------------
February 27, 1999                                0.92 to 1
--------------------------------------------------------------------------------
May 29, 1999                                     1.10 to 1
--------------------------------------------------------------------------------
August 28, 1999                                  1.10 to 1
--------------------------------------------------------------------------------
the last day of each quarter thereafter          1.25 to 1
--------------------------------------------------------------------------------

               SECTION  6.15.  Consolidated  Net  Worth.  The  Borrower  and its
Subsidiaries will not permit  Consolidated Net Worth at any time to be less than
$56,800,000.

               SECTION  6.16.  Consolidated  Net  Loss.  The  Borrower  and  its
Subsidiaries  will not incur a  consolidated  net loss for any  fiscal  quarter,
except that the Borrower and its  Subsidiaries may incur a consolidated net loss
in one fiscal quarter per each fiscal year as follows:  (a) if such consolidated
net loss  occurs  during the first  fiscal  quarter of any such year,  such loss
shall not exceed ($1,600,000) or if such consolidated net loss occurs during any
fiscal quarter other than the first fiscal  quarter,  such loss shall not exceed
($2,000,000);   (b)  the  Borrower  and  its  Subsidiaries   will  not  incur  a
consolidated  net loss for the first six  months of such  fiscal  year,  (c) the
Borrower and its  Subsidiaries  shall earn a consolidated net profit of $447,000
for the first nine  months of such fiscal  year,  and (d) the  Borrower  and its
Subsidiaries  shall earn a consolidated  net profit of $4,078,000 in such fiscal
year.

               SECTION 6.17.  EBITDA. The Borrower and its Subsidiaries will not
permit  EBITDA for each  quarter  ending on the dates set forth below to be less
than the amounts set forth opposite such dates:

--------------------------------------------------------------------------------
Fiscal Quarter Ending                              EBITDA
--------------------------------------------------------------------------------
February 28, 1998                                  $4,700,000
--------------------------------------------------------------------------------
May 30, 1998                                       ($1,800,000)
--------------------------------------------------------------------------------

               SECTION   6.18.   Cumulative   EBITDA.   The   Borrower  and  its
Subsidiaries  will not permit  Cumulative EBITDA on the dates set forth below to
be less than the amounts set forth opposite such dates:

--------------------------------------------------------------------------------
Fiscal Quarter Ending                              Cumulative EBITDA
--------------------------------------------------------------------------------
August 29, 1998                                    $3,100,000
--------------------------------------------------------------------------------
November 28, 1998                                  $5,640,000
--------------------------------------------------------------------------------
February 27, 1999 and on the last day of           $14,400,000
each quarter thereafter
--------------------------------------------------------------------------------

                                       58
<PAGE>

               SECTION 6.19. Capital Expenditures.  The Borrower will not permit
Capital Expenditures for the term of the Loans to exceed $6,000,000.

                                   ARTICLE VII

                                Events of Default

               SECTION  7.01.  Capital  Expenditures.  If any  of the  following
events ("Events of Default") shall occur:

               (a) the Borrower  shall fail to pay any  principal of any Loan or
        any reimbursement  obligation in respect of any LC Disbursement when and
        as the  same  shall  become  due and  payable,  whether  at the due date
        thereof or at a date fixed for prepayment thereof or otherwise;

               (b) the  Borrower  shall fail to pay any  interest on any Loan or
        any fee or any other amount (other than an amount  referred to in clause
        (a) of this  Article)  payable  under this  Agreement  or any other Loan
        Document, when and as the same shall become due and payable;

               (c) any  representation  or warranty made or deemed made by or on
        behalf of the Borrower or any  Subsidiary in or in  connection  with any
        Loan  Document  or any  amendment  or  modification  thereof  or  waiver
        thereunder, or in any report, certificate,  financial statement or other
        document  furnished  pursuant to or in connection with any Loan Document
        or any amendment or  modification  thereof or waiver  thereunder,  shall
        prove to have been incorrect when made or deemed made;

               (d) the Borrower  shall fail to observe or perform any  covenant,
        condition or agreement contained in Section 5.02,  5.04 (with respect to
        the existence of the Borrower), 5.09, 5.13 or 5.14 or in Article VI;

               (e) the Borrower  shall fail to observe or perform any  covenant,
        condition or agreement  contained in any Loan Document (other than those
        specified in clause (a), (b) or (d) of this  Article),  and such failure
        shall continue unremedied for a period of 30 days;

               (f) the Borrower or any Subsidiary shall fail to make any payment
        (whether of principal or interest and  regardless  of amount) in respect
        of any Material Indebtedness,  when and as the same shall become due and
        payable;

               (g) any event or  condition  occurs that  results in any Material
        Indebtedness  becoming  due  prior  to its  scheduled  maturity  or that
        enables or permits  (with or without the giving of notice,  the lapse of
        time or both) the holder or holders of any Material  Indebtedness or any
        trustee  or  agent  on  its  or  their  behalf  to  cause  any  Material
        Indebtedness  to become due, or to require the  prepayment,  repurchase,
        redemption  or  defeasance  thereof,  prior to its  scheduled  maturity;
        provided  that this  clause (g) shall not apply to secured  Indebtedness
        that  becomes due as a result of the  voluntary  sale or transfer of the
        property or assets securing such Indebtedness;

                                       59
<PAGE>

               (h)  an   involuntary   proceeding   shall  be  commenced  or  an
        involuntary   petition   shall   be   filed   seeking   (i) liquidation,
        reorganization  or  other  relief  in  respect  of the  Borrower  or any
        Subsidiary or its debts, or of a substantial  part of its assets,  under
        any Federal,  state or foreign bankruptcy,  insolvency,  receivership or
        similar  law now or  hereafter  in effect or (ii) the  appointment  of a
        receiver,  trustee,  custodian,  sequestrator,  conservator  or  similar
        official for the Borrower or any Subsidiary or for a substantial part of
        its assets,  and, in any such case,  such  proceeding or petition  shall
        continue  undismissed  for  60 days or an order or decree  approving  or
        ordering any of the foregoing shall be entered;

               (i) the Borrower or any Subsidiary shall (i) voluntarily commence
        any proceeding or file any petition seeking liquidation,  reorganization
        or  other  relief  under  any  Federal,  state  or  foreign  bankruptcy,
        insolvency,  receivership  or similar  law now or  hereafter  in effect,
        (ii) consent to the  institution  of, or fail to contest in a timely and
        appropriate  manner,  any proceeding or petition described in clause (h)
        of this  Article,  (iii) apply  for or consent to the  appointment  of a
        receiver,  trustee,  custodian,  sequestrator,  conservator  or  similar
        official for the Borrower or any Subsidiary or for a substantial part of
        its assets, (iv) file an answer admitting the material  allegations of a
        petition  filed  against it in any such  proceeding,  (v) make a general
        assignment  for the benefit of creditors or (vi) take any action for the
        purpose of effecting any of the foregoing;

               (j) the Borrower or any Subsidiary shall become unable,  admit in
        writing its inability or fail  generally to pay its debts as they become
        due;

               (k)  one or  more  judgments  for  the  payment  of  money  in an
        aggregate  amount in excess of $750,000  shall be  rendered  against the
        Borrower,  any Subsidiary or any combination  thereof and the same shall
        remain  undischarged  for a period of  30 consecutive  days during which
        execution  shall  not be  effectively  stayed,  or any  action  shall be
        legally  taken by a judgment  creditor to attach or levy upon any assets
        of the Borrower or any Subsidiary to enforce any such judgment;

               (l) an ERISA Event shall have  occurred  that,  in the opinion of
        the Required  Lenders,  when taken  together with all other ERISA Events
        that have occurred,  could reasonably be expected to result in liability
        of the Borrower and its  Subsidiaries in an aggregate  amount  exceeding
        $750,000 in any year;

               (m) any Lien purported to be created under any Security  Document
        shall  cease to be, or shall be asserted  by the  Borrower  not to be, a
        valid and perfected Lien on any Collateral,  with the priority  required
        by the applicable Security Document,  except (i) as a result of the sale
        or other  disposition  of the  applicable  Collateral  in a  transaction
        permitted  under the Loan  Documents,  (ii) as a result  of the  Agent's
        failure to maintain  possession  of any stock  certificates,  promissory
        notes or other instruments  delivered to it under the Security Documents
        or (iii) pursuant to the terms of such Security Document;

               (n) a Change in Control shall occur;

                                       60
<PAGE>

               (o) if any Loan  Document  ceases to be in full  force and effect
        (other  than by reason of any action by the  Agent),  or if without  the
        written  consent  of the  Lenders,  this  Agreement  or any  other  Loan
        Document shall be disaffirmed  or shall  terminate,  be terminable or be
        terminated  or become void or  unenforceable  for any reason  whatsoever
        (other than in accordance with its terms in the absence of default or by
        reason of any action by the Lenders or the Agent); or

               (p) if the Borrower  shall  breach any of the  material  terms or
conditions  of any  Hedging  Agreement  with any of the  Lenders and such breach
shall continue beyond any grace period, if any, relating thereto pursuant to its
terms;

then,  and in every such event (other than an event with respect to the Borrower
described  in clause  (h) or (i) of this  Article),  and at any time  thereafter
during the  continuance of such event,  the Agent may, and at the request of the
Required  Lenders shall,  by notice to the Borrower,  take either or both of the
following   actions,   at  the  same  or  different  times:  (i)  terminate  the
Commitments,  and thereupon the  Commitments  shall terminate  immediately,  and
(ii) declare  the Loans then  outstanding  to be due and payable in whole (or in
part,  in which case any  principal  not so  declared  to be due and payable may
thereafter  be declared to be due and  payable),  and thereupon the principal of
the Loans so declared to be due and  payable,  together  with  accrued  interest
thereon and all fees and other  obligations of the Borrower  accrued  hereunder,
shall become due and payable immediately,  without presentment,  demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (h) or (i)
of this Article, the Commitments shall automatically terminate and the principal
of the Loans then  outstanding,  together with accrued  interest thereon and all
fees  and  other   obligations  of  the  Borrower   accrued   hereunder,   shall
automatically become due and payable,  without presentment,  demand,  protest or
other notice of any kind, all of which are hereby waived by the Borrower.

                                  ARTICLE VIII

                                    The Agent

               Each of the  Lenders  and the  Issuing  Bank  hereby  irrevocably
appoints the Agent as its agent and authorizes the Agent to take such actions on
its behalf and to  exercise  such  powers as are  delegated  to the Agent by the
terms of the Loan  Documents,  together  with  such  actions  and  powers as are
reasonably incidental thereto.

               The bank  serving  as the  Agent  hereunder  shall  have the same
rights  and  powers in its  capacity  as a Lender as any  other  Lender  and may
exercise  the same as  though  it were  not the  Agent,  and  such  bank and its
Affiliates may accept deposits from,  lend money to and generally  engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate  thereof
as if it were not the Agent hereunder.

               The Agent shall not have any duties or  obligations  except those
expressly set forth in the Loan  Documents.  Without  limiting the generality of
the  foregoing,  (a) the  Agent shall not be subject to any  fiduciary  or other

                                       61
<PAGE>

implied duties,  regardless of whether a Default has occurred and is continuing,
(b) the  Agent  shall  not have any duty to take  any  discretionary  action  or
exercise  any  discretionary  powers,  except  discretionary  rights  and powers
expressly  contemplated  by the Loan  Documents  that the Agent is  required  to
exercise in writing by the Required  Lenders (or such other number or percentage
of the  Lenders as shall be  necessary  under the  circumstances  as provided in
Section 9.02),  and (c) except as expressly set forth in the Loan Documents, the
Agent  shall not have any duty to  disclose,  and  shall  not be liable  for the
failure to  disclose,  any  information  relating to the  Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as Agent or
any of its  Affiliates  in any  capacity.  The Agent shall not be liable for any
action  taken or not  taken  by it with the  consent  or at the  request  of the
Required  Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the absence
of its own gross negligence or wilful misconduct.  The Agent shall not be deemed
not to have  knowledge of any Default unless and until written notice thereof is
given to the  Agent by the  Borrower  or a Lender,  and the  Agent  shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or  representation  made in or in  connection  with any Loan  Document,
(ii) the  contents  of any  certificate,  report  or  other  document  delivered
thereunder or in connection  therewith,  (iii) the  performance or observance of
any of the  covenants,  agreements or other terms or conditions set forth in any
Loan Document, (iv) the validity,  enforceability,  effectiveness or genuineness
of any Loan Document or any other agreement,  instrument or document, or (v) the
satisfaction  of any  condition set forth in Article IV or elsewhere in any Loan
Document,  other  than to  confirm  receipt of items  expressly  required  to be
delivered to the Agent.

               The Agent shall be entitled to rely upon, and shall not incur any
liability  for  relying  upon,  any  notice,  request,   certificate,   consent,
statement,  instrument,  document or other writing  believed by it to be genuine
and to have been  signed or sent by the proper  Person.  The Agent also may rely
upon any  statement  made to it orally or by telephone  and believed by it to be
made by the  proper  Person,  and  shall not incur  any  liability  for  relying
thereon.  The Agent may consult  with legal  counsel (who may be counsel for the
Borrower),  independent  accountants and other experts selected by it, and shall
not be liable for any  action  taken or not taken by it in  accordance  with the
advice of any such counsel, accountants or experts.

               The Agent may  perform  any and all its duties and  exercise  its
rights and  powers by or through  any one or more  sub-agents  appointed  by the
Agent.  The Agent and any such  sub-agent may perform any and all its duties and
exercise its rights and powers through their  respective  Related  Parties.  The
exculpatory  provisions  of the  preceding  paragraphs  shall  apply to any such
sub-agent and to the Related Parties of each Agent and any such  sub-agent,  and
shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.

               Subject to the  appointment  and  acceptance  of a successor  the
Agent as  provided  in this  paragraph,  the  Agent  may  resign  at any time by
notifying  the  Lenders,  the  Issuing  Bank  and the  Borrower.  Upon  any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower,  to appoint a successor.  If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment  within 30 days
after the  retiring  Agent gives  notice of its  resignation,  then the retiring
Agent may, on behalf of the Lenders  and the Issuing  Bank,  appoint a successor

                                       62
<PAGE>

Agent  which  shall be a bank  with an  office  in New  York,  New  York,  or an
Affiliate of any such bank.  Upon the  acceptance  of its  appointment  as Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights,  powers,  privileges and duties of the retiring  Agent,  and the
retiring Agent shall be discharged  from its duties and  obligations  hereunder.
The fees payable by the Borrower to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor.  After the Agent's  resignation  hereunder,  the  provisions  of this
Article  and  Section 9.03  shall  continue  in effect  for the  benefit of such
retiring Agent, its sub-agents and their  respective  Related Parties in respect
of any  actions  taken or omitted to be taken by any of them while it was acting
as Agent.

               Each Lender  acknowledges that it has,  independently and without
reliance  upon the Agent or any other  Lender  and based on such  documents  and
information  as it has  deemed  appropriate,  made its own credit  analysis  and
decision to enter into this  Agreement.  Each Lender also  acknowledges  that it
will,  independently and without reliance upon the Agent or any other Lender and
based on such  documents  and  information  as it shall  from  time to time deem
appropriate,  continue to make its own  decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.

                                   ARTICLE IX

                                  Miscellaneous

               SECTION  9.01.  Notices.  Except in the case of notices and other
communications  expressly  permitted to be given by  telephone,  all notices and
other  communications  provided  for  herein  shall be in  writing  and shall be
delivered  by  hand  or  overnight  courier  service,  mailed  by  certified  or
registered mail or sent by telecopy, as follows:

               (a) if to the Borrower,  to it at One Whitehall Street, New York,
        New York, 10004-2109, Attention of Ms. Catherine K. Jessup (Telecopy No.
        212-376-0621)  with a copy to Willkie  Farr &  Gallagher,  One  Citicorp
        Center,  153 East 53rd Street,  New York,  New York 10022  (Telecopy No.
        212-821-8111  (after May 30, 1998 to 787 Seventh  Avenue,  New York, New
        York  10019-6099  (Telecopy  No.  212-728-8111),  Attention  of  William
        Hiller, Esq.;

               (b) if to the Agent,  to The Chase  Manhattan  Bank, 1 Pierrepont
        Plaza,  16th Floor,  Brooklyn,  New York,  11201-2791,  Attention of Mr.
        Christopher  Murtha and Regional  Manager  (Telecopy No.  718-403-6598),
        with a copy to  Zalkin,  Rodin & Goodman  LLP,  750 Third  Avenue,  27th
        Floor, New York, New York, 10017-2771, Attention of Mark F. Liscio, Esq.
        (Telecopy No. 212-682-6331);  provided that after June 12, 1998, notices
        shall be  delivered  to the Agent at 4  Metrotech  Center,  22nd  Floor,
        Brooklyn, New York, 11245.

               (c) if to the  Issuing  Bank,  to it at the  address  provided in
        paragraph (b) above;

                                       63
<PAGE>

               (d) if to any other  Lender,  to it at its address  (or  telecopy
        number) set forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for notices and other
communications  hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

               SECTION 9.02.  Waivers;  Ammendments.  (a) No failure or delay by
the  Agent,  the  Issuing  Bank or any Lender in  exercising  any right or power
hereunder or under any other Loan Document  shall  operate as a waiver  thereof,
nor shall any single or  partial  exercise  of any such  right or power,  or any
abandonment  or  discontinuance  of steps  to  enforce  such a right  or  power,
preclude  any other or further  exercise  thereof or the  exercise  of any other
right or power.  The rights and remedies of the Agent,  the Issuing Bank and the
Lenders  hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any  provision of any Loan  Document or consent to any departure by the Borrower
therefrom shall in any event be effective  unless the same shall be permitted by
paragraph (b)  of this  Section,  and  then  such  waiver  or  consent  shall be
effective  only in the  specific  instance  and for the purpose for which given.
Without  limiting  the  generality  of the  foregoing,  the  making of a Loan or
issuance  of a Letter  of  Credit  shall  not be  construed  as a waiver  of any
Default,  regardless  of whether the Agent,  any Lender or the Issuing  Bank may
have had notice or knowledge of such Default at the time.

               (b) Neither this  Agreement  nor any other Loan  Document nor any
provision hereof or thereof may be waived,  amended or modified  except,  in the
case of this  Agreement,  pursuant  to an  agreement  or  agreements  in writing
entered into by the  Borrower  and the  Required  Lenders or, in the case of any
other Loan Document,  pursuant to an agreement or agreements in writing  entered
into by the Agent and the Borrower that are parties  thereto,  in each case with
the consent of the Required  Lenders;  provided that no such agreement shall (i)
increase  the  Commitment  of any Lender  without  the  written  consent of such
Lender,  (ii)  reduce the  principal  amount of any Loan or LC  Disbursement  or
reduce  the rate of  interest  thereon,  or reduce any fees  payable  hereunder,
without the written consent of each Lender affected thereby,  (iii) postpone the
scheduled  Revolving  Maturity  Date or Term Loan  Maturity  Date, or reduce the
amount of, waive or excuse any payment of the principal amount of any Loan or LC
Disbursement,  or any interest thereon,  or any fees payable hereunder,  without
the written consent of each Lender affected thereby, (iv) change Section 2.18(b)
or (c) in a manner  that would alter the pro rata  sharing of payments  required
thereby,  without  the  written  consent of each  Lender,  (v) change any of the
provisions of this Section or the definition of "Required  Lenders" or any other
provision of any Loan  Document  specifying  the number or percentage of Lenders
(or  Lenders  of any  Class)  required  to  waive,  amend or modify  any  rights
thereunder or make any  determination or grant any consent  thereunder,  without
the written  consent of each  Lender (or each Lender of such Class,  as the case
may be),  (vi)  release  any  Subsidiary  (to the extent  such  Subsidiary  is a
Guarantor  hereunder)  from its Guarantee  hereunder,  or limit its liability in
respect of such  Guarantee,  without the written  consent of each Lender,  (vii)
release  all or any  substantial  part of the  Collateral  from the Liens of the
Security  Documents,  without the written consent of each Lender,  (viii) change
any  provisions  of any Loan  Document in a manner  that by its terms  adversely

                                       64
<PAGE>

affects the rights in respect of payments  due to Lenders  holding  Loans of any
Class  differently  than those  holding  Loans of any other  Class,  without the
written  consent of Lenders  holding a majority in  interest of the  outstanding
Loans and unused  Commitments of each affected Class or;  provided  further that
(A) no such  agreement  shall amend,  modify or  otherwise  affect the rights or
duties of the Agent,  or the Issuing Bank without the prior  written  consent of
the  Agent,  or the  Issuing  Bank,  as the  case  may be,  and (B) any  waiver,
amendment or modification of this Agreement that by its terms affects the rights
or duties under this  Agreement of the Revolving  Lenders (but not the Term Loan
Lenders)  or the Term  Loan  Lenders  (but  not the  Revolving  Lenders)  may be
effected by an agreement or agreements  in writing  entered into by the Borrower
and requisite percentage in interest of the affected Class of Lenders.

               SECTION 9.03. Expenses; Indemnity; Damage Waiver.(a) The Borrower
shall pay (i) all reasonable  out-of-pocket  expenses  incurred by the Agent and
its Affiliates,  including the reasonable  fees,  charges and  disbursements  of
counsel  for the  Agent,  in  connection  with  the  syndication  of the  credit
facilities  provided for herein,  the preparation and administration of the Loan
Documents or any amendments,  modifications or waivers of the provisions thereof
(whether  or not the  transactions  contemplated  hereby  or  thereby  shall  be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in  connection  with the issuance,  amendment,  renewal or extension of any
Letter  of  Credit  or  any  demand  for  payment   thereunder   and  (iii)  all
out-of-pocket  expenses  incurred by the Agent,  the Issuing Bank or any Lender,
including the fees,  charges and disbursements of any counsel for the Agent, the
Issuing Bank or any Lender,  in connection with the enforcement or protection of
its rights in  connection  with the Loan  Documents,  including its rights under
this Section,  or in connection  with the Loans made or Letters of Credit issued
hereunder,  including  all  such  out-of-pocket  expenses  incurred  during  any
workout,  restructuring  or  negotiations in respect of such Loans or Letters of
Credit.

               (b) The Borrower shall indemnify the Agent,  the Issuing Bank and
each Lender,  and each Related Party of any of the foregoing  Persons (each such
Person being called an "Indemnitee")  against, and hold each Indemnitee harmless
from, any and all losses,  claims,  damages,  liabilities and related  expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted  against any  Indemnitee  arising out of, in  connection
with,  or as a result of (i) the  execution or delivery of any Loan  Document or
any other agreement or instrument  contemplated  hereby,  the performance by the
parties to the Loan Documents of their respective  obligations thereunder or the
consummation   of  the  Financing   Transactions   or  any  other   transactions
contemplated  hereby,  (ii) any  Loan  or  Letter  of  Credit  or the use of the
proceeds therefrom  (including any refusal by the Issuing Bank to honor a demand
for payment  under a Letter of Credit if the  documents  presented in connection
with  such  demand  do not  strictly  comply  with the  terms of such  Letter of
Credit),  (iii) any actual or alleged presence or release of Hazardous Materials
on or  from  any  property  owned  or  operated  by the  Borrower  or any of its
Subsidiaries,  or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding  relating to any of the foregoing,  whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto;  provided that such indemnity shall not, as to any Indemnitee, be
available  to the extent  that such  losses,  claims,  damages,  liabilities  or
related  expenses are determined by a court of competent  jurisdiction  by final

                                       65
<PAGE>

and nonappealable  judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee.

               (c) To the  extent  that the  Borrower  fails  to pay any  amount
required to be paid by it to the Agent or the Issuing Bank under  paragraph  (a)
or (b) of this Section,  each Lender severally agrees to pay to the Agent or the
Issuing Bank, as the case may be, such Lender's pro rata share (determined as of
the time that the  applicable  unreimbursed  expense  or  indemnity  payment  is
sought)  of such  unpaid  amount;  provided  that the  unreimbursed  expense  or
indemnified loss, claim,  damage,  liability or related expense, as the case may
be, was  incurred  by or asserted  against the Agent or the Issuing  Bank in its
capacity as such.  For  purposes  hereof,  a Lender's  "pro rata share" shall be
determined  based  upon its share of the sum of the total  Revolving  Exposures,
outstanding Term Loans and unused Commitments at the time.

               (d) To the extent permitted by applicable law, the Borrower shall
not assert,  and each hereby waives,  any claim against any  Indemnitee,  on any
theory of liability,  for special,  indirect,  consequential or punitive damages
(as opposed to direct or actual damages)  arising out of, in connection with, or
as a result of, this  Agreement  or any  agreement  or  instrument  contemplated
hereby, the Financing  Transactions,  any Loan or Letter of Credit or the use of
the proceeds thereof.

               (e) All amounts due under this Section shall be payable  promptly
after written demand therefore.

               SECTION 9.04.  Successors and Assigns. (a) The provisions of this
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their  respective  successors and assigns  permitted  hereby  (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that the
Borrower may not assign or otherwise  transfer any of its rights or  obligations
hereunder  without the prior  written  consent of each Lender (and any attempted
assignment  or transfer by the Borrower  without such consent  shall be null and
void).  Nothing in this  Agreement,  express or implied,  shall be  construed to
confer  upon  any  Person  (other  than the  parties  hereto,  their  respective
successors and assigns  permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby,  the  Related  Parties of each of the Agent,  the  Issuing  Bank and the
Lenders)  any legal or  equitable  right,  remedy or claim under or by reason of
this Agreement.

               (b) Any Lender may assign to one or more  Eligible  Assignees all
or a portion of its rights and obligations  under this Agreement  (including all
or a portion of its Commitment and the Loans at the time owing to it);  provided
that  (i) except  in the case of an  assignment to a Lender or an Affiliate of a
Lender,  the Agent (and,  in the case of an  assignment of all or a portion of a
Revolving  Commitment or any Lender's obligations in respect of its LC Exposure,
the  Issuing  Bank) must give their  prior  written  consent to such  assignment
(which consent shall not be unreasonably  withheld),  (ii) except in the case of
an  assignment  to a Lender or an Affiliate of a Lender or an  assignment of the
entire  remaining  amount of the assigning  Lender's  Commitment  or Loans,  the
amount of the  Commitment or Loans of the assigning  Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such  assignment is delivered to the Agent) shall not be less than $5,000,000

                                       66
<PAGE>

and, after giving effect thereto,  the assigning Lender shall retain Commitments
and Loans aggregating at least $5,000,000, in each case unless the Agent and the
Borrower  otherwise  consent,  (iii) each partial assignment shall be made as an
assignment  of a  proportionate  part of all the assigning  Lender's  rights and
obligations  under this  Agreement,  except that this clause  (iii) shall not be
construed  to  prohibit  the  assignment  of a  proportionate  part  of all  the
assigning Lender's rights and obligations in respect of one Class of Commitments
or Loans,  (iv) the parties to each assignment  shall execute and deliver to the
Agent an Assignment and  Acceptance,  together with a processing and recordation
fee of $3,500, and (v) the assignee,  if it shall not be a Lender, shall deliver
to  the  Agent  an  Administrative  Questionnaire.  Subject  to  acceptance  and
recording thereof pursuant to paragraph (d) of this Section,  from and after the
effective  date  specified  in  each  Assignment  and  Acceptance  the  assignee
thereunder  shall be a party hereto and, to the extent of the interest  assigned
by such Assignment and  Acceptance,  have the rights and obligations of a Lender
under this Agreement,  and the assigning Lender  thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations  under  this  Agreement  (and,  in the  case  of an  Assignment  and
Acceptance  covering all of the assigning  Lender's rights and obligations under
this Agreement,  such Lender shall cease to be a party hereto but shall continue
to be  entitled to the  benefits of  Sections 2.15,  2.16,  2.17 and 9.03).  Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this  paragraph  shall be treated for purposes of this
Agreement  as a sale by such  Lender  of a  participation  in  such  rights  and
obligations in accordance with paragraph (e) of this Section.

               (c) The  Agent,  acting  for  this  purpose  as an  agent  of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each  Assignment  and  Acceptance  delivered  to  it  and  a  register  for  the
recordation  of the names and addresses of the Lenders,  and the  Commitment of,
and  principal  amount of the Loans and LC  Disbursements  owing to, each Lender
pursuant to the terms hereof from time to time (the "Register").  The entries in
the Register shall be conclusive,  and the Borrower, the Agent, the Issuing Bank
and the  Lenders may treat each  Person  whose name is recorded in the  Register
pursuant  to the terms  hereof as a Lender  hereunder  for all  purposes of this
Agreement,  notwithstanding  notice  to the  contrary.  The  Register  shall  be
available for  inspection by the Borrower,  the Issuing Bank and any Lender,  at
any reasonable time and from time to time upon reasonable prior notice.

               (d)  Upon  its  receipt  of  a  duly  completed   Assignment  and
Acceptance  executed by an  assigning  Lender and an  assignee,  the  assignee's
completed  Administrative  Questionnaire (unless the assignee shall already be a
Lender   hereunder),   the  processing  and   recordation  fee  referred  to  in
paragraph (b)  of  this  Section  and any  written  consent  to such  assignment
required  by  paragraph  (b) of  this  Section,  the  Agent  shall  accept  such
Assignment and Acceptance and record the  information  contained  therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.

               (e) Any Lender  may,  without the  consent of the  Borrower,  the
Agent or the Issuing  Bank,  sell  participations  to one or more banks or other
entities  (a  "Participant")  in all or a portion  of such  Lender's  rights and
obligations  under this Agreement  (including all or a portion of its Commitment
and the Loans owing to it);  provided that (i) such  Lender's  obligations under

                                       67
<PAGE>

this  Agreement  shall remain  unchanged,  (ii) such  Lender shall remain solely
responsible to the other parties hereto for the performance of such  obligations
and (iii) the Borrower,  the Agent, the Issuing Bank and the other Lenders shall
continue to deal solely and directly  with such Lender in  connection  with such
Lender's  rights  and  obligations  under  this  Agreement.   Any  agreement  or
instrument  pursuant to which a Lender sells such a participation  shall provide
that such Lender shall retain the sole right to enforce the Loan  Documents  and
to approve any  amendment,  modification  or waiver of any provision of the Loan
Documents;  provided  that such  agreement or  instrument  may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification  or waiver  described in the first proviso to Section  9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
2.16 and 2.17 to the same  extent as if it were a Lender  and had  acquired  its
interest  by  assignment  pursuant  to  paragraph  (b) of this  Section  but the
aggregate amount payable by the Borrower to the Lender selling the participation
and the Participant shall not exceed the amount which would otherwise be payable
in the  absence of the  participation.  To the  extent  permitted  by law,  each
Participant  also shall be entitled to the benefits of Section 9.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 2.18(c)
as though it were a Lender.


               (f) A  Participant  shall not be  entitled to receive any greater
payment  under Section 2.15 or 2.17 than the  applicable  Lender would have been
entitled to receive with respect to the participation  sold to such Participant,
unless  the  sale of the  participation  to such  Participant  is made  with the
Borrower's prior written  consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Borrower is notified of the participation  sold to such Participant and such
Participant  agrees,  for the benefit of the  Borrower,  to comply with  Section
2.17(e) as though it were a Lender.

               (g) Any  Lender  may at any time  pledge  or  assign  a  security
interest  in all or any  portion of its rights  under this  Agreement  to secure
obligations  of such  Lender,  including  any  pledge  or  assignment  to secure
obligations  to a Federal  Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security  interest;  provided that no such pledge
or  assignment  of a security  interest  shall  release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

               SECTION 9.05 Survival. All covenants, agreements, representations
and  warranties  made  by  the  Borrower  in  the  Loan  Documents  and  in  the
certificates  or other  instruments  delivered in connection with or pursuant to
this  Agreement  or any other Loan  Document  shall be  considered  to have been
relied upon by the other  parties  hereto and shall  survive the  execution  and
delivery of the Loan  Documents  and the making of any Loans and issuance of any
Letters of Credit,  regardless of any investigation made by any such other party
or on its behalf and  notwithstanding  that the Agent,  the Issuing  Bank or any
Lender  may  have  had  notice  or   knowledge   of  any  Default  or  incorrect
representation  or warranty at the time any credit is  extended  hereunder,  and
shall  continue  in full  force and  effect as long as the  principal  of or any
accrued  interest on any Loan or any fee or any other amount  payable under this
Agreement is outstanding  and unpaid or any Letter of Credit is outstanding  and
so long as the  Commitments  have not expired or  terminated.  The provisions of
Sections 2.15,  2.16, 2.17 and 9.03 and Article VIII shall survive and remain in

                                       68
<PAGE>

full  force  and  effect  regardless  of the  consummation  of the  transactions
contemplated  hereby,  the repayment of the Loans, the expiration or termination
of the  Letters  of  Credit  and  the  Commitments  or the  termination  of this
Agreement or any provision hereof.

               SECTION  9.06.  Counterparts;  Integration;  Effectiveness.  This
Agreement may be executed in  counterparts  (and by different  parties hereto on
different counterparts),  each of which shall constitute an original, but all of
which when taken together shall  constitute a single  contract.  This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Agent  constitute the entire contract among the parties  relating
to the subject  matter hereof and supersede any and all previous  agreements and
understandings,  oral or written,  relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have  been  executed  by the  Agent  and  when the  Agent  shall  have  received
counterparts  hereof which, when taken together,  bear the signatures of each of
the other parties hereto,  and thereafter shall be binding upon and inure to the
benefit of the  parties  hereto and their  respective  successors  and  assigns.
Delivery of an executed  counterpart  of a signature  page of this  Agreement by
telecopy  shall be effective as delivery of a manually  executed  counterpart of
this Agreement.

               SECTION 9.07. Severability.  Any provision of this Agreement held
to be invalid,  illegal or unenforceable  in any jurisdiction  shall, as to such
jurisdiction,  be  ineffective to the extent of such  invalidity,  illegality or
unenforceability without affecting the validity,  legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a  particular  jurisdiction  shall not  invalidate  such  provision in any other
jurisdiction.

               SECTION 9.08. Right of Setoff.  If an Event of Default shall have
occurred and be  continuing,  each Lender and each of its  Affiliates  is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all  deposits  (general  or  special,  time or
demand, provisional or final) at any time held and other obligations at any time
owing by such  Lender or  Affiliate  to or for the credit or the  account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement  held by such Lender,  irrespective  of whether or
not such Lender  shall have made any demand  under this  Agreement  and although
such obligations may be unmatured.  The rights of each Lender under this Section
are in addition to other rights and remedies  (including other rights of setoff)
which such Lender may have.

               SECTION 9.09. Governing Law; Jurisduction;  Consent to Service of
Process.  (a) This Agreement  shall be construed in accordance with and governed
by the law of the State of New York.

               (b) The Borrower hereby irrevocably and unconditionally  submits,
for itself and its property,  to the  nonexclusive  jurisdiction  of the Supreme
Court of the State of New York  sitting  in New York  County  and of the  United
States  District  Court of the Southern  District of New York, and any appellate
court from any thereof,  in any action or proceeding  arising out of or relating
to any Loan Document,  or for  recognition  or enforcement of any judgment,  and
each of the parties hereto hereby  irrevocably and  unconditionally  agrees that
all  claims  in  respect  of any such  action  or  proceeding  may be heard  and

                                       69
<PAGE>

determined  in such New York  State or, to the extent  permitted by law, in such
Federal  court.  Each of the parties  hereto agrees that a final judgment in any
such  action or  proceeding  shall be  conclusive  and may be  enforced in other
jurisdictions  by suit on the judgment or in any other  manner  provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Agent, the Issuing Bank or any Lender may otherwise have to bring any action
or proceeding  relating to this Agreement or any other Loan Document against the
Borrower or its properties in the courts of any jurisdiction.

               (c) The Borrower hereby irrevocably and  unconditionally  waives,
to the fullest extent it may legally and  effectively do so, any objection which
it may now or  hereafter  have to the  laying  of venue of any  suit,  action or
proceeding  arising  out of or  relating  to this  Agreement  or any other  Loan
Document in any court referred to in paragraph (b) of this Section.  Each of the
parties hereto hereby  irrevocably  waives,  to the fullest extent  permitted by
law, the defense of an  inconvenient  forum to the maintenance of such action or
proceeding in any such court.

               (d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in  Section 9.01.  Nothing in this
Agreement or any other Loan  Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

               SECTION  9.10.  WAIVER OF JURY TRIAL.  EACH PARTY  HERETO  HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR  RELATING  TO THIS  AGREEMENT,  ANY  OTHER  LOAN  DOCUMENT  OR THE  FINANCING
TRANSACTIONS  CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,  TORT OR ANY OTHER
THEORY).  EACH  PARTY  HERETO  (A) CERTIFIES  THAT NO  REPRESENTATIVE,  AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,  EXPRESSLY OR OTHERWISE,  THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER  AND  (B) ACKNOWLEDGES  THAT IT AND THE OTHER  PARTIES  HERETO  HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,  THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

               SECTION  9.11.  Headings.  Article and Section  headings  and the
Table of Contents used herein are for  convenience  of reference  only,  are not
part of this  Agreement  and shall not affect the  construction  of, or be taken
into consideration in interpreting, this Agreement.

               SECTION  9.12.  Confidentiality.  Each of the Agent,  the Issuing
Bank and the Lenders agrees to maintain the  confidentiality  of the Information
(as defined below),  except that Information may be disclosed (a) to its and its
Affiliates' directors,  officers,  employees and agents,  including accountants,
legal counsel and other advisors (it being  understood  that the Persons to whom
such  disclosure  is made will be  informed of the  confidential  nature of such
Information and instructed to keep such  Information  confidential),  (b) to the
extent  requested by any  regulatory  authority,  (c) to the extent  required by

                                       70
<PAGE>

applicable laws or regulations or by any subpoena or similar legal process,  (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding  relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an  agreement  containing  provisions  substantially  the same as
those of this Section,  to any assignee of or Participant in, or any prospective
assignee  of or  Participant  in,  any of its rights or  obligations  under this
Agreement,  (g) with the  consent of the  Borrower  or (h) to  the  extent  such
Information (i) becomes publicly available other than as a result of a breach of
this Section or  (ii) becomes  available  to the Agent,  the Issuing Bank or any
Lender on a nonconfidential basis from a source other than the Borrower provided
the Agent,  the Issuing Bank or any Lender does not have actual  knowledge  that
such source is in breach of any confidentiality agreement with the Borrower. For
the purposes of this Section,  "Information" means all information received from
the Borrower or its agents relating to the Borrower or its business,  other than
any such  information  that is available  to the Agent,  the Issuing Bank or any
Lender on a nonconfidential basis prior to disclosure by the Borrower;  provided
the Agent,  the Issuing Bank or any Lender does not have actual  knowledge  that
such source is in breach of any confidentiality agreement with the Borrower. The
Agent,  the Issuing  Bank and each  Lender  each agrees that  neither it nor its
affiliates  will use any Information in connection with the performance by it of
services for companies other than the Borrower and its Subsidiaries.

               SECTION 9.13. Interest Rate Limitation.  Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees,  charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted  for,  charged,
taken,  received or reserved by the Lender holding such Loan in accordance  with
applicable law, the rate of interest  payable in respect of such Loan hereunder,
together with all Charges  payable in respect  thereof,  shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been  payable in  respect  of such Loan but were not  payable as a result of the
operation  of this  Section  shall be  cumulated  and the  interest  and Charges
payable to such Lender in respect of other Loans or periods  shall be  increased
(but not above the Maximum Rate therefor) until such cumulated amount,  together
with  interest  thereon  at the  Federal  Funds  Effective  Rate to the  date of
repayment, shall have been received by such Lender.

                                       71
<PAGE>

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

                                                THE TOPPS COMPANY, INC.

                                                By:_________________________
                                                   Name:
                                                   Title:

                                                THE CHASE MANHATTAN BANK, 
                                                individually and as Agent,

                                                By:_________________________ 
                                                   Name:
                                                   Title:


                                       72
<PAGE>



                                  SCHEDULE 2.01

                                   COMMITMENTS

                              Term Loan Commitment

                            The Chase Manhattan Bank
                                   $24,950,000

                              Revolving Commitment
                      The Chase Manhattan Bank $ 9,450,000

<PAGE>

                                  SCHEDULE 3.05
                                  REAL PROPERTY


Office and warehouse
401 York Avenue                                                        Leased
Duryea, PA 18642

Manufacturing plant
50 Poplar Street                                                       Owned
Scranton, PA 18509

Manufacturing plant and office*
Innishmore                                                             Owned
Ballincollig
County Cork
Republic of Ireland

Executive offices
1 Whitehall St.                                                        Leased
New York, NY  10004

Office and warehouse
18 Vincent Avenue                                                      Leased
Crownhill, Milton Keynes
United Kingdom MK8 OAW

Office
5409 Eglinton Avenue West                                              Leased
Suite 210
Etobicoke, Ontario
Canada M9C 5K6

Office
Rua Carmo do Rio Verda                                                 Leased
241-Cj. 41
CEP 04729-010
Santo Amaro
Sao Paulo SP, Brazil

*Topps  Ireland  has signed a contract  to sell this  property  and lease back a
small portion for office space.

                                       1
<PAGE>



Office
Sinclair 3139                                                          Leased
2nd Floor "A"
1425 - Capital Federal
Argentina

Office
Alborado 136, 9 Piso                                                   Leased
Col. Parques del Pedregal
Mexico D.F., 14010
Mexico

Office
Via Villoresi 13,                                                      Leased
20143 Milano, Italy

                                       2
<PAGE>

                        SCHEDULE 3.06 - DISCLOSED MATTERS

          1. In August 1996, the Company was named a defendant in a class action
             in the United States District Court for the Eastern District of New
             York (the "Court") entitled Sullivan, et. al. v. The Topps Company,
             Inc. No.  CV-96-3779  (EDNY) (the  "Action").  The Action  alleged,
             among other things, that the Company violated the federal Racketeer
             Influenced and Corrupt Organizations Act by its practice of selling
             sports  and  entertainment  cards with  randomly-inserted  "insert"
             cards,  in violation of state and federal  anti-gambling  statutes.
             Each of the Company's principal competitors,  as well as several of
             its principal licensors,  was separately sued in its home state for
             employing or participating in, the same or similar  practices.  The
             Action sought treble damages and  attorneys'  fees on behalf of all
             purchasers of packs of cards potentially  including  "insert" cards
             over a four-year  period.  On August 21, 1997,  the Court entered a
             judgment  granting the  Company's  motion to dismiss the  complaint
             with prejudice.  The plaintiffs have filed a Motion to Alter, Amend
             and Vacate  Judgment and for Leave to File Amended  Complaint.  The
             Company has opposed the motion.

          2. The Company has the following collective bargaining agreements:

             A. Certain  employees at the Scranton,  Pennsylvania  manufacturing
                facility  are covered  under a Collective  Bargaining  Agreement
                between Borrower and Teamsters Local Union No. 229.

             B. Topps  Ireland  Limited  has  agreements  in  effect  with   the
                following unions:

                    a) Services Industrial Professional Technical Union
                    b) Amalgamated Engineering and Electrical Union
                    c) Technical Engineering and Electrical Union

<PAGE>

                                  Schedule 3.12

                                THE TOPPS COMPANY
              SUBSIDIARIES, AFFILIATES and CONTROLLED CORPORATIONS

<TABLE>
<CAPTION>

<S>                                 <C>                   <C>                       <C>                 <C>
                                                          JURISDICTION OF            % OF
NAME                                STATUS                INCORPORATION              OWNERSHIP           BUSINESS
Topps Comics, Inc.                 inactive               Delaware                   100%                Publishing
Bowman Gum, Inc.                   inactive               Delaware                   100%                -
Goudey Gum, Inc.                   inactive               Delaware                   100%                -
Topps International, Inc.          inactive               New York                   100%                -
Topps Ireland Limited              active                 Ireland                    100%                Sales-confectionery
Topps Distributors, Ltd.           inactive               Ireland                    100%                -
Sweetco Limited                    active                 Ireland                    100%                Sales-gum
Topps Sales Company, Inc.          active                 Barbados                   100%                Commissioned Broker
Topps Canada, Inc.                 active                 Canada                     100%                Wholesaler
Topps Europe Limited               active                 U.K.                       100%                Publishing
Merlin Marketing Services, Ltd.    inactive               U.K.                       100%                -
Merlin Publishing Limited          active                 U.K.                       100%                Publishing
Square Circle Limited              inactive               U.K.                       100%                -
Merlin Holdings, Inc.              inactive               Delaware                   100%                -
Merlin Editions, Inc.              inactive               Delaware                   100%                -
Editions Merlin SARL               inactive               France                     100%                Publishing
Topps Italia S.R.L.                active                 Italy                      100%                Publishing
Merlin Publishing BV               inactive               Netherlands                100%                Publishing
Merlin Publishing SL               inactive               Spain                      100%                Publishing
Topps International Holding, Inc.  active                 Delaware                   100%                Holding Company
Topps Mexico S.A. de C.V.          active                 Mexico                     100%                Sales-confectionery
Topps Brasil Ltda.                 active                 Brazil                     100%                Sales-confectionery
Topps Argentina S.A.               active                 Argentina                  100%                Sales-confectionery
Servmex S.A. de C.V.               active                 Mexico                     100%                Management company
Topps Latin America S.A.           active                 Uruguary                   100%                Sales-confectionery
</TABLE>

<PAGE>


                                  SCHEDULE 3.13
                                    INSURANCE

                         TOPPS EUROPE INSURANCE POLICIES

TYPE OF INSURANCE                               UNDERWRITER

Combined Property/Liability                     Commercial Union Assurance Co.
     includes:- Property Damage
                Business Interruption
                Employers Liability
                Public/Products Liability
                Money
                Fidelity
                Personal Accident

Travel                                          ITT London and Edinburgh

Computer                                        National Vulcan

Motor Fleet                                     Eagle Star

Uninsured Loss Recovery                         Hambro Legal Protection

Legal Expenses                                  Hambro Legal Protection

Directors and Officers                          Chubb Insurance Europe

Marine Cargo                                    Maritime


                         TOPPS ITALIA INSURANCE POLICIES

Property - Fire, Theft                          Gan Italia

Managing Director Legal Responsibility          Gan Italia

Employees Accident Insurance                    Gan Italia

Car Insurance                                   Vittoria

MD Health Insurance                             Assicassa

Retired Pension Insurance                       Gan Italia

<PAGE>


                       IRELAND LIMITED INSURANCE POLICIES


TYPE                                              UNDERWRITER

Curtain Bond                                      Hibernian

Employer's Liability                              Royal Sun Alliance

Private Car                                       Hibernian

Forklifts                                         Hibernian

Contingent Motor                                  Hibernian

Fidelity Guarantee                                Royal Sun Alliance

Engineering (Plant)                               Hibernian

Business Travel                                   Lloyd

Property Damage                                   Chubb

Business Interruption                             Chubb

Money                                             Chubb

Public/Products Liability                         Chubb


<PAGE>

                                  SCHEDULE 5.04
                                MATERIAL LICENSES


          1. Agreement dated July 25, 1995 between  Borrower and NBA Properties,
             Inc. as amended from time to time.

          2. Agreement dated May 19, 1997 between Borrower and National Football
             League  Properties,  Inc. as amended  from time to time;  Agreement
             dated June 18, 1997 between Borrower and NFL Players Association as
             amended from time to time.

          3. Individual  licenses with Major League Baseball Players pursuant to
             Borrower's  standard  form of  Baseball  Player's  Picture  License
             Agreement of various dates. Agreement dated January 1, 1969 between
             Borrower and Major League Baseball  Properties as amended from time
             to time.

          4. Agreement dated August 3, 1994 between  Borrower and Premier League
             Soccer as amended from time to time.

<PAGE>

                                  SCHEDULE 6.01
                              EXISTING INDEBTEDNESS


          1.  Topps  Ireland  Limited  ("TIL")  has  various  credit  facilities
          pursuant  to  an  agreement  dated  July  9,  1997  with  Ulster  Bank
          ("Ulster"). They are as follows:

                    a) Overdraft facility up to 500,000 Irish pounds.

                    b) Letter of credit  facility  of up to  $3,450,000  million
                       (U.S.).

                    c) 70,000  Irish  pound  guarantee  to  the   Department  of
                       Agriculture.

                    d) 20,000  Swiss  Franc  guarantee  to Messrs.  Gordernd  in
                       respect of the importation of goods into Switzerland.

                    e) 2,000,000 Irish pound forward currency hedging  facility.
                       The Company  may  have up to 20  million Irish pounds  in
                       currency contracts open at any time.

                    f) 58,000  Sterling pound  guarantee in favor of VAG Finance
                       Limited.

          The  documentation  relating to these  facilities  includes a negative
          pledge in respect of the assets of TIL.

          2. 1,500,000  British  pounds  available  under  the Bank of  Scotland
             credit facility.

<PAGE>

                                  SCHEDULE 6.02
                                 EXISTING LIENS


          Lien in favor of IBM  Corp.  as set  forth in the  attached  financing
          statement.

          Lien in favor of  Paula  Ann  Cockrell  as set  forth on the  attached
          Judgment & Lien Report.


<PAGE>





                                  SCHEDULE 6.04
                              EXISTING INVESTMENTS


          1. Investments in subsidiaries listed on Schedule 3.12



<PAGE>



                                  SCHEDULE 6.09
                              EXISTING RESTRICTIONS



          1. Negative  pledge of the assets of TIL contained  within Ulster Bank
             Credit Agreement referred to in Schedule 6.01.



<PAGE>

                                                                       EXHIBIT A
                                                                          to the
                                                                Credit Agreement


                            ASSIGNMENT AND ACCEPTANCE
                             Dated: __________, ____

               Reference  is made to the Credit  Agreement,  dated as of May 11,
1998 (as amended,  amended and  restated,  supplemented,  modified and in effect
from time to time, the "Credit  Agreement"),  among THE TOPPS  COMPANY,  INC., a
Delaware corporation (the "Borrower"),  the Lenders party thereto (together with
their successors and assigns,  the "Lenders"),  and THE CHASE MANHATTAN BANK, as
agent (in such capacity,  the "Agent") for the Lenders.  Capitalized  terms used
herein and not otherwise  defined shall have the meanings assigned to such terms
in the Credit Agreement. This Assignment and Acceptance between the Assignor (as
set forth on Schedule I hereto and made a part  hereof) and the Assignee (as set
forth on Schedule I hereto and made a part hereof) is dated as of the Assignment
Effective Date (as set forth on Schedule I hereto and made a part hereof).

               The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor,  and the Assignee hereby irrevocably purchases
and  assumes  from the  Assignor  without  recourse to the  Assignor,  as of the
Assignment  Effective Date, an undivided  interest (the "Assigned  Interest") in
and to all the  Assignor's  rights and  obligations  under the Credit  Agreement
respecting  those,  and only those,  credit  facilities  contained in the Credit
Agreement as are set forth on Schedule I hereto (the "Assigned Facilities"),  in
a principal amount for each Assigned Facility as set forth on Schedule I hereto.

               The Assignor (i) makes no  representation or warranty and assumes
no responsibility with respect to any statements,  warranties or representations
made in or in  connection  with the  Credit  Agreement  or any other of the Loan
Documents or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency or value of the Credit Agreement, any other of the Loan Documents or
any other instrument or document furnished pursuant thereto,  other than that it
is the legal and beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim;  [and] (ii) makes
no representation or warranty and assumes no responsibility  with respect to the
financial  condition  of the  Borrower,  any of its  Subsidiaries  or any  other
obligor of any of their respective obligations under the Credit Agreement or the
performance or observance by the Borrower or any of its  Subsidiaries  of any of
their respective  obligations under the Credit Agreement,  any of the other Loan
Documents or any other instrument or document furnished  pursuant thereto;  [and
(iii)  attaches the Note(s)  (representing  the  Revolving  Loan(s)  and/or Term
Loan(s) held by it,  singularly  or  collectively,  the  "Notes(s)")  held by it
evidencing  the Assigned  Facilities  and requests that the Agent  exchange such
Note(s) for a new Note or Notes  payable to the  Assignor  (if the  Assignor has
retained any interest in the Assigned  Facility) and a new Note or Notes payable
to the Assignee in the  respective  amounts which reflect the  assignment  being
made hereby (and after giving effect to any other  assignments which have become
effective on the Assignment Effective Date)].

               The  Assignee  (i)  represents  and  warrants  that it is legally
authorized  to enter  into  this  Assignment  and  Acceptance  and that it is an
Eligible  Assignee;  (ii)  confirms  that it has  received  a copy of the Credit
Agreement,  together  with  copies  of  the  most  recent  financial  statements
delivered  pursuant  to  Section  5.01  thereof,  and such other  documents  and
information  as it has deemed  appropriate  to make its own credit  analysis and
decision to enter into this  Assignment  and  Acceptance;  (iii)  agrees that it
will, independently and without reliance upon the Agent, the Assignor, any other
Lender or any other Secured Party and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions

<PAGE>

in taking or not taking action under the Credit Agreement, any of the other Loan
Documents or any other instrument or document furnished  pursuant thereto;  (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and  discretion  under the Credit  Agreement,  the other
Loan Documents or any other instrument or document furnished pursuant thereto as
are  delegated to the Agent by the terms  thereof,  together with such powers as
are  reasonably  incidental  thereto;  (v)  agrees  that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations  which by the terms of the Credit  Agreement are required to
be performed by it as a Lender;  and (vi) if the Assignee is organized under the
laws of a jurisdiction outside the United States,  attaches the forms prescribed
by the  Internal  Revenue  Service of the  United  States  certifying  as to the
Assignee's  exemption from United States  withholding  taxes with respect to all
payments to be made to the  Assignee  under the Credit  Agreement  or such other
documents  as are  necessary to indicate  that all such  payments are subject to
such tax at a rate reduced by an applicable tax treaty.

               Following the execution of this  Assignment  and  Acceptance,  it
will be delivered to the Agent,  together with a processing and  recordation fee
of $3,500 for  acceptance by it and  recording by the Agent  pursuant to Section
9.04(b) of the Credit Agreement,  effective as of the Assignment  Effective Date
(which  Assignment  Effective Date shall be, unless  otherwise  agreed to by the
Agent,  at least five Business Days after the execution of this  Assignment  and
Acceptance).

               Upon such acceptance and recording, from and after the Assignment
Effective  Date,  the Agent shall make all  payments in respect of the  Assigned
Interest (including payments of principal,  interest, fees and other amounts) to
the  Assignee,  whether  such  amounts  have  accrued  prior  to the  Assignment
Effective  Date or accrue  subsequent  to the  Assignment  Effective  Date.  The
Assignor and the Assignee shall make all appropriate adjustments in payments for
periods prior to the  Assignment  Effective Date by the Agent or with respect to
the making of this assignment directly between themselves.

               From and after the  Assignment  Effective  Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in (x) this
Assignment and Acceptance and (y) Section 9.04 of the Credit Agreement, have the
rights and obligations of a Lender thereunder and under the other Loan Documents
and shall be bound by the provisions  thereof,  and (ii) the Assignor  shall, to
the extent  provided in (x) this  Assignment and Acceptance and (y) Section 9.04
of the  Credit  Agreement,  relinquish  its  rights  and be  released  from  its
obligations  under  the  Credit  Agreement;   provided,   that  Assignor  hereby
represents and warrants that the  restrictions  set forth in Section  9.04(b) of
the Credit  Agreement  pertaining to the minimum amount of assignments have been
satisfied.

               This  Assignment and Acceptance  shall be construed in accordance
with and  governed  by the laws of the  State of New  York,  without  regard  to
conflicts of laws principles and by federal law to the extent applicable.

               IN  WITNESS   WHEREOF,   the  parties  hereto  have  caused  this
Assignment and  Acceptance to be executed by their  respective  duly  authorized
officers on Schedule I hereto.

<PAGE>

                     Schedule I to Assignment and Acceptance
              Respecting the Credit Agreement, dated as of May 11,
              1998, among The Topps Company, Inc., the Lenders party
              thereto, together with their successors and assigns and The
              Chase Manhattan Bank, as Agent


Legal Name of Assignor:

Legal Name of Assignee:

Assignment Effective Date:

                             Principal New Term Loan Amount 
                                      Assigned:                     $___________

                             Principal New Term Loan Amount
                                      Retained:                     $___________

                             Principal Revolving Credit Commitment
                                      Amount Assigned               $___________

                                      Revolving Credit Commitment
                                             Percentage Assigned:
                                                                     __________%

                                      Principal Revolving Credit
                                              Commitment Amount
                                              Retained:
                                                                    $___________

Revolving Credit Commitment Percentage Retained: __________%

                                      Face Amount of Pre-Petition
                                            Letters of Credit
                                            Assigned:
                                                                    $___________

                                      Face Amount of Pre-Petition
                                            Letters of Credit
                                            Retained:
                                                                    $___________

ACCEPTED:

THE CHASE MANHATTAN BANK,
                               as Agent
                                                      _________________________,
                               as Assignor

                By__________________________
                                                       By_______________________
                Name:
                                                       Name:
                Title:
                                                       Title:

                                                    ___________________________,
                                                    as Assignee

                                                    By__________________________
                                                    Name:
                                                    Title:

<PAGE>

CONSENT OF THE BORROWER
to the extent that the assignee is not
an Eligible Assignee or as required
in Section 9.04(b)(ii) of the Credit
Agreement where such assignment
is not to a Lender or an Affiliate
of a Lender or is not an assignment
of the entire remaining amount of
the assigning Lender's Commitment
or Loan

THE TOPPS COMPANY, INC.


By____________________________
Name:
Title:

<PAGE>


                                   EXHIBIT B-1
                                       TO
                                CREDIT AGREEMENT
                      FORM OF OPINION OF BORROWER'S COUNSEL

May 11, 1998


The Chase Manhattan Bank, as Agent
and each of the other Lenders party to
the Credit Agreement referenced below
One Pierrepont Plaza
Brooklyn, New York 11201-2791

         Re:      $34,400,000 Term Loan, Revolving Credit
                  and Letter of Credit Facilities among The
                  Topps Company, Inc., The Chase Manhattan
                  Bank, as Agent, and the other lenders
                  party 
                  hereto__________________________________

Ladies and Gentlemen:

     We have acted as special  counsel to The Topps  Company,  Inc.,  a Delaware
corporation (the "Company"),  in connection with (i) the Term Loan in the amount
of $24,950,000 (the "Term Loan"),  (ii) the Revolving Credit facility (inclusive
of Letters of Credit) in the amount of $9,450,000  (the  "Revolving  Facility"),
each being made  available  to the  Company by you on this date  pursuant to the
Credit Agreement dated as of May 11, 1998 among you, the Lenders and the Company
(the "Credit Agreement") and (iii) the other transactions contemplated under the
Credit Agreement.

     This opinion is being  delivered in accordance with the condition set forth
in Section 4.01 of the Credit  Agreement.  All  capitalized  terms not otherwise
defined  herein  shall  have  the  meanings  provided  therefor  in  the  Credit
Agreement.

<PAGE>

     The terms "Actual  Knowledge" and "Primary  Lawyer Group" have the meanings
provided in the Legal  Opinion  Accord of the ABA Section of Business law (1991)
(the  "Accord"),  except the term "Primary Lawyer Group" shall also include Jack
H.  Nusbaum.  The above  reference  to the Accord is made solely with respect to
such definitions and not for any other purpose.

                                       2
<PAGE>


     As such counsel, we have reviewed the following documents:

                  1.       the Credit Agreement;

                  2.       the Trademark Security Agreement;

                  3.       the Pledge Agreement,

                  4.       the Topps Guarantee Agreement; and

                  5.       the Financing Statements (as
                           hereinafter defined).

                  All the foregoing documents are collectively referred to
     hereinafter as the "Loan Documents."

     In connection with this opinion,  we have made such examinations of law and
inquiries of officers of the Company and have  examined  certificates  of public
officials,  execution copies of the Loan Documents and such corporate  documents
and records of the Company and  certificates of officers of the Company and such
other  documents as we have deemed  necessary or appropriate for the purposes of
this  opinion.  In such  examination,  we have  assumed the  genuineness  of all
signatures (other than those of the Company),  the authenticity of all documents
submitted to us as originals and the conformity to authentic  original documents
of all documents submitted to us as certified,  conformed or photostatic copies.
As to various  questions of fact material to this  opinion,  we have relied upon
the   certifications,   representations   and   warranties   of   officers   and
representatives  of the Company and upon the  representations  and warranties of
the Company set forth in the Loan Documents.

                (A)  Based upon and subject to the foregoing,
                     we are of the opinion that:

                1.   The   Company   is  a   corporation   duly
incorporated,  validly existing and in good standing under the laws of the State
of Delaware and is duly qualified to transact business as a foreign  corporation

                                       3
<PAGE>

and is in good standing in the State of New York (except the Company's  biennial
report  is past due but the  Company  continues  to be  authorized  to  transact
business in the State of New York) and the  Commonwealth  of  Pennsylvania.  The
Company has the corporate  power and authority to own its assets and conduct the
businesses in which it is now engaged and has the corporate  power and authority
to  enter  into  each of the  Loan  Documents  and to  perform  its  obligations
thereunder.

                2.  The  execution,  delivery and  performance by the Company of
the Loan Documents and the  consummation  and  performance  of the  transactions
contemplated   thereby  have  been  approved  by  all  necessary  corporate  and
stockholder  action on the part of the Company.  Each of the Loan  Documents has
been duly authorized,  executed and delivered by the Company and constitutes the
legal,  valid and binding  obligation  of the Company,  enforceable  against the
Company in accordance with its respective terms.

                3.  Neither the  execution or delivery  of, nor performance  by 
the Company of its obligations  under,  the Loan Documents does or will conflict
with, violate or constitute a breach of the charter or bylaws of the Company.

                4.  To the  Actual Knowledge  of the Primary Lawyer Group, there
 except as disclosed in the Credit  Agreement, there is no pending or threatened
action, suit, investigation or proceeding,  before or by any court, governmental
department,  commission,  board,  bureau,  instrumentality,  agency or  arbitral
authority,  which calls into question the validity or  enforceability  of any of
the Loan Documents or the titles to their respective offices or authority of any
officers of the Company or which, if determined  adversely to the Company or its
Subsidiaries would have a Material Adverse Effect on the financial  condition of
the Company and its  Subsidiaries on a consolidated  basis or the ability of the
Company to perform its obligations under the Loan Documents.

                5.  Assuming  the  proceeds of the Loans are used  in compliance
with the provisions of the Credit Agreement,  the making of the Loans and use of

                                       4
<PAGE>

the proceeds  thereof  contemplated  by the Loan Documents and the pledge of and
granting of security interests in collateral  contemplated by the Loan Documents
will not  violate  any New  York or  Federal  law,  including  Section  7 of the
Securities  Exchange Act of 1934, as amended,  any  regulations  issued pursuant
thereto,  or  regulations  G, T, U or X of the Board of Governors of the Federal
Reserve System.

                6. The  Company  is not  (i)  an  "investment  company"  or  a 
company  "controlled"  by an  "investment  company"  within  the  meaning of the
Investment  Company  Act of 1940,  as amended or (ii) a "holding  company"  or a
"subsidiary  company"  of a "holding  company"  within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

                7. The  provisions  of the  Pledge  Agreement are  effective  to
create in favor of the Agent for the benefit of the  Lenders a legal,  valid and
enforceable security interest in all right, title and interest of the Company in
the Collateral  referred to therein.  So long as the Agent has possession in the
State of New York of (i) the certificates evidencing the Pledged Shares and (ii)
the Intercompany Notes, has acquired the security interest therein in good faith
and without  notice of any adverse claim and value has been given by the Lenders
to the Company, such security interest will be perfected and will be free of any
"adverse claim" (as defined in Section 8-102 of the New York Uniform  Commercial
Code (the  "NYUCC"))  with the rights of a "protected  purchaser" (as defined in
Section 8-303 of the NYUCC and which term  includes,  pursuant to the definition
of the terms "purchase" and "purchaser" in Section 1-201 of the NYUCC, a holder,
such as the Agent for the benefit of the Lenders, of a security interest).

                8. The  provisions  of  the  Trademark  Security  Agreement  are
effective  to  create in favor of the Agent  for the  benefit  of the  Lenders a
legal, valid and enforceable  security interest in all right, title and interest
of the Grantor party thereto in the  Trademark  Collateral  referred to therein.

                                       5
<PAGE>

The filing of the Trademark  Security  Agreement in the United States Patent and
Trademark  Office  will  result in the  perfection  of the Liens which have been
created and granted pursuant to the Trademark Security Agreement.  To the Actual
Knowledge  of the  Primary  Lawyer  Group  there are no Liens on the  Collateral
subject to the Trademark Security Agreement except for liens permitted under the
Credit Agreement and the Liens in favor of you expressly created pursuant to the
Loan Documents.

                9.  Neither the  execution or  delivery of, nor  performance  by
the  Company of its  obligations  under,  the Loan  Documents  (a) to the Actual
Knowledge of the Primary  Lawyer  Group,  does or will  violate or  constitute a
breach of any material contract, agreement,  indenture, lease, instrument, other
document, judgment, writ, determination, order or decree to which the Company is
a party or by which the Company or any of its properties is bound or (b) does or
will violate any law, rules or  regulations  applicable to the Company or (c) to
the Actual  Knowledge of the Primary  Lawyer  Group,  does or will result in the
creation or imposition of any lien, pledge,  charge or encumbrance of any nature
upon or with respect to any of the  properties of the Company,  except for liens
permitted  under the Credit  Agreement  and the Liens in favor of you  expressly
created pursuant to the Loan Documents.

                10.  Neither the  execution or delivery of, nor performance  by
the Company of its  obligations  under,  the Loan  Documents  requires the prior
approval,  consent,  waiver,  permission  or  authorization  of,  notice  to  or
registration  or  filing  with any  court or New  York or  Federal  governmental
authority,  except for  filings  expressly  contemplated  by the Loan  Documents
(which  have  been  made),  the  filing of  Uniform  Commercial  Code  financing
statements (the "Financing  Statements") and future filings, if any, required to
continue  the  perfection  of  security  interests  perfected  by the  Financing
Statements or to perfect any security interests in proceeds of collateral.

                11. The Company is not subject to any charter or bylaw provision
which restricts,  limits, or prohibits payment of the Term Loan or advances made

                                       6
<PAGE>

or reimbursement obligations arising under the Revolving Facility or performance
of any of the obligations pursuant to the terms of the Loan Documents.

                (B)  The opinions expressed herein, however,
                           are subject to the following:

                1.  We are  members of the Bar of the State of New York and  do
 not purport to be experts in the laws of jurisdictions  other than the State of
New York, the General  Corporation  Law of the State of Delaware and the Federal
laws of the United  Sates of America and we do not express any opinion as to the
laws of any  jurisdiction  other than the present laws of the State of New York,
the General  Corporation  Law of the State of Delaware  and Federal  laws of the
United States, in each case of the type specifically  applicable to transactions
of the  type  contemplated  by the  Loan  Documents  and  the  present  judicial
interpretations thereof and to the facts as they presently exist.

                2.  The  opinions  set forth in  Paragraph  A, insofar  as they 
relate to the  enforceability  of the Loan Documents,  are subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting or
limiting  the  enforcement  of  creditors'  rights  generally  and to  equitable
principles affecting the availability of equitable relief (regardless of whether
enforcement  is  considered  in a  proceeding  in equity  or at law),  including
principles  of  commercial  reasonableness  or  conscionability  and an  implied
covenant  of good  faith and fair  dealing.  Such  principles  of equity  are of
general  application,  and in applying  such  principles,  a court,  among other
things,  might not allow a creditor to accelerate  the maturity of a debt for an
immaterial  default.  Such  principles  applied  by  a  court  might  include  a
requirement  that a  creditor  act  with  reasonableness  and good  faith.  Such
requirement  might  be  applied,  for  example,  to any  provision  of the  Loan
Documents purporting to authorize conclusive determinations by any Lender or the
Agent.  Insofar  as  provisions  contained  in the Loan  Documents  provide  for

                                       7
<PAGE>

indemnification,  the  enforcement  thereof  may be  limited  by  public  policy
considerations.

                3.  A partner of this firm,  Jack R. Nusbaum, is a member of the
 Board of Directors of the Company.

                4.  We  have  made no independent  investigations  except  as  
specifically set forth herein.

                5.  We  express no opinion as to the effect of the law of any  
jurisdiction  other than the State of New York  wherein  any Lender or the Agent
(or any assignee of any of the rights  and/or  obligations  of any Lender or the
Agent under the Loan  Documents)  may be located or wherein  enforcement  of the
Loan  Documents  may be  sought  which  limits  the  rates of  interest  legally
chargeable or collectible.

                6.  We express no opinion as to (i)  whether a federal  or state
court  outside of the State of New York  would give  effect to the choice of New
York law provided for in the Loan Documents, (ii) sections of the Loan Documents
insofar as such sections relate to the subject matter jurisdiction of the courts
specified  therein to adjudicate any controversy  related to the Loan Documents,
(iii)  sections of the Loan  Documents  insofar as such  sections  relate to the
waiver of trial by jury, (iv) the waiver of defenses and the waiver of objection
to venue set forth in the Loan  Documents  with  respect to  proceedings  in the
courts specified therein or (v) the  enforceability of any provision of the Loan
Documents  that  purports to define  acts that will  constitute  a  commercially
reasonable disposition of collateral.

                7.  We  express no opinion as to the effect of any Federal or 
state fraudulent  transfer or preferential  transfer law, including Sections 547
or 548 of the  Bankruptcy  Reform Act, as amended,  on the opinions set forth in
paragraphs 2 and 5 of the Part A or as to the  enforceability  of any  guarantee
agreement provided pursuant to Section 5.14 of the Credit Agreement.

                                       8
<PAGE>

                8.  We  have  made  no  examination  of and express  no  opinion
as to (i) the ownership of any Collateral described in the Loan Documents or any
other matters  affecting  title or (ii) the priority of any Lien purported to be
created by any Loan Documents (except as otherwise  expressly noted in paragraph
7 of Part A above).

                9.  Our   opinions    contained   herein   are rendered  solely
for your information in connection with the transactions  contemplated under the
Loan  Documents  and may not be relied  upon in any manner by any other  person,
entity or agency, or by you for any other purpose. Our opinions herein shall not
be quoted or otherwise included, summarized or referred to in any publication or
document, in whole or in part, for any purposes whatsoever,  or furnished to any
other person,  entity or agency,  except as may be required by you by applicable
law or regulation  or request of regulatory  agencies to which you are subjects.
We further  advise you that we are not  assuming  any  obligation  to notify the
Agent or the  Lenders of any  changes  in this  opinion as a result of any facts
that may come to our  attention  in the future  which may cause a change in this
opinion,  including any action necessary to maintain  perfection of the security
interest referred to in paragraphs 7 or 8 of Part A above.

                10.  This   opinion   is   limited  to  matters expressly  set
forth  herein and no opinion  is to be  implied  or may be  inferred  beyond the
matters expressly stated herein.

                                                  Very truly yours,


                                       9
<PAGE>

                                   EXHIBIT B-2
                                       TO
                                CREDIT AGREEMENT
                   FORM OF OPINION OF BORROWER'S U.K. COUNSEL


                                                                     11 May 1998

                                 CONFORMED COPY


The Chase Manhattan Bank, as Agent and
Each of the Lenders party to the Credit Agreement
Referenced Below.
One Pierrepont Plaza
Brooklyn
NY 11201-2791
USA




Dear Sirs

Re:  US$34,400,000 Term Loan, Revolving Credit Facility and Letter of Credit 
amongst The Chase  Manhattan  Bank, as Agent,  the Lenders party thereto and 
The Topps Company, Inc.

1.          We have been  instructed  to opine on  certain  specific  matters
            concerning  Topps  Europe  Limited  ("Topps  Europe")  as English
            legal   advisers  to  The  Topps  Company,   Inc.   ("Topps")  in
            connection  with a Credit  Agreement (the "Credit  Agreement") of
            11 May 1998 and  expressed  to be  between  Topps  and The  Chase
            Manhattan  Bank  (the  "Agent")  for  each  of the  lenders  (the
            "Lenders")  now or hereafter  party to the Credit  Agreement.  We
            have  taken  instructions  solely  from  Topps in respect of this
            matter.  We understand  that the Agent  proposes to take a pledge
            (the  "Pledge")  to be  governed  by New York  law  over  certain
            shares in Topps Europe.  We have not advised Topps,  the Lenders,
            the Agent or any other  person  on the  terms and we  express  no
            opinion  on  the  effect  (if  any)  or  the  enforceability  (or
            otherwise) of the Pledge  (whether under English Law or under the
            laws of any other  country)  nor on whether  the  Pledge  creates
            security  or is an  appropriate  form  of  taking  security  over
            shares in a company incorporated in England.

2.          For the purposes of this opinion, we have examined:

            2.1        the entries  shown on the  microfiche  (obtained by us
                       from Companies House,  London,  on 11 May 1998) of the
                       memorandum and articles of  association  and the files
                       of Topps Europe  maintained  at Companies  House ("the
                       Microfiche"); and

<PAGE>

            2.2        the Share  Register (as  referred to in  paragraph  6.3
                       below).

3.          This  opinion is limited to English  law as applied by the English
            courts at the date  hereof  and is given on the basis that it will
            be governed by and  construed in  accordance  with English law. We
            have made no  investigation  of, and express no opinion as to, any
            laws other than the law of England.  In  particular  we understand
            that the Pledge  and the  Credit  Agreement  are  expressed  to be
            governed by the laws of the State of New York.

4.          This opinion is being  delivered in accordance  with the condition
            in section  4.01(b) of the  Credit  Agreement.  We would draw your
            attention  to the  fact  that  we have  not  reviewed  the  Credit
            Agreement  or any  amendments,  supplements  or exhibits  thereof.
            We have  assumed  that there is  nothing  in the Credit  Agreement
            which would be relevant  to, or which would  otherwise  affect the
            opinions which we express in this letter.

5.          We would  also  draw your  attention  to the fact that we have not
            reviewed  the Pledge or any  amendments,  supplements  or exhibits
            thereof.  We have  assumed  that  there is  nothing  in the Pledge
            which would be relevant  to, or which would  otherwise  affect the
            opinions which we express in this letter.

ASSUMPTIONS

6.          For the purposes of this opinion we have assumed the following:

            6.1        both  Topps  and the Agent  are duly  incorporated  and
                       validly  existing  under  the laws of the  jurisdiction
                       of  their   incorporation   and  the  Pledge  has  been
                       validly  authorised,  executed  and  delivered  by both
                       Topps  and  the   Lender   and  the   entry   into  and
                       performance  of the Pledge are within the  capacity and
                       powers of both Topps and the Lender;

            6.2        all  factual   statements   made  in  the   Secretary's
                       Certificate,   attached   hereto  as  Schedule  1  (the
                       "Secretary's Certificate"), are true and correct;

            6.3        the  share   register  of  Topps   Europe  (the  "Share
                       Register") is true and correct;

            6.4        the  information  on the  Microfiche is accurate and it
                       should  be  noted  that we have  made no  investigation
                       into whether all  necessary  documents  have been filed
                       by Topps Europe or whether the register  maintained  by
                       the  Registrar  in  respect of Topps  Europe  correctly
                       records  all  such   information  and  consequently  it
                       should  be  noted  that  such   information   could  be
                       incomplete or incorrect;

            6.5        the searches and  enquiries  referred to in  paragraphs
                       7.5  and 7.6  below  were  accurate  and  complete  and
                       disclosed  all  information  which is material  for the
                       purposes   of  this   opinion;   it  should  be  noted,
                       however,  that searches at the  Companies  Registry are
                       not  capable of  revealing  whether or not a winding up
                       petition  or a  petition  for an  administration  order
                       has been  presented;  notice of a winding up order made
                       or resolution  passed,  or  administration  order made,

                                       3
<PAGE>

                       or a  receiver  or  administrative  receiver  appointed
                       may   not   be   filed   at  the   Companies   Registry
                       immediately;   also,  the  results  of  oral  telephone
                       enquiries   of  the   Central   Index  of   Winding  Up
                       Petitions have been found to be unreliable.

OPINION

7.          Subject  to  the   foregoing   assumptions   and  subject  to  the
            reservations  mentioned  in  paragraph  8 below and to any matters
            not  disclosed  to  us,  we are of the  opinion,  based  upon  our
            examination of the documents referred to above, that:

            7.1        Topps  Europe  is  a  company  duly   incorporated  and
                       validly  existing in England  under the  Companies  Act
                       1985 under the registered number 2331336;

            7.2        based  solely  upon an  examination  on the date hereof
                       of Topps Europe's  Share  Register and the  Secretary's
                       Certificate:

                       o          the present  issued  share  capital of Topps
                                  Europe  consists of 178,571  Ordinary Shares
                                  of US$0.01  and 178,571  Deferred  Shares of
                                  Br Pds 1 each, in  each case, fully  paid or
                                  credited as fully paid;

                       o          all of such  Ordinary  Shares  and  Deferred
                                  Shares are registered in the name of Topps;

            7.3        under the articles of  association  of Topps Europe the
                       holders  of  Deferred   Shares  are  only  entitled  to
                       participate  in the  assets of Topps  Europe  after the
                       holders of every  other  class of shares in the capital
                       of Topps  Europe  shall  have  received  on a return of
                       assets on liquidation or otherwise  the sum of Br pds 1
                       million in respect of each share  (other than  Deferred
                       Shares) held by them;

            7.4        under  the  articles  of  association  of Topps  Europe
                       none  of  the  Deferred   Shares  carry  any  right  to
                       receive  notice  of or attend  and vote at any  general
                       meeting of Topps Europe;

            7.5        entries  shown on the  Microfiche  (obtained by us from
                       Companies  House,  London on 11 May 1998)  revealed  no
                       order  or  resolution  for  the  winding  up  of  Topps
                       Europe,  no  interim or final  administration  order in
                       relation   to  Topps   Europe  and  no  notice  of  the
                       appointment of a receiver,  administrative  receiver or
                       administrator of Topps Europe or its assets;

            7.6        telephone  enquiries  of the  Central  Index of Winding
                       Up  Petitions  made on 11 May 1998 did not reveal  that
                       any  petition for the winding up or  administration  of
                       Topps Europe had been presented;

            7.7        subject  to the same being  duly  completed  and signed
                       by or on  behalf of the  person  who as  transferor  is
                       named in the Share  Register as the  registered  holder
                       of a share or shares in the  issued  share  capital  of
                       Topps  Europe,   to  it  being  duly  stamped  and  the
                       provisions   of   Article   9  of   the   Articles   of
                       Association  of Topps  Europe in the form  referred  to

                                       4
<PAGE>

                       in   paragraph   2  of  the   Secretary's   Certificate
                       otherwise  being  complied  with, a stock transfer form
                       in  the  form   attached   hereto  as   Schedule  2  is
                       effective,  upon  registration  in the Share  Register,
                       to  transfer  such share or shares to the person  named
                       as the  transferee  on such  stock  transfer  form  and
                       entered in the Share Register.

RESERVATIONS

8.
            8.1        No  opinion  is   expressed  in  relation  to  any  tax
                       consequences    arising   out   of   any   transactions
                       contemplated herein.

            8.2        We have  assumed  that  there will be no changes in the
                       matters  relevant  for the  purposes  of  this  opinion
                       after the date of this opinion.

            8.3        No opinion  is  expressed  as to whether  the Pledge is
                       capable  of   registration   with  the   Registrar   of
                       Companies,  whether the Pledge  should be so registered
                       or as to the  consequences of  non-registration  within
                       the  applicable  time-limit.  We would,  however,  draw
                       your  attention  to section  409 of the  Companies  Act
                       1985  which   provides  that  a  charge  created  by  a
                       company  incorporated  outside  Great Britain which has
                       an  established  place of business in England and Wales
                       on property  situate in England and Wales  (which would
                       include  shares  in  Topps  Europe)  will  be  void  as
                       against a  liquidator,  administrator  or any  creditor
                       of  the  company   unless  it  is   presented   to  the
                       Registrar of Companies,  together  with the  prescribed
                       particulars,  within 21 days of its  creation.  We have
                       not been instructed to register the Pledge.

            8.4        No opinion is  expressed  as to the  capacity  in which
                       Topps holds the Shares.

            8.5        No  opinion  is  expressed  as to the  priority  of any
                       security interest which may be created by the Pledge.

            8.6        We would  point out that,  notwithstanding  the  choice
                       of law  contained  in the Pledge  (which we  understand
                       to be  New  York  law),  an  English  court  will  give
                       effect to  mandatory  provisions  of the English law in
                       relation  to the Pledge and that,  in  particular,  the
                       Pledge  may be  subject  to any laws  from time to time
                       in   effect   relating   to   bankruptcy,   insolvency,
                       administration,   liquidation,   reorganisation,  court
                       schemes,  moratorium,  the doctrine of frustration  and
                       any  other  laws or other  legal  procedures  affecting
                       generally   the   enforcement   of   security   or   of
                       creditors' rights.

DISCLOSURE

9.          This  opinion  is  addressed  to you  solely  for your own use and
            benefit in  connection  with the Credit  Agreement  and is neither
            to be  transmitted  to any other  person,  nor relied  upon by and

                                       5
<PAGE>

            other person or for any other  purpose,  nor quoted or referred to
            in any public  document  nor filed with any  government  agency or
            other person, without our prior written consent.

Yours faithfully,



SIMMONS & SIMMONS




                                       6
<PAGE>


                                    EXHIBIT C
                                       TO
                                CREDIT AGREEMENT

                             PERFECTION CERTIFICATE


     The undersigned,  being the Vice President - Chief Financial Officer of THE

TOPPS COMPANY,  INC., a Delaware  corporation (the "Borrower"),  pursuant to the

requirements of Sec 4.01(f)(iv) of the Credit Agreement (the "Credit Agreement")

of even date herewith by and between the Borrower,  THE CHASE MANHATTAN BANK, as

Agent (the "Agent") and the lenders party thereto,  hereby certifies as follows:

A.    Set forth on Exhibit A are the results of the search of the  Uniform  Code
      filings made with respect to the Borrower in the following jurisdictions:

                               1.    Secretary of State, New York
                               2.    City Register, New York County, New York
                               3.    City Register, New York County, New York
                               4.    County Clerk, New York County, New York
                               5.    Central Filing Office, Pennsylvania
                               6.    County of Luzerne, Pennsylvania
 
B.    Set forth on Exhibit B are the results of the search of the United  States
      Patent and  Trademark Office with respect to the  Borrower's  intellectual
      property.

C.    This certificate is being  given  in the  corporate  and not the  personal
      capacity of the undersigned.


         Dated:      May 11, 1998


                                           THE TOPPS COMPANY, INC.


                                           By:_____________________________
                                                Title: Vice President -
                                                        Chief Financial Officer

<PAGE>


                                                                       EXHIBIT D
                                                         TO THE CREDIT AGREEMENT


                            FORM OF PLEDGE AGREEMENT


          PLEDGE  AGREEMENT  dated as of May 11, 1998 between THE TOPPS COMPANY,
INC., a Delaware  corporation  (the  "Pledgor") and THE CHASE MANHATTAN BANK, as
agent (in such capacity,  the "Agent") for the lenders (the "Lenders") from time
to time  parties to the Credit  Agreement  dated as of May 11, 1998 (as the same
may be  amended,  supplemented  or  otherwise  modified  from time to time,  the
"Credit Agreement"), among the Pledgor, the Lenders and the Agent.

          W I T N E S S E T H:WHEREAS, (a) pursuant to the Credit Agreement, the
Lenders  have  severally  agreed to make  Loans and other  extensions  of credit
(collectively,  the  "Extensions  of Credit") to the Pledgor  upon the terms and
subject  to the  conditions  set forth  therein  and (b) one or more  Lenders or
affiliates  of Lenders may from time to time enter into Hedging  Agreements  (as
defined in the Credit Agreement) with the Pledgor;

          WHEREAS, the proceeds of the Extensions of Credit will be used in part
to enable the Pledgor to make valuable  transfers to certain of its Subsidiaries
(as defined in the Credit  Agreement) in connection  with the operation of their
respective  businesses,  which transfers are evidenced by Intercompany Notes (as
defined in the Credit Agreement);

          WHEREAS,  the  Pledgor  and such  Subsidiaries  are engaged in related
businesses and the Pledgor and such Subsidiaries will derive  substantial direct
and indirect benefit from the making of the Extensions of Credit;

          WHEREAS,  it is a condition precedent to the obligation of the Lenders
to make their  respective  Extensions  of Credit to the Pledgor under the Credit
Agreement  that the  Pledgor  shall have  executed  and  delivered  this  Pledge
Agreement to the Agent for the ratable benefit of the Lenders; and

          WHEREAS,  Pledgor is the legal and beneficial  owner of (a) the shares
of stock of Topps Europe Limited,  a company  registered in England under number
2331336 (the  "Issuer")  described on Schedule I hereto (the "Pledged  Shares"),
which Pledged Shares constitute the percentage of all the issued and outstanding
shares of capital stock of the Issuer identified on such Schedule I, and (b) the
indebtedness  evidenced  by the  Intercompany  Notes  more  fully  described  on
Schedule II and the  indebtedness  described  from time to time on amendments to
Schedule II hereafter delivered to the Agent in accordance with the terms of the
Credit Agreement (collectively, the "Pledged Debt");

          NOW,  THEREFORE,  in  consideration  of the premises and to induce the
Agent and the Lenders to enter into the Credit  Agreement,  the  Pledgor  hereby
agrees with the Agent, for the ratable benefit of the Lenders, as follows:

<PAGE>

             1.         Defined Terms.

             (a)              Unless  otherwise  defined herein,  terms  defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

             (b)              References to "Lenders"  in this Pledge  Agreement
shall be deemed to  include  affiliates  of  Lenders  that may from time to time
enter into Hedging Agreements with the Pledgor.

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

             2.         Grant of Security.

             (a)              Subject  to the  provisions  of  subparagraph  (b)
hereof,  the Pledgor hereby transfers,  assigns and pledges to the Agent for the
ratable  benefit of the Lenders,  and hereby grants to the Agent for the ratable
benefit of the Lenders, a security interest in, the following, whether now owned
or existing or hereafter acquired or existing (collectively, the "Collateral"):

                                       (i)         the  Pledged  Shares  and the
                        certificates representing  the  Pledged  Shares  and any
                        interest of the Pledgor  in the entries on  the books of
                        any financial  intermediary  pertaining  to the  Pledged
                        Shares,  and  all  dividends,  cash,  warrants,  rights,
                        instruments and other property or proceeds  from time to
                        time received,  receivable or otherwise  distributed  in
                        respect of or in exchange for  any or all of the Pledged
                        Shares; and

                                       (ii)        the  Pledged   Debt  and  the
                        instruments  evidencing  the  Pledged  Debt,  and  all  
                        interest,  cash,  instruments  and  other  property  or 
                        proceeds  from time  to  time  received,  receivable  or
                        otherwise distributed  in respect of or in exchange  for
                        any or all of the Pledged  Debt; and

                                       (iii)             to   the   extent   not
                        covered by clauses  (i)  and (ii)  above,  respectively,
                        all  proceeds or any or all of the foregoing Collateral.
                        For  purposes  of  this  Pledge   Agreement,  the   term
                        "proceeds" includes  whatever is receivable  or received
                        when  Collateral  or  proceeds  are   sold,  exchanged, 
                        collected  or  otherwise  disposed  of,  whether  such  
                        disposition  is  voluntary or involuntary, and includes,
                        without  limitation,   proceeds  of any  indemnity  or  

<PAGE>

                        guaranty payable to the  Pledgor or the Agent from  time
                        to time  with respect to any of the Collateral.

             (b)              Notwithstanding any other provision of this Pledge
Agreement, at no time shall the aggregate Pledged Shares hereunder comprise more
than 65% of the outstanding  ordinary shares of the Issuer,  and the Agent shall
release,  upon the request of the Pledgor,  any shares of Pledged  Shares in the
event and to the extent such Pledged  Shares  shall  represent in excess of such
amount.

             3.         Security for Obligations. This Pledge  Agreement secures
the payment of all Obligations of the Pledgor.  Without  limiting the generality
of the foregoing,  this Pledge Agreement secures the payment of all amounts that
constitute part of the Obligations and would be owed by the Pledgor to the Agent
or the  Lenders  under  the  Loan  Documents  but for the  fact  that  they  are
unenforceable   or  not   allowable  due  to  the  existence  of  a  bankruptcy,
reorganization or similar proceeding involved the Pledgor.

             4.     Delivery of the Collateral. All certificates or instruments,
if any, representing or evidencing the Collateral shall be promptly delivered to
and held by or on behalf of the Agent  pursuant  hereto and shall be in suitable
form  for  transfer  by  delivery,  or  shall be  accompanied  by duly  executed
instruments  of  transfer  or  assignment  in blank,  all in form and  substance
reasonably  satisfactory  to the Agent.  The Agent shall have the right,  at any
time after the occurrence and during the  continuance of an Event of Default and
without notice to the Pledgor,  to transfer to or to register in the name of the
Agent or any of its nominees any or all of the Pledged Shares.

             5.     Representations and  Warranties.  The Pledgor represents and
warrants as follows:

             (a)              The Pledged Shares set  forth on Schedule I hereto
represent on the date hereof the  percentage  of all the issued and  outstanding
capital stock of the Issuer thereof as identified on Schedule I.

             (b)              The  Pledgor  is the  legal and  beneficial  owner
of the  Collateral,  as  indicated  on Schedule I and  Schedule  II,  pledged or
assigned by the  Pledgor  hereunder  free and clear of any Lien,  except for the
Lien created by this Pledge Agreement or Liens permitted under Section 8 hereof.

             (c)              As of the  date  of  this  Pledge  Agreement,  the
Pledged  Shares pledged by the Pledgor  hereunder have been duly  authorized and
validly issued and are fully paid and non-assessable.

             (d)              The  execution  and  delivery  by the  Pledgor  of
this Pledge Agreement and the pledge of the Collateral hereunder pursuant hereto
create a valid and perfected first priority security interest in the Collateral,
securing the payment of the Obligations.

             (e)              The Pledgor  has full power,  authority and  legal
right to pledge all the Collateral pledged pursuant to this Pledge Agreement and

<PAGE>

will defend its and the Agent's title or interest thereto or therein (and in the
proceeds  thereof) against any and all Liens (other than the Lien of this Pledge
Agreement), however arising, or any and all persons whomsoever.

             6.         Further Assurances. The  Pledgor agrees that at any time

and from time to time, at its own expense,  it will promptly execute and deliver
all further instruments and documents,  and take all further action, that may be
necessary,  or that the Agent may  reasonably  request,  in order to perfect and
protect any pledge,  assignment or security  interest granted or purported to be
granted  hereby or to enable the Agent to  exercise  and  enforce its rights and
remedies hereunder with respect to any Collateral.

             7.         Voting Rights; Dividends and Distributions; Etc.

             (a)              So long as no Event of Default shall have occurred
and be continuing:

                                       (i)         The Pledgor shall be entitled
                        to exercise any  and all  voting  and  other  consensual
                        rights pertaining to the Collateral or any part  thereof
                        for any  purpose  not  prohibited  by the  terms of this
                        Pledge Agreement or the other Loan Documents.

                                       (ii)        The Agent  shall execute  and
                        deliver (or cause to be executed and  delivered)  to the
                        Pledgor all such  proxies and  other  instruments as the
                        Pledgor  may  reasonably  request  for the  purpose  of 
                        enabling the  Pledgor to  exercise  the voting and other
                        rights  that  it is  entitled  to exercise  pursuant  to
                        paragraph (i) above.

             (b)              Subject to paragraph (c) below,  the Pledgor shall
be entitled  to receive  and retain and use,  free and clear of the Lien of this
Pledge Agreement, any and all dividends,  distributions,  principal and interest
made or paid in respect of the Collateral;  provided,  however, that any and all
dividends  and  other   distributions  in  equity  securities  included  in  the
Collateral  shall be, and shall be forthwith  delivered to the Agent to hold as,
Collateral and shall,  if received by the Pledgor,  be received in trust for the
benefit of the Agent,  be  segregated  from the other  property  or funds of the
Pledgor and be forthwith  delivered to the Agent as  Collateral in the same form
as so received (with any necessary endorsement).

             (c)              Upon written  notice to  the Pledgor  by the Agent
following the occurrence and during the continuance of an Event of Default,

                                       (i)         all rights of the  Pledgor to
                        exercise or refrain from exercising the voting and other
                        consensual rights that it would otherwise be entitled to
                        exercise  pursuant to  Section 7(a)(i) shall  cease, and
                        all such  rights shall  thereupon  become  vested in the
                        Agent,  which  shall thereupon  have  the sole right  to

<PAGE>

                        exercise  or refrain  from  exercising  such  voting and
                        other  consensual  rights  during  the  continuance  of 
                        such Event of Default;

                                       (ii)        all rights of the  Pledgor to
                        receive  the dividends, distributions  and principal and
                        interest payments that the Pledgor  would  otherwise  be
                        authorized  to receive  and retain  pursuant to  Section
                        7(b) shall cease,  and all such rights  shall  thereupon
                        become vested in the Agent, which shall  thereupon  have
                        the sole right to receive  and hold as  Collateral  such
                        dividends,  distributions  and  principal  and  interest
                        payments during the continuance of such Event ofDefault;

                                       (iii)       all dividends,  distributions
                        and principal and interest  payments  that are  received
                        by the Pledgor  contrary to  the  provisions  of Section
                        7(b) shall be received in trust for  the benefit of  the
                        Agent,  shall be  segregated  from  other  funds of  the
                        Pledgor  and shall forthwith  be paid over to the  Agent
                        as  Collateral  in the  same  form as so received  (with
                        any necessary indorsements); and

                                       (iv)        in order to permit the  Agent
                        to  receive all dividends,  distributions  and principal
                        and interest  payments to which it may be entitled under
                        Section  7(b) above,  to exercise  the voting and  other
                        consensual rights that it may be  entitled  to  exercise
                        pursuant to Section 7(c)(i) above,  and  to  receive all
                        dividends,  distributions  and  principal  and  interest
                        payments that  it may be entitled  to under Section 7(c)
                        (ii) above, the Pledgor shall, if necessary,upon written
                        notice from the Agent,  from time  to time  execute  and
                        deliver to  the  Agent,  appropriate  proxies,  dividend
                        payment orders and other instruments  as the  Agent  may
                        reasonably request.

             8.         Transfers  and Other Liens; Additional Collateral;  Etc.
 The Pledgor shall:

             (a)              not, except as permitted by the Credit  Agreement,
(i) sell or  otherwise  dispose of, or grant any option or warrant  with respect
to, any of the Collateral or (ii) create or suffer to exist any consensual  Lien
upon or with  respect to any of the  Collateral,  except for the Lien under this
Pledge Agreement; and

             b.               (i)cause the Issuer of Pledged Shares not to issue
any stock or other  securities in addition to or in substitution for the Pledged
Shares  issued by the Issuer,  except to the  Pledgor,  and (ii)  subject to the
provision of Section 2(b),  pledge  hereunder,  immediately upon its acquisition
(directly or  indirectly)  thereof,  any and all  additional  shares of stock or
other securities of the Issuer within 60 Business Days of such acquisition.

<PAGE>

             9.         Agent  Appointed  Attorney-in-Fact. The  Pledgor  hereby
irrevocably  appoints  the Agent as the  Pledgor's  attorney-in-fact,  with full
authority  in the place and stead of the  Pledgor and in the name of the Pledgor
or  otherwise  to take any action and to execute  any  instrument,  in each case
after the occurrence and during the continuance of an Event of Default, that the
Agent may deem  reasonably  necessary or advisable to accomplish the purposes of
this Pledge Agreement,  including,  without limitation,  to receive, indorse and
collect all instruments  made payable to the Pledgor  representing any dividend,
distribution  or principal or interest  payment in respect of the  Collateral or
any part thereof and to give full discharge for the same.

             10.        The Agent's Duties. The powers conferred  on  the  Agent
hereunder  are solely to protect its  interest in the  Collateral  and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody
of any  Collateral in its  possession  and the  accounting  for moneys  actually
received by it hereunder, the Agent shall have no duty as to any Collateral,  as
to ascertaining or taking action with respect to calls, conversions,  exchanges,
maturities,  tenders or other matters relative to any Pledged Shares, whether or
not the Agent or any Lender has or is deemed to have  knowledge of such matters,
or as to the  taking of any  necessary  steps to  preserve  rights  against  any
parties or any other rights  pertaining  to any  Collateral.  The Agent shall be
deemed to have exercised  reasonable care in the custody and preservation of any
Collateral  in  its  possession  if  such   Collateral  is  accorded   treatment
substantially equal to that which the Agent accords its own property.

             11.        Remedies.  If any  Event of Default  shall have occurred
and be continuing:

             (a)            The Agent may exercise in respect of the Collateral,
in  addition  to other  rights and  remedies  provided  for herein or  otherwise
available  to it, all the rights and  remedies of a secured  party upon  default
under  the  Uniform  Commercial  Code in effect in the State of New York at such
time (the "N.Y.  Uniform  Commercial  Code")  (whether  or not the N.Y.  Uniform
Commercial Code applies to the affected  Collateral) and also may without notice
except as specified  below,  sell the  Collateral  or any part thereof in one or
more parcels at public or private sale, at any exchange broker's board or at any
of the Agent's offices or elsewhere, for cash, on credit or for future delivery,
at such price or prices and upon such other terms as are commercially reasonable
irrespective  of the  impact  of any  such  sales  on the  market  price  of the
Collateral.  Each  purchaser  at any such  sale  shall  hold the  property  sold
absolutely  free  from any  claim or right on the part of the  Pledgor,  and the
Pledgor hereby waives (to the extent permitted by law) all rights of redemption,
stay  and/or  appraisal  which it now has or may at any time in the future  have
under any rule or statute now existing or hereafter enacted.  The Pledgor agrees
that,  to the extent notice of sale shall be required by law, at least ten days'
notice to the Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute  reasonable  notification.
The Agent shall not be obligated to make any sale of  Collateral  regardless  of
notice of sale having  been  given.  The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.  To the extent permitted by law, the Pledgor hereby waives any
claim  against  the Agent  arising by reason of the fact that the price at which
any Collateral may have been sold at such a private sale was less than the price

<PAGE>

that might have been  obtained at a public sale,  even if the Agent  accepts the
first  offer  received  and does not  offer  such  Collateral  to more  than one
offeree.

             (b)              All cash and  cash proceeds  received by the Agent
in respect of any sale of,  collection from, or other  realization  upon, all or
any part of the Collateral  may, in the discretion of the Agent,  be held by the
Agent as collateral for,  and/or then or at any time  thereafter  applied (after
payment of any  amounts  payable to the Agent  pursuant  to Section  9.03 of the
Credit  Agreement)  in whole or in part by the Agent for the ratable  benefit of
the Lenders  against,  all or any part of the  Obligations  in such order as the
Agent shall elect.  Any surplus of such cash or cash  proceeds held by the Agent
and remaining after payment in full of the Obligations shall be paid over to the
Pledgor or to any other  Person  that may be lawfully  entitled to receive  such
surplus.

             (c)              The  Agent  may  exercise  any and  all rights and
remedies of the Pledgor in respect of the Collateral.

             (d)              All payments  received by  the  Pledgor after  the
occurrence  and during the  continuance of an Event of Default in respect of the
Collateral  shall be received  in trust for the  benefit of the Agent,  shall be
segregated  from other funds of the Pledgor and shall be forthwith  paid over to
the Agent in the same form as so received (with any necessary indorsement).

             If at any time when the Agent shall determine to exercise its right
to sell all or any part of the Pledged  Shares  pursuant to this  Section,  such
Pledged  Shares  or the  part  thereof  to be  sold  shall  not  be  effectively
registered  under the  Securities  Act of 1933, as amended,  and as from time to
time in effect, and the rules and regulations thereunder (the "Securities Act"),
the Agent is hereby  expressly  authorized  to sell such Pledged  Shares or such
part thereof by private sale in such manner and under such  circumstances as the
Agent may deem  necessary  or  advisable  in order that such sale may legally be
effected  without such  registration.  Without  limiting the  generality  of the
foregoing, in any such event the Agent (a) may proceed to make such private sale
notwithstanding  that a  registration  statement for the purpose of  registering
such  Pledged  Shares or such part  thereof  shall  have been  filed  under such
Securities  Act,  (b) may  approach and  negotiate  with a restricted  number of
potential  purchasers  to  effect  such sale and (c) may  restrict  such sale to
purchasers  as to their  number,  nature of business  and  investment  intention
including without limitation to purchasers each of whom will represent and agree
to the  satisfaction of the Lender that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of such
Pledged Shares, or part thereof, it being understood that the Agent may cause or
require the Pledgor,  and the Pledgor hereby agrees upon the written  request of
the Agent, to cause (i) a legend or legends to be placed on the  certificates to
be  delivered  to  such  purchasers  to  the  effect  that  the  Pledged  Shares
represented  thereby  have not been  registered  under  the  Securities  Act and
setting  forth or  referring  to  restrictions  on the  transferability  of such
securities;  and (ii) the issuance of stop transfer instructions to the Issuer's
transfer agent,  if any, with respect to the Pledged  Shares,  or, if the Issuer
transfers  its own  securities,  a notation  in the  appropriate  records of the
Issuer. In the event of any such sale, the Pledgor does hereby consent and agree
that the Agent shall incur no responsibility or liability for selling all or any

<PAGE>

part of the Pledged Shares at a price which the Agent may deem reasonable  under
the circumstances,  notwithstanding the possibility that a substantially  higher
price  might be  realized  if the sale were  public  and  deferred  until  after
registration as aforesaid.  [The provisions of the U.K. Law of Property Act 1925
relating  to the  power of sale  conferred  thereby  are  hereby  varied so that
section  103 shall not apply,  and such  provisions  are hereby  extended as set
forth herein.]

             1.         Amendments,  etc.  with  Respect  to  the   Obligations;
Waiver of Rights. The Pledgor shall remain obligated  hereunder  notwithstanding
that,  without any  reservation of rights against the Pledgor and without notice
to or  further  assent by the  Pledgor,  any  demand  for  payment of any of the
Obligations  made by the Agent or the Lender may be  rescinded by such party and
any of the Obligations continued,  and the Obligations,  or the liability of any
other  party  upon or for any  part  thereof,  or any  collateral  security,  or
guarantee  therefor or right of offset with respect  thereto,  may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Agent or any Lender, and the
Credit Agreement,  the other Loan Documents, the Letters of Credit and any other
documents  executed  and  delivered  in  connection  therewith  and the  Hedging
Agreements  and  any  other  documents  executed  and  delivered  in  connection
therewith may be amended,  modified,  supplemented or terminated, in whole or in
part, as the Agent (or the Required Lenders, as the case may be, or, in the case
of any Hedging Agreement, the Lender party thereto) may deem advisable from time
to time, and any collateral  security,  guarantee or right of offset at any time
held by the Agent or any Lender for the payment of the  Obligations may be sold,
exchanged,  waived,  surrendered  or released.  Neither the Agent nor any Lender
shall have any obligation to protect,  secure, perfect or insure any Lien at any
time held by it as security for the Obligations or for this Pledge  Agreement or
any property subject thereto. The Agent or any Lender may, but shall be under no
obligation to, make demand hereunder against the Pledgor, and any failure by the
Agent or a Lender to make any such  demand or to collect any  payments  from the
Pledgor or release the Pledgor shall not relieve the Pledgor in respect of which
a demand is made or  collection is not made or the Pledgor is not so released of
its  obligations  or liabilities  hereunder,  and shall not impair or affect the
rights and remedies,  express or implied, or as a matter of law, of the Agent or
any Lender against the Pledgor. For the purposes hereof,  "demand" shall include
the commencement and continuance of any legal proceedings.

             2.         Continuing  Security  Interest;  Assignments  Under  the
Credit  Agreement.  This Pledge  Agreement  shall create a  continuing  security
interest in the  Collateral  and shall (a) remain in full force and effect until
the  payment  in full  in cash of the  Obligations,  (b) be  binding  upon  each
Pledgor, its successors and assigns and (c) inure,  together with the rights and
remedies of the Agent  hereunder,  to the benefit of the Agent,  the Lenders and
their respective successors, transferees and assigns.

             3.         Reinstatement.  This  Pledge  Agreement  shall  continue
to be effective,  or be reinstated,  as the case may be, if at any time payment,
or any part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Agent or any Lender upon the insolvency, bankruptcy,
dissolution,  liquidation  or  reorganization  of the  Pledgor,  or upon or as a
result of the  appointment  of a  receiver,  intervenor  or  conservator  of, or

<PAGE>

trustee or similar  officer  for,  the  Pledgor or any  substantial  part of its
property, or otherwise, all as though such payments had not been made.

             4.         Notices.  All  notices, requests  and  demands  pursuant
hereto shall be made in accordance with Section 9.01 of the Credit Agreement.

             5.         Counterparts.  This Pledge  Agreement may be executed by
one or more of the parties  hereto on any number of separate  counterparts,  and
all of said  counterparts  taken  together shall be deemed to constitute one and
the same instrument.

             6.         Severability.  Any  provision of  this Pledge  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.

             7.         Integration.  This  Pledge  Agreement  represents   the 
agreement of the Pledgor with respect to the subject matter hereof and there are
no  promises  or  representations  by the Agent or the  Lender  relative  to the
subject matter hereof not reflected herein or in the other Loan Documents.

             8.         Amendments in Writing; No Waiver; Cumulative Remedies.

             (a)              None  of  the  terms  or provisions of this Pledge
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the Pledgor and the Agent.

             (b)              Neither the Agent nor any Lender  shall by any act
(except by a written instrument pursuant to Section 19(a)),  delay,  indulgence,
omission or otherwise be deemed to have waived any right or remedy  hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any of
the terms and  conditions  hereof.  No  failure  to  exercise,  nor any delay in
exercising,  on the  part of the  Agent  or any  Lender,  any  right,  power  or
privilege  hereunder  shall  operate as a waiver  thereof.  No single or partial
exercise of any right, power or privilege  hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Agent or any Lender of any right or remedy  hereunder on any one
occasion  shall not be  construed as a bar to any right or remedy that the Agent
or such Lender would otherwise have on any future occasion.

             (c)              The  rights  and  remedies  herein  provided  are 
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.

             9.         Section  Headings.  The  Section  headings  used in this
Pledge Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

<PAGE>

             10.        Successors and Assigns.  This Pledge  Agreement shall be
binding  upon the  successors  and assigns of the Pledgor and shall inure to the
benefit of the Agent and the Lenders and their  successors  and assigns,  except
that the  Pledgor may not  assign,  transfer  or  delegate  any of its rights or
obligations under this Pledge Agreement without the prior written consent of the
Agent.

             11.        Governing  Law;  Jurisdiction;  Consent  to  Service  of
Process.

             (a)              This  Pledge  Agreement  shall  be  construed  in 
accordance with and governed by the law of the State of New York.

             (b)              The Pledgor hereby irrevocably and unconditionally
submits,  for itself and its property,  to the nonexclusive  jurisdiction of the
Supreme  Court of the State of New York  sitting  in New York  County and of the
United  States  District  Court of the  Southern  District of New York,  and any
appellate court from any thereof,  in any action or proceeding arising out of or
relating  to  any  Loan  Document,  or for  recognition  or  enforcement  of any
judgment,  and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding  may be heard
and  determined  in such New York  State or, to the extent  permitted by law, in
such Federal  court.  Each of the parties hereto agrees that a final judgment in
any such action or proceeding  shall be conclusive  and may be enforced in other
jurisdictions  by suit on the judgment or in any other  manner  provided by law.
Nothing in this Pledge  Agreement  or any other Loan  Document  shall affect any
right  that the Agent or any Lender  may  otherwise  have to bring any action or
proceeding  relating to this Pledge Agreement or any other Loan Document against
the Pledgor or its properties in the courts of any jurisdiction.

             (c)              The Pledgor hereby irrevocably and unconditionally
waives,  to the  fullest  extent  it may  legally  and  effectively  do so,  any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding  arising out of or relating to this Pledge Agreement or any
other Loan  Document in any court  referred to in paragraph (b) of this Section.
Each of the parties  hereto hereby  irrevocably  waives,  to the fullest  extent
permitted by law, the defense of an  inconvenient  forum to the  maintenance  of
such action or proceeding in any such court.

             (d)              Each party to this  Pledge  Agreement  irrevocably
consents  to  service  of  process  in  the  manner   provided  for  notices  in
Section 9.01 of the Credit  Agreement.  Nothing in this Pledge  Agreement or any
other Loan  Document  will  affect the right of any party to this  Agreement  to
serve process in any other manner permitted by law.

             12.        WAIVER OF JURY TRIAL.  EACH PARTY  HERETO HEREBY WAIVES,
TO THE FULLEST  EXTENT  PERMITTED BY APPLICABLE  LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING  DIRECTLY OR INDIRECTLY  ARISING OUT OF OR
RELATING TO THIS PLEDGE  AGREEMENT,  ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,  TORT OR ANY OTHER THEORY). EACH
PARTY  HERETO  (A) CERTIFIES  THAT NO  REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD

<PAGE>

NOT,  IN THE EVENT OF  LITIGATION,  SEEK TO  ENFORCE  THE  FOREGOING  WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO  THIS   AGREEMENT   BY,  AMONG  OTHER  THINGS,   THE  MUTUAL   WAIVERS  AND
CERTIFICATIONS IN THIS SECTION.



<PAGE>


             IN WITNESS WHEREOF,  each of the undersigned has caused this Pledge
Agreement to be duly executed and delivered by its duly authorized officer as of
the day and year first above written.

                                          THE TOPPS COMPANY, INC.


                                          By:______________________________
                                                   Name:
                                                   Title:


                                          THE CHASE MANHATTAN BANK, as
                                              Agent and as a Lender,


                                          By:______________________________
                                                   Name:
                                                   Title:


<PAGE>

                                   SCHEDULE II

     1.       Loan Agreement, dated February 3, 1997 by and between Topps Brasil
         Ltda. and the Pledgor in the original prinicpal amount of $1,000,000.

     1.       Loan  Agreement,  dated  September  16, 1997 by and between  Topps
         Brasil  Ltda. and  the  Pledgor  in the  original  principal  amount of
         $650,000.




<PAGE>


                                                                       EXHIBIT E
                                                                              TO
                                                                CREDIT AGREEMENT

                          TRADEMARK SECURITY AGREEMENT

     TRADEMARK SECURITY  AGREEMENT (the "Agreement"),  dated as of May 11, 1998,
made by THE TOPPS COMPANY,  INC., a Delaware  corporation (the "Grantor") to THE
CHASE MANHATTAN BANK, with an office at 1 Pierrepont Plaza,  Brooklyn,  New York
11201,  as agent (the "Agent") for the benefit of the Lenders (as defined in the
Credit Agreement referred to below).

     WHEREAS,   contemporaneously  with  the  execution  and  delivery  of  this
Agreement,  the Agent,  the Lenders and the Grantor are  entering  into a Credit
Agreement dated as of the date hereof (as amended, modified or supplemented from
time to time, the "Credit Agreement"); and

     WHEREAS,  unless  otherwise  defined  herein,  terms  defined in the Credit
Agreement are used herein as therein defined; and

     WHEREAS,  it is a  condition  precedent  to the  making  of Loans  that the
Grantor shall have executed and delivered this Agreement;

     NOW,  THEREFORE,  in  consideration  of the premises and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the Grantor and the Agent agree as follows:

I.                 Grant of Security. The Grantor  hereby assigns and pledges to
the Agent for its benefit and for the ratable benefit of the Lenders, and hereby
grants to the Agent for its benefit and for the ratable  benefit of the Lenders,
a lien on and first  priority  security  interest  in (except to the extent such
assignment,  pledge or grant would  violate  the terms of any license  agreement
with any other  person in  connection  with any of the  Trademarks,  as  defined
below,  whether  the  Grantor is a licensee  o licensor  under any such  license
agreement),  the entire  right,  title and interest of the Grantor in and to the
following, whether now owned or hereafter acquired (the "Trademark Collateral"):

     (a)                All owned domestic  trademarks,  service  marks,  trade
     names and trade dress and all trademark and service mark  registrations and
     applications  for  trademark  or service  mark  registration  in the United
     States  (except for "intent to use"  applications  for trademark or service
     mark registrations filed pursuant to Section l(b) of the Lanham Act, unless
     and until an Amendment  to Allege Use or a Statement of Use under  Sections
     l(c) and l(d) of said Act has been filed) and (i) all renewals thereof, (ii
     all income,  royalties,  damages and payments now and  hereafter due and/or
     payable with respect thereto (including, without limitation, payments under
     all licenses entered into in connection therewith, and damages and payments
     for  past or  future  infringements  thereof),  (iii)  the  right to sue or
     otherwise recover for all past, present and future  infringements  thereof,

<PAGE>

     and (iv) all rights  corresponding  thereto  throughout the world (but only
     such rights as now exist or may come to exist under  applicable local law),
     together,  in each case,  with the goodwill of the business  connected with
     the use of, and symbolized by each such trademark, service mark, trade name
     and trade dress (all of the foregoing and other rights being, collectively,
     the "Trademarks");

     (b)              All license agreements with any other Person in connection
     with any of the  Trademarks  when the Grantor is a licensor  under any such
     license  agreement  (subject,  in each case,  to the terms of such  license
     agreements),  and the right to prepare  for sale,  sell and  advertise  for
     sale, all inventory (as defined in the Uniform Commercial Code in effect in
     the State of New York (the "NYUCC")),  to the extent now or hereafter owned
     by  the  Grantor  and  now or  hereafter  covered  by  such  licenses  (the
     "Licenses").

SECTION 2.        Security  for  Obligations.  The  assignment  and   pledge  of
and grant of a security  interest  in the  Trademark  Collateral  by the Grantor
pursuant to this Agreement (collectively,  the "Security Interests") secures the
payment of all  Obligations  of the Grantor now or hereafter  existing  (and any
other  documents  in  respect  of  such  Obligations),  whether  for  principal,
interest,  fees,  expenses or otherwise (all such Obligations being the "Secured
Obligations").

     The Security Interests granted by this Agreement are granted in conjunction
with the security interests granted to the Agent in other assets of the Grantor,
as set forth in the Credit Agreement and the other Loan Documents.

SECTION I.        Representations  and  Warranties.  The Grantor  represents and
warrants  on the date  hereof as  follows:

     (a)              The  Grantor  is the sole, legal and  beneficial  owner of
     the entire  right,  title and interest in and to the federal  registrations
     and applications  for  registration of the Trademarks  listed on Schedule I
     hereto  and the  Licenses  free and clear of any lien,  security  interest,
     option,  charge,  pledge,  registered user agreement,  assignment  (whether
     conditional or not), or covenant, or any other encumbrance,  except for the
     Security  Interests  created or permitted  by this  Agreement or the Credit
     Agreement,  and  except  for any  such  encumbrances  which  do not  have a
     material  adverse  impact  on the  economic  value  of  any of the  federal
     registrations and applications for registration of the Trademarks listed on
     Schedule I hereto,  and except as permitted by Section 5 of this Agreement.
     No  effective  financing  statement or other  instrument  similar in effect
     covering all or any part of the federal  registrations and applications for
     registration of the Trademarks  listed on Schedule I hereto or the Licenses
     purported  to be  granted  by  the  Grantor  hereunder  is on  file  in any
     recording office, including,  without limitation,  the United States Patent
     and  Trademark  Office,  except such as may have been filed in favor of the
     Agent relating to this Agreement.

     (b)              Set forth on Schedule I is a complete and  accurate  list 
     of all of the United States  federal  registrations  and  applications  for
     federal registration of the Trademarks owned by the Grantor.

<PAGE>

     (c)                Each federal  trademark and  service mark  registration 
     and application for registration of the Grantor identified on Schedule I is
     subsisting  and,  to the  best of the  Grantor's  knowledge,  has not  been
     adjudged invalid, unregistrable or unenforceable,  in whole or in part, and
     is,  to the  best  of  the  Grantor's  knowledge,  valid,  registrable  and
     enforceable.  Each  License of the  Grantor,  to the best of the  Grantor's
     knowledge,   is   subsisting   and  has  not  been   adjudged   invalid  or
     unenforceable,  in who or in part,  and is,  to the  best of the  Grantor's
     knowledge,  valid and  enforceable.  The Grantor has  notified the Agent in
     writing of all prior uses of any federal registrations and applications for
     registration  of the  Trademarks  listed on  Schedule I hereto of which the
     Grantor is aware,  which  would  lead,  in the  reasonable  judgment of the
     Grantor,  to such Trademarks  becoming invalid or unenforceable,  including
     prior  unauthorized uses by third parties and uses which were not supported
     by the goodwill of the business connected with such item.

     (d)                The Grantor has not,  except  as  permitted  under  the 
     Credit  Agreement,  granted any license,  release,  covenant not to sue, or
     non-assertion assurance to any third person with respect to any part of the
     federal  registrations  and applications for registration of the Trademarks
     listed on  Schedule I hereto  which  would  materially  interfere  with its
     business  as  currently   carried  on  under  any  such   registrations  or
     applications for registrations.

     (e)                The  Grantor has  used reasonable  and  proper statutory
     notice in connection with its use of each registered  trademark and service
     mark listed on Schedule I, except inadvertent omissions thereof.

     (f)                Except for (i) the  appropriate  filings with the United
     States Patent and Trademark Office, and (ii) the appropriate  filings under
     Article 9 of the Uniform  Commercial  Code,  no consent of any other Person
     (other than  licensors  of any License to which the Grantor is a licensee),
     no authorization, consent, approval or other action by, and no notice to or
     filing or recording  with,  any  governmental,  administrative  or judicial
     authority or regulatory body is required in the United States either (x for
     the granting by the Grantor of the Security Interests granted hereby or for
     the execution, delivery or performance of this Agreement by the Grantor, or
     (y) for the  perfection  of or the  exercise by the Agent of its rights and
     remedies hereunder,  except where the failure to obtain, take, give or make
     such authorizations, consents, approvals, actions, notices or filings would
     not, and would not be reasonably  likely to, have a material adverse effect
     on the financial condition,  operations,  business, properties or assets of
     the Grantor.

     (g)                The  consummation of  actions  contemplated  under or in
     connection with the Loan Documents to be performed by the Grantor, will not
     impair  the  legal  right  of  the  Grantor  to  use  any  of  the  federal
     registrations and applications for registration of the Trademarks listed on
     Schedule I hereto.

     (h)                The Grantor has no  knowledge of  the existence  of  any
     trademark,  service mark,  trade name or trade dress, or license  agreement

<PAGE>

     held or claimed by any other Person  that,  if upheld,  would  preclude the
     Grantor from  distributing,  marketing,  selling or  providing  any product
     (except  as  set  forth  on  Schedule  II  hereto)  or  service   currently
     distributed, marketed, sold or provided by it, as the case may be, under or
     in connection with any of the federal  registrations  and  applications for
     registration  the Trademarks  listed on Schedule I hereto (except,  in each
     case,  to the extent that the Grantor has granted an  exclusive  license to
     another person), or that would materially interfere with the ability of the
     Grantor to carry on its business as currently  carried on, and, the Grantor
     has no  knowledge  of any  claim  that is  likely to be made that if upheld
     would  preclude or  materially  interfere  with its  business as  currently
     carried on under any of the  federal  registrations  and  applications  for
     registration  of the  Trademarks  listed on Schedule I hereto.

     (i)                No material claim in any court or in the  United  States
     Patent  and  Trademark  Office  has been made  (and,  as to any  trademark,
     service mark,  trade name, or trade dress with respect to which the Grantor
     is a licensee,  to the best knowledge of the Grantor, no material claim has
     been made  against  the  third  party  licensor),  and the  Grantor  has no
     knowledge of any material  claim that has been made or (except as set forth
     on Schedule II hereto) is likely to be made, that the use by the Grantor of
     an Trademark  Collateral does or may violate the rights of any Person.

     (j)                The  Grantor,  to the  best of its  knowledge, has  used
     commercially reasonable standards of quality in manufacturing, distribution
     and marketing of each product sold and  provision of each service  provided
     under  or in  connection  with  any  Trademark  Collateral,  and has  taken
     whatever steps necessary to ensure that all licensed users of any Trademark
     Collateral use such commercially  reasonable standards of quality.

SECTION 2.         Further Assurances.

     (a)                The  Grantor  agrees  that  from  time to  time,  at the
     expense of the Grantor,  the Grantor will promptly  execute and deliver all
     further instruments and documents, and take all further action, that may be
     necessary or desirable,  as the Agent may reasonably  request,  in order to
     (i)  continue,  perfect  and  protect  any  Security  Interest  granted  or
     purported  to be granted  hereby,  or (ii) enable the Agent to exercise and
     enforce its rights and remedies  hereunder  with respect to any part of the
     Trademar Collateral.  Without limiting the generality of the foregoing, the
     Grantor will execute and file such financing or continuation statements, or
     amendments  thereto,  and such  other  instruments  or  notices,  as may be
     necessary or desirable, or as the Agent may reasonably request, in order to
     perfect and  preserve  the  Security  Interests  granted or purported to be
     granted hereby.

     (b)                The Grantor  hereby  authorizes the Agent to file one or
     more financing or continuation statements, and amendments thereto, relative
     to all or any part of the Trademark Collateral without the signature of the
     Grantor  where   permitted  by  law.  A  carbon,   photographic   or  other
     reproduction  of this  Agreement or any  financing  statement  covering the

<PAGE>

     Trademark Collateral or any part thereof shall be sufficient as a financing
     statement  where  permitted  by law.

     (c)                The Grantor will furnish to the  Agent from time to time
     statements and schedules  further  identifying and describing the Trademark
     Collateral  and  such  other  reports  in  connection  with  the  Trademark
     Collateral as the Agent may reasonably  request,  all in reasonable detail.

     (d)                The Grantor  agrees   that,  if,   before   the  Secured
     Obligations  have been  satisfied  in full,  it (i)  obtains  an  ownership
     interest in any new trademark, service mark, trade name and trade dress, or
     trademark or service mark  registration  or  application  for  trademark or
     service mark  registration  which is not now identified on Schedule I, (ii)
     enters into any new license agreement,  subject, in each case, to the terms
     of the license agreements,  or (iii) becomes entitled to the benefit of any
     tradema  service  mark,  trade name and trade  dress  (which is  materially
     important  to the  business  of the  Grantor),  trademark  or service  mark
     registration,  application  for  trademark  or service  mark  registration,
     license  agreement or license  agreement  renewal,  (x) the  provisions  of
     Section 1 of this Agreement shall automatically apply thereto,  and (y) any
     such trademark,  mark,  registration,  application,  or license  agreement,
     together  with the goodwill of the business  connected  with the use of the
     mark or symbolized by it, shall automatically  become part of the Trademark
     Collateral.  The Grantor  shall,  on the fifteenth day of each month,  give
     written  notice  to the  Agent  of  each  new  trademark  or  service  mark
     registration  or  application  for  registration  which  arose or was filed
     during the preceding month. The Grantor authorizes the Agent to modify this
     Agreement  by  amending  Schedule I to include  any such new  trademark  or
     service mark  registration,  or  application  for trademark or service mark
     registration  which  becomes part of the  Trademark  Collateral  under this
     Section, or which, in the reasonable business judgment of the Grantor, is a
     material   trademark  or  service  mark  registration  or  application  for
     trademark or service mark registration.

     (e)                The Grantor  agrees (i)  to  prosecute  diligently   any
     trademark or service mark  application  that is part of Schedule I, (ii) to
     file  applications  for registration of any trademark or service mark which
     is or becomes  material to its business,  (iii) to take all necessary steps
     in any proceeding  before the United States Patent and Trademark  Office or
     in any court,  to maintain and protect  each  material  trademark,  service
     mark, trade name,  trade dress and trademark or service mark  registration,
     and  each  License  agreement,  and  (iv)  to  participate  in  opposition,
     cancellation and infringement  proceedings in each case, such actions under
     clauses (i) through (iv) above,  to be taken as and to the extent  Grantor,
     in the exercise of its reasonable  commercial judgment,  deems necessary or
     desirable.  Any expenses  incurred in connection with such activities shall
     be borne by the  Grantor.  If the  Grantor  fails to comply with any of the
     foregoing  duties,  the Agent shall have the right, but not the obligation,
     to effect  compliance in the name of the Grantor to the extent permitted by
     law, at the Grantor's expense.

<PAGE>

     (f)                Except as may be permitted by Section 5.04 of the Credit
     Agreement,  the Grantor shall not (i) abandon any trademark or service mark
     registration or application for trademark or service mark registration,  or
     any trademark,  service mark or trade name,  without the written consent of
     the Agent, which consent shall not be unreasonably  withheld,  except where
     such abandonment  would not be reasonably likely to have a material adverse
     effect on the financial condition, operations, business, properti or assets
     of the Grantor,  or (ii) take any action,  or permit any action to be taken
     by any other Persons to the extent such Persons are subject to its control,
     or fail to take any action, which would materially and adversely affect the
     validity,  perfection,  priority or enforcement  of the rights  transferred
     herein to the Agent under this Agreement,  and any such action or agreement
     if it  shall be  entered  into or  taken,  shall be null and void and of no
     effect  whatsoever.  The Grantor agrees to notify the Agent immediately and
     in  writing  if the  Grantor  learns  (i)  that  any  material  item of the
     Trademark  Collateral  may  become  abandoned,   or  (ii)  of  any  adverse
     determination  or  any  development  (including,  without  limitation,  the
     institution  of any  proceeding  in the United  States Patent and Trademark
     Office  or  any  court)  regarding  any  material  part  of  the  Trademark
     Collateral.

     (g)                In the event that  any  material  item of the  Trademark
     Collateral is infringed or  misappropriated  by a third party,  the Grantor
     shall (i) promptly notify the Agent and (ii) take all reasonable  steps and
     actions to defend against and enjoin the  infringement or  misappropriation
     and  take  such  other  actions  as  the  Grantor  shall   reasonably  deem
     appropriate  under the  circumstances to protect and enforce such Trademark
     Collateral  unless (A) the Grantor  shall  reasonably  determine  that such
     Trademark  Collateral is of immaterial economic value to the Grantor or (B)
     such  infringement or  misappropriation  would not be reasonably  likely to
     have a material  adverse  effect on the  financial  condition,  operations,
     business, properties or assets of the Grantor taken as a whole. Any expense
     incurred in connection with such activities  shall be borne by the Grantor.

     (h)                The Grantor shall  continue to use reasonable and proper
     statutory notice in connection with its use of each registered trademark or
     service mark.

     (i)                The Grantor agrees (i) to maintain  the  quality of  any
     and all products or services of the Grantor used or provided in  connection
     with the Trademark Collateral, consistent with the quality of said products
     and services as of the date hereof and (ii) to take all reasonable steps to
     ensure that all licensees of any Trademark  Collateral  maintain consistent
     standards of quality,  consistent  with the standards in effect on the date
     hereof,  except in each case as may otherwise be determined by the Borrower
     in the  exercise  of its prudent  business  judgment to the extent that the
     failure to do so would not have an adverse affect on any material Trademark
     Collateral.

SECTION 3.         Transfers and Other Liens.  The Grantor shall  not, except as
otherwise  permitted under Section 5.04 the Credit  Agreement:

<PAGE>

     (a)                sell, assign  (by  operation  of law  or  otherwise)  or
     otherwise  dispose  of any of, or grant any  option  with  respect  to, the
     Trademark  Collateral,  except that the  Grantor may license the  Trademark
     Collateral (i) in the ordinary course of the Grantor's  business,  provided
     that the Grantor,  in the exercise of its reasonable  commercial  judgment,
     determines  that such  license is  necessary or desirable in the conduct of
     the Grantor's  business,  or (ii) in connection  with a sale or transfer of
     assets as  provided in the Credit  Agreement,  provided  that such  license
     shall be on terms  reasonably  expected to maximize the gain to the Grantor
     resulting from the granting of such license,

     (b)                create or suffer to exist any Lien upon or with  respect
     to any of the  Trademark  Collateral  except  for  the  Security  Interests
     created by this Agreement or permitted by the Credit Agreement, or take any
     other action in connection with any of the Trademark  Collateral that would
     impair the value of the  interest  or rights  thereunder  of the Grantor or
     that would impair the interest or rights of the Agent or the Lenders.

SECTION 4.         Agent   Appointed   Attorney-in-Fact.   The  Grantor   hereby
irrevocably  appoints  the  Agent  the  Grantor's  attorney-in-fact,  with  full
authority  in the place and stead of the  Grantor and in the name of the Grantor
or otherwise,  from time to time in the Agent's  discretion  upon the occurrence
and during the  continuance  of an Event of  Default,  to take any action and to
execute  any  instrument  that the  Agent may deem  necessary  or  advisable  to
accomplish the purposes of this Agreement,  including,  without  limitation:  

     (a)                to ask, demand,  collect, sue  for, recover, compromise,
     receive and give  acquittance and receipts for moneys due and to become due
     under  or in  respect  of any  of the  Trademark  Collateral,

     (b)                to  receive,  endorse, and  collect  any drafts or other
     instruments,  documents and chattel  paper,  in connection  with clause (a)
     above, and

     (c)                to file any claims or take any  action or institute  any
     proceedings  which  the  Agent  may deem  necessary  or  desirable  for the
     collection  of  any  payments  relating  to  the  Trademark  Collateral  or
     otherwise  to enforce  the  rights of the Agent with  respect to any of the
     Trademark  Collateral.

SECTION 5.        Agent May Perform.

     (a)                If the Grantor fails to perform any  agreement contained
     herein,  the  Agent may  itself  perform,  or cause  performance  of,  such
     agreement,  and the expenses of the Agent incurred in connection  therewith
     shall be payable by the Grantor under Section 10(b) of this Agreement.

     The Agent or its designated  representatives  shall have the right,  at any
     reasonable  time during normal  business hours and from time to time,  upon
     reasonable  notice,  and without undue  interruption to the business of the

<PAGE>
  
     Grantor,  to inspect the  premises of the Grantor and to examine the books,
     records and operations of the Grantor (including,  without limitation,  the
     Grantor's quality control processes) relating to the Trademark  Collateral.

SECTION 6. The Agent's  Duties.The  powers  conferred on the Agent hereunder are
solely to protect its interest in the Trademark  Collateral and shall not impose
any duty upon it to exercise any such powers.

SECTION  7.  Remedies.  If any  Event of  Default  shall  have  occurred  and be
continuing:

     (a)                The Agent may  exercise  in  respect  of  the  Trademark
     Collateral, in addition to other rights and remedies provided for herein or
     otherwise  available to the Agent,  all the rights and remedies of a Lender
     in  default  under  the NYUCC  (whether  or not the  NYUCC  applies  to the
     affected Trademark Collateral) and also may (i) exercise any and all rights
     and remedies of the Grantor  under or otherwise in respect of the Trademark
     Collateral, (ii) require the Grantor to, and the Grantor hereby agrees that
     will at its expense and upon request of the Agent  forthwith,  assemble all
     or any part of the documents embodying the Trademark Collateral as directed
     by the Agent and make such  documents  available to the Agent at a place to
     be designated by the Agent which is reasonably convenient to both the Agent
     and  the  Grantor,  (iii)  occupy,  for a  reasonable  period  and  without
     obligation to the Grantor in respect of such occupation, any premises owned
     or leased by the Grantor where documents embodying the Trademark Collateral
     or any part thereof are assembled in order to effectuate the Agent's rights
     and remedies  hereunder or under law,  and (iv)  without  notice  except as
     specified below,  sell the Trademark  Collateral or any part thereof in one
     or more parcels at public or private sale, at any of the Agent's offices or
     elsewhere,  for cash, on credit or for future delivery, and upon such other
     terms as the Agent may deem  commercially  reasonable.  In the event of any
     sale,  assignment,  or other disposition of any of the Trademark Collateral
     by the Grantor,  the goodwill of the business connected with and symbolized
     by any Trademark  Collateral subject to such disposition shall be included,
     and the Grantor  shall supply to the Agent or its  designee  the  Grantor's
     know-how and expertise  relating to the manufacture and sale of products or
     the provision of services relating to any Trademark  Collateral  subject to
     such disposition, and its customer lists and other records relating to such
     Trademark Collateral and to the distribution of such products and services.
     The Grantor  agrees that, to the extent notice of sale shall be required by
     law, at least ten days'  notice to the Grantor of the time and place of any
     public sale or the time after  which any  private  sale is to be made shall
     constitute  reasonable  notification.  The Agent shall not be  obligated to
     make any sale of Trademark  Collateral  regardless of notice of sale having
     been given.  The Agent may adjourn any public or private  sale from time to
     time by announcement  at the time and place fixed  therefor,  and such sale
     may, without further notice,  be made at the time and place to which it was
     so adjourned. 

     (b)             All payments received by the Grantor under or in connection
     with any of the  Trademark  Collateral  shall be  received in trust for the

<PAGE>

     benefit of the Agent,  shall be segregated  from other funds of the Grantor
     and  shall be  forthwith  paid  over to the  Agent  in the same  form as so
     received  (with any necessary  endorsement).  All payments made under or in
     connection with or otherwise in respect of the Trademark Collateral and all
     cash proceeds  received by the Agent in respect of any sale of,  collection
     from, or other realization upon all or any part of the Trademark Collateral
     may, in the  discretion  of the Agent,  be held by the Agent as  collateral
     for,  and/or then or at any time  thereafter  applied (after payment of any
     amounts  payable to the Agent pursuant to Section 10 of this  Agreement) in
     whole or in part by Agent for the ratable  benefit of the Lenders  against,
     all or any part of the  Secured  Obligations,  in such  order as the  Agent
     shall elect.  Any surplus of such cash or cash  proceeds  held by the Agent
     and remaining after payment in full of all the Secured Obligations shall be
     paid  over to the  respective  Grantor  or to  whomsoever  may be  lawfully
     entitled to receive  such  surplus. 

SECTION 8.         Indemnity and Expenses.

     (a)                The Grantor  agrees to  indemnify  the  Agent  from  and
     against any and all claims,  losses and  liabilities  arising out of, or in
     connection  with or  resulting  from  this  Agreement  or the  transactions
     contemplated  hereby (including,  without  limitation,  enforcement of this
     Agreement),  except to the extent such claims, losses or liabilities result
     from the Agent's gross negligence or willful  misconduct as determined by a
     final judgment of a court of competent jurisdiction.

     (b)                The Grantor will upon demand pay to the Agent the amount
     of any and all reasonable  expenses,  including,  without  limitation,  the
     reasonable  fees and costs of its  counsel  and of any  experts and agents,
     that the Agent may incur in connection with (i) the  administration of this
     Agreement, (ii) the custody, preservation, use or operation of, or the sale
     of,  collection  from,  or other  realization  upon,  any of the  Trademark
     Collateral,  (iii) the exercise or  enforcement of any of the rights of the
     Agent or the  Lenders  hereunder  or (iv) the  failure  by the  Grantor  to
     perform or observe any of the provisions hereof.

SECTION 9.         Security Interest Absolute.   All rights  of  the  Agent  and
Security Interests granted hereunder,  and the Grantor's Obligations,  shall, to
the extent permitted by law, be absolute and unconditional irrespective of:

       (i)              any lack of  validity  or  enforceability  of the Credit
                    Agreement  or any  other  Loan  Document,  or any  agreement
                    or instrument  relating  thereto;

       (ii)             any  change in the time, manner  or place of payment of,
                    or in  any  other  term  of,  all  or  any  of  the  Secured
                    Obligations,  or any  other  amendment  or  waiver of or any
                    consent to departure from, the Credit Agreement or any other
                    Loan  Document  (other  than  this  Agreement),   including,
                    without limitation,  any increase in the Secured Obligations

<PAGE>

                    resulting  from the  extension of  additional  credit to the
                    Borrowers or otherwise;

       (iii)            any  taking  and  holding  of  Trademark  Collateral  or
                    guarantees for all or any of the Secured Obligations; or any
                    amendment,  alteration,  exchange,  substitution,  transfer,
                    enforcement,  waiver, subordination,  termination or release
                    of any  Trademark  Collateral  or  such  guarantees,  or any
                    nonperfection of any Trademark Collateral, or any consent to
                    departure from any such guaranty;

       (iv)             any manner of application of  Trademark  Collateral,  or
                    proceeds thereof, to all or any of the Secured  Obligations,
                    or the manner of sale or other  disposition of any Trademark
                    Collateral;

       (v)              any  consent  by any Lender or the Agent to  the change,
                    restructuring  or termination of the corporate  structure or
                    existence of the Grantor and any  corresponding  restructure
                    of the  Secured  Obligations,  or any other  restructure  or
                    refinancing  of  the  Secured  Obligations  or  any  portion
                    thereof;

       (vi)             any modification, compromise, settlement  or  release by
                    the Agent or any Lender,  by  operation  of law or otherwise
                    (except  any  of  the   foregoing   with   respect  to  this
                    Agreement),  collection or other  liquidation of the Secured
                    Obligations  or  the  liability  of the  Grantor,  or of the
                    Trademark  Collateral,  in whole or in part, and any refusal
                    of payment by the Agent or any Lender,  in whole or in part,
                    from any obligor,  the Grantor in connection with any of the
                    Secured  Obligations,  whether  or not with  notice  to,  or
                    further assent by, or any reservation of rights against, the
                    Grantor; or

       (vii)            any  other  circumstance (including, but not limited to,
                    any statute of limitations) that might otherwise  constitute
                    a defense available to, or a discharge of, the Grantor.

The granting of a Security  Interest in the Trademark  Collateral shall continue
to be effective or shall be  reinstated,  as the case may be, if at any time any
payment of any of the Secured  Obligations  is  rescinded  or must be  otherwise
returned  by  the  Agent  or any  Lender  upon  the  insolvency,  bankruptcy  or
reorganization  of the Grantor or otherwise,  all as though such payment had not
been made.

SECTION I.          Waiver.  The Grantor  hereby  waives promptness,  diligence,
notice of  acceptance  and any other  notice with  respect to any of the Secured
Obligations  (as that term is defined in this  Agreement) and this Agreement and
any requirement that the Agent or any Lender protect,  secure, perfect or insure
any Security  Interest or any property  subject  thereto or exhaust any right or
take any action against the Grantor or any other Person or any collateral.

<PAGE>

SECTION 2.         Amendments, Etc.

     (a)                Except as provided in subsection (b) to this Section 13,
     no amendment or waiver of any provision of this  Agreement,  and no consent
     to any departure by the Grantor  herefrom,  shall be in any event effective
     unless the same shall be in writing and signed by the Agent,  and then such
     waiver or consent shall be effective only in the specific  instance and for
     the specific  purpose for which given. No failure to exercise nor any delay
     in  exercising,  on the part of the Agent or any of the  Lenders,  a right,
     power or privilege  under this Agreement shall operate as a waiver thereof;
     further,  no single or partial  exercise of any right,  power or  privilege
     under this Agreement shall preclude any other or further  exercise  thereof
     or the exercise of any other right, power or privilege.

     (b)                Any trademark security agreement supplement hereto shall
     be in  substantially  the  form of  Exhibit  A  hereto  (each a  "Trademark
     Security  Agreement  Supplement"),  and upon  the  execution  and  delivery
     thereof by the Grantor the supplements  attached to each Trademark Security
     Agreement  Supplement  shall be incorporated  into and become a part of and
     supplement  Schedule I hereto, and the Agent may attach such supplements to
     such Schedule as supplemented pursuant hereto.

SECTION 3.         Addresses for Notices.  All notices and other  communications
to any party provided for hereunder shall be in writing (including  telegraphic,
telecopy,  telex or cable  communication) and mailed,  telegraphed,  telecopied,
telexed,  cabled  or  delivered,  addressed  to such  party,  in the case of the
Grantor,  at its address referred to in Section 9.01(a) of the Credit Agreement,
in the case of the Agent,  at the  address of the Agent  referred  to in Section
9.01(b) of the  Credit  Agreement,  or as to any party at such other  address as
shall be  designated  by such  party in a  written  notice to each  other  party
complying as to delivery  with the terms of this  Section.  All such notices and
other  communications  shall  be  effective  (a) when  received,  if  mailed  or
delivered,  or (b) when  delivered  to the  telegraph  company,  transmitted  by
telecopier,  confirmed by telex  answerback  or delivered to the cable  company,
respectively, addressed as aforesaid.

SECTION 4.         Continuing Security Interest; Release and Reassignment of
                   Collateral.

     (a)                This  Agreement  shall  create  a  continuing   Security
     Interest in the Trademark Collateral and shall (i) remain in full force and
     effect until the cash payment in full of the Secured  Obligations,  (ii) be
     binding  upon the Grantor,  its  successors  and assigns,  and (iii) inure,
     together  with the  rights  and  remedies  of the Agent  hereunder,  to the
     benefit  of  the  Agent,  the  Lenders  and  their  respective  successors,
     transferees and assigns,  including,  but not limited to, those provided in
     the Credit  Agreement.  Without  limiting the  generality  of the foregoing
     clause  (iii),  any  Lender  may assign or  otherwise  transfer  all or any
     portion  of  its  rights  and  obligations   under  the  Credit   Agreement
     (including,  without  limitation,  all or any portion of the Loans owing to
     it) to any other  Person,  and such other  Person  shall  thereupon  become
     vested with all the benefits in respect  thereof  granted  to  such  Lender

<PAGE>
 
     herein or otherwise, in each case subject to and as provided for in Section
     9.04 of the Credit Agreement.

     (b)                  In  the  case of any  Trademark Collateral pledged  or
     assigned,  or in which a  security  interest  is granted  hereunder  by the
     Grantor, upon any sale, lease, transfer or other disposition of any item of
     Trademark  Collateral in accordance with the terms of the Credit  Agreement
     (other than sales of  Inventory in the ordinary  course of  business),  the
     Agent will, at the Grantor's  expense,  execute and deliver to the Grantor,
     any such documents as the Grantor shall reasonably  request to evidence the
     release  of such  item of  Trademark  Collateral  from the  assignment  and
     security  interest  granted hereby;  provided,  however,  as to clause (ii)
     above,  that (x) at the time of such  request and such  release no Event of
     Default (or event or  condition  which upon notice or lapse of time or both
     would   constitute  an  Event  of  Default)  shall  have  occurred  and  be
     continuing,  (y) the Grantor shall have delivered to the Agent, at least 10
     Business  Days prior to the date of the proposed  release,  or such shorter
     period acceptable to the Agent under this Agreement,  a written request for
     release  describing  the item of Trademark  Collateral and the terms of the
     sale, lease, transfer or other disposition in reasonable detail,  including
     the price thereof and any expenses in connection therewith, together with a
     form of  release  for  execution  by the Agent and a  certification  by the
     Grantor to the effect that the transaction is in compliance with the Credit
     Agreement  and as to such other  matters as the Agent may request,  and (z)
     any  proceeds  of any such  sale,  lease,  transfer  or  other  disposition
     required to be applied to the  prepayment of Loans in  accordance  with the
     Credit Agreement shalll be so applied.


     (c)               Upon the cash payment in full of the Secured Obligations,
     the Security Interests granted hereby shall terminate and all rights to the
     Trademark  Collateral  shall  revert and be  reassigned  to the  respective
     Grantor.  Upon any such  termination,  the  Agent  will,  at the  Grantor's
     expense,  execute and deliver to the Grantor such  documents as the Grantor
     shall reasonably request to evidence such termination and reassignment.

SECTION 5. Transactions Permitted Under the Credit Agreement.  Nothing contained
in this Agreement shall in any manner prohibit or restrict the Grantor or any of
its Subsidiaries from consummating any transaction,  entering into any agreement
or otherwise taking any action expressly permitted under the Credit Agreement.

SECTION 6. Severability.  If any term or provision of this Agreement is or shall
become illegal,  invalid or unenforceable in any  jurisdiction,  all other terms
and provisions of this Agreement  shall remain legal,  valid and  enforceable in
such jurisdiction and such illegal,  invalid or unenforceable provision shall be
legal, valid and enforceable in any other jurisdiction.

SECTION 7.  Execution in  Counterparts.  This  Agreement  may be executed in any
number of  counterparts  each of which when so executed shall be deemed to be an
original and all of which when taken together shall  constitute one and the same
agreement.

<PAGE>

SECTION 8.  GOVERNING  LAW;  TERMS.  THIS  AGREEMENT  SHALL BE GOVERNED  BY, AND
CONSTRUED IN ACCORDANCE  WITH, THE LAWS OF THE STATE OF NEW YORK,  EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY  INTEREST  HEREUNDER,  OR
REMEDIES  HEREUNDER,  IN  RESPECT OF ANY  PARTICULAR  TRADEMARK  COLLATERAL  ARE
GOVERNED BY THE LAWS OF THE UNITED STATES OR ANY OTHER  JURISDICTION  OTHER THAN
THE  STATE  OF NEW  YORK.  UNLESS  OTHERWISE  DEFINED  HEREIN  OR IN THE  CREDIT
AGREEMENT, TERMS USED IN ARTICLE 8 OR 9 OF THE U.C.C. ARE USED HEREIN AS THEREIN
DEFINED.

SECTION 6.  WAIVER OF TRIAL BY JURY.  The  Grantor  HEREBY  UNCONDITIONALLY  AND
IRREVOCABLY  WAIVES TO THE EXTENT PERMITTED BY LAW ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION,  PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.



<PAGE>


     IN WITNESS  WHEREOF,  the  Grantor  has caused  this  Agreement  to be duly
executed and delivered by its officer  thereunto duly  authorized as of the date
first above written.



                                                 GRANTOR:

                             THE TOPPS COMPANY, INC.


                             By:____________________________________________
                             Title:


                                                 AGENT:

                             THE CHASE MANHATTAN BANK

                             By:____________________________________________
                             Title:


<PAGE>



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


On  the   ____  day  of   ___________,   1997,   before   me   personally   came
______________________, to me known, who, being by me duly sworn, did depose and
say  she   resides   at   _____________________________   and   that  she  is  a
_____________________________  of  The  Topps  Company,  Inc.,  the  corporation
described in and which executed the above instrument.



 
                                       _________________________________________
                                                   Notary Public


[Notarial Seal]



<PAGE>

                                   SCHEDULE I

                                   TRADEMARKS

                                  See Attached.




<PAGE>

                                                                       EXHIBIT A
                                                                              TO
                                                    TRADEMARK SECURITY AGREEMENT


                     TRADEMARK SECURITY AGREEMENT SUPPLEMENT


               TRADEMARK SECURITY AGREEMENT SUPPLEMENT, dated as of ____________
__,  1998  (this  "Supplement"),  made by THE TOPPS  COMPANY,  INC.,  a Delaware
corporation  (the  "Grantor") to The Chase Manhattan Bank, with an office at One
Pierrepont  Plaza,  Brooklyn,  New York 11201,  as agent (the  "Agent")  for the
benefit of each of the lenders (the "Lenders") signatory to the Credit Agreement
dated as of May 11,  1998 (as may have been or may be amended,  supplemented  or
otherwise modified from time to time, the "Credit Agreement") among the Grantor,
the Agent and the Lenders.

               WHEREAS,  all terms used herein and not otherwise  defined herein
shall, unless the context specifically  requires otherwise,  have the respective
meanings  ascribed to them in, or pursuant to the  provisions  of, the Trademark
Security Agreement (as hereinafter defined);

               WHEREAS,  pursuant to the terms of the Credit  Agreement  and the
other Loan Documents,  the Lenders agreed to make Loans to the Borrower upon the
terms and subject to the  conditions  set forth  therein to be  evidenced by the
Notes issued by the Borrower and to be guarantied by the Guarantors thereunder;

               WHEREAS,   the   Trademark   Security   Agreement   dated  as  of
___________,   1998  (the  "Trademark  Security   Agreement")  and  recorded  on
___________,  1998 in Reel ____,  Frame  ___-___ in the United States Patent and
Trademark  Office was  delivered  by the Grantor in favor of the Agent to secure
its obligations under the Credit Agreement and the other Loan Documents; and

               WHEREAS,  the Grantor and the Agent mutually desire to supplement
the  Trademark  Security  Agreement  to add  certain  additional  Trademarks  as
collateral for the respective obligations of Grantor under the Credit Agreement.

               NOW,  THEREFORE,  for  valuable  consideration,  the  receipt and
sufficiency  of which are hereby  acknowledged,  the parties  hereto  agree that
Schedule I to the Trademark Security Agreement is hereby supplemented to add the
Trademark(s) set forth on Schedule A hereto.

<PAGE>

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


                                THE TOPPS COMPANY, INC.


                                By:_____________________________________________
                                                       Name:
                                Title:


                                AGENT:
                                THE CHASE MANHATTAN BANK


                                By:_____________________________________________
                                                       Name:
                                Title:

                                By:_____________________________________________
                                                       Name:
                                Title:



<PAGE>

                                                                       EXHIBIT F
                                                                              TO
                                                                CREDIT AGREEMENT


                     Form of Covenant Compliance Certificate

          A.       Compliance with Section 6.01(a)(vii):  Indebtedness
                   1.  additional Indebtedness

                   Required:  Line A1 must not be greater than $100,000

          B.       Compliance with Section 6.04:  Investments,  Loans, Advances,
                   Guarantees and Acquisitions
         

                   1. investments by Borrower in its Subsidiaries (6.04(c))
                   2. Intercompany  Debt evidenced by notes owing to Borrower by
                      Subsidiaries (6.04(d))
                   3. Intercompany Debt not evidenced by notes owing to Borrower
                      by Subsidiaries (6.04(e))
<TABLE>
<CAPTION>

------------------ ----------- ----------- ------------ ----------- ----------- ----------- ------------ -----------
<S>                <C>         <C>         <C>          <C>         <C>         <C>         <C>          <C>        
                   Topps       Topps       Topps        Topps       Topps       Topps       Topps        Other
                   Ireland     Canada      Europe       Mexico      Brazil      Argentina   Latin
                                                                                            America
------------------ ----------- ----------- ------------ ----------- ----------- ----------- ------------ -----------
------------------ ----------- ----------- ------------ ----------- ----------- ----------- ------------ -----------

Investments
------------------ ----------- ----------- ------------ ----------- ----------- ----------- ------------ -----------
------------------ ----------- ----------- ------------ ----------- ----------- ----------- ------------ -----------

Interco. Debt
evidenced by
notes
------------------ ----------- ----------- ------------ ----------- ----------- ----------- ------------ -----------
------------------ ----------- ----------- ------------ ----------- ----------- ----------- ------------ -----------

Interco. Debt
not evidenced by
notes
------------------ ----------- ----------- ------------ ----------- ----------- ----------- ------------ -----------
</TABLE>

                   4.  loans and advances to officers, directors and employees 
                       (6.04(i))

                   Required:  Line B1 must not be greater than $3,000,000
                              Line B2 must not be greater than $3,000,000
                              Line B3 must not be greater than $15,000,000
                              Line B4 must not be greater than $100,000

          C.       Compliance with Section 6.05:  Asset Sales
                   1.  aggregate  fair  market  value of sales,  transfers  and
                   dispositions  of assets  (6.05(f)) 
                   2.  aggregate  fair  market  value of sales,  transfers  and
                   dispositions   of  assets   between  the  Borrower  and  any
                   Subsidiary (6.05(g))

                   Required:  Line C1 must not be greater than $500,000  during
                              any fiscal year 
                              Line C2 must  not be greater than $750,000 during 
                              the term of the Loans
<PAGE>

          D.       Compliance with Section 6.06:  Hedging Agreements
                   1.  Hedging Agreements

                   Required:  Line D1 must not be greater than $54,000,000

          E.       Compliance with Section 6.07:  Restricted  Payments 
                   1.  Restricted  Payments  pursuant to and in accordance with
                   stock option plans or other benefit plans for  management or
                   employees or consultants

                   Required:  Line E1 must not be greater than  $250,000 during
                   any fiscal year

          F.       Compliance with Section 6.13:  Consolidated Leverage Ratio
                   1.  Indebtedness for Money Borrowed of the Borrower
                   2.  Indebtedness for Money Borrower of Subsidiaries
                   3.  Capitalized Leases
                   4.  Standby Letters of Credit
                   5.  F1 + F2 + F3 + F4

                   6.  Normalized EBITDA
                                                       QE1  QE2  QE3  QE4  Total
                       a. Consolidated Net Income (or net loss)
                       b. depreciation expense
                       c. amortization expense
                       d. net total income tax expense
                       e. interest expense
                       f. $2,853,000 for periods that include the quarter ended
                           5/30/97
                       g. $3,044,000 for periods that include the quarter ended
                           11/28/97
                       h. $10,646,000 for periods that include the quarter ended
                           2/28/98
                       I. a + b + c + d + e + f + g + h

                   7.  Ratio of F5 to F6

                   Required:  Line F7  must  not be  greater  than  the  amount
                              specified opposite such dates:

                       (Insert chart from Section 6.13)

<PAGE>

          G.      Compliance with Section 6.14:  Consolidated Fixed Charge Ratio
                                                       QE1  QE2  QE3  QE4  Total
                  1.  Normalized EBITDA (as calculated above)
                  2.  unfinanced Capital Expenditures
                  3.  G1 - G2

                  4.  current portion of long term debt
                  5.  interest expense
                  6.  G4 + G5
 
                  7.  Ratio of G3 to G6

                  Required:  Line G7 must not be less than the amount specified
                             opposite such dates:

                       (Insert chart from Section 6.14)

          H.       Compliance with Section 6.15:  Consolidated Net Worth
                   1.  Consolidated Shareholders' Equity
                   2.  all reserves
                   3.  H1 - H2

                   Required:  Line H3 must not be less than $56,800,000

          I.       Compliance with Section 6.16:  Consolidated Net Loss
                           1Q  2Q  Total 1+2  3Q  Total 1+2+3  4Q  Total 1+2+3+4
                   1.  net loss or profit

                   Required: the net loss  or profit reflected on Line  I1 must 
                             not (Insert language from Section 6.16)

          J.       Compliance with Section 6.17:  EBITDA
                   1.  Consolidated Net Income (or net loss)
                   2.  depreciation expense
                   3.  amortization expense
                   4.  net total income tax expense
                   5.  interest expense
                   6.  J1 + J2 + J3 + J4 + J5

                   Required:  Line J6 must not be less than $4,700,000 for the 
          fiscal quarter ending 2/28/98 and ($1,800,000) for the fiscal quarter 
          ending 5/30/98

<PAGE>

          K.       Compliance with Section 6.18:  Cumulative EBITDA
                                                       QE1  QE2  QE3  QE4  Total
                   1.  Consolidated Net Income (or net loss)
                   2.  depreciation expense
                   3.  amortization expense
                   4.  net total income tax expense
                   5.  interest expense
                   6.  K1 + K2 + K3 + K4 + K5

                   Required:Line K6 must not be less than $3,100,000 for the two
                            fiscal quarter period ending 8/29/98, and $5,640,000
                            for the three fiscal quarter period ending 11/28/98,
                            and $14,400,000 for the four fiscal quarter periods 
                            thereafter.

          L.       Compliance with Section 6.19:  Capital Expenditures
                           1Q99  2Q99  3Q99  4Q99  1Q00 2Q00 3Q00 4Q00 1Q01 2Q01
                   1.  Capital Expenditures

                   Required:  Line L1 must not be more than $6,000,000 for the 
                              term of the Loans.


<PAGE>

                                                                       EXHIBIT G
                                                                              TO
                                                                CREDIT AGREEMENT

                                TOPPS SA GUARANTY


               TOPPS SA GUARANTY,  dated as of May 11, 1998  (together  with any
amendments, restatements, modifications and supplements, the "Guaranty") made by
THE TOPPS COMPANY,  INC., a Delaware corporation (the "Guarantor"),  in favor of
THE CHASE MANHATTAN BANK, as agent (the "Agent") for the lenders (the "Lenders")
party to the Credit Agreement (as hereinafter  defined).  Capitalized  terms not
otherwise  defined herein shall have the meanings  assigned to such terms in the
Credit Agreement.

               WHEREAS,  contemporaneously  with the  execution  and delivery of
this  Guaranty,  the  Guarantor,  the Agent and the Lenders are entering  into a
Credit  Agreement  dated  as  of  the  date  hereof  (as  amended,  modified  or
supplemented from time to time, the "Credit Agreement");

               WHEREAS,  pursuant  to the  terms of the  Credit  Agreement,  the
Issuing  Bank has agreed,  among  other  things,  to issue and the Lenders  have
agreed,  among other things,  to  participate  in the Topps SA Letters of Credit
which  letters  of credit  are issued at the  request  of the  Borrower  for the
account of Topps Latin America SA (the "Obligor").

               WHEREAS,  it is a condition precedent to the effectiveness of the
Credit  Agreement  that the  Guarantor  shall have executed and delivered to the
Lenders this Guaranty;

               NOW,  THEREFORE,  in consideration  of the Lenders'  agreement to
extend credit to the  Guarantor  and for other good and valuable  consideration,
the receipt and  sufficiency of which is hereby  acknowledged  by the Guarantor,
the Guarantor agrees with the Lenders as follows:

               SECTION 1.  Guaranty.  (a) The Guarantor  hereby  unconditionally
guarantees  the punctual  payment when due, of all  obligations of every kind or
character now or hereafter existing, whether matured or unmatured, contingent or
liquidated,  of the Obligor to each of the Agent and the Lenders under the Topps
SA Letters of Credit and any  agreements  executed in connection  therewith (the
Topps SA Letters of Credit and all such agreements, as may hereafter be amended,
restated, modified or supplemented collectively, the "SA Documents") whether for
principal,  interest,  fees,  expenses or otherwise and whether in United States
dollars or other  currencies,  and any and all  reasonable  expenses  (including
reasonable  counsel fees and expenses)  incurred by the Agent and the Lenders in
enforcing  any  of  their  respective  rights  under  this  Guaranty  (all  such
obligations being collectively referred to as the "Obligations").

<PAGE>

               SECTION 2. Guaranty of Payment. The Guarantor further agrees that
its guarantee hereunder  constitutes a guarantee of payment and performance when
due and not of  collection,  and waives any right to require  that any resort be
had by any of the Lenders to (i) the Obligor,  (ii) any other  guarantor,  (iii)
any  Collateral  held for  payment of the  Obligations  or to any balance of any
deposit account or credit on the books of the Lenders in favor of the Obligor or
any other person or (iv) recourse against any other party.

               SECTION 3. Guaranty Absolute.  The Guarantor  guarantees that the
Obligations  will be performed and paid strictly in accordance with the terms of
the SA Documents, regardless of any law, regulation or order now or hereafter in
effect in any  jurisdiction  affecting any of such terms or the rights of any of
the Lenders with respect thereto and is not subject to any setoff,  counterclaim
or defense.  The  Obligations of the Guarantor  hereunder are independent of the
obligations  of other persons under any other related  document,  and a separate
action or actions may be brought and prosecuted  hereunder whether the action is
brought against any such person or whether any such person is joined in any such
action or actions.  The liability of the Guarantor  under this Guaranty shall be
absolute  and  unconditional,  and shall not be affected or released in any way,
irrespective of:

               (i) any lack of validity or  enforceability  of the SA Documents,
               or to the Obligations;

               (ii) any change in the time, manner or place of payment of, or in
               any other  term of, all or any of the  Obligations,  or any other
               amendment  or  waiver of or any  consent  to  departure  from any
               document  evidencing or relating to any of the Obligations or the
               SA  Documents,  including,  but not  limited  to, an  increase or
               decrease in the Obligations;

               (iii)  any  taking  and  holding  of   Collateral  or  any  other
               collateral  or  additional  guaranties  for  all  or  any  of the
               Obligations,    or   any   amendment,    alteration,    exchange,
               substitution,   transfer,  enforcement,   waiver,  subordination,
               termination,   or  release  of  any   collateral   securing   the
               Obligations, if any (the "Collateral") or any other collateral or
               such guaranties,  or any  non-perfection of any collateral or any
               consent to departure from any such guaranty;

               (iv)  any  manner  of  application  of  Collateral  or any  other
               collateral,   or  proceeds   thereof,   to  all  or  any  of  the
               Obligations, or the manner of sale of any Collateral or any other
               collateral;

               (v) any  consent  by one or more of the  Lenders  to the  change,
               restructuring  or  termination  of  the  corporate  structure  or
               existence  of  the  Obligor  or any  affiliate  thereof  and  any
               corresponding  restructuring  of the  Obligations,  or any  other
               restructuring  or refinancing  of the  Obligations or any portion
               thereof;

<PAGE>

               (vi) any modification,  compromise,  settlement or release by one
               or  more  of the  Lenders,  by  operation  of  law or  otherwise,
               collection  or  other  liquidation  of  the  Obligations  or  the
               liability  of the  Obligor  and any  other  guarantor,  or of the
               Collateral or any other collateral,  in whole or in part, and any
               refusal of payment by one or more of the Lenders,  in whole or in
               part, from any Obligor or guarantor in connection with any of the
               Obligations, whether or not with notice to, or further assent by,
               or any reservation of rights against, the Guarantor;

               (vii) the waiver of the  performance or observance by the Obligor
               of any agreement,  covenant, term or condition to be performed by
               it;

               (viii) the  voluntary or  involuntary  liquidation,  dissolution,
               sale of all or substantially  all of the property,  marshaling of
               assets and  liabilities,  receivership,  insolvency,  bankruptcy,
               assignment   for  the  benefit  of   creditors,   reorganization,
               arrangement,  composition  or  readjustment  of, or other similar
               application  or  proceeding  affecting  the Obligor or any of its
               assets;

               (ix)  the  release  of  the  Obligor  from  the   performance  or
               observance  of any  agreements,  covenants,  terms or  conditions
               contained in any agreement or document  evidencing or relating to
               the Obligations or the SA Documents by operation of law; or

               (x) any other  circumstance  (including,  but not limited to, any
               statute  of  limitations)  which  might  otherwise  constitute  a
               defense available to, or a discharge of, the Guarantor.

                                                                           
               Without  limiting the generality of the foregoing,  the Guarantor
hereby consents,  and hereby agrees,  that the rights of the Lenders  hereunder,
and the liability of the Guarantor  hereunder,  shall not be affected by any and
all releases of any  Collateral or any other  collateral.  This  Guaranty  shall
continue to be  effective or be  reinstated,  as the case may be, if at any time
any payment of any of the Obligations is rescinded or must otherwise be returned
by the Lender upon the insolvency,  bankruptcy or  reorganization of the Obligor
or otherwise, all as though such payment had not been made.

               SECTION 4. Waivers.  The Guarantor waives  presentment to, demand
of payment from and protest to the Obligor, or any other guarantor of any of the
Obligations, and also waives notice of acceptance of its guarantee and notice of
protest  for  non-payment.  The  Guarantor  hereby  further  waives  promptness,
diligence,  notice of acceptance and any other notice with respect to any of the
Obligations  and this  Guaranty and any  requirement  that the Lenders  protect,
secure,  perfect or insure any security interest or lien or any property subject

<PAGE>

thereto or exhaust  any right or take any action  against  the  Obligor,  or any
other person or any Collateral or any other collateral.


               SECTION 5.  Covenants.  The Guarantor  hereby waives any right to
require the Lenders to proceed  against the Obligor,  any other guarantor or any
person or proceed against any Collateral or any other collateral,  or pursue any
other remedy in the power of the Agent or the Lenders.

               SECTION 6. Subrogation. Upon payment by the Guarantor of any sums
to the  Lenders  hereunder,  all rights of the  Guarantor  against  the  Obligor
arising as a result thereof by way of right of  subrogation or otherwise,  shall
in all respects be subordinate and junior in right of payment to the prior final
and defeasible  payment in full of all the  Obligations.  If any amount shall be
paid to the Guarantor for the account of the Obligor,  such amount shall be held
in trust for the  benefit  of the  Lenders  and shall  forthwith  be paid to the
Lenders to be  credited  and  applied  to the  Obligations,  whether  matured or
unmatured.

               SECTION  7.  Amendments,  Etc.  No  amendment  or  waiver  of any
provision  of this  Guaranty  nor  consent  to any  departure  by the  Guarantor
herefrom shall in any event be effective unless the same shall be in writing and
signed by the Lenders and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

               SECTION 8.  Notices,  Etc.  All notices and other  communications
provided for hereunder  shall be in writing and shall be given in the manner set
forth in Section 9.01 of the Credit Agreement and with copies specified therein,
if to the  Guarantor  and if to the Lenders,  to their  respective  addresses as
specified in the Credit Agreement.

               SECTION 9. No Waiver,  Remedies. No failure on the part of any of
the Lenders to exercise,  and no delay in exercising,  any right hereunder shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
right hereunder  preclude any other or further  exercise thereof or the exercise
of any  other  right.  The  remedies  herein  provided  are  cumulative  and not
exclusive  of any remedies  provided by law,  the Credit  Agreement or any other
agreement relating to the Obligations.

               SECTION 10. Right of Set-off.  Upon the occurrence and during the
continuance  of any Event of Default,  the Lenders are hereby  authorized at any
time and from time to time, to the fullest  extent  permitted by law, to set off
and apply any and all deposits (general or special, time or demand,  provisional
or final) at any time held and other indebtedness at any time owing by the Agent
or the Lenders to or for the credit or the account of the Guarantor  against any
and all of the Obligations of the Guarantor now or hereafter existing under this
Guaranty,  irrespective  of whether the Lenders shall have made any demand under
this Guaranty and although such Obligations may be contingent and unmatured. The
rights of the Lenders  under this Section 10 are in addition to other rights and
remedies  (including,  without  limitation,  other rights of set-off)  which the
Lenders may have.

<PAGE>

               SECTION 11.  Continuing  Guaranty;  Transfer of Note;  Release of
Guaranty.  This  Guaranty is a continuing  guaranty and shall (i) remain in full
force and effect  until the  payment in full of all of the  Obligations  and all
other amounts  payable under this Guaranty,  (ii) be binding upon the Guarantor,
its successors and assigns, and (iii) inure to the benefit of and be enforceable
by the Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (iii), each Lender may assign or
otherwise  transfer any instrument of indebtedness of the Obligor held by it, or
any interest  therein,  or grant any  participation in its rights or Obligations
under any agreement  relating to the Obligations and the SA Documents subject to
the  provisions  of such  agreement to any other  person,  and such other person
shall thereupon  become vested with all the rights in respect thereof granted to
the Lender.

               SECTION 12. Jurisdiction; Waiver of Jury Trial. (a) THE GUARANTOR
HEREBY  IRREVOCABLY  SUBMITS  ITSELF TO THE EXCLUSIVE  JURISDICTION  OF BOTH THE
SUPREME  COURT OF THE STATE OF NEW YORK,  NEW YORK COUNTY AND THE UNITED  STATES
DISTRICT COURT FOR THE SOUTHERN  DISTRICT OF NEW YORK, AND ANY APPEAL THEREFROM,
FOR THE  PURPOSE  OF ANY SUIT,  ACTION  OR OTHER  PROCEEDING  ARISING  OUT OF OR
RELATING TO THIS GUARANTY,  AND HEREBY WAIVES,  AND AGREES NOT TO ASSERT, BY WAY
OF MOTION,  AS A DEFENSE OR OTHERWISE,  IN ANY SUIT,  ACTION OR PROCEEDING,  ANY
CLAIM THAT IT IS NOT PERSONALLY  SUBJECT TO THE  JURISDICTION OF THE ABOVE-NAMED
COURTS  FOR ANY  REASON  WHATSOEVER,  THAT SUCH SUIT,  ACTION OR  PROCEEDING  IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THIS GUARANTY MAY NOT BE ENFORCED IN OR
BY SUCH COURTS.  NEITHER THE GUARANTOR  NOR THE LENDER WILL SEEK TO  CONSOLIDATE
SUCH  PROCEEDING INTO ANY ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED.

               SECTION 13.  Applicable  Law. THIS GUARANTY SHALL IN ALL RESPECTS
BE  CONSTRUED  IN  ACCORDANCE  WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.

               SECTION 14. Expenses of the Agent and the Lenders.  The Guarantor
agrees to pay all reasonable and necessary  out-of-pocket  expenses  incurred by
the Agent and the Lenders in connection  with the  enforcement  or protection of
its rights or the rights of the Agent and the Lenders  generally  in  connection
with the  Guaranty  including,  but not  limited  to,  the  reasonable  fees and
disbursements of counsel for the Agent and the Lenders.



                          [Signature on Following Page]

<PAGE>

               IN WITNESS WHEREOF,  the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer  thereunto duly  authorized as of the
date first above written.


                                              THE TOPPS COMPANY, INC.



                                              By: _______________________

                                                  Name:
                                                  Title: